Exchange-traded funds (ETFs) can be wonderful investments if we find ideas that can be diversified and deliver returns.
Betashares Global Quality Leaders ETF (ASX: QLTY)
In an uncertain world, it might be quality global businesses that deliver the best returns. When times get rough, that’s when weak businesses may run into trouble, so owning strong businesses could make a lot of sense.
To get into the portfolio, there are four key factors that they need to rank well on: return on equity (ROE), debt to capital, cashflow generation ability and earnings stability.
The ETF has an annual management fee of 0.35%, which is pretty cheap compared to most active fund managers.
There are 150 global companies outside of Australia in the portfolio. Some of the biggest positions include UnitedHealth, Vertex Pharmaceuticals, Microsoft, Meta Platforms, Novo Nordisk, L’Oreal, Adobe, ASML and Visa.
The index that this ETF tracks has delivered an average return per year of around 15% over the decade to October 2023.
Betashares Global Cybersecurity ETF (ASX: HACK)
Investing in ETFs doesn’t just have to be focused on the main ASX or global index. It can also enable us to gain access to an investment trend.
Cybersecurity is one of the most attractive areas in my eyes. More people are going online every year in Australia and globally. There’s more data and important information that is now accessed via online means. Organisations need to make sure their cybersecurity is strong, so there’s a good growth runway for the sector.
Plus, it’s not as though governments or businesses would cancel their cybersecurity services if economic growth goes backwards temporarily.
With that in mind, I think the HACK ETF could do very well over the long-term, just like it has done in the past, though that’s not indicative that good returns will continue.
Some of the biggest businesses in the portfolio include Palo Alto Networks, Infosys, Broadcom, Cisco Systems, Fortinet, Splunk, Crowdstrike and Qualys.
