Exchange-traded funds (ETFs) may be the greatest thing since sliced bread. I think there are a few worth buying in 2024.
Plenty of investors may be attracted to iShares S&P 500 ETF (ASX: IVV), it’s a great investment. But, it’s heavily focused on just a few large US tech shares and is only invested in businesses listed in the US.
I’m expecting to buy both of these ETFs in 2024.
VanEck Morningstar International Wide Moat ETF (ASX: GOAT)
This is a global version of the Vaneck Morningstar Wide Moat ETF (ASX: MOAT) – MOAT only invests in US shares.
GOAT invests in international companies which Morningstar believes has sustainable competitive advantages, also known as wide economic moats. Economic moats can come in a variety of different forms, including brand power or patents.
The economic moats of the businesses involved are expected to last for a very long time.
Some of the companies currently in the portfolio include Adyen, Harmonic Drive Systems, Anheuser-Busch Inbev, Charles Schwab and Marketaxess.
Over the past decade, the index which this ETF tracks has delivered an average return per year of 13.2%.
I like the diversification offered by this investment, which currently has 55 holdings.
VanEck MSCI International Quality ETF (ASX: QUAL)
This ETF is focused on quality global shares which rank well on a combined score from three metrics.
The stocks involved have a high return on equity (ROE), they have earnings stability and low financial leverage. In other words, they make good profit for how much shareholder money is retained in the business, they don’t usually suffer from large profit declines and they have low debt.
There is a total of around 300 businesses in this portfolio, so there’s plenty of diversification. A number of countries are represented in the portfolio, including Ireland, New Zealand, Spain, Norway, Finland, France, Canada and of course the US.
The biggest positions in the portfolio currently are Apple, Microsoft, Nvidia, Meta Platforms and Eli Lilly.
Since the ETF started in October 2014, it has generated an average return per annum of around 15%, though we can’t expect this to continue forever, or be achieved in any particular year.
