Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

2 quality ETFs I’d buy in October 2021

I've got a couple of high-quality exchange-traded funds (ETFs) in mind that could be good options to consider in October 2021.

It’s almost October 2021. I’ve got a couple of high-quality exchange-traded funds (ETFs) in mind that could be good options to consider next month.

I love ETFs as a way of investing in shares. It takes a lot of the hassle and guesswork out of the equation. There are plenty of options to choose from, such as Vanguard Msci Index International Shares ETF (ASX: VGS) and iShares S&P 500 ETF (ASX: IVV).

But I think these two investments could be very effective for the long-term:

Betashares Global Quality Leaders ETF (ASX: QLTY)

This ETF is all about investing in business that tick multiple quality boxes, resulting in a high-quality portfolio. Return on equity, debt-to-capital, cash flow generation ability and earnings stability are the four main metrics. They essentially mean that the business is reliable, makes real cash profit, has little debt and makes good money for what shareholders have put into the business. If a business does well in those four areas, then it’s not surprising that it can do well.

There are around 150 businesses in the portfolio. At the moment, some of the biggest holdings include: Texas Instruments, Applied Materials, Intel, Intuit, Novo Nordisk, Visa, Keyence, Accenture, Advanced Micro Devices and Cisco Systems. It’s a global portfolio, ‘only’ 62% of it is invested in US businesses, with the rest allocated to other countries like Japan and Switzerland.

Betashares Global Quality Leaders ETF has done very well since it launched in November 2018, returning an average of 23.76% per year. However, past performance is not a reliable indicator of future performance.

This portfolio comes with annual costs of just 0.35%.

A quality, diversified portfolio, at a relatively low fee, with good returns. It’s a good option in my opinion.

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

This ETF is a bit different to the BetaShares one. It’s looking for businesses that have a wide economic moat, or a strong competitive advantage.

The shares are chosen for the portfolio by analysts at Morningstar who are looking for these wide businesses in the US that are valued at attractive value compared to their estimate of fair value. In other words, it is believed the portfolio of businesses are nicely priced.

At 23 September 2021, it had 50 holdings including Wells Fargo, Salesforce.com, Cheniere Energy, Alphabet, Microsoft, Tyler Technologies, Gilead Sciences and Guidewire Software.

The analysts at Morningstar have been very effective at choosing the right shares at the right prices, though past performance is not a reliable indicator of future performance. Over the last five years, VanEck Morningstar Wide Moat ETF has delivered an average return per year of 19.4%. That has beaten the S&P 500’s return of 18% per year over the same time period.

It has an annual management cost of 0.49%.

Summary thoughts

I really like both of these ETFs for the quality and diversification they can provide. Investing is all about returns and these two have been very good at that. It’s hard to pick a winner between the two, I think I would choose to invest in both.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.
Skip to content