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1 elite ETF I’d buy with $1,000

There is one exchange-traded fund (ETF) that I would definitely want to buy if I had $1,000 to invest into it, the QLTY ETF.
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Jaz Harrison

Jaz is a Staff Writer for Rask. She is a keen investor who loves to thoroughly poke holes in an investment idea before it has a chance of making it into her portfolio. Jaz invests for the long-term and doesn't sweat the small stuff. She strongly believes that empowering people with knowledge is the best way for them to take charge of their finances, which is exactly the approach she takes with her own money and investments.
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There is one exchange-traded fund (ETF) that I would definitely want to buy if I had $1,000 to invest into it.

ETFs are a great way to invest in my opinion, but I believe that there may be better picks than ones like Vanguard Diversified High Growth Index ETF (ASX: VDHG) and BetaShares Australia 200 ETF (ASX: A200).

I think ETFs that give exposure to a high quality group of businesses could perform better over the longer-term than the ones that are generalised.

There is one in-particular that I really like:

Betashares Global Quality Leaders ETF (ASX: QLTY)

This ETF is about a portfolio of quality businesses from across the world.

Typically, a portfolio should have dozens of holdings to be effectively diversified. This ETF has around 150 holdings.

Those businesses are spread across the world. Numerous countries are represented: the US (61.6% of the portfolio), Japan (12.6%), Switzerland, Hong Kong, Denmark, France, the UK, Germany and Netherlands all have positions of 2% of more.

What makes the portfolio quality?

There are many different metrics on how to judge a business. But if a company can rank well on several of those metrics then they may be very worthwhile investments.

The Betashares Global Quality Leaders ETF ranks well on several on those quality metrics: return on equity (ROE), debt to capital, cashflow generation and earnings stability.

When you put those metrics together, the combination of those businesses – and don’t forget there’s 150 of them – can do very well.

Top holdings

Here are the biggest ten positions in the portfolio: Advanced Micro Devices, Accenture, Intel, Novo Nordisk, Roche, SAP, Texas Instruments, UnitedHealth, Visa and Applied Materials.

Returns and management fee

Since inception in November 2018, the QLTY ETF has produced net returns of 21% per annum. It would be too optimistic to think that the next few years will be as strong, but I do think it can continue to outperform.

It’s attractively cheap too, when it comes to the management cost it’s only 0.35% per year.

I believe the QLTY ETF can form a core part of a portfolio.

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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.

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