The ASX-listed exchange-traded fund (ETF) landscape, like many asset classes, has been rocked by the announcement of widespread tariffs by the US on most goods from most countries.
I think it's a great idea to invest when prices are lower because it means that we're able to buy more for our money. So, I think this is one of the best times of the last six months to invest.
However, I don't just want to buy anything. I only want to own some of the best businesses in the world. With that in mind, I'm going to highlight two ASX ETFs that I really like that can give investors that access.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
This fund has been one of the harder-hit ASX ETFs because it's a portfolio that only buys US listed shares. Investors seem a bit more cautious on US stocks following the tariff announcements. However, I still believe US businesses – particularly ones with global earnings – can achieve good long-term profit growth.
The MOAT ETF only considers high-quality US-listed businesses with strong economic moats, or competitive advantages. Those advantages could be in the form of brand power, network effects, cost advantages, intellectual property, regulatory licences and so on.
A wide moat refers to a competitive advantage that analysts from Morningstar believe is more likely than not to endure for at least 20 years. That's a lot of strong profit generation.
The ASX ETF only invests in those great businesses when the Morningstar analysts think the company is trading at good value.
Some of the businesses currently in the portfolio include Huntington Ingalls Industries, Boeing and Allegion.
VanEck MSCI International Quality ETF (ASX: QUAL)
The QUAL ETF offers a more diversified portfolio because the portfolio picks are from across the world.
For any business to be considered for this fund, there are three fundamentals that I believe make this ASX ETF very compelling. They should have a high return on equity (ROE), earnings stability and low financial leverage.
What this means is that the businesses generate a high level of profit for retained shareholder money, resilient earnings and low levels of debt.
It owns a portfolio of around 300 companies from a range of sizes, sectors and countries.
The ASX ETF has four positions with a weighting of more than 3.5%, namely Apple, Meta Platforms, Alphabet, Microsoft and Nvidia.
I think these businesses have plenty of potential to re-invest future profit generation into more growth areas where they can earn a high ROE.
