Two ASX ETFs I'm targeting for a bounce back next year

Target these ASX ETFs in the new year.

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Key points

  • Two ASX ETFs, the VanEck MSCI International Small Companies Quality ETF (ASX: QSML) and the Global X Morningstar Global technology ETF (ASX: TECH), underperformed in 2025 but show potential for a rebound next year.
  • The QSML ETF, which focuses on diversified, quality small-cap international stocks with strong historical returns, rose modestly by 4.9% in 2025, yet historically offers over 11% annual returns.
  • Although the TECH ETF focused on tech and semiconductor sectors dropped by more than 8% in 2025, its strong five-year average return of 8.45% and potential sector growth suggest a promising recovery in 2026.

Last week I covered three ASX ETFs that have historically performed well but fell flat in 2025. 

These centred around sectors like financials and real estate that had a slow second half of the calendar year. 

As the year comes to a close, I am continuing my search for funds that underperformed this year. 

While past performance isn't a guarantee of future performance, these funds had a strong track record of bringing investors strong returns. 

With that sentiment in mind, here are two more ASX ETFs that have fallen below historical performance in 2025. 

VanEck Msci International Small Companies Quality ETF (ASX: QSML)

This fund gives investors a diversified portfolio of 150 international developed market small-cap quality growth securities.

The success of small-cap companies has been an emerging story in 2025. 

Data shows attention is increasingly shifting to smaller and mid-sized companies.

These can offer potential for outsized growth and portfolio broadening. 

This fund may be set to catch these tailwinds in the next 12 months. 

According to VanEck, this fund focuses on quality small companies that have delivered outperformance over the long term relative to other global small companies benchmarks and also relative to large- and mid-cap benchmarks.

In 2025, the fund has risen a modest 4.9%. 

However historically, it has brought returns of more than 11% per annum including dividends. 

The fund was first listed in early 2021. 

The fund is largely weighted towards US securities, with almost 80% of the underlying holdings being US companies. 

By sector, its largest exposure is to: 

  • Industrials (38.2%)
  • Financials (18.9%)
  • Information Technology (12.1%)

Global X Morningstar Global Technology ETF (ASX: TECH)

According to Global X, this ETF seeks to invest in companies positioned to benefit from the increased adoption of technology. 

This includes companies whose principal business is in offering computing Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), Infrastructure-as-a-Service (IaaS), and/or cloud and edge computing infrastructure and hardware.

At the time of writing, it is made up of 39 underlying holdings. 

Its largest exposure is to companies focussed on: 

  • Software (34.4%)
  • Semiconductors and semiconductor equipment (21.1%)
  • Financial services (12.4%)

It is heavily weighted towards US companies, with more than half its portfolio being US based holdings. 

So far in 2025, it has fallen more than 8%. 

However in the last 5 years, it has a p.a. return of 8.45%. 

With global investment in these booming sectors continuing, there's good reason to believe in a bounce back for this fund in 2026. 

Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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