Certain ASX-listed exchange-traded funds (ETFs) have managed to deliver great long-term returns, and I'm not expecting that to change in the AI era.
AI may well have a large impact in some ways and in some sectors. However, other companies have business models that could continue to succeed despite AI, or even receive an earnings boost from AI.
Here are two of my favourite ideas for long-term success.
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Betashares Global Quality Leaders ETF (ASX: QLTY)
We can't know for sure which businesses are going to succeed, but I think the businesses in this portfolio are likely to be among the winners.
This portfolio includes 150 global companies (excluding Australian stocks), ranked by the highest quality score.
How is the quality score determined? There are four factors that decide.
There's the return on equity (ROE). That shows how much profit a business makes compared to how much shareholder money is retained within the business. It also suggests what level of return a business could make on additional money invested its operations.
Second, there's earnings stability. If earnings don't usually go backwards then that suggests rising earnings, which can cushion a business during market sell-offs and can help long-term share price growth.
Third, they need to have low levels of debt. That ensures that high ROE isn't being influenced by high levels of leverage. It also means the business is in a much healthier position.
Finally, the businesses need to have good cash flow generation. That ensures the businesses are turning accounting profits into actual cash flow.
When you put all of those elements together, the ASX ETF has a very good portfolio. 32.7% of the portfolio was invested in technology shares as of 30 January 2026, and some of those may benefit from AI in the coming years.
To me, it's not a surprise the QLTY ETF has delivered an average return per year of 13.8% since inception in November 2018.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
It's during periods of technological advancements like this that can really test how strong the economic moat of a business actually is.
So, it's the truly great businesses that will manage to succeed in the coming years – ones that can continue growing earnings because of the economic moat.
Analysts at Morningstar aim to identify US-listed businesses that have a strong economic moat and are priced an at attractive value.
The MOAT ETF only invests in companies that are viewed by analysts to have competitive advantages that are almost certainly going to last for a decade and more likely than not last for at least two decades. The businesses in this portfolio are viewed some of the highest-quality ones on the market.
There are a number different types of economic moats such as cost advantages, network effects, brand power, intellectual property, regulatory advantages and more. Businesses can generate and maintain strong profits in a variety of different ways.
On top of that, the ASX ETF only invests in businesses that analysts think are trading at attractive value to their underlying value. That's a very effective investment strategy.
Since inception in June 2015, the MOAT ETF has returned an average of 14.5% per year.
