In uncertain times like this, there are particular ASX-listed exchange-traded funds (ETFs) that could provide strong returns over the long-term which I'm drawn to.
The short-term may be volatile, but that can happen every so often on the share market. Sometimes the world can throw up a big unexpected event which cause share prices to drop.
Earnings of some businesses may well fall. But, some may fare better than others because of the quality metrics they possess.
I want to highlight two funds in-particular that have performed strongly over the long-term and could be resilient through whatever happens next. But, I have a positive view about the long-term.
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Betashares Global Quality Leaders ETF (ASX: QLTY)
This ETF represents a global portfolio of 150 companies that are ranked by the highest quality score.
By owning 150 businesses from across the world and in different sectors, it offers investors significant diversification, much more than what the S&P/ASX 200 Index (ASX: XJO) currently provides.
BetaShares says that the quality score rankings used to select the stocks in the index are based on a combined ranking of four key factors – return on equity (ROE), debt-to-capital, cash flow generation ability and earnings stability.
In other words, these businesses make a lot of profit for shareholders, they use little-to-no debt to do so, they generate plenty of cash flow and their earnings are stable. But combining these elements, I think you're left with many of the world highest-quality companies in the portfolio.
Over the three years to the end of February 2026, the QLTY ETF returned an average of 17.3% per year, which is an excellent return, in my view. Past performance is not a guarantee of future returns of course.
I'm backing the ASX ETF's portfolio to continue delivering good results over time.
VanEck MSCI International Quality ETF (ASX: QUAL)
The QUAL ETF has a somewhat similar setup – it's aiming to provide investors with a high-quality global portfolio that is decided by a few quality-based metrics.
It doesn't look at quite as many quality characteristics, but it does own twice as many shares as the QLTY ETF. In terms of the number of different names it provides exposure to, it does have more diversification.
The three metrics that this ASX ETF looks for is a high return on equity, earnings stability and low financial leverage. In other words, these businesses are very profitable on behalf of shareholders' funds, the profit is resilient and doesn't usually go backwards, and these companies don't utilise much, if any debt, as part of the business.
Impressively, to 28 February 2026, it has returned an average of 20.3% per year over the prior three years, though that's not a guarantee of future returns.
