As March draws to a close, I find myself doing what I often do at this time of year: stepping back, reviewing my portfolio, and asking a simple question. Where do I want my money working from here?
But I'm not trying to predict what April will bring. Markets can move for all sorts of reasons in the short term. I'm thinking about what I would be happy to hold for the long term.
Right now, there are two ASX exchange-traded funds (ETFs) on my watch list.
Each could play a different role in a portfolio, and together I believe they offer a compelling mix of quality, growth, and global diversification.
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VanEck MSCI International Quality ETF (ASX: QUAL)
One of the hardest parts of investing, in my experience, is consistently sticking to high-quality businesses. It is easy to get distracted by hype or short-term opportunities. That is where I believe this ETF really earns its place.
The VanEck MSCI International Quality ETF systematically filters for stocks with strong returns on equity, stable earnings, and sensible balance sheets. In other words, it focuses on businesses that are already doing a lot of things right.
But what appeals to me most is not just the end result. It is the process.
I like knowing that there is a rules-based approach constantly refining the portfolio, keeping it tilted toward financially strong companies without me having to make those calls myself.
Of course, you end up with familiar global leaders in the mix. But I think the real value lies in the consistency of the quality filter over time. Personally, I see this as a core building block. It is the part of a portfolio I would feel most comfortable holding through volatility without second guessing.
Vanguard FTSE Asia Ex-Japan Shares Index ETF (ASX: VAE)
I think it is very easy as an Australian investor to end up overly exposed to a handful of familiar markets. Australia. The United States. Maybe a bit of Europe.
But when I look ahead 10 or 20 years, I find it hard to believe that growth will be concentrated only in those regions.
That is why I think the Vanguard FTSE Asia Ex-Japan Shares Index ETF is well worth considering.
This ETF gives exposure to a wide range of Asian economies, from China and India through to Taiwan and South Korea. And what I find compelling is the diversity within that region.
You have advanced semiconductor manufacturing, rapidly expanding middle classes, digital platforms with enormous user bases, and economies still earlier in their growth journey compared to the West.
I do not see this as a short-term trade. In fact, I think it requires patience. There will likely be periods of volatility, particularly given geopolitical and economic uncertainties.
But if I am investing with a long-term mindset, I believe having meaningful exposure to Asia is not just an option. It is something I want to build over time.
Foolish takeaway
As I head into April, I am not trying to make bold, all-or-nothing bets.
Instead, I am thinking about how to steadily build a portfolio of ASX ETFs that I would be comfortable holding for years.
For me, these two ETFs tick all the boxes and could move from my watch list to my portfolio next month.
