Invest In QUAL or QLTY ETF?

Both QUAL and QLTY ETFs are very similar and they both offer investors exposure to good quality international companies (excluding Australia). I like these ETFs because it suits my investment style and gives me exposure out of ASX. In fact, what they stated in their fund strategy is exactly what I"m looking for a good quality company.

What Is A Good Quality Company?

  • Consistent Earning growth / cash flow
  • High return on equity (ROE)
  • Low financial leverage (i.e. low or negative net debt to equity ratio)

The only few things are not stated (which I also look at) are:

  • Wide economy mode (competitive advantage) 
  • Future growth rate

Why I prefer QUAL than QLTY?

QUAL management cost is 0.4% and QLTY is 0.35%.  As you can see from the chart below, their performances are about the same. In fact, strictly speaking QUAL return is higher! :) 

So management cost difference is not an issue here but why I prefer QUAL? 

  • QUAL is older than QLTY (6 years vs 2 years)
  • QUAL net assets is higher than QLTY ($1.5B vs $100M)
There are my reasons to choose QUAL but both are really the same in my opinion. You can choose QLTY if you like (e.g. I like the Betashare website way more better than Vaneck!)

Since my portfolio is lacking of ETF exposure, I have bought QUAL last week at $33. One thing I'm not quite sure is currency risk impact on this ETF since AUD is getting stronger now. It appears to me it probably doesn't really matter in long term. Something for me to look into.


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