3 ASX ETFs that could turn $500 a month into serious wealth

Investing $500 a month into the share market may not feel like a life-changing amount.

But over long periods, regular investing can become surprisingly powerful.

For example, if an investor put $500 a month into the share market and achieved an average annual return of 10%, they could build a portfolio worth more than $1 million after 30 years.

That return is not guaranteed, but it is largely in line with historical averages, so could be possible.

With that in mind, here are three ASX exchange traded funds (ETFs) that could help investors build serious wealth over the long term.

Betashares Australian Quality ETF (ASX: AQLT)

The first ASX ETF for investors to look at is the Betashares Australian Quality ETF.

This fund gives investors exposure to a portfolio of high-quality Australian companies, selected using measures such as profitability, balance sheet strength, and earnings stability.

That makes it a different way to invest in the local market. Rather than simply leaning into the largest companies on the ASX, the fund applies a quality screen to find businesses with stronger financial characteristics.

Holdings include BHP Group Ltd (ASX: BHP), Telstra Group Ltd (ASX: TLS), and Wesfarmers Ltd (ASX: WES).

This mix gives investors exposure to resources, telecommunications, retail, financials, and other parts of the Australian economy, but with a focus on companies that meet the fund’s quality criteria.

For someone investing $500 a month, that discipline could be useful. It provides local market exposure while avoiding the need to decide which individual ASX blue chip deserves the next dollar. It was recently recommended by the team at Betashares.

Betashares Global Cash Flow Kings ETF (ASX: CFLO)

Another ASX ETF that could be worth considering for a $500 investment is the Betashares Global Cash Flow Kings ETF.

This fund is built around free cash flow. In simple terms, it looks for global companies that are good at generating surplus cash from their operations.

That is a powerful trait. Companies producing strong free cash flow can fund expansion, reduce debt, buy back shares, pay dividends, or keep investing when weaker competitors are under pressure.

Its holdings include NVIDIA (NASDAQ: NVDA), ASML Holding (NASDAQ: ASML), and Visa (NYSE: V).

What makes this fund interesting is that it is not just chasing growth for growth’s sake. It is looking for businesses with financial firepower. Over long periods, companies that consistently generate cash can have more options and more resilience.

It was also recently recommended by the team at Betashares.

VanEck MSCI International Quality ETF (ASX: QUAL)

A final ASX ETF for investors to consider buying is the VanEck MSCI International Quality ETF.

This fund gives investors exposure to global companies with quality characteristics, including strong returns on equity, stable earnings, and low financial leverage.

Its holdings include Broadcom (NASDAQ: AVGO), Microsoft (NASDAQ: MSFT), and Eli Lilly and Co (NYSE: LLY).

These are businesses operating in areas such as semiconductors, enterprise software, cloud computing, healthcare, and consumer technology. Many have strong competitive positions and the financial strength to keep investing through different market conditions.

Quality companies can be well placed to compound over time because they tend to have stronger margins, better balance sheets, and more durable earnings.

Used consistently, month after month, this type of ETF could help turn small regular investments into a much larger portfolio over the long run.

The team at VanEck has recommended this fund to clients.

The post 3 ASX ETFs that could turn $500 a month into serious wealth appeared first on The Motley Fool Australia.

More reading

• 3 ASX ETFs I’d buy to build a portfolio from scratch
• Which ASX ETFs I’d buy for retirement investing
• MOAT vs QUAL: Which quality ASX ETF would I buy today?
• How to become a millionaire on a $70,000 salary
• Could this ASX ETF be the easiest way to invest in global quality?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ASML, Broadcom, Eli Lilly, Microsoft, Nvidia, Visa, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended ASML, BHP Group, Microsoft, Nvidia, Visa, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.