Global Quality Stocks as the Market’s Safe-Growth Trade
The Betashares Global Quality Leaders ETF (ASX: QLTY) offers Australians exposure to 150 of the world’s highest-quality companies, selected using a multi-factor quality score. By focusing on profitable, financially sound businesses with stable earnings, it aims to deliver the resilience that quality stocks can offer, particularly in volatile markets.
In September 2026, with a more hawkish US Federal Reserve and periodic Volatility in global markets, the quality Factor is drawing attention as a potential safe-growth trade. This article explains how QLTY works, why it is in focus, and the catalysts and risks that could shape it from here. Note that QLTY, from Betashares, is distinct from other similarly named quality funds on the ASX, using its own index and methodology.
What is the QLTY ETF?
QLTY is a passive ETF issued by Betashares. It aims to track, before fees and expenses, the iSTOXX MUTB Global ex-Australia Quality Leaders Index — an index of 150 global companies (excluding Australia) ranked by a combined quality score based on four factors: return on equity, debt-to-capital, cash-flow generation and Earnings stability. The fund charges management costs of 0.35% per annum, is currency-unhedged, and launched in 2018. It offers, in a single trade, a portfolio of 150 high-quality companies from a range of geographies and sectors.
The multi-factor quality screen is the defining feature. Rather than weighting purely by size, QLTY selects companies that score highly on profitability, low leverage, strong cash generation and stable earnings — characteristics associated with durable, resilient businesses. The resulting portfolio has a pronounced tilt towards technology and other quality-heavy sectors, and is heavily weighted to the United States. It is worth distinguishing QLTY from VanEck’s similarly named international quality fund: they use different indices and methodologies, though both target the quality factor.
What is driving interest now?
Two forces are drawing attention to QLTY. The first is the appeal of quality in uncertain markets. With the US Federal Reserve hawkish and global equities experiencing periodic volatility, investors often gravitate towards companies with strong profitability, low Debt and stable earnings — exactly what QLTY screens for. This “flight to quality” dynamic can make quality strategies attractive when markets are choppy, offering a form of safe growth.
The second is the long-run case for the quality factor. Over extended periods, high-quality companies have tended to compound steadily and hold up relatively well in downturns. That said, QLTY’s heavy technology weighting means it is not purely defensive — its fortunes remain tied to global growth and technology sentiment, and it can lag when other parts of the market lead. The more hawkish Fed and the direction of the Australian dollar both feed into its unhedged returns.
Portfolio and holdings
QLTY’s portfolio is 150 global quality companies, dominated by the United States and tilted towards technology. Independent data has shown its largest holdings including names such as Lam Research and ASML, with technology services and electronic technology among the biggest sector exposures. The quality screen produces a portfolio of profitable, financially sound businesses, many of which are global leaders in their fields.
This composition means QLTY is more style-driven than a plain market-cap global fund. Its quality tilt can help it outperform when investors reward quality characteristics and hold up better in some downturns, but it can also lag when the broad market or lower-quality stocks lead. The heavy technology and US weighting means it shares some of the drivers of a broad global fund, while the quality screen shapes the overall composition. Investors should understand that QLTY is a factor strategy, not a neutral market exposure.
Catalysts to watch
Several factors could influence QLTY in the coming months: whether markets reward the quality factor during any volatility; the trajectory of US Federal Reserve policy and its effect on growth and quality stocks; the earnings of its largest technology holdings; the AUD/USD Exchange Rate for unhedged returns; and broader global economic growth and risk sentiment.
Risks
QLTY carries the risks of a global quality equity fund. Technology and single-stock concentration mean a repricing of growth or quality stocks could weigh on returns. Currency risk is unhedged, so a rising Australian dollar can erode returns. The quality factor can underperform the broad market for extended periods, as recent performance shows. Country and sector concentration, valuation risk, and general market and geopolitical risks all apply. Investors should also be careful not to confuse QLTY with other similarly named quality funds, which use different methodologies.
Outlook
QLTY offers Australians a multi-factor, quality-tilted global equity portfolio, which can appeal as a safe-growth option in volatile markets — though its recent performance shows quality can also lag. Its near-term fortunes rest on whether markets reward quality characteristics, on the direction of the largest global technology stocks, and on the Australian dollar. Investors may be watching global earnings, US rate decisions and the exchange rate for direction. The outlook may depend on whether the quality factor reasserts its historical resilience and on how the currency moves for unhedged Australian investors.
