Investing for the future is one of the most important things we can do for our children. When thinking about how to help my child financially in the long run, I turn to exchange-traded funds (ETFs) on the Australian Stock Exchange (ASX). These investment vehicles offer the perfect combination of diversification, long-term growth potential, and simplicity. They allow investors to own a basket of companies with just one investment. This is particularly useful for long-term investments, such as building wealth for a child’s future.

Why Invest for the Long Term?

Before diving into specific ETFs, it's worth understanding why long-term investing is a powerful wealth-building strategy. By investing for the long haul, we give our money more time to grow, largely thanks to compounding. Compounding is when the returns on your investments generate their own returns. Over time, this can lead to exponential growth in the value of your portfolio.

For example, if I were to invest a relatively small amount now for my child, it could grow into a significant sum by the time they turn 20 or 25. The key is choosing investments that have strong growth potential, and that’s where ETFs come in.

Here are the top ETFs I would buy for my child, with a focus on long-term growth and stability.

Global X FANG+ ETF (ASX: FANG)

One of the first ETFs I’d consider for my child is the Global X FANG+ ETF (ASX: FANG). This fund invests in some of the biggest and most influential tech companies in the world. It holds just 10 positions, but each company in its portfolio is a giant in its field. Some of the well-known names include Apple, Microsoft, Amazon, and Alphabet (Google’s parent company).

These companies are leaders in areas like e-commerce, cloud computing, social media, and cybersecurity—industries that are likely to keep growing for many years to come. If there’s a new technological breakthrough, chances are one of these companies will be involved.

What’s particularly appealing about this ETF is its strong performance in recent years. While past performance is not always an indicator of future success, the Global X FANG+ ETF has delivered an average return of 21.4% over the past three years. That kind of growth potential makes it a solid option for a long-term investment.

Betashares Global Quality Leaders ETF (ASX: QLTY)

Another ETF that I would buy for my child is the Betashares Global Quality Leaders ETF (ASX: QLTY). This fund focuses on investing in high-quality businesses from around the world. What sets it apart is its rigors selection process. To be included in the portfolio, companies must meet certain criteria: a high return on equity (ROE), a low debt-to-capital ratio, strong cash flow, and stable earnings.

This ETF includes 150 positions, offering more diversification than the FANG ETF. The companies in this fund are not just tech giants but come from a variety of industries. This broader approach spreads the risk while still focusing on high-quality businesses with a proven track record.

Since its inception in November 2018, the QLTY ETF has returned an average of 14.6% per year. While this is lower than the FANG ETF’s recent returns, it’s still very impressive given the ETF’s focus on stability and diversification. For long-term investors, the combination of quality and diversification makes this a compelling choice.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Next on my list is the BetaShares NASDAQ 100 ETF (ASX: NDQ). This ETF gives investors exposure to 100 of the largest non-financial companies listed on the NASDAQ stock exchange in the United States. The fund is heavily focused on tech companies, which is one reason it has performed so well over time.

Like the FANG ETF, this one includes many of the big names in tech, such as Apple, Amazon, and Microsoft. However, because it holds 100 stocks rather than just 10, it offers a bit more diversification. If you believe that the tech industry will continue to be a major driver of economic growth in the future, this is an excellent option to consider.

iShares S&P 500 ETF (ASX: IVV)

If you want to spread your investment across a wider range of industries, the iShares S&P 500 ETF (ASX: IVV) is another great choice. This ETF tracks 500 of the largest companies listed on the US stock exchange. While it still includes tech giants like Apple and Microsoft, it also gives exposure to companies in other industries, such as Exxon Mobil (energy), Walmart (retail), and Johnson & Johnson (healthcare).

The broader diversification of the S&P 500 ETF makes it a less risky investment compared to more tech-heavy funds. It’s a great way to gain exposure to a wide array of sectors while still benefiting from the long-term growth of US companies.

A Solid Foundation for the Future

When investing for my child’s future, my goal is to choose investments that are likely to grow over time while spreading the risk across multiple companies and industries. The ETFs mentioned above provide a balance of high-quality companies and diversification. Whether it’s the tech-heavy Global X FANG+ ETF, the stability of the Betashares Global Quality Leaders ETF, or the broad exposure of the iShares S&P 500 ETF, these funds are designed to build wealth over the long term.

By investing in ETFs, I can help set my child up for financial success without the need for active stock-picking or constantly monitoring the market. In 15 or 20 years, these investments could potentially provide a solid financial foundation for their future.