The BetaShares Global Cybersecurity ETF (ASX: HACK) is one of the funds you can use to achieve future-proof ASX diversification in your portfolio.
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Diversification is a problem that many Aussie investors struggle with when building their ASX share portfolios. Many investors don’t even bother to turn their eye to companies beyond our shores. For older investors especially, this is fair enough. It has only been in the past decade or so that investing in non-ASX shares has become less difficult. Not to mention less prohibitively expensive.
But these days, it has never been easier. You don’t even have to navigate foreign sharemarkets, there is a plethora of exchange-traded funds (ETFs) on the ASX that take care of the hard work for us.
Here are two such ETFs today that offer diversification for an ASX share portfolio.
2 ASX ETFs for future-proof diversification
Vanguard MSCI Index International Shares ETF (ASX: VGS)
This ETF from Vanguard brings home the bacon when it comes to diversification. It holds more than 1,500 companies dispersed amongst the major advanced economies of the world. That’s diversification for you. This includes the United States (of course), as well as Canada, Britain, Europe, Japan, Singapore and Hong Kong. US shares do make up the lion’s share of this fund’s holdings with more than 60%. But since the US is home to most of, if not all of, the world’s largest companies, this is understandable.
In VGS, you’ll find all of the big US tech companies like Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), and Amazon.com Inc (NASDAQ: AMZN), as well as other giants like Nestle SA, LVMH and Toyota.
VGS has returned an average of 12.4% per annum over the past 5 years, and charges a management fee of 0.18% per annum.
BetaShares Global Cybersecurity ETF (ASX: HACK)
Another ETF today is this cybersecurity fund from BetaShares. The brilliantly tickered HACK holds 40 companies that all offer goods and services related to electronic security. An area I’m sure we can all agree is of growing importance in this day and age.
This ETF’s holdings are heavily weighted towards the US at more than 88% of its holdings being American companies, reflecting the centrality of the US in this industry. But it also has exposure to Britain, Israel, Rance, Japan and South Korea. Some of this ETF’s top holdings include CrowdStrike Holdings Inc (NASDAQ: CRWD), Zscaler Inc (NASDAQ: ZS), Cisco Systems Inc (NASDAQ: CSCO) and Splunk Inc (NASDAQ: SPLK).
HACK has returned an average of 20.26% per annum and charges a management fee of 0.67% per annum.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Apple, CrowdStrike Holdings, Inc., and Microsoft and recommends the following options: short March 2023 $130 calls on Apple, long January 2022 $1920 calls on Amazon, short January 2022 $1940 calls on Amazon, and long March 2023 $120 calls on Apple. The Motley Fool Australia owns shares of BETA CYBER ETF UNITS. The Motley Fool Australia has recommended Amazon, Apple, and Vanguard MSCI Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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