These two ETFs could be good ways to get diversification and growth.
The post These 2 ETFs could be good long-term growth options appeared first on The Motley Fool Australia. –
Exchange-traded funds (ETFs) can be a really good way to get diversification and get exposure to businesses that are growing globally.
Some ETFs are focused on an individual country, like Vanguard Australian Shares Index ETF (ASX: VAS), whilst others are about specific industries or global share markets.
It might be a good idea to find ETFs that give exposure to international growth because of the domestic focus of many Aussie investors.
Here are two to consider:
Vanguard MSCI Index International Shares ETF (ASX: VGS)
This ETF is about getting exposure to businesses that are listed across the world in ‘developed’ countries.
There are numerous countries represented in the portfolio including the US, Japan, the UK, France, Canada, Switzerland, Germany, the Netherlands, Sweden, Hong Kong, Denmark, Spain, Italy, Singapore, Finland, Belgium, Israel, Norway, Ireland and so on.
It has a total of just over 1,500 positions spread across all of those countries. So it’s very diversified.
Vanguard MSCI Index International Shares ETF’s investments are also spread across numerous sectors. Plenty of the sectors that typically demonstrate growth characteristics are the ones with the biggest exposures (of more than 5%) in the portfolio: IT (23.2%), financials (12.9%), healthcare (12.8%), consumer discretionary (12%), industrials (10.5%), communication services (9.4%) and consumer staples (6.9%).
The usual US-listed global tech names are in the portfolio, like Apple, Microsoft, Amazon, Facebook and Alphabet. But there are also large non-US holdings such as Nestle, ASML, Roche, LVMH, Novartis, Toyota, AstraZeneca, Shopify and Novo Nordisk.
All of this diversification comes at a cost of just 0.18% per annum. The net returns of the Vanguard MSCI Index International Shares ETF has been an average of 15.7% per annum over the last five years.
Betashares Global Cybersecurity ETF (ASX: HACK)
This ETF is a much more focused investment than the Vanguard one, it’s all about the global cybersecurity sector, if you hadn’t already guessed.
BetaShares says that with cybercrime on the rise, the demand for cybersecurity services is expected to grow strongly for the foreseeable future. Worldwide spending on cybersecurity is predicted to increase to almost US$250 billion by 2023. It is invested in businesses that are leading the fight against cybercrime around the world.
There are a total of 36 names in the portfolio, with the following being the biggest ten positions: Palo Alto Networks, Accenture, Cisco Systems, Okta, Crowdstrike, Cloudflare, Tenable, Cyberark Software, Fireeye and F5 Networks.
Whilst the sub-sector of ‘systems software’ makes up more than half of the portfolio, there are also double digit allocations to ‘communications equipment’ and ‘internet services and infrastructure’.
Betashares Global Cybersecurity ETF comes with an annual management cost of 0.67%. Despite that, over the last three years the ETF has produced an average return per annum of 22% after fees. But, past performance is not a reliable indicator of future performance.
The post These 2 ETFs could be good long-term growth options appeared first on The Motley Fool Australia.
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The Vanguard MSCI Index International Shares ETF (ASX:VGS) has more than doubled the ASX 200’s returns in 2021
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended BETA CYBER ETF UNITS and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia owns shares of and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended 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.