The two ETFs in this article could be top ones to own.
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Exchange-traded funds (ETFs) are some of the easiest ways to get exposure to quality businesses. This article covers two excellent ETFs that could be options for 2022.
Some ETFs give exposure to a certain stock market. Others focus on a region of the world, or the entire world. Different industries or investment styles can also be represented within ETFs.
Here are two ETFs that could be good contenders for investors:
Betashares Global Cybersecurity ETF (ASX: HACK)
This ETF is about providing investors exposure to a defensive and growing sector – cybersecurity.
BetaShares says that this industry is a quickly-growing, global sector. Cybercrime on the rise, the demand for cybersecurity services is expected to grow strongly for the foreseeable future.
There are global giants and emerging players in this portfolio.
The smallest positions in the portfolio includes: Tufin Software Technologies, Ribbon Communications, Zix, Onespan, Radware and Mantech International.
Betashares Global Cybersecurity ETF’s biggest positions includes: Accenture, Palo Alto Networks, Cisco Systems, Okta, Crowdstrike, F5 Networks, Juniper Networks, Tenable, Mimecast and Verisign.
More than 90% of the portfolio is listed in the US, with only Israel (3.3%), Japan (2.4%) and France (1.6%) having a weighting of more than 1%.
Between 2017 and 2023, the global cybersecurity market is expected to grow from US$137.6 billion to US$248.3 billion, providing a tailwind for the underlying businesses.
This ETF’s annual management fee is 0.67% per annum. Including those fees, over the last five years the Betashares Global Cybersecurity ETF portfolio has delivered an average return per annum of 22.6%. However, past performance is no guarantee of future performance.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
This ETF is, according to VanEck, about giving investors exposure to a diversified portfolio of attractively priced US companies with sustainable competitive advantages according to Morningstar’s equity research team.
In other words, the analysts at Morningstar have rated the businesses in the portfolio as having wide economic moats and they are/were good value at the time that those businesses were added to the portfolio.
At 10 December 2021, it had 50 businesses in the portfolio. The businesses that had a weighting of at least 2.5% at the time were the following: Microsoft, Cheniere Energy, Wells Fargo, Alphabet, Tyler Technologies, Corteva, Aspen Technology, Blackbaud, Salesforce.com, Berkshire Hathaway and Gilead Sciences.
IT has the biggest sector allocation of 26.8%, with healthcare (18.6%), industrials (13.6%) and consumer staples (11.8%) being the other sectors with double digit weightings.
Looking at the historical performance, which is no guarantee of future performance, the past five years show that the VanEck Morningstar Wide Moat ETF produced an average return per annum of 18.4%, outperforming the S&P 500 by an average of 0.2% per annum after fees. Those fees are an average of 0.49% per year.
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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 and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia owns and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.