It’s a good thing if more people are investing, no matter how they do it. There has been a big rise in passive investing over the past decade, particularly with exchange-traded funds (ETFs).
An ETF is a simple way to become invested into many shares with a single purchase. Investing across many shares gives you diversification and theoretically reduces risk.
There is a huge amount of different ETF options that you could choose to invest in. Here are some examples:
iShares S&P 500 ETF (ASX: IVV)
This is one of the lowest-costing ETFs on the ASX with a management fee of only 0.04% per annum. It gives the investor exposure to 500 of the biggest stocks in the US and has performed very well over the past year, decade and longer-term.
Some of its top holdings include Apple, Microsoft, Amazon, Facebook, JPMorgan, Berkshire Hathaway and Alphabet (Google). It’s easy to imagine that this group of companies will continue to be some of the top performing shares in the world.
Betashares Global Cybersecurity ETF (ASX: HACK)
This ETF looks to give exposure to some of the biggest cybersecurity companies in the world. There has been an increased amount of hacks and DDOS attacks in recent times. Businesses and governments need to make sure they keep hackers far away from the important data, so they’ll pay for the best security.
Some of its top holdings include Palo Alto Networks, Symantec Corp, Akamai Technologies, VMware and Cisco Systems.
BetaShares Global Agriculture ETF (ASX: FOOD)
This ETF contains some of the world’s largest food-producing companies. Experts believe that there’s going to be a food shortage in a decade or so from now, so these companies could receive a lot more money for their products during this time.
Its top holdings are businesses like Archer Daniels Midland, Kubota, Deere & Co, Tyson Foods, WH Group and Associated British Foods.
I’d be happy to buy and hold any of the above ETFs for the next decade. The S&P 500 is probably trading a bit too expensively for me at the moment, due to how low interest rates are. However, the cybersecurity and food ETFs could be decent long-term value today.
But, if you want to beat the market then you’ll probably want to stick to top quality individual shares like these ones.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of BETA CYBER ETF UNITS. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.