There has been a big rise in the popularity of exchange-traded funds (ETFs) in recent years. There’s nothing fundamentally wrong with passive investing if you take an ultra-long-term approach and don’t sell on market weakness.
If you just own a low-cost (compared to fund managers), quality ETF for the long-term then you can outperform a majority of investors because of the small fees and quality holdings.
Here are three of my favourite ETFs:
BetaShares Global Agriculture ETF (ASX: FOOD)
This is an ETF that looks to give investors exposure to some of the best food-related businesses in the world. I think this could be a good opportunity because the global population is expected to continue growing and this will make food more valuable as it may be difficult for food exporting countries to continue growing production to match the demand.
Some of its top holdings include Deere & Co, Archer Daniels Midland, Kubota, Tyson Foods, WH Group and Associated British Foods.
Vanguard MSCI Index International Shares ETF (ASX: VGS)
This is one of the broadest ETFs on the ASX. Not only does it have over 1,500 holdings but it has investments spread across many countries like Japan, the UK, France, Germany, Canada, Switzerland, Hong Kong, the Netherlands, Spain and so on.
The diversification offered by Vanguard is really good and over the long-term (think decades) this ETF should produce quite pleasing results. It could be one of the best ways to invest in the global share market. Its largest holdings are Apple, Microsoft, Alphabet (Google) and Facebook.
Betashares Global Cybersecurity ETF (ASX: HACK)
This is an ETF that gives exposure to some of largest cybersecurity firms in the world. There is a growing trend of cyber attacks because more of a company’s value and intellectual property is held on computers these days. I’m talking about things like software, databases, product design and so on. These are great targets for a hacker.
Its top holdings include Palo Alto Networks, Akamai Technologies, VMware, Cisco Systems and Symantec.
I’d be very happy to own all three ETFs in my portfolio. I don’t own any ETFs yet but there’s a good chance I will have the FOOD ETF and the Vanguard in my portfolio at some point down the road, I’m just waiting for the overall market’s valuation to become a bit more attractive.
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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. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. 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.