Every investor should be looking for investments that are simple and can provide good returns.
Exchange-traded funds (ETFs) may be the simplest way to do this. You don’t have to fill out any forms and most of them provide good diversification for a low cost.
Two ETFs that I’m interested for my portfolio are these two shares:
BetaShares NASDAQ 100 ETF (ASX: NDQ)
This ETF gives investors exposure to the leading American technology businesses that are listed in the US on the NASDAQ.
Everyone will have heard of its top holdings: Amazon, Microsoft, Apple, Alphabet, Facebook and Netflix. These are the businesses that are changing our lives the most each year and will likely continue to be the ones innovating next year and the foreseeable future. I think most of them have very compelling growth prospects.
This ETF is a good way of buying all of them, for an annual management fee cost of only 0.48%. Since inception in May 2015 the ETF has delivered an average return per annum of 15.8%.
iShares Asia 50 ETF (ASX: IAA)
This ETF gives investors exposure to 50 of the biggest Asian businesses listed outside of Japan.
You may not have heard of many of them, but they are all giants of the biggest continent. The biggest holdings in this ETF are: Tencent, Samsung, Taiwan Semiconductor Manufacturing, AIA, China Construction Bank and China Mobile.
Asia as a whole is growing at a good rate, which should boost the listed businesses over the long-term. The growing middle class should translate into demand growing for middle class services like insurance businesses and banks. I also wrote here about some reasons why the Chinese share market may soon get a big boost.
This ETF has an annual management fee cost of 0.5%. Over the past five years it has delivered an average return per annum of 10.55%, despite the recent decline in value of Asian shares.
Both of these ETFs could make attractive long-term investments, so it’s hard to pick a favourite of the two. At this stage I’d go for the NASDAQ one because its top businesses have proven to be excellent value builders to shareholders over the long-term.
The Asian ETF is trading very cheaply when you look at its p/e valuation, but there are more risks to consider than just the price, such as government risks.
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BETANASDAQ 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.