Exchange traded funds (ETFs) have a reputation as a slow-and-steady kind of investment, even something for those who don’t like stock picking, but want to invest anyway.
Sure, if you go along with a market-wide ETF like the Vanguard Australian Shares Index ETF (ASX: VAS), you can expect to make close to the market average through your 300 underlying companies.
But there are ETFs out there that cater to high-growth areas, and don’t just follow the market. Although some of these ETFs charge higher fees, they can offset this by bringing in higher returns.
Here are 2 high-growth ETFs that I think are worthy of a look
BetaShares Nasdaq 100 ETF (ASX: NDQ)
This ETF tracks the top 100 companies on the Nasdaq – the US exchange where all of the ‘cool’ companies like to list. For example, your top 10 holdings through NDQ would be Microsoft, Apple, Amazon, Facebook, Alphabet (Google), Intel, Comcast, Cisco, Pepsi and Adobe. All sound like pretty high-growth companies to me.
You’d also get other tech players like Tesla, Uber and Netflix, so I think this could be a great high-growth investment for your portfolio. I think most of these companies will be the ones shaping the world for at least the next decade, so why not get yourself a slice of them!
NDQ has returned 22.26% p.a. over the past three years.
BetaShares Global Cybersecurity ETF (ASX: HACK)
HACK is a very specialised ETF that tracks companies that are big in the cybersecurity space (hence the almost-too-relevant ticker code). I think this will continue to be one of the biggest growth areas in tech. Company and governmental use of the internet is only going to grow, and data protection will be ever-more important as this occurs.
HACK only holds 49 stocks, including Palo Alto, Cisco and Broadcom. But with returns of 16.59% over the past three years, it seems to be a winning formula.
I think both of these ETFs have a compelling growth narrative and would be a worthy addition to any growth-focused portfolio. I like the idea of investing where the world is going, and both of these ETFs offer investors just that.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Sebastian Bowen owns shares of Facebook and Tesla. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Facebook and Tesla. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia owns shares of BETA CYBER ETF UNITS. The Motley Fool Australia has recommended Facebook. 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.