I think exchange traded funds (ETFs) can be great additions to a balanced portfolio.
This is because they give investors easy access to a large and diverse number of different shares through just a single investment.
There are a lot of ETFs for investors to choose from, so which should you buy? Three of the best in my opinion are listed below. Here’s why I like them:
BetaShares NASDAQ 100 ETF (ASX: NDQ)
The BetaShares NASDAQ 100 ETF is my favourite ETF. It gives investors exposure to 100 of the largest non-financial companies on the Nasdaq index. This means investors will be getting a slice of some of the biggest and most iconic companies in the world. Among its holdings are the likes of Amazon, Apple, Facebook, Microsoft, Netflix, and Tesla. Given the quality of these companies and their very positive outlooks, I expect the Nasdaq 100 ETF to generate strong returns for investors over the next decade.
VanEck Vectors Australian Banks ETF (ASX: MVB)
If you’re looking for exposure to the banking sector, then you might want to look at the VanEck Vectors Australian Banks ETF. This ETF gives investors a piece of all the big four banks, the regionals, and also investment bank Macquarie Group Ltd (ASX: MQG) through a single investment. I think this is great for investors that are unsure which of the banks they want to invest in. Another positive with the ETF is its generous dividend. I expect when bank dividends return to normal, it could yield somewhere in the region of 5% or more.
VanEck Vectors China New Economy ETF (ASX: CNEW)
A final ETF I think investors should look at is the VanEck Vectors China New Economy ETF. This fund gives exposure to the growing Chinese economy through a portfolio of 120 exciting companies which are in sectors making up the New Economy. This includes the technology, health care, consumer staples, and consumer discretionary sectors. I like the fact that the fund invests in shares it believes represent growth at a reasonable price. This should make the fund appropriate for investors looking for lower risk growth options.