Exchange-traded funds (ETFs) are a really good way to get exposure to a broad group of businesses that are generating growth.
Not every ETF would be classified as 'growth' – for example, some of them are focused on companies that are dividend payers instead.
These two ETFs could be able to generate growth in the coming years:
Betashares Asia Technology Tigers ETF (ASX: ASIA)
This investment is about investing in many of the largest technology businesses in Asia outside of Japan.
It's actually invested in 50 names. Betashares Asia Technology Tigers ETF gives exposure to businesses such as Samsung Electronics, Taiwan Semiconductor Manufacturing, Meituan, Tencent, Alibaba, JD.com, Pinduoduo, Infosys, SK Hynix and Baidu.
The returns of this ETF have been very strong since inception in September 2018, with an average net return per annum of 36.5%. Over the last year its net return has been 69.3%. Past performance is not an indicator of future performance. But it shows the ability of the underlying businesses to do very well at certain times.
These businesses that it's invested in are key players in tech sectors like e-commerce, telecommunications, IT, software, data processing and computer communications.
BetaShares explains why this is ETF has such good growth potential:
Due to its younger, tech-savvy population, Asia is surpassing the West in terms of technological adoption and the Asian technology sector is anticipated to remain a growth sector.
It has an annual management fee of 0.67% per annum, which is cheaper than many funds that are focused on Asia.
One important thing to know about this ETF is that it gives a high level of exposure to Chinese businesses. China makes up 54% of the country allocation, with another 22% from Taiwan, 18.3% from South Korea and 4.8% from India.
Betashares Global Cybersecurity ETF (ASX: HACK)
This ETF is about giving investors exposure to the global cybersecurity sector. Investors get to invest in both global giants as well as the emerging players across the world.
Having said that, almost 90% of the portfolio is invested in US businesses. Then there's 3.8% from the UK, 3.1% from Israel, 1.9% from France, 1.8% from Japan and 0.5% in South Korea.
According to numbers produced by Statista, the world spent US$137.6 billion on cybersecurity in 2017. There's an expenditure projection of US$184.2 billion in 2020, rising to almost US$250 billion by 2023.
BetaShares believes that this ETF would be a good one to consider because Aussie investors have few local options for exposure to this fast-growing sector and the overall tech sector accounts for less than 2% of the ASX share market capitalisation.
The returns have been consistently strong since inception in August 2016 – Betashares Global Cybersecurity ETF has generated net returns of 19.2% per annum, a 20.26% net return per annum over the last three years and the net return has been 26.25% over the last year.
You can get exposure to this global theme for a management fee cost of just 0.67% per annum.
