There are a handful of high-growth, quality exchange-traded funds (ETFs) that could be worth looking into.
ETFs that have a significant weighting to certain industries have the ability to generate stronger returns for investors.
These two in-particular could be good options to think about:
Betashares Nasdaq 100 ETF (ASX: NDQ)
This ETF is about investing in 100 of the largest non-financial businesses listed on the NASDAQ in the US. Many of these businesses are the ones at the forefront of the new economy.
What’s the benefit of this investment? BetaShares explains that with its strong focus on technology, the Betashares Nasdaq 100 ETF provides diversified exposure to a high-growth potential sector that is under-represented in the ASX share market.
The types of major businesses you get exposure to with this ETF includes: Apple, Microsoft, Amazon, Tesla, Alphabet, Facebook, Nvidia and PayPal.
All of the above names are global earners and are usually among the strongest in the world in their respective operating divisions.
However, there’s more to the 100 names than just those huge tech names. These smaller businesses are also global leaders such as Adobe, Cisco Systems, Netflix, Broadcom, Costco, Texas Instruments, Qualcomm, Intuit, Intuitive Surgical and Advanced Micro Devices.
It has an annual management fee of 0.48% and no performance fees, which is attractive for the strength of the portfolio that it provides and the net returns it has been generating. Since inception in May 2015, Betashares Nasdaq 100 ETF has made net returns of 21.6% per annum.
VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)
This ETF gives investors concentrated exposure to some of the world’s leading video gaming business. The gaming world has been generating long-term growth and this has sent the share prices of many of the constituents of this ETF to higher levels.
The video gaming sector has seen an average annual growth rate of 12% since 2015, whilst e-sports revenue has grown by an average of 28% per year since 2015.
As VenEck points out, the social ecosystem around video gaming illustrates demand for online interactive entertainment.
The average age of e-sports enthusiasts is under 30, which suggests there’s scope for a bigger audience. E-sports has created new potential revenue streams including game publisher fees, media rights, merchandise, ticket sales and advertising.
There’s a total of 25 businesses in this ETF’s portfolio. The biggest 10 positions account for over 60% of the portfolio, those names include: Nvidia, Tencent, Sea, Advanced Micro Devices, Nintendo, Activision Blizzard, Netease, Electronic Arts, BiliBili and Nexon.
The US may have a fairly large allocation at 38.6% of the portfolio, but there’s also a heavy Asian influence as well. Japan (20.6%), China (18.5%), Singapore (7.2%) and South Korea (5%) are the next countries with the biggest allocations.
The index that this ETF aims to track has been performing very well – over the last three years it has returned an average of 32.4% per annum.