Exchange-traded funds (ETFs) can be an effective way to invest in a share market or in a particular sector. January 2022 could be a good month to find some ETF opportunities.
Investors can get useful diversification or a targeted allocation from the array of different options out there.
These two could be ideas to consider this month:
Betashares Global Cybersecurity ETF (ASX: HACK)
This ETF is focused, as the name suggests, on cybersecurity businesses around the world. Around 92% of the businesses are listed in the US, so it’s mostly an American-focused investment. However, those underlying businesses do typically earn profit globally.
As BetaShares says, with cybercrime on the rise, the demand for cybersecurity services is expected to “grow strongly for the foreseeable future”.
Looking at numbers provided by Statista, the global cybersecurity market is expected to grow from $137.6 billion in 2017 to $248.3 billion by 2023.
So what businesses are actually in the Betashares Global Cybersecurity ETF? At the moment, the biggest positions are: Accenture, Cisco Systems, Palo Alto Networks, Crowdstrike, Cloudflare, Juniper Networks, Booz Allen Hamilton, Leidos, VMware and Akamai Technologies.
Past performance is not a reliable indicator of future performance. However, after accounting for the annual management costs of 0.67%, the net returns over the past five years has been an average of 22.4% per annum.
BetaShares Asia Technology Tigers ETF (ASX: ASIA)
This is another ETF from BetaShares. It’s both geographic and sector focused. This investment is about the 50 biggest technology businesses in Asia, outside of Japan.
The three main places that are represented here are China (46.2%), Taiwan (24.6%) and South Korea (17.3%). India, with a 6.6% weighting, is the fourth biggest.
Many of Asia’s biggest tech names are in this portfolio. There are three positions that have a weighting of more than 10%: Taiwan Semiconductor Manufacturing (12.7%), Samsung Electronics (11.8%) and Tencent (10.2%).
Other businesses that have an allocation of at least 4% includes Alibaba (8.6%), Meituan (5.7%), Infosys (5.2%) and JD.com (4%).
The three sectors with the biggest weighting within this tech ETF are benefiting from growth tailwinds. Those three sector allocations are internet and direct marketing retail (25.9%), semiconductors (20.6%) and interactive media and services (17.1%).
BetaShares says that due to its younger, tech-savvy population, Asia is surpassing the West in terms of technological adoption and the sector is anticipated to remain a growth sector.
This potential investment has a 0.67% annual fee. Since inception in September 2018, the BetaShares Asia Technology Tigers ETF has returned an average of 16.4% per annum.