Exchange-traded funds (ETFs) can be very effective ways of investing. Some ETFs are based on an index like the S&P/ASX 200 Index (ASX: XJO). But others are focused on specific sectors.
There are some leading ETFs to think about in April. Here are two top ETF contenders:
Betashares Global Cybersecurity ETF (ASX: HACK)
As the name says, this ETF is about the global cybersecurity sector.
Cybercrime continues to rise, which could drive demand for cybersecurity higher over the years.
As reported by the Australian government, here in Australia cybercrime is increasing:
The pandemic has significantly increased Australian dependence on the internet – to work remotely, to access services and information, and to communicate and continue our daily lives. This dependence has increased the attack surface and generated more opportunities for malicious cyber actors to exploit vulnerable targets in Australia.
Over the 2020–21 financial year, the ACSC received over 67,500 cybercrime reports, an increase of nearly 13% from the previous financial year… A higher proportion of cyber security incidents this financial year was categorised by the ACSC as 'substantial' in impact. This change is due in part to an increased reporting of attacks by cybercriminals on larger organisations.
There are a total of 41 businesses in this portfolio that are involved in some way to protect against cybercrime.
Examples of portfolio businesses include Crowdstrike, Cloudflare, Palo Alto Networks, Zscaler, Cisco Systems, Splunk, Akamai Technologies, Booz Allen Hamilton, Mandiant and Infosys.
It has an annual management fee of 0.67%.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
This ETF has holdings that are chosen by analysts at Morningstar.
VanEck, the ETF provider, notes that the investment strategy has a focus on quality US companies that Morningstar believes possess sustainable competitive advantages or 'wide economic moats'.
Those competitive advantages are expected to be maintained for at least the next decade or two.
But target companies must be trading at attractive prices relative to Morningstar's estimate of fair value to be added to the portfolio. So, over time, the portfolio holdings can significantly change if a company loses its competitive advantage or if it doesn't look like good value any more.
The latest portfolio update dated 24 March 2022 showed that these are the top 10 largest holdings: Compass Minerals, Mercado Libre, Amazon, Western Union, Emerson Electric, Intel, Medtronic, Merck & co, Zimmer Biomet and Wells Fargo.
Despite getting access to Morningstar's "rigorous equity research process", this ETF comes with an annual management cost of 0.49%.
