If you have room in your ASX portfolio for some Australian exchange-traded funds (ETFs), then it could be worth checking out the two in this article.
They provide investors with access to groups of high-quality ASX shares and were recently tipped as buys by analysts at Betashares. Here's what you can expect from these ETFs:
Betashares Australian Momentum ETF (ASX: MTUM)
The first Australian ETF for investors to look at is the Betashares Australian Momentum ETF. It provides investors with access to a momentum strategy over ASX shares.
This strategy focuses on buying shares that show a recent trend of outperforming the broad market. It is based on the theory that rising asset prices often continue rising, whereas falling prices tend to continue falling.
Commenting on the fund, the fund manager said:
Momentum investing is an investment strategy that involves buying companies that have outperformed and selling or avoiding those that have underperformed in the recent past. Rather than aiming to profit from underlying company fundamentals, momentum investing instead is based on the theory that rising asset prices tend to continue rising, and falling prices tend to continue falling. The initial research on momentum was published by Jegadeesh and Titman in 1993, and has been found to be persistent since that time and pervasive across a range of countries and asset classes.
Betashares notes that the index the fund tracks has outperformed the S&P/ASX 200 index by an average of 2.3% per annum since its inception in May 2011. Importantly, it also highlights that the outperformance exists on most time periods and isn't being cherry-picked.
BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)
Another Australian ETF that is being tipped as a buy by the fund manager is the BetaShares S&P/ASX Australian Technology ETF.
It is invested in the leading ASX listed companies from a range of tech-related market segments. This includes information technology, consumer electronics, online retail, and medical technology.
Betashares feels this Australian ETF could be a good option given the positive outlook for the tech sector. It said:
With the nascent adoption of AI, cloud computing, big data, automation, and the internet of things, there's a good chance that the next decade's major winners will come from the tech sector. Despite Australia's sharemarket skewing heavily towards financials and resources, investors can gain direct exposure to Aussie tech stocks via ATEC.
Among its holdings are health imaging technology company Pro Medicus Limited (ASX: PME), logistics solutions provider WiseTech Global Ltd (ASX: WTC), and cloud accounting platform provider Xero Ltd (ASX: XRO).
