There are a lot of exchange-traded funds (ETFs) to choose from on the Australian share market.
With so many options, it can be difficult to decide where to invest your money.
To narrow things down, let's look at some ASX ETFs that stand out as compelling options for long-term investors looking to build wealth.
Here's why they could be top picks for investors with $20,000 to invest into the share market this week:
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Betashares Global Cash Flow Kings ETF (ASX: CFLO)
The first ASX ETF to consider is the Betashares Global Cash Flow Kings ETF. This fund focuses on companies that generate high levels of free cash flow, which Betashares notes tend to outperform the market over the medium to long term.
Free cash flow is a key measure of financial strength and profitability, as it indicates how much cash a company has left over after covering its operating expenses and capital expenditures.
Some of the major holdings in this ETF include global giants such as Alphabet (NASDAQ: GOOG) and Visa (NYSE: V). These companies have a history of strong cash generation and dominant market positions, making them attractive long-term investments. Given its focus on high-quality businesses with robust cash flows, Betashares has recommended this ETF as a strong core exposure to global equities.
BetaShares Global Cybersecurity ETF (ASX: HACK)
Another ASX ETF that could be worth looking at is the BetaShares Global Cybersecurity ETF. This fund provides investors with exposure to the leading players in the global cybersecurity industry. With increasing digital threats and the growing importance of data security, the cybersecurity sector is expected to experience significant expansion over the coming years.
Betashares highlights that the cybersecurity market has an estimated total addressable market of between $1.5 trillion and $2.0 trillion globally, according to research by McKinsey.
However, the sector is still in its early stages, with only around 10% market penetration. This suggests there is a very long runway for growth, which could drive strong returns for investors in the HACK ETF in the future.
iShares S&P 500 ETF (ASX: IVV)
The final ASX ETF to consider for your $20,000 is the iShares S&P 500 ETF. This fund tracks the performance of the S&P 500 index, giving investors exposure to 500 of the largest and most influential companies listed on Wall Street.
By investing in this fund, you gain access to a diversified portfolio spanning multiple industries and sectors. This includes tech giants like Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT), as well as major players in the energy and healthcare sectors, such as Exxon Mobil (NYSE: XOM) and Johnson & Johnson (NYSE: JNJ). The S&P 500 has historically delivered solid long-term returns, making this ETF an attractive option for investors looking to build wealth over time.
