Betashares strategist, Tom Wickenden, says the Iran war is directly impacting ASX ETF investment activity today.
In a new report, Wickenden says the longer-term impact of the Iran war will centre around global energy self-sufficiency.
Investors have responded by ploughing funds into 5 ASX ETF thematics.
Let's take a look.
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Energy producers
An example is the Global Energy Companies Currency Hedged ETF (ASX: FUEL), which is 30% higher in the year to date (YTD).
Another example is the commodity-price-based energy ETF, Betashares Crude Oil Index Currency Hedged Complex ETF (ASX: OOO).
OOO ETF was the best performer among the more than 400 ASX ETFs on the market last month, returning 55% due to the global oil shock.
Uranium
Betashares offers investors the Global Uranium ETF (ASX: URNM), which is up 15% in the YTD.
The uranium arena is volatile, however, James Gerrish from Market Partners says small modular reactors are the way of the future.
In a recent Money Matters newsletter, Gerrish said:
Nuclear power accounts for ~10% of global electricity generation today with demand set to rise substantially over the coming years as AI usage ratchets up.
With the uranium market transitioning into a structural tightening phase, and a high probability of deficit emerging later this decade, the URNM ETF should push higher in the coming years.
Defence
Vaneck Global Defence ETF (ASX: DFND) is one of the most popular defence ETFs on the market today.
DFND ETF has risen 34% over the past 12 months amid NATO committing to a substantial lift in defence spending at America's urging.
Critical minerals
Australia's last mining boom, from the early 2000s through to 2013, was mainly driven by iron ore and coal exports to China.
Experts say the next one already underway is being driven by critical minerals tied to electrification, power generation, and energy security.
They include copper, uranium, lithium, rare earths, and silver.
Betashares Energy Transition Metals ETF (ASX: XMET) was among the 6 best-performing international shares-based ASX ETFs last year.
XMET ETF delivered a 100% return while Global X Green Metal Miners ETF (ASX: GMTL) returned a similarly impressive 81%.
Agricultural commodities
The oil shock has sparked concern over the global supply of fertiliser, which is crucial for crop production.
Natural gas is a key feedstock for nitrogen-based fertilisers like ammonia and urea.
This means higher oil and gas prices can significantly increase fertiliser costs.
Betashares offers the Global Agriculture Companies Currency Hedged ETF (ASX: FOOD), which has risen 41% over the past year.
