It's clear that Australians are more consistently turning to ASX ETFs for diversification and growth prospects. 

This increased investment is pushing funds higher this week. 

Here are five funds hitting record highs. 

Betashares Capital – Asia Technology Tigers ETF (ASX: ASIA)

This fund pushed to a new all-time high yesterday, flirting with $21 per share during Thursday's trading session. 

Yesterday's gain now takes its 12 month return to over 83%. 

The fund aims to track the performance of an index (before fees and expenses) comprising the 50 largest technology and online retail stocks in Asia (ex-Japan).

Many of these companies are leading Asia's (ex-Japan) technological revolution.

Global X AI Infrastructure ETF (ASX: AINF)

This ASX ETF from Global X also hit an all-time high during Thursday. 

The artificial intelligence movement has accelerated as businesses and industries have accepted AI demand is real, not theoretical. 

The benefits are spreading beyond software into hardware, infrastructure and materials. 

This ASX ETF has captured these tailwinds in a thematic fund, and is now up over 65% in the last 12 months. 

It offers targeted exposure to the physical and operational backbone enabling AI's global expansion. 

While most AI investments focus on chips or platforms, AINF ETF looks underneath the surface at the energy, data, and materials infrastructure powering this transformation.

Vanguard S&P 500 US Shares Index ETF (ASX: V500)

This new fund from Vanguard has enjoyed a steady climb since its initial listing in March 2026. 

It rose again yesterday, pushing to a new all-time high. 

This fund aims to track the performance of the S&P 500 Index, giving investors exposure to 500 of the largest publicly listed companies in the United States. 

It is up more than 6% in its short history. 

Betashares Climate Change Innovation ETF (ASX: ERTH)

This ESG focussed ETF hit yearly highs yesterday. 

It comprises a portfolio of up to 100 leading global companies that derive at least 50% of their revenues from products and services that help to address climate change and other environmental problems through the reduction or avoidance of CO2 emissions. 

This covers clean energy providers, along with leading companies tackling green transport, waste management, sustainable product development, and improved energy efficiency and storage.

It is now up over 18% in the last 12 months. 

VanEck Global Clean Energy ETF (ASX: CLNE)

Another ESG focussed fund, this ASX ETF has rocketed 70% higher in the last 12 months. 

It is now also trading at a 52-week high.

It gives investors a diversified portfolio of 30 of the largest and most liquid companies involved in clean energy production and associated technology and clean energy equipment globally.

The post These ASX ETFs are smashing record highs  appeared first on The Motley Fool Australia.

"ESG" stands for environmental, social, and governance considerations. 

It is becoming increasingly important for investors who are looking not only for financial returns but also to positively impact the world through their investment choices.

In a practical sense, this might involve investing in specific companies that align with personal beliefs. 

It can also mean investors actively avoid certain companies or sectors involved in industries or practices that are not ethical. 

This could be (for example) weapons manufacturers, or companies causing significant harm to the environment. 

One of the simplest ways for investors to target ESG principles is through an ASX ETF. 

There are plenty of funds that now use screening processes to target companies that align with ethical considerations. 

Of course, alongside these decisions, is the underlying goal of building wealth. 

WIth that in mind, here are how some of the most popular ESG ASX ETFs are performing this year. 

Betashares Capital Ltd – Betashares Climate Change Innovation ETF (ASX: ERTH)

Geopolitical conflict has sent many ASX ETFs into the red this year. 

However this Betashares fund has been beating indexes like the S&P/ASX 200 Index (ASX: XJO). 

It is up approximately 5% year to date. 

This ASX ETF is made up of a portfolio of roughly 100 leading global companies that derive at least 50% of their revenues from products and services that help to address climate change and other environmental problems through the reduction or avoidance of CO2 emissions. 

This covers clean energy providers, along with leading companies tackling green transport, waste management, sustainable product development, and improved energy efficiency and storage.

Betashares Australian Sustainability Leaders ETF (ASX: FAIR)

It has been a different story in 2026 for this ASX ETF. 

This fund from Betashares is down roughly 8% year to date. 

It includes Australian companies that have passed screens to exclude companies with direct or significant exposure to fossil fuels or engaged in activities deemed inconsistent with responsible investment considerations.

The Fund's methodology also prefers companies classified as 'Sustainability Leaders' based on their involvement in business activities aligned to the United Nations Sustainable Development Goals.

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

This ethical ASX ETF has also fallen in 2026. 

At the time of writing, it is down 6% year to date. 

Unlike the previous fund mentioned above, this ASX ETF focusses on global companies rather than just Australian ones. 

It holds a diversified portfolio of large, sustainable, ethical companies from a range of global locations. 

Ishares Core MSCI Australia Esg Leaders ETF (ASX: IESG)

This fund from iShares aims to provide exposure to large, mid and small cap segments of the Australian market with better sustainability credentials relative to their sector peers.

It has proven relatively resilient in a volatile market this year, falling roughly 3% in that span. 

The post What is the best performing ESG ASX ETF in 2026? appeared first on The Motley Fool Australia.

According to the report, it has previously been framed as an innovation story built on novel solutions, venture capital funding rounds and the promise of disruption.

However, it has now moved decisively into its execution phase.

According to Vinnay Cchoda Manager – Responsible Investments at Betashares, this marks a structural shift. 

Climate technology is no longer a niche growth theme but a key constituent of the infrastructure and capital investment cycle underpinning the global economy.

What is climate technology?

Climate technology refers to the tools, systems, and processes used to reduce greenhouse gas emissions and adapt to the impacts of climate change. 

It also includes things like renewable energy (solar, wind), energy storage, electric transport, smart grids, and low-carbon industrial processes.

More broadly, it now covers the infrastructure and technologies needed to transform how energy is produced, distributed, and used.

This is along with solutions for resilience, such as water management and climate-resilient materials.

Investment and application growing

In yesterday's report from Betashares, the ASX ETF provider said the case for climate technology has strengthened in recent times. 

The physical impacts of climate change are increasingly being felt and have material economic consequences.

The Intergovernmental Panel on Climate Change (IPCC) confirms that human-induced climate change has increased the frequency and intensity of extreme heat, heavy rainfall and drought across most regions – raising risks to infrastructure, food systems and productivity.

At the same time, the transition is increasingly underpinned by energy system economics rather than environmental policy alone. 

The International Energy Agency (IEA) estimates that global energy investment exceeded US$3 trillion in 2024, with roughly two-thirds directed towards clean energy, electrification, grids and storage.

In that context, climate technology should no longer be viewed as a discretionary or thematic allocation. It represents a structural response to tightening physical constraints and a reconfiguration of the global energy and industrial system.

How to gain exposure

For investors looking for exposure to climate tech the Betashares Capital Ltd – Betashares Climate Change Innovation ETF (ASX: ERTH) is worth considering. 

It provides exposure to a portfolio of global companies positioned to benefit from climate change mitigation and adaptation. 

Importantly, this exposure includes early-stage innovators and established companies with scale, robust balance sheets and global revenue bases.

As climate technology becomes increasingly embedded in mainstream capital expenditure and infrastructure cycles, a diversified listed exposure offers a way to participate in the transition without relying on the success of any single technology or policy outcome.

The post The compelling case for investing in this climate tech ASX ETF appeared first on The Motley Fool Australia.

According to Betashares, one of the three overarching megatrends that's shaping the future is climate change. 

Thematic investing is when an investor tries to identify long-term transformational trends. Investors can benefit if those trends play out.

According to Betashares, as a megatrend, climate change encapsulates:

• The impacts and resource scarcity caused by climate change and environmental degradation
• Policy initiatives designed to support decarbonisation and the climate transition
• Consumer and investor preferences for sustainability.

One way to target this megatrend is through ASX ETFs. 

There are several that aim to capture this theme, some of which have dropped to start 2026. 

This could make it an ideal time to initiate an investment in this theme.

Here are some climate positive ASX ETFs to consider. 

Betashares Climate Change Innovation ETF (ASX: ERTH)

ERTH ETF aims to track the performance of an index that comprises a portfolio of up to 100 leading global companies. These companies derive at least 50% of their revenues from products and services that help to address climate change and other environmental problems through the reduction or avoidance of CO2 emissions. 

This included clean energy providers and other leading companies tackling:

• Green transport
• Waste management
• Sustainable product development
• Improved energy efficiency and storage.

It has performed extremely well over the last 12 months relative to some other climate positive funds.

It is up 10.48% in that span. 

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

This fund aims to track the performance of an index (before fees and expenses) that includes a portfolio of large global stocks identified as "climate leaders."

These companies have also passed screens to exclude companies with direct or significant exposure to fossil fuels or engaged in activities deemed inconsistent with responsible investment considerations.

At the time of writing it is made up of just over 200 international companies. Its largest exposure (73%) is to the United States. 

It has fallen 8% in 2026. 

SPDR S&P World Ex Australia Carbon Control Fund (ASX: WXOZ)

This ASX ETF combines roughly 1,000 companies outside Australia. 

It is designed to measure the performance of S&P Global ESG Score-screened companies within the S&P Developed ex Australia LargeMidCap Index and weighted to minimise carbon intensity in the portfolio. 

Essentially, the index is designed to support investors seeking to reduce their exposure to carbon intensity measured by weighted average carbon intensity.

It has fallen 5.4% year to date. 

iShares Core MSCI World All Cap ETF (ASX: IWLD)

IWLD ETF aims to provide investors with the performance of the MSCI World Ex Australia Custom ESG Leaders Index, before fees and expenses. 

The index is designed to measure the performance of global, developed market large and mid-capitalisation companies with better sustainability credentials relative to their sector peers.

At the time of writing it is made up of 655 holdings. The fund has fallen 5.3% for the year to date. 

The post Is now the time to buy climate focused ASX ETFs? appeared first on The Motley Fool Australia.

Many Aussie investors now target financial success alongside positively impacting the world through their investment choices.

This can look different for many investors. 

For some, this can focus on targeting companies aiming for certain environmental targets. 

It can also mean eliminating companies engaged in certain practices like weapons or tobacco manufacturing, gambling, etc. 

This is called negative screening.

These broader investment styles are also known as socially responsible, sustainable, green, or impact investing. 

Essentially, it will look a little different for each investor as they balance financial and ESG goals. 

If you are looking to add an ESG-themed fund to your portfolio, here are three of the most popular for investors in 2026. 

Betashares Australian Sustainability Leaders ETF (ASX: FAIR)

According to Betashares, this fund aims to track the performance of an index (before fees and expenses) that includes Australian companies that have passed screens to exclude companies with direct or significant exposure to fossil fuels or engaged in activities deemed inconsistent with responsible investment considerations.

The Fund's methodology also preferences companies classified as 'Sustainability Leaders' based on their involvement in business activities aligned to the United Nations Sustainable Development Goals.

The fund does not invest in any of the big four banks, or large Australian mining companies.

It has a management fee per annum (p.a.) of 0.49%. 

iShares Core MSCI World All Cap ETF (ASX: IWLD)

This ASX ETF provides investors with an opportunity to invest in non-Australian companies. 

The Fund aims to provide investors with the performance of the MSCI World Ex Australia Custom ESG Leaders Index. 

The index is designed to measure the performance of global, developed-market large and mid-capitalisation companies with better sustainability credentials relative to their sector peers.

More info about the index can be found here.

However, for example, it negatively screens companies engaged in industries like: 

• Adult entertainment
• Alcohol
• Weapons
• Gambling
• Oil & gas drilling
• Tobacco and more

At the time of writing, it is made up of more than 600 holdings, and comes with a management fee of 0.09% p.a. 

Betashares Climate Change Innovation ETF (ASX: ERTH)

This ASX ETF is worth listing because, rather than using negative screening and eliminating negative companies, it actually targets companies actively engaged in climate solutions. 

That might sound similar on the surface, but they're actually very different strategies. 

Negative screening only removes "bad" companies – it doesn't actively pick "good" ones.

Suppose an ESG ETF excludes fossil fuels, tobacco, and weapons.

What's left could still be a bunch of companies that are neutral or even minimally impactful – like banks, supermarkets, or software firms that aren't actively solving environmental or social problems.

You might end up with a portfolio of companies that simply aren't doing harm, but also aren't contributing anything positive, like renewable energy, clean tech, or social-impact ventures.

However, the ERTH ETF provides a portfolio of up to 100 leading global companies that derive at least 50% of their revenues from products and services that help to address climate change and other environmental problems through the reduction or avoidance of CO2 emissions. 

This covers clean energy providers, along with leading companies tackling green transport, waste management, sustainable product development, and improved energy efficiency and storage.

It comes with a management fee p.a. of 0.65%. 

The post 3 of the most popular ethical/ESG ASX ETFs in 2026 appeared first on The Motley Fool Australia.

There are now plenty of options on the ASX to choose from that utilise some form of screening to align with specific investor goals. 

These can be related to actively choosing companies engaged in a specific cause, or by something called negative screening.

This is when ASX ETF providers build a fund by excluding companies that don't align with specific values or are engaged in harmful activities. 

These could be companies that operate in sectors like tobacco, weapons manufacturing, gambling, etc. 

This is often called ethical investing, impact investing, or ESG investing. 

It is helpful for investors to be able to actively avoid companies that don't align with their values. 

However, one might also argue that excluding companies isn't the same as 'putting your money where your mouth is,' and actively investing in companies making positive change.

At the end of the day, alongside these causes, investors ultimately still want to build wealth. 

There is a fund that has been able to combine actively investing in climate-positive companies, while also bringing strong returns in 2025. 

Betashares Capital Ltd – Betashares Climate Change Innovation ETF (ASX: ERTH)

According to Betashares, this fund aims to track the performance of an index (before fees and expenses) that comprises a portfolio of up to 100 leading global companies that derive at least 50% of their revenues from products and services that help to address climate change and other environmental problems through the reduction or avoidance of CO2 emissions. 

This covers clean energy providers, along with leading companies tackling green transport, waste management, sustainable product development, and improved energy efficiency and storage.

By supporting companies that are leading the fight to create a more sustainable planet, investors in ERTH can be confident that their investment dollars are having a positive impact.

This is one of the few ASX ETFs I could find that is actively investing in climate-positive companies rather than just using negative screening. 

It does also use negative screening, to exclude companies with direct involvement in the fossil fuels industry (coal, oil, and natural gas). 

Alongside its innovative structure, the fund has also brought strong returns in 2025. 

Since January, it is up 12.68%. 

For comparison, the S&P/ASX 200 Index (ASX: XJO), Australia's benchmark index, is up approximately 5.29% year to date.

The post Which ethical ASX ETF is on track to deliver the best returns in 2025? appeared first on The Motley Fool Australia.

How about the new Betashares Global Defence ETF (ASX: ARMR), which only began trading in October last year?

If you're invested in any Betashares exchange-traded funds (ETFs), today you'll be rewarded with your next lot of dividends.

Here is how much you'll receive in your bank account by the close of business on Wednesday.

Dividends for A200, NDQ and ARMR ETFs

The A200 ETF tracks the benchmark S&P/ASX 200 Index (ASX: XJO) before fees.

It provides exposure to Australia's top listed companies, including Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), and CSL Ltd (ASX: CSL).

A200 will pay $1.07576468 per unit with 56.21% franking.

ASX NDQ tracks the NASDAQ-100 Index (NASDAQ: NDX) before fees.

This ETF provides exposure to global household names like Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Meta Platforms (NASDAQ: META), Nvidia (NASDAQ: NVDA), and Tesla (NASDAQ: TSLA).

The ASX NDQ will pay 49.021982 cents per unit.

The ARMR ETF seeks to track the VettaFi Global Defence Leaders Index before fees.

ARMR provides exposure to up to 60 companies that derive more than 50% of their revenue from defence equipment or services.

The ETF's top holdings are Rheinmetall AG (ETR: RHM), Palantir Technologies (NASDAQ: PLTR), and BAE Systems PLC (FRA: BSP).

ARMR ETF will pay a maiden dividend of 53.546615 cents per unit.

What about other Betashares ASX ETFs?

Here is a summary of the dividends that people invested in this selection of Betashares ETFs will receive today.

Betashares Australian Quality ETF (ASX: AQLT) will pay 78.670012 cents per unit with 45.7% franking.

The Betashares Asia Technology Tigers ETF (ASX: ASIA) will pay 2.7997434 cents per unit.

Betashares S&P/ASX Australian Technology ETF (ASX: ATEC) will pay 62.133156 cents per unit with 9.65% franking.

Betashares Diversified All Growth ETF (ASX: DHHF) will pay 27.862004 cents per unit with 21.31% franking.

The Betashares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ) will pay 28.781362 cents per unit.

Betashares Climate Change Innovation ETF (ASX: ERTH) will pay 4.524139 cents per unit.

The Betashares Global Sustainability Leaders ETF (ASX: ETHI) will pay 30.660703 cents per unit.

The Betashares Australian Sustainability Leaders ETF (ASX: FAIR) will pay 46.17632 cents per unit with 31.18% franking.

Here's a few more…

The Betashares Video Games and Esports ETF (ASX: GAME) will pay 14.695966 cents per unit.

The Betashares Geared Australian Equity Fund – Hedge Fund (ASX: GEAR) will pay 18.921508 cents per unit with 389.47% franking.

Betashares Geared U.S. Equity Fund – Currency Hedged (ASX: GGUS) will pay 87.057737 cents per unit.

The Betashares Global Cybersecurity ETF (ASX: HACK) will pay 43.465958 cents per unit.

The Betashares Australian Financials Sector ETF (ASX: QFN) will pay 21.176497 cents per unit with 57.69% franking.

Betashares Global Quality Leaders ETF (ASX: QLTY) will pay 67.851406 cents per unit.

The Betashares Australian Resources Sector ETF (ASX: QRE) will pay 10.181135 cents per unit with 82.43% franking.

Betashares Global Uranium ETF (ASX: URNM) will pay 19.732154 cents per unit.

The Betashares Australian Top 20 Equity Yield Maximiser Fund (ASX: YMAX) will pay 13.102915 cents per unit with 40.39% franking.

The post Own ASX A200, NDQ, or ARMR ETFs? It's dividend payday for you! appeared first on The Motley Fool Australia.

Investors who own these Betashares ETFs below will receive their dividends on 16 July.

According to the schedule, the ex-dividend date is 1 July, and the record date is 2 July.

Dividend pay day for Betashares ETF investors

Here is a summary of the dividend amounts that people invested in this selection of Betashares ETFs will receive on 16 July.

The Betashares Australia 200 ETF (ASX: A200) will pay $1.07576468 per unit with 56.21% franking.

Betashares NASDAQ 100 ETF (ASX: NDQ) will pay 49.021982 cents per unit.

Betashares Australian Quality ETF (ASX: AQLT) will pay 78.670012 cents per unit with 45.7% franking.

The Betashares Global Defence ETF (ASX: ARMR) will pay 53.546615 cents per unit.

The Betashares Asia Technology Tigers ETF (ASX: ASIA) will pay 2.7997434 cents per unit.

Betashares S&P/ASX Australian Technology ETF (ASX: ATEC) will pay 62.133156 cents per unit with 9.65% franking.

Betashares Diversified All Growth ETF (ASX: DHHF) will pay 27.862004 cents per unit with 21.31% franking.

The Betashares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ) will pay 28.781362 cents per unit.

Betashares Climate Change Innovation ETF (ASX: ERTH) will pay 4.524139 cents per unit.

The Betashares Global Sustainability Leaders ETF (ASX: ETHI) will pay 30.660703 cents per unit.

The Betashares Australian Sustainability Leaders ETF (ASX: FAIR) will pay 46.17632 cents per unit with 31.18% franking.

Nope, not done yet!

The Betashares Video Games and Esports ETF (ASX: GAME) will pay 14.695966 cents per unit.

The Betashares Geared Australian Equity Fund – Hedge Fund (ASX: GEAR) will pay 18.921508 cents per unit with 389.47% franking.

Betashares Geared U.S. Equity Fund – Currency Hedged (ASX: GGUS) will pay 87.057737 cents per unit.

The Betashares Global Cybersecurity ETF (ASX: HACK) will pay 43.465958 cents per unit.

The Betashares Australian Financials Sector ETF (ASX: QFN) will pay 21.176497 cents per unit with 57.69% franking.

Betashares Global Quality Leaders ETF (ASX: QLTY) will pay 67.851406 cents per unit.

The Betashares Australian Resources Sector ETF (ASX: QRE) will pay 10.181135 cents per unit with 82.43% franking.

Betashares Global Uranium ETF (ASX: URNM) will pay 19.732154 cents per unit.

The Betashares Australian Top 20 Equity Yield Maximiser Fund (ASX: YMAX) will pay 13.102915 cents per unit with 40.39% franking.

Want to reinvest your ASX ETF dividends?

A distribution reinvestment plan (DRP) is available for all of these Betashares ETFs.

Betashares must receive your DRP election by 5pm AEST on 3 July.

The post Dividend alert: What Betashares ASX ETFs are paying and when appeared first on The Motley Fool Australia.

Many companies are now working towards achieving net zero emissions within a certain timeframe. And there are specific businesses developing products, services, and improvements that can help businesses and households reduce their impact on the planet.

The ERTH ETF's underlying stocks have strong tailwinds because many billions (or even trillions) are expected to be spent on decarbonisation in the coming years.

What does the ERTH ETF invest in?

The Betashares Climate Change Innovation ETF tracks an index boasting a portfolio of up to 100 businesses making at least half of their revenue from products and services that address climate change and other environmental problems by reducing or completely avoiding CO2 emissions.

The ASX ETF's businesses are focused on several different areas: clean energy, electric vehicles, energy efficiency technologies, sustainable food, water efficiency, and pollution control.

The ETF also applies a range of environmental, social, and corporate governance (ESG) screens to the portfolio. It excludes companies directly involved in the fossil fuel industry, companies with fossil fuel-related revenue above a threshold, and certain other less-than-green business activities.

What does the Betashares Climate Change Innovation ETF own?

On a sector basis, Betashares has split its holdings between five areas. Looking at its portfolio, the ASX ETF has invested 23.5% in companies involved in sustainable products, 13.5% is invested in water and waste improvements, 21.2% in green transportation, 18.7% in enabling solutions, and 23% in green energy.

The portfolio is diversified geographically, with the United States accounting for 41.9% of the portfolio. In globally focused ETFs, the US typically has an allocation of at least 70%, so there's more invested in other places.

Other countries with a weighting of at least 2.6% include China (10%), South Korea (6.9%), France (6.5%), Denmark (5.8%), Switzerland (5%), Japan (4.3%), the United Kingdom (2.6%) and Ireland (2.6%).

You may recognise a few of the ERTH ETF's 10 largest positions:

• DSM Firmenich – 5%
• Ecolab – 4.9%
• Cie de Saint-Gobain – 4.9%
• BYD – 4.4%
• American Water Works – 3.9%
• Vestas Wind Systems – 3.7%
• East Japan Railway – 3.7%
• First Solar – 3.2%
• Tesla – 2.8%
• Zoom Video Communications – 2.7%

Each of the above businesses is making a difference in the world and reducing global pollution in its own way.

Is this a good time to invest in the ERTH ETF?

The Betashares Climate Change Innovation ETF unit price is down more than 40% from November 2021 (after the index had rallied strongly in previous years). This means investors can now invest in the underlying companies at a much cheaper price.

Keep in mind that the index this ASX ETF tracks has done well over the long-term, with an average return of 11.5% over the five years to March 2024, despite the big pullback over the last two and a half years.

If I were looking to invest in decarbonisation stocks, this could be a very good time to buy.

The post Want to invest in shares that help the world go green? Try this ASX ETF appeared first on The Motley Fool Australia.

It's understandable why many Aussies focus on ASX shares – there are plenty of great choices. But, the ASX only represents a very small amount of the global share market.

For my child, I'm looking for investments that can do well over an extended period of time and that I can feel good about owning for my child. Investing in a coal miner isn't the type of choice I'd want to make. But I do like the look of the below two.

Betashares Climate Change Innovation ETF (ASX: ERTH)

This ASX ETF provides exposure to a portfolio of businesses that aim to help the world become a greener, cleaner place.

Its holdings include clean energy providers, along with companies that tackle green transport, waste management, sustainable product development, and improved energy efficiency and storage.

The ETF invests in up to 100 businesses that derive at least 50% of their revenues from products and services that help to address climate change and other environmental problems through the reduction or avoidance of CO2 emissions.

At the moment, the biggest six positions in terms of portfolio allocation are Cie De Saint-Gobain, Ecolab, Vestas Wind Systems, DSM-Firmenich, American Water Works and BYD.

There's a lot of country diversification with this ETF. Normally, globally focused ETFs have around 70% to 80% invested in the United States, whereas this one currently has 40.4% invested in US businesses. Other countries with a sizeable weighting include China, South Korea, France, Denmark, Switzerland and Japan.

Past performance is not a reliable dictator of future returns, but over the past five years, the index this ASX ETF tracks has delivered an average return per annum of approximately 15%.

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

This ASX ETF isn't focused on one particular theme like decarbonisation, but instead, the idea is that it's invested in a global portfolio of businesses that pass a number of ethical screens.

It has a total of around 200 holdings which have been identified as climate leaders that are in the top one-third in carbon efficiency in their industry or are engaged in activities that can help reduce carbon emissions by other industries.

The ASX ETF has excluded a number of industries, such as gambling, tobacco, armaments and junk foods.

At the moment, the biggest allocations in the portfolio include Nvidia, Visa, Apple, Home Depot and Mastercard.

I like the diversification offered by this ASX ETF, as well as the solid returns. Past performance is not a guarantee of future returns, but since its inception in June 2017, it has returned an average return per annum of 16.76%.

The post 2 compelling ASX ETFs I'd buy for my child in 2024 appeared first on The Motley Fool Australia.

That said, certain investments may work better for some investors than others, depending on their age bracket.

I'm going to outline which type of ASX stocks I'd buy for each life stage, though there's one investment that could work for everyone.

School-leaver

Starting in the financial world can be daunting because of the array of different investment options.

A beginner investor doesn't need to go for the riskiest ASX stocks out there. It pays to note that good companies can deliver compelling compounding returns over the long term. I believe it's better to think of the ASX stock market as the ASX business market, because there are real companies behind each ticker code.

School leavers may be interested in companies that are committed to doing good in the world while still able to deliver capital growth.

BetaShares Global Sustainability Leaders ETF (ASX: ETHI) is an exchange-traded fund (ETF) that provides exposure to a global portfolio of companies that rank well on environmental, social and governance (ESG) factors.

Similarly, Betashares Climate Change Innovation ETF (ASX: ERTH) is an ETF invested in a portfolio of companies looking to help the world reduce energy and water usage, create circular economies (such as better recycling), or innovate for better transportation.

For an individual ASX stock, I like Volpara Health Technologies Ltd (ASX: VHT) an ESG B Corp-certified company that provides breast screening software and risk analysis for patients globally.

Full-time work

Once people enter full-time work earning regular income, they usually also enter a higher tax bracket. At this stage, I wouldn't suggest high-yield ASX dividend shares. As an alternative, I'd want to find investments that can deliver solid returns while also having lower dividend yields.

Betashares Nasdaq 100 ETF (ASX: NDQ) is an ASX ETF that invests in 100 of the biggest companies listed on the US NASDAQ with a demonstrated record of long-term capital growth. The fund is invested in names like Microsoft and Alphabet (Google).

Another ASX stock I particularly like is Johns Lyng Group Ltd (ASX: JLG). The company provides repair and restoration services after insurable events. It's seeing huge growth in its catastrophe division and I also like its expansion into strata services and home compliance (such as smoke alarm and electrical testing).

Mortgage, married, kids

At this age bracket, household income may be strong but expenditure is also high. I think it could make sense to invest in companies that are growing earnings over the long term, but also offer a solid (and growing) dividend that could help with household cash flow.

Wesfarmers Ltd (ASX: WES) is the company that owns Bunnings, Kmart, Officeworks, and more. It's also investing in areas like lithium and healthcare and offers investors a solid grossed-up dividend yield of 5.2%.

Another share I like is Lovisa Holdings Ltd (ASX: LOV), an affordable jewellery company that is expanding its store network globally and is regularly entering new countries. It has a trailing grossed-up dividend yield of 4.9%.

Retiree

Once someone has retired, they're in a much lower tax bracket and that means higher yield options and/or defensive shares make sense.

Charter Hall Long WALE REIT (ASX: CLW) is a real estate investment trust (REIT) that owns commercial property across Australia. It owns assets such as Bunnings Warehouse properties, service stations, industrial and logistics properties, and so on. According to the company's guidance, Charter Hall will pay a distribution yield of 7.8% in FY24 and has a weighted average lease expiry (WALE) of 11 years.

Sonic Healthcare Ltd (ASX: SHL) is an ASX healthcare share that provides pathology services in a number of countries. It's benefiting from Australia's growing and ageing population. Sonic has grown or maintained its dividend every year for decades (though there's no guarantee this will continue), and it has a grossed-up dividend yield of 5.1%.

One ASX stock for everyone

There's one name that could be good for everyone – the investment house Washington H. Soul Pattinson and Co. Ltd (ASX: SOL). Its portfolio is diversified, defensive, growing, and the company has increased its annual ordinary dividend every year since 2000. It currently offers a trailing grossed-up dividend yield of 3.7%.

The post School-leaver to retiree: ASX stocks I'd buy for each age bracket appeared first on The Motley Fool Australia.

I'm heavily invested in ASX shares, directly and indirectly. It'd be good to get some diversification. So, I like the look of investment options that can give me access to businesses and investment themes that I can't access on the ASX.

ETFs that are invested in global shares could be really interesting to Aussies. Below are two that I'm a fan of.

Betashares Climate Change Innovation ETF (ASX: ERTH)

The idea of this ASX-listed ETF is that it's invested in up to 100 global companies that make at least 50% of their revenue from products and services that help to address climate change and other environmental problems by reducing or avoiding CO2 emissions.

There is a broad range of sectors and solutions within this portfolio, including clean energy, electric vehicles, energy efficiency technologies, sustainable food, water efficiency and pollution control.

Some estimates put the cost of decarbonisation by 2050 at trillions of dollars. That's a huge price tag, but it can represent a large pool of potential revenue for the businesses that are enabling decarbonisation.

Some of the biggest positions in the portfolio at the moment include BYD, Cie De Saint-Gobain, Ecolab, American Water Works, Tesla, Vestas Wind Systems and East Japan Railway.

The ERTH ETF unit price has dropped more than 20% from 1 August 2023, as we can see on the chart below, so it could be a contrarian time to invest.

Vaneck Morningstar Wide Moat ETF (ASX: MOAT)

This is one of my favourite ASX-listed ETFs, not just because it has done really well but because of the investment style.

The concept of the MOAT ETF is that it invests in 'quality' US companies that Morningstar thinks has sustainable competitive advantages or wide economic moats.

Moat power can come in many different forms, such as brand power, patents, intellectual property, network effects and cost advantages.

However, the ETF portfolio only initiates a position in a business when it's trading at an attractive price compared to Morningstar's estimate of fair value.

Some of the biggest positions in the portfolio are currently Alphabet, Gilead Sciences, Comcast, Wells Fargo, Nike and Walt Disney.

Past performance is definitely not a guarantee of future performance, but the MOAT ETF has done very well. Over the last five years, the MOAT ETF has delivered an average return per annum of 14.1%, compared to a return of 11.9% for the S&P 500 Index (INDEXSP: .INX) in the same time period.

The ASX ETF's unit price has fallen 6% since 5 September 2023, so now could be a good time to look at this investment and buy the dip.

The post 2 ASX ETFs I'd love to buy for my portfolio appeared first on The Motley Fool Australia.

For readers who don't know what ETFs are, it's a good idea to read our explainer on them.

In simple terms, it's a fund that we can buy through a stock exchange (and our online broker) rather than having to go directly to the fund provider.

They can be very useful. Imagine you want to buy a variety of fruit – you can choose them yourself or you can buy a large basket of fruit that is already prepared. There are a number of fruit basket (ETF) providers, and the good providers charge an extremely small fee for putting the basket together.

There are some ETFs that are just focused on a particular sector, while others provide exposure to different geographic markets, such as Australia, the US or even the entire world.

Why ASX ETFs appeal to me

There are lots of great businesses that are listed on the ASX, but the ASX only represents 2% of the global market. I like that we can gain diversification through ETFs to countries and companies in a way that isn't available on the ASX.

For example, there are ETFs focused on countries like India and the UK with Betashares India Quality ETF (ASX: IIND) and Betashares FTSE 100 ETF (ASX: F100).

The biggest ETF with the most money invested in it is the Vanguard Australian Shares Index ETF (ASX: VAS), which tracks 300 of the biggest businesses on the ASX.

There are some options that are focused on particular areas of the market where there may be strong tailwinds. It could be hard to identify a particular winner, so why not just buy a group of them?

Cybersecurity is becoming increasingly important, so the Betashares Global Cybersecurity ETF (ASX: HACK) could be an option.

There are a group of businesses aimed at making the world more sustainable by reducing emissions, being more efficient with resources, moving to electric transportation and so on, which is what Betashares Climate Change Innovation ETF (ASX: ERTH) gives exposure to.

I particularly like the options available to us to invest in ETFs that are created by looking at quality metrics, so we only end up with the strongest businesses in the ETF's portfolio. One of my favourites is the Vaneck Morningstar Wide Moat ETF (ASX: MOAT) and I'm planning to invest in the VanEck MSCI International Quality ETF (ASX: QUAL) sooner rather than later.

I expect to keep investing in ASX shares for the rest of my life, but I also want to make sure that my portfolio is invested in quality global businesses.

Another of the main reasons that I like ETFs is that they can be quite tax-effective because of how the portfolio updates itself. ETF portfolios regularly change to reflect the most current index, or whatever the rules of the ETF decide – we don't need to sell to the ETF itself for the portfolio to adjust, avoiding a capital gains tax event. A lot of ETF portfolios regularly change, which I think helps future-proof them.

The post Why I love investing in ASX ETFs appeared first on The Motley Fool Australia.

The wonderful thing about investing in ASX ETFs is the ability to just buy one and then not need to track, or worry about, what each individual company is doing.

But, I wouldn't want to just invest in any ETF for my child. I'd want to choose ones that can do well and hopefully have a positive impact on the world.

These are two I'd buy.

Betashares Climate Change Innovation ETF (ASX: ERTH)

The concept of this ETF is that it invests in a portfolio of up to 100 "leading global companies that derive at least 50% of their revenues from products and services that help to address climate change and other environmental problems through the reduction or avoidance of CO2 emissions".

It is invested in a number of areas including clean energy providers, green transportation, waste management, sustainable product development, sustainable food, water efficiency, and improved energy efficiency and storage.

BetaShares says that "demand for products and services to tackle the world's growing climate and environment-related problems is anticipated to rise strongly over the long term".

This investment has been certified by the Responsible Investment Association Australasia.

Some of the largest positions in the portfolio as of April 2023 include Tesla, BYD, Ecolab, Samsung, Trane Technologies, and Vestas Wind Systems.

Over the past five years, the index that this ASX ETF tracks has returned an average of 15.6% per annum. Past performance isn't a guarantee of future results, but it shows the progress the underlying businesses are making.

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

I think this could be one of the most effective, feel-good ETFs to invest in for global diversification.

It invests in a portfolio of large global shares that have been identified as 'climate leaders' while excluding businesses involved in a variety of activities including fossil fuels, manufacturing weapons, gambling, habitat destruction, predatory lending, tobacco, and so on.

The ASX ETF owns a portfolio of around 200 names including Visa, Nvidia, Apple, Home Depot, Mastercard, Toyota, ASML, and Adobe.

I like that there's more diversification across products and services offered within this ETF, and there are more holdings as well.

The portfolio has performed admirably over the longer term. In the past five years, it has delivered an average return per annum of 16.3%. Though past performance is not a reliable indicator of future returns.

Foolish takeaway

I like the global diversification offered by these two ASX ETFs, as well as the exposure to businesses trying to do the right thing. I think the two ETFs can perform well while also being positive for the world.

The post 2 ASX ETFs I'd buy for my child and gift again in 15 years appeared first on The Motley Fool Australia.

Some ETFs like the Vanguard Australian Shares Index ETF (ASX: VAS) track an index with businesses that are spread across a variety of sectors, such as the S&P/ASX 300 Index (ASX: XKO).

But, there are a growing number of ETFs that provide investors with access to a specific industry or theme.

A report by Sharesies has identified which ETFs investors have been buying. While the Vanguard Australian Shares Index ETF was the most popular, I'm going to outline the next two most popular ETFs that were bought in November 2022 on the Sharesies platform.

VanEck Global Clean Energy ETF (ASX: CLNE)

The purpose of the ETF is to give investors exposure to 30 of the largest companies involved in "clean energy production and associated technology and equipment globally", according to VanEck. These businesses are from both 'developed' and 'developing' markets.

There are four main areas that this ASX ETF is invested in – independent power producers and energy traders (33% of the portfolio), electrical equipment (29.3%), semiconductors and semiconductor equipment (24.8%), and electric utilities (12.9%).

In terms of geographic weighting, the US is the biggest allocation with 41%, but many countries have a weighting of more than 2.5%: Spain (10%), China (9.2%), Israel (7.5%), New Zealand (6.6%), Denmark (5.3%), Canada (4.6%), Japan (4.2%), Brazil (2.9%), and Austria (2.6%).

At the end of November 2022, these were the ten biggest positions in the portfolio: Solaredge Technologies, Vestas Wind Systems, Sunrun, First Solar, Enphase Energy, EDP Renovaveis, Bloom Energy, Xinyi Solar, Chubu Electric Power, and Brookfield Renewable. Those positions make up around 48% of the total portfolio.

This ASX ETF comes with an annual management fee of around 0.65%.

BetaShares Climate Change Innovation ETF (ASX: ERTH)

This investment provides a more diversified exposure to the fight against climate change. It's invested in up to 100 global companies that make at least 50% of their revenue from "products and services that help to address climate change and other environmental problems through the reduction or avoidance of CO2 emissions".

Sectors covered within the ETF include clean energy providers, along with companies tackling "green transport, waste management, sustainable product development, and improved energy efficiency and storage".

Looking at the allocations, green energy gets the biggest allocation with 23.8% of the portfolio, followed by 'enabling solutions' (21.9%), green transportation (21.3%), sustainable products (21.1%), and water and waste improvements (11.9%).

The portfolio is a bit more US-focused than the first one I outlined, with a weighting of 53.9% to the United States. Other weightings of more than 2% include China (8.6%), South Korea (6.2%), Denmark (5.1%), France (4.4%), Japan (3.5%), Spain (2.5%), Sweden (2.3%), and Germany (2.1%).

The top holdings of this ASX ETF look very different from the VanEck one. Here are the biggest 10 positions: Trane Technologies, Enphase Energy, Eaton, Vestas Wind Systems, American Water Works, Ecolab, Samsung, Cie De Saint-Gobain, East Japan Railway, and BYD.

This ETF comes with an annual management fee of 0.65%.

The post 2 ASX ETFs that investors are using to bet on the future appeared first on The Motley Fool Australia.

Inflation and higher interest rates have punished the valuations of plenty of businesses that are expected to grow their operations over the coming years.

After all of the investor panic that we saw earlier in the year, there appear to be signs that investors are now returning to the market.

Is confidence returning?

According to the Sharesies Investing Insights report for October 2022, there was "steady buying by the majority of investors, with some choosing to buy and sell the market moves."

For me, this was one of the most interesting takeaways from the report:

Twice as much buying as selling on the Sharesies platform this month. Buy orders outstripping sell orders is a consistent pattern on the platform over the last six months, regardless of market volatility.

Which ASX shares are people buying?

ASX mining shares were some of the most popular investments last month according to the report.

In terms of the total amount invested, in dollar terms, these were the top ten: Sayona Mining Ltd (ASX: SYA), New Hope Corporation Limited (ASX: NHC), Fortescue Metals Group Limited (ASX: FMG), Core Lithium Ltd (ASX: CXO), Pilbara Minerals Ltd (ASX: PLS), Qx Resources Ltd (ASX: QXR), Telstra Corporation Ltd (ASX: TLS), BHP Group Ltd (ASX: BHP), Qantas Airways Limited (ASX: QAN) and Flight Centre Travel Group Ltd (ASX: FLT).

However, the list was a little different when you look at which were the top 10 most bought ASX shares by the number of investors. Here is the list: BHP, Fortescue, Commonwealth Bank of Australia (ASX: CBA), Pilbara Minerals, Wesfarmers Ltd (ASX: WES), Core Lithium, Woolworths Group Ltd (ASX: WOW), Qantas, Coles Group Ltd (ASX: COL) and Macquarie Group Ltd (ASX: MQG).

Perhaps unsurprisingly, investors were drawn to a number of ASX's blue chips.

Strong levels of ETF investing

According to the report, exchange-traded funds (ETFs) saw four times as much buying in dollar volume traded terms as selling in October.

Sharesies suggested that this was "likely driven by investors employing a dollar-cost averaging investment strategy".

These were some of the ETFs getting investor attention last month:

Vanguard Australian Shares Index ETF (ASX: VAS)

VanEck Global Clean Energy ETF (ASX: CLNE)

BetaShares Climate Change Innovation ETF (ASX: ERTH)

iShares Core MSCI World Ex Aus ESG Leaders ETF (ASX: IWLD)

iShares Core MSCI Australia ESG Leaders ETF (ASX: IESG)

Foolish takeaway

While investors may be coming back to the market, it doesn't mean that the market has reached a bottom yet. Only time will tell whether June was the month we saw the lowest prices for many ASX shares.

The post Are ASX share investors getting their mojo back? appeared first on The Motley Fool Australia.

Shares have the ability to produce attractive compounding returns. In other words, growth on growth over multiple years. Of course, there's always the chance that in any given year there could be a market slump. The current volatility we're seeing is an example of that. The COVID-19 crash was another example of a market decline, but that also demonstrated how markets have typically recovered over time.

I view market declines as opportunities to buy businesses and assets at cheaper prices. When I go to the supermarket, I'd prefer the products priced at a discount rather than being fully priced. For me, it's a similar thing to investing. I'd rather invest heavily when share prices are down.

In my opinion, the current market decline means it could be a good time to invest if I had to start a portfolio from scratch. With that in mind, if I were given $20,000 to invest in ASX shares, this is how I'd do it:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

I would invest $4,000 into Soul Pattinson. For me, this investment house business can be an ultra-long-term investment (it's already over a century old). It has a diverse portfolio across a range of industries like telecommunications, resources, property, building products, agriculture, and so on.

I'd make it my biggest allocation because I think it can provide stability, long-term growth and growing dividends.

Wesfarmers Ltd (ASX: WES)

Next, I would put $3,000 towards Wesfarmers shares. Wesfarmers is another conglomerate, but it has a more focused portfolio. Hardware business Bunnings is the key division, which makes big profit for Wesfarmers, but the ASX share also owns other quality businesses in retail (Kmart, Officeworks, and more), healthcare (Priceline), energy and fertilisers (WesCEF), and so on. I like that it can, and does, buy and sell businesses to improve its portfolio.

Airtasker Ltd (ASX: ART)

I'd want to put $2,500 into Airtasker shares. I believe that the local services marketplace business has a very promising future. It's generating growth and making rapid gains in the large markets of the UK and US.

It's one of my preferred ASX growth shares and I think it's doing the right things to succeed in the long term. Nothing is guaranteed, but I think it could be a much bigger and more profitable business in a decade from now if it keeps growing its revenue at a double-digit rate.

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

I think that the MOAT ETF is one of the best exchange-traded funds (ETFs) on the ASX. I'd put $3,500 into this choice.

It's an actively managed portfolio focused on US businesses that have strong competitive advantages which are expected to endure for many years to come. Businesses are only added to the portfolio if they are viewed as good value. The ETF has performed well, with the MOAT ETF unit price almost doubling over five years. I also like the geographic diversification the ETF would add for Aussies as well.

Pilbara Minerals Ltd (ASX: PLS)

Pilbara Minerals is an ASX lithium mining share I'd put $2,000 towards.

While it's not as cheap as it was in June 2022, I'm bullish about the long-term of Pilbara Minerals. Not only is it benefiting from very high lithium prices – which could stay relatively high as electric vehicle and battery demand grows – but it's also working on being involved with more of the lithium value chain. I think this is very promising for the future profitability of the business.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price has dropped around 50% in 2022. I'd want to put $1,500 towards it because I like how the business is investing in various ways to give great customer service, including its virtual reality and augmented reality technology. The online model can come with better profit margins and more rapid scaling than a brick-and-mortar business could achieve.

After its fall this year, I think it's an opportunity. I like its expansion into other areas like home improvement. Scale should also help profit margins in the future. Year over year, it's growing quickly.

Betashares Climate Change Innovation ETF (ASX: ERTH)

This ETF is about investing in a portfolio of global businesses that are aiming to help the world decarbonise or become greener and sustainable in some form.

I'd want to put $1,500 into this one because I believe the growing desire of societies to reach net zero in the coming decades will translate into growing revenue and earnings for the businesses making that greener future happen.

Bailador Technology Investments Ltd (ASX: BTI)

This is an investment company that purely invests in small (but rapidly growing) technology businesses. I'd want to invest $2,000 into this one.

It's looking for private tech businesses that have plenty of growth potential, international revenue, and have good unit economics. The Bailador investment team has been effective at finding those opportunities. I'm backing them to continue to find good opportunities, while the introduction of a regular dividend is also attractive to me.

The post How I'd invest $20,000 in ASX shares today if I had to start from scratch appeared first on The Motley Fool Australia.

Some ETFs are about the entire share market, such as Vanguard US Total Market Shares Index ETF (ASX: VTS) or Vanguard Australian Shares Index ETF (ASX: VAS).

Other ETFs can give exposure to specific sectors like cybersecurity, video gaming or banking.

The below two ETFs are ones that are all about green technology:

BetaShares Climate Change Innovation ETF (ASX: ERTH)

This investment is about a portfolio of businesses that are aiming to fight climate change. BetaShares says the portfolio "comprises a portfolio of up to 100 leading global companies that derive at least 50% of their revenues from products and services that help to address climate change and other environmental problems through the reduction or avoidance of CO2 emissions."

The types of sectors that it's invested in include clean energy, electric vehicles, energy efficiency technologies, energy storage, sustainable food, water efficiency and pollution control.

Some of the names in the portfolio include ones like Eaton, American Water Works, Cie De Saint-Gobain, Trane Technologies, Ecolab, Vestas Wind Systems, Infineon Technologies, Tesla, Samsung and Zoom Video Communications.

It's a pretty diverse portfolio, geographically speaking. The US is less than half of the country allocation, which is less than most globally-focused ETFs. China, France, Germany, Denmark, the UK, South Korea and Japan all get weightings of more than 3%.

The ERTH ETF has an annual management fee of 0.65%.

ETFS Battery Tech & Lithium ETF (ASX: ACDC)

As the name may suggest, this ETF is about businesses involved in battery technology and lithium mining.

ETFSecurities says that "demand for energy storage is being driven by the movement towards emissions reduction and renewable energy."

It's a global portfolio, with around 30 names. Some of the names in there include BYD, Allkem Ltd (ASX: AKE), TDK, Mineral Resources Ltd (ASX: MIN), LG Energy Solution, Renault, Livent and NGK Insulators.

The annual management fee of this ETF is 0.69%.

ETFSecurities says:

Battery technology represents a growth investment for many investors given the projected demand for storage in the coming years off the back of growth in renewables use and the electric vehicle industry.

The value chain for battery technology ranges from mining companies, mining for metals like lithium, to manufacturers of battery storage and storage technology providers. All are potential beneficiaries of the anticipated growth in this industry.

Foolish takeaway

I'm not going to say that either of these ETFs is a buy, but I do think that both of them give exposure to two very interesting sectors and megatrends.

The post These 2 ASX ETFs are focused on 'green' technology appeared first on The Motley Fool Australia.

Breaking down an ESG ETF

When it comes to ethical ESG ETFs, there are normally two classes that a fund will fall into. There are funds that follow a broad market index, such as the S&P/ASX 200 Index (ASX: XJO), but then 'filter' out any unsavoury companies from the index. And then there are those that invest in a particular ESG-aligned industry, such as renewable energy. There is a big difference between these two approaches.

Let's first look at the index funds. The BetaShares Australian Sustainability Leaders ETF (ASX: FAIR) is one such fund. This ETF tracks an index that screens ASX companies based on ESG criteria such as fossil fuel production, gambling, tobacco, alcohol, environmental destruction and animal cruelty. It holds 80 ASX shares, which includes some big names like Telstra Corporation Ltd (ASX: TLS), CSL Limited (ASX: CSL) and Xero Limited (ASX: XRO). As such, you are still getting some of the diversification benefits a simple ASX 200 index fund might provide, but without the companies that have been identified as not possessing ESG characteristics.

There are other ASX ESG ETFs that follow a similar methodology. The Vanguard Ethically Conscious Australian Shares ETF (ASX: VETH) is one. The VanEck Vectors MSCI Australian Sustainable Equity ETF (ASX: GRNV) is another. There are even funds available that take this approach and apply it to overseas shares instead of ASX companies. Such funds include the VanEck Vectors MSCI International Sustainable Equity ETF (ASX: ESGI) and the BetaShares Global Sustainability Leaders ETF (ASX: ETHI).

What about sector-specific ETFs?

That's only one side of the ASX ethical ESG ETF coin though. There are also a number of funds out there that chase specific ESG sectors. Take the ETFS Battery Tech & Lithium ETF (ASX: ACDC). This fund aims to give exposure to "the energy storage and production megatrend, including companies involved in the supply chain and production for battery technology and lithium mining."

Whilst this fund does not have a specific ESG mandate, it is still focused on an industry with 'green' credentials in aiming to reduce greenhouse gas pollution. However, a fund like this arguably provides less diversification than one of the funds named above. That's because all of the holdings in this ETF are companies that operate in a very specific sector.

The same can be said of the VanEck Vectors Global Clean Energy ETF (ASX: CLNE) or the BetaShares Climate Change Innovation ETF (ASX: ERTH).

Whilst there is nothing wrong with this approach, it's worth pointing out that there is a lot more concentration on one particular section of the ESG market. This carries its own set of risks compared to a more diversified fund.

Foolish takeaway

Ethical ESG investing looks as though it's here to stay as an investing trend. But if you are seeking out ESG funds to invest in, make sure you know what kind of exposure you are looking for. Not all ethical ETFs are equal — some of these funds might be offering a portfolio that's too concentrated for your goals, or risk profile. Just because something has 'ESG' or 'ethical' doesn't mean it's automatically a good investment.

The post An ASX investor's guide to ESG-focused ETFs appeared first on The Motley Fool Australia.

What's so special about ERTH? 

The ASX ERTH ETF comprises a portfolio of up to 100 leading global companies. These companies derive at least 50% of their revenues from products and services that aim to tackle climate change and other environmental challenges. 

Many have pointed to tackling climate change as the next investment megatrend, including leading rare earths producer Lynas Rare Earths Ltd (ASX: LYC). The Lynas share price was one of the best performing ASX 200 shares last year, surging some ~80%. The company sees continued demand for its minerals through areas such as the accelerated demand for electric vehicles, expanding global wind and solar capacity and a growing consumer electronics market.

ERTH aims to provide its investors with exposure to this emerging megatrend where demand for environment-related goods and services is anticipated to rise strongly over the long term. 

Investors will be exposed to a broad range of clean solutions including clean/renewable energy, green transportation, water and waste improvements, decarbonisation-enabling solutions and sustainable products.

What companies does ERTH hold? 

The ASX ERTH ETF currently holds 90 companies and is heavily US concentrated (42.9%), likely due to the breadth and depth of companies available. The ETF has allocated approximately 60% of its funds into three sectors: capital goods, semiconductors and automobiles.

Its top ten holdings that make up approximately 40.3% of the fund include: 

• Trane Technologies PLC (NYSE: TT)
• Infineon Technologies AG (ETR: IFX)
• Zoom Video Communications Inc (NASDAQ: ZM)
• Cie De Saint-Gobain SA 
• DocuSign Inc (NASDAQ: DOCU)
• Tesla Inc (NASDAQ: TSLA)
• East Japan Railway Co 
• Nio Inc (NYSE: NIO)
• Vestas Wind Systems 
• Plug Power Inc

ERTH dodges recent market selloff

The recent tech and growth related selloff may have had a significant impact on the ASX ERTH ETF share price had it listed earlier. 

Renewable-related ETFs including the Global X Lithium & Battery Tech ETF (NYSEARCA: LIT), iShares PHLX Semiconductor ETF (NASDAQ: SOX) and Invesco Solar ETF (NYSEARCA: TAN) all slumped around 5%-20% in mid-February before staging a rebound in early-March. 

The ERTH ETF has been able to capture the recent rebound. At the time of writing, ERTH shares are up 3.13% to $13.19.

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