It includes the 200 largest companies in Australia weighted by market capitalisation. 

Many investors have a portion of their portfolio dedicated to an ASX ETF that tracks the performance of this index. 

However, many investors might not be aware of concentration risk. 

Concentration: the case against traditional funds 

Some investors may be unaware that the ASX 200 index is weighted towards just a couple of holdings and sectors because it is market capitalisation based.

A small number of very large companies – especially banks like Commonwealth Bank Of Australia (ASX: CBA) and miners like BHP Group (ASX: BHP) – make up a disproportionately large share of the index due to market-cap weighting. 

This means the performance of the "Australian market" is often driven more by a handful of companies than by the broader Australian economy.

A recent report from VanEck highlights this issue.

Investors buying a diversified Australian equity strategy would think it is unlikely that two stocks would be 22% of the portfolio, nor would they think two sectors represent over 50% of the portfolio. This is a risk: Concentration risk.

Nothing highlighted this more than the post-budget fall of CBA. Australia's 2nd largest company fell by over 10% on Wednesday.

So how do investors combat this? 

There are several ASX ETFs that use unique strategies to provide a more balanced profile of the ASX 200. 

Here are three options to consider. 

VanEck Australian Equal Weight ETF (ASX: MVW)

This ASX ETF includes only the largest and most liquid companies on ASX.

It currently includes 76 equally weighted stocks, that are rebalanced on a quarterly basis.

Due to the MVW Index's equal weight construction methodology, at the last rebalance, no company was more than 1.3%. Therefore, MVW, which tracks this index has less stock concentration risk than the ASX 200.

BetaShares Ftse Rafi Australia 200 ETF (ASX: QOZ)

QOZ ETF is another option to target the ASX 200.

It tracks the performance an index that comprises the top 200 companies listed on the ASX. However they are measured by fundamental size.

QOZ is weighted in a way that is reflective of the economic importance rather than the market capitalisation of its constituents.

Constituent weighting is based on accounting values and is known as "Fundamental indexing".

BetaShares Australian Ex-20 Portfolio Diversifier ETF (ASX: EX20)

Many portfolios having a heavy bias towards the big banks and miners. However, EX20 helps diversify exposure away from those stocks and sectors.

It aims to track the performance of an index comprising the 180 largest stocks listed on the ASX, after excluding the 20 largest, based on their market capitalisation.

The post Three unique ASX ETFs to target the ASX 200  appeared first on The Motley Fool Australia.

ASX 200 tech shares rose 12.96% while the benchmark S&P/ASX 200 Index (ASX: XJO) dipped 0.15%.

Tech shares had been suffering from plenty of headwinds in 2026, including negative sentiment due to AI disruption fears.

The challenge facing investors now is identifying which companies are realistically in danger of having core products and services replaced, and which are set to benefit from AI integration.

However these fears appear to be disappearing as markets simply can't ignore the discount on offer for technology shares. 

As The Motley Fool's Bronwyn Allen reported last week, these fears drove a near halving in the value of the S&P/ASX 200 Information Technology Index (ASX: XIJ) in just seven months.

Between 29 August and 30 March, the tech index experienced an extraordinary 48% sell-off. 

If we have reached rock bottom of this current cycle, much of the sector remains undervalued, even after last week's rebound. 

Here are two ASX ETFs that could be worth targeting. 

Betashares S&P ASX Australian Technology ETF (ASX: ATEC)

This ASX ETF is the only pure-play Australian tech focussed fund. 

It provides exposure to leading ASX-listed companies in a range of tech-related market segments such as information technology, consumer electronics, online retail and medical technology.

In the last week it has risen almost 12%, however remains down 14% year to date. 

At the time of writing it includes 45 holdings, with its largest weighting being towards Xero Ltd (ASX: XRO) and Computershare Ltd (ASX: CPU) which combine for roughly 20% of the fund. 

BetaShares Australian Ex-20 Portfolio Diversifier ETF (ASX: EX20)

Australia's benchmark index is heavily concentrated on big banks and miners. 

In fact, according to VanEck, the top 5 securities account for 33% of the S&P/ASX 200 Index. 

This means traditional, ASX 200 tracking ASX ETFs will be heavily skewed to these equities. 

That's what makes the EX20 fund intriguing. 

It eliminates this over-saturation by excluding the largest 20 holdings listed on the ASX. 

What's left is the 180 largest stocks listed on the ASX, after excluding the 20 largest, based on their market capitalisation.

No individual holding makes up more than 3.4% of the total fund. 

Subsequently, there is a higher exposure to tech shares than traditional ASX 200 funds. 

For the to date, the fund remains down just over 3%. 

However, it has begun to rally, rising 20% since late March. 

This fund may appeal to investors looking for tech exposure, while still spreading risk across a range of sectors.

The post 2 ASX ETFs that could be a perfect for a tech rally appeared first on The Motley Fool Australia.