Wickenden points out that 2025 was the first year since 2020 that ASX small-cap shares outperformed the rest of the market.

The S&P/ASX Small Ords Index (ASX: XSO), which tracks companies ranked 101 to 300 by market cap, delivered a total return (capital growth plus dividends) of 24.96% last year.

By comparison, the S&P/ASX All Ords Index (ASX: XAO) delivered total returns of 10.56%.

Small-cap shares typically have market caps between a few hundred million dollars and $2 billion.

Wickenden said:

Following years of large cap earnings stability and pricing power during the higher-than-normal interest rate environment, 2025 gave way to a rate cutting cycle supporting mid and small caps. 

Lower interest rates reduce smaller companies' debt servicing costs and boost their earnings potential.

Wickenden said:

Mid and small caps in Australia also reported much stronger earnings growth throughout 2025, further driving the performance turnaround. 

Lower funding costs and easing input pressures helped to lift margins and free cash flow across these segments. 

Wickenden points to the Betashares Australian Small Companies Select ETF (ASX: SMLL) as an example of the trend.

SMLL ETF delivered a total return of 36.39% last year. It was the second-best-performing ASX ETF holding Aussie shares in 2025.

Here are three ASX exchange-traded funds (ETFs) that provide exposure to small-cap shares both on the ASX and overseas exchanges.

Betashares Australian Small Companies Select ETF (ASX: SMLL)

This ASX-focused ETF seeks to track the returns of the Nasdaq Australia Small Cap Select Index before costs.

Betashares explains the ETF's strategy:

SMLL invests in a portfolio of ASX-listed companies that are generally within the 91-350 largest by free float market capitalisation. The portfolio will typically consist of 50-100 securities.

SMLL's index uses screens that aim to identify companies with positive earnings and a strong ability to service debt.

Relative valuation metrics, price momentum and liquidity are also evaluated as part of the selection process.

ASX gold stocks dominate the ETF's list of top holdings.

There's Perseus Mining Ltd (ASX: PRU) shares at 6.1%, Westgold Resources Ltd (ASX: WGX) 4.8%, Genesis Minerals Ltd (ASX: GMD) 4.6%, Vault Minerals Ltd (ASX: VAU) 4.4%, Capricorn Metals Ltd (ASX: CMM) 4%, and Ramelius Resources Ltd (ASX: RMS) 3.9%.

Over the past five years, SMLL ETF has delivered an average annual total return of 9.73% after fees.

Vanguard MSCI International Small Companies Index ETF (ASX: VISM)

VISM ETF seeks to track the MSCI World ex-Australia Small Cap Index (with net dividends reinvested) in Australian dollars before fees.

This ASX ETF gives investors access to more than 4,000 smaller companies operating in more than 20 developed countries.

The top holdings are flash memory designer and manufacturer Sandisk Corp (NASDAQ: SNDK) 0.82%, US laser and photonics technologies developer, Coherent Corp (NYSE: COHR) 0.39%, and aircraft engine leasing operator, FTAI Aviation Ltd (NASDAQ: FTAI) 0.29%.

VISM ETF has delivered an average annual total return of 9.9% after fees over the past five years.

VanEck MSCI International Small Companies Quality ETF (ASX: QSML)

QSML ETF seeks to mirror the performance of the MSCI World ex Australia Small Cap Quality 150 Index before costs.

This provides exposure to a diversified portfolio of 150 high-quality, small-cap companies in developed countries outside Australia.

Stocks are selected on three key fundamentals: return on equity (ROE); earnings stability; and low financial leverage.

The top holdings are US aerospace industrial company, Curtiss-Wright Corp (NYSE: CW) 1.9%, precious metals royalties company, Royal Gold Inc (NASDAQ: RGLD) 1.8%, and US convenience store operator, Casey's General Stores Inc (NASDAQ: CASY) 1.65%.

QSML ETF began trading in March 2021.

Over the past three years, the ASX ETF has produced an average annual total return of 14.87% after fees.

The post 3 ASX ETFs capitalising on 'the great rotation' into small caps appeared first on The Motley Fool Australia.

It's been well documented the run being enjoyed by BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO). 

These two ASX mining giants are both hovering around all-time highs. 

Analysis from Betashares indicates this bull run could continue in 2026. 

Changing of the guard for Australian large caps

Tom Wickenden, investment strategist at Betashares said in a report earlier this week that strong momentum in resource prices underpin the firm's positive outlook. 

Iron ore has rallied and is holding above US$100 per tonne.

While further upside could be limited, he believes current levels support strong profitability for Australia's large-cap miners.

He also reinforced the strategic pivot of Australia's miners toward copper.

According to the report, BHP is now the world's largest copper producer, with the metal contributing 45% of its earnings, up from 29% a year ago. 

Rio Tinto's copper assets currently contribute ~15% of group earnings, but production is expected to grow significantly through to 2030. 

It could also be boosted further by a possible acquisition of Glencore plc (LSE: GLEN).

Mr Wickenden also said copper prices are at all-time highs.

Supply is constrained by multi-year project lead times, while demand is driven by the AI infrastructure buildout and energy transition.

For these reasons, we believe materials will drive large-cap returns in 2026, a notable shift from recent history. Over the last two years, financials accounted for 60% of the ASX 200's gains led by the 'Big 5'. While financials earnings expectations remain solid at 6.9% (which we expect can be met), we see meaningfully greater upside in materials given their earnings inflection from -18.0% in FY25 to 19.4% in FY26.

Commodities surge impact for small-caps

While Betashares now tips large-cap miners to lead the way in 2026, the report also said the rally in gold and critical minerals is set to be a key driver of Australian mid and small-cap outperformance in 2026.

The report said Australia's gold exports are expected to grow by ~47% in FY25/26, surpassing coal and natural gas to become our second-largest export behind iron ore. 

Meanwhile, the October 2025 US-Australia Critical Minerals Framework, an US$8.5 billion partnership focused on rare earths and critical minerals including lithium and graphite, positions Australia as a strategic partner in countering China's dominance in processing capacity. 

With escalating US-China trade tensions, we expect critical minerals to remain a focal point of geopolitical competition and national stockpiling.

Ultimately, mid and small-cap indices are positioned to benefit from this commodity rally. 

How do investors gain exposure?

The tailwinds benefiting small-cap stocks have been well documented.

For investors looking to capture exposure to this sector, there are a few options. 

BetaShares Australian Small Companies Select Fund (ASX: SMLL) provides access to a tailored portfolio of high-quality, profitable small-cap Australian companies. 

Another option for Australian small-cap exposure is VanEck Vectors Small Companies Masters ETF (ASX: MVS). 

For investors more focused on commodities, Betashares Energy Transition Metals ETF (ASX: XMET) offers exposure to global producers of copper, lithium, nickel, cobalt, graphite, manganese, silver, and rare earths elements.

Global X Green Metal Miners ETF (ASX: GMTL) offers exposure to global companies that produce critical metals for clean energy infrastructure and technologies, including lithium, copper, nickel, and cobalt.

It's worth noting these ASX ETFs do not exclusively target Australian critical minerals. 

The post Why 2026 will be the year of ASX resources and commodities – Expert appeared first on The Motley Fool Australia.

That was a 75% increase on net inflows in 2024, according to Betashares data.

There is now $331 billion invested across 423 ETFs on the market.

There was a net increase of 56 ETFs launched on the ASX last year, with the three major issuers being Vanguard, Betashares, and iShares.

Aussies have fallen in love with ASX ETFs for their simplicity and low cost.

They provide great diversification, and are an easy vehicle for investing in international shares through the ASX.

The Australian Securities Exchange has just released the full-year performance data for ASX ETFs in 2025.

Here, we look at the six ETFs holding ASX shares that delivered the best total returns (that's capital growth plus dividends) for investors.

6 top ASX ETFs for total returns in 2025

Two key themes are evident in the top six ETFs of 2025.

They are rising commodities and ASX mining shares, and turbocharged growth for small-cap companies.

The ASX 200 materials sector was the top performer of 2025 due to fast-rising mining shares buoyed by stronger commodity values.

S&P/ASX 200 Materials (ASX: XMJ) returned 36.21% in 2025 compared to 10.32% for the benchmark S&P/ASX 200 Index (ASX: XJO).

ASX small-cap shares also had a fantastic year due to interest rate cuts and staggering share price growth for junior gold miners.

The S&P/ASX Small Ords Index (ASX: XSO), which tracks companies ranked 101 to 300 by market cap, gave a total return of 24.96% last year compared to a 10.56% return for the S&P/ASX All Ords Index (ASX: XAO), which tracks the 500 largest companies on the market.

Let's take a look at those ETFs.

1. VanEck Australian Resources ETF (ASX: MVR)

The No. 1 ETF for total returns was the VanEck Australian Resources ETF.

MVR ETF delivered a total one-year return of 40.53%. The historical distribution yield is 2.57%.

The ETF closed at $45.96 per unit on Tuesday.

2. Betashares Australian Small Companies Select ETF (ASX: SMLL)

The SMLL ETF delivered a total one-year return of 36.39%. The historical distribution yield is 2.26%.

SMLL ETF closed at $4.92 per unit yesterday.

3. SPDR S&P/ASX 200 Resources ETF (ASX: OZR)

The OZR ETF delivered a total one-year return of 35.73%. The historical distribution yield is 2.62%.

The OZR ETF closed at $16.05 per unit yesterday.

4. Betashares Australian Resources Sector ETF (ASX: QRE)

The QRE ETF delivered a total one-year return of 35.42%. The historical distribution yield is 2.36%.

QRE ETF closed at $9.20 per unit yesterday.

Learn more about this ETF here.

5. Firetrail Aust Small Companies Fund — Active ETF (ASX: FSML)

This active ETF delivered a total one-year return of 35.2%. The historical distribution yield is 0.22%.

FSML ETF closed at $2.37 per unit yesterday.

6. Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO)

VSO ETF delivered a total one-year return of 25.11%. The historical distribution yield is 6.75%.

The VSO closed at $80.01 per unit on Tuesday.

The post 6 best-performing ASX ETFs holding Aussie shares in 2025 appeared first on The Motley Fool Australia.

Last week I compared how Australia's benchmark index has performed against the most influential US indexes. 

For a quick recap, the S&P/ASX 200 Index (ASX: XJO) rose roughly 6.4% in 2025. 

Meanwhile, the S&P 500 Index (SP: .INX) rose roughly 18%, and the NASDAQ-100 Index (NASDAQ: NDX) rose 22.2%. 

History tells us this was a slightly below average year for the ASX 200, which historically has brought returns of 9-10% per annum. 

There are a few ASX ETFs that track this index, so investors can gain exposure to this benchmark. 

However, there are plenty of ASX ETFs that outperformed the ASX 200 significantly this year. 

Let's look at three of the best performing funds from ASX ETF provider Betashares. 

Betashares Energy Transition Metals Etf (ASX: XMET)

This ASX ETF was an absolute winner in 2025. 

It started the year trading at roughly $7.40 each, and has more than doubled to now trade at approximately $15.00. 

That's good for a rise of 102%. 

This fund rode the tailwinds of booming commodity prices this year. 

This ASX ETF provides exposure to a portfolio of global companies in the Energy Transition Metals ('ETMs') industry. ETMs are raw materials that are essential to the transition to a less carbon-intensive economy.

It has holdings in global producers of copper, lithium, nickel, cobalt, graphite, manganese, silver and rare earth elements.

BetaShares Global Banks ETF – Currency Hedged (ASX: BNKS)

As the name suggests, this ASX ETF offers exposure to the largest global banks, excluding Australia. 

This includes banks such as JP Morgan Chase, Bank of America and Wells Fargo. 

At the time of writing, it is made up of 60 holdings, with its largest geographical weighting towards: 

• United States (27.7%)
• Canada (14.9%)
• Britain (10.0%)
• Japan (9.2%)

It proved a worthwhile investment this year, with the fund rising by approximately 46% in 2025.

What's perhaps even more impressive is it boasts a track record of 19.51% returns per annum over the last 5 years. 

BetaShares Australian Small Companies Select Fund (ASX: SMLL)

Another emerging theme in 2025 has been the performance of small-cap shares.

In fact, as at December 17, small-cap shares had outperformed their large-cap counterparts by 14%. This marks the best relative outperformance in nearly 16 years.

This ASX ETF offers exposure to ASX-listed companies that are generally within the 91-350 largest by free float market capitalisation. 

In 2025, this fund has risen by more than 30%. 

The post 3 Betashares ASX ETFs that smashed the ASX 200 this year appeared first on The Motley Fool Australia.

This has been reflected in the investor activity throughout November. Data shows there has been a surge in small-cap investing amongst ETF investors. 

Outperforming the blue-chips

The Global X Market Scoop report stated that Australian equity ETFs with a size-tilt experienced a notable surge in net flows during November. This reflects growing investor interest in diversifying beyond the large-cap-dominated landscape.

According to the report, after several years in which large caps, such as banks, led market returns, attention is increasingly shifting to smaller and mid-sized companies.

These can offer potential for outsized growth and portfolio broadening. 

Global X said the trend underscores that investors may be looking to capture opportunities across the full spectrum of the Australian equity market rather than concentrating solely on the mega-cap heavyweights.

Whether investors are aiming for the top 300 Australian companies rather than just the top 200, or focusing exclusively on smaller companies, small-caps could be making a comeback.

So far in 2025, these shares have outperformed their large-cap counterparts by 14%. This marks the best relative outperformance in nearly 16 years.

Attracting investor capital 

Global X said this renewed focus has coincided with the launch of several new, more active ETFs targeting small and mid segments. 

This provides investors with targeted exposure and more flexible management strategies. 

For example, the Global X Australia 300 ETF (ASX: A300) was launched in August this year. 

As these products gain traction, small and mid-cap ETFs are beginning to attract capital, suggesting the potential for a rotation or at least a complementary role alongside traditional large-cap allocations.

In November 2025, record inflows of approximately $272 million were seen into Australian small-cap ETFs, underscoring a growing investor appetite for the segment.

How to target small-caps

There are funds that track the 300 largest companies on the ASX, like the previously mentioned Global X Australia 300 ETF or the Vanguard Australian Shares Index ETF (ASX: VAS). 

These give you more access to mid and smaller companies outside the top 200.

However, they do still include a large weighting towards blue-chip stocks. 

For a more specific focus and to avoid crossover into large-cap stocks, there are other ASX ETFs to consider: 

• Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO) – Tracks roughly 180 small-cap companies
• BetaShares Australian Small Companies Select Fund (ASX: SMLL) – Invests in a portfolio typically between 50-100 small-cap stocks that are generally within the 91-350 largest by market cap

The post Why Australian small-cap shares are shining appeared first on The Motley Fool Australia.

Whether you are searching for small caps, global tech, or diversified high-growth portfolios, there is likely to be an ASX ETF out there for you.

With that in mind, let's take a look at three funds that could be top picks for growth investors heading into 2026.

Betashares Australian Small Companies Select ETF (ASX: SMLL)

Small caps are often where the next generation of market leaders begin, but they can also be volatile and difficult to analyse individually.

The BetaShares Australian Small Companies Select ETF solves this by focusing on profitable, higher-quality small stocks rather than speculative miners or businesses that are unsustainably burning cash.

Its index screens for companies with positive earnings, strong balance sheets, and reasonable valuations. That means investors avoid the traditional pitfalls of the Australian small-cap universe, which is often littered with unprofitable explorers and early-stage businesses with uncertain futures.

Current holdings include Capricorn Metals Ltd (ASX: CMM), Codan Ltd (ASX: CDA), and Breville Group Ltd (ASX: BRG).

This fund was recently recommended by analysts at Betashares.

Betashares Diversified All Growth ETF (ASX: DHHF)

Another ASX ETF for growth investors is the Betashares Diversified All Growth ETF.

If you want ultimate simplicity with maximum growth exposure, it is hard to beat this fund. This ASX ETF is invested in a blend of large, mid, and small cap stocks from Australia, global developed and emerging markets.

Betashares notes that this means it offers investors exposure to an all-cap, all-world share portfolio with the potential for high growth over the long term. In total, the fund provides exposure to approximately 8,000 stocks that are listed on over 60 global exchanges.

It was also recently recommended by analysts at Betashares.

Betashares Cloud Computing ETF (ASX: CLDD)

A third ASX ETF for growth investors to look at is the Betashares Cloud Computing ETF.

Businesses across the world now rely on cloud platforms to run software, manage data, deploy artificial intelligence, and operate at scale.

And with cloud adoption still expanding rapidly, this ASX ETF gives investors direct exposure to the companies powering that transformation.

The fund includes global cloud leaders such as Shopify (NASDAQ: SHOP), ServiceNow (NYSE: NOW), and Snowflake (NYSE: SNOW). These companies are deeply embedded in the digital economy, providing the infrastructure and software that modern organisations cannot function without.

It was recently recommended by analysts at Betashares.

The post 3 stellar ASX ETFs for growth investors to buy in 2026 appeared first on The Motley Fool Australia.

Despite last week's broad sell-off, there remain many ASX-focused ETFs that have brought big returns this year.

As the calendar year nears its end, let's look at the sectors or strategies that have paid off in 2025. 

VanEck Australian Resources ETF (ASX: MVR)

Australian resources have returned to form in 2025. 

MVR gives investors exposure to a diversified portfolio of ASX-listed resources companies. 

At the time of writing, the ASX ETF has 31 underlying holdings.

This includes blue-chip companies like BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO), and Woodside Petroleum Ltd (ASX: WDS). 

This fund's exposure to gold shares has also influenced its strong performance. 

Since the start of the year, it has risen 28.5%. 

BetaShares Australian Small Companies Select Fund (ASX: SMLL)

This ASX ETF offers a portfolio of ASX-listed companies that are generally within the 91-350 largest by free float market capitalisation. 

SMLL's index uses screens that aim to identify companies with positive earnings and a strong ability to service debt. 

Relative valuation metrics, price momentum, and liquidity are also evaluated as part of the selection process.

At the time of writing, it comprises 66 holdings, with no individual company accounting for more than 5.1%. 

Its largest exposure by sector is to: 

• Materials (27.2%)
• Consumer discretionary (25.1%)
• Industrials (12.7%)

This ASX ETF is up 25.6% year to date. 

VanEck Vectors Australian Property ETF (ASX: MVA)

Real estate stocks and REITs have broadly performed well this year as the Australian property market has continued to grow. 

Exposure to these kinds of holdings can be a foot in the door for investors looking for exposure to the sector, without having the cash to buy physical brick-and-mortar properties. 

The MVA ETF gives investors exposure to a diversified portfolio of Australian REITs.

MVA holds a minimum of 10 Australian REITs, with a maximum weighting of 10% for each REIT.  

At the time of writing, the fund has 13 holdings, with exposure ranging from 3%-10%. 

The fund has risen 15% year to date. 

It also offers a 4% yield.

The post Which Aussie-focused ASX ETFs have performed the best in 2025 appeared first on The Motley Fool Australia.

That's because rather than trying to pick a single winning stock, ETFs give you access to tens or even thousands of stocks in one trade.

But which ASX ETFs could be top options for Aussie investors today? Let's take a look at three picks that could be destined for big things. They are as follows:

Betashares Australian Momentum ETF (ASX: MTUM)

The Betashares Australian Momentum ETF is an ASX ETF to consider buying. It targets around 100 ASX shares with the strongest price momentum.

This fund can tilt towards a variety of sectors depending on market leadership at the time. For example, the Betashares Australian Momentum ETF currently has heavier weightings to financials, consumer discretionary, and industrial. This reflects where strength has been most pronounced on the ASX recently.

Its largest holdings currently include Westpac Banking Corp (ASX: WBC), Brambles Ltd (ASX: BXB), and Wesfarmers Ltd (ASX: WES). It was recently named as one to consider buying by Betashares.

Betashares Australian Small Companies Select ETF (ASX: SMLL)

Another ASX ETF to consider buying is the Betashares Australian Small Companies Select ETF.

It offers investors exposure to a handpicked basket of small cap ASX shares, and aims to capture the upside of small cap investing while avoiding common pitfalls. Its index screens for shares with positive earnings, low debt, and reasonable valuations. The result is a portfolio of 60–90 stocks that is broadly diversified but tilted toward quality.

Top holdings currently include gold miner Perseus Mining Ltd (ASX: PRU), retailer Super Retail Group Ltd (ASX: SUL), and infant formula producer A2 Milk Company Ltd (ASX: A2M).

It was also recently named as one to consider buying by analysts at Betashares.

Vanguard Total Stock Market ETF (ASX: VTS)

Finally, the Vanguard Total Stock Market ETF could be a top pick for investors.

This ASX ETF offers exposure to more than 4,000 U.S. stocks, ranging from giants like Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) to smaller, fast-growing companies. This makes it one of the broadest, most diversified ways to tap into the U.S. market.

It also means that investors get instant access to the largest share market in the world, with companies driving global innovation across technology, healthcare, and consumer sectors.

The post Buy these fantastic ASX ETFs before everybody else does appeared first on The Motley Fool Australia.

The Australian Taxation Office just last week said that more than two million Australian taxpayers were yet to lodge their tax returns, and gave them a nudge that they needed to get it done, or at least be registered with their tax agent by October 31 to avoid possible penalties.

ATO Assistant Commissioner Rob Thomson said that regardless of how people lodge their returns, October 31 was a crucial date.

As he said:

If you're lodging yourself, you need to have completed and submitted your return by 31 October. If you plan to lodge through a registered tax professional, you must be on their books by 31 October.

Personally, I usually can't wait to lodge my tax return. I usually get something back and it's a great opportunity to have a think about what I can invest it into.

This year, like many others, I'm thinking ETFs – an increasingly popular, low-effort way to diversify your holdings and hopefully lock in some good returns.

I've had a look at a few on offer, and while this is certainly not financial advice – please do your own research and get advice on what best suits your needs – these are the ones which have piqued my interest.

Betashares Australian Small Companies Select ETF (ASX: SMLL)

Over the years as a business reporter, I've seen plenty of smaller companies grow into larger entities. Adelaide company Codan Ltd (ASX: CDA) is a great example, with a market cap now of more than $6 billion. Small and medium-sized companies, while they sometimes lack the scale and market dominance of their larger competitors, also have more room to grow, and smaller news events can move the needle much more. This ETF has delivered a five-year annualised return of 10% and 15.9% over three years, and personally, I like small caps for their ability to surprise.

Betashares Australian Resources Sector ETF (ASX: QRE)

There's something in the air when it comes to commodities at the moment. While iron ore has its issues with China pricing and supply, rare earths are running hot, gold investors are killing it, and governments are increasingly concerned about the sovereign supply of resources. While with a 20.57% return over the past six months, this ETF is running hot, and I just can't go past the idea that Australian miners are still a good investment.

Betashares Australia 200 ETF (ASX: A200)

Nothing beats diversification, right? And this ETF claims to be the world's lowest-cost Australian shares index ETF, with management costs of just 0.04%. This ETF tracks the S&P/ASX 200 Index (ASX: XJO) as the name suggests, and pays out distributions quarterly, which can be reinvested. If you like the Australian market, there's nothing not to like here.

Betashares Crypto Innovators ETF (ASX: CRYP)

This ETF is a bit more of a gamble on an emerging industry, and one I'd place in the higher risk category in my mind. As the name suggests, the ETF "provides exposure to global companies at the forefront of the dynamic crypto economy''. But with high risk comes high reward, and the performance to date has been impressive, returning 84% over a year and 47.8% over three years, annualised.

As always, do your own research, and happy investing!

The post As a key tax deadline approaches, here are four ETFs I'd consider investing my tax return into appeared first on The Motley Fool Australia.

For those with $10,000 to invest and a disdain for stock-picking, exchange-traded funds (ETFs) could be the answer.

They offer instant diversification, access to entire sectors or themes, and the ability to compound returns over time without the stress of picking individual stocks.

But which ASX ETFs could be worth considering? Let's take a look at three that could be worth considering in October:

Betashares Global Defence ETF (ASX: ARMR)

The first ASX ETF to look at is the Betashares Global Defence ETF. It gives investors exposure to some of the world's leading defence, aerospace, and cybersecurity stocks. These businesses are benefiting from rising global defence spending as nations strengthen their capabilities amid ongoing geopolitical tensions.

The fund's holdings include global defence giants such as Lockheed Martin (NYSE: LMT), Northrop Grumman (NYSE: NOC), and RTX Corporation (NYSE: RTX). These are all key suppliers of advanced defence systems and technology to the United States and allied nations.

Defence has historically been a resilient sector, often performing well even during periods of market volatility. With governments prioritising security and military modernisation in a more uncertain world, demand for high-end defence solutions is expected to keep growing. It is no wonder then that analysts at Betashares recently recommended the fund.

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

Another ASX ETF that could be a good option for the $10,000 is the BetaShares Australian Technology ETF.

This popular fund provides exposure to some of the country's fastest growing and most innovative tech stocks. It includes many of the names driving Australia's digital transformation, such as WiseTech Global Ltd (ASX: WTC), Xero Ltd (ASX: XRO), and NextDC Ltd (ASX: NXT).

WiseTech continues to dominate global logistics software, Xero remains a leader in cloud-based accounting, and NextDC is capitalising on the surging demand for data storage and artificial intelligence.

Overall, by investing in the BetaShares S&P/ASX Australian Technology ETF, you gain exposure to Australian innovators that could deliver outsized returns as digitalisation and automation reshape the economy over the next decade. It was also recently recommended by the team at Betashares.

Betashares Australian Small Companies Select ETF (ASX: SMLL)

Finally, the Betashares Australian Small Companies Select ETF could be a top option.

It tracks the Nasdaq Australia Small Cap Select Index, which screens for small-cap shares with positive earnings, strong debt servicing ability, and solid valuations. This helps avoid the riskier, speculative stocks and instead focuses on quality growth names.

The fund generally holds between 60 and 90 stocks, allowing investors to benefit from the growth potential of Australia's next generation of corporate leaders. It is another fund that Betashares recently picked out as one to consider.

The post Where to invest $10,000 in ASX ETFs right now appeared first on The Motley Fool Australia.

Exchange traded funds (ETFs) remain one of the easiest and most effective ways to gain diversified exposure to the share market, whether you're chasing growth, quality, or even a little speculative upside.

With that in mind, let's take a look at three ASX ETFs that could be worth considering if you have $2,500 to invest this October. They are as follows:

Betashares Crypto Innovators ETF (ASX: CRYP)

For investors with a higher risk appetite, the Betashares Crypto Innovators ETF could be worth a look. It provides exposure to global stocks at the forefront of the digital asset economy. Holdings include crypto exchanges, mining companies, and businesses building blockchain infrastructure.

This includes Coinbase Global Inc (NASDAQ: COIN) and Strategy Inc (NASDAQ: MSTR).

While cryptocurrencies remain volatile and unpredictable, the sector continues to develop as institutional adoption grows. The Betashares Crypto Innovators ETF certainly is not for everyone, but allocating a small portion of a portfolio here could deliver strong returns if the digital asset theme keeps maturing.

Betashares Australian Quality ETF (ASX: AQLT)

At the other end of the spectrum, the Betashares Australian Quality ETF focuses on high-quality shares listed on the ASX. Its methodology screens for businesses with strong profitability, solid balance sheets, and consistent earnings growth.

The result is a concentrated portfolio of blue-chip names that tend to weather downturns better than the broader market. This includes Wesfarmers Ltd (ASX: WES), Telstra Group Ltd (ASX: TLS), and CSL Ltd (ASX: CSL).

For investors seeking a core holding that prioritises quality over speculation, the Betashares Australian Quality ETF could be a sensible place to invest right now. It was recently named as one to consider buying by analysts at Betashares.

Betashares Australian Small Companies Select Fund (ASX: SMLL)

For those willing to step beyond large caps, the Betashares Australian Small Companies Select Fund could be worth a shout. It offers a smarter approach to small-cap investing. Instead of chasing speculative explorers and loss-making minnows, this ASX ETF is designed to screen for stocks with positive earnings, manageable debt, and reasonable valuations.

Its portfolio of around 60 to 90 names tilts towards consumer discretionary and staples, as well as established mid-tier miners. This blend means investors still get the growth potential of small caps but with a focus on quality and financial strength. For long-term investors, the Betashares Australian Small Companies Select Fund provides a more disciplined way to access the small side of the market. Betashares recently recommended the fund to investors.

The post Where to invest $2,500 in ASX ETFs this month appeared first on The Motley Fool Australia.

By buying quality exchange-traded funds (ETFs) and holding them for a decade or more, you give compounding the chance to work its magic.

That said, here are three of the best ASX ETFs that could reward patient investors over the next 10 years.

Betashares Australian Small Companies Select ETF (ASX: SMLL)

The Betashares Australian Small Companies Select ETF offers investors exposure to a handpicked basket of small-cap shares on the ASX. Small caps are often seen as riskier, but they can deliver stronger growth than larger companies over time.

This ASX ETF aims to capture the upside of small cap investing while avoiding common pitfalls. Its index screens for companies with positive earnings, low debt, and reasonable valuations. The result is a portfolio of 60–90 stocks that is broadly diversified but tilted toward quality.

Top holdings include Perseus Mining Ltd (ASX: PRU), Harvey Norman Holdings Ltd (ASX: HVN), and A2 Milk Company Ltd (ASX: A2M). By mixing miners, retailers, and service providers, the Betashares Australian Small Companies Select ETF taps into the entrepreneurial energy of smaller businesses while keeping a focus on financial discipline. It was named as one to consider buying by Betashares this month.

Betashares Global Quality Leaders ETF (ASX: QLTY)

Another ASX ETF that could be a top buy and hold contender is the Betashares Global Quality Leaders ETF. It focuses on around 150 of the highest-quality companies in the world, chosen for their strong balance sheets, stable earnings, and high returns on equity.

Holdings include ResMed Inc (ASX: RMD), Johnson & Johnson (NYSE: JNJ), and Adobe (NASDAQ: ADBE). By prioritising quality, the Betashares Global Quality Leaders ETF tilts towards businesses that can better withstand economic downturns and still deliver growth, making it a smart option for investors looking to sleep well at night. It was also named as one to consider buying by Betashares.

iShares S&P 500 ETF (ASX: IVV)

Finally, the iShares S&P 500 ETF could be one of the best buy and hold picks out there. It is one of the simplest ways to invest in the world's most important share market. It tracks the S&P 500 index, which includes the 500 largest stocks in the U.S.

That means exposure to household names such as Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOGL), and Nvidia (NASDAQ: NVDA). Over the long term, the S&P 500 has delivered strong returns, thanks to its exposure to innovative and globally dominant businesses. I wouldn't bet against this happening over the next decade.

The post The best ASX ETFs to buy and hold for 10 years appeared first on The Motley Fool Australia.

The reasoning is that they have underperformed compared to their larger cap sisters over the last two years as inflation and rising interest rates forced investors to flee for more conservative options.

But now with the tantalising prospect of rate cuts looming, it could be time for sweet revenge.

"The fundamental setup for small cap returns in 2024 is compelling," the analysts at LSN said in a memo to clients.

"Valuations are attractive, the earnings outlook is robust, and tailwinds from an improved economic backdrop historically provide active small cap managers with outsized returns."

They noted that even Australia's sovereign wealth fund, the Future Fund, has started a new program to buy small-cap ASX shares. 

"ASX small caps have underperformed the ASX top 100 by 25% since August 2021 and are now trading at substantial discount, despite the outlook for significantly more earnings growth," read the LSN memo.

"This has not gone unnoticed in capital markets with a recent flurry of M&A from financial investors and industry players taking advantage of the environment."

How to grab a piece of the small-cap action

So, if you believe in this thesis, how do you take advantage?

Of course, you can buy ASX small caps directly. But that requires much research and due diligence, which is all the more harder with less information available to the public than the big businesses.

One shortcut might be to buy an exchange-traded fund (ETF) that invests in smaller ASX businesses.

As well as cutting down on the required research, such funds have the advantage of providing immediate diversification to potentially smooth out the volatility of individual stocks.

Here are four ETFs on the ASX that invest in small-cap equities:

The post Which ASX ETFs could explode if small caps surge in 2024? appeared first on The Motley Fool Australia.