ETFs Offering Exposure to Investing Themes of the Future
Rene Anthony
It no secret that exchange-traded funds have become a popular investment choice for many, whether it be those who are new to investing or those who count themselves experienced. From their ease of access, to their low-cost approach to diversification, ETFs provide a number of benefits.
In fact, ETFs are among the most sought-after products across the Selfwealth community, with as much as 40% of the value of all holdings across the platform tied up in exchange-traded products, including ETFs and managed funds.
With the top ten ASX ETFs representing more than a quarter of the value of all holdings across the Selfwealth platform, and the top 50 accounting for more than one-third, there is strong interest in the most-recognised names.
However, recent months have seen a number of new ETFs launch on the ASX to much fanfare, tapping into some of the popular investing themes of the future. Here are five of the latest ASX ETFs seeing growing interest.
BetaShares Crypto Innovators ETF (ASX: CRYP)
No other ETF has enjoyed a debut on the ASX like the BetaShares Crypto Innovators ETF (ASX: CRYP), which smashed records on its first day of trading. Within the first 15 minutes of trading earlier this month, more than $8 million worth of units in CRYP' had traded hands. By the end of the day, that ballooned to $39.7 million, setting an ETF product record for first-day trading activity on the ASX.While CRYP' does not provide direct exposure to cryptocurrency, it tracks an index of 50 companies that operate in the digital assets and cryptocurrency economy. This includes global names that service or provide infrastructure for cryptocurrency markets, or have material investments in crypto assets. Examples of portfolio holdings include Silvergate Capital (NYSE: SI), Coinbase (NASDAQ: COIN) and Riot Blockchain (NASDAQ: RIOT).
iShares Core MSCI Australia ESG Leaders ETF (ASX: IESG)
In light of COP26, as well as a heightened level of focus on Australia formulation of a net-zero policy, ESG investing has continued to gain prominence over recent months. While a number of different ETFs tap into this theme - some specifically targeting climate change, others offering a broader ESG focus - the iShares Core MSCI Australia ESG Leaders ETF (ASX: IESG) is the latest name to provide exposure to this popular investing theme.The IESG ETF holds a number of small, mid and large-cap ASX shares that fund manager Blackrock believes possess better sustainability credentials relative to their sector peers. It specifically excludes companies that have adverse effects on climate, or which engage in controversial' activities. Household names like Commonwealth Bank (ASX: CBA), CSL (ASX: CSL) and Wesfarmers (ASX: WES) are at the heart of the portfolio, which currently includes more than 100 positions.
ETFS Semiconductor ETF (ASX: SEMI)
The semiconductor shortage has been one of the most-prevailing topics affecting businesses all around the world over the last year. Even after all this time, a number of industries remain hamstrung as a delay in sourcing microchips weighs on supply chains. On the contrary, however, semiconductor stocks have been a direct beneficiary following unprecedented demand for all sorts of electronic devices required to keep pace in the digital economy.
This trend remains a present force in the US stock market, with five of the top ten best-performing large-cap stocks over the last month coming from the semiconductor industry. Launched at the end of August, the ETFS Semiconductor ETF (ASX: SEMI) offers investors exposure to the world leading semiconductor companies, right through the value chain, including the likes of Nvidia (NASDAQ: NVDA), Advanced Micro Devices (NASDAQ: AMD), Qualcomm (NASDAQ: QCOM) and Micron Technology (NASDAQ: MU).
ETFS Hydrogen ETF (ASX: HGEN)
With hydrogen looking to play an increasing role in Australia commitment to net-zero by 2050, the sector has seen a buzz of activity over recent weeks. That ramped up a notch in the midst of COP26, not to mention the attention generated by Fortescue Metals Group (ASX: FMG) as it looks to become a major player in the green' hydrogen field.
The recently-launched ETFS Hydrogen ETF (ASX: HGEN) has had a fond start to life on the ASX, up more than 25% since early October alone. The fund offers exposure to 30 hydrogen companies from developed markets across the world, including Korea and Taiwan. An emphasis is placed on pure-play hydrogen companies such as hydrogen fuel-cell makers, hydrogen-based infrastructure, and businesses creating hydrogen or storage facilities for hydrogen. Plug Power (NYSE: PLUG) is currently the largest holding in HGEN', followed by Bloom Energy (NYSE: BE).
ETFS Fintech and Blockchain ETF (ASX: FTEC)
Available exclusively through the Chi-X stock exchange, which is now available to Selfwealth members, the ETFS Fintech and Blockchain ETF (ASX: FTEC) taps into one of the most-watched themes in recent years amid a number of digitisation trends. The ETF tracks a basket of 75 equally-weighted fintech stocks from developed countries, including a number of which are actively involved in decentralised finance (DeFi) and blockchain activities.While blockchain is highlighted as a key sub-theme within the ETF, FTEC' also provides exposure to other high-growth and innovative areas of the financial services economy including the popular buy-now pay-later segment, as well as big data and research. FTEC' is pitched to investors eyeing disruptive names in an evolving space, including but not limited to Affirm (NASDAQ: AFRM), Upstart Holdings (NASDAQ: UPST) and Bill.com Holdings (NYSE: BILL).
Buying ETFs through Selfwealth
For a limited time, Selfwealth is offering free brokerage on any ASX-listed ETF you buy until January 4, 2022. To take advantage of this offer, simply place a buy order for any ETF using your Selfwealth ASX trading account and you will not be charged a brokerage fee.
Before investing in any ETFs, make sure you consult the respective product Product Disclosure Statement, which will be available on the fund website.
Important disclaimer: SelfWealth Ltd ABN 52 154 324 428 (“Selfwealth”) (AFSL 421789). The information contained on this website is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser and/or accountant. Taxation, legal and other matters referred to on this website are of a general nature only and should not be relied upon in place of appropriate professional advice. You should obtain the relevant Product Disclosure Statement for any product mentioned and consider its contents before making any decision.