Increase your investment opportunities by exploiting global trends.
Now that we are in the middle of the year, it is a good time to reflect on the state of the financial markets and consider investment opportunities for the remainder of the year and beyond.
It’s been a good few months for the Australian equity market. By mid-year, it hit a record high, up 11% from last year. The United States is also trading at record highs, up about 13%. If you have stocks in banks or in the mining industry, then you are doing fine. Banks are outperforming as employment has returned to pre-pandemic levels and people are buying more homes. Governments are investing heavily in green energy and infrastructure, also giving a big boost to the mining sector.
“There are several investment themes that deserve to be considered as we move into the second half of the year”, says Jessica Amir, senior market analyst for Bell Direct. “These can be invested by buying exchange traded funds (ETFs). ETFs are an inexpensive way to access global markets and diversify your portfolio. Some ETFs have outperformed the Australian equity market so far this year, which is up 11%.
Here are some investment portfolio ideas to consider:
“The economy is growing out of the pandemic, which means costs are rising due to a shift in the supply and demand curves. This means that agribusinesses make more money as their incomes increase – and will continue to do so as global life expectancy and population growth are expected to increase, ”Ms. Amir said. ETF FOOD, invests in 50 of the world’s largest food companies, outside of Australia. It includes companies such as John Deere, which sells tractors to farmers, and Nutrien, the world’s largest crop fertilizer company. ETF FOOD has performed well so far this year with an increase of 18%.
2. Electric vehicles
By 2030, 70% of new cars sold in Australia are expected to be electric. The rest of the world is even more advanced; Norway and the Netherlands have banned the sale of new gasoline-powered cars after 2035, and President Biden wants to use part of a $ 2 trillion infrastructure bill to build a charging network of electric vehicles. “This means that lithium and battery technology is about to have a huge push, ”Ms. Amir said. “The ACDC ETF invests in 30 of the world’s largest lithium and battery companies, from Tesla which produces electric cars to lithium companies like Pilbara Minerals. Last year he gained about 60 percent.
3. Climate change
“About 30 countries plan to be carbon neutral by 2050, so investing in companies that are already striving to reduce their carbon footprint could increase your investment portfolio,” Ms. Amir said. the ERTH The ETF invests in 100 companies leading carbon footprint reduction across a wide range of industries. ERTH’s largest stake is Trane Technologies, which creates efficient and sustainable climate innovations for buildings, homes and transportation.
4. The technological race
The United States wants to overtake China as the new global technology leader. This means that many incentives will be made available to US tech companies, including semiconductor companies that create microchips, artificial intelligence, robotics, quantum computing and research. Earlier this month, a $ 250 billion bill was enacted into U.S. law, aimed at building technology manufacturing facilities and getting U.S. semiconductor companies to open in the United States. ”Ms. Amir said. Companies in the semiconductor industry are already doing well, due to growing demand and lack of supply. There are shortages of the semiconductors needed to power electric cars, laptops and smartphones. And don’t forget that semiconductors will also be needed as businesses grow and develop driverless cars. The ETF is one of the most purchased ETFs that invests in US technology companies. NDQ, so you can invest in that too, or look at the australian tech ETF ATEC.
5. Stocks that pay dividends
“We have seen that dividends are back in fashion. Savvy investors have understood that cryptocurrencies and memes stocks don’t pay dividends, so many investors return to investments that do. Mrs. Amir said. There are three dividend paying ETFs that stand out from the crowd. BNKS invests in approximately 60 of the world’s largest banks, including HSBC and RBC. As the value of bank stocks has risen, the ETF has also risen, and as a result, it is currently up 21%. MVB invests in seven Australian banks, including CBA, WBC and NAB, and rose 23% on ASX. VHY invests in over 60 Australian companies all of which have paid high dividends, from BHP to Transurban. This means that you get both share price growth and dividends. Win-win.
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