If you think you’ve built a properly diversified portfolio of global equities, it might be time to think again.
Does it expose you to lithium, a metal essential to the electrified economy? Or space exploration? What about semiconductors? Automating? Robotics? Does it include inflation protection? Or funds that will make money when the stock markets fall?
You might not need all of these in your wallet, but you can’t afford to ignore them.
The following low cost exchange traded funds (ETFs) can fill gaping holes in your portfolio and maybe help you take advantage of the next big thing.
Some have recently shown outstanding performance but, as always, this does not guarantee future returns, so understand the risks.
Global X Lithium FNB and batteries
Vijay Valecha, Investment Director at Century Financial in Dubai, chose this ETF as something to consider. Lithium is now an essential metal for battery technology, electric vehicles, renewable energy storage and mobile devices.
âThis offers a more convenient and less risky way to exploit its growth potential than buying individual lithium stocks,â he says.
Global X invests in companies involved in the complete lithium cycle, from metal mining and refining to battery production. The main titles are Albermale Corporation, Gangfeng Lithium Co and Yunnan Energy New Material. The performances have been breathtaking over the past 12 months, but don’t expect a repeat.
This [ETF] offers a more convenient and less risky way to exploit its growth potential than buying individual lithium stocks
Vijay Valecha, Chief Investment Officer, Century Financial
Fund size: $ 4.86 billion
Total expense ratio: 0.75%
One year return: 130.26 percent
Yield: N / A
MSCI EAFE Xtrackers Hedged Equity ETF
Are you too exposed to the booming US stock market after its recent dramatic outperformance? If so, it might be a good time to split your money.
This ETF provides exposure to a range of developed markets outside of the United States, Mr. Valecha said. âIt provides currency risk hedging for the MSCI EAFE Index, which tracks large and mid-cap stocks in 21 developed markets. “
Two-thirds of the fund invests in Europe, particularly in the United Kingdom, France and Switzerland, and one-third in Asia, mainly in Japan.
Fund size: $ 4.17 billion
Total expense ratio: 0.36 percent
One year yield: 25.05%
Yield: 2.83 percent
ARK space exploration and innovation ETF
This ETF will appeal to investors who wish to gain exposure to a sector that is literally out of this world: space exploration and technological innovation. It was launched on March 30 by star fund manager Cathie Wood of ARK Invest.
âThe portfolio includes orbital and sub-orbital aerospace companies, companies with potential to benefit from aerospace activities and companies that develop technologies that enable space exploration, including robotics and artificial intelligence,â said Mr. Valecha. Performance has been stable so far, but these are the early days.
Fund size: $ 627 million
Total expense ratio: 0.75%
Back to three months: 1.01%
Yield: N / A
Wisdom Tree Futures Management Strategy Fund
Investors not only make money when the markets are up, they can profit when they are falling as well. Managed term funds attempt to generate a positive return in all cases.
They do this by both âlongâ on stocks, in the hope that their stock price will rise, but also by âsellingâ profiting when they fall.
This ETF invests in a diverse range of futures contracts covering commodities, stocks, currencies and interest rates, Mr. Valecha said.
Fund size: $ 142.9 million
Total expense ratio: 0.65 percent
One year return: 11.62 percent
Yield: 0.42%
IShares S&P India Nifty 50 ETF
This will appeal to investors who wish to gain exposure to the Indian stock market, as it tracks the performance of the largest Indian companies through the benchmark Nifty 50.
Indian markets have been the best performing emerging markets lately, said Mr. Valecha. “They are supported by political stability, an aging workforce, high foreign exchange reserves and a relatively stable currency, compared to peers like Mexico, China and Brazil.”
Fund size: $ 730.7 million
Total expense ratio: 0.90 percent
One year return: 50.86 percent
Yield: N / A
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ETF Amplifying Transformational Data Sharing
Buying cryptocurrencies such as Bitcoin or Ethereum is not the only way to invest in the blockchain revolution. You can spread your risk with this ETF.
It invests in the shares of companies actively involved in blockchain technologies, both developers and users, including crypto miners and semiconductor producers.
While risky, its major holdings include solid names like PayPal, digital payment firm Square, and Nvidia, as well as specialist holdings like Hive Blockchain Technologies, Coinbase, and Bitfarms. Recent performance has been breathtaking, but again, expect volatility.
Fund size: $ 1.29 billion
Total expense ratio: 0.71 percent
One year yield: 99.10%
Yield: N / A
IShares Semiconductor ETF
Semiconductors are the building blocks of computers and a critical component in everything from smartphones and headphones to clean energy. They are currently scarce due to plant closures, US-China disputes and strong demand as car sales recover.
Apple CEO Tim Cook has warned of a semiconductor shortage hitting its iPhones and iPads.
This ETF provides investors with exposure to US listed companies that design, manufacture and distribute semiconductors, including Nvidia, Broadcom, AMD, ASML Holdings and Texas Semiconductor.
Fund size: $ 7.38 billion
Total expense ratio: 0.43%
One year return: 68.99%
Yield: 0.67%
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Global X NASDAQ 100 Covered Call ETF
This fund may appeal to those looking for maximum income as it is currently earning 11.8 percent. It does this by following a âcovered buyâ strategy, buying stocks in the Nasdaq 100 index and selling corresponding call options on the same index.
This historically produces higher returns, especially in times of volatility.
Fund size: $ 4.3 billion
Total expense ratio: 0.60%
One year return: 20.14 percent
Yield: 11.80%
Vanguard Short-Term Inflation-Protected ETFs
Investors who are concerned about the impact of inflation on their portfolios might get some protection from an ETF investing in US Treasury Inflation-Protected Securities, or TIPS.
Vanguard’s fund tracks the performance of inflation-protected US government bonds with a remaining maturity of less than five years.
Demand is increasing along with inflationary fears, says Valecha. âUse them for cover purposes, rather than a pure investment themed game. “
Fund size: $ 52.8 billion
Total expense ratio: 0.05%
One year yield: 5.33%
Yield: 0.30 percent
This [iShares Automation and Robotics UCITS ETF] gives you exposure to companies at the forefront of technological change
Matt Brennan, Head of Investment Management, AJ Bell
IShares Automation and Robotics UCITS ETF
If you’re in the mood for investing in a “megatrend,” Matt Brennan, head of investment management at AJ Bell, recommends this ETF from fund manager BlackRock’s iShares franchise. It invests in companies in developed and emerging markets that develop automation and robotics technologies.
âThis gives you exposure to companies at the forefront of technological change that will drive future economic growth,â he says.
Fund size: $ 3.87 billion
Total expense ratio: 0.40 percent
One year yield: 50.27 percent
Yield: N / A
Franklin FTSE Korea UCITS ETF
Investors can also use ETFs to gain exposure to individual companies and Mr. Brennan advises Franklin Templeton’s range of low cost single country funds.
This gives you direct exposure to the dynamic Korean economy, one of the fastest growing emerging markets. It targets large and mid-cap stocks by tracking the performance of the FTSE Korea 30/18 Capped Index.
Fund size: $ 492.25 million
Total expense ratio: 0.09%
One year yield: 39.13%
Yield: N / A
Franklin FTSE China UCITS ETF
Any serious investor needs some exposure to China, the world’s second largest economy, and Mr. Brennan says this ETF is a cheaper way to do it.
The Chinese stock market has been slipping lately, but this could be a buying opportunity for those looking for long-term exposure.
Fund size: $ 209.62 million
Total expense ratio: 0.19 percent
One year yield: -5.37 percent
Yield: N / A
Updated: September 13, 2021 5:00 a.m.