James Hardie Industries plc (ASX: JHX) shares have experienced sharp swings over the past year.

At one point, the stock fell roughly 40% to 50% from its high amid concerns over a large US acquisition, softer earnings, and governance uncertainty. In the first weeks of 2026, James Hardie shares have staged a meaningful recovery and gained 18% in value to $36.54, at the time of writing.

Let’s have a look why experts think there’s more to come from the ASX share.

Market leadership and pricing power

James Hardie is the dominant fibre cement player in North America and Australia. Its brand recognition, distribution network, and product durability create a competitive moat that is difficult for rivals to replicate.

The leadership position of James Hardie shares have historically allowed the company to push through price increases, even in mixed demand environments. The addition of outdoor living products through its US expansion broadens James Hardie’s addressable market and provides cross-selling opportunities.

Over time, management believes scale benefits and cost synergies can lift margins and support earnings growth.

Better than expected profit

Last week James Hardie released a third-quarter profit that exceeded expectations. The building products maker said in a statement to the ASX that its net sales rose 30% to US$1.2 billion, while operating income was US$176 million. The net sales figure was, however, inflated by the contribution of AZEK, which James Hardie bought mid-last year.

The company upgraded its full-year adjusted EBITDA guidance from US$1.2 to US$1.25 billion to US$1.23 to US$1.26 billion. It also upgraded the net sales outlook for both the siding and trim, and deck, rail & accessories divisions.

Cyclicality and execution risk

The flip side of the US presence is exposure to the housing cycle there. New construction, repairs and remodel activity are highly sensitive to mortgage rates and consumer confidence. Elevated interest rates have dampened housing demand, and volumes have been uneven across regions.

Valuation is another consideration. After rebounding, James Hardie shares are no longer priced for disaster. That means future gains will likely depend on earnings delivery rather than sentiment alone.

What do brokers see next?

Analyst views on James Hardie shares generally sit in the moderate buy to outperform range, with many price targets above recent trading levels. Forecasts point to gradual earnings improvement as cost savings flow through and housing markets stabilise.

The consensus expectation is not for explosive short-term growth, but for steady gains if management executes well and demand conditions normalise. Analysts have set the average 12-month price target for James Hardie shares at $41.77, a potential gain of 14% at current levels.

Morgans is feeling positive about the medium-term outlook of James Hardie shares. As a result, the broker has retained its buy rating with an improved price target of $45.75, a potential 25% upside. 

Foolish takeaway

James Hardie shares are not a straight-line growth story. They are cyclical, exposed to macro conditions. But the company also holds strong market positions, proven pricing power, and expansion opportunities in attractive categories.

If housing conditions improve and synergies are realised, the shares could continue trending higher. Investors should expect volatility, but long-term believers may see the recent swings as part of the journey rather than the end of the story.

The post Why James Hardie shares could keep charging higher appeared first on The Motley Fool Australia.

More reading

• These ASX 200 shares could rise 25% to 65%
• 3 ASX 200 stocks smashing the benchmark this week
• Buy, hold, sell: James Hardie, CSL, and CBA shares
• Here are the top 10 ASX 200 shares today
• Why AGL, CBA, Domino’s, and James Hardie shares are jumping today

Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

REA Group Ltd (ASX: REA) shares have slid 41% over the past 12 months, even as the engine underneath keeps humming.

At current levels, this beaten-down ASX share looks mispriced. For investors prepared to ride out short-term volatility and tune out broader market noise, REA Group shares could offer compelling long-term upside.

Let’s have a look at the reasons why.

Dominant digital marketplace

REA Group is the owner of realestate.com.au — Australia’s dominant online property marketplace. In digital real estate, scale wins. REA Group has it.

The business throws off strong cash flow and has long demonstrated pricing power. Agents pay for depth products, premium listings and data insights because that’s where the eyeballs are. Even in softer listing markets, REA Group has historically lifted yield per listing to keep revenue moving higher.

Pricing and product mix drive growth

Recent quarterly numbers told the same story: revenue and EBITDA up, driven more by pricing and product mix than sheer volume. That’s the mark of a quality platform. The moat of the REA Group shares is clear — market leadership, network effects and recurring agent services.

REA Group recently reported its results for the six months to 31 December 2025. With its core operations, it reported revenue growth of 5% to $916 million, underlying operating profit excluding associates growth of 6% to $569 million, and net profit growth of 9% to $341 million.

Regulatory scrutiny and elevated multiples

But REA Group shares are not risk-free. Regulatory scrutiny is a live issue, and the stock still trades on elevated multiples compared to long-term averages. That can limit short-term upside if growth wobbles.

Still, leverage to a housing recovery remains powerful. If listings rebound or management successfully rolls out AI-driven tools that deepen agent engagement, sentiment could shift quickly.

Pullback as opportunity

For long-term investors, a 41% pullback in a category leader doesn’t automatically signal trouble. It can signal opportunity. Most brokers seem to think so.

Following the half-year results, Bell Potter has maintained its buy rating on REA Group shares but trimmed its price target to $211.00 from $244.00. With the shares currently trading at $158.09, that implies potential upside of around 33% over the next 12 months.

The business is also rated as a buy by UBS, with a price target of $218.90. This points to a possible rise of around 38% within the next year from where it is at the time of writing.

UBS recently explained that REA Group shares seem cheap compared to its valuation multiples of the last five years:            

We reiterate our Buy rating on REA. Whilst difficult to know where the valuation support would be in the current market environment, REA is trading today on 18.5x fwd EBITDA, 31x fwd P/E both more than 1SD below last 5yr averages, which we view as attractive for a stock continuing to deliver resilient double digit earnings growth, and most AI defensive across our Online Classifieds coverage.

The post 3 tailwinds that could send REA Group shares higher again appeared first on The Motley Fool Australia.

More reading

• 3 ASX ETFs to protect your portfolio from the tech sell-off
• Does AI spell doom for REA Group and Car Group?
• How to go from zero to $50,000 with ASX shares
• Here are the top 10 ASX 200 shares today
• Bell Potter says these ASX 200 stocks are buys with 20%+ upside

Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The tech sector has been hit hard over the past week, with heavy selling sweeping across global markets.

Artificial intelligence (AI) disruption fears, stretched US valuations, and Nasdaq declines have sparked a broad sell-off in international software shares.

That volatility has dragged down several of the ASX’s highest quality technology companies, pushing them to multi-year lows.

Investors have been cutting risk, with growth stocks sold off the hardest. This sharp correction has created some appealing opportunities.

Why tech shares are under pressure

For the past 18 months, AI has been treated as a major growth driver for software companies. Investors are now reassessing how it will affect earnings, customer demand, and competition across the sector.

At the same time, valuations across US software stocks had expanded significantly after a strong rally, making the sector sensitive to even minor setbacks.

Significant falls on the Nasdaq have prompted fund managers to reduce exposure across the technology sector, and that selling has flowed through to the ASX.

Interest rates are also weighing on sentiment. Higher bond yields tend to pressure long-duration growth companies, where much of the valuation is tied to future earnings.

WiseTech Global Ltd (ASX: WTC)

On Friday, WiseTech shares fell 10.41% to $42.62, their lowest level since July 2022.

WiseTech is best known for its CargoWise platform, which helps logistics providers manage complex global supply chains. It has built a strong position in freight forwarding software and continues to expand its footprint internationally.

Over the past decade, the company has delivered consistent revenue growth and strong margins. Management has focused on developing a single global platform rather than stitching together multiple disconnected systems, supporting scalability and integration.

A large portion of revenue comes from recurring contracts with customers who use the software to run critical parts of their business.

Despite the recent decline, the company remains exposed to a large global market with a long runway for growth.

TechnologyOne Ltd (ASX: TNE)

TechnologyOne shares dropped 7.05% on Friday to $20.17, their lowest level since early August 2024.

The company provides enterprise software to governments, councils, universities and large organisations. Its systems are deeply embedded in customer operations, making switching providers difficult.

TechnologyOne has spent years transitioning customers to its cloud platform, increasing recurring revenue and supporting margin expansion.

Annual recurring revenue (ARR) has grown strongly in recent years, alongside steady improvements in profitability. The business model is simple, focused and scalable.

Like WiseTech, the share price weakness appears more linked to global sector sentiment than any material change in the company’s fundamentals.

Foolish takeaway

Tech stocks do not fall 10% in a day without reason.

The market is reassessing growth expectations across the tech sector. That does not mean the fundamentals have suddenly changed.

WiseTech and TechnologyOne are not without risk. However, after this correction, both are trading at levels not seen for some time. If earnings continue to grow and margins remain solid, today’s prices could look very attractive in hindsight.

The post 2 ASX tech stocks smashed to multi-year lows appeared first on The Motley Fool Australia.

More reading

• The $10,000 Test: Which ASX shares would I still own after 10 years?
• Should you just forget ASX tech stocks after the AI selloff?
• How I would build an income portfolio that lasts a lifetime
• Why WiseTech shares are plunging 11% today
• Why Austal, Cochlear, Nick Scali, and WiseTech shares are tumbling today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Technology One and WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ASX dividend stock Pinnacle Investment Management Group Ltd (ASX: PNI) has sunk a painful 36% since its February 2025 peak. When a business like Pinnacle falls that far, I think it’s a great time to consider an investment.

Pinnacle is invested in a portfolio of funds management businesses (affiliates), so funds under management (FUM), management fees and performance fees are a core part of the ASX dividend stock’s performance.

The business recently reported its FY26 half-year result, which reinforced to me why it’s a strong pick for dividend income.

Solid HY26 result

The company reported that its bottom line – the net profit after tax – declined by 11% to $67.3 million. That was essentially because performance fees (post-tax) contributed $13.4 million of Pinnacle’s net profit, compared to $36.4 million in the prior corresponding period.

Pinnacle noted that its affiliates have continued medium-term outperformance across many affiliates, with 86% of five-year affiliate strategies outperforming their respective benchmarks over the five years to 31 December 2025.

Excluding performance fees, Pinnacle’s net profit rose 37% year-over-year, or it was 11% higher than the second half of FY25.

Pinnacle reported a record net inflows for the half-year period of $17.2 billion, with domestic retail net inflows of $6.8 billion, domestic institutional net inflows of $7 billion and international net inflows of $3.4 billion.

The aggregate affiliate FUM grew to $202.5 billion at 31 December 2025, up $23.1 billion, or 13%, from $179.4 billion at 30 June 2025. Affiliate retail FUM grew 18% over the six months to $46.7 billion and affiliate international FUM rose 12% to $57.8 billion.

Pinnacle also noted that all of its affiliates are profitable, with revenue and core earnings continuing to build.

The ASX dividend stock also welcomed its 19^th affiliate, Advantage Partners of Japan and also announced a further investment into Pacific Asset Management.

With the business paying out virtually all of its net profit as a dividend, the payout was 12% lower than the FY25 half-year dividend. However, it was 7% higher than the FY25 final dividend.

ASX dividend stock credentials

So far, FY26 has been very volatile in terms of share market valuations, which could have impact earnings and the dividend in the annual result. However, the future of dividend growth looks very promising, in my view.

The broker UBS forecasts that the business could pay an annual dividend per share of 81 cents in FY27. The payout could then be increased each year to FY30 when the payment could be $1.28 per share, representing growth of 58% between FY26 to FY30. I don’t know what the level of franking will be, so I’ll calculate the potential dividend yield without franking credits.

Those projections suggest a dividend yield of 5.8% in FY26 and 7.8% in FY30, excluding franking credits. I think those would be very pleasing yields if they happen.

The post 1 ASX dividend stock down 36% I’d buy right now appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Pinnacle Investment Management Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Pinnacle Investment Management Group. The Motley Fool Australia has positions in and has recommended Pinnacle Investment Management Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Insurance Australia Group Ltd (ASX: IAG) shares ended in the green on Friday afternoon. At the close of the ASX, the shares finished up 1.03% to $6.87 a piece.

It’s welcome news for investors after the insurance shares have dropped nearly 10% since the start of February. And the stock is now 11.92% lower than this time last year.

What happened to IAG shares this month?

IAG started dropping on Monday last week. There was no price-sensitive news out of the company at the time, so it’s possible that investors were taking gains off the table ahead of the company’s first half FY26 results. 

Extreme wet weather events, particularly in NSW and Queensland which would result in a surge of insurance claims and increased payouts, likely dented investor confidence too. A higher number of claims generally reduces profit margins for insurers like IAG.

Investors were right to be apprehensive. The company’s half-year FY26 results, posted on Thursday, showed a significant drop in profit.

For the six months to 31st December 2025, IAG’s revenue was up 23.3% but its net profit after tax dropped 35.1%.

Despite the decline, IAG maintains its FY26 profit guidance of between $1,550 million and $1,750 million.

Why I think the share price could jump higher

While IAG shares tumbled in February, I think there is potential for the stock to storm up to $10 per share this year. Here’s why.

IAG is likely to hike its home and motor insurance premiums following high claims from several extreme weather events across the country over the past few months. 

According to a report by The Australian, market analysts expect the combined impact of recent catastrophes and broader claims inflation to flow through to upcoming renewals as insurers work to manage loss ratios and capital requirements.

This means that if weather conditions normalise (or at least the number of extreme events reduces, even slightly) earnings could rebound fast. This translates through to better dividends for investors and possible share buybacks. It could also drum up more investor confidence (or interest) in IAG shares, which would in turn drive the price higher. 

Analysts are very bullish on the outlook for IAG shares right now. Out of 11 analysts, 7 have a buy or strong buy rating. The maximum target price is $9.80, which implies a 42.65% upside at the time of writing. And I think, if the pieces of the puzzle fall into place, the shares could well break the $10 barrier this year.

The post Prediction: IAG shares could jump to $10 in 2026 appeared first on The Motley Fool Australia.

More reading

• IAG shares could go how high?
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• ASX 200 financials flew but tech and mining shares faltered last week
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• IAG share price drops 13 in a year: Buying opportunity or time to sell up?

Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

When you have $3,000 to invest, you do not need to spread it across dozens of ideas. A handful of targeted exchange-traded funds (ETFs) can be enough to provide exposure to powerful global themes in a simple and diversified way.

Rather than focusing on broad market exposure, let’s look at funds that lean into structural trends that could play out over many years. These are three that stand out to me right now.

BetaShares Global Defence ETF (ASX: ARMR)

Global defence spending has been rising, not falling. Governments across Europe, North America, and Asia are increasing defence budgets in response to geopolitical tensions and shifting security priorities. The ARMR ETF provides exposure to a diversified portfolio of global defence companies involved in aerospace, military equipment, and advanced technologies.

The appeal of this ASX ETF for me lies in the durability of the theme. Defence contracts tend to be long term, and spending decisions are often driven by strategic considerations rather than short-term economic cycles. For investors seeking exposure to increased global defence investment, I think the BetaShares Global Defence ETF offers a straightforward way to participate.

BetaShares Crypto Innovators ETF (ASX: CRYP)

The CRYP ETF provides exposure to stocks involved in the cryptocurrency and blockchain ecosystem. It holds global businesses such as crypto exchanges, miners, and infrastructure providers that benefit from increased digital asset adoption. Unlike holding a single cryptocurrency, this ASX ETF spreads risk across multiple players in the industry.

Cryptocurrency markets have experienced a recent sell-off, which has weighed on sentiment. For investors who remain confident in the long-term future of digital assets and blockchain technology, I think periods of weakness like this can present opportunities to gain exposure at lower prices.

But it is important to understand that the CRYP ETF is volatile and not suitable for every investor. I would only buy it if I believed in the long-term growth of crypto infrastructure.

VanEck China New Economy ETF (ASX: CNEW)

The CNEW ETF offers exposure to China’s evolving economy. It targets stocks that are well-positioned in consumer, technology, healthcare, and innovation-driven sectors. It aims to capture growth in areas aligned with domestic consumption, innovation, and structural change.

Chinese equities have faced volatility and mixed sentiment in recent years. That uncertainty has weighed on valuations in parts of the market. For investors willing to accept that volatility, the VanEck China New Economy ETF provides a way to access long-term growth themes within the world’s second-largest economy.

Foolish takeaway

Exciting ETFs often come with higher volatility, but they also offer exposure to themes that could shape the next decade.

The ARMR ETF taps into rising global defence spending, the CRYP ETF provides access to the crypto ecosystem at a time when prices have pulled back, and the CNEW ETF focuses on China’s economic transition.

For investors with a higher risk tolerance and a long-term horizon, I believe these three ASX ETFs could be worth considering this month.

The post 3 exciting ASX ETFs to buy with $3,000 this month appeared first on The Motley Fool Australia.

More reading

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• Should Aussie investors have exposure to Chinese equities in 2026? – Expert 

Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It is fair to say that ASX growth shares have taken a hit this month.

Whenever sentiment turns against an area of the market, high-quality businesses can get sold off alongside weaker names. That can be uncomfortable in the short term, but for long-term investors it can also create opportunity.

After the recent growth sell-off, these are the ASX shares I would be looking to buy on weakness.

Temple & Webster Group Ltd (ASX: TPW)

The first ASX growth share I would consider is Temple & Webster.

The company is often lumped in with broader retail stocks, but its model is quite different. As an online-only furniture and homewares retailer, it doesn’t carry the heavy store network costs that traditional chains do. That gives it flexibility in slower periods and leverage when demand improves.

What makes the current weakness interesting is that the long-term story hasn’t changed. Australian furniture retail still has relatively low online penetration compared to overseas markets. Temple & Webster continues to build brand recognition, expand its product range, improve its private-label offering, and grow its market share.

When consumer confidence eventually rebounds, the business could be operating from a stronger competitive position than before the downturn.

Web Travel Group Ltd (ASX: WEB)

Another ASX growth share I would look at after market weakness is Web Travel.

Since spinning off its consumer-facing Webjet business in 2024, this ASX growth share has been focused on WebBeds, which is its global B2B hotel distribution platform. This is a very different business to the traditional travel agency model. It connects hotels with travel agents and tour operators around the world.

Travel demand remains structurally strong, but the market tends to react sharply to any macro uncertainty. That volatility can spill over into Web Travel Group’s share price, even when booking volumes and long-term travel trends remain intact.

With global tourism still normalising and scale advantages building within WebBeds, this period of share price weakness could offer patient investors an attractive entry point.

Xero Ltd (ASX: XRO)

A final ASX growth share I would buy following recent weakness is Xero.

It has been caught up in the broader tech sell-off, with investors questioning valuations and worrying about the potential impact of artificial intelligence on software businesses.

Yet the company remains deeply embedded in the workflows of small and medium-sized businesses across the world. Accounting software is not something companies switch lightly. Integrations, payroll systems, and compliance processes create meaningful stickiness.

Short-term sentiment may swing, but the structural shift toward cloud-based accounting remains intact.

The post The ASX growth shares I’d buy after the tech meltdown appeared first on The Motley Fool Australia.

More reading

• Bell Potter names 3 sold-off ASX 200 shares to buy today
• 13 ASX 200 shares hit multi-year lows as the market takes a breather
• Are Temple & Webster shares a buy after falling 32% yesterday following earnings results?
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Motley Fool contributor James Mickleboro has positions in Temple & Webster Group, Web Travel Group Limited, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX copper shares have been firing on the back of a rising copper price as the energy transition gets fully underway.

The market’s largest pure-play copper share, Sandfire Resources Ltd (ASX: SFR), is up 75% over the past 12 months.

Meantime, shares in the world’s largest copper producer, BHP Group Ltd (ASX: BHP), have lifted 25% over the same period.

In 2025, the copper price rose by 42%.

Last month, the red metal hit a new record above US$6.30 per pound before retreating to the high US$5 range this month.

Here are 2 ASX copper shares that are buy rated by the experts.

True North Copper Ltd (ASX: TNC)

The True North Copper share price closed at 49 cents on Friday, up 19.5% over the past year.

True North’s flagship asset is the Mount Oxide exploration project, which has copper, silver, and cobalt deposits.

The current JORC mineral resource estimate (MRE) is 220 kt of copper, 5.13 Moz of silver, and 21.2 kt of cobalt.

True North Copper also owns the Cloncurry Copper Project and provided an MRE update last week.

The copper resource estimate increased 7% to 109 kt Cu and the gold resource estimate lifted 9% to 84 koz Au.

True North Copper said:

The updated MRE’s provide a current technical baseline to support ongoing Cloncurry Copper Project Pre-Feasibility (PFS) study work, including evaluation of future development options and underground potential.

Morgans has a buy rating on this ASX copper share with a 12-month target of $1.20.

This suggests a possible 145% capital gain over the next year.

Aeris Resources Ltd (ASX: AIS)

The Aeris Resources share price closed at 51 cents on Friday, up 240% over 12 months.

After Aeris released its 2Q FY26 report on 29 January, Morgans maintained its accumulate rating.

The broker also lifted its 12-month price target from 60 to 70 cents.

Since then, Aeris has announced new drilling results and the acquisition of Peel Mining Ltd (ASX: PEX).

This will give Aeris ownership of Peel’s South Cobar Copper Project, comprising the Mallee Bull and Wirlong mines.

Aeris Resources said the deal represented “a highly synergistic combination” of its Tritton mine with Peel’s South Cobar Project.

South Cobar has a contained MRE of 10.6Mt @ 1.85% Cu for 197kt of contained Cu and is within haulage distance of Tritton.

Peel intends to demerge its other Cobar assets into a new company.

Morgans upgraded its rating from accumulate to buy on the news, commenting:

AIS is acquiring Peel Mining’s (PEX) South Cobar Copper Project, extending Tritton’s resource base and supporting a credible 10+ year mine life.

Mallee Bull adds high-grade, largely indicated resources, improving production visibility and enabling stronger mill utilisation, lower unit costs and enhanced operating leverage from ~FY29.

Upgrade to BUY with a A$0.70ps target price, with the transaction strengthening Tritton’s long-term outlook.

The price target suggests a potential 37% upside over the next year.

The post 2 ASX copper shares to buy: experts appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has positions in BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

A new report from VanEck has reinforced the new tailwinds for emerging market focussed ASX ETFs. 

According to Anna Wu, Senior Associate, Cross-Asset Investment Research, last year marked the strongest annual performance for emerging market equities since 2017.

She believes there are a number of drivers that could support this momentum throughout 2026. 

US dollar weakness

According to last week’s report, assuming historical patterns hold, US dollar down cycles tend to persist once they begin. 

In 2026, factors such as high US government debt, easing monetary policy, and slowing US economic growth could contribute to further dollar weakness. 

Additionally, the US dollar’s share of global foreign exchange reserves has declined to its lowest level since the mid-1990s, suggesting a broader move away from dollar dominance.

A weaker US dollar typically boosts the strength of emerging markets currencies, making exports cheaper, improving revenues and contributing to outperformance in this environment.

Emerging markets are positioned for growth tailwinds

The report from VanEck also reinforced that emerging economies are growing at almost twice the rate of developed markets. 

This is along with relatively stable inflation, which positions them as the world’s primary growth drivers.

On a corporate level, street analysts are pricing in an upbeat earnings outlook for emerging markets companies, circa 20% EPS growth over the short and medium term. This highlights the upside potential for continued earnings growth. 

Valuations of emerging markets corporates also appear more attractive compared to their developed markets peers, at a 25% relative discount and at an absolute level closer to the historical average.

Key markets to watch

VanEck pointed to South Korea and Taiwan as markets that have performed well recently. 

It said investors have been chasing exposure to the AI ‘picks and shovels’ trade. 

These are the companies that supply the core building blocks of artificial intelligence rather than end-use applications. These markets are among the world’s top providers of semiconductors.

It also highlighted India as the next potential growth driver in emerging markets. 

India’s strong GDP and earnings growth, coupled with easing policy and strong corporate earnings growth, reinforces its potential to return as a key emerging market outperformer this year. 

Additionally, the country could be a beneficiary of the global AI infrastructure buildout, with US tech giants such as Google and Microsoft continuing to increase capital expenditure (CAPEX) commitments in the country.

This sentiment is also shared by Global X who also identified India as a structural growth market in a report last week.

How do investors gain exposure to emerging markets?

For broad exposure to emerging markets, there are several options including: 

• VanEck Msci Multifactor Emerging Markets Equity ETF (ASX: EMKT)
• iShares MSCI Emerging Markets ETF (ASX: IEM)
• Vanguard FTSE Emerging Markets Shares ETF (ASX: VGE)

For geographic specific ASX ETFs for the aforementioned countries: 

• iShares Msci South Korea ETF (ASX: IKO)
• Betashares Capital Ltd – Asia Technology Tigers Etf (ASX: ASIA) – Includes roughly 63% combined weighting to South Korea and Taiwan
• VanEck India Growth Leaders ETF (ASX:GRIN)
• Betashares India Quality ETF (ASX: IIND)

The post The case for emerging markets ASX ETFs strengthens: Expert appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Aaron Bell has positions in Betashares Capital – Asia Technology Tigers Etf. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Australian and global technology stocks have come under pressure as investors reassess the risks and rewards of the AI boom. Accordingly, it could be an ideal time to protect your portfolio through ASX ETFs. 

What’s going on with tech and AI?

After a period of strong gains driven by optimism around artificial intelligence, markets have turned more cautious. 

This has been driven by growing concern that AI could both fail to justify lofty valuations and disrupt the traditional software business models many ASX tech companies rely on. 

Many Software-as-a-service (SaaS) companies and online classified platforms have been sold off as investors worry that generative AI could replicate core software functions. 

We’ve seen this fear deplete the share price of many ASX stocks including REA Group Ltd (ASX: REA) and CAR Group Ltd (ASX: CAR). 

While discourse amongst experts suggests this fear is largely overblown, it hasn’t stopped the steady decline due to negative sentiment.  

The sell-off has also been amplified by weaker leads from Wall Street and a rotation into more defensive, income-generating sectors such as banks and resources, leaving local tech stocks exposed to a sharp sentiment reversal.

How to protect your portfolio with ASX ETFs

For investors who are suffering with significant exposure to these tech shares, it could be an ideal time to gain exposure to other sectors. 

There are several ASX ETFs that target sectors that are less exposed to these fears. 

Keep in mind none of these are completely immune to broad market sell-offs – they can still decline if overall sentiment turns bearish. 

However they could hold up better relative to tech-focused or growth-oriented stocks during periods of risk aversion.

iShares Global Consumer Staples ETF (ASX: IXI)

This fund provides investors with the performance of the S&P Global 1200 Consumer Staples Sector Index. 

The index is designed to measure the performance of global consumer staples companies that produce essential products, including food, tobacco, and household items. 

These companies tend to have steady earnings regardless of tech cycle swings. 

Consumer staples are viewed as defensive because the demand for these products stays relatively stable even when markets wobble.

BetaShares Australian Quality ETF (ASX: AQLT)

This fund targets companies with strong profitability and balance sheets, which can help reduce volatility compared with growth or tech-heavy funds. 

These companies tend to be more resilient in market downturns.

By sector, it has a large exposure to ASX dominant sectors like financials (35.9%) and materials (16.2%). 

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

This ASX ETF could appeal to investors seeking protection from an AI-driven tech sell-off. 

It provides exposure to a very different part of the market, namely global banks rather than high-growth software or platform companies.

SaaS or online marketplaces whose valuations hinge on future earnings growth and AI disruption narratives. 

Meanwhile, banks generate profits primarily from net interest margins, lending volumes and credit quality. 

Essentially, their earnings are tied to economic activity. 

Foolish Takeaway

It’s important for investors not to abandon AI or tech completely. 

These sectors remain powerful drivers of productivity, earnings growth and long-term innovation across the global economy. 

Rather, the recent global fears have driven valuations down, reminding investors of the importance of diversification.

The post 3 ASX ETFs to protect your portfolio from the tech sell-off appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended iShares International Equity ETFs – iShares Global Consumer Staples ETF. The Motley Fool Australia has recommended CAR Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.