If you’re wanting to add some diversification to your portfolio in 2022, then you might want to look at exchange traded funds (ETFs).
ETFs are a great way to achieve this because they give investors easy access to a large and diverse number of different shares through a single investment.
With that in mind, here are two highly rated ETFs that are generating strong returns for investors:
BetaShares Global Cybersecurity ETF (ASX: HACK)
The first ETF to look at is the BetaShares Global Cybersecurity ETF. It aims to track the performance of an index providing investors with exposure to the leading companies in the growing global cybersecurity sector.
Cyber security companies look well-placed for growth in the coming years thanks to increasing demand for cybersecurity services due to a rise in cybercrime. And given how this side of the market is heavily under-represented on the ASX, this ETF give investors an easy way to invest in the sector.
Among the ETF’s holdings you’ll find the likes of Accenture, Cisco, Cloudflare, Crowdstrike, and Okta.
In respect to the latter, Okta provides large enterprises with workforce identity solutions. Its customer identity and access management (CIAM) solutions ensure an organisation’s remote workforce is who they claim to be and that they only have access to the business applications they need to perform their job.
The fund has generated a return of 23.4% per annum for investors over the last five years. This would have turned a $20,000 investment into ~$57,000.
VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)
Another ETF to look at is the VanEck Vectors Morningstar Wide Moat ETF. This fund gives investors access to around 50 US-based stocks which are judged to have sustainable competitive advantages.
Historically, companies with competitive advantages, or moats, have generated strong returns for investors. This is why investing in companies with this quality is a key investment tenet for Warren Buffett.
Among the ETF’s holdings are the likes of Amazon, Boeing, Coca-Cola, Meta, and Microsoft.
Over the last five years, the ETF has outperformed the ASX 200 index with an average total return of 19.8% per annum. This would have turned $20,000 into ~$49,350.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia owns shares of and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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