2 ASX ETFs I’d buy for my child and gift again in 15 years

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I think ASX-listed exchange-traded funds (ETFs) are a great vehicle for creating wealth. So, ASX ETFs could be a great way for me to invest for my child and then gift it to them in 15 years.

The wonderful thing about investing in ASX ETFs is the ability to just buy one and then not need to track, or worry about, what each individual company is doing.

But, I wouldn’t want to just invest in any ETF for my child. I’d want to choose ones that can do well and hopefully have a positive impact on the world.

These are two I’d buy.

Betashares Climate Change Innovation ETF (ASX: ERTH)

The concept of this ETF is that it invests in a portfolio of up to 100 “leading global companies that derive at least 50% of their revenues from products and services that help to address climate change and other environmental problems through the reduction or avoidance of CO2 emissions”.

It is invested in a number of areas including clean energy providers, green transportation, waste management, sustainable product development, sustainable food, water efficiency, and improved energy efficiency and storage.

BetaShares says that “demand for products and services to tackle the world’s growing climate and environment-related problems is anticipated to rise strongly over the long term”.

This investment has been certified by the Responsible Investment Association Australasia.

Some of the largest positions in the portfolio as of April 2023 include Tesla, BYD, Ecolab, Samsung, Trane Technologies, and Vestas Wind Systems.

Over the past five years, the index that this ASX ETF tracks has returned an average of 15.6% per annum. Past performance isn’t a guarantee of future results, but it shows the progress the underlying businesses are making.

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

I think this could be one of the most effective, feel-good ETFs to invest in for global diversification.

It invests in a portfolio of large global shares that have been identified as ‘climate leaders’ while excluding businesses involved in a variety of activities including fossil fuels, manufacturing weapons, gambling, habitat destruction, predatory lending, tobacco, and so on.

The ASX ETF owns a portfolio of around 200 names including Visa, Nvidia, Apple, Home Depot, Mastercard, Toyota, ASML, and Adobe.

I like that there’s more diversification across products and services offered within this ETF, and there are more holdings as well.

The portfolio has performed admirably over the longer term. In the past five years, it has delivered an average return per annum of 16.3%. Though past performance is not a reliable indicator of future returns.

Foolish takeaway

I like the global diversification offered by these two ASX ETFs, as well as the exposure to businesses trying to do the right thing. I think the two ETFs can perform well while also being positive for the world.

The post 2 ASX ETFs I’d buy for my child and gift again in 15 years appeared first on The Motley Fool Australia.

Scott Phillips’ ETF picks for building long term wealth…

If you’re an investor looking to harness the sheer compounding power of ETFs, then you’ll need to check out this latest research from 25-year investing veteran Scott Phillips.

He’s painstakingly sorted through hundreds of options and uncovered the small handful he thinks are balanced and diversified. ETFs he thinks investors could aim to hold for years, and potentially build outstanding long term wealth.

Click here to get all the details
*Returns as of April 3 2023

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More reading

Motley Fool contributor Tristan Harrison 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 ASML, Adobe, Apple, Home Depot, Mastercard, Nvidia, Tesla, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $420 calls on Adobe, long January 2025 $370 calls on Mastercard, short January 2024 $430 calls on Adobe, and short January 2025 $380 calls on Mastercard. The Motley Fool Australia has recommended ASML, Adobe, Apple, Mastercard, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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