Why these ASX ETFs could be top picks in May

As May approaches, investors are no doubt looking for opportunities that reflect both recent market moves and longer-term trends.

Some areas have been sold off and could be setting up for a recovery. Others continue to benefit from structural growth or offer exposure to high-quality businesses.

Here are three ASX exchange traded funds (ETFs) that stand out for different reasons.

BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)

The first ASX ETF to look at is the BetaShares S&P/ASX Australian Technology ETF.

It has been caught up in the broader weakness across technology shares this year. That has pushed valuations lower across a number of its holdings, despite their underlying businesses continuing to execute.

Its portfolio includes companies such as NextDC Ltd (ASX: NXT), Pro Medicus Ltd (ASX: PME), and REA Group Ltd (ASX: REA).

With sentiment around tech currently subdued, the BetaShares S&P/ASX Australian Technology ETF offers a way to gain exposure to a group of companies that are still tied to structural growth, but trading on lower multiples than a year ago. This fund was recently recommended by analysts at BetaShares.

Betashares Global Cash Flow Kings ETF (ASX: CFLO)

Another ASX ETF worth looking at in May is the Betashares Global Cash Flow Kings ETF.

This fund focuses on companies that generate strong and consistent free cash flow. Rather than chasing emerging themes, it leans toward businesses with established earnings and the ability to reinvest over time.

Its holdings include companies such as Alphabet (NASDAQ: GOOG), Mastercard (NYSE: MA), and Palantir Technologies (NASDAQ: PLTR).

Alphabet is a good example of this approach. Its core search business produces significant cash flow, which supports continued investment in areas like artificial intelligence and cloud computing. That financial strength allows it to expand without needing to rely heavily on external funding. It was also recently recommended by analysts at BetaShares

BetaShares Global Cybersecurity ETF (ASX: HACK)

A third ASX ETF to consider in May is the BetaShares Global Cybersecurity ETF.

Cybersecurity has become a core requirement for businesses as more systems move online and digital threats become more sophisticated.

Its holdings include companies such as Cisco (NASDAQ: CSCO), Palo Alto Networks (NASDAQ: PANW), and Okta (NASDAQ: OKTA).

Okta is a good example of how the sector is evolving. It focuses on identity and access management, helping organisations control who can access systems and data. As businesses adopt more cloud-based tools, this type of service becomes increasingly important.

With demand for cybersecurity continuing to build, the future looks bright for the BetaShares Global Cybersecurity ETF and its holdings.

The post Why these ASX ETFs could be top picks in May appeared first on The Motley Fool Australia.

More reading

• After 7 straight days in the red, where is the value for ASX 200 stocks?
• Are these the best ASX ETFs to buy in May?
• 3 excellent ASX ETFs to buy and hold for 10 years or more
• Why it’s time to look past the “SaaSpocolypse” and target Aussie tech
• Is this ASX ETF the perfect companion to Vanguard’s VAS?

Motley Fool contributor James Mickleboro has positions in Nextdc, Pro Medicus, and REA Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, BetaShares Global Cybersecurity ETF, Cisco Systems, Mastercard, Okta, and Palantir Technologies. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Palo Alto Networks and Pro Medicus. The Motley Fool Australia has recommended Alphabet, Mastercard, Okta, and Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.