1 beaten-down ASX share to consider buying today, and 5 I’m shunning for now

Numerous ASX share investments have gone through volatility over the last few weeks and months. The declines can be a great buying opportunity, in my view. I think this could be an excellent time to look at an investment like Global X Fang+ ETF (ASX: FANG).

While it’s not your typical ASX share, the exchange-traded fund (ETF) can be bought on the ASX and it’s about investing in shares.

When I think about which investments would be good buys, I’m optimistic that it’s the best businesses that will deliver the strongest results over the long-term. This fund is about great stocks.

The appeal of the FANG ETF

This ASX ETF aims to give investors exposure to some of the largest global tech companies.

There are only 10 businesses in the portfolio, so it’s a highly concentrated investment that gives exposure to names like Nvidia, Netflix, Meta Platforms, Alphabet, Amazon.com, Broadcom, Apple, Crowdstrike, Palantir and Microsoft.

Each of those positions is meant to roughly have a 10% weighting. The position sizing is reweighted every so often to ensure each business takes up around a tenth of the ETF.

These businesses operate across a wide range of areas such as AI, social media, online video, online search, e-commerce, smartphones, semiconductors, software for devices, cybersecurity and so on.

The FANG ETF has delivered an average return per year of 20.5% over the last five years, but it has noticeably declined over the last few years, as the chart below shows.

Past performance is not a guarantee of future performance, but the fund’s holdings are the ones at the forefront of developing the next products and services for society. I think it’s a good idea to look at investing in this ASX share during this period.  

ASX shares I’m not buying right now

There are a few ASX shares that have declined over the last week or two amid the volatility, but there are a few compelling businesses I’m not looking to invest in today.

I think that ASX mining shares can make great investments because of how cyclical they are. Changes in supply and demand can lead to big changes in resource prices, net profit and valuation shifts.

After a strong run-up of share prices (though there has been a decline very recently), I’m not looking to buy into names like BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO), Fortescue Ltd (ASX: FMG), PLS Group Ltd (ASX: PLS) and Lynas Rare Earths Ltd (ASX: LYC).

I’ll be more interested if/when investor excitement about these ASX mining shares settles down and future expectations are reduced. I’ll be looking at other opportunities in the meantime.

The post 1 beaten-down ASX share to consider buying today, and 5 I’m shunning for now appeared first on The Motley Fool Australia.

More reading

• Why BHP, EQ Resources, Lottery Corp, and Woodside shares are falling today
• Buy, hold, sell: Endeavour, Life360, and Lynas shares
• Here’s the earnings forecast out to 2030 for Fortescue shares
• Why is BHP share price sinking today?
• 5 Australian stocks to buy and hold for the next 5 years

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 Alphabet, Amazon, Apple, CrowdStrike, Meta Platforms, Microsoft, Netflix, Nvidia, and Palantir Technologies. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Broadcom and Lynas Rare Earths Ltd. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, BHP Group, CrowdStrike, Meta Platforms, Microsoft, Netflix, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.