ASX ETFs to target this month that focus on undervalued sectors

Here at The Motley Fool, we believe in long-term, diversified investing principles. One simple way to follow these principles is with ASX ETFs. 

ASX ETFs offer instant diversification in just one trade. 

However more and more thematic funds are becoming available that allow investors to tap into specific sectors. 

This can be extremely effective when certain areas of the market are undervalued. 

Scooping up an ASX ETF in an undervalued sector can pay off big in the long run when markets correct. 

With that in mind, here are three ASX sectors that have struggled recently, making them a prime value play in the long run. 

Healthcare

Healthcare shares have been hit hard in 2026. 

Here on home soil, the S&P/ASX 200 Health Care Index (ASX:XHJ) is down around 30% for the year to date. 

Many healthcare stocks were previously trading at high valuations after years of strong performance, so investors became less willing to pay premium prices as interest rates stayed elevated. 

Higher rates also pushed investors away from growth-oriented healthcare and biotech companies and toward sectors like banks, mining, and energy. 

Some experts are now suggesting the sell-off may have swung too far to the down side, creating a buy-low opportunity for ASX ETFs focussed on this sector. 

These headwinds have pushed down healthcare shares globally, not just here in Australia. 

Some options for investors optimistic on a global long-term rebound include: 

• BetaShares Global Healthcare ETF – Currency Hedged (ASX: DRUG)
• iShares International Equity ETFs – iShares Global Healthcare ETF (ASX: IXJ)
• Vaneck Vectors Global Health Leaders ETF (ASX: HLTH). 

Technology 

ASX technology shares have also been heavily sold off in 2026. 

The S&P/ASX All Technology Index (ASX: XTX) is down around 20% for the year to date. 

ASX technology shares have been pressured by fears that generative AI could disrupt traditional software business models and reduce the value of existing SaaS platforms. 

Investors have been concerned that AI tools and autonomous agents may replace some software functions, weaken pricing power, and force Australian tech companies to spend heavily just to remain competitive against larger global AI players.

However it appears some momentum is beginning to swing back in favour of tech shares.

Targets from brokers are now swinging back towards the optimistic side. 

For investors confident in a long-term rebound, an ASX ETF to consider is Betashares S&P/ASX Australian Technology ETF (ASX: ATEC), which provides exposure to leading ASX-listed companies in a range of tech-related market segments.

Real estate

Finally, real estate shares have also struggled in 2026. 

The S&P/ASX 200 Real Estate Index (ASX: XRE) has dropped around 10% since the start of the year. 

Headwinds have included higher bond yields and interest rates hurting property valuations and REIT financing costs. 

For investors looking to target this undervalued sector, some ASX ETFs to consider include: 

• VanEck Vectors Australian Property ETF (ASX: MVA)
• Vanguard Australian Property Securities Index ETF (ASX: VAP). 

The post ASX ETFs to target this month that focus on undervalued sectors appeared first on The Motley Fool Australia.

More reading

• 3 amazing ASX ETF for beginners to buy and hold
• 3 ASX ETFs that could outperform the ASX in the next 12 months 
• 3 excellent ASX ETFs to buy and hold for 10 years
• Why this BetaShares ETF could be a strong buy for Aussie investors
• ASX tech shares vs. ATEC ETF: How they fared during sector downturn

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 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.