3 high-quality ASX ETFs at 52-week highs I’d still buy

Buying an ASX exchange-traded fund (ETF) at a 52-week high can feel unnerving.

It is natural to wonder whether the easy gains have already been made, especially when markets have been strong.

But I do not think a 52-week high is automatically a reason to stay away. Some ETFs reach new highs because the businesses inside them are continuing to grow, innovate, and generate value.

With that in mind, here are three high-quality ASX ETFs I would still buy after they hit 52-week highs on Monday.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

The Vanguard MSCI Index International Shares ETF is the kind of fund I think many investors could hold for decades.

It gives exposure to a broad range of developed-market shares outside Australia. That includes many of the world’s largest companies across technology, healthcare, financials, industrials, consumer goods, and communication services.

What I like about this ETF is that it does not require investors to predict which single country, sector, or company will lead the next stage of global growth. It spreads the money across a large group of businesses that operate in many different parts of the world.

That can be valuable for Australian investors. The local market has some excellent companies, but it cannot offer the same depth in global software, semiconductors, pharmaceuticals, luxury goods, payments, consumer platforms, and industrial leaders. This ETF helps fill that gap in one trade.

iShares S&P 500 AUD ETF (ASX: IVV)

The iShares S&P 500 AUD ETF is another fund I would still buy.

It tracks the popular S&P 500 Index, which gives investors access to many of America’s biggest and best companies.

This ETF owns companies involved in cloud computing, artificial intelligence (AI), smartphones, digital advertising, healthcare, payments, retail, food, logistics, and financial services.

That mix is what makes it so attractive in my view. The fund is not just a bet on the US consumer. Many of the companies inside the S&P 500 earn revenue around the world. They are global businesses listed in the United States.

The index has also been a strong long-term wealth creator. Past returns are not a guarantee of future performance, but I think the quality and scale of the companies inside the S&P 500 give it a good chance of continuing to reward patient investors over long periods.

There will be downturns. Valuations can become stretched, and the largest technology companies now have a major influence on index returns. Even so, I think this remains one of the best funds available to investors.

Global X Semiconductor ETF (ASX: SEMI)

The Global X Semiconductor ETF is a more focused option. That means it comes with more risk, but I think the long-term theme is compelling.

Semiconductors sit behind many of the most important parts of the modern economy. They are used in data centres, AI, cars, smartphones, industrial equipment, defence systems, medical devices, cloud computing, and consumer electronics.

I like the SEMI ETF because it gives exposure to the companies enabling that demand, rather than trying to pick a single winner.

The semiconductor industry can be cyclical. Demand can move sharply, inventories can shift, and capital spending can rise and fall. Investors should expect more volatility than they would from a broad global ETF.

But I think chips are becoming more important. If artificial intelligence, automation, electrification, and connected devices keep growing, demand for advanced semiconductors should remain a major investment theme.

Foolish takeaway

I do not think investors need to avoid an ETF just because it has reached a 52-week high.

The better question is whether the fund still gives exposure to assets that can become more valuable over time.

For me, these three ETFs do that in different ways. One offers broad developed-market exposure, another owns many of America’s largest companies, and the third focuses on one of the most important industries in the digital economy.

If I were investing with a long-term mindset, I would still be happy buying all three.

The post 3 high-quality ASX ETFs at 52-week highs I’d still buy appeared first on The Motley Fool Australia.

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• What $500 a month in ASX ETFs looks like in 10 years
• 5 ASX ETFs for beginners with $500
• Which ASX ETF should I buy?

Motley Fool contributor Grace Alvino 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 iShares S&P 500 ETF. The Motley Fool Australia has recommended Vanguard Msci Index International Shares ETF and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.