If you don’t have enough funds to build a truly diverse portfolio, a quick way to add some diversity is with exchange traded funds (ETFs).

Through just a single investment, ETFs give investors exposure to whole indices, industries, and even themes.

There are a large number of ETFs for investors to choose from, but three that I rate highly right now are listed below. Here’s why I like them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

I think the BetaShares Asia Technology Tigers ETF would be a great option for investors. This exchange traded fund provides investors with exposure to a number of exciting tech shares in the Asian market. These include the likes of ecommerce giant Alibaba, search engine company Baidu, and new Afterpay Ltd (ASX: APT) shareholder and WeChat owner, Tencent. These companies are revolutionising the lives of billions of people in the region and look very well-positioned to profit from it over the next decade.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Another option you can use to diversify is the BetaShares NASDAQ 100 ETF. It provides investors with exposure to the 100 largest non-financial shares on the NASDAQ index. This includes giants such as Amazon, Facebook, Microsoft, and Starbucks. I believe many of these companies have the potential to grow at a quicker rate than the global economy over the next decade. This could lead to the BetaShares NASDAQ 100 ETF providing stronger returns than the ASX 200 for the foreseeable future.

iShares Global Healthcare ETF (ASX: IXJ)

Another option for investors to consider is the iShares Global Healthcare ETF. I believe it could be a quality option for investors due to the increasing demand for healthcare services globally. This exchange traded fund provides exposure to companies across a range of sectors including biotechnology, pharmaceutical, and medical devices. This includes many of the world’s biggest healthcare companies such as CSL Ltd (ASX: CSL), Johnson & Johnson, Novartis, and Pfizer.

More reading

• Are Megaport shares the ones to buy and hold beyond 2030?
• Why I would buy these outstanding ASX 50 shares right now
• Where to invest $2,000 in cheap shares
• Why the shares of Afterpay rival Openpay are up 840% since March
• 3 of the best ASX shares to buy with $3,000 right now

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and CSL Ltd. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS and BetaShares Asia Technology Tigers ETF. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The ASX tech sector is relatively small compared to the much larger US NASDAQ tech sector. However, it is home to a growing number of exciting tech shares, including Megaport Ltd (ASX: MP1).

You may be familiar with names such as Appen Ltd (ASX: APX), Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO), but perhaps not Megaport.

Here’s why I think this fast-growing tech share is a good buy and hold option for the long term.

What does Megaport do?

Megaport provides a ‘network as a service’ offering to enterprises, or what is commonly referred to as “elastic interconnection services”.

This enables enterprises to increase or decrease their fixed broadband bandwidth. They can do this in response to their own usage requirements and can then ramp up their bandwidth requirements during busy times. Likewise, they can reduce it when demand is lower.

The service is provided via a network of cloud providers, data centre operators, and network service providers.

A simple mobile application enables users to access services for as short or as long a period as they require.

Why is the Megaport business model so compelling?

Megaport has a subscription-based billing model.

This is much more beneficial than being tied to regular network service agreement levels, or expensive long-term contracts.

It also provides Megaport with a sticky recurring revenue stream, receiving revenue from not just the network access points, but also the services that customers consume within the ecosystem.

As more network access points are added, more customers are attracted to joining. Also, existing ones tend to consume more. Thus, the ecosystem continues to grow and grow over time.

Megaport has a geographically dispersed customer base across the Asia Pacific, Europe and North America. This provides it with a diversified income stream.

It also partners with all the leading cloud operators including Amazon Web Services, Google Cloud and Microsoft Azure, further strengthening its business model as none are in direct competition.

Strong customer demand in a fast-growing industry

Megaport is growing rapidly within a fast-growing industry. Demand for its services continues to grow strongly.

It is connected to over 60 data centres globally. And this number continues to climb. The amount that enterprises worldwide continue to spend on cloud computing services is increasing at a rapid clip.

This is leading to solid customer and revenue growth, shown through Megaport’s share price.

In the first half of FY 2020, Megaport reported a massive 70% increase in revenue to $25.9 million.

Its March 2020 quarter update revealed a 10% increase in revenue, quarter on quarter. At the end of March, it had a healthy cash balance of $108.7 million.

Are Megaport shares a good long-term investment?

Buying Megaport shares is potentially a risky investment. Its revenues are growing rapidly and it is still yet to reach profitability.

Also, its current share price is factoring in the expectation that it will continue to grow at a high growth rate. If it fails to meet its growth targets, its share price could be hit harshly over the short term.

However, I still believe Megaport is a good long-term investment. This is despite the possibility of short-term share price volatility.  

Megaport is well placed to tap into the rapid rise of cloud computing and the need for rapid connectivity. The global public cloud services market continues to expand rapidly, as more infrastructure migrates to the cloud.

More reading

• 3 top ETFs you can easily diversify your portfolio with immediately
• 3 large cap shares beating the ASX 200 this year
• Where to invest $2,000 in cheap shares
• Why the shares of Afterpay rival Openpay are up 840% since March
• Should the Xero share price have a P/E ratio of 4,000?

Phil Harpur owns shares of AFTERPAY T FPO, Appen Ltd, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO, MEGAPORT FPO, and Xero. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended MEGAPORT FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Are Megaport shares the ones to buy and hold beyond 2030? appeared first on Motley Fool Australia.

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The S&P/ASX 50 index is potentially Australia’s most important large-cap equity index.

It represents 50 of the largest and most liquid ASX shares by float-adjusted market capitalisation.

Whilst this doesn’t necessarily mean that all the shares on the index are buys, I believe there are a few that standout as strong buys.

Three outstanding ASX 50 shares I would buy today are listed below:

CSL Limited (ASX: CSL)

The first ASX 50 share to look at buying is biotherapeutics giant CSL. I think it is one of the best buy and hold options on the index due to its high quality operations. Both its CSL Behring and Seqirus businesses appear well-placed to deliver strong sales and earnings growth over the next decade. This is thanks to their leading products and lucrative research and development (R&D) pipelines. In FY 2019 CSL invested US$832 million in its R&D activities and a similar level of investment is expected this year. I believe these investments will allow the company to maintain its market-leading position and underpin solid profit growth for the foreseeable future.

Goodman Group (ASX: GMG)

I think Goodman Group is another ASX 50 share to buy. It is an integrated commercial and industrial property group which owns, develops, and manages industrial real estate globally. The company’s portfolio has been expertly curated over the last few years to give Goodman exposure to online, logistics, food, consumer goods, and digital economy. I’m particularly positive on its prospects due to its exposure to the rapidly growing ecommerce market. Especially given its relationships with the likes of Amazon and DHL. Overall, I believe Goodman is well-placed to deliver solid earnings and distribution growth over the next decade.

Telstra Corporation Ltd (ASX: TLS)

A final ASX 50 share to consider buying is Telstra. I’ve been very impressed with the progress the telco giant is making with its new strategy. This strategy is stripping out costs and simplifying its business. Combined with the easing of the NBN headwind and the arrival of 5G, I believe Telstra’s struggles are close to coming to an end. This could mean a return to growth is now in sight for the company. In light of this and its attractive valuation, I think now would be an opportune time to invest.

More reading

• 3 of the best ASX shares to buy with $3,000 right now
• These ASX 200 shares could be perfect for a retirement portfolio
• Top brokers name 3 ASX 200 shares to buy right now
• The smartest ASX 200 shares to buy with $2,500 today
• JobMaker is coming. These 3 ASX 200 shares could benefit

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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