If you’re looking for an easy way to invest in international shares for diversification, then exchange traded funds (ETFs) could be the answer.

But which ETFs should you look at? Listed below are three excellent ETFs that could be worth getting better acquainted with in December. Here’s what you need to know:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ETF to look at is the BetaShares Asia Technology Tigers ETF. It provides investors with easy access to a number of the most promising tech shares in the Asian market. This means you’ll be owning a slice of well-known companies such as ecommerce giant Alibaba, search engine company Baidu, and WeChat owner Tencent. There are also a number of lesser known companies included in the fund, such as Meituan Dianping and Pinduoduo, with explosive growth potential. And while regulatory issues in China have been weighing on sentiment, there are signs now that the worst could be over.

BetaShares Global Cybersecurity ETF (ASX: HACK)

Another ASX ETF for investors to consider is the BetaShares Global Cybersecurity ETF. This ETF gives investors exposure to the leading companies in the global cybersecurity sector. Given the growing number of cyberattacks globally and how much infrastructure is now in the cloud, demand for cybersecurity services is expected to rise strongly in the future. This bodes well for companies included in the fund. This includes Accenture, Cisco, Cloudflare, Crowdstrike, Okta, Palo Alto Networks, and Splunk.

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

A final ETF for ASX investors to look at is the VanEck Vectors Video Gaming and eSports ETF. This ETF gives investors exposure to a portfolio of the largest companies involved in video game development, hardware, and esports. Among the quality companies you’ll be buying a slice of are Activision Blizzard, AMD, Electronic Arts, Nintendo, Nvidia, Roblox, and Take-Two. VanEck notes that these companies are well-placed to benefit from the increasing popularity of video games and eSports.

The post 3 excellent ETFs for ASX investors to buy in December appeared first on The Motley Fool Australia.

More reading

• 2 top ETFs that could be buys in December 2021
• 2 compelling ASX shares that could be buys in December 2021
• How did the Betashares Global Cybersecurity ETF (ASX:HACK) perform in November?
• Why is the BetaShares Asia Technology Tigers ETF (ASX:ASIA) struggling this month?
• 3 excellent ETFs for ASX investors in December

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia owns and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended BetaShares Asia Technology Tigers ETF and VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX tech shares could be the sector to look at for opportunities in December 2021.

There has been a lot more volatility in recent months, which could mean better ideas for investors at better prices.

Companies in the technology sector can make it possible to achieve attractive margins and quicker growth.

These ASX tech shares could be opportunities this month:

Xero Limited (ASX: XRO)

Xero is a leading cloud accounting software business which is providing services all over the world. It has sizeable subscriber numbers in New Zealand, Australia, the UK, the US, Singapore and South Africa. Total subscribers went up 23% to 3 million in the most recent result.

It’s currently rated as a buy by the broker Credit Suisse with a price target of $160, which is more than 10% higher than it is today. The broker notes the strong margins at Xero. In the FY22 first half, its gross profit margin improved from 85.7% to 87.1%.

The growth of average revenue per user (ARPU) could be an important contributor to operating revenue going forwards. In HY22, ARPU increased 5% to NZ$31.32.

Xero continues to see its annualised monthly recurring revenue (AMRR) increase, showing what the next 12 months of revenue could be. HY22 AMRR went up 29% to NZ$1.13 billion.

The ASX tech share is going to continue to focus on growing its global small business platform and maintain a preference for re-investing cash generated, to drive long-term shareholder value. Historically, that seems to have worked with the Xero share price up more than 750% over the last five years.

Adore Beauty Group Ltd (ASX: ABY)

Adore Beauty is an e-commerce business which sells thousands of different beauty products through its website.

The company is currently rated as a buy by the broker UBS with a price target of $6. That’s around 40% higher than it is today. The broker is expecting double digit revenue growth from Adore Beauty and its new private label brand products could be helpful.

Adore Beauty’s FY22 first quarter showed ongoing revenue growth, active customer growth and returning customer spending. The revenue in the first three months of this financial year grew by 25%.

FY21 showed a number of different pleasing metrics, including annual revenue per active customer increasing $13 over the year to $219. The gross profit margin increased 1.2 percentage points to 33.1%.

Over the longer-term, the business is expecting scale benefits to increase operating leverage and deliver further earnings before interest, tax, depreciation and amortisation (EBITDA) margin expansion.

In the current financial year, it is focused on increasing its market share by building its range ‘authority’, providing an “exceptional” online transaction experience and increasing its content-led engagement.

The post Are these 2 ASX tech shares good buys in December? appeared first on The Motley Fool Australia.

More reading

• How to snare a multi-bagger ASX share: expert
• 2 small cap ASX shares to get excited about
• 3 reasons why the Xero (ASX:XRO) share price could be a high-quality buy
• 10 ASX shares to buy in 2022
• 2 ASX shares with strong long term growth potential

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. owns and has recommended Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia owns and has recommended Xero. The Motley Fool Australia has recommended Adore Beauty Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It’s been a nerve-racking time recently for those following the S&P/ASX 200 Index (ASX: XJO).

The COVID-19 Omicron variant battered confidence a couple of weeks ago, but this week the index rallied hard to recover those losses.

If this were a plane ride, a few people might be reaching for the vomit bag.

According to Shaw and Partners portfolio manager James Gerrish, the ASX 200 was now within 3% of its all-time high just moments after Omicron scared some pessimists away from ASX shares.

He wrote in his Market Matters (MM) newsletter on Thursday that his team is optimistic for the ASX 200 as 2021 winds down.

“MM is still bullish targeting the 7,700 to 7,800 area into early 2022,” he said.

“Another 4% to 5% rally — although higher levels cant be ruled out as the trend’s clearly up.”

To truly put their money where their mouth is, Gerrish’s flagship growth portfolio currently only holds 1% in cash.

“The important factor to remember is MM [is] fully committed to stocks, as we basically have been since the start of the pandemic,” he said.

“If it was a game of poker we would be all-in!”

Why would the ASX 200 rise to end 2021?

Statistical patterns give Gerrish much confidence heading into the last fortnight before Christmas.

“If we assume (dangerous word) that 7,168 is the low for this December we could easily see 7,500 to 7,600 in the coming weeks, just through [simple] extrapolation of the average monthly ranges post COVID,” he said.

“Over the last 40 years the ASX has rallied 85% of the time from mid-December until January, delivering an average return of 2.9%.”

The Australian stock market is dominated by the finance and mining sectors, and the former has always done well at this time of the year.

“The influential banking sector has rallied 100% of the time since 1992 with an average return of 7% — a potentially huge tailwind for the ASX.”

But what to do in 2022?

Gerrish wrote that his team will focus on its existing holdings as share prices rally heading into the new year.

“Tis the time to be merry and boring!”

But what about when the ASX 200 peaks sometime in 2022?

Then the Market Matters experts will sell some shares off to increase their cash holdings.

“We could comfortably see ourselves taking cash levels significantly higher in Q1 of 2022 while we reassess what comes next as interest rates start to rise.”

The post If this is poker, we’re now ALL-IN on ASX shares: expert appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• Why did the AGL share price outperform the ASX 200 today?
• Here are the top 10 ASX shares today
• ASX 200 (ASX:XJO) midday update: Sydney Airport takeover update, Santos falls
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Tony Yoo 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 Bruce Jackson.

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Are you looking for dividend shares to buy? If you are, then you might want to look at the shares listed below.

Here’s why these ASX dividend shares could be in the buy zone:

Accent Group Ltd (ASX: AX1)

The first dividend share to look at is Accent. This retailer owns and operates a growing network of footwear focused brands including The Athlete’s Foot, Platypus, and HypeDC to name just three.

Over the last decade, Accent has been growing its earnings and dividend at a strong rate. And while this is unlikely to be the case in FY 2022 due to the negative impact of lockdowns on its performance, a number of brokers expect its strong growth to resume next year.

One of those is Bell Potter, which has a buy rating and $3.05 price target on its shares at present.

As for dividends, the broker is forecasting fully franked dividends per share of 9.1 cents in FY 2022 and then 13.5 cents in FY 2023. Based on the latest Accent share price of $2.34, this represents yields of 3.9% and 5.75%, respectively.

Rio Tinto Limited (ASX: RIO)

Another ASX dividend share to look at is Rio Tinto. This mining giant could be a top option due to the quality of its operations, its exposure to in-demand commodities like aluminium, its attractive valuation, and its generous yield.

In respect to the latter, the team at Goldman Sachs is forecasting fully franked dividend yields of ~11%+ in FY 2022 and FY 2023.

Furthermore, the broker sees decent upside for the Rio Tinto share price at the current level. Goldman has a buy rating and $121.00 price target on its shares at present.

One of the reasons Goldman is so positive on the mining giant is its aluminium business. It explained: “In addition to copper production growth, Rio has one of the highest margin, lowest carbon emission aluminium businesses in the world, with over 2.2Mt of Ali production powered by hydro, and we think ELYSIS inert anode technology could be worth billions of $.”

The post Analysts name 2 ASX dividend shares to buy now appeared first on The Motley Fool Australia.

More reading

• Here’s why ASX 200 mining shares are flying higher
• Why the Rio Tinto (ASX:RIO) share price could be a bargain buy
• ASX 200 retail shares lift as Aussies head into Christmas with $240bn in savings
• Rio Tinto (ASX:RIO) and Fortescue (ASX:FMG) share prices hit by broker downgrade
• Rio Tinto (ASX:RIO) share price sinks amid Serbian protests, Novak Djokovic weighs in

Motley Fool contributor James Mickleboro 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 recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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On Thursday, the S&P/ASX 200 Index (ASX: XJO) fought hard but ultimately fell short of recording another gain. The benchmark index dropped 0.3% to 7,384.5 points.

Will the market be able to bounce back from this on Friday? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set to end the week in a subdued fashion. According to the latest SPI futures, the ASX 200 is expected to open the day 8 points or 0.1% lower this morning. This follows a poor night of trade on Wall Street, which late on sees the Dow Jones up 0.2%, but the S&P 500 down 0.2% and the Nasdaq down 1%.

ANZ rated as a buy

The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price remains in the buy zone according to the team at Bell Potter. In response to its $25 million civil penalty, the broker has retained its buy rating and $31.00 price target on the banking giant’s shares. While another penalty is disappointing, it notes that the bank is well-provisioned for it. Outside this, the broker like ANZ due to its huge opportunity from funding the decarbonisation transition.

Oil prices fall

Energy producers including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could end the week in the red after oil prices dropped. According to Bloomberg, the WTI crude oil price is down 1.6% to US$71.18 a barrel and the Brent crude oil price is down 1.6% to US$74.60 a barrel. Oil prices fell due to concerns about Omicron restrictions in Europe and China.

Annual general meetings

Fund manager Pendal Group Ltd (ASX: PDL) and investment house Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) will be on watch today when they hold their respective annual general meetings. Both companies could provide their shareholders with an update on their performances at their events.

Gold price falls

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a poor finish to the week after the gold price dropped. According to CNBC, the spot gold price is down 0.5% to US$1,775.10 an ounce. The gold price fell following some strong economic data out of the US.

The post 5 things to watch on the ASX 200 on Friday appeared first on The Motley Fool Australia.

More reading

• Why did the AGL share price outperform the ASX 200 today?
• Could rumours over a Westpac (ASX:WBC) mega-merger ever become facts?
• Here are the top 10 ASX shares today
• Woodside (ASX:WPL) share price dips as company eyes east coast market
• Oil Search (ASX:OSH) share price dips despite PNG court approval of Santos (ASX:STO) merger

Motley Fool contributor James Mickleboro 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 owns and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in banking giant National Australia Bank Ltd. (ASX: NAB) edged higher on Thursday to finish trading at $28.69, up 0.21%.

It’s been a fairly stable year for the NAB share price, as volatility has been constrained and periods of drawdown have been short-lived.

Each downtick in price action has seen NAB springboard off the bottom and climb to new 52-week highs in the days to weeks afterwards.

As such, shareholders have enjoyed a 22% upside in the last 12 months, after shares have rallied a further 27% this year to date, beating the benchmark S&P/ASX 200 Index (ASX: XJO)’s return of 10% in the last year.

With this in mind, we ask – what’s the outlook for NAB investors in 2022? Read on to see what the experts are saying.

What can NAB investors expect in 2022?

In terms of financial performance, data provided by Bloomberg Intelligence reveals that the majority of analysts expect NAB to deliver $17.63 billion in revenue in FY22, which could carry through to $6.4 billion in net profit after tax (NPAT).

This calls for a net margin of 36.5%, and earnings per share (EPS) of $1.95 in FY22. Compared to FY21, that’s a growth of 3.6%. At present, the bank’s total capital ratio is 18.91% as of FY21.

The team at JP Morgan reckon there are plenty of legs left in the NAB share price next year and retain an overweight rating on the stock.

JP Morgan’s stance is reflective of what it deems as NAB’s “stronger-than-peer revenue growth prospects more than offsetting uncertainty on potential enforcement action from AUSTRAC on AML”.

Not only that, the broker notes NAB’s stronger revenue profile versus its peers, and that this reflects NAB’s tilt towards small business banking, which should insulate it from return on equity (ROE) pressures in retail banking.

Whilst it acknowledges that there are still headwinds on the horizon for NAB, JP Morgan has these factored into its forecasts and still sees NAB’s “pre-provision profit growth outstripping peers”.

As such it has a December 2022 price target of $31.40 on the share price, a number which NAB is gradually encroaching on, given its current trajectory.

What is the sentiment on NAB for 2022?

Jarden Securities is equally as bullish on the banking sector and likes the recent focus of Aussie banks in capital management, and cost efficiency over the medium term. It values NAB at $31 a share.

Jefferies is the most bullish on NAB, folding in a $32.60 price target on the share, whereas JP Morgan is a close second.

Goldman Sachs, Bell Potter, Jarden and Barrenjoey each value NAB at $31 a share, whereas Macquarie reckons the bank is worth $30.50 per share.

In fact, the bulk of analysts covering NAB – 62.5% to be exact – have NAB as a buy. The average price target of the analyst group is $30.14, according to the list provided by Bloomberg Intelligence.

With this in mind, taking the wisdom of the crowd, this average figure implies an upside potential of 4.7% at the time of writing.

Hence, the sentiment is bullish on NAB shares and going by what these experts think, it may be a period of marginal growth in FY22 for the company’s share price. However, do note that price targets change often on the back of earnings results, and this may very well be the case for NAB early in FY22.

The post What is the outlook for the NAB (ASX:NAB) share price in 2022? appeared first on The Motley Fool Australia.

More reading

• Can NAB (ASX:NAB) shares ever close in on CBA’s market cap?
• Why ANZ Bank (ASX:ANZ) is losing market share to other big ASX banks
• Here are the 3 top-performing ASX 200 banks of November
• Why did the NAB (ASX:NAB) share price struggle in November?
• Here’s why ASX 200 banks are making news today

The author has no positions 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 Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) ended up having a bit of a disappointing day of trading this Thursday. The ASX 200 ended up finishing at 7,384.5 points, down 0.28%.

But one ASX share was a far more pleasing spectacle to watch. That was the Pengana Private Equity Trust (ASX: PE1) share price. Pengana Private Equity shares ended up finishing the trading day at $1.66 each, up a very pleasing 7.82%. That came after closing at $1.54 a share yesterday and opening at $1.55 this morning.

What’s more is that the $1.66 share price that Pengana Private Equity finished at was both a new 52-week and all-time high for the fund.

Pengana Private Equity is a fund that invests in private equity (companies not traded on a public share market). It has returned an average performance of 13.3% per annum since its inception (April 2019) and targets a 4% dividend yield.

So what was pushing this trust up so convincingly today?

A new high for Pengana Private Equity shares

Well, it seems that a monthly investment update could be to thank. Pengana put out this ASX notice this morning before market open.

It informed the markets that the Pengana Private Equity Trust returned 9.3% over the month of November. That’s objectively an impressive performance for just one month. Especially considering the S&P/ASX 200 Index (ASX: XJO) actually went backwards by close to 1% over the same period.

So how did the Trust make such pleasing bank during November? Well, Pengana cited its investments in Project Rambler, Deliverr and the successful initial public offering (IPO) of the US carmaker Rivian Automotive Inc (NASDAQ: RIVN). On the latter, Pengana stated the following:

We had exposure to the private equity and a convertible security of Rivian, both of which are now held in the company’s public equity. As a participant in the convertible security, we were entitled to additional IPO shares, which we purchased at the IPO price and exited at a material profit shortly after the initial purchase.

The Amazon-backed Rivian made headlines last month when it rocketed nearly 30% on its first day of trading. So you can see how Pengana Private Equity Trust might have made a quid on this investment.

The post Why did Pengana Private Equity Trust (ASX:PE1) shares jump 8% today? appeared first on The Motley Fool Australia.

More reading

• What is the outlook for the NAB (ASX:NAB) share price in 2022?
• Why did the AGL share price outperform the ASX 200 today?
• Argenica (ASX:AGN) share price leapt 12% on US patent news today
• 2 top ETFs that could be buys in December 2021
• Could rumours over a Westpac (ASX:WBC) mega-merger ever become facts?

Motley Fool contributor Sebastian Bowen 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 Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) had a pretty poor day on Thursday, closing 0.28% down to 7,384.50. But one ASX 200 share left the index in the dust. That was none other than AGL Energy Limited (ASX: AGL).

Yes, AGL shares went up by a very healthy 4.66% on Thursday to finish the session at $5.84. This means the AGL share price is now trading 14.5% above its 20-year low of $5.10, which it descended to back on 16 November.

A partnership with Fortescue Future Industries?

So why did AGL shares have such a robust day? Especially in the face of an anaemic broader market?

Well, there was no news or announcements out of AGL today, so we can’t say for sure. However, these gains could possibly be linked to the news out yesterday.

As we reported, AGL told investors that it has signed a memorandum of understanding (MOU) with Fortescue Future Industries. This could result in AGL transforming its Liddell and Bayswater coal-fired power stations into green hydrogen hubs.

The MOU will result in a 12-month feasibility study which will “map key operational and commercial plans for the project”.

Fortescue Future Industries is the hydrogen venture started by Fortescue Metals Group Limited (ASX: FMG) boss Dr Andrew Forrest AO. It aims to produce 15 million tonnes of green hydrogen annually by 2030 using renewable energy.

AGL aims to close Liddell and Bayswater by 2023 and 2025 respectively. In their place, AGL is hoping to use renewable energy and large-scale batteries — ideally in conjunction with Fortescue Future Industries.

AGL share price snapshot

AGL’s long-suffering shareholders will no doubt welcome today’s price gains. AGL has seen its market capitalisation decimated over the past 5 years. This has occurred due to poor energy market profitability and concern over AGL’s emissions-intensive power generation assets.

Despite the recent rally, the AGL share price is still down a nasty 51.9% year to date in 2021. It’s also down close to 80% from the all-time highs of roughly $28 a share that we saw back in 2017.

At the current AGL share price, the company has a market capitalisation of $3.84 billion with a trailing dividend yield of 11.15%.

The post Why did the AGL share price outperform the ASX 200 today? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• Fortescue (ASX:FMG) share price rises amid green train progress
• ASX 200 (ASX:XJO) midday update: Sydney Airport takeover update, Santos falls
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX shares today

Motley Fool contributor Sebastian Bowen 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 Bruce Jackson.

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The Argenica Therapeutics Ltd (ASX: AGN) share price was rocketing today after the company released positive news on a US patent.

The biotechnology company’s shares were up 12.36% at the close, trading at 75 cents.

Argenica is working on new therapeutics to protect the brain after a patient suffers a stroke and other brain injuries.

Why is the Argenica share price up today?

Investors appeared to welcome news the company will be granted a US patent for its lead drug candidate ARG-007.

Argenica said this meant it would be able to use ARG-007 to treat people with stroke, traumatic brain injury and hypoxic-ischaemic encephalopathy (HIE). HIE is a condition that arises from not having enough oxygen or blood flow to the brain.

Argenica now plans to spearhead the drug’s commercialisation in the lucrative United States market.

The company advised it was given official “notice of allowance” for the patent, with the patent being formally granted within months.

The patent claim also covers the drug’s use for other diseases including multiple sclerosis, Parkinson’s disease, Huntington’s disease and epilepsy.

Comment from management

Argenica CEO Dr Liz Dallimore welcomed the announcement, saying:

The granting of this patent will strengthen our ability to enter into commercial negotiations with US pharmaceutical companies in the future.

The allowance of the claims in Argenica’s US patent are essential to potentially commercialising ARG-007 in our lead applications of stroke, TBI and HIE in the US.

Argenica Therapeutics share price snapshot

The Argenica share price has shot up in 2021, up 275%. The company listed on the ASX in June.

Over the past month, Argenica shares are up 50%. The company has a market capitalisation of about $35 million based on the current share price.

The post Argenica (ASX:AGN) share price leapt 12% on US patent news today appeared first on The Motley Fool Australia.

More reading

• 2 top ETFs that could be buys in December 2021
• Could rumours over a Westpac (ASX:WBC) mega-merger ever become facts?
• Here’s why the Galan Lithium (ASX:GLN) share price popped today
• These were the top performing ASX cannabis shares in November
• Here are the top 10 ASX shares today

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 Bruce Jackson.

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Exchange-traded funds (ETFs) could be smart picks in December 2021 for the long-term.

ETFs can be very effective investment vehicles to get exposure to the stock market. Some ETFs are focused on a particular share market, like Vanguard Msci Index International Shares ETF (ASX: VGS).

But there are others that provide more specific exposure and have historically produced better returns:

Betashares Global Cybersecurity ETF (ASX: HACK)

This ETF provides investors with access to a range of businesses involved with cybersecurity. In total, there are 36 positions in the portfolio.

Some of those businesses are large companies like Palo Alto Networks, Cisco Systems, Okta, Crowdstrike, Cloudflare, F5 Networks, Mimecast and Verisign. There are also smaller ones like Tufin, Ribbon Communications and Zix.

BetaShares says that worldwide spending on cybersecurity is predicted to increase to almost US$250 billion by 2023. This ETF provides access to the leading companies who are working to reduce the impact of cybercrime globally.

The investment fund provider notes that there are very few pure play cybersecurity businesses on the ASX, so this ETF is a way to get that exposure.

It comes with an annual management fee cost of 0.67%. After fees, the Betashares Global Cybersecurity ETF has returned an average of 22.6% per annum over the last five years. However, past performance is not a reliable indicator of future performance.

Over 90% of the portfolio is based on US-listed businesses. The other countries with noticeable allocations are: Israel, Japan, France and India.

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

This ETF has a focus on quality US companies that Morningstar believes have sustainable competitive advantages, or wide economic moats.

The target companies must be trading at attractive prices relative to Morningstar’s estimate of fair value to be added to the portfolio. Those valuations are reached after Morningstar’s “rigorous” equity research process.

At 7 December 2021, this ETF had 50 positions. The ones with weightings of more than 2.5% were: Berkshire Hathaway, Constellation Brands, Salesforce, Blackbaud, Corteva, Aspen Technology, Alphabet, Tyler Technologies, Wells Fargo, Microsoft and Cheniere Energy.

For the moat rating, Morningstar looks at the 1,500 companies under its coverage and decides whether those businesses have sustainable competitive advantages that allow the company to generate positive economic profits for investors over an extended period of time. Only 14% had a wide moat rating.

To earn a wide moat rating, a company must (with near certainty) be able to generate excess normalised returns in 10 years from now. Also, excess normalised returns must, more likely than not, be positive 20 years from now.

For this ETF, the duration of forecast economic profit is far more important than the absolute magnitude. For example: “If a high-flying tech company is a first-mover in offering a popular, innovative product or service, it might quickly achieve very high returns on invested capital. However, if there is no moat source, such as intellectual property, preventing competitors from replicating that product or service”, then the business wouldn’t get a wide moat rating.

It has an annual management fee of 0.49% and has produced average returns per annum of 18.4% over the last five years. Again, past performance is not a reliable indicator of future performance.

The post 2 top ETFs that could be buys in December 2021 appeared first on The Motley Fool Australia.

More reading

• Boost your portfolio in 2022 with these popular ASX ETFs
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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. owns and has recommended BETA CYBER ETF UNITS and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia owns and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors Morningstar Wide Moat ETF and Vanguard MSCI Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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