There are some leading exchange-traded funds (ETFs). Are they top candidates for the long-term?
Individual businesses can have plenty of growth potential, but there are ETFs that give investors exposure to a whole group of companies with typically good prospects.
With that in mind, here are two options:
Image source: Getty Images
Betashares Nasdaq 100 ETF (ASX: NDQ)
This ETF gives investors exposure to 100 of the biggest businesses on the NASDAQ, which is a North American stock exchange.
Many of the biggest technology businesses in the world are listed on the NASDAQ, such as Microsoft, Apple, Amazon and Alphabet. These businesses are ones that have dominant global positions in their respective markets and continue to introduce products that are changing how we work, learn or entertain ourselves.
But there are more tech businesses in this portfolio than just the ones with market capitalisations over a trillion dollars.
These are some of the other tech names in the portfolio, which all continue to aim to improve the world with their services: Nvidia, Tesla, Meta Platforms, Adobe, Broadcom, Cisco Systems, Advanced Micro Devices, Intl, Qualcomm, Netflix, Texas Instruments, Intuit and PayPal.
But the ETF is not all tech either, there is diversification in other areas. Costco, PepsiCo, Intuitive Surgical and Starbucks are some of the larger positions.
Since inception in May 2015, the NDQ ETF has returned an average of 21.9% per year, that's after the management fees of 0.48% per annum.
VanEck Video Gaming and Esports ETF (ASX: ESPO)
This ETF is about giving investors the ability to invest in the global video gaming and e-sports industry. There are only 26 holdings in the portfolio, but several places are represented: the US, Japan, China, South Korea, Singapore, France, Sweden, Taiwan and Poland.
The video gaming business is now larger than both the movie and music industries. Video gaming has achieved 12% average annual growth since 2015. The e-sports sector has opened up a number of new revenue streams including: game publisher fees, media rights, merchandise, ticket sales and advertising.
Global games revenue is expected to grow from around US$100 billion in 2016 to US$200 billion in 2023.
VanEck believes that the ESPO ETF has a "dynamic growth opportunity", giving investors exposure to tech away from the typical 'FAANG' names. The fund provider believes this ETF can be a long-term growth story.
These are some of the ETF's biggest holdings: Tencent, Activision Blizzard, Nintendo, Nvidia, Advanced Micro Devices, Netease, Electronic Arts and Take-Two Interactive Software.
