I think all Aussies can benefit from owning ASX-listed exchange-traded funds (ETFs) which provide exposure to great international companies.
The Australian Securities Exchange (ASX) only accounts for around 2% of the global share market. I believe it would be a mistake to miss out on all those compelling businesses in the other 98%.
There are not many companies on the ASX that give Australian investors access to the technology sector.
However, I think most investors, including me, would improve their portfolio returns by buying the following two ASX ETFs.
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Betashares Global Cybersecurity ETF (ASX: HACK)
Cybersecurity is one of the most important services these days because it is essential for governments to keep their citizens' data safe and for businesses to protect customer and employee data.
Governments and businesses must do their best to protect against fraud, intellectual property theft, and various other cybersecurity threats.
The HACK ETF gives investors exposure to a fast-growing industry. According to BetaShares and its sources:
Based on recent data from the Australian Cyber Security Centre (ACSC), cybercrime reports increased by nearly 23% in Australia during FY23, with one report made approximately every six minutes.
These crimes have a real cost, to individuals, corporates, governments, and the economy. The ACSC also reported that medium-sized businesses in Australia lost an average of $97,200 per reported incident in FY23. Looking at a wider scale, global cybercrime is projected to cost US$10.5 trillion per annum by 2025.
As more companies and individuals sign up for cybersecurity, the more revenue and net profit the businesses within the HACK ETF can make.
Past performance is not a guarantee of future performance, but over the past five years, the ASX ETF has delivered an average return per annum of 16.3%.
Betashares Nasdaq 100 ETF (ASX: NDQ)
I think it's a good idea to own some of the best businesses in the world in your portfolio. When looking at the NDQ ETF portfolio, I see a fund full of global leaders.
Technology is becoming an ever-increasing part of each business and industry. Plenty of the businesses in this portfolio are leading the world to change how they work, communicate, serve customers, shop online, how healthcare is provided and so on.
The NDQ portfolio includes top companies Apple, Microsoft, Nvidia, Broadcom, Amazon.com, Meta Platforms, Alphabet, Costco, Netflix, Advanced Micro Devices, Adobe, Cisco Systems, Intuitive Surgical and Applied Materials.
Collectively, these businesses have very strong market positions, global brand power, impressive returns on equity (ROE) and plenty of opportunities to invest for more growth.
The ASX ETF has performed very well thanks to the strength of these companies. Strong investment returns aren't always guaranteed, particularly if valuations get ahead of themselves. But, I think this group of businesses can keep expanding for a long time to come.
Over the five years to August 2024, the NDQ ETF has returned an average return per year of 20.6%.
