ASX exchange-traded funds (ETFs) could be a smart place to invest $5,000 in the current environment.
After the US election and the shift to Republicans, a number of policies will seemingly change. It's difficult to know how certain elements of the plan, such as potential tariffs, will affect some stocks on the ASX share market. But with that in mind, having a diversified portfolio could be the way to go for both opportunities and risk mitigation.
I do believe that a wide range of businesses will continue to be able to grow their operations and profits, but there could be more volatility, which can open up opportunities.
With that in mind, the three ASX ETFs below could be compelling picks now and before the end of the year.
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Betashares India Quality ETF (ASX: IIND)
In my opinion, the Indian share market is a compelling area to invest in because of the huge population, the digitalisation of the economy and other improvements across the country. According to the World Bank, Indian GDP has grown by at least 7% in the last two years, which demonstrates the strong growth of the economy. I think it's a good tailwind for the underlying 30 stocks in this portfolio.
Some investors may be worried about investing in an 'emerging market', which is why the ASX ETF's quality focus is compelling in my eyes. BetaShares says this portfolio holds top Indian companies ranked by their quality score.
Since inception in August 2019, the IIND ETF has returned an average of 10.5% per year to September 2024.
Betashares Global Quality Leaders ETF (ASX: QLTY)
The global share market can be an excellent place to find good investments. There are many leading businesses in various sectors in stock markets in regions like North America, Europe, and Asia.
I think the QLTY ETF is a strong pick in this environment because it's selective about which businesses it invests in. To make it into the portfolio, these businesses have to rank well in terms of their return on equity (ROE), profitability, low leverage, and earnings stability. I think the companies in this portfolio can collectively perform well in almost any economic condition.
Past performance is not a reliable indicator of future performance, but since inception in November 2018, this ASX ETF has returned an average of 14.6% per annum.
Global X Fang+ ETF (ASX: FANG)
This ASX ETF only owns 10 US businesses, including Nvidia, Amazon, Alphabet, Meta Platforms, Apple, Microsoft, and Netflix. These are among the strongest businesses in the US, and this fund is a good way to gain an approximate 10% position in each tech company.
These businesses are at the forefront of many technological advances, such as cloud computing, online video, artificial intelligence, and so on.
Regardless of whether the US economy performs strongly or not over the next four years, I believe the companies within the FANG ETF can continue growing profit because of the economic moat advantages, global growth outlook and ongoing significant investments.
I'm not expecting the same level of returns going forward, but in the last three years, it has returned an average of 19.9% per annum.
