I think these 2 ASX ETFs are great buys for 2025 and the long-term

I'm excited about the growth potential of these investments.

| More on:
ETF with different images around it on top of a tablet.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

I believe certain ASX exchange-traded funds (ETFs) can produce strong returns next year and in the longer term.

Particular ETFs can expose us to specific industries or investment styles—I'm going to discuss one ETF for each strategy.

Very few ASX shares give exposure to the types of trends or themes that I'm about to outline, so I'd say they are effective tools for diversification.

Let's get into these two ASX ETF ideas.

Betashares Global Cybersecurity ETF (ASX: HACK)

This fund idea aims to provide investors access to global cybersecurity companies, from the giants to the emerging players.

According to the United States Agency for International Development (USAID), the global cybercrime cost was estimated at over US$8 trillion in 2023. In 2019, 300 global CEOs said the lack of cybersecurity was the single greatest threat to the global economy over the next decade. With a worrying projection, USAID said:

And cybercrime is expected to continue to grow unabated over the coming years, with projections as high as $23.84 trillion by 2027.

Cybersecurity is essential for businesses and governments to keep their customers and citizens safe. There are many services that require a high level of cybersecurity, such as e-commerce transactions, banking, taxation, birth certificates, medical records and so on.

With the importance of cybersecurity, I think this ETF provides exposure to companies with both potentially defensive and growing earnings. We'll need cybersecurity regardless of what happens economically in 2025.

It's not surprising to me that the fund has returned an average annual return of 17% over the past five years, though past performance is not a reliable indicator of future performance.

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

The MOAT ETF is one of my favourite ETFs because it combines investing in high-quality US businesses at appealing prices.

Morningstar analysts identify potential businesses for the investment watchlist by finding companies with sustainable competitive advantages, which can also be called wide economic moats.

A competitive advantage could be a patent, intellectual property, a regulatory license, owning a leading brand, having cost advantages, or network effects. Morningstar is looking for businesses where there's a good chance the advantage will last for at least 20 years.

With that watchlist of strong businesses, the MOAT ETF only invests in companies trading at attractive prices compared to what Morningstar thinks they're worth.

According to VanEck, the provider of this ASX ETF, this fund returned an average of 14.5% over the five years to 30 November 2024, which I think is a strong return. While there's no guarantee the next five years will be as good, thanks to its investment strategy, I think this fund can continue performing pleasingly.

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. has positions in and has recommended BetaShares Global Cybersecurity ETF. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF. The Motley Fool Australia has recommended VanEck Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ETFs

Man holding a calculator with Australian dollar notes, symbolising dividends.
ETFs

$10,000 invested in CRYP ETF a year ago is now worth…

This exchange-traded fund allows investors to gain exposure to cryptocurrency in a different way.

Read more »

The letters ETF with a man pointing at it.
ETFs

Where to invest $5,000 in ASX ETFs in June

These funds could be worth a look if you have money to invest this month.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
ETFs

3 things about the Vanguard Australian Shares Index ETF (VAS) every smart investor knows  

This fund has a number of interesting characteristics. Here’s what I’m focused on.

Read more »

ETF on different coloured wooden blocks.
ETFs

BetaShares reaches $50 billion FUM: What are their 5 most popular ASX ETFs?

Do any of these 5 ASX ETFs appeal to you?

Read more »

ETF written on cubes sitting on piles of coins.
ETFs

2 amazing ASX ETFs I wish I'd bought a decade ago

These funds are impressive with their holdings and returns.

Read more »

tick, approval, business person with device and tick of approval in background
ETFs

Why this could become my favourite ASX ETF to buy

This ASX ETF ticks all my boxes.

Read more »

Three happy office workers cheer as they read about good financial news on a laptop.
ETFs

The best ASX ETFs to ride the AI and tech megatrends

Let's see what these exciting funds are invested in.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
ETFs

BetaShares ETF provider to expand into private credit. Should you be interested?

Private credit could be coming to the ASX.

Read more »