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

sdf

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

Hologram of a man next to a human robot, symbolising artificial intelligence.
ETFs

This fantastic ASX ETF could win big from the AI boom over the next decade

Want to invest in AI? This could be an easy way to do it.

Read more »

A smiling woman holds a Facebook like sign above her head.
ETFs

The ultimate ASX ETFs to buy right now

Let's see what sort of stocks these funds are invested in.

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
ETFs

Overinvested in Vanguard Australian Shares Index ETF (VAS)? Here are two alternative ASX ETFs

The VAS ETF isn’t the only fund on the ASX worth buying.

Read more »

A laughing woman wearing a bright yellow suit, black glasses and a black hat spins dollar bills out of her hands signifying the big dividends paid by BHP
ETFs

How to grow your wealth the easy way with ASX ETFs

Is this the easiest way for investors to build a nice nest egg? Let's find out.

Read more »

Oil rig worker standing with a clipboard.
ETFs

Up 18% in June, is the Betashares Crude Oil Index ETF a good oil price play?

ASX investor interest in the OOO ETF has risen amid surging oil prices due to the Israel-Iran conflict.

Read more »

Man holding Australian dollar notes, symbolising dividends.
ETFs

Buy these ASX ETFs for passive income

Want an easy way to generate income from the share market? Check out these funds.

Read more »

A magnifying glass highlighting India on a map.
ETFs

Why I think this is a top ASX ETF for growth and dividends

This fund can provide a useful mixture of passive income and capital growth.

Read more »

An analyst wearing a dark blue shirt and glasses sits at his computer with his chin resting on his hands as he looks at the CBA share price movement today
ETFs

With Middle East tensions escalating, should I buy DFND ETF?

DFND ETF is up 50% for the year to date.

Read more »