What the ETF? Investors look for ASX ETFs with access to cybersecurity and COVID-19 vaccines
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July was a modest month for ASX ETFs but the hottest was focused on cybersecurity, with another focused on COVID-19 vaccine makers not far behind.
Topping the charts was BetaShares Global Cybersecurity ETF (ASX:HACK).
Unlike some other sectors covered by ASX ETFs there is no shortage of ASX players in the space with companies such as Tesserent (ASX:TNT) and ArchTIS (ASX:AR9) running hot as demand for their product rises.
BetaShares’ ASX Cybersecurity ETF however tracks the world’s giants, including Cisco (NDQ:CSCO), Cloudflare (NYSE:NET), XScaler (NDQ:ZS) and Crowdstrike (NDQ:CRWD).
Nearly 90% of its holdings are in the US.
Among the other top 10 ASX ETFs in July there was a healthy mix of winners. Taking silver and bronze spots were resources ETFs – SPDR S&P/ASX 200 Resources (ASX:OZR) and Betashares Australian Resources Sector ETF (ASX:QRE).
Both of these are focused on resources companies in Australia, particularly the large cap producers.
iShares Global Health ETF (ASX:IXJ) was another performer of note during the month, which saw the Delta strain of COVID-19 become an increasing concern, even among countries with high proportions of their nations vaccinated.
This fund invests directly in its US equivalent which in turn invests in many world healthcare giants. That includes but is not limited to COVID-19 vaccine makers such as Pfizer (NYSE:PFE), Moderna (NDQ:MRNA), AstraZeneca (LON:AZN) and Johnson & Johnson (NYSE:JNJ).
On a yearly basis, ETFs have proved stronger than the performance of the top 10 in July would suggest. The average return on ASX ETFs in 2021 is just over 13% and the top 10 ETFs all gained over 23%.
2021’s top ETF winners almost all had a focus on foreign equities, particularly the US market.
Although the ASX has made a healthy 12% gain this year, America has done better. The S&P500 is up 18% while the Nasdaq and Dow Jones are up nearly 16%.
Once again the top performer was BetaShares’ Geared US Equities (ASX:GGUS). The fund invests in the top 500 shares listed in the US by market capitalisation and does so with a mix of debt and equity finance.
Two unique winners were investees in foreign property – Van Eck’s International Property ETF (ASX:REIT) and SPDR Dow Jones Global Real Estate ETF (ASX:DJRE).
However as much promise as there is on foreign equity markets, investors have begun to get picky on where they divert their money to.
Early this year, ETFs with a focus on China and the broader Asia Pacific were running hot. But it appears investors have been spooked by regulatory moves in China as well as fears of what could be next.
Betashares’ AsiaTech Tigers ETF (ASX:ASIA) gained 80% in the 12 months to 31 January 2021 but this year it has lost over 11%.
Van Eck’s China A50 ETF (ASX:CETF) is a laggard too, having lost nearly 8% this year.
But in a sign of investor confidence in the share markets generally, the three worst performers are all ETFs designed to go down when the market owns up – BetaShares Bear Funds for Australia and the US (ASX:BBOZ, ASX:BEAR and ASX:BBUS).