The S&P/ASX 200 Index (ASX: XJO) edged 0.7% lower yesterday and continues to be volatile in 2020. However, I think one ASX tech exchange-traded fund (ETF), ETFS Morningstar Global Technology ETF (ASX: TECH), could be the answer.

However, there's a couple of segments that have been surging since the March bear market. Among those are tech and gold but investors don't know where to place their bets given current uncertainty.

Here's why one ASX tech ETF could be the answer to capturing more upside in 2020.

Why this ASX tech ETF can track the market higher

I think the "two-speed" economy we're seeing is a big factor here. A broad market ETF can be great for diversification and peace of mind.

However, a sector-focused ETF like ETFS Morningstar Global ETF can be a useful part of tactical portfolio allocation.

It is still a broad fund with 34 holdings including some of the biggest tech shares on the market. Among the top 10 holdings are industry leaders like Microsoft Corp (NASDAQ: MSFT) and salesforce.com (NYSE: CRM).

That's good news for investors seeking easy exposure to the surging international tech stocks. 

I think this ASX tech ETF provides broad exposure to the industry without needing to bet on individual companies.

What's not to like?

For one, investing in this ASX tech ETF means you're expecting tech to continue to outperform. The tech sector is hot right now and will likely see further growth, but much of that is already priced in.

For instance, the Xero Limited (ASX: XRO) share price trades at a price to earnings (P/E) ratio of 4,700. That means a lot of that expected earnings growth is already factored into market values.

On an ETF specific level, the ETFS Morningstar Global ETF does come at a cost. The management fee is a lofty 0.45% per annum according to the fund's website.

That may not seem like much, but it does add up over time compared to some funds charging as little as 0.07% per annum.

There's also currency risk to consider. This ASX tech ETF is unhedged which could be good or bad, but leaves you exposed to currency risk which could eat into gains.

Foolish takeaway

If you're after a globally diversified ASX tech ETF, I think this ETF Morningstar fund is a good option.

It's not without its drawbacks, but it could be an easy option for investors with FOMO on the tech sector bull run.

The post Why this ASX tech ETF can ride the market gains higher appeared first on The Motley Fool Australia.

It's hard to focus on the long-term when ASX shares are so volatile.

The March bear market threw a real spanner in the works for investors. New investors, in particular, can be the first to head for the exits when their investments are falling.

That means now could be a good time to re-evaluate your investing strategy. Let's say, hypothetically, that you've got an initial sum of $20,000 to invest in the share market and are looking at a long-term investment horizon of 20 years. Here's how I would invest $20,000 for 20 years in ASX shares.

How to invest $20,000 for 20 years in ASX shares

Well, $20,000 is a lot of money, but you really want to be able to grow that number over time by investing it into the share market. But every time you buy and sell ASX shares there are costs associated, like brokerage fees and taxes.

I would lean towards investing your first $20,000 in a diversified exchange-traded fund (ETF), as ETFs can provide instant diversification with very low management fees.

If you just want to passively track the Aussie share market, a low-cost ETF like Vanguard Australian Shares Index ETF (ASX: VAS) is a good option.

Vanguard Australian Shares Index ETF seeks to track the S&P/ASX 300 Index (ASX: XKO) and currently holds 306 securities. That's a good chunk of the total share market if you want a passive investment in ASX shares.

It's not just broad market indexes that you can invest in. If you want targeted exposure, you could try a sector or industry-specific index like ETFS Morningstar Global Technology ETF (ASX: TECH).

This allows you to get broad exposure to ASX (and international) tech shares without betting on individual companies straight away.

Buying shares in these sorts of ASX ETFs can provide diversified exposure to a whole host of underlying companies.

But how does it work in practice?

Let's use the Vanguard Australian Shares Index ETF as an example.

Since its inception, this fund has returned an average of 8.18% on an annualised basis.

Let's see what happens if we invest $20,000 at 8.18% per year for 20 years:

As the graph above indicates, that initial capital would grow to be worth a handy $96,376 by the end of a 20-year period.

The story is even better if you make some additional contributions along the way. So, if you invested an additional $1,000 per year, that original $20,000 investment would grow to be worth $143,060 across a 20-year investing horizon.

Of course, this is before you take into account inflation and what $96,376 or $143,060 would buy you in 20 years. However, the proof is in the pudding that investing in ASX shares for the long-term can pay dividends.

Can I only achieve this with ETFs?

Not at all! In fact, many investors would have already seen some strong gains this year. In particular, those who purchased ASX shares in mid-March would have picked some absolute winners.

Aside from Afterpay Ltd (ASX: APT), other top performers include A2 Milk Company Ltd (ASX: A2M) and Fortescue Metals Group Limited (ASX: FMG).

Picking high-quality companies and investing with a long-term view is the key. With a strong investment strategy and a touch of good fortune, you may well have more than $96,376 or $143,060 in 20 years' time.

The post How to turn $20,000 into $100,000 with ASX ETF shares appeared first on The Motley Fool Australia.

ASX share market falls can be scary, but could dollar-cost averaging (DCA) be the answer?

To the inexperienced investor, the March bear market made for scary viewing. In fact, even experienced investors were spooked amid unprecedented market volatility.

While it's good to buy undervalued ASX shares, you don't want to fall into the trap of market timing. After all, 'time in the market is better than timing the market', as the saying goes. 

That's where a DCA strategy can come into your investment plans and help you think long-term.

What is dollar-cost averaging?

According to Vanguard Australia, DCA is "investing the same amount of money at set intervals over a long period – whether market prices are up or down".

Essentially, dollar-cost averaging is the opposite of market timing. Obviously, ASX share prices will fluctuate over time. The good news is that if you're using DCA to your advantage, you can buy more shares at cheap prices.

For instance, let's say you invested $1,000 per month in Afterpay Ltd (ASX: APT) shares. When the Afterpay share price was trading at $40.50 per share in February that would net you 24 shares.

However, when the ASX tech share fell to its 52-week low of $9.99 in March, that same $1,000 would buy you 100 shares.

Is now a good time to dollar-cost average into ASX shares?

The simple answer is yes, it's always a good time to DCA into ASX shares.

The whole point of dollar-cost averaging is to ignore market timing. By definition, if you pick and choose when to DCA, you are going against that whole philosophy.

Of course, what you invest in is a whole separate issue. You could continue to buy beaten-down ASX shares like Star Entertainment Group Ltd (ASX: SGR).

However, DCA is more common with passive investors looking to track an index like the S&P/ASX 200 Index (ASX: XJO). Where active investors like to buy undervalued companies, passive investors trust that the market will win in the long run.

A couple of classic broad market ETFs that you could deploy a DCA strategy into are BetaShares Australia 200 ETF (ASX: A200) or Vanguard Australian Shares Index ETF (ASX: VAS).

ETFs don't just have to track the whole market. For instance, the ETFS Morningstar Global Technology ETF (ASX: TECH) provides exposure to global technology companies and could be a good option for a DCA strategy in a tech-focused portfolio.

Foolish takeaway

Using DCA can be a powerful strategy for both your own thinking and your investments. Rather than panicking in a bear market, you can think of it as a fire sale on your favourite ASX shares.

That means you can sit back, relax and enjoy the long-term investment journey.

The post Is it time to dollar-cost average into ASX shares? appeared first on The Motley Fool Australia.

ASX tech shares have been dominating the S&P/ASX 200 Index (ASX: XJO) news lately.

Whether it's Zip Co Ltd (ASX: Z1P) or Xero Limited (ASX: XRO) making new all-time highs, or Afterpay Ltd (ASX: APT) teaming up with Chinese tech giant Tencent Holdings, there has certainly been a lot of buzz in this sector.

This wouldn't have been hurt by the fact that ASX tech shares have been amongst some of the best performers since the ASX 200 bottomed out in late March. For example, Afterpay shares have risen more than 800% since 23 March. The Zip share price is also up around 400% over the same period.

We saw a similar pattern over on the US markets. Growth and tech stocks like Tesla, Amazon, Apple, Microsoft and Square have soared since March. Tesla is up around 333% in the last 4 months, whilst Amazon has gained nearly 90% (an incredible move for a US$1 trillion+ company) and Square is up ~233%.

But these kinds of moves tend to get investors' blood boiling – and not in a good way. According to reporting in the Australian Financial Review (AFR), money is pouring into tech-themed exchange-traded funds (ETFs), both in Australia and around the world.

Are tech stocks in a bubble?

This has been fuelled by the FOMO-inducing performances of the companies above and others – and investors have noticed. For example, the ASX tech-tracking BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) is up nearly 90% from 23 March, largely due to the Afterpay share price.

The ASX ETF that tracks the US tech-heavy NASDAQ index – the BetaShares Nasdaq 100 ETF (ASX: NDQ) – has also been a winner for ASX investors, climbing 27% since 23 March to a new record high of $25.97 just yesterday.

As has the more globally focused ETFS Morningstar Global Tech ETF (ASX: TECH), also up 27% over the same period.

This stellar and rapid performance has got some investors worried though.

This is some of what the AFR had to say:

"If history is any guide, the tech ETF boom has two inevitable consequences: retail investors joining the tech party too late and getting burned, and issuers launching tech funds to meet demand."

The AFR also quotes Chris Brycki, CEO of Stockspot:

"History shows the worst time to buy a thematic ETF is when a lot of products get issued in a hot market. Investors want tech and issuers are happy to 'feed the ducks when they are quacking'… With hindsight, tech ETFs were a great investment a decade ago. It is hard to argue they are as attractive now. Apple and other trillion-dollar tech giants might maintain their growth rates, but it is much harder from here. Most people buying tech shares today are doing so because they have done well in the recent past, which is not a sound strategy."

Foolish takeaway

It's hard to argue with these sentiments in my view. There will be some exceptions of course, but I do think that most tech stocks are getting into 'exuberant' territory at their current pricing levels. No one wants to call time on a raging party, but it has to end at some point. And you don't want to be left without a seat when the music does stop.

The post Are ASX tech shares in a bubble? appeared first on The Motley Fool Australia.

It's hard to pick a tech share and get it right. Multitudes already exist with new ones coming on the market regularly. Buying single tech shares means putting your faith in that company to outperform in an extremely competitive industry, however, sitting on the sidelines means watching tech companies become so expensive it's hard to get a foot in the door.

To further complicate things, not only is it a question of which company to invest in, but which country. With the US markets producing some of the world's most well-known tech companies, it seems like an easy choice to look overseas for returns.

However, as an Aussie investor, this is easier said than done, particularly if you are trying to invest in multiple countries or gain access to multiple exchanges. But putting tech in the 'too hard' basket can mean missing out on staggering returns overseas.

In my view, the solution lies in a global tech exchange-traded fund (ETF):

Morningstar Global Technology ETF (ASX: TECH)

With a ticker like 'TECH', this one should be easy to remember. In my opinion, Morningstar have done a great job putting this fund together and I really like the global exposure. Although there are alternative tech ETFs on offer, this one is top of my list.

Country allocation

At the time of writing, the fund's global allocation is: USA (74.1%), Germany (7.1%), Switzerland (6.2%), Israel (4.1%), Japan (3.8%), Hong Kong (2.4%) and France (2.2%) approx. This is a great spread and really provides that global exposure investors need for the tech industry.

Top 10 holdings

At the time of writing, TECH's top 10 holdings include: Infineon Technologies (5.0%), Splunk Inc (4.4%), STMicroelectronics (4.4%), Microchip Technology Inc (4.3%), Nice Ltd (4.2%), Broadcom Inc (4.1%), Microsoft Corp (4.0%), Servicenow Inc (4.0%), Zendesk Inc (3.9%) and Guidewire Software (3.9%).

Performance

The fund's 3-year return at the time of writing clocks in at around 24% per annum and its 3-month return sits at approximately 17%. That's nothing to sneeze at, considering the current state of the economy. Compared with the S&P/ASX 200 Index (ASX: XJO), which has delivered a 3-year return of just over 4% and a 3-month return of around 10%. I could also provide comparisons to multiple overseas markets, however the value of adding this particular ETF to your portfolio is global diversity and exposure to tech outside of Australia, so it's pertinent to provide an ASX 200 comparison.

Fees

Something to be aware of with most ETFs is that they have annual fees. TECH has annual management costs of 0.45%. According to CommSec, ETFs on the ASX can range in fees from 0.1% to 1% per year, which puts TECH roughly in the middle as far as costs go. 

Trading and investing

Buying and selling ETFs is done in the same way as regular shares, directly through your chosen broker. Simply search for the ETF using the ticker above.

Foolish takeaway

The returns that tech shares can provide are staggering at times. With our world evolving and becoming more digital in nature by the day, I feel that tech shares should form a part of all portfolios, however, choosing the right ones can be both daunting and expensive.

Investing through ASX ETFs such as TECH means exposure to global tech players. Over multi-year periods, compounded returns in tech ETFs can be hard to beat – and you never know, your ETF might just catch the next Amazon!

The post The ASX tech ETF you can buy and hold forever appeared first on The Motley Fool Australia.

NextDC Ltd (ASX: NXT) has been one of the many ASX tech shares to outperform in 2020.

While the S&P/ASX 200 Index (ASX: XJO) has slumped more than 10% lower this year, NextDC shares have rocketed 73% higher.

Some investors might think they've missed the boat on the Aussie data centre operator. Here's why I think NextDC and 2 more ASX tech shares could actually be in the buy zone.

Why I think NextDC has more growth left in it

I think it's worth mentioning that most tech shares are going to be trading at high price-to-earnings (P/E) ratios. That's because investors are paying handsomely today for future expected growth.

For instance, NextDC reported revenue of $97.7 million in its February half-year results, but a net loss after tax of $4.9 million. That's not unusual when investing in ASX tech shares. Despite this, I believe there is strong potential – I like NextDC for its strong revenue growth projections and increasing demand for data storage and security.

Cybersecurity and off-site data storage are two looming issues for Aussie businesses over the next decade or two. I think NextDC is already somewhat ahead of the curve with established sites across Melbourne, Sydney, Brisbane, Perth and Canberra.

A recent company update also indicated strong contracted commitment options after winning several material customer contracts in New South Wales. That caught the eye of leading broker Goldman Sachs which upped its price guidance for the NextDC share price to $11.10 per share. NextDC has already smashed through that target, with shares up to $11.34 today at the time of writing.

Clearly, there is strong momentum behind the ASX tech share right now. Given its significant expansion plans and growth potential, I think NextDC's value may continue to climb higher. 

2 more ASX tech shares I'd like to buy today

It's not just NextDC shares I've got my eye on. Despite climbing 16% higher this year, I like the look of Xero Limited (ASX: XRO) shares.

Xero offers a cloud-based accounting software platform for small and medium-sized businesses. That's a particularly in-demand area at the moment given complexities around small business accounting amid the coronavirus crisis.

While the government stimulus programs have helped prop up the economy, it has also created a few headaches for small business accountants. That's where Xero can continue to innovate and make the most of a strong market opportunity.

According to government statistics, small businesses account for 34% of industry value added (IVA) in Australia. This huge contribution to Australia's GDP makes them a potentially lucrative market for Xero to continue to capture.

The ASX tech share reported some strong numbers in its 14 May full-year result. Xero's subscriber numbers surged 467,000 during the year to 2.285 million while the company posted a net profit after tax of $3.3 million. Free cash flow jumped $20.7 million to $27.1 million for the year.

Those are some strong financials, despite flagging slowing subscriber additions due to COVID-19.

Finally, if you want to diversify across ASX tech shares, I'd consider an exchange-traded fund (ETF). An ASX-listed ETF can be an easy way to gain exposure to multiple tech companies.

The ETFS Morningstar Global Technology ETF (ASX: TECH) has caught my eye recently. The ASX tech ETF has a management fee of 0.45%, is not currency-hedged and has assets under management of $144.3 million as of 3 July 2020.

With top holdings like BroadCom Inc. (4.2%) and Microsoft Corp (4.0%), this ETF is an easy way to get exposure to other quality tech shares outside of the ASX.

The post Where to invest $1,000 in ASX tech shares today appeared first on The Motley Fool Australia.

Exchange-traded funds (ETFs) are no longer a one-size-fits-all investment vehicle. The first ETFs available in Australia were plain old index funds — tracking benchmarks like the S&P/ASX 200 Index (ASX: XJO ) without too much fanfare.

But these days (much like the app store), if there's a trend, asset class or industry to track, chances are there's an ETF for that.

But with a plethora of choice out there, which ETFs should we choose for our portfolios? Well, if you're looking to add some international exposure to your portfolio, I've found 2 exotic ETFs I think merit consideration.

iShares MSCI EAFE ETF (ASX: IVE)

Don't let this acronym-replete name dissuade you. IVE tracks a basket of shares from Europe, Australia and the Far East (EAFE). Most of the international investing that Aussies tend to participate in revolves around the United States. While this is not necessarily a bad thing, I do think that America has its own set of unique challenges right now. Considering this, a bit of international diversification might not go astray in our portfolios.

IVE has its largest exposure (26% of the portfolio) to Japan with shares like Toyota. But the United Kingdom (at 14%), France (at 10.5%), Switzerland (10.2%) and Germany (9%) also feature heavily. Our own ASX shares make up around 6.4% of this ETF. Apart from Toyota, other companies that feature in IVE's top 10 list include Nestle, Roche, Novartis, SAP and LVMH.

IVE has a management fee of 0.31% per annum, which I think is reasonable considering the geographical diversification it brings to the table.

ETFS Morningstar Global Technology ETF (ASX: TECH)

This tech-focused ETF (hence the ticker symbol) is one of my favourite exotic ETFs on the ASX. It aims to track a basket of tech-related companies that are selected by the reputable Morningstar group. It's dominated by US companies (with 85.5% of the portfolio), but also features Japan, Germany and France in its exposures. TECH's holdings are made up of both large and small tech companies. Microsoft is in the top 10, as is Fortinet, Splunk, ServiceNow and Intel.

Morningstar regularly updates and rebalances this index. Thus, you can have reasonable confidence that any company that stumbles or goes off the rails will be replaced with another up-and-comer. If you feel your portfolio doesn't have sufficient exposure to the global technology sector, then TECH is a great way to easily remedy this situation. This ETF has a management fee of 0.45% per annum, which isn't on the cheap side. However, since TECH has returned an average of 25.15% per annum over the past 3 years, personally I would consider this fee 'worth it'.

The post 2 exotic ETFs for your ASX portfolio appeared first on The Motley Fool Australia.

Shouldn't we all just buy ASX tech shares from now on?

Tech shares of all stripes have done remarkably well since the S&P/ASX 200 Index (ASX: XJO) market bottom – but it's easy to forget just how well.

Since 23 March, the ASX 200 has risen approximately 28% (even after today's falls). But since the same date, the S&P/ASX All Technology Index (ASX: XTX) is up nearly 70%.

Just look at shares like Afterpay Ltd (ASX: APT). Its shares have been truly phenomenal to watch over the past 2 months. After bottoming out at $8.90 on 23 March, Afterpay shares were at an all-time high this week, hitting $54.85 at one point. That's a return of more than 500% – sensational stuff!

It's a similar story over in the United States for tech shares. Since 23 March (also the US market bottom), the Dow Jones Industrial Average has risen roughly 35%. But if you look at US tech shares like Apple (up nearly 50% since 23 March), Mastercard (up 43%), and Facebook (up nearly 52%), we can see a similar story playing out.

So should we just give up on the blue chips of the world in favour of ASX tech shares? By blue chips, I'm referring to the likes of Commonwealth Bank of Australia (ASX: CBA), Woolworths Group Ltd (ASX: WOW) and Telstra Corporation Ltd (ASX: TLS). 

A bull case for ASX tech shares

Well, I think to ignore tech shares is to do so at our own peril. These are the companies that are shaping the future of business in my view. Thus, I think it's imperative to at least consider some tech shares like Afterpay, or maybe Altium Limited (ASX: ALU) or NextDC Ltd (ASX: NXT) for one's portfolio. If you're aiming to build your wealth through ASX shares, you'll want to find at least some companies that are growing quickly – and there's nowhere better to find such companies than in the tech space, in my view.

If you're not confident investing in individual ASX tech shares, you can always look at exchange-traded funds (ETFs) instead. The Betashares Nasdaq 100 ETF (ASX: NDQ) is a great place to start. You can also have a look at the aptly tickered ETFS Morningstar Global Technology ETF (ASX: TECH).

In saying this, I also think it's a mistake to tar all ASX tech shares with the same brush. Like any other sector, there will be winners and losers. For every Afterpay, there's another tech company with a 'brilliant idea' that won't make it off the starter's block.

Furthermore, investors shouldn't forget that having a diversified portfolio is always important. And only investing in tech isn't diversified at all. The tech sector isn't immune from the vicissitudes of life and faces some unique risks that merit the same level of balanced diversification as any other sector in your portfolio.

The post Tech shares! Should we even invest in anything else? appeared first on The Motley Fool Australia.

If you've saved up $1,000 and are looking to invest right now, ASX exchange-traded funds (ETFs) could be the way to go.

ETFs essentially allow you to buy units in a fund that invests in a diversified portfolio of shares. These funds come in many forms and can be specific to a particular country, like Vanguard Australian Shares Index ETF (ASX: VAS), or a sector like the ETFS Morningstar Global Technology ETF (ASX: TECH).

So, before you commit your hard-earned cash to the share market, let's check out some of the best ASX ETFs to buy today.

Why should I buy ETFs in the first place?

ETFs are a great way to achieve instant diversification. Portfolio construction is critical but it takes time and money. If you're just looking to invest $1,000 today, this may only buy you a few shares in the S&P/ASX 200 Index (ASX: XJO).

For instance, the CSL Limited (ASX: CSL) shares are currently trading at nearly $300 each which will eat up the majority of your investment for a grand total of only 3 shares in one company. 

However, an ETF like the Vanguard Australian Shares Index ETF gives you broad exposure to the S&P/ASX 300. This ETF essentially tracks the market and means you're a passive investor.

Investing in ASX ETFs isn't for everyone and many investors prefer to select individual shares to buy. If you're a relatively new investor, however, or you like the diversification offered by ETFs, here are a couple of top funds to consider today.

Where to invest $1,000 in ASX ETFs today

I think ETFs have a place in almost any portfolio. Buying ETFs is an easy way to diversify or even target a specific sector or geography.

For instance, If you're bullish about tech, the ETFS Morningstar Global Technology ETF can top up your exposure without buying shares in each individual tech company.

VAS and TECH aside, iShares S&P 500 ETF (ASX: IVV) could be a strong buy if you're bullish about the United States. Federal Reserve Chair Jerome Powell is doing everything he can to keep the economy ticking along right now and we could see some strong gains in US markets as a result.

If you're after an all-in-one solution, the Vanguard Diversified High Growth Index ETF (ASX: VDHG) could be for you. This fund is a diversified global portfolio with a heavier weighting towards the ASX.

Either of these could be great options if you're just looking to invest $1,000 in a diversified portfolio but don't know where to start.

The post Where to invest $1,000 in ASX ETFs today appeared first on The Motley Fool Australia.

Exchange-traded funds (ETFs) are not normally the domain of the growth investor. Index funds like the Vanguard Australian Shares Index ETF (ASX: VAS) are very popular investments in this space. But they are usually favoured by passive investors who are not trying to beat the market long-term.

But there are ETFs out there that are more growth-orientated. These have proven themselves to deliver market-beating performances (as well as market-beating ticker codes!). Here are 3:

3 growth ETFs to hold for the long term

Betashares Global Cybersecurity ETF (ASX: HACK)

Aside from this fund's brilliant ticker code, I also think it's worth a look at from a growth perspective. As its name suggests, HACK invests in companies around the world that operate in the cyber security sector. This is an industry that has been growing enormously over the past decade, both in size and importance. I also think there's plenty of room for future growth as our reliance on the internet continues to accelerate. 

HACK has returned an average of 16.7% per annum since listing in 2016. I believe these returns, along with the future-proof nature of the cyber security industry, mean this ETF would be perfect for growth investors. 

ETFS Morningstar Global Technology ETF (ASX: TECH)

This ETF is set up to track a basket of tech stocks the fund believes have market-leading positions as well as sustainable competitive advantages. By its nature, TECH invests in growth companies and has returned a pleasing 24.37% per annum since its inception in 2017. Some of its current holdings include Microsoft, Fortinet, Splunk and Intel.

As such, TECH is a perfect choice for any tech-focused growth investor. It might also suit those investors looking to increase their global exposure to the technology sector as a whole.

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

This ETF (another from BetaShares) tracks tech stocks that hail from Asian markets such as China, Taiwan and Korea. Shares from these countries don't often find their way into Australian investment portfolios. Yet, in my opinion, they present some of the best growth opportunities for the 21st century.

ASIA's primary focus is on tech companies and you'll find some familiar names in its holdings. There's Afterpay Ltd's (ASX: APT) new business partner Tencent Holdings, as well as Alibaba, JD.com and Baidu (sometimes called the Google of China). ASIA has returned an average of 14.6% per annum since its inception in 2018.

Foolish takeaway

For a diversity play, as well as exposure to significant growth opportunities, I believe these 3 ETFs are top picks for ASX growth investors today!

The post 3 ETFs perfect for an ASX growth investor appeared first on The Motley Fool Australia.

In early March, analysts at Macquarie Group Ltd (ASX: MQG) made a statement, believing "investors will be drawn back to Tech" following the bear market created by COVID-19.

This was based on COVID-19, despite being worse than SARS, following a similar playbook with technology companies leading the SARS market rebound.

With that in mind, below are three ASX tech shares to consider buying in April in anticipation of the recovery.

Audinate Group Ltd (ASX: AD8)

The Audinate share price has been crushed since the beginning of the bear market. At one point, it was down to just $2.51 per share, a staggering 70% below its February highs. Since then, Audinate has followed the market back higher to sit at $4.12 at the time of writing. However, this is still more than 50% lower than its February highs of $8.50 a share.

Who is Audinate?

Audinate is a leading provider of professional digital audio networking technology. Its Dante platform allows distribution of uncompressed, multi-channel digital media over a standard ethernet network with near zero latency. This means heavy expensive cabling is no longer required, with existing networks sometimes able to be taken advantage of.

Audinate's first-half results showed a 3.8 percentage point increase in gross margin to 77.1%, driving its gross profit 20% higher over the prior corresponding period. The company has not yet released an announcement in response to COVID-19 but has a strong cash position on its balance sheet to help it navigate the turbulent waters.

NEXTDC Ltd (ASX: NXT)

NEXTDC is an S&P/ASX 200 Index (ASX: XJO) company that provides data centre outsourcing, connectivity services and infrastructure management software.

Unlike most ASX shares during March, NEXTDC actually saw its share price rise, posting a 13% gain for the month. After reporting strong half-year results at the end of February, NEXTDC shares continue to perform well as isolation and social distancing measures increase demand for video calls and cloud-based software.

Recent announcement

NEXTDC announced this morning a trading halt for its shares as the company looks to raise $672 million. With strong growth recently, these funds are to be used to continue growing the business. It appears management has timed the capital raise well with its shares sitting at a high. Meanwhile, other companies such as Webjet Limited (ASX: WEB) are forced to raise capital at deflated prices.

I think NEXTDC will continue to see a growing demand for its services. Raising capital during a time of share price strength is a smart move to capitalise on its growth prospects. Once NEXTDC shares return to trading, I wouldn't be surprised to see the share price drop closer to the issue price, providing a better opportunity for investors.

ETFS Morningstar Global Technology ETF (ASX: TECH)

If you believe a particular sector will rebound strongly but are unsure which company to invest in, an ETF can provide great diversification across an industry.

An investment in the ETFS Morningstar Global Technology ETF provides investors with global exposure to the technology sector. Companies within this ETF are chosen based on Morningstar's MOAT methodology. This method selects companies that are market leaders with distinct competitive advantages. The TECH ETF is largely invested in US tech shares, with smaller investments in Japan, Germany, Switzerland, Israel and France as of April 1, 2020. 

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Dividing the economy into sectors is a useful way of classifying shares and other investments into categories. A sector is an area of the economy in which related businesses compete or produce the same or similar product and services. Well-known sectors include healthcare, technology, and infrastructure. Here we take a look at seven sector-specific ETFs.

Each sector will have unique economic drivers and risk characteristics. When one sector is expanding, others may be contracting, and vice versa. For this reason, diversifying across sectors is recommended. Diversifying within sectors by having exposure to multiple businesses in a sector is also recommended.

Exchange Traded Funds provide a quick and simple method for gaining exposure to a sector of the economy whilst also diversifying within it. ETFs are traded on the ASX like shares and hold baskets of securities providing for instant diversification. Sector ETFs are designed to provide exposure to specific sectors of the economy.

Infrastructure

The VanEck Vectors FTSE Global Infrastructure (Hedged) ETF (ASX: IFRA) provides exposure to a diversified portfolio of infrastructure securities listed in developed markets globally. Core infrastructure businesses span the telecommunications, transportation, and energy industries. Infrastructure is traditionally considered a defensive asset class which provides inflation-linked income.

The ETF delivered total returns of 20.01% in the year to 31 October 2019. Management costs are 0.52% per annum and distributions are made four times a year. Holdings are distributed across the United States (54.8%), Canada (8.8%), Australia (8.4%), Italy (5.3%), Spain (5.0%), Japan (4.4%), the United Kingdom (2.9%), China (2.7%), France (1.8%), New Zealand (1.6%), and elsewhere (4.3%).

Top holdings include Nextera Energy Inc (5.12%), Transurban Group (ASX: TCL) (4.88%), American Tower Corp (3.79%), Atlantia Spa (3.63%), Aena SME SA (3.57%), Duke Energy Corp (3.08%), Dominion Energy Inc (2.97%), The Southern Co (2.93%), Enbridge Inc (2.86%), and Crown Castle International Corp (2.27%).

Healthcare

The iShares Global Healthcare ETF (ASX: IXJ) provides investors with exposure to the S&P Global 1200 Healthcare Sector Index before fees and expenses. The Index measures the performance of biotechnology, healthcare, medical equipment, and pharmaceutical companies globally. The ETF returned 13.64% in the year to 31 October 2019.

Management fees are 0.47% and distributions are made twice yearly. Exposure is centred on the US (68.05%), followed by Switzerland (10.03%), Japan (6.06%), United Kingdom (4.80%), Germany (2.48%), Denmark (2.26%), and Australia (2.07%).

Top holdings include Johnson & Johnson (6.70%), UnitedHealth Group Inc (4.94%), Novartis AG (4.33%), Merck & Co Inc (4.24%), Roche Holding Par AG (4.05%), Pfizer (3.92%), Abbott Laboratories (2.80%), Medtronic PLC (2.77%) and Amgen Inc (2.60%).

Technology

ETFS Morningstar Global Technology ETF (ASX: TECH) offers focused exposure to the global technology sector. The ETF tracks the Morningstar Developed Markets Technology Moat Focused Index which is composed of equally weighted market leaders that have a competitive advantage over others in the same field.

Returns were 26.45% in the year to 31 October. Management fees are 0.45% per annum and distributions are made twice yearly. Holdings are distributed across the United States (89.5%), Australia (5.8%), Japan (2.4%), and Germany (2.1%).

As at 31 October, the ETF held 34 securities including Arrow Electronics (4.17%), Alphabet Inc A (4.13%), Palo Alto Networks (4.12%), Guidewire Software (4.10%), Microsoft Corp (4.06%), Microchip Technology (3.98%), Broadcom (3.94%), Sabre Corp (3.93%), Facebook Inc A (3.88%), and Salesforce.com (3.83%).

Property

The Vanguard Australian Property Securities Index ETF (ASX: VAP) provides exposure to property securities listed on the ASX. Property sectors the ETF invests in include retail, office, industrial and diversified.

The ETF tracks the return of the S&P/ASX 300 A-REIT Index before taking into account fees, expenses and tax. The fund returned 21.90% in the year to 31 October. Management fees are 0.23% per annum and distributions are made quarterly.

Top holdings include Goodman Group (ASX: GMG) (17.28%), Scentre Group (ASX: SCG) (15.28%), Dexus Property Group (ASX: DXS) (9.72%), Mirvac Group (ASX: MGR) (9.52%), Stockland Corporation Ltd (ASX: SGP) (8.92%), GPT Group (ASX: GPT) (8.59%), Vicinity Centres (ASX: VCX) (6.43%), and Charter Hall Group (ASX: CHC) (3.92%).

Ethical

The Betashares Global Sustainability Leaders ETF (ASX: ETHI) provides exposure to 100 large global shares (ex Australia) which are climate change leaders and not materially engaged in activities inconsistent with responsible investment considerations. Exclusion screens are applied to remove companies with exposure to fossil fuel, gambling, armaments, uranium/nuclear energy, junk food, animal cruelty, pornography, human rights and supply chain concerns.

The fund returned 31.15% in the year to 29 November. Management costs are 0.59% and distributions are made twice yearly. Holdings are distributed across the United States (75.2%), Switzerland (5.0%), Japan (4.4%), Hong Kong (3.1%), Netherlands (2.3%), Denmark (2.1%), Sweden (1.9%), Spain (1.5%), Finland (1.0%) and elsewhere (3.4%).

Top holdings include Apple (4.8%), MasterCard (4.3%), Visa (4.1%), UnitedHealth Group (4.0%), Home Depot (3.9%), Roche Holding (3.9%), Adobe Systems (2.4%), PayPal Holdings (2.0%), Nvidia Corp (2.0%), and Netflix (2.0%).

China

The VanEck Vectors China New Economy ETF (ASX: CNEW) provides exposure to companies in China having the best growth prospects in sectors making up 'the New Economy', namely technology, health care, consumer staples and consumer discretionary. The ETF tracks the CSI MarketGrader China New Economy Index. The Index aims to select the 120 companies in China with the best growth at reasonable price attributes, which are considered the best drivers of long-term capital appreciation.

The ETF has delivered total returns of 33.33% since inception in November last year. Management costs are 0.95% per annum and distributions are made once per year. Top holdings at the end of October included Wus Printed Circuit Kunshan (1.53), Luxshare Precision Industry (1.38%), Fujian Boss Software Development (1.36%), Shandong Yisheng Livestock & Poultry (1.29%), Autobio Diagnostics (1.24%), Shanxi Xinghuacun Fen Wine Factory (1.18%), and Changchun High & New Technology (1.14%).

Cybersecurity

The Betashares Global Cybersecurity ETF (ASX: HACK) provides exposure to leading companies in the cybersecurity sector. The ETF tracks the Nasdaq Consumer Technology Association Cybersecurity Index.

Returns were 17.79% in the year to 31 October. Management fees are 0.67% and distributions are made twice yearly. Holdings are distributed across the United States (82.5%), Israel (6.0%), Britain (5.6%), Japan (3.0%), France (2.5%), South Korea (0.3%), and elsewhere (0.1%).

Top holdings include Broadcom Inc (6.2%), Palo Alto Networks (6.2%), VMWare (6.1%), Okta Inc (5.7%), Cisco Systems (5.4%), Fortinet Inc (3.7%), Splunk (3.7%), Fireeye Inc (3.5%), and F5 Networks (3.2%).

Foolish takeaway

Sector ETFs can provide diversified exposure to specific areas of the economy that are not perfectly correlated with other areas of the economy. This can be valuable in improving diversification across the broader portfolio.

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