Exchange-traded funds (ETFs) can take a lot of the guesswork out of investing, allowing investors to pick a theme or index they’d like to track, then trusting in the ETF manager to build a portfolio which fits the bill.
Index tracking ETFs, such as those that seek to replicate the performance of the S&P/ASX 200 Index (ASX: XJO), for example, are popular; however, if you’re looking for outsized gains, it can pay to look further afield into sectors that have strong economic tailwinds behind them.
While past performance is no guarantee of future performance, let’s have a look at three such funds that have done well over the past year.
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Global X Hydrogen ETF (ASX: HGEN)
This ETF is a relatively small one, with just $45 million in assets under management.
The fund aims to invest in companies that stand to benefit from the advancement of the global hydrogen industry.
The fund’s website adds:
This includes companies involved in hydrogen production; the integration of hydrogen into energy systems; and the development/manufacturing of hydrogen fuel cells, electrolysers, and other technologies related to the utilisation of hydrogen as an energy source.
The fund has returned 98.5% over the past year after falling back 5.2% over the past month.
Global X Semiconductor ETF (ASX: SEMI)
This fund “seeks to invest in companies that stand to potentially benefit from the broader adoption of tech-enabled devices that require semiconductors”.
This is a much larger fund, with $1.1 billion in funds under management.
Some of the fund’s top holdings include Micron Technology, SK Hynix, Nvidia, and Intel.
This fund has returned 136.4% over the past year and 83.5% year to date.
This fund aims to track an index providing exposure to global companies in the energy transition metals field – think metals such as lithium, copper, nickel, and graphite.
The fund’s website says:
The transition from fossil fuels to clean energy solutions is driving growth in a range of disruptive products and processes such as renewable energy generation, battery storage solutions, and electric vehicles, all of which are critically dependent on the select group of energy transition metals that XMET provides exposure to.
The fund’s top holdings include PLS Group Ltd (ASX: PLS), BHP Group Ltd (ASX: BHP), and Lynas Rare Earths Ltd (ASX: LYC).
This fund has returned 83.9% over the past year.