Want to add some growth to your portfolio? Here are two ASX growth ETFs I’m looking to purchase with $1,000 in the near future.
1. VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)
ESPO provides diversified exposure to the largest companies involved in video game development, eSports and related hardware and software globally. Each of the 25 holdings within the ETF derives at least 50% of their revenues from video gaming and/or esports.
In 2020, total projected esports revenue was expected to reach US$1.1 billion, representing 10.6% year-on-year growth. Moreover, the ETF has a large total addressable market, with more than 3 billion gamers worldwide.
The ESPO ETF was only launched on the ASX in September last year, however, the underlying index has achieved an impressive five-year return of 38.85% per annum. Notable holdings include Nintendo Co Ltd (TYO: 7974) and Activision Blizzard Inc (NASDAQ: ATVI).
Geographically, the fund’s largest allocation is in the United States (36.1%), followed by China (23.0%) and Japan (19.3%).
With a management fee of 0.55%, the ETF would provide tactical exposure to a diversified portfolio.
2. BetaShares S&P 500 Equal Weight ETF (ASX: QUS)
QUS offers an equal-weighted portfolio of the 500 leading companies located in the United States. It differs from traditional ETFs that track the S&P 500 by allocating the same amount of funds to each company, independent of size. This means investors have less exposure to high-flying tech stocks such as Tesla Inc (NASDAQ: TSLA), which has seen its share price rocket over the past year.
The fund still has exposure to tech-darlings including Microsoft Corporation (NASDAQ: MSFT), Apple Inc (NASDAQ: AAPL), and Alphabet Inc (NASDAQ: GOOGL).
Sectoral allocation is evenly spread, with the largest sector being Information Technology (15.0%), followed by Industrials (13.9%), Financials (13.6%), and Healthcare (12.6%).
The fund has a five-year performance of 9.74% per annum, meaning $1,000 invested in 2016 would be worth nearly $1,600 today. More impressively, the fund has outperformed the market-cap-weighted S&P 500 Index since inception.
With a management fee of 0.29%, this ETF is perfect for investors who are concerned about lofty market valuations and want to limit downside exposure.
Summary thoughts
Given I already have existing exposure to the United States, I’ll be looking to add ESPO in the near-term. It provides my portfolio with a point of difference in a sector that is difficult to gain exposure to on the Australian market.
For more ETF research, I’d check out the Rask ETFs service for our members-only model portfolios.
