I think there are some really good themed exchange-traded funds (ETFs) that could do well over the long-term.
Some ETFs are based on an index like iShares S&P 500 ETF (ASXL IVV) and BetaShares Australia 200 ETF (ASX: A200).
But some are based on sectors or themes, that may be able to produce pretty good returns over time:
BetaShares Climate Change Innovation ETF (ASX: ERTH)
This ETF is about investing in businesses that are doing their bit to address and fight climate change. It’s a portfolio of up to 100 global shares where at least 50% of revenue comes from products or services that help to address climate change and other environmental problems through the reduction or avoidance of CO2 emissions.
What types of things are we talking about? It means things like clean energy providers, along with leading companies tackling green transport, waste management, sustainable product development, and improved energy efficiency and storage.
Some of the holdings include names like Tesla, Eaton Corp, Infineon Technologies, Docusign, Ecolab, Trane Technologies, Vestas Wind Systems, Nio, Cie De Saint-Gobain and American Water Works.
It’s actually fairly diversified across countries. These are the countries with a weighting of more than 3%: US (40.9%), China (11.1%), France (8.1%), Germany (7.6%), the UK (5.1%), Japan (4%), Taiwan (3.4%) and Denmark (3%).
This comes with an annual management fee of 0.65%, which seems quite cheap for the exposure it offers.
VanEck Video Gaming and Esports ETF (ASX: ESPO)
This is an interesting ETF that provides exposure to video game-related companies like Advanced Micro Devices, Nvidia, Sea, Tencent, Unity Software, Activision, Electronic Arts, Take Two Interactive Software, Zynga and Ubisoft.
VanEck points to several factors for video gaming and e-sports. There are now apparently more than 2.7 billion active gamers worldwide.
The competitive video gaming audience is expected to reach 646 million people globally by 2023, partly driven by more people using the internet. Content is increasingly being consumed through online platforms and. The average age of e-sports enthusiasts is under 30 according to VanEck.
The ETF provider says that e-sports revenue growth has increased on average by 28% per year since 2015.
VanEck notes that e-sports is the convergence of entertainment, video gaming, sports and media businesses. With an active, engaged and fairly young demographic, the sector is “set for sustainable long-term growth”.
