With 2022 just around the corner, it’s time to review portfolios and plan for any additions or subtractions for the new year.
Here are three ASX exchange-traded funds (ETFs) I’ve got my eye on and will be looking to add in 2022.
1. BetaShares Future of Payments ETF (ASX: IPAY)
IPAY was only released last week, but the more I look at the ETF and its holdings the more I want to add it to my portfolio.
In simple terms, IPAY is a bet on payment innovation. Think of everything from Mastercard to Block (formerly Square) to PayPal.
The ETF provides exposure to 50 companies in this space, for a 0.67% management fee.
It’s on the upper end regarding fees, but I’d struggle to get the same exposure and diversification on my own.
With a three year return of 17.86% per annum, IPAY is one I’ll be looking to add in 2022.
2.
Many portfolios (including yours truly) have exposure to markets such as Australia and the United States.
But there are plenty of other markets, particularly emerging ones such as China, Taiwan and India, which are growing at faster rates yet don’t get nearly the same attention.
VGE provides super diversified exposure (over 5,000 holdings) of emerging companies including JD.com, Alibaba and Taiwan Semiconductor.
It’s certainly a higher risk, given most of the markets are still developing.
But this is a part of the investible world that I definitely want to ride the coattails of.
3. BetaShares S&P 500 Equal Weight ETF (ASX: QUS)
QUS provides exposure to the most well-known index, the S&P 500 located in the United States, with a slight twist.
Instead of weighting each company by its market capitalisation, the index gives equal weighting to all holdings.
Subsequently, each company has a 0.2% weight.
This means the largest stock is weighted the same as the company number 500.
Why is that important? It means the ETF isn’t overly skewed towards any particular company.
In the S&P 500, just four companies – Apple (6.8%), Microsoft (6.2%), Amazon (3.7%) and Alphabet (Google) (4.1%) – make up over 20% of the index.
As a result, the performance of the overall index is largely dictated by the performance of a select few companies.
I already have an existing substantial allocation to these big tech giants, therefore in 2022, I’ll be looking to add some more diversified exposure.
