Exchange-traded funds (ETFs) would be good additions for your portfolio in December 2021.
I really like the concept of ETFs because they make investing so easy. Diversification and good businesses can help generate solid returns.
If I were investing in ETFs in December 2021, these are the two I’d love to buy:
Betashares Global Cybersecurity ETF (ASX: HACK)
This is ETF is about global cybersecurity businesses if you hadn’t guessed already.
It’s increasingly that organisations like governments and businesses have the best defences against the cybercriminals that are trying to do shady things like stealing important information.
There are various elements of cybersecurity like firewalls, screening emails, the ability to remove viruses, strong log in features and so on.
Global spending on cybersecurity is expected to keep rising for a number of years which is a useful tailwind for the businesses involved.
Talking of those businesses, you may recognise some of the biggest holdings including: Palo Alto Networks, Accenture, Cisco Systems, Okta, Crowdstrike, Cloudflare, Zscaler, F5 Networks, Mimecast and Tenable.
Whilst it isn’t going to be the world’s strongest ETF, I think it can provide defensive and growing earnings.
Past performance is certainly not a guarantee of future performance, however over the past five years the ETF has returned an average of 22.6% per year.
VanEck Video Gaming and Esports ETF (ASX: ESPO)
This is another ETF which could offer strong growth and defensive earnings.
It’s all about the global video gaming and e-sports industry. It has many of the world’s most recognisable game producers which have loyal fan bases.
Some of the holdings include: Nvidia, Advanced Micro Devices, Activision Blizzard, Nintendo, Take-Two Interactive and Unity Software.
Video gaming revenue continues to grow at a compound double digit growth rate as non-Western gamers and the e-sports audience grows.
Games continue to get more immersive, with augmented reality (AR) and virtual reality (VR) likely to open up another area of growth for the industry (and even more earnings).
Past performance is no guarantee of future performance, but the index that the ESPO tracks has done very well. Over the last five years the index has returned an average of 30.2% per annum.
