Exchange-traded funds can prove useful for exposure to certain sectors or international indices, for example. Read on to find out the five terms that a number of our free website writers hold in their Stocks and Shares ISAs…
Invesco EQQQ Nasdaq 100
What it does: This ETF tracks the Nasdaq 100 index, which represents the 100 largest non-financial companies on the Nasdaq Stock Exchange.
Written by Harshil Patel. I Invesco EQQQ Nasdaq 100 ETF (LSE:EQQQ) may sound like a mouthful, but it offers an easy way to own great growth shares.
In fact, it's one of the biggest companies I hold in my Stocks and Shares ISA. In recent years, it has been dominated by tech giants.
25% of the fund is invested in it an apple, Microsoft again Nvidia. Another 25% of the fund is invested in it Amazon, Broadcom, Meta, Tesla, Costco again Alphabets.
I find this ETF to be an efficient and cost-effective way to own these technical heavyweights.
Performance has been very good in recent years. For example, in the last five years it has gained 125%. And in the last ten years, it has increased by 460%.
This far exceeds that of S&P 500 again FTSE 100.
But be aware that you return to Nasdaq 100 it can be more flexible. In its most recent decline in 2022, it fell 26% compared to the S&P 500's 10% decline.
Harshil Patel is a shareholder in the Invesco EQQQ Nasdaq 100 ETF.
iShares Core EURO STOXX 50 EUR
What it does: the ETF tracks the performance of a diversified index made up of the 50 largest companies in Europe.
Written by Gordon Best. I'm a big fan of investing in potentially undervalued markets. Europe has stood out to me in recent years as a region with a lot of uncertainty, but a lot of quality too. iShares Core EURO STOXX 50 EUR (LSE:EUE) tracks 50 of the biggest stocks in the Eurozone. It offers diversification in a variety of sectors, including finance, consumer goods, and technology.
Of course, the European market is perhaps not as volatile as many US companies, but with strong growth numbers, and experienced management, it can cope with similar trends. For specialized semiconductor companies such as ASMLThe same growth as US companies can be seen, but as a more reasonable estimate.
I do have one concern though. A strong dollar could have a major negative impact on European companies that operate in other currencies, and there is a continuing risk of the country rising as the conflict in Ukraine continues.
Gordon Best is a shareholder in iShares Core EURO STOXX 50 EUR.
iShares Edge MSCI World Quality Factor ETF
What it does: The iShares Edge MSCI World Quality Factor ETF seeks to track the performance of an index composed of stocks with strong and stable returns.
Written by Paul Summers. To say I love it iShares Edge MSCI World Quality Factor ETF (LSE: IWFQ) is putting it mildly. It's easy to hold more in my Stocks and Shares ISA.
With a portfolio that includes the usual tech suspects and the pharma giant Novo Nordiskthis $4bn idle car has returned almost 80% over the last 5 years (at the time of writing).
The ETF focuses only on 'quality' stocks with a track record of high return on equity, stable earnings growth and sound financials. In other words, it avoids having waste.
None of this comes free but the 0.3% ongoing charge is reasonable compared to fully managed funds with the same objective.
My only concern is that 70% of the portfolio is dedicated to US stocks. With elections coming up next month, volatility may be on the cards.
Paul Summers is a shareholder in the iShares Edge MSCI World Quality Factor ETF.
IL&G Cyber Security UCITS ETF
What it does: The IL&G Cyber Security ETF is made up of cybersecurity stocks and tracks the ISE Cyber Security UCITS Index.
Written by Ben McPoland. Warren Buffett said something really interesting a few months ago. He predicted that AI-enabled fraud will be “an all-time growth industry“.
I think you are right. As well as tricking humans, AI can be used to create malware that adapts its behavior to avoid detection by conventional antivirus software.
This is because I have a IL&G Cyber Security ETF (LSE: ISPY) in my ISA. The ETF holds a basket of cybersecurity majors, including Palo Alto Networks again CrowdStrike.
Almost a week ends today without a major robbery incident. So this investment gives me exposure to an industry that research firm McKinsey thinks could one day be worth $1.5trn.
Naturally, the ETF is closely related to the performance of certain cybersecurity companies. These may face hacks, innovation challenges, or competitive pressures.
But since its launch in 2015, the price has increased by almost 150%. I expect it to continue to rise over time as revenue in the cybersecurity sector grows.
Ben McPoland is a shareholder in CrowdStrike and the L&G Cyber Security UCITS ETF.
VanEck Semiconductor ETF share price
What it does: The ETF invests in the 25 largest US-listed companies that manufacture semiconductors, or semiconductor devices.
Written by Dr. James Fox. The semiconductor industry moves rapidly through constant technological advancements and innovation cycles. In fact, this fast-paced environment can make it challenging for stockholders to stay abreast of the latest developments and trends.
So, while I invest in individual semiconductor stocks, an ETF that invests in the 25 largest US-listed companies that produce semiconductors, or semiconductor equipment allows me to spread the risk and hedge my bets.
I VanEck Semiconductor ETF share price (NASDAQ:SMH) has performed exceptionally well in recent years, up 46% over 12 months and 269% over five years. However, potential investors may be interested to see that the share price has retreated in recent months.
This creates an interesting entry point, but also reflects the ever-changing sentiment related to artificial intelligence and data centers – these sectors have driven the demand for high-end chips in the past 18 months – which may represent risks.
Personally, I'm looking beyond the near-term volatility and thinking about where this stock could be in a decade as our economy becomes increasingly dependent on semiconductor technology.
James Fox is a shareholder in the VanEck Semiconductor ETF
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