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Exchange-traded funds (ETFs) play an important role in investment strategies. These passive vehicles provide a quick and often inexpensive way to invest in a variety of companies.
Here, I will highlight three ETFs that I would buy and hold for ten years.
The digital age
Technology is playing an increasingly important role in almost every area of our lives. The digitization of the world is set to accelerate in the coming years.
I think one great way to gain exposure to this is through iShares NASDAQ 100 UCITS ETF (LSE: CNX1). It tracks 100 technology stocks listed on the Nasdaq stock market.
| Top 5 possessions (as of March 27) | Portfolio weight % |
| 1. Microsoft | 12.5% |
| 2. Apple | 12.3% |
| 3. Amazon | 6.1% |
| 4. Nvidia | 5.1% |
| 5. Alphabet | 3.8% |
The index is down 20% in the last 18 months, so I’ll be investing myself.
One risk to be aware of is the concentration of the portfolio, with a quarter of the investment in just two stocks. If one (or both) experiences a downturn, the entire ETF may underperform.
However, over the next decade, I expect many holdings to move toward higher valuations as technology spreads across nearly every industry.
Common themes in these ETFs include cloud computing, artificial intelligence, payments, and digital advertising.
The current cost is 0.33% per year.
Alternative energy
I also like it iShares Global Clean Energy ETF Stock price history. This fund offers a way to invest in the global clean energy trend.
It is invested in 97 stocks and the top stocks are included The first solar, Enphase Energyand offshore wind farm giants Ørsted.
Global investment into renewable energy reached a new record of $495bn last year. Almost certainly these numbers will increase as the energy transition progresses.
One thing worth pointing out is that investor sentiment about green technology waxes and wanes. That means any returns are not necessarily consistent from one year to the next.
However, if I had the money, I would invest in this ETF. The current fee is 0.65% per annum.
The cat and the mouse
Another ETF that I rate highly is L&G Cyber Security ETF (LSE: ISPY). As the name suggests, this fund tracks sellers of companies active in the cybersecurity industry.
This is an area poised for huge growth in the coming years, as cybercrime is expected to cost the world around $10.5trn annually by 2025. This means that cyber security is fast becoming a necessity for all companies, organizations and governments.
This ETF has 43 stocks and has a 0.69% trailing power.
| Top 5 possessions (as of February 28) | Portfolio weight % |
| 1. The Palo Alto Network | 5.2% |
| 2. Cloudflare | 5.1% |
| 3. Fortinet | 4.7% |
| 4. Blackberry | 4.6% |
| 5. Cheating | 4.6% |
Cybersecurity threats are changing as the technology hackers use is becoming more sophisticated. Companies must constantly innovate to stay on top of this evolving landscape. It’s like a never-ending game of cat and mouse.
This ETF provides broad exposure to all industries
One risk is that ownership can be quite stable. For example, Cloudflare shares rose 73% in 2021, before falling 65% last year.
However, this ETF has returned a whopping 155% since its launch in 2015. And I think the future looks bright.
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