Exchange traded funds are often popular investment vehicles for investors looking to diversify their portfolio in one simple trade.
This can help offset some volatility and spread your portfolio around the Australian or global markets.
However rather than spreading your portfolio geographically or across sectors, another benefit of ETFs is narrowing in on a specific market or theme you might be optimistic on.
Here are two ASX ETFs with a niche focus on markets could continue to grow in the long term.
As the name suggests, this fund has a specific focus on robotics and artificial intelligence.
According to the fund, it seeks to invest in companies that potentially stand to benefit from increased adoption and utilisation of robotics and artificial intelligence. These include those involved with industrial robotics and automation, non-industrial robots, and autonomous vehicles.
I like this niche focus due to the growing opportunity in these fields.
According to research, the global robotics technology market size is estimated at US$94.54 billion in 2024. It is anticipated to reach around US$372.59 billion by 2034.
Despite focussing on the robotics and AI fields, the fund is highly diversified within the sector. In fact, no company currently represents more than 2.04% of the total fund.
At the time of writing it is made up of 74 holdings. Its largest geographical representation being in the United States (43.5%) and Japan (21.49%).
It's important to mention it has not always been smooth sailing for holders of the fund, and has experienced volatility.
It has risen 10% over the last month.
This fund aims to track the performance of an index (before fees and expenses) that provides exposure to the leading companies in the global cybersecurity sector.
The logic behind it is simple: with cybercrime on the rise, the demand for cybersecurity services is expected to grow strongly for the foreseeable future.
It is made up of 32 holdings, with large exposure (78.2%) to the United States.
It includes industry leaders such as Palo Alto Networks (NASDAQ: PANW) and CrowdStrike (NASDAQ: CRWD).
The fund has risen 33.98% over the past year, reinforcing that investors agree there is value in this market.
Many investors use ASX ETFs to track markets like the S&P/ASX 200 Index (ASX: XJO) or S&P 500 Index (SP: .INX).
ETFs that track these markets are great fundamental options for your portfolio.
But if you already have holdings in these, niche ASX ETFs can be a way to call your shot on specific markets you anticipate will grow.
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