Exchange-traded funds (ETFs) could be the best type of investment to look at in December 2021.
I think that there are certain themes or industries that are particularly worthwhile paying attention to.
For example, one of the main trends that I can see for the ultra-long-term is companies continually moving to improve their ESG (environmental, social and governance) aspects.
Whether it’s a coincidence or not, the companies that are doing this seem to be doing well for shareholders and customers.
Investors can feel good about owning the below two ETFs:
BetaShares Global Sustainability Leaders ETF (ASX: ETHI)
The idea of this ETF is that you can get diversified exposure to a portfolio of large global companies that meet strict sustainability and ethical standards.
It starts out with the large global shares and then makes a number of exclusions.
For example, potential companies have to be in the top one-third of performers in terms of carbon efficiency for their industry, or are engaged in activities that can help reduce carbon use by other industries.
It also cuts out a number of industries and other ESG issues such as: no fossil fuel producers, no companies significantly engaged in armaments, gambling, alcohol or junk foods. No companies are allowed that have issues relating to human rights or the supply chain. Companies aren’t allowed into the portfolio if they lack gender diversity on the board. There are other exclusions.
After those exclusions, what remains is the 200 largest companies by market cap.
Some of the biggest names in the portfolio includes: Nvidia, Apple, Home Depot, Visa, Adobe, Mastercard, ASML, Toyota, Cisco Systems and PayPal.
I think it’s cheap for what it does, with an annual management fee of 0.59%.
Betashares Climate Change Innovation ETF (ASX: ERTH)
This ETF is about giving investors the ability to get exposure, in one trade, to a group of businesses that are trying to help the world, in a green sense.
The portfolio can have up to 100 names that derive at least half of their revenue from products and services that help to address climate change and other environmental problems through the reduction or avoidance of CO2 emissions.
BetaShares says that demand for these types of products and services is expected to rise strongly over the long-term.
There are a number of areas represented by this climate change innovation ETF with some being clean energy providers, as well as other sectors like green transport, waste management, sustainable product development and improved energy efficiency and storage.
Some of the names in the portfolio includes companies like Tesla, Infineon Technologies, Eaton, Vestas Wind Systems, Ecolab, DocuSign, Trane Technologies, Nio Inc, Cie de Saint-Gobain and American Water Works.
