Up 17% and 85%, these 2 ETFs could be the next big growth winners
Global interest in exchange-traded funds (ETFs) is exploding — and it’s easy to see why.
Picking individual stocks to buy can deliver spectacular, market-leading profits. But ETFs can deliver a powerful alternative: instant diversification that spreads risk and provides the opportunity to make life-changing returns.
According to fund consultancy ETFGI, there are more than 16,600 global ETFs currently vying for investors’ attention. I think I’ve found two of the most exciting, both of which can be found on London’s stock market.
These are:
Food for thought
Over the last three years, the VanEck Sustainable Future of Food ETF has risen 17% in value. With the climate crisis rapidly worsening, I think it could pick up serious momentum.
The fund “invests in companies innovating across the food value chain, from sustainable agriculture to food technology“. Therefore, it could be well positioned to benefit from powerful long-term trends. As planetary heating and rising populations put pressure on food supplies, the need to farm smarter is becoming increasingly necessary.
This week, the United Nations’ Food and Agriculture Organization’s Food Price Index reached a three-year high following recent global droughts. Companies like Novenesis, whose chemicals boost crop yields, and plant-based ingredient maker Ingredion — both key holdings in this VanEck ETF — could play a critical role in preventing high prices and food shortages from becoming the new normal.
Feeding people in decades to come will require ingenuity and innovation to produce more food on less land in more sustainable way.
World Bank
By focusing on small-to-mid-sized companies, this ETF has in my view significantly greater growth potential that many other environmentally themed funds. Just be mindful that this strategy also comes with some added risk — smaller companies can can be more sensitive to economic downturns.
Another winning ETF?
Cyberattacks pose another significant threat to humanity as the world becomes more digitalised. From banking and healthcare, to energy networks and transportation systems, critical infrastructure is becoming increasingly reliant on internet-connected systems.
These dangers are becoming even more serious as artificial intelligence (AI) gives cybercriminals powerful new tools. In a chilling reminder of this, systems from OpenAI, Meta, and Anthropic have all ‘gone rogue’ in recent weeks, escaping their boundaries and carrying out cyberattacks on other entities.
