There has been an explosion of index-tracking exchange-traded funds (ETFs) in recent years, covering every market, sector and region of the world.
Private investors are snapping them up for their low charges and amazing diversification, but with thousands to choose from, finding the right one can be bewildering.
Globally, the number of ETFs have grown to more than 7,600 in 2020, from just 276 in 2003, according to Statista.
Many don't know where to start, or stick to the obvious ones, such as ETFs tracking the US S&P 500 or FTSE 100.
We asked three ETF experts to highlight a selection of their favourite funds that could do well as the post-Covid recovery gets under way.
Most private investors will invest in ETFs through online wealth platforms, either in their local jurisdiction or, if based offshore, through sites such as Interactive Brokers, Saxo Bank and Swissquote. Availability will vary according to the platform.
These funds are not for everybody. Some are specialist, or risky. Always remember to balance them against your existing holdings, and invest for the long term to overcome short-term volatility.
iShares Russell 2000 ETF
This ETF tracks the performance of the Russell 2000 Index of smaller US companies. Small caps can be more volatile but outperform when confidence is rising, Vijay Valecha, chief investment officer at Century Financial in Dubai, says. “The Russell 2000 is more diversified than the tech and growth-heavy S&P 500 and should benefit from the vaccine-driven cyclical recovery,” Mr Vijay adds.
Underlying charges: 0.19 per cent
Yield: 0.90 per cent
Year-to-date total return: 17.80 per cent
iShares Global Clean Energy ETF
As global governments target net-zero carbon, money is pouring into renewables such as wind and solar. In a further boost, US President Joe Biden’s $2.25 trillion infrastructure plan will focus on green energy and decarbonisation, Mr Valecha says. “This fund is one of the most liquid and well-established clean energy ETFs, and globally diversified with 40 per cent in the US and significant holdings in Canada, New Zealand, Hong Kong and Brazil," he says.
Underlying charges: 0.46 per cent
Yield: 0.42 per cent
Year-to-date total return: -20.24 per cent
Shares MSCI Europe Financials ETF
Mr Valecha picks this ETF that tracks the MSCI Europe Financials Index, giving investors access to around 80 financial companies in Europe.
European banks now offer better value than their US counterparts and if inflation and interest rates rise, that would improve their margins and profitability, he says. "The EU's €750 billion [$881bn] economic recovery plan should also help the banks ramp up their lending activity.”
Underlying charges: 0.48 per cent
Yield: 1.21 per cent
Year-to-date total return: 20.97 per cent
iShares MSCI Emerging Markets ETF
The iShares MSCI Emerging Markets ETF seeks to track large- and mid-capitalisation emerging market stocks, with highest exposure to China, Taiwan, and South Korea.
Many investors have overlooked emerging markets due to runaway US success, Mr Valecha says. “Emerging markets often outperform during periods of US underperformance, making this ETF a perfect complement to a well-diversified portfolio.”
Underlying charges: 0.68 per cent
Yield: 1.38 per cent
Year-to-date total return: 7.33 per cent
iShares PHLX Semiconductor ETF
This ETF invests in large- and medium-sized companies developing semiconductors, which lie at the heart of all modern electronics systems.
Unlike some other high-dividend ETFs, it applies strict rules to avoid potential income traps, companies with high dividends but a poor underlying business
It gives investors exposure to semiconductor powerhouse Taiwan, but should also benefit from US plans to invest $50bn in building its chip industry. The current semiconductor shortage “makes this ETF one of the most bullet-proof investment trends in the market, as they are as necessary to our lives as bread and water”, Mr Valecha says.
Underlying charges: 0.46 per cent
Yield: 0.74 per cent
Year-to-date total return: 14.51 per cent
US Global Jets ETF
JETS is a pure play airline ETF, Mr Valecha says. This fund is 80 per cent invested in US domestic airlines and aviation companies, and 20 per cent internationally. “This reopening trade should benefit from easing of travel restrictions.”
Underlying charges: 0.60 per cent
Yield: 0.00 per cent
Year-to-date total return: 18.09 per cent
iShares S&P 500 Information Technology Sector ETF
This is a cost-effective way of gaining access to some of the largest US technology companies, Matt Brennan, head of the ETF team at fund platform AJ Bell, says. Top 10 holdings include Apple, Microsoft, Visa, MasterCard, PayPal, Adobe, Cisco and Salesforce.
Underlying charges: 0.15 per cent
Yield: 0.00 per cent
Year-to-date total return: 7.45 per cent
Fidelity Global Quality Income ETF
This ETF gives investors access to a portfolio of global companies paying above average dividends, Mr Brennan says. “Unlike some other high-dividend ETFs, it applies strict rules to avoid potential income traps, companies with high dividends but a poor underlying business.”
Underlying charges: 0.40 per cent
Yield: 2.41 per cent
Year-to-date total return: 12.57 per cent
UBS MSCI World Socially Responsible ETF
More investors are looking to invest in green funds that adopt environmental, social and governance (ESG) criteria. This ETF starts with a portfolio of developed market equities plucked from the MSCI World Index, then removes certain “sin” stocks, such as tobacco, alcohol, fossil fuels and weapons. “This allows investors to gain exposure to a portfolio of global equities, with a lower carbon footprint and less controversial industries,” Mr Brennan says
Underlying charges: 0.25 per cent
Yield: 1.09 per cent
Year-to-date total return: 9.57 per cent
Franklin FTSE China ETF
This fund invests in large- and mid-sized Chinese companies, Mr Brennan says. He also tips the Franklin FTSE India ETF. “These two ETFs give investors access to two of the fastest-growing economies in the world,” he adds.
Underlying charges: 0.19 per cent
Yield: 0.90 per cent
Year-to-date total return: 0.66 per cent
Invesco Elwood Global Blockchain ETF
Cryptocurrencies such as Bitcoin are volatile and controversial, and aren't for everyone, says Tom Bailey, ETF specialist at wealth platform Interactive Investor. Investors who are happy to take a punt but do not want to buy the actual currencies could choose this ETF instead.
“It offers exposure to companies involved directly in Bitcoin and crypto mining, and more conventional companies using the underlying blockchain technology. This is not for the faint-hearted and should only ever form a tiny amount of a balanced portfolio.”
A slightly less risky option is the First Trust Indxx Innovative Transaction & Process UCITS ETF, which does not hold any cryptocurrencies but tracks an index of companies investing in blockchain technology.
Underlying charges: 0.00 per cent
Yield: 0.00 per cent
Year-to-date total return: 26.65 per cent
It offers exposure to companies involved directly in Bitcoin and crypto mining, and more conventional companies using the underlying blockchain technology
VanEck Vector Video Gaming & eSports ETF
This is another esoteric ETF for those who want to benefit from the fast-growing and profitable PC gaming business, Mr Bailey says. “The VanEck ETF tracks the MVIS Global Video Gaming eSports Index, composed of 25 stocks. Or consider The Global X ETF, which tracks the Solactive Video Games & Esports V2 Index.”
Underlying charges: 0.55 per cent
Yield: 0.12 per cent
Year-to-date total return: 1.73 per cent
VanEck Vectors Morningstar Global Wide Moat ETF
Billionaire investor Warren Buffett, chairman of Berkshire Hathaway, popularised the term "moat" to describe a company with a strong competitive advantage that keeps out competitors.
But rather than trying to work out which companies have a moat, this ETF does the job for you, tracking global companies on the Morningstar Global Wide Moat Focus Index, Mr Bailey says.
Underlying charges: 0.47 per cent
Yield: 1.25 per cent
Year-to-date total return: 20.31 per cent
iShares Global Timber & Forestry ETF
The price of lumber is soaring due to supply shortages and bottlenecks, as demand for houses and renovations surges, Mr Bailey says. “This ETF tracks the S&P Global Timber & Forestry Index, which is comprised of the 25 largest publicly traded forests and timberland companies.”
Underlying charges: 0.46 per cent
Yield: 0.86 per cent
Year-to-date total return: 12.20 per cent
iShares MSCI USA SRI ETF
For investors who want exposure to ethical US companies, Mr Bailey recommends this ETF, which tracks only companies with high ESG ratings.
Underlying charges: 0.55 per cent
Yield: 0.00 per cent
Year-to-date total return: 0.20 per cent
Global Online Retail ETF
As the world shifts from bricks-and-mortar retail to online shopping, companies such as Amazon and Alibaba are reaping the benefits. This fund looks beyond those two behemoths and includes smaller operators such as DoorDash, Peloton Interactive, Etsy and Delivery Hero, which may grow faster, Mr Bailey says.
Underlying charges: 0.69 per cent
Yield: 0.00 per cent
Year-to-date total return: 3 per cent (since launch in March)
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%202-litre%204-cylinder%20turbo%20and%203.6-litre%20V6%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ESeven-speed%20automatic%0D%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20235hp%20and%20310hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E258Nm%20and%20271Nm%0D%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh185%2C100%0D%3Cbr%3E%3C%2Fp%3E%0A
Results
%3Cp%3E%3Cstrong%3EStage%207%3A%3C%2Fstrong%3E%3Cbr%3E1.%20Adam%20Yates%20(GBR)%20UAE%20Team%20Emirates%20%E2%80%93%203hrs%2029min%2042ses%3Cbr%3E2.%20Remco%20Evenepoel%20(BEL)%20Soudal%20Quick-Step%20%E2%80%93%2010sec%3Cbr%3E3.%20Geoffrey%20Bouchard%20(FRA)%20AG2R%20Citroen%20Team%20%E2%80%93%2042sec%3Cbr%3E%3Cstrong%3EGeneral%20Classification%3A%3C%2Fstrong%3E%3Cbr%3E1.%20Remco%20Evenepoel%20(BEL)%20Soudal%20Quick-Step%3Cbr%3E2.%20Lucas%20Plapp%20(AUS)%20Ineos%20Grenaders%20%E2%80%93%2059se%3Cbr%3E3.%20Adam%20Yates%20(GBR)%20UAE%20Team%20Emirates%20%E2%80%9360sec%3Cbr%3ERed%20Jersey%20(General%20Classification)%3A%20Remco%20Evenepoel%20(BEL)%20Soudal%20Quick-Step%3Cbr%3EGreen%20Jersey%20(Points%20Classification)%3A%20Tim%20Merlier%20(BEL)%20Soudal%20Quick-Step%3Cbr%3EWhite%20Jersey%20(Young%20Rider%20Classification)%3A%20Remco%20Evenepoel%20(BEL)%20Soudal%20Quick-Step%3Cbr%3EBlack%20Jersey%20(Intermediate%20Sprint%20Classification)%3A%20Edward%20Planckaert%20(FRA)%20Alpecin-Deceuninck%3C%2Fp%3E%0A
Countries offering golden visas
UK
Innovator Founder Visa is aimed at those who can demonstrate relevant experience in business and sufficient investment funds to set up and scale up a new business in the UK. It offers permanent residence after three years.
Germany
Investing or establishing a business in Germany offers you a residence permit, which eventually leads to citizenship. The investment must meet an economic need and you have to have lived in Germany for five years to become a citizen.
Italy
The scheme is designed for foreign investors committed to making a significant contribution to the economy. Requires a minimum investment of €250,000 which can rise to €2 million.
Switzerland
Residence Programme offers residence to applicants and their families through economic contributions. The applicant must agree to pay an annual lump sum in tax.
Canada
Start-Up Visa Programme allows foreign entrepreneurs the opportunity to create a business in Canada and apply for permanent residence.
RESULTS
6.30pm: Meydan Sprint Group 2 US$175,000 1,000m
Winner: Ertijaal, Jim Crowley (jockey), Ali Rashid Al Raihe (trainer)
7.05pm: Handicap $60,000 1,400m
Winner: Secret Ambition, Richard Mullen, Satish Seemar
7.40pm: Handicap $160,000 1,400m
Winner: Raven’s Corner, Richard Mullen, Satish Seemar
8.15pm: Dubai Millennium Stakes Group 3 $200,000 2,000m
Winner: Folkswood, William Buick, Charlie Appleby
8.50pm: Zabeel Mile Group 2 $250,000 1,600m
Winner: Janoobi, Jim Crowley, Mike de Kock
9.25pm: Handicap $125,000 1,600m
Winner: Capezzano, Mickael Barzalona, Salem bin Ghadayer
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20OneOrder%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20March%202022%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Tamer%20Amer%20and%20Karim%20Maurice%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Cairo%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%20%3C%2Fstrong%3E82%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Series%20A%3C%2Fp%3E%0A
Tax authority targets shisha levy evasion
The Federal Tax Authority will track shisha imports with electronic markers to protect customers and ensure levies have been paid.
Khalid Ali Al Bustani, director of the tax authority, on Sunday said the move is to "prevent tax evasion and support the authority’s tax collection efforts".
The scheme’s first phase, which came into effect on 1st January, 2019, covers all types of imported and domestically produced and distributed cigarettes. As of May 1, importing any type of cigarettes without the digital marks will be prohibited.
He said the latest phase will see imported and locally produced shisha tobacco tracked by the final quarter of this year.
"The FTA also maintains ongoing communication with concerned companies, to help them adapt their systems to meet our requirements and coordinate between all parties involved," he said.
As with cigarettes, shisha was hit with a 100 per cent tax in October 2017, though manufacturers and cafes absorbed some of the costs to prevent prices doubling.
Defined benefit and defined contribution schemes explained
Defined Benefit Plan (DB)
A defined benefit plan is where the benefit is defined by a formula, typically length of service to and salary at date of leaving.
Defined Contribution Plan (DC)
A defined contribution plan is where the benefit depends on the amount of money put into the plan for an employee, and how much investment return is earned on those contributions.
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
The biog
Family: wife, four children, 11 grandchildren, 16 great-grandchildren
Reads: Newspapers, historical, religious books and biographies
Education: High school in Thatta, a city now in Pakistan
Regrets: Not completing college in Karachi when universities were shut down following protests by freedom fighters for the British to quit India
Happiness: Work on creative ideas, you will also need ideals to make people happy
CABINET%20OF%20CURIOSITIES%20EPISODE%201%3A%20LOT%2036
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3EGuillermo%20del%20Toro%3Cbr%3E%3Cstrong%3EStars%3A%3C%2Fstrong%3E%20Tim%20Blake%20Nelson%2C%20Sebastian%20Roche%2C%20Elpidia%20Carrillo%3Cbr%3ERating%3A%204%2F5%3C%2Fp%3E%0A
if you go
The flights
Emirates flies to Delhi with fares starting from around Dh760 return, while Etihad fares cost about Dh783 return. From Delhi, there are connecting flights to Lucknow.
Where to stay
It is advisable to stay in Lucknow and make a day trip to Kannauj. A stay at the Lebua Lucknow hotel, a traditional Lucknowi mansion, is recommended. Prices start from Dh300 per night (excluding taxes).
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
Spider-Man%202
%3Cp%3E%3Cstrong%3EDeveloper%3A%3C%2Fstrong%3E%20Insomniac%20Games%0D%3Cbr%3E%3Cstrong%3EPublisher%3A%3C%2Fstrong%3E%20%20Sony%20Interactive%20Entertainment%0D%3Cbr%3E%3Cstrong%3EConsole%3A%20%3C%2Fstrong%3EPlayStation%205%0D%3Cbr%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%205%2F5%3C%2Fp%3E%0A
MATCH INFO
Uefa Champions League semi-final, first leg
Bayern Munich 1
Kimmich (27')
Real Madrid 2
Marcelo (43'), Asensio (56')
Emergency phone numbers in the UAE
Estijaba – 8001717 – number to call to request coronavirus testing
Ministry of Health and Prevention – 80011111
Dubai Health Authority – 800342 – The number to book a free video or voice consultation with a doctor or connect to a local health centre
Emirates airline – 600555555
Etihad Airways – 600555666
Ambulance – 998
Knowledge and Human Development Authority – 8005432 ext. 4 for Covid-19 queries
TRAP
Starring: Josh Hartnett, Saleka Shyamalan, Ariel Donaghue
Director: M Night Shyamalan
Rating: 3/5
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
The biog
Name: Salem Alkarbi
Age: 32
Favourite Al Wasl player: Alexandre Oliveira
First started supporting Al Wasl: 7
Biggest rival: Al Nasr
Uefa Champions League play-off
First leg: Wednesday, 11pm (UAE)
Ajax v Dynamo Kiev
Second leg: Tuesday, August 28, 11pm (UAE)
Dynamo Kiev v Ajax
Veere di Wedding
Dir: Shashanka Ghosh
Starring: Kareena Kapoo-Khan, Sonam Kapoor, Swara Bhaskar and Shikha Talsania
Verdict: 4 Stars
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
The%20specs%20
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3EDual%20permanently%20excited%20synchronous%20motors%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E516hp%20or%20400Kw%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E858Nm%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ESingle%20speed%20auto%3Cbr%3E%3Cstrong%3ERange%3A%20%3C%2Fstrong%3E485km%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh699%2C000%3C%2Fp%3E%0A
Overview
What: The Arab Women’s Sports Tournament is a biennial multisport event exclusively for Arab women athletes.
When: From Sunday, February 2, to Wednesday, February 12.
Where: At 13 different centres across Sharjah.
Disciplines: Athletics, archery, basketball, fencing, Karate, table tennis, shooting (rifle and pistol), show jumping and volleyball.
Participating countries: Algeria, Bahrain, Comoros, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Saudi Arabia, Sudan, Syria, Tunisia, Qatar and UAE.
UAE currency: the story behind the money in your pockets
BIRD%20BOX%20BARCELONA
%3Cp%3E%3Cstrong%3EDirectors%3A%3C%2Fstrong%3E%20David%20and%20Alex%20Pastor%3Cbr%3E%3Cstrong%3EStars%3A%20%3C%2Fstrong%3EGeorgina%20Campbell%2C%20Mario%20Casas%2C%20Diego%20Calva%3Cbr%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%202%2F5%3C%2Fp%3E%0A
SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E2.4-litre%204-cylinder%20turbo%20hybrid%0D%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20366hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E550Nm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ESix-speed%20auto%0D%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh360%2C000%0D%3Cbr%3E%3Cstrong%3EAvailable%3A%20%3C%2Fstrong%3ENow%0D%3C%2Fp%3E%0A
ESSENTIALS
The flights
Emirates, Etihad and Swiss fly direct from the UAE to Zurich from Dh2,855 return, including taxes.
The chalet
Chalet N is currently open in winter only, between now and April 21. During the ski season, starting on December 11, a week’s rental costs from €210,000 (Dh898,431) per week for the whole property, which has 22 beds in total, across six suites, three double rooms and a children’s suite. The price includes all scheduled meals, a week’s ski pass, Wi-Fi, parking, transfers between Munich, Innsbruck or Zurich airports and one 50-minute massage per person. Private ski lessons cost from €360 (Dh1,541) per day. Halal food is available on request.
Pad Man
Dir: R Balki
Starring: Akshay Kumar, Sonam Kapoor, Radhika Apte
Three-and-a-half stars
Killing of Qassem Suleimani
UAE currency: the story behind the money in your pockets
INDIA V SOUTH AFRICA
First Test: October 2-6, at Visakhapatnam
Second Test: October 10-14, at Maharashtra
Third Test: October 19-23, at Ranchi
Section 375
Cast: Akshaye Khanna, Richa Chadha, Meera Chopra & Rahul Bhat
Director: Ajay Bahl
Producers: Kumar Mangat Pathak, Abhishek Pathak & SCIPL
Rating: 3.5/5