Important information: the value of investments and the income from them can go down as well as up, so you may get back less than you invest.
Do you think quantum computing is the next big thing, ready to take over stock market leadership from AI? Or perhaps you believe it’s nuclear energy’s turn in the sun? Or perhaps that an ‘anywhere but America’ approach is sensible after years of Wall Street outperformance.
Whichever it is, an exchange-traded fund (ETF) will allow you to put money behind your conviction. These investment themes, and many others, are now available to Fidelity Personal Investing customers via ETFs recently added to our platform. It is the beauty of ETFs that they offer exposure to a huge range of very specific themes via simple share trades, often at a low annual cost.
We have added more than 100 ETFs to the platform in recent months – too many to list here. But here are some that caught our eye. You can search the full range of ETFs with our Investor Finder tool.
VanEck Quantum Computing
This ETF offers exposure to companies involved in the development of quantum computing technology or leaders in ownership of patents related to quantum computing.
Its management company says: ‘Quantum computing is transitioning from theory to reality, promising to redefine what is computationally possible … While early use cases are emerging, commercial success remains uncertain, and financial exposure may extend beyond pure-play quantum companies.’
The fund, which VanEck said was Europe’s first ETF devoted to the field, was launched in May last year and has already attracted $453m in assets.
- More on VanEck Quantum Computing
WisdomTree Uranium and Nuclear Energy
In the words of the management firm, this ETF ‘offers exposure to a diversified basket of companies which have involvement in the uranium and nuclear energy market such as uranium mining, building nuclear infrastructure or conducting advanced research on future nuclear technologies’.
The sector has attracted attention recently as countries seek more secure sources of power at a time of international tension, but also because of the energy needs of data centres, which have prompted some technology companies to explore nuclear power as a solution.
iShares MSCI World ex-USA
Some investors want to actively avoid Wall Street over fears that ‘American exceptionalism’ is faltering or that US markets are overvalued. Others are simply aware of how American-dominated ‘global’ tracker funds are and want a highly diversified fund that invests internationally but without that US dominance.
An ‘ex-USA’ fund such as this one from iShares offers a solution. The iShares MSCI World ex-USA ETF has 30% of its money in the eurozone, 19.8% in Japan, 13.8% in non-euro parts of Europe and 12.5% in Britain, with smaller exposure to other markets such as Canada and Australasia.
Investors who own this fund alongside an S&P 500 tracker can get exactly the US exposure they want by adjusting the relative size of the two holdings. They could, for example, put 25% of their money in the S&P 500 tracker and the rest in this ETF; US exposure overall would therefore be 25% as opposed to 71.7% from, for example, the Fidelity MSCI World Index Fund.
- More on iShares MSCI World ex-USA
ARK Innovation
ARK is an American investment management company whose founder and boss, Cathie Wood, has cult status among many US private savers. All the firm’s ETFs are actively managed and Ms Wood is known for her bold bets on disruptive technology companies such as Tesla.
The American version of the ARK Innovation ETF was launched in 2014 and attracted attention during the pandemic boom in tech stocks when it posted a gain of 153% for the year 2020 (it later gave up all those gains before it started to rise once more). Please remember past performance is not a reliable indicator of future returns.
Now a European version of the ETF, also run by Ms Wood, is available to British savers; it follows much the same investment strategy as its US counterpart. Although Tesla is its largest holding, the fund is not simply another way to invest in the ‘Magnificent 7’ – other top-10 holdings include the chip maker AMD, gene editing company CRISPR Therapeutics and the crypto broker Coinbase.
Performance is volatile but the shares rose by 39.9% in the year to the end of March. Also available on the Fidelity platform is ARK Artificial Intelligence & Robotics.
- More on ARK Innovation
iShares UK Gilts 0-5yr
Few private investors wanted to buy gilts – bonds issued by the British government – when interest rates, and yields on bonds, were barely above zero. That all started to change about five years ago when the return of inflation after the pandemic and the invasion of Ukraine prompted interest rates and bond yields to return to more normal levels.
This ETF, which owns a spread of gilts that are due to mature in five years’ time or less, currently yields 4%, which is competitive with cash savings. Please note this yield is not guaranteed.
One advantage of gilts over savings accounts is that the latter are subject to the £120,000 limit on protection from the ‘lifeboat’ scheme in the event of a bank going bust; gilts, by contrast, represent money lent directly to the government, which has never failed to pay back its debts.
This does not mean that gilts are completely risk-free, however. Their prices can and do fluctuate in the market and tend to fall if interest rates rise. A gilt fund could be worth considering for investors who want an income but also expect interest rates to fall.
- More on iShares UK Gilts 0-5yr
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Important information: investors should note that the views expressed may no longer be current and may have already been acted upon. This information is not a personal recommendation for any particular investment. Overseas investments will be affected by movements in currency exchange rates. Investments in emerging markets can be more volatile than other more developed markets. There is a risk that the issuers of bonds may not be able to repay the money they have borrowed or make interest payments. When interest rates rise, bonds may fall in value. Rising interest rates may cause the value of your investment to fall. There is no guarantee that the investment objective of any Index Tracking Sub-Fund will be achieved. The performance of the sub-fund may not match the performance of the index it tracks due to factors including, but not limited to, the investment strategy used, fees and expenses and taxes. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.
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