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2 ETFs to invest in despite share markets at all-time highs

Tristan Harrison
Exchange Traded Fund (ETF)

Share markets around the world are getting close to all-time highs again.

The ASX 200 (ASX: XJO) is almost there, the S&P 500 (INX) is pretty much at its all-time high. It might seem painful to invest at an all-time high in exchange-traded funds (ETFs) like BetaShares Australia 200 ETF (ASX: A200) and iShares S&P 500 ETF (ASX: IVV). What are you supposed to do?

There are some ETFs that could still be good value investments like these two:

BetaShares FTSE 100 ETF (ASX: F100) 

The UK share market suddenly looks a lot better with a course for Brexit decided by the Boris Johnson government which has just won a large majority.

This ETF is invested in the 100 biggest businesses on the London Stock Exchange.

Over the past couple of months the capital value of the ETF has gone up 7.6%, but there may be more growth to come because UK shares are priced cheaper than global shares. According to BetaShares, at the end of November the ETF had an underlying price/earnings ratio of 12.5x, which is cheap for a whole index.

Some of the biggest businesses on the FTSE have promising futures including AstraZeneca, GlaxoSmithKline, Diageo and Unilever.

The UK share market is a pretty good option for income as well. It had an underlying dividend yield of 4.5% at the end of November 2019.

Vanguard FTSE Asia Ex Japan Shares Index ETF (ASX: VAE) 

Asian shares also look more promising with the trade war between the US and China possibly getting close to an end.

Investing in this ETF means we get exposure to over 1,200 businesses. Asia is home to some of the most promising companies in the world including Alibaba, Tencent and Ping An that are all growing at impressive rates.

Asian citizen wealth is rising at a much faster rate than the western world and this is flowing to Asian businesses.

Over the past three years the ETF has returned an average of 11.8% per annum despite the trade war.

I think it still looks good value with an earnings growth rate of 11.4%, a price/earnings ratio of 13.6x and a return on equity (ROE) of almost 16% – these are attractive stats for an ETF.

Foolish takeaway

The easiest money has probably already been made from the UK shares’ growth between August and now. Asia is a very tempting region for investing, although the risks are higher too – so I’d only allocate a relatively small portion of my portfolio to the ETF.

The post 2 ETFs to invest in despite share markets at all-time highs appeared first on Motley Fool Australia.

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Motley Fool contributor Tristan Harrison owns shares of VANGUARD FTSE ASIA EX JAPAN SHARES INDEX ETF. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019