Looking at ETF's for a Recovery

The USA and Iran have, at points, indicated they are ready to talk. Does it mean the end of the conflict, not yet, but it gives markets the hope that its near and that is all they need. So what are some ideas on how to play the recovery.

Australian ASX200 ETF (ASX: A200)

The ASX200 fell 9% at the March low. The A200 is a fund operated by Betashares that focuses on tracking the ASX200 and provides simple diversification that will deliver the performance of the ASX200 (less fees). The fund is cheap with the Management Expense Ratio (MER) 0.04%.

A200 vs ASX200

As you can see, the tracking is very close.

Copper Miners ETF (ASX: WIRE)

Copper is considered the bell weather for the health of the global economy. If the economy is expected to see growth then copper will generally perform strongly. During period of uncertainty copper will suffer and that has been the case during the Iran conflict with the price falling 15% at the March low.

Global X offers the Copper Miners ETF (ASX: WIRE) which "provides access to a global basket of copper miners which stand to benefit from being a key part of the value chain facilitating growth in major areas of innovation such as technology, infrastructure and clean energy"

While the price of Copper fell 15% copper miners suffered substantially more with the WIRE ETF falling 28% at the March low and still 21% from the February high of $28.

3 month price for WIRE

As the conflict de-escalates and (hopefully) reaches a conclusion the focus will return to the Economy and the demand for copper which remains in a structural deficit (driven by electrification and a lack of new supply).

FANG+ ETF

The Global X FANG+ ETF (ASX: FANG) seeks to invest in companies at the leading edge of next-generation technology that includes household names and newcomers. It comprises a very narrow exposure:

FANG ETF holdings

This ETF, as you can, is heavily skewed to the American tech giants which have suffered. While note specifically driven by the Iran conflict it certainly hasn't helped sentiment which Microsoft (for example) down 30%.

The big tech sector is now trading at more reasonable 21x earnings (vs 28 previously) and the valuations are beginning to pique the interest of the large fund managers who've been happy sellers during this period.

Most of the FANG stocks have reliable earnings growth and if you believe that growth will continue this may just be a great time to take advantage.