Millennials will need to be more selective with their investments in 2022. Central banks prepare to ease back on the loose monetary policy they have pursued since the beginning of the pandemic. That policy change from the U.S. Federal Reserve and the Bank of Canada (BoC) could lead to increased volatility in the months ahead. In 2021, Canadians invested a record $53 billion in exchange-traded funds (ETFs), according to the annual Mackenzie Investments Year-End ETF Report. Mackenzie expects this trend to continue in 2022.
Today, I want to look at two ETFs that are geared up for superior long-term growth. Both offer exposure to two very exciting and fast-growing sectors. These are perfect investments for a millennial investor who is on the hunt for growth over the course of this decade. Let’s jump in.
Evolve Cyber Security ETF (TSX:CYBR) is the first ETF I’d suggest for a millennial investor today. This ETF seeks to replicate, to the extent possible, the performance of the Solactive Global Cyber Security Index Canadian Dollar Hedged. It invests in equity securities of companies located in Canada or internationally that are engaged in the cybersecurity industry through hardware and software development. Shares of this ETF have dropped 7.3% year over year as of close on January 13.
Back in 2020, I’d discussed why investors should get in on the red-hot cybersecurity space. Last year, Grand View Research released a report on the future growth prospects for the cybersecurity market. The global cybersecurity market was valued at $167 billion in 2020. Grand View Research projects that the market will deliver CAGR of 10% from 2021 through to 2028.
Some of the top holdings in this ETF include Palo Alto Networks, Fortinet, Okta, and Crowdstrike Holdings. The ETF last had an RSI of 34, putting it just outside technically oversold territory. Millennials should look to snag this cybersecurity-focused fund on the dip in the middle of January.
The development of automated vehicles has accelerated significantly in recent years. It may be a long time before we are able to even think driverless automobiles on the roads around us. Still, this development promises to dramatically change the auto industry as we know it in the 21st century. Future-oriented automobile equities in this space are well worth your attention.
Today, millennials should look to Evolve Automobile Innovation ETF (TSX:CARS). This ETF invests primarily in equity securities of companies that are directly or indirectly involved in developing electric drivetrains, autonomous driving, or network-connected services for vehicles. Shares of this ETF have dropped 15% in the year-over-year period.
Tesla is one of the top three holdings in this fund. Meanwhile, investors should also recognize companies like NVIDIA, Synaptics, and the Canada-based company Lion Electric. Millennials should look to snatch up this ETF on the dip, as it has shed over $10 in value since the middle of November 2021.
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