Exchange-traded funds (ETFs) have become popular investment vehicles, offering both diversification and strong returns. In particular, two ETFs, the L&G Gold Mining ETF and the iShares Digital Security ETF, have achieved an impressive average annual return of 16.2% over the past five years. This performance raises a critical question for investors: can these funds maintain their momentum?
Gold Mining ETF’s Resilience
The L&G Gold Mining ETF has leveraged a multi-year bull run in gold prices, delivering an average yearly return of 19.1% since its inception. This ETF invests in shares of 36 different gold mining companies, including major players like Newmont and AngloGold Ashanti. The fund’s performance reflects a ‘leverage’ effect, where the profits of mining companies tend to increase more dramatically than the price of gold itself.
Currently, gold has experienced a price surge in 2025, attracting significant media attention. Analysts suggest that the upward trend in gold prices may continue, buoyed by factors such as a depreciating US dollar, potential interest rate cuts, and escalating geopolitical tensions. These elements could further enhance the attractiveness of gold as a safe-haven asset.
Cybersecurity ETF’s Growth Potential
On the technology front, the iShares Digital Security ETF offers a compelling investment opportunity as cybersecurity threats escalate. With an average return of 13.2% since November 2020, this ETF focuses on companies providing robust online defenses. Recent high-profile cyberattacks, including one on Jaguar Land Rover, underscore the growing urgency for enhanced cybersecurity measures.
Market analysts at Global Market Insights project that the global cybersecurity market will more than double in size over the next decade, reaching $55 billion. The iShares fund includes prominent firms like CrowdStrike, Cloudflare, and Palo Alto Networks, which have established strong brand identities and substantial research and development capabilities.
While the performance of technology stocks can be cyclical, the increasing demand for cybersecurity solutions suggests a strong long-term trajectory for the iShares Digital Security ETF. By holding a diversified portfolio of over 100 tech stocks, the ETF mitigates risks associated with individual companies, providing investors with a balanced approach to this burgeoning field.
Investors considering these ETFs should evaluate their potential for continued growth amid changing economic conditions. Both the gold and cybersecurity sectors present unique opportunities that align with current market dynamics, making them worthy of consideration for those looking to enhance their investment portfolios.
