Investors don’t actually need to buy any assets to utilise their allowance. Just parking money into a Stocks and Shares ISA is enough to enjoy their tax benefits. But if the right opportunity arises, it can make sense to strike while the iron’s hot.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

I have money in my own ISA I’m soon looking to invest. More specifically, I have my eyes on increasing my stake in this high-returning exchange-traded fund (ETF).

A booming market

ETFs allow investors to spread risk without necessarily sacrificing large returns. In fact, these financial instruments provide a simple way to diversify without the costs of buying a multitude of different shares.

Given these advantages, it’s no surprise that the ETF market has exploded in the last decade, and is tipped for further growth in 2025. Investment bank State Street says that a record $1.9trn flowed into global ETFs last year, pushing total assets to $14.7trn.

For 2025, it’s predicting total assets in European funds to rise another 25%, to above $2.8trn. And it thinks the proportion of retail investors owning them will jump to between 30-35%, up from 20-25% today.

Huge returns

UK investors are spoilt for choice, with more than 1,700 ETFs currently listed in London. One I think is worth serious consideration today is the iShares S&P 500 Information Technology Sector ETF (LSE:IUIT).

As you may expect, this fund provides substantial exposure to the grouping of high-growth of ‘Magnificent Seven’ tech stocks. More specifically, 57.4% of its capital is tied up in Apple, Microsoft and Nvidia shares.

This spread has underpinned the whopping gains it’s delivered to shareholders. Since its inception in November 2015, it’s risen an impressive 540.2% in value.

An intelligent approach

When it comes to investing in technology, I think taking a diversified approach like this is worth serious consideration. And news of Skype’s demise over the weekend reminded me why. What was once the video conference market’s dominant player, Skype had more than 300m customers. Today, its user base is around 10% of that number, and so Microsoft plans to wind down the service in May.

The fast-moving nature of tech development means today’s sector king can end up the industry’s big loser. By owning a large basket of shares — in total, the above iShares ETF has holdings in 69 different tech businesses — investors can substantially reduce this danger.

There are still risks, of course. Cyclical ETFs like this can underperform during economic downturns. Its constituents also face mounting competition from Chinese businesses. But on balance, I’m confident it can continue delivering stunning long-term returns.

The post A last-minute growth ETF to consider before next month’s ISA deadline! appeared first on The Motley Fool UK.

While volatility has calmed as the week’s rolled on, concern over tech stocks’ profitability — and more specifically those in the artificial intelligence (AI) space — remains at the front of investors’ minds.

Could the S&P 500 be about to crash?

Deep trouble?

To recap, the S&P 500 nosedived on Monday following fresh news on DeepSeek, a Chinese startup that’s developing its own AI system to rival those developed in the US.

DeepSeek’s been around for a while, but performance data from its R1 model has just blown industry experts’ socks off. Testing data shows performance comparable to that of existing AI systems like OpenAI’s o1. However, DeepSeek has achieved this at significantly lower cost.

If these findings hold, there may be significant implications for the global AI landscape. From providing direct competition to established system operators like OpenAI and Google, to impacting demand for high-power computer chips, DeepSeek’s advancements could drive major changes in market dynamics, and with it expectations of soaring profits across the US tech sector.

What next?

Given the S&P 500’s large weighting of technology stocks, it’s easy to see why the index slumped. At the start of 2025, tech giants like Nvidia, Microsoft, Apple, Meta, and Alphabet made up just over 30% of the S&P’s entire market capitalisation.

Their share price gains last year, which were built on hopes of booming AI-related profits, have come under serious scrutiny. Even after Monday’s washout, many tech names still command sky-high valuations.

Yet despite this, the chances of a full-blown market crash look (for the moment at least) pretty low. Disruption has long been a common theme across the tech sector. In addition, R1 has so far has not reached the artificial general intelligence (AGI) level, and can only be used for narrow tasks. It’s possible that disruption to current AI assumptions will not be as severe as thought.

It’s also important to remember that DeepSeek’s model could boost earnings and cash flows across the S&P 500 if it revolutionises AI development.

For system developers, the expense of developing and running these systems may be lower moving ahead. Meanwhile, large swathes of the S&P 500 could benefit from more affordable AI solutions that substantially bring down costs.

Here’s what I’m doing

I continue to remain optimistic over the US tech sector and, by extension, the S&P 500. As well as AI, other tech phenomena like cloud and quantum computing, autonomous vehicles, and cybersecurity offer significant growth opportunities.

But rather than putting all my eggs in the same basket, I think a diversified approach is the best way to invest. The iShares S&P 500 Information Technology Sector ETF (LSE:IUIT) is a top exchange-traded fund (ETF) I hold in my own portfolio and think investors should consider.

With cash spread across 69 companies, it gives me exposure to all of the growth opportunities mentioned above. These include semiconductor manufacturers, software developers, IT consultants, and communications equipment suppliers.

These are early days in the AI revolution, so a crash that pulls this fund (and the broader S&P 500) lower can’t be ruled out. But on balance, I think the outlook for the US tech industry remains extremely bright.

The post Could worries about DeepSeek crash the S&P 500 and AI stocks? appeared first on The Motley Fool UK.

Investors can gain exposure to the index in a number of ways. They can buy individual shares, or open a position in an exchange-traded fund (ETF) that tracks the S&P 500.

Alternatively, investors can focus on a specific group of stocks using the expanding array of sector or thematic ETFs — a trend that is gaining significant traction.

Targeted ETFs like these have the potential to outperform standard benchmarks such as the S&P 500. Moreover, they offer additional benefits tailored to an investor’s objectives.

Here are two worth consideration today.

iShares S&P 500 Information Technology Sector ETF

As I say, excitement around tech stocks — and in particular those with a hand in developing artificial intelligence (AI) — has powered the S&P 500’s smart gains in 2024.

This can be illustrated by the stunning performance of the iShares S&P 500 Information Technology Sector ETF (LSE:IUIT). It’s up 42.3% in the year to date, driven by tech heavyweights like chipmaker Nvidia, social media giant Meta, and e-marketplace Amazon.

As with any investment, gains like these leave the fund in danger of a price correction. This can happen if excessive profit taking sets in, or if investor confidence suddenly fades.

But I’m confident the fund can continue outperforming over the long term. As well as AI, it provides exposure to other fast-growing technologies like cloud computing, cybersecurity, robotics, and autonomous vehicles.

This ETF’s delivered an average annual return of 24.9% since 2019. I expect these strong returns to continue, which is why I currently hold it in my own portfolio.

ProShares S&P 500 Dividend Aristocrats ETF

The US stock market isn’t famed for its dividend culture. Investors seeking dividends often turn to London, which boasts a rich selection of reliable shares delivering large and growing payouts.

But investors can still tap into these qualities Stateside with the ProShares S&P 500 Dividend Aristocrats ETF (LSE:NOBL). As the name suggests, this thematic ETF is one that focuses on dividend growth shares.

It holds stocks that have grown dividends for 25 consecutive years or more. In total, it holds shares in 66 different businesses, with major holdings including household names like Stanley Black & Decker, McDonald’s, and IBM.

The dividend yield here isn’t the largest, at 2.25%. But its ability to deliver reliable passive income growth still makes it worth serious attention.

What’s more, with capital gains also taken into account, this ProShares fund has delivered an average annual return of 10.9% over the past five years. That’s better than the 6.2% the FTSE 100 — which is more popular with dividend investors — has delivered over the same timeframe.

Its bias towards dividend shares could see it underperform growth stock-focused ETFs during bull markets. However, the stable and rising income it provides still makes it worthy of a close look, depending on an investor’s goals.

The post 2 S&P 500 funds to consider for huge profits in 2025! appeared first on The Motley Fool UK.

Tech titan

This has been a blowout year for tech stocks, and especially those located in the US. If fresh research from eToro is anything to go by, investor interest in this share class could surge again in the New Year.

According to a survey of clients, “when asked which sector they were most likely to increase their allocation to in 2025, tech stocks were by far the most popular answer at 17%“, eToro said. This was ahead of second-placed financial services, which polled 10%.

I opened a position in the iShares S&P 500 Information Technology Sector ETF (LSE:IUIT) in July. And I’ve added to it several times since, enjoying juicy returns in the process. It’s near the top of my list of ETFs to buy in the New Year, too.

Since 2019, it’s delivered an average annual return of 24.9%. This concentration on tech stocks mean its delivered a better return than the S&P 500 average of 15.4% over the same timescale.

As you’d expect, the fund provides exposure to some of the so-called Magnificent Seven tech stocks. Its holdings in Apple, Microsoft, and Nvidia account for just below 58% of the total fund.

However, the fund also has holdings in 66 other tech companies. This provides investors with a way to reduce risk while also capitalising on growth opportunities elsewhere.

As you’d expect, the cyclical nature of the fund means returns could disappoint during economic downturns. But I’m expecting it to continue outperforming over the long term, driven by rising adoption of technologies like artificial intelligence (AI), robotics, and quantum computing.

Metals mammoth

I already have meaningful exposure to the global mining sector. This is thanks to my large holdings in Rio Tinto, along with some diversified funds and trusts in my portfolio.

But I’m looking for ways to increase my stake to mining companies. The current downturn means that many metals producers — and by extension mining funds — look dirt cheap to me at current prices.

The VanEck Global Mining ETF (LSE:GIGB) is one fund I have my eye on. Designed to track the S&P Global Mining Reduced Coal Index, it excludes shares that extract thermal coal, which in turn reduces the risk I face as cleaner energy sources take over.

In fact, I’m planning to boost my metals exposure in order to capitalise on the accelerating green revolution. Growing renewable energy capacity, rising electric vehicle (EV) sales, and updating power grid infrastructure will all require vast amounts of metal.

The VanEck Global Mining ETF holds shares in 129 producers including big hitters BHP, Rio Tinto, Freeport-McMoran and Glencore. So it gives me exposure to many metals for which demand it tipped to surge like iron ore, copper, lithium, and aluminium.

Since 2014, the fund’s delivered an average annual return of 10.95%. Its broad mining industry exposure doesn’t eliminate the threat of operational problems like disappointing exploration results and production outages. But it does reduce the risk to overall returns.

The post 2 top ETFs I’m considering buying for my SIPP in 2025! appeared first on The Motley Fool UK.

It’s a fact that many people worry about how they’ll fund their retirement. Research from Charles Stanley shows that 28% of Brits aren’t on course to hit their goals for a ‘dream retirement.’ Another 39% said they didn’t know how much they’d need to retire comfortably.

They might not want to hear it. But for these people, taking immediate action is more important than ever as living and social costs rise, and uncertainty over future State Pension rules linger.

The good news is that grasping the nettle needn’t be a painful experience. Even someone at the age of 40 could, by investing the price of a cost of a daily coffee, build a multimillion-pound ISA by the time they reach 65.

Here’s how.

Building cash

I’m sure you’ve noticed prices in your local coffee shop creeping steadily higher. Today, my local Starbucks won’t charge me a penny less than £5.40 for a large caffè latte.

With coffee prices at 50-year highs, the cost of my daily fix looks set to keep climbing too. This is enough to give me the hump. And especially when I consider what a better use of my money investing in shares, funds, or trusts undoubtedly is.

Let’s say I save that £5.40 and make my morning coffee at home instead. At the end of each quarter I’d have roughly £493 to invest in my Stocks and Shares ISA.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Tasty windfalls

Past performance is no guarantee of future returns. But history shows us that even a modest amount like this could be enough to build significant long-term wealth.

The FTSE 100 has delivered an average annual return of 6.1% since 2014. S&P 500 shares, meanwhile, has provided an even-better 12.4%.

If someone invested £493 in a Footsie tracker fund each quarter, they could — after 25 years — have created an ISA worth £115,065 (excluding fees). With an S&P 500 fund, they’d have made £328,142.

They’re both decent windfalls, in my opinion, just for the cost of a skipped daily coffee. But thanks to a wide range of shares and funds, investors can potentially do even better.

A £2.4m ISA

For example, let’s say an investor parked their money into the iShares S&P 500 Information Technology Sector ETF (LSE:IUIT). Since its creation in 2015, this exchange-traded fund (ETF) has delivered a stunning average annual return of 22.9%.

If this rate were to continue, a 40-year old who invested £493 every quarter would have a portfolio worth a whopping £2,444,676 (excluding fees) by the time they reached 65.

I actually own this particular fund in my own portfolio. By spreading my cash across 69 shares (like Nvidia, Tesla, and Amazon), I can target high returns while also managing risk.

The profits I make could disappoint during economic downturns when tech revenues typically fall. But over the long term, I’m confident the fund could keep delivering big returns thanks to growth areas like artificial intelligence (AI), robotics, and quantum computing.

The post Aged 40? Here’s how skipping the daily coffee could build a £2.4m ISA! appeared first on The Motley Fool UK.

abrdn

What it does: abrdn is an investment company whose clients range from Sovereign wealth funds through to individuals.

By Andrew Mackie. The latest trading update from abrdn (LSE: ABDN) back in October, highlighted that it continues to struggle to stem outflows from its funds. Year to date, capital withdrawn from its funds has been £2.3bn greater than deposits. Since 2022, net outflows have totalled over £25bn.

The reasons for these outflows are varied. But one key factor has been the rise of passive investing strategies. As an active investment manager, its funds have simply been unable to match the stellar returns of the S&P 500, which is where the vast majority of global capital is drawn to.

So, is this a doomed business? I don’t believe it is. Passive investing strategies work well when markets are rising, but when they are falling, they can be disastrous. In such a market, active managers tend to stand out. Indeed, this has been the case in bond markets, where abrdn’s funds have outperformed.

Its falling share price means it now sits on a meaty 10.5% dividend yield. The road ahead will undoubtedly be bumpy but I could not sit on the sidelines when shares in a quality business go on sale.

Andrew Mackie owns shares in abrdn.

Chord Energy

What it Does: Chord Energy is an oil and gas company. It’s the largest independent operator in the Williston Basin.

By Stephen Wright. Warren Buffett et al have been continuing to build Berkshire Hathaway’s stake in Occidental Petroleum. In a similar spirit, I’ve been buying shares in Chord Energy (NASDAQ:CHRD).

Chord’s operations are in the Williston Basin. The downside to that is that extraction costs are higher than they are in the Permean – where Occidental has its operations. 

On top of this, depletion rates are relatively high, meaning new wells either have to be found or acquired more regularly. Despite this, I think the stock looks like a good opportunity.

The company is set to return 75% of its free cash flows to investors. And if oil prices average $70 per barrel, that’s forecast to be around $525m in dividends.

With a market cap of $7.8bn, that’s a 6.7% yield. And I’m expecting this to increase over the next decade, making for an attractive passive income opportunity.

Stephen Wright owns shares in Berkshire Hathaway and Chord Energy.

CrowdStrike

What it does: CrowdStrike is a fast-growing cybersecurity company that has clients globally. 

By Edward Sheldon, CFA. I’ve had CrowdStrike (NASDAQ: CRWD) shares on my watchlist for ages now. And I finally pulled the trigger and bought a few for my portfolio. 

The main reason I’ve invested here is that the cybersecurity industry is set for huge growth over the next decade. And this is the fastest-growing large-cap company in the market.

I also think the industry offers an element of defence. Given the disastrous damage that cyberattacks can cause, no company can afford to pull back on cybersecurity spending today.

It’s worth noting that CrowdStrike was responsible for the major global IT outage a few months ago. This could result in slightly slower growth (and share price volatility) in the near term as customers renegotiate their contracts. So, I’ve started with a very small position here to reduce my risk. 

Taking a five to 10-year view, however, I’m fairly confident that this company will generate good returns for me. 

Edward Sheldon owns shares in CrowdStrike 

iShares S&P 500 Information Technology Sector ETF

What it does: iShares S&P 500 Information Technology Sector ETF invests in industry giants like the ‘Magnificent Seven.’

By Royston Wild. As its name implies, the iShares S&P 500 Information Technology Sector ETF (LSE:IUIT) provides exposure to the US’ biggest technology stocks.

Consequently, it has substantial growth potential and the capacity to deliver exceptional capital gains. In the past five years, it’s delivered an impressive average yearly return of 26.2%.

The ETF’s three biggest holdings are Apple, Nvidia and Microsoft, which collectively account for almost 60% of its entire weighting. So poor news coming out of these businesses can have a significant adverse effect on the fund.

Still, I’m confident a tech-focused fund like this could deliver more great returns over the long term. Segments like robotics, AI, cybersecurity, cloud services, and spatial and quantum computing are all tipped for strong growth in the coming decade.

And with capital spread across 69 different companies, this ETF means investors take on less risk than by investing in one or two particular shares. This is critical, in my opinion, given the industry’s rapid pace of change.

Royston Wild owns iShares S&P 500 Information Technology Sector ETF.

ITV

What it does: ITV is a broadcaster with a terrestrial and digital business, as well as operating production studios and facilities

By Christopher Ruane. The market did not like a recent trading update from ITV (LSE: ITV). That reaction was understandable. Revenues in the first nine months of the year were 8% below the same period last year. Total revenue in the studios part of the business fell a fifth compared to the prior year period.

There are risks that advertising demand may remain weak. Plans for further cost-cutting also involve risks, as I see it. Such cuts can hurt staff morale and also reduce the organisation’s nimbleness, at a time when advertising demand is hard to predict.

Still, I think the current share price undervalues this consistently profitable business. The share price is within 1% of where it began the year, but has more than halved in five years.

That means the dividend yield is now a juicy 7.9%.

ITV still has a lucrative legacy business and has been building its digital footprint strongly. The studios arm provides additional revenue streams.

Christopher Ruane owns shares in ITV.

MercadoLibre

What it does: MercadoLibre is a Latin American based e-commerce enterprise that simultaneously providing digital payment solutions.

By Zaven Boyrazian. While Amazon dominates e-commerce across Europe and North America, MercadoLibre (NASDAQ:MELI) reigns supreme in Latin America. The online marketplace took a bit of a tumble following its latest earnings. Despite revenue surging by 35% to a new high of $5.3bn for the quarter, the lacklustre 9.4% growth in profits due to shrinking margins caused concern.

A drop from 18% operating margins to 10% is undoubtedly worrying. The drag on earnings stems from a jump in credit card loans that helped deliver higher revenue but at a lower margin. When paired with aggressive investment in new distribution facilities in Brazil, seeing earnings take a hit isn’t entirely surprising.

Increased exposure to credit card debt comes at a higher level of risk. But, management seems to be acting prudently to avoid bad debt. At the same time, MercadoLibre just added another seven million new buyers to its online marketplace, bringing the total to 60.8 million!

Zaven Boyrazian owns shares in MercadoLibre.

The post 6 stocks that Fools have been buying! appeared first on The Motley Fool UK.

Since 1 January 2000, the index has risen a whopping 305% in value. That’s ahead of major UK indexes: the FTSE 250‘s up 215% over the same timeframe and the FTSE 100 sits way back with growth of ‘just’ 24%.

But the S&P faces challenges looking ahead. The threat of a US recession lingers, and much uncertainty surrounds the outcome of next week’s presidential election.

It may also struggle to progress given the high valuations of many stocks, and especially those of the so-called Magnificent Seven (tech giants Apple, Alphabet, Amazon, Meta, Microsoft, Nvidia and Tesla).

That said, claims of excessive valuations aren’t new and haven’t hindered the S&P’s progress in recent decades. In fact, with inflation falling and interest rates following suit, the index could well pick up steam.

Strong return

Rate cuts from central banks including the Federal Reserve have already supercharged the S&P 500 this year. It’s up 23.2% since 1 January.

This means that £30,000 invested in an exchange-traded fund (ETF) like the HSBC S&P 500 ETF (LSE:HSPX) at the start of 2024 would have turned into £36,960. That’s just taking into account price appreciation and not dividend income.

Can the S&P continue rising strongly? I think so. The US economy’s tipped to keep growing at a steady clip. And a wide range of phenomena like artificial intelligence (AI), robotics, cybersecurity, and green technology could power the tech-heavy index’s earnings through the roof.

I opened a position in the HSBC S&P tracker fund at the start of the year. I also bought shares in the iShares S&P 500 Information Technology Sector ETF (LSE:IUIT) for more specific exposure to the US technology sector.

Here’s what I’m doing next

ETFs like this have advantages and disadvantages. They spread my capital across a large range of companies which, in turn, helps me to spread risk. However, they also mean I can make far less impressive returns than by buying individual shares.

Nvidia’s share price, for instance, has risen 193.4% so far in 2024. If I’d invested £30,000 here on 1 January, I’d be sitting on £88,020. That’s far higher than the £36,960 an S&P 500 tracker could’ve delivered.

My plan is to get the best of both worlds. So I aim to continue building my stake in the iShares S&P 500 Information Technology Sector ETF, which holds shares in 69 different businesses.

Since it started in 2015, the fund’s delivered an average annual return of 23.3%. This is thanks largely to the stunning performance of the Magnificent Seven.

In theory, the high valuations of many of these funds could limit further gains. Yet I’m optimistic the fund will keep soaring in value as rapid digitalisation rolls on across the globe.

The post If I’d put £30,000 into the S&P 500 at the start of 2024, here’s what I’d have today! appeared first on The Motley Fool UK.

Those figures aren’t too shabby, I’m sure you’d agree. In fact, someone who invested just £1,000 when the S&P 500 started should be a millionaire.

Could there be a better way to build wealth today however? I have exposure to the Footsie and the S&P 500 through individual shares and funds. But I’m looking for ways to make an even better return.

If I had cash to invest, here are two exchange-traded funds (ETFs) I’d add to my portfolio.

Talking tech

Soaring tech profits have propelled the S&P 500 higher in more recent decades. US companies have effectively exploited (and indeed, pioneered) a range of phenomena-like advances such as e-commerce, smartphones, cloud computing, social media and the Internet of Things (IoT).

With the digital revolution continuing, some of these segments have further room for growth. There are also other new exciting tech frontiers opening up like artificial intelligence (AI), 6G and space travel.

The trouble is that less than a third (31%) of the S&P is made up of tech stocks. For the FTSE 100, the proportion is much weaker. It’s less than 1%, in fact.

Investors can get around this however, by purchasing a pure technology-focused ETF. The iShares S&P 500 Information Technology Sector ETF (LSE:IUIT) is one such financial instrument.

Since it started in 2015, the fund has delivered a whopping average annual return of around 23%. It provides exposure to big tech hitters like Nvidia, Microsoft and Apple, and across multiple sub-sectors like semiconductors, consultancy and comms equipment.

Okay, here’s the thing. I already own this tech-geared ETF, along with one that tracks the broader S&P 500. When I next have spare money, I’ll invest more in the first one to target a better return.

Having said that, I am aware that its focus on the cyclical tech sector could result in more disappointing returns during economic downturns.

Looking east

Targeting superior profits may also involve more than just choosing certain types of UK or US shares. It might see me diverting some of my attention to other faster-growing economies.

The Franklin FTSE India UCITS ETF (LSE:FLXI) could deliver mighty returns as Asia’s third-largest economy grows. It’s already enjoyed an average yearly return above 13% since it began five years ago.

The fund invests in 244 mid- and large-sized Indian companies across multiple sectors, which in turn provides solid diversification.

India’s economy is booming for several reasons. It has a young and growing population, rising middle class, improving technological landscape, and is benefitting from rising foreign investment and economic reforms.

Encouragingly for investors in this ETF, economists are expecting GDP there to continue rocketing. The IMF’s tipping growth of 5.5% in 2025, which could have positive implications for the country’s stock market.

For the US and UK, growth’s predicted at a far more modest 1.7% and 1.1% respectively.

While India offers huge opportunities, it also faces big challenges that could hamper growth. High unemployment and climate risks are a couple of such dangers.

Still, on balance, I think this ETF could prove a top buy for me.

The post I’d buy these 2 ETFs to try and beat the FTSE 100 AND the S&P 500! appeared first on The Motley Fool UK.

Here’s why I think they’re worth a close look by savvy long-term investors.

Bank of Georgia Group

Bank of Georgia‘s (LSE:BGEO) delivered spectacular earnings growth during the past decade. As a consequence, it’s share price has risen an incredible 462% since this point in 2014.

Yet the bank isn’t just an attractive growth share in my book. It also offers plenty for value and dividend investors to get their teeth into.

For 2024, the company trades on a forward price-to-earnings (P/E) ratio of 3.3 times. This is built on predictions of an 37% bottom-line surge this year. And the dividend yield on Bank of Georgia shares is a meaty 7.1%.

I can understand why the bank’s so cheap right now. Rising political tension in the country could potentially impact earnings growth at cyclical firms like these.

However, the pace at which financial services demand is rising in its Georgian and Armenian emerging markets remains hard to ignore. The bank’s lending rose 18% between April and June, latest financials showed, which helped to thrust pre-tax profit 15% higher.

Georgia’s economy has been one of the fastest growing on the planet in recent decades. And the outlook here remains pretty encouraging, in spite of the current political crisis. Last month, the Asian Development Bank raised its GDP growth forecasts to 7% for 2024, up from the 5% previously estimated.

The political backdrop means there may be bumps along the way. Indeed, Bank of Georgia’s share price may experience volatility following next week’s general election. But I believe it’s still a top growth share to consider right now.

iShares S&P 500 Information Technology Sector ETF

Past performance is no guarantee of future returns. But the ripping performance of the iShares S&P 500 Information Technology Sector ETF (LSE:IUIT) suggests it’s also worth a close look today.

Since its inception in 2015, this fund’s delivered a whopping average annual return of 23.3%. To put that into context, it’s better than the 13.9% yearly average return the S&P 500 has produced in that time. It’s also more than triple the FTSE 100‘s corresponding return of 6.9%.

As its name suggests, the fund provides targeted exposure to US technology stocks. We’re talking about global mammoths like Nvidia, Apple, Microsoft, and the rest of the so-called Magnificent Seven.

In total, this ETF has holdings in 69 different companies. So while the sector’s high risk, this diversified approach helps me to reduce the dangers I face (for the record, I currently own the fund in my Self-Invested Personal Pension (SIPP)).

Alongside artificial intelligence (AI), it gives me an opportunity to profit from multiple tech trends like the growth of the metaverse, green technologies, quantum computing, and the eventual rollout of 6G.

The ETF’s cyclical nature means I could experience disappointing returns when economic growth cools. Still, I’m optimistic it will continue delivering big returns over the long haul.

The post A cheap FTSE 250 growth share and an ETF to consider for blistering returns appeared first on The Motley Fool UK.

AI frenzy

The market buzz around artificial intelligence (AI) remains intense. So as concerns over Nvidia‘s high valuation remain, share pickers are buying other, more reasonably-priced companies to capitalise on this new tech frontier.

During Q3, semiconductor and chip manufacturers dominated the list of companies with the largest proportionate increase in UK retail investors. These companies accounted for five of the 10 biggest risers among eToro customers:

eToro analyst Sam North notes that “the transformative potential of AI continues to dominate the business agenda, and UK investors are increasingly turning to the companies that these technologies are built on“.

With AI stocks coming back into vogue, I’m considering increasing my stake in iShares S&P 500 Information Technology Sector UCITS ETF (LSE:IUIT).

As its name suggests, this ETF gives me broad exposure to the US tech sector. It has holdings in 69 companies, in fact, including all of those on the ‘biggest risers’ list above.

The beauty of this fund is that it allows me to capitalise on the AI boom in a way that greatly reduces risk. This ETF might not have provided the stunning recent returns of Nvidia. However, it’s still appreciated rapidly in value, up 30% over the past year and a brilliant 214% in the past five.

Personally speaking, I think this is the more sensible way to try and make big profits from AI. History shows us that early tech leaders (like MySpace, Yahoo! and Netscape, to name a few) can spectacularly collapse after shining brightly.

While I’m not saying Nvidia will meet the same fate, a fund like this helps reduce this threat.

Returns may disappoint during economic downturns when companies and consumers typically rein in spending. But I’m confident this ETF will prove a wise investment over time.

A cheap FTSE 250 stock

Having said all this, I’m to be flexible if the ‘right’ tech investment opportunity comes along. I think FTSE 250-quoted NCC Group (LSE:NCC) might be one such business.

It doesn’t operate in the field of AI. But the company’s a rising star in the world of cybersecurity. And for this financial year, NCC’s shares command a price-to-earnings growth (PEG) ratio of 0.2. Any reading below 1 indicates that a stock is undervalued.

The PEG reading remains ultra low for the two following years, too, at 0.7.

NCC provides cybersecurity and risk mitigation services like security consulting and software escrow. And right now it’s enjoying robust sales growth as the digital landscape grows and evolves.

Revenues rose 4% between the traditionally quiet July to September period, latest financials show. This year, City analysts expect earnings to more than double (+120%), and to rise more than 20% in each of the following two years.

NCC’s promising growth outlook is further supported by restructuring initiatives that are boosting margins. These actions pushed gross margins to a healthy 38.2% in the six months to May.

The company faces significant competition that could limit long-term profits growth. Yet at current prices, I think it might be too cheap for me to ignore.

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