As young Australians pour money into the local Exchange Traded Funds (ETFs), we asked our expert which ASX ETFs got her eye on – both to consider and to avoid.
Australians poured a record $53 billion into exchange-traded funds in 2025, with younger investors leading the charge. On this week’s Switzer TV, RBC Capital Markets’ Jacqueline Fearnley us walked through the thematics she’s backing, the sectors she’s steering clients away from, and the corner of the market she thinks Australian investors are under-hedged for. Here’s the full picks list.
The numbers behind the ETF boom are hard to ignore. Australian ETF industry inflows hit $53 billion in 2025, up 76 per cent on the prior year, according to Betashares’ annual review. State Street this week forecast that the market for ETFs would hit $380 billion in 2026.
That growth is being driven, in large part, by younger investors. NAB research has found that 40 per cent of Gen Z and 34 per cent of Millennials now hold at least one ETF, with four of the five most popular investments among those cohorts being ETFs rather than direct shares. nabtrade data shows Gen Z ETF buy orders rise by 49 per cent on days when the market falls more than 1 per cent. NAB’s Director of SMSF and Investor Behaviour Gemma Dale has described as a generation that understands the value of diversification and systematic dip-buying.
So with record amounts of money moving into these products, the question for any new ETF investor is a simple one: which ones are worth paying attention to right now, and which themes are worth steering clear of?
On the 20 April 2026 episode of Switzer TV, Jacqueline Fearnley, Head of Investment Strategy at RBC Capital Markets, joined host Peter Switzer to walk through exactly that. Her job, in her own words, is to provide the kind of outsourced Chief Investment Office service that wealth advisers rely on for strategic asset allocation, high-conviction lists, model portfolios and managed accounts. In other words: she picks the ETFs and securities that professional advisers hand on to their clients.
Fearnley’s starting point is a framework that she uses cuts through market noise. “In markets, risk is ever present,” she said. “It’s just which shadow do you want to try and box around.” Two variables matter most in her view: the direction of inflation and the direction of economic growth. Those two axes produce four regimes. Goldilocks (growth up, inflation down) and reflation (both up) are generally risk-on. Inflation alone and deflation are risk-off, and of those two, deflation has historically produced the biggest market drawdowns, such as the Global Financial Crisis.
Her current book is tilted toward the risk-on side, but with specific theme-based conviction and some defensive hedging built in. Here is the full list of ETFs she discussed on the show, grouped by what she is buying, what she is avoiding, and what she is watching.
What she’s buying
1. VanEck Global Defence ETF (ASX: DFND)
Fearnley has been investing in global defence for about twelve months, and she’s not backing off the theme. Her thesis is structural rather than headline-driven.
“One statistic that’s worth holding on to is the US has spent a billion dollars a day in their defence stores or armaments. The reality is war is expensive,” she said. The point, she argued, is not this war or the next one. It is that the globe needs to spend more on rearming itself, regardless of any single conflict’s outcome.
“Trump is divisive, we’ve moved into a multipolar world, and Trump wants Europe and other regions to pay their way. None of that’s changing. Those are big themes. What we’ve just seen with this war is that’s just utilised the stores. So they need to be replenished as well.”
DFND is VanEck’s Australian-listed play on that thesis. It gives exposure to global defence primes including aerospace, cybersecurity, unmanned systems and training software. Current top holdings include RTX Corporation, Thales, Hanwha Aerospace, Leonardo and Saab.
2. VanEck Rare Earth/Strategic Metals ETF (NYSE Arca: REMX)
Fearnley treats rare earths as the natural extension of the defence theme. “The corollary or the extension of that becomes rare earths,” she said. “REMX is giving you exposure to the rare earths that are the inputs into missiles, etcetera. So there are extension investments around that big defence theme, but we think that defence theme is going to be with us for a while.”
REMX is listed on NYSE Arca rather than the ASX, so Australian investors need international share access to buy it directly. It is a holding worth flagging for readers who may have assumed Fearnley was recommending an ASX-listed product.
3. Betashares Asia Technology Tigers ETF (ASX: ASIA)
Fearnley has been buying technology for clients since January, on the view that the sell-off in mega-cap US tech (the so-called Magnificent Seven) created a compelling entry point. But her preferred tech exposure is not American; it is Asian.
“The very specific tech that we’re quite interested in is Asia tech. It’s about two-thirds cheaper from a multiple perspective,” she said. “The Chinese and that region also has an energy cost competitive advantage, and tech is very energy-dependent.”
She referenced the Stanford AI Index research suggesting the gap between US and Chinese AI capability has narrowed considerably, reinforcing her view that the tech opportunity set is global rather than US-centric. Rather than taking single-country China exposure, RBC Capital Markets uses the thematic approach. The ASIA ETF captures about 50 of the largest technology and online retail companies listed in Asia ex-Japan, including TSMC, Tencent and Samsung.
What she’s holding or not adding to
4. Australian banks and resources
Fearnley has been in the banks-versus-resources mean-reversion trade for a while, but is no longer adding capital to it.
“We all saw the craziness of banks versus resources valuations,” she said. “That was stretched beyond any point in history. CBA at one ninety-four, that was just madness. We all understood why. And at some point it was going to mean revert. When you think about banks and resources, that’s probably the easiest sector to assume mean reversion.”
Her position on additional capital deployment: “Probably not.”
5. Global healthcare: iShares Global Healthcare ETF (ASX: IXJ)
Healthcare is a holding rather than a current high-conviction buy, but Fearnley sees it as a sector that could reward patient investors. IXJ gives exposure to global healthcare including the large US and European names. Fearnley acknowledged that CSL’s performance inside the ETF is diluted by the weight of those global peers, but argued that the entire sector has been out of favour long enough that the setup is now interesting.
“The sector globally has been on the nose for an extended period of time. You do look at that and you think, well, at some point this will come back the other way.”
She also referenced the quality-factor ETFs QLTY (Betashares Global Quality Leaders ETF) and QUAL (VanEck MSCI International Quality ETF) as indirect healthcare exposure, since high-quality global businesses tend to have meaningful healthcare weightings.
DISCLAIMER
This article does not take into account the investment objectives, financial situation or particular needs of any individual. It does not constitute formal advice. Before acting on anything discussed in this article or the accompanying Switzer Investing TV episode, consider the appropriateness of the information in regards to your circumstances and, where necessary, seek the appropriate professional advice.
