ETF Focus List 2026 – Positioning for the opportunities ahead

• Click here to view the latest edition of our ETF booklet, or click here to view our ETF Focus list.

• In this year’s edition of our ETF Focus List, there are a total of 16 changes, consisting of additions and removals of some sub-categories.

• We have added Asia Semiconductors, Rare Earth, China Tech A Shares, Global Defence, Electrification, and China Renewable Energy as new investment themes that warrant investors' attention.

• We have removed REITs and Fintech from the Tactical Plays category, as we believe they are less attractive than our newly introduced ideas.

• We have added a Greater China ETF for investors seeking exposure to China, Hong Kong, and Taiwan through a single investment vehicle.

• We have updated our ETF recommendations for Europe, Latin America, Agribusiness, and China Electric Vehicles.

• We have reorganised our Digital Economy theme into three categories—Digital Economy (Internet), Digital Economy (Semiconductor), and Digital Economy (China Tech)—to better differentiate between the three technology segments.

With over 11,100 ETFs available on our platform, choosing the right one for your portfolio can be overwhelming—especially for those new to investing. To help investors sift through the vast number of options across different exchanges, we launched our ETF Focus List in 2018 with the goal of spotlighting the best-in-class ETFs across global equity and fixed income markets.

The ETFs on our Focus List are selected based on a set of quantitative and qualitative factors. The quantitative factors include expense ratio, liquidity, and tracking difference, while the qualitative factors encompass the underlying index, ETF structure, and withholding tax implications.

Our ETF Focus List is updated annually to ensure that our recommendations remain relevant and up to date for investors. For 2026, we refreshed the list with 16 changes.

Added Asia Semiconductors into “Core Equity” category

Asian semiconductor companies sit at the core of the global AI boom, controlling the physical manufacturing bottlenecks that the entire tech ecosystem relies on. Regardless of which tech giant designs the latest AI chip—whether it is Nvidia's general-purpose Graphics Processing Units (GPUs) or custom processors designed by Google and Amazon—the actual production heavily depends on Asian foundries. For instance, Taiwan Semiconductor Manufacturing Company (TSMC) commands roughly 73% of the global foundry market. This concentrated manufacturing leadership means that nearly all cutting-edge silicon must be fabricated in Asia, effectively placing the region at the critical hardware bottleneck of global AI infrastructure growth.

Beyond fabrication, Asia maintains a near-monopoly on the specialized hardware necessary for AI processing speeds through its dominance in High Bandwidth Memory (HBM). South Korean giants like SK Hynix and Samsung Electronics anchor this critical space, which is facing a prolonged structural shortage as AI demand evolves from initial model training into real-time inference and agentic AI systems. This massive demand wave has triggered a highly favorable pricing upcycle for essential components like Dynamic Random Access Memory (DRAM) and NAND.

Despite these immense structural advantages and staggering corporate earnings—with top regional players reporting triple-digit year-on-year profit growth in 2026—Asian chipmakers remain remarkably cheap. As of 30 June, The FactSet Asia Semiconductor Index trades at a forward price-to-earnings (P/E) multiple of roughly 14x, which is more than half the 34x multiple carried by the MVIS US Listed Semiconductor 25 Index. Asian semiconductor companies therefore allow investors to capture the explosive upside of the 'picks and shovels' of the AI gold rush at a fraction of the valuation of their US peers.

To capitalise on this opportunity, we recommend the Global X Asia Semiconductor ETF (HKEX: 3119), which provides broad exposure to Asia's semiconductor value chain across South Korea, Taiwan, Japan, and China—from advanced memory and leading-edge foundries to semiconductor equipment manufacturers and emerging domestic AI chip designers.

Related article: Tap into Asia’s semiconductor growth through the Global X Asia Semiconductor ETF (HKEX:3119)

GF CSI All Shares Info Tech ETF – A new addition to our Digital Economy (China Tech) selection

China's A-share technology companies sit at the heart of the country's physical AI buildout, supplying the critical hardware that underpins its domestic AI ecosystem. While many investors associate China's technology sector with Hong Kong-listed internet platforms such as Alibaba and Tencent, the companies driving AI infrastructure investment are predominantly listed on mainland exchanges. These include Hygon Information, a chip manufacturer; Cambricon, an AI processor designer; Foxconn Industrial Internet, an AI server assembler; and Victory Giant Technology, a supplier of high-end printed circuit boards used in AI servers.

These companies benefit not only from robust global demand for AI infrastructure but also from China's accelerating push for supply chain localisation. Tightening US export restrictions on advanced chips have reinforced the country's drive towards semiconductor self-sufficiency, prompting enterprises to replace imported components with domestically produced alternatives. At the same time, mainland A-share technology offers investors differentiated exposure from Hong Kong's internet platform companies, with returns driven primarily by the production of AI infrastructure rather than the monetisation of digital platforms.

To gain more comprehensive exposure to China's technology landscape, we recommend pairing the GF CSI All Shares Info Tech ETF (SZSE: 159939), which focuses on mainland-listed semiconductor and AI hardware companies, with a Hang Seng Tech ETF such as the iShares Hang Seng TECH ETF (HKEX: 3067) or, for SRS investors, the Lion-OCBC Securities Hang Seng TECH ETF (SGX: HST).

Related article: China has two AI trades right now. Here is why both are worth owning.

Added China Renewable Energy into “Tactical Plays” category

China's renewable energy sector is poised for long-term growth, supported by both ambitious government policies and powerful structural tailwinds. The country's energy transition is anchored by a target to double its non-fossil energy supply by 2035 relative to 2025 levels, providing a clear and predictable growth runway for solar, wind, and energy storage deployments. Beyond policy support, a new market-driven catalyst has emerged in the rapid expansion of AI data centres. As global technology companies and domestic cloud providers ramp up their procurement of renewable power, clean energy operators stand to benefit from stronger demand, premium pricing, and enhanced long-term earnings visibility.

Compounding this domestic momentum is China's dominance as a global supplier. The country has firmly established itself as the indispensable backbone of the world's clean energy supply chain, controlling over 80% of global solar hardware capacity—reaching up to 95% for upstream components like wafers—and commanding roughly 70% of the global EV battery market. As geopolitical tensions push other nations to pivot toward renewable energy for strategic energy security, international demand is skyrocketing. This global reliance is already reflecting in trade data, with China's clean energy exports hitting a record USD 21.9 billion in March 2026, marking a massive 70% year-over-year surge.

Importantly for investors, these drivers are converging just as the sector enters a healthier phase of maturing industry conditions and margin recovery. Following a brutal three-year period of overcapacity and intense price competition, strict production discipline and industry consolidation are successfully forcing out inefficient capacity and stabilizing prices. Concurrently, rapid technological advancements are slashing production costs. This shift from reckless expansion to cost-efficient consolidation sets the stage for meaningful margin improvements and earnings upgrades across leading clean energy players.

Investors seeking broad exposure to this theme may consider the China Southern CSI New Energy ETF (SSE: 516160), which tracks the CSI New Energy Index and provides diversified exposure to A-share listed companies across the entire new energy value chain, including solar, wind, energy storage, new energy vehicles, and hydrogen.

Related article: China’s energy transition playbook: Capturing structural opportunities across the new energy sector

Added Electrification into “Tactical Plays” category

While investing in China's renewable energy sector provides exposure to upstream materials, clean power generation, and battery storage, the electrification theme focuses on the downstream infrastructure required to transmit and distribute that electricity. Generating clean power is only part of the equation—the greater challenge now lies in expanding and modernising the networks needed to deliver that electricity. By investing in electrification, investors gain exposure to the critical hardware underpinning the power grid, including high-voltage cables, transformers, and smart-grid technologies that every unit of electricity must pass through before reaching end users.

Demand for grid infrastructure is being driven by two powerful structural tailwinds. In the near term, the rapid expansion of AI data centres has shifted the industry's primary constraint from computing power to electricity supply, necessitating significant upgrades to high-density electrical infrastructure. However, AI is only one part of the story. Data centres are expected to account for around one-fifth of the increase in electricity demand in advanced economies by 2030, with the figure approaching half in the US. The remainder will come from the broader electrification of transport, buildings, and industrial processes as economies transition away from fossil fuels. This diversified demand base provides a resilient and durable growth outlook for grid infrastructure, even if AI-related spending moderates.

The strategic importance of grid investment has also evolved beyond climate policy to become a matter of energy security. Recent geopolitical disruptions, including tensions around the Strait of Hormuz, have reinforced the need for more resilient and domestically secure energy systems. At the same time, renewable energy curtailment—where clean power generation is constrained because ageing grids cannot absorb additional electricity—has highlighted the urgent need for transmission and distribution upgrades. As governments accelerate investment to modernise electricity networks, many grid equipment manufacturers have accumulated multi-year order backlogs, creating a favourable backdrop for companies positioned to benefit from this structural investment cycle.

Our preferred vehicle for gaining exposure to the electrification theme is the First Trust NASDAQ® Clean Edge® Smart Grid Infrastructure Index Fund (NASDAQ: GRID).

Related article: The energy security trade the market has not priced yet

Added Global Defence into “Tactical Plays” category

Across the globe, military preparedness has become a top priority as modern conflicts place unprecedented strain on global defence frameworks. In the US, defence outlays are scaling toward historical highs to address immediate inventory depletions and drive large-scale modernisation. Specifically, the US-Iran conflict has underscored that defending against high-volume, low-cost, expendable weapons is now critical, dramatically expanding the addressable market for companies embedded in drone production and counter-drone technologies. Meanwhile, Europe continues to strengthen its defence capabilities in response to a shifting geopolitical landscape, with the US increasingly urging European nations to assume greater responsibility for their own security.

At the same time, Asia—led by South Korea—has emerged as a key global arms supplier, leveraging its efficient manufacturing base to secure large multi-year export contracts and fill the supply gap left by capacity-constrained Western defence manufacturers. The recent conflict in the Middle East further validated the competitiveness of Korean defence systems. During high-intensity engagements, the UAE-operated Cheongung-II air defence system reportedly achieved interception rates of 96% to 99% against ballistic missiles and 93.7% against drones. Its strong battlefield performance has boosted international confidence in Korean defence technology and accelerated procurement discussions across several Gulf states.

While our Europe Defence ETF—WisdomTree Europe Defence UCITS ETF (LSE:WDEF)—remains our preferred choice for investors seeking targeted exposure to the region's rearmament theme, investors looking to benefit from the broader, long-term increase in global defence spending can consider the Global X Defense Tech ETF (NYSE:SHLD). The ETF broadens investors' exposure beyond Europe by investing in defence companies across the US, Europe, Asia-Pacific, and the Middle East, capturing beneficiaries of rising defence spending worldwide.

Related articles:
Defence technology opportunities in a changing geopolitical landscape
Don’t mistake the pullback: Why Asian defence’s growth thesis remains intact
Rheinmetall fell 19% in a day. Here is what the market got wrong about European defence

VanEck Rare Earth and Strategic Metals ETF – A new addition to our Global Resources selection

Rare earth elements are essential inputs in a wide range of high-growth industries, including electric vehicles (EVs), renewable energy, artificial intelligence (AI), robotics, healthcare and defence. As the global energy transition gathers pace and AI infrastructure continues to expand, demand for rare earth elements is expected to accelerate. At the same time, geopolitical tensions are prompting the US and other developed economies to develop their own domestic rare earth supply chains to reduce their reliance on China, as these critical minerals have become increasingly important for national security and technological leadership.

That said, supply is likely to remain structurally constrained. China continues to dominate the global rare earth supply chain, accounting for around 69% of global mine production. Outside China, new projects typically take many years to reach commercial production, limiting the industry's ability to respond quickly to rising demand. This combination of robust demand, constrained supply and sustained policy support should provide a favourable backdrop for the rare earth sector over the medium term.

For rare earth exposure, we recommend the VanEck Rare Earth and Strategic Metals ETF (NYSE: REMX), which invests in companies across the rare earth and strategic metals value chain, with exposure to key markets such as China, Australia and the US.

Related article: Rare earth soared and pulled back, but the global resource war is far from over

Amundi Core Stoxx Europe 600 UCITS ETF (LSE:MEUS) – Our new Europe ETF

We have changed our recommended Europe ETF from the Vanguard FTSE Europe ETF (NYSE: VGK) to the Amundi Core STOXX Europe 600 UCITS ETF (LSE: MEUS). The change is driven primarily by the superior tax efficiency of the UCITS structure.

As a UCITS ETF, MEUS benefits from lower dividend withholding tax (WHT) at both the fund and investor levels. At the fund level, its effective WHT is approximately 9%, compared with around 15% for US-domiciled ETFs such as VGK, as the UCITS structure is able to benefit from tax treaties across European countries. At the investor level, Singapore investors are not subject to dividend withholding tax on distributions from European UCITS ETFs, whereas distributions from US-listed ETFs are generally subject to a 30% WHT. Together, these advantages reduce the tax drag on dividend income and enhance investors' total returns over the long term.

The two ETFs track different indices. VGK tracks the FTSE Developed Europe All Cap Index, which comprises approximately 1,200–1,300 large-, mid-, and small-cap companies across developed European markets, while MEUS tracks the STOXX Europe 600 Index, which consists of 600 large- and mid-cap companies. Despite these differences in index construction, the two ETFs have delivered very similar historical performance, with MEUS slightly outperforming VGK across various time periods even before accounting for the investor-level WHT advantage (Table 2). After incorporating these additional tax savings, MEUS is expected to deliver even stronger total returns.

Therefore, we prefer MEUS over VGK despite its slightly higher expense ratio of 0.07% versus 0.06%, as the tax benefits are expected to more than offset the marginal increase in fees.

Table 1: Key differences between Vanguard FTSE Europe Index Fund ETF and Amundi Core Stoxx Europe 600 UCITS ETF

	2025	2026
Recommended ETF	Vanguard FTSE Europe Index Fund ETF (NYSE:VGK)	Amundi Core Stoxx Europe 600 UCITS ETF (LSE:MEUS)
Underlying Index	FTSE Developed Europe All Cap Index	STOXX Europe 600 Index
Number of constituents	1,222	626
Assets under management (USD Millions)	29,981	23,297
Trading currency	USD	USD
Expense ratio	0.06%	0.07%
Dividend withholding tax for Singapore investors	~15% at the fund level 30% at the investor level	~9% at the fund level 0% at the investor level
Source: Bloomberg Finance L.P., iFAST Compilations Data as of 30 June 2026

Table 2: Total return comparison between VGK and MEUS

	1Y	3Y	5Y
Vanguard FTSE Europe Index Fund ETF Shares (NYSE:VGK)	17.36%	53.48%	53.95%
Amundi Core Stoxx Europe 600 UCITS ETF (LSE:MEUS)	17.85%	54.84%	55.50%
Source: Bloomberg Finance L.P., iFAST Compilations Data as of 10 July 2026

Related article: A tax-savvy gateway to European equities

Other key changes to the list

Removals

We have removed Fintech and REITs from the “Tactical Plays” category to keep the Focus List streamlined and help investors focus on our highest-conviction ideas, which we believe have greater potential to outperform over the next few years. REITs, in particular, face a more challenging macro backdrop as persistent inflation keeps interest rates higher for longer. Higher risk-free rates increase financing costs, put downward pressure on property valuations, and reduce the relative attractiveness of REIT yields, limiting the sector's near-term upside.

Additions

We have added Greater China to the “Regional Equity” category for investors seeking broad exposure to China, Hong Kong, and Taiwan through a single investment vehicle. Our preferred ETF in this category is the Global X FTSE Greater China ETF (HKEX:3470), which allocates 48% of its portfolio to China, 38% to Taiwan, and 13% to Hong Kong as of 30 June 2026, providing diversified exposure across the region.

Changes

We have renamed "Digital Economy" to "Digital Economy (Internet)" and "Digital Economy (Semiconductor)" to better distinguish between internet and semiconductor companies. Consistent with this change, we have renamed "China Tech" to "Digital Economy (China Tech)" to reflect its place within the broader Digital Economy theme.

For Latin America, we have reinstated our 2024 recommendation of the iShares Latin America 40 ETF (NYSE: ILF) in place of the iShares MSCI EM Latin America UCITS ETF (LSE: DLTM). While DLTM was previously preferred for its withholding tax (WHT) advantages, ILF has ultimately delivered higher net returns due to its more efficient index replication. Over the past three years, ILF has recorded a significantly narrower tracking difference (-1.36%) than DLTM (-4.87%), more than offsetting DLTM's withholding tax advantage.

We have updated our Agribusiness recommendation from the VanEck Agribusiness ETF (NYSE: MOO) to the iShares Agribusiness UCITS ETF (LSE: ISAG), as we believe the latter provides a purer proxy for commodity prices through its greater exposure to commodity producers. In contrast, MOO adopts a broader approach to the agribusiness value chain, with holdings whose performance can also be influenced by structural themes such as the pet care industry and industrial automation. As a result, it is less sensitive to commodity price movements, making it a less effective vehicle for investors seeking to diversify away from traditional equity and fixed income assets.

We have also changed our ETF recommendation for China Electric Vehicles from the Global X China Electric Vehicle and Battery ETF (HKEX:2845) to the ChinaAMC CSI New Energy Vehicle Index ETF (SSE:515030). Compared with 2845, 515030 provides broader exposure across the EV value chain, with a greater emphasis on upstream and midstream companies such as battery manufacturers, lithium producers, and materials suppliers, where we remain more constructive amid intense competition among downstream EV makers. The ETF also offers better liquidity and a lower expense ratio (0.60% vs. 0.68%).

Table 4: Summary of changes to the 2026 ETF Focus List

	2025	2026
Core Equity
Asia Semiconductors	-	Global X Asia Semiconductor ETF (HKEX:3119)
Europe	Vanguard Value ETF (NYSE:VTV)	Amundi Core Stoxx Europe 600 UCITS ETF (LSE:MEUS)
Regional Equity
Greater China	-	Global X FTSE Greater China ETF (HKEX:3470)
Latin America	iShares MSCI EM Latin America UCITS ETF (LSE:DLTM)	iShares Latin America 40 ETF (NYSE:ILF)
Commodity
Global Resources	-	VanEck Rare Earth and Strategic Metals ETF (NYSE:REMX)
Agribusiness	VanEck Agribusiness ETF (NYSE:MOO)	iShares Agribusiness UCITS ETF (LSE:ISAG)
Tactical Plays
China Electric Vehicles	Global X China Electric Vehicle and Battery ETF (HKEX:2845)	ChinaAMC CSI New Energy Vehicle Index ETF (SSE: 515030)
Digital Economy (China Tech) (formerly “China Tech”)	-	GF CSI All Shares Info Tech ETF (SZSE:159939)
Global Defence	-	Global X Defense Tech ETF (NYSE:SHLD)
Fintech	Global X Fintech ETF (NASDAQ:FINX)	-
REIT	Amova-StraitsTrading Asia ex Japan REIT ETF (SGX:CFA)	-
Electrification	-	First Trust NASDAQ® Clean Edge® Smart Grid Infrastructure Index Fund (NASDAQ: GRID)
China Renewable Energy	-	China Southern CSI New Energy (SSE:516160)

A starting point for your investment journey

The objective of our ETF Focus List is to serve as a starting point for investors by zeroing in on the best-in-class ETFs from the vast number of options available on our platform.

While ETFs are not the only investment products that investors can select for their portfolios, they still serve as great investment tools for gaining diversified exposure to markets at a low cost.

As for the ETFs which have been removed or replaced, investors who are holding on to them should not be worried as they remain viable investment options. They will also continue to be available under the Regular Savings Plan (RSP), along with the new additions.

Declaration:

This research report was prepared with the assistance of artificial intelligence (AI) tools. iFAST Financial Pte Ltd does not rely exclusively on AI for content generation; the content of this report – including all investment theses, ratings, price targets and conclusions – has been independently reviewed and verified by the research analyst(s) to ensure accuracy and professional integrity.

For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) and the analyst who produced this report hold a NIL position in the abovementioned securities.