I really like the idea of investing in ASX tech shares.
Technology is often the sector that is changing our lives in some way.
It seems quite easy for a tech company to grow quickly because of how easy it is to replicate that software. It’s also very cheap to add another client or subscriber, leading to high profit margins.
These are two ASX tech shares that I really like the look of:
Redbubble Ltd (ASX: RBL)
Redubble is a leading ASX tech share in the online retail space.
The idea is that it pays creative artists designs which are then printed on quality ‘blank’ products.
Redbubble sells its products through the websites of Redbubble.com and TeePublic.com.
The business sells products in a wide array of products including: clothes, bags, wall art, stationery, phone cases and so on.
Redbubble believes that it has a very large total addressable market to target. That’s why it’s planning to invest heavily over the next couple of years to capture as much market share as possible.
Bigger scale should come with plenty of economic benefits and that could lead to much higher profit margins in FY25 and onwards.
The Redbubble share price has fallen 52% over the last six months. I believe that on a 4-year time-scale, the ASX tech share could be a really good opportunity
.
VanEck Video Gaming and Esports ETF (ASX: ESPO)
This is an exchange-traded fund (ETF) that’s all about getting access to some of the world’s leading listed video gaming businesses.
But the holdings aren’t just game makers. It has businesses involved in the hardware and software of the games ecosystem as well.
There are a number of global gaming businesses in the portfolio such as: Nvidia, Advanced Micro Devices, Tencent, Sea, Nintendo and Activision Blizzard. There are a total of 26 positions in the portfolio. So it’s kind of diversified, but not like a typical ETF.
Gaming has been around for a long time. But the global demand for games and watching
e-gaming continues to grow.
The biggest e-sports get the same sort of audiences as the Soccer World Cup and the Olympics.
I think that ESPO offers compelling exposure to businesses that have loyal customer businesses, high profit margins and perhaps defensive earnings.
Past performance of the index that the ETF tracks is not a reliable indicator of future performance. However, over the last three years, the index has returned an average of 31%.
But don’t forget, the ASX tech share has an annual management fee of 0.55%.
