Some ASX exchange-traded funds (ETFs) are so good that Australians can invest in them for the long-term.
ETFs provide a way for us to gain exposure to businesses that you simply can’t find on the ASX. We’re talking about globally-leading, powerful businesses.
Let’s get into two excellent options.
Vanguard Msci Index International Shares ETF (ASX: VGS)
This ASX ETF gives investors the ability to invest in the global share market.
The fund provides exposure to many of the world’s largest companies listed in major developed countries.
Its portfolio is truly global. The US may make up more than 70% of the global share market, but markets like Japan, the UK, Canada, France, Switzerland, Germany, the Netherlands, Spain, Sweden, Italy, Hong Kong, Singapore, Denmark, Finland, Israel, Belgium, Norway and Ireland.
By investing in more than 1,200 holdings from across the world, the ASX ETF is extremely diversified. I think it could be a very effective all-in-one investment for Australians to gain exposure to numerous appealing companies.
Currently, some of the largest holdings include Nvidia, Apple, Alphabet, Microsoft, Amazon, Broadcom and Meta Platforms. But, there’s loads of other names in there such as McDonald’s, AstraZeneca, Netflix, Toyota, Samsung and plenty more.
Over the last five years, the VGS ETF has returned an average of 12.3% per year.
VanEck Morningstar Wide Moat AUD ETF (ASX: MOAT)
The MOAT ETF has a focus on quality US companies that Morningstar (a share investment research outfit) believes possess sustainable competitive advantages (or wide economic moats).
The fund aims to target companies trading at attractive prices compared to Morningstar’s estimate of fair value. In other words, it only wants to invest in great businesses that are attractively priced.
These businesses in the portfolio are expected to deliver good profits for many years into the future, which could be increasingly valuable as the world changes.
Currently, some of its largest holdings include Veeva Systems, Airbnb, Microsoft, LPL Financial and Charles Schwab.
Past performance is not necessarily a reliable indicator of future performance, but over the past five years the MOAT ETF has returned an average of around 10% per year.
I think it could continue to perform well in the coming years.
