The Vanguard Msci Index International Shares ETF (ASX: VGS) might be one of the best exchange-traded funds (ETFs) to own for the long-term.
It’s already one of the larger ETFs on the ASX and I think it offers plenty of positives. In-fact, it’s so effective I’d be satisfied if I were my only investment, though it’s good to have more investments.
Here are the three positives to me.
Low fees
Vanguard, the provider of the VGS ETF, are always trying to provide investors with low-cost investment products.
The VGS ETF has an annual management fee of just 0.18%. It’s not the cheapest fund on the ASX, but considering the number of stocks it’s invested in and the global nature of the portfolio, I think the fee is extremely reasonable.
Diversification
I think diversification and my final reason are more important than the fees to like the VGS ETF.
It’s appealing to me to be able to invest on the ASX and get exposure to the global economy.
The VGS ETF is currently invested in around 1,220 businesses. That’s a lot of shares! Owning that many means the risks are reduced because investors aren’t overly exposed to one company.
Those businesses are from numerous markets including the US, Japan, the UK, Canada, France, Switzerland, Germany, the Netherlands, Spain, Sweden, Italy, Singapore, Hong Kong, Denmark, Finland, Israel, Belgium, Norway and Ireland.
This ETF gives excellent diversification through a single investment, which is why I suggested it can work as investment even someone had just one (or a few) different investments.
Strong businesses
The final thing I want to highlight is that this isn’t just a portfolio of average businesses.
It owns many of the world’s leading companies in its ranks, with the biggest global businesses having the largest weightings.
At the end of August 2026, the biggest positions were Nvidia, Apple, Microsoft, Alphabet, Amazon.com, Broadcom, Meta Platforms, Micron Technology, Tesla and JPMorgan Chase.
But, there’s plenty of non-US names in there too like ASML, Toyota, Samsung, SAP, Vodafone, Canadian banks, GSK, Astrazeneca and so on.
With a return on equity (ROE) of 19.7%, it’s clear the VGS ETF portfolio is high-quality and the businesses can re-invest for a good return.
Over the past decade, the VGS ETF has returned an average of 13.7% per year. Though, I think it would be reasonable to expect a return a bit lower than that over the next decade,
Overall, it’s a wonderful ETF and I think it would be a welcome addition to most Australian portfolios.
