3 ETFs I’d love to add to my portfolio

Exchange-traded funds, or ETFs, are becoming increasingly popular with investors. ETFs give investors good diversification and usually for a cheap price if you choose the right fund.

There are many ETFs on the ASX, here are three of my favourite ideas:


The NASDAQ is home to some of the most exciting technology companies in the world. This particular ETF is run by Betashares and focuses on the biggest 100 businesses in the NASDAQ.

Some of its biggest holdings include Apple, Microsoft, Amazon, Facebook and Alphabet.

The management fee to get exposure to some amazing technology companies is only 0.48% for this ETF. It’s currently trading with a trailing distribution yield of 0.56%.

Vanguard All-World ex-U.S. Shares Index ETF (ASX: VEU)

Vanguard is one of the most famous low-cost fund managers in the world. Vanguard offers a large array of investment options for investors who may want to focus on Australian equities, real estate investment trusts, bonds or many other categories.

I think the only place worthy to invest is in shares and that’s what this Vanguard ETF gives exposure to. It invests in stock markets around the world, except in the USA.

Some of its top holdings include Nestle, Samsung, Tencent, HSBC, Toyota and Unilever.

The fund has delivered average returns per annum to investors of 12.82% over the past five years and 8.91% over the past three years. It has done this with a very reasonable management fee of 0.11% per annum.

It currently has a trailing distribution yield of 2.57%.

Vanguard US Total Market Shares Index ETF (ASX: VTS)

This fund is all about the stocks listed in the USA, it has been a fantastic place for people to be invested in and I imagine that will continue to be the case over the next few decades as well.

The fund has businesses like Apple, Alphabet, Microsoft, Amazon, Facebook, Berkshire Hathaway and General Electric as some of its top holdings.

The fund has delivered average annual returns of 21.28% over the last five years and 18.21% over the last three years.

It has a very cheap management fee of 0.04% and currently has a trailing distribution yield of 1.81%.

Foolish takeaway

I believe all three ETFs are great options for investors who have little exposure to overseas investments and want more diversification.

At the current prices, I think the Vanguard excluding US fund currently offers investors the best value.

However, the problem with all three of these options is that they offer very little income. Perhaps the best way to get income and overseas growth is our number one dividend pick for 2017 which has a grossed-up dividend yield of over 9% and is expanding into the USA and Asia.

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Motley Fool contributor Tristan Harrison has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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