Exchange-traded funds (ETFs) are becoming very popular for people to take a passive approach to invest in.
Some of the biggest ETFs have very diverse portfolios such as Vanguard MSCI Index International Shares ETF (ASX: VGS).
However, some investors may want their ETFs to be more growth-orientated or offer a higher dividend yield. Perhaps investors want the ETFs to focus on a specific idea.
Here are two ideas for ETF-focused investors:
BetaShares Australia 200 ETF (ASX: A200)
This is the cheapest ASX-focused ETF in the world, with an annual management fee of only 0.07% per annum, which is almost as cheap as the cheapest global ETFs that Australian investors can choose from.
With this ETF you get substantial exposure to all of the large Australian shares like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP) and CSL Limited (ASX: CSL). You also get a pretty juicy dividend, with the 12-month trailing dividend being 4.87%, before including the franking credits.
Vanguard US Total Market Shares Index ETF (ASX: VTS)
If you’re looking for a bit more growth with your ETF pick then this could be this one, which gives you exposure to essentially the entire US share market.
The ETF has just over 3,500 holdings and has generated an average annual return per annum of nearly 15% since inception in May 2009.
With this ETF you get exposure to some of the best global growth tech shares like Microsoft, Amazon, Apple, Facebook and Alphabet. That’s one of the main reasons the index is currently generating underlying earnings growth of nearly 11%.
Of course, if the Australian or US share market had a downturn then these ETFs would also suffer considerably. If I could only pick one of the two ETFs it would be the Vanguard US one because of the quality and growth of its largest holdings.
One way to invest could be to combine the above ETFs with quality ASX shares like these that offer both dividends and growth.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. 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 Scott Phillips.