I believe it's worth considering whether Vanguard US Total Market Shares Index ETF (ASX: VTS) is a good long-term investment for your portfolio.
Vanguard is one of the best providers of exchange-traded funds (ETFs) in the world because the annual management fee is so low due to the fact that Vanguard is run for the benefit of its members, not making profit for itself.
The Vanguard US Total Market Shares Index ETF aims to essentially give exposure to most of the American businesses listed in the US. What this boils down to is that the number of holdings you get with this ETF is nearly 3,600 businesses. That's excellent diversification!
You do get the largest exposure to the biggest US businesses like Microsoft, Apple, Amazon, Facebook, Alphabet, Berkshire Hathaway, Johnson & Johnson and Exxon Mobil.
The split across different sectors is finely balanced with technology, financials, industrials, consumer services and health care all having between 10% and 20% of the ETF's allocation.
The strength of the US economy and the performance of the big US businesses since the GFC has meant the ETF's average annual return since inception in May 2009 has been nearly 15.5% per annum. Past performance is not an indicator of future performance, but the ETF currently has a return on equity (ROE) of 15.5% so it's quite possible that strong returns will continue over the next decade.
Foolish takeaway
The Vanguard US Total Market Shares Index ETF currently has a price/earnings ratio of 19.3x, so it's not exactly cheap. But with an annual management fee of only 0.04% it could be one of the best ways to get exposure to international shares.
