Exchange-traded funds (ETFs) might be the easiest way to invest for long-term returns.
The fact that you can buy a whole group of shares, or other assets, with a single purchase is great for simplicity.
But I think it could be a wise idea to look beyond Australia’s shores for your ETF buying because Australian ETFs are weighted too much to the big ASX banks.
Here are two international ETFs to consider:
Vanguard MSCI Index International Shares ETF (ASX: VGS)
One of the best ways to invest might just be to invest in a broad group of shares across the entire world. That way there’s much lower country-specific risk. The Vanguard MSCI Index ETF is invested in 1,578 shares, which is excellent diversification.
You get exposure to all of the world’s largest businesses like Apple, Microsoft, Alphabet, Amazon, Facebook and Nestle. The top holdings will shift over time as new companies replace the disrupted ones.
I think it’s entirely possible to just own this one ETF in your portfolio and nothing else.
One of the main benefits of this ETF is that its annual management fee cost is very low at around 0.18% per annum.
BetaShares Asia Technology Tigers ETF (ASX: ASIA)
If you want an ETF that’s a bit more focused on growth areas, then this Asian technology ETF could be what you are after.
Instead of the US FAANG shares, this ETF owns the Asian equivalents like Tencent, Baidu, Alibaba and Samsung. The ETF owns 50 shares and the underlying index has a price/earnings ratio of just over 21 and a dividend yield of 1.3%, according to BetaShares.
Technology is proving to be the best industry to own over the long-term these days because of the capital-light nature of the businesses and how quickly they can grow. Asian shares are trading cheaper than US ones, so now could be a good time to buy and benefit from the long-term growth of the Asian economies.
I’d be quite happy to buy units of the Asian Technology ETF today due to the long-term growth potential of the underlying businesses.
The only downside to both of the ETFs I mentioned above is that neither of them pay a decent dividend yield. These top ASX shares could provide the growth and dividends that you want from your portfolio.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. 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.