I believe that Vanguard US Total Market Shares Index ETF (ASX: VTS) could be one of the best long-term investments on the ASX.
If you have a full-time job (that isn’t investing) and you want to put some money aside to work for you over the long-term then this ETF could be one of the best choices.
The US share market has been one of the best places to be invested over the last few decades. I believe this will continue to be the case over the next century.
Exchange-traded funds (ETFs) are a simple and low-cost way to be invested. In-fact, this ETF has an extremely low annual management fee cost of only 0.04%, it may even drop to 0.03% according to the Vanguard website, which is incredibly low and leaves more net returns for investors.
Another good thing about most ETFs, and this ETF in-particular, is that you can buy a tiny slice of many businesses with just one purchase. The Vanguard US Total Market Shares Index ETF gives us exposure to over 3,600 holdings.
Its largest holdings are some of the best businesses in the world including Microsoft, Alphabet, Amazon and Berkshire Hathaway.
Although this ETF doesn’t come with any franking credits, it does come with much better diversification that an ASX Index ETF which is mainly focused on financials and resources. Technology, financials, industrials, consumer services and healthcare all have more than 10% of the ETF’s allocation.
Over the past five years this ETF has delivered an average return per annum of around 16.4%, but I wouldn’t expect the next five years to be as good. However, I do think it will continue to outperform the ASX over the long-term because of the underlying global earnings base of its holdings and larger exposure to technology.
If you’d like to mix this ETF with some quality ASX shares that are growing strongly then these top ASX shares could be good ideas.
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Motley Fool contributor Tristan Harrison has no position in any of the 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 Scott Phillips.