Motley Fool Australia

How I’d invest $50,000 into ASX ETFs


These days it’s getting harder to choose what shares to invest in.

A lot of shares are struggling to generate meaningful profit growth, whilst the ones that are growing strongly are trading at high valuations.

It could be better to just invest in the whole market at the moment, which is why I would be happy to invest $50,000 into the below ASX ETFs:

Vanguard FTSE Asia Ex Japan Shares Index ETF (ASX: VAE) – $15,000

The ongoing trade war between China and the US is creating an opportunity to buy Asian shares at a much cheaper price in my opinion.

Over the long-term I think the Asian economies have a lot more growth ahead compared to western economies as it’s Asia that is increasing GDP and wealth the most. 

The underlying index’s 890 holdings are still growing profit by more than 10% a year as a whole, which should help long-term distributions to shareholders as well.  

BetaShares Australia 200 ETF (ASX: A200) – $5,000

The Australian index is trading at close to a multi-year high, so I’m not sure now is the best time to be putting a lot of money to work in the Australian market.

However, that doesn’t mean it should be ignored entirely. This ETF offers the lowest ASX-focused management fee available of 0.07% per annum and gives a high level of exposure to Australia’s biggest blue chips.

Although you probably won’t see much capital growth in the near future from this ETF, it offers a solid dividend yield thanks to the influence of the big bank yields.

Vanguard MSCI Index International Shares ETF (ASX: VGS) – $20,000

Over the ultra-long-term I think the safest way to invest is to try to get exposure to all of the best businesses on the planet.

So, if you invest in this ETF you essentially investing in the entire world’s stock market. Don’t forget, Australia’s market capitalisation only makes up 2% of the global share market.

This ETF has almost 1,600 holdings, so it provides excellent diversification. You will own a tiny, tiny slice of shares like Apple, Microsoft, Amazon, Alphabet, Facebook, JPMorgan Chase and Johnson & Johnson.

Vanguard Australian Fixed Interest Index ETF (ASX: VAF) – $10,000

As interest rates fall it makes current fixed interest rate products seem more appealing. Fixed interest products may also provide protection against severe market volatility, so I don’t think it’s a bad idea to at least consider holding some fixed interest assets in your portfolio to deploy in bad times.

This Vanguard fixed interest ETF could be a good way to get exposure to high-quality bond assets. 

Foolish takeaway

Each of these ETFs have plenty of compelling reasons to own them in a portfolio. At the moment I think the most attractively valued ETF is the Vanguard Asia ETF, but it does come with higher risks like the Chinese government, although the whole ETF isn’t invested in China of course.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of February 15th 2021

Motley Fool contributor Tristan Harrison owns shares of VANGUARD FTSE ASIA EX JAPAN SHARES INDEX 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.

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