There are a number of exchange-traded funds (ETFs) on the ASX that could be good, simple investment options to build wealth.
ETFs are an easy way to invest in many shares with just a single investment and usually for a low cost.
That’s why I think the two below ETFs could be good options to consider:
iShares Asia 50 ETF (ASX: IAA)
Asia is an interesting place to think about investing in with how large the populations of China, India etc. are and how quickly Asian household wealth and spending is growing.
Obviously some of the benefits are flowing through to some of Asia’s biggest businesses like Tencent, Samsung, Taiwan Semiconductor, AIA Group and China Construction Bank, which are some of its largest holdings.
It has a management fee of around 0.50%, which is pretty good when compared to most active Australian managers. The large end of the market normally captures a lot of economic value growth, so it’s not surprising that this ETF has delivered an average return per annum of 13.5% over the past five years.
This could be a good one to add to your portfolio if you have little Asian exposure.
Vanguard US Total Market Shares Index ETF (ASX: VTS)
The US share market has been one of the best performing regions since the GFC and some of the top-performing businesses have been in the US tech industry, which feature heavily in this ETF which essentially gives exposure to most of the US share market through thousands of holdings.
I’m sure you recognise many of the leading holdings like Microsoft, Amazon, Apple, Alphabet, Facebook and Berkshire Hathaway.
One of the best reasons to like this ETF, aside from the globally diverse underlying earnings, is that it comes with a management fee of only 0.03%. Almost all of the net returns produced stay with the investor, which is very attractive.
I think each of these ETFs are attractive passive options to think about for a portfolio that wants to really take a hands-off approach. At the current prices I’d rather go for the Asian ETF because I have very little Asian exposure and it could be a good value long-term option, but it does come with ‘China’ risks.
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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.