I’m always on the lookout for good quality exchange traded funds (ETFs) for my portfolio at the right price.
I really like the idea of owning ETFs because of how much diversification you can get through a single share purchase.
There are plenty of weird and wonderful ETFs out there, but I think it’s best just to stick to high-quality ones when opportunities present themselves, such as the two below:
Vanguard FTSE Asia Ex Japan Shares Index ETF (ASX: VAE)
The ongoing trade war between the US and China has put a serious dent in global confidence about worldwide growth and Asian share prices, particularly in China. When you add that to the fact that the Chinese currency has fallen so much recently, it could mean it’s the right time to buy Asian shares.
I think it’s much wiser idea to buy a large basket of Asian shares rather than trying to pick one or a few individually. Low-cost ETF leader Vanguard gives exposure to 1,176 Asian businesses with this ETF with a low management fee of 0.4%.
It owns shares in impressive Asian businesses like Tencent, Alibaba, Samsung and Ping An Insurance. In many ways they are the equal of some of their western business counterparts.
The growing Asian middle class is an attractive tailwind which should provide plenty of fuel for returns from this ETF over the coming years as long as the dispute between the US and China doesn’t get out of control.
It has a low price/earnings ratio of 13x, a low book ratio of 1.1x and a quite high earnings growth rate of 10.7%, so on paper it looks attractive.
BetaShares Australia 200 ETF (ASX: A200)
We learned today that house prices in Melbourne and Sydney rebounded strongly in August, which could lead to a stabilising and recovery of the Australian economy if price rises continue.
The cheapest way to be invested in a broad portfolio of ASX shares which could benefit from this is with the BetaShares ASX 200 ETF, which has an annual cost of just 0.07%.
Of course, you get plenty of exposure to Australia’s biggest blue chips like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC) BHP Group Ltd (ASX: BHP) and CSL Limited (ASX: CSL).
It offers one of the highest dividend yields compared to other popular ETFs with a mostly-franked dividend yield of 4.4%.
I think each of these ETFs are priced quite nicely for how much growth and dividends they may be able to generate over the longer-term. Out of the two I’d rather invest in the Asian ETF due to how much potential growth the Asian region still has in the coming decades.
Where to invest $1,000 right now
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Tristan Harrison owns shares of VANGUARD FTSE ASIA EX JAPAN SHARES INDEX ETF. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. 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.
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