Vanguard is perhaps the world’s best exchange-traded fund (ETF) provider, but it offers plenty of ETF options – one which should you invest in?
Vanguard is a very attractive ETF provider to consider because it’s run for the benefit of its investors, who are also the owners of the business. It tries to lower costs as much as possible, leaving more returns in the hands of investors and boosting net returns.
That’s why its ETFs are the cheapest, or close to the cheapest, options on the ASX.
For example, the Vanguard Australian Share ETF (ASX: VAS) tracks the ASX 300 and comes with an annual management fee of only 0.10%. If you want a little exposure to some of the smaller ASX businesses then this ETF could be the best choice, whereas ASX 200 ETFs don’t provide quite the same level of diversification.
The Vanguard US Total Market Shares Index ETF (ASX: VTS) tracks a broad group of US-based shares for an annual management fee of only 0.03%. It provides more diversification than iShares S&P 500 ETF (ASX: IVV) and is slightly cheaper.
The Vanguard Australian Fixed Interest Index ETF (ASX: VAF) could be a good way to access the Australian bond market for an annual fee of only 0.20%.
The Vanguard Australian Property Securities Index ETF (ASX: VAP) gives a diversified way to invest in ASX real estate investment trusts (REITs) for an annual fee of only 0.23%.
The Vanguard MSCI Index International Shares ETF (ASX: VGS) could be the best to invest in the global share market by tracking the MSCI World ex-Australia index for a relatively low cost of 0.18% per annum, every major global business that’s listed somewhere is probably in this ETF’s holdings.
The Vanguard FTSE Asia ex Japan Shares Index ETF (ASX: VAE) provides exposure to most of the Asian share market outside of Japan for an annual management fee of 0.40%.
Each of these ETFs gives exposure to areas that you may not have enough diversification with in a portfolio. For my own portfolio, I’d be most likely to invest more into the Vanguard FTSE Asia ex Japan Shares Index ETF because Asia seems like the best value with the potential for the most long-term growth, but I wouldn’t mind owning the Vanguard MSCI Index International Shares ETF.
Bonds don’t interest me, I’m not a fan of most property investments and I’d rather pick my own ASX shares.