Vanguard is an American company founded by the late famous investor Jack Bogle. It runs on a mutual ownership structure, which means any profits get ploughed back into reducing fees further. It’s also built a name for itself by first pioneering the index fund and then making them so cheap some are almost free.
Thus, I think Vanguard ETFs are at the top of the ETF industry and are well worth considering for your portfolio. Here are 3 of my favourites for your perusal.
Vanguard Australian Shares Index ETF (ASX: VAS)
Getting a broad slice of the Aussie market means lots of diversification (albeit with a heavy weighting to the banks) and a healthy, partially franked distribution yield of around 4%. VAS charges a very reasonable fee of 0.1%
Vanguard US Total Market Shares Index ETF (ASX: VTS)
This ETF tracks all 3,555 companies in the entire US stock market – as opposed to the more popular S&P 500 index. I see this as a positive, considering the American economy has been at the forefront of global growth and disruption since the dawn of the 20th century.
Its largest companies – Apple, Microsoft and Amazon – remain the purveyors of many of the most popular products and services on the planet. Warren Buffett always says to never bet against America, and who am I to argue with the Oracle of Omaha?
This ETF also has the distinction of charging the lowest fee of any ASX ETF (to my knowledge) at 0.03%.
Vanguard FTSE Emerging Markets Shares ETF (ASX: VGE)
This ETF covers companies based in ‘emerging markets’ such as China, Taiwan, India and Brazil. I think a substantial chunk of global growth is going to be driven by these kinds of countries for the rest of this century, and so I think getting yourself a slice might be a good idea.
Some holdings in this ETF might sound familiar – Tencent, Alibaba and Britania Industries are the top 3, but VGE holds over 5,000 stocks in total. This ETF’s management fee is slightly higher than the others at 0.48%, but this should fall over time as the ETF grows in size.
I think these 3 Vanguard ETFs would be a perfect bolt-on to any portfolio out there. All are highly diversified, and all offer distribution yields of various sizes. But most importantly, all charge very low fees, ensuring more profits in your pocket at the end of the day.
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Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. 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.