In my view, ETFs (exchange traded funds) are one of the most innovative and useful inventions to have come out of the financial services industry in the last 50 years.
The ability to track the average market return for (usually) dirt cheap prices gives the ‘everyday’ investor the opportunity to share in the prosperity of the share market without having to pick your stocks or even pay a financial advisor.
ETFs are also useful for diversification purposes – you can gain access to entire asset classes, countries or even groups of countries with just 1 share on the stock market.
So here are some ETFs I would consider throwing $50,000 in next week.
iShares Global Consumer Staples ETF (ASX: IXI)
This ETF tracks a global list of companies that make consumer staples – goods that we can’t really live without. These include everything from food, drinks and personal grooming products to laundry powder, dishwashing liquid and washcloths.
We’re always going to need the companies in this ETF, regardless of what the economy is doing – making it a great investment in my view. Some of IXI’s top holdings include Nestle, Proctor & Gamble, Coca-Cola, Costco and Philip Morris International.
iShares Asia 50 ETF (ASX: IAA)
This ETF simply follows the largest 50 companies in Asia (not including Japan). I think Asia is going to be a crucible of global growth over the coming decades and owning a slice of the 50 largest Asian companies is a fantastically easy way to get in on the action.
This ETF owns companies across China, Taiwan, Korea, Hong Kong and Singapore. Some of its holdings include Tencent, Samsung, Bank of China and the Taiwan Semiconductor Manufacturing Company.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
Everyone loves getting passive dividend income from ASX shares, and with this ETF you can get easy access to a whole basket. VHY only selects ASX shares that consistently pay out high dividends, holding around 60 at the current time.
Some big names you’ll probably know include the big four banks, BHP Group Ltd (ASX: BHP), Wesfarmers Ltd (ASX: WES) and Telstra Corporation Ltd (ASX: TLS). True to its name, VHY offers a juicy grossed-up dividend yield of 7.3%
I think these 3 ASX ETFs are some of the best that the market has to offer. I would definitely consider deploying $50,000 amongst them next week as I believe you can buy and hold them for time immemorial – the best kind of investment.
5 stocks under $5
We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
Motley Fool contributor Sebastian Bowen owns shares of Ishares Asia 50 Etf and Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of iShares Global Consumer Staples ETF and Wesfarmers Limited. 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.
- The WiseTech share price is up 15% in a week. Too late to buy? – July 7, 2020 5:03pm
- Why I sold this ASX ETF last week – July 7, 2020 2:56pm
- Afterpay’s founders are selling shares. Should you? – July 7, 2020 2:11pm