The Motley Fool

3 ETFs I would add to my ASX portfolio in this bear market

Like with most ASX shares, bear markets are a great time to pick up units in exchange-traded funds (ETFs) in my opinion.

Because ETFs only seek to mirror indexes rather than protect capital (unlike managed funds and listed investment companies), they can often fall viciously in market crashes.

But that means you can also pick up ETFs for rock-bottom prices when no one else wants them.

Thus, if you’re a passive investor who loves the benefits ETFs can bring, I think today is a great day to make some additional investments.

So, here are three ETFs that I think are good candidates for such an investment.

VanEck Vectors Wide Moat ETF (ASX: MOAT)

MOAT is one of my favourite ASX ETFs. It invests in a basket of US shares that are selected for their ‘long-term competitive advantages’ or moats (hence the name). The most recent filing tells us that this basket currently includes names like, Nike, Kellogg and Microsoft – names most of us would be familiar with.

Using this strategy, MOAT has returned an average of 16.19% every year for the past five years. Therefore, I think this ETF is well worth considering for an investment today.

Vanguard FTSE Emerging Markets Shares ETF (ASX: VGE)

This ETF from Vanguard invests in shares from countries that are considered ‘emerging economies’ such as China, Taiwan, India, Brazil and South Africa. These economies have different growth vectors in play than countries like Australia, Europe and the USA – and so could provide a lot of balance in one’s ASX portfolio.

Some of the companies that appear in VGE (such as Alibaba, Tencent and Naspers) might not be household names in Australia – but they are in other parts of the world. This ETF is an easy way to get some of these exotic holdings to balance out an ASX-heavy portfolio and is another contender for a top ETF addition today, in my view.

iShares S&P 500 (AUD Hedged) ETF (ASX: IHVV)

Finally, we have this iShares S&P 500 ETF, but with a twist. Not only does this ETF follow the largest 500 companies over in the US, but it also takes the variability from currency fluctuations out of the equation. This might be important to investors that are worried we might be at the bottom of the current USD-AUD currency cycle and don’t want to be exposed to a rising Aussie dollar in the future.

Quite simply, this ETF holds some of the best companies in the world – such as Apple, Alphabet, Berkshire Hathaway and Facebook. It’s one of the most popular indexes in the world and is even recommended by the great Warren Buffett – who calls it a ‘slice of America’.

NEW. The Motley Fool AU Releases Five Cheap and Good Stocks to Buy for 2020 and beyond!….

Our experts here at The Motley Fool Australia have just released a fantastic report, detailing 5 dirt cheap shares that you can buy in 2020.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading over 40% off it's high, all while offering a fully franked dividend yield over 3%...

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click here or the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.


Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Nike, Kellogg, Facebook, and VanEck Vectors Morningstar Wide Moat ETF. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Facebook, and Nike. The Motley Fool Australia has recommended Alphabet (A shares), Facebook, Nike, and VanEck Vectors Morningstar Wide Moat ETF. 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.