I believe it could be the perfect time to buy the Vanguard MSCI Index International Shares ETF (ASX: VGS).
About Vanguard MSCI Index International Shares ETF
Firstly, let me tell you about Vanguard if you don’t already know. It’s one of the world’s biggest providers of exchange-traded funds (ETFs). It’s special because it’s not trying to make heaps of money from its investors. Instead, the owners of Vanguard are the investors. Vanguard shares the profit with investors in the form of lower fees.
This particular ETF invests in the entire global share market. It’s invested in almost every major share market such as the US, Japan, the UK, Switzerland, France, Canada, Germany, the Netherlands, Hong Kong, Sweden and so on.
Vanguard MSCI Index International Shares ETF also has attractive diversification in the sense of the different industries it’s invested in. The biggest allocation is 20% to IT, followed by 14.7% to health care, 12.7% to financials, 10.9% to consumer discretionary, 10% to industrials, 9% to communication services and 8.7% to consumer staples.
In terms of actual holdings it’s invested in almost 1,600 businesses. But its top holdings are: Apple, Microsoft, Amazon, Alphabet, Facebook, Johnson & Johnson, Nestle, Visa, JPMorgan Chase and Proctor & Gamble.
Why I think it’s a good time to buy
This could be one of the easiest investments to hold for the long-term in any environment because of the Vanguard ETF’s diversification. It also has a very low management fee. It’s not the cheapest out there, but 0.18% per annum is great for the global nature of it.
I think it’s a good time to buy for two reasons. Number one is that Vanguard MSCI Index International Shares ETF is still 11% lower than its pre-coronavirus high. Bearing in mind that interest rates are now incredibly low, that’s not bad at all if you’re a long-term investors. Granted, there could be more declines later this year. Particularly with the US election coming up.
Second, the Australian dollar has significantly recovered. The Aussie dollar now buys US$0.66. During the worst part of the crash it was under US$0.60. This gives us more buying power to buy international shares compared to nearly all of April and May.
Where to invest $1,000 right now
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*Returns as of February 15th 2021
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares 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.