If you're aiming to diversify your portfolio, then you might want to look at exchange traded funds (ETFs). This is because ETFs provide investors with easy access to a large number of different shares through a single investment.
With that in mind, listed below are two ETFs that are highly rated. Here's what you need to know about them:
VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)
The first ETF to look at is the VanEck Vectors Morningstar Wide Moat ETF. This fund gives investors exposure to 49 US-based stocks which are judged to have sustainable competitive advantages or moats.
Moats are something that Warren Buffett recommends when looking for investment options. And with his track record, it is hard to argue against this.
Further supporting this idea is the returns that companies with moats have generated for investors. Over the last five years, this ETF has generated an average total return of 17.3% per annum. This compares to a 14.3% per annum return by the S&P 500 over the same period.
Among the companies included in the ETF are giants such as Amazon, Boeing, Coca-Cola, Facebook, Kelloggs, Microsoft, McDonalds, and Pfizer.
Vanguard MSCI Index International Shares ETF (ASX: VGS)
A second ETF to look at is the Vanguard MSCI Index International Shares ETF. This ETF is arguably as diversified as it possibly gets. This is because the Vanguard MSCI Index International Shares ETF currently gives investors exposure to 1,530 of the world's largest listed companies from major developed countries.
Vanguard notes that this allows investors to participate in the long-term growth potential of international economies outside Australia. Among its largest holdings are giants such as Apple, Johnson & Johnson, JP Morgan, Nestle, Procter & Gamble, Tesla, and Visa.
Over the last five years, the Vanguard MSCI Index International Shares ETF has provided a 13.2% per annum total return.
