If you’re wanting to add some diversification to your portfolio, then you might want to look at exchange traded funds (ETFs). The reason for this is that ETFs give investors easy access to a large and diverse number of different shares through just a single investment.
With that in mind, listed below are two ETFs which are popular with investors. 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 a diversified portfolio of 48 fairly priced US companies with sustainable competitive advantages or moats.
Historically, companies with moats have generated strong returns for investors. It is for this reason that Warren Buffett is such a big fan of investing in companies with this characteristic. And given the returns he has generated over the long term, it is hard to argue against this.
Among the ETF’s holdings are the likes of Alphabet (Google’s parent), Amazon, American Express, Boeing, Coca-Cola, Microsoft, Pfizer, Salesforce, and Yum! Brands.
Over the last five years, the fund has outperformed the ASX 200 index by some distance. During this time, it has generated an average total return of 19.4% per annum.
Vanguard MSCI Index International Shares ETF (ASX: VGS)
Another ETF to look at is the Vanguard MSCI Index International Shares ETF. This ETF provides investors with exposure to 1,505 of the world’s largest listed companies from major developed countries.
The fund manager notes that this ETF gives investors low-cost access to a broadly diversified range of securities that allows them to participate in the long-term growth potential of international economies outside Australia.
Among the many companies investors will be buying a slice of are giants such as Apple, Johnson & Johnson, JP Morgan, Nestle, Nvidia, Procter & Gamble, and Visa.
Over the last five years, the Vanguard MSCI Index International Shares ETF has generated a total return of almost 15.3% per annum.