Do you want to add an exchange traded fund (ETF) or two to your portfolio in 2023?
Well, depending on what your investment objective is, the two ETFs listed below could be worth considering. Here's what you need to know:
VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)
If you're looking for an ETF to buy and hold then the VanEck Vectors Morningstar Wide Moat ETF could be the one.
This popular ETF has been a strong performer over the last decade thanks to its focus on fairly priced US companies with sustainable competitive advantages or moats. These are qualities that Warren Buffett famously looks for when making investment. And given his success over multiple decades, it is hard to argue against the strategy.
VanEck Vectors Morningstar Wide Moat ETF regularly changes its constituents because it removes stocks when they become overvalued. But generally, there will be approximately 50 shares in the fund at any given time. At present, this includes Adobe, Alphabet, Amazon, Boeing, Microsoft, Salesforce, and Walt Disney.
Over the last decade, the index that it tracks has outperformed the market with an average annual return of 19.2%. This would have turned a $10,000 investment into almost $60,000 today.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
If income is your aim then you might want to consider the Vanguard Australian Shares High Yield ETF.
This ETF provides investors with low-cost exposure to ASX-listed companies that have higher forecast dividends relative to other ASX-listed companies.
The good news is that the ETF has been made with diversification front of mind so you don't end up with a portfolio filled with coal and iron ore miners.
Vanguard restricts the proportion invested in any one industry to 40% and 10% for any one company. Furthermore, Australian Real Estate Investment Trusts (A-REITS) are excluded from the index, so there's limited exposure to the property market.
Among the ~70 shares included in the portfolio you'll find giants including BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), Telstra Corporation Ltd (ASX: TLS), and Wesfarmers Ltd (ASX: WES).
Finally, as you would expect, the dividend yield on offer is notably better than average. At present, the Vanguard Australian Shares High Yield ETF trades with an estimated forward dividend yield of 5.5%.
