I love buying ASX exchange-traded funds (ETFs) for my investment portfolio. Don't get me wrong, I also love buying individual stocks, which make up the lion's share of my investment strategy.
But I also think ETFs are a great way to supplement a portfolio of individual companies, given their instant diversification benefits, and wide coverage of a specific market or sector.
As such, if I had an extra $2,000 to invest today, I would probably deploy it into one of two of what I consider to be the smartest ETFs on the ASX.
2 smart ASX ETFs to put $2,000 into today
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
First up is a Warren Buffett-inspired fund in the VanEck Wide Moat ETF. This ETF is not your traditional passive investment. Instead of tracking a market-wide index, MOAT invests in a relatively concentrated portfolio of American shares, all of which are selected on their perceived possession of a wide economic moat.
A moat is the Warren Buffett-coined term for an intrinsic competitive advantage a company can possess. This could be a strong brand, low-cost advantage or network effect of its products.
We can see this in action by looking at some of MOAT's current holdings. These include Campbell Soup Co, Walt Disney, Adobe and Pfizer – all companies that arguably possess some form of moat.
This ETF's strategy has, in my view, been a particularly smart one to employ. Over the five years to 30 September, MOAT investors have enjoyed an annual average return of 14.76% per annum.
As such, I would happily invest $2,000 into MOAT units today.
iShares Global Consumer Staples ETF (ASX: IXI)
Another top ETF worthy of consideration is this fund from iShares. The iShares Global Consumer Staples ETF gives ASX investors an easy way to invest in the largest consumer staples shares in the world. Some of this fund's current top holdings include Nestle, Procter & Gamble, Costco, Coca-Cola and Philip Morris International.
This is a sector that the ASX is relatively light on, yet, in my view at least, provides investors with significant advantages.
Consumer staples shares tend to be good 'all-weather' performers, delivering returns in good economic times and bad. This stems from the essential nature of the products these companies manufacture and sell – food, drinks, and household essentials.
With all this in mind, I think this ETF is another smart choice to include in any ASX share portfolio and is worth a $2,000 investment.
