The ASX-listed exchange-traded fund (ETF) iShares Global 100 ETF (ASX: IOO) could be one of the top funds for getting exposure to excellent global companies.
There are plenty of ways for Aussies to invest in the global share market, such as Vanguard Msci Index International Shares ETF (ASX: VGS), iShares S&P 500 ETF (ASX: IVV) and VanEck MSCI International Quality ETF (ASX: QUAL).
Many of the options available to Aussies own many hundreds (or even thousands) of holdings.
But what if you don't want to own all of the smaller companies? What if investors just want exposure to the largest and strongest businesses in the world, regardless of which country they come from?
The iShares Global 100 ETF, AKA the IOO ETF, could be the answer.
What the IOO ETF is invested in?
As the name may suggest, it's invested in 100 of the largest international companies in developed and emerging markets. The index this fund tracks is focused on 100 multi-national, blue-chip companies "of major importance" in global equity markets.
Unsurprisingly, just over 81% of the portfolio is invested in the US, while other countries with a weighting of more than 1% include the UK, Switzerland, France, Germany, Japan, the Netherlands and China.
Pleasingly, IT makes up more than 43% of the portfolio weighting.
It owns many of the huge, recognisable businesses, including Apple, Nvidia, Microsoft, Alphabet and Amazon. The IOO ETF also owns companies like Colgate-Palmolive, L'Oreal, Nike, LVMH, Caterpillar and Samsung.
I'm not going to list every business within the ASX ETF, but I've named a few different stocks to show that there are a variety of names from different sectors in there.
Management fee
Having low, reasonable management fees is important to ensure that most of the returns stay in the hands of investors rather than being sent to the fund manager.
While the iShares Global 100 ETF doesn't have the cheapest fee around, it's still reasonable in my opinion.
The IOO ETF has an annual fee of 0.40%.
Why I like this ASX ETF so much
Past performance is not a reliable indicator of future performance, but the IOO ETF has done very well for investors.
Over the past 10 years, it has delivered an average return per annum of 14.6%.
I think this fund will be able to outperform the S&P/ASX 200 Index (ASX: XJO) over the long term because of the strength of these leading businesses.
This collective group within the ASX ETF is among the best in the world at what they do in their respective areas, such as smartphones, software, online video, healthcare, and so on. Their leading position can enable them to make the best profits in seconds and reinvest in their businesses at high rates of return.
Leading businesses typically have a habit of continuing their growth and consolidating power. I'd say it would take an incredible competitor to have a chance of dislodging the IOO ETF's companies from their leading market positions.
I think the IOO ETF can be a very pleasing performer over the next decade, though there may be some volatility along the way.
