The only Australian ETFs I own at the start of 2025

Every ETF adds something different to my portfolio…

A woman presenting company news to investors looks back at the camera and smiles.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Last weekend, I discussed the only Australian shares in my ASX stock portfolio as we embark on investing in 2025. Today, I'm going to expand on that by discussing the only ASX exchange-traded funds (ETFs) that I own at the start of this year.

As I went through last weekend, although ASX shares and ETFs were my first and, for a long time, only investments, my portfolio now contains more US shares and ETFs than ASX ones.

But even so, there are several ASX ETFs that I currently own now.

The index funds

First and foremost amongst these is the Vanguard Australian Shares Index ETF (ASX: VAS).

VAS is the quintessential ASX index fund. It represents an investment in the largest 300 Australian shares listed on the ASX. That's everything from BHP Group Ltd (ASX: BHP) and National Australia Bank Ltd (ASX: NAB) to Ampol Ltd (ASX: ALD) and Aussie Broadband Ltd (ASX: ABB).

I like VAS for its simple and cheap exposure to the Australian stock market. I'm happy to pay VAS' management fee of 0.08% per annum for this access. Given its decent long-term historical return of 9.15% per annum (as of 31 December) and the hefty dividends this ETF habitually pays out, I am happy to hold this position for the long term, just in case my individual share choices don't end up being market-beaters.

In addition to VAS, I also own the Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO). This ASX ETF complements the Vanguard Australian Shares ETF with its portfolio of around 180 smaller companies on the ASX. Instead of BHP and NAB, VSO's largest holdings are stocks like JB Hi-Fi Ltd (ASX: JBH) and Bendigo and Adelaide Bank Ltd (ASX: BEN).

I think this ETF nicely balances out VAS. Together, these two funds offer a more well-rounded exposure to the Australian markets than either one individually.

The other index fund in my portfolio is the BetaShares Nasdaq 100 Currency Hedged ETF (ASX: HNDQ).

This ETF covers the largest 100 non-financial shares listed on the tech-heavy NASDAQ-100 (INDEXNASDAQ: NDX) Index. It's a great way to easily add exposure to American tech giants like Apple, Amazon, Tesla and NVIDIA, as well as other tech heavyweights like Airbnb, Netflix, PayPal and Texas Instruments.

Other ASX ETFs

There are another two ASX ETFs in my portfolio that are worth mentioning. Neither are the broad-based market index funds that we see above.

Firstly, there's the iShares Global Consumer Staples ETF (ASX: IXI). I love consumer staples shares for their defensive nature and ability to ring in profits during all kinds of economic weather. The ASX doesn't have too many global consumer staples companies, so this ETF is a great way to get exposure to the likes of Walmart, Costco, Unilever, Procter & Gamble, Colgate-Palmolive and Coca-Cola.

I like the defensiveness and stability that this ETF adds to my portfolio.

Secondly, there's the VanEck Morningstar Wide Moat ETF (ASX: MOAT). This is a peculiar ETF in that it holds an actively managed portfolio of US shares selected based on business characteristics. In this case, those characteristics are the perceived possession of a wide economic moat.

This Warren Buffett term refers to a company's inbuilt competitive advantage over its competition. Buffett himself has said he likes to look for it in a new investment.

MOAT has been an exceptional performer in my portfolio for a number of years. Since this ETF's inception in 2015, it has managed an average performance of 16.16% per annum (as of 31 December). As long as this ASX ETF is bringing home those kinds of returns, it has a place in my investing house.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Amazon, Apple, Betashares Nasdaq 100 ETF - Currency Hedged, Coca-Cola, Costco Wholesale, National Australia Bank, Procter & Gamble, Tesla, Unilever, VanEck Morningstar Wide Moat ETF, Vanguard Australian Shares Index ETF, Vanguard Msci Australian Small Companies Index ETF, and iShares International Equity ETFs - iShares Global Consumer Staples ETF. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Airbnb, Amazon, Apple, Aussie Broadband, Colgate-Palmolive, Costco Wholesale, Netflix, Nvidia, PayPal, Tesla, Texas Instruments, and Walmart. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Unilever and has recommended the following options: long January 2027 $42.50 calls on PayPal and short March 2025 $85 calls on PayPal. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank and iShares International Equity ETFs - iShares Global Consumer Staples ETF. The Motley Fool Australia has recommended Airbnb, Amazon, Apple, Aussie Broadband, BHP Group, Betashares Nasdaq 100 ETF - Currency Hedged, Jb Hi-Fi, Netflix, Nvidia, PayPal, and VanEck Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ETFs

Two smiling work colleagues discuss an investment or business plan at their office.
ETFs

2 ASX ETFs I'm thinking about buying next

Now is a great time to consider investing in these two funds, in my view.

Read more »

Five young people sit in a row having fun and interacting with their mobile phones.
ETFs

5 of the best ASX ETFs to buy in February

Check out these funds that could be great picks for Aussie investors this month.

Read more »

Middle age caucasian man smiling confident drinking coffee at home.
ETFs

Buy these ASX ETFs for passive income this month

Here are some top options for income investors to choose from right now.

Read more »

ETF spelt out with a rising green arrow.
ETFs

3 top ASX ETFs to buy and hold for 10 years

Let's see why these funds could be worth holding onto for the long term.

Read more »

ETF in written in different colours with different colour arrows pointing to it.
ETFs

3 top ASX ETFs I'd buy for instant diversification

I believe these funds can offer Aussie investors a lot.

Read more »

A young woman drinking coffee in a cafe smiles as she checks her phone.
ETFs

Worried about Magnificent Seven concentration risk? These ASX ETFs offer varied exposure

The Magnificent Seven makes up about a third of the S&P 500's total market capitalisation.

Read more »

The letters ETF with a man pointing at it.
ETFs

4 excellent ASX ETFs to buy with $4,000 for 2025

Here are a few options for Aussie investors to choose from on the Australian share market.

Read more »

ETF in blue with person's hand in the direction of green and red bars on graph.
ETFs

This will be my next ASX ETF buy

This fund is exactly what my portfolio needed.

Read more »