US shares have outperformed in recent years, and Aussie investors, who have traditionally been very loyal to local equities, have benefited from this via ASX exchange-traded funds (ETFs).
Gaining exposure to the US market via ASX ETFs proved to be a smart strategy last year.
The US S&P 500 Index (SP: .INX) rose by 23.31% in 2024, while the S&P/ASX 200 Index (ASX: XJO) lifted 7.49%. And the weaker local currency then enhanced those returns even further!
Vanguard Global Chief Economist Joe Davis says the outperformance of US shares over other global equities has been surprisingly persistent. But he reckons the gap will close eventually.
Maybe it already has given the ASX 200 is tracking ahead of the S&P 500 in the year to date.
At the time of writing, the ASX 200 is up 3.67%, while the S&P 500 is up 3.14%.
Interesting…
Anyway, most analysts are expecting another good year for US shares, so here are three ASX ETFs that allow Aussie investors an easy way to gain exposure to this powerhouse market.
3 ASX ETFs offering exposure to US shares
iShares Core S&P 500 AUD ETF (ASX: IVV)
The IVV ETF tracks the US benchmark S&P 500 Index, run by S&P Global.
As the name suggests, the index is made up of the 500 largest listed US companies by market capitalisation.
Aussie investors love this ASX ETF. In fact, it was the single most popular equity traded by Australian investors using the Stake online trading platform in 2024.
Investing in 500 businesses provides good company diversification. However, the Magnificent Seven stocks now make up more than 30% of the index, so there's some concentration risk.
Sector representation includes 32% tech shares, 14% financials, 11% consumer discretionary, and 10% healthcare. The biggest holdings are Apple 7.6%, Nvidia 6.6%, and Microsoft 6.3%.
Since its inception in 2000, this ASX ETF's total returns have averaged 7.38% per annum.
Its management expense ratio (MER) is 0.04%.
Global X Fang+ ETF (ASX: FANG)
The Global X Fang+ ETF tracks the NYSE FANG+ Index, run by ICE Data Indices.
This ASX ETF only invests in 10 companies, all of which are in the US. Six are Magnificent Seven stocks, and the others are Crowdstrike, Netflix, Broadcom, and ServiceNow Inc.
Its sector representation is 60% technology, 30% communication services, and 10% consumer discretionary. The biggest holdings are Crowdstrike 12%, Meta Platforms 12%, and Netflix 11%.
Since its inception in 2020, the Fang+ ETF's total returns have averaged 30.5% per annum.
The Fang+ ETF topped the list of best international ASX ETFs for total returns in 2024, largely because of its Mag 7 concentration.
The MER is 0.35%.
Vanguard MSCI Index International Shares ETF (ASX: VGS)
The Vanguard MSCI Index International Shares ETF tracks the MSCI World ex-Australia (with net dividends reinvested) AUD Index, run by MSCI.
The VGS ETF focuses on large companies with global earnings bases. It holds 1,352 stocks, and almost three-quarters of them are US shares. There are also equities from Japan 5.5%, the UK 3.5%, Canada 3.1%, France 2.6%, and Switzerland 2.2%.
Sector representation includes 27% technology, 16% financials, 11% consumer discretionary, and 11% industrials. The biggest holdings are Apple 6%, Nvidia 5%, and Microsoft 4%.
Since this ASX ETF's inception in 2014, the total returns have averaged 13.74% per annum.
Its MER is 0.18%.
