Commonwealth Bank of Australia (ASX: CBA) shares have been among the standout performers on the ASX 200 over the past 12 months, climbing to record highs before recently pulling back.
But with that outperformance has come a steep valuation — and growing concern that the good news is more than priced in.
In fact, several major brokers now have sell ratings on CBA shares, with price targets that sit well below current levels. Analysts argue that CBA is one of the most expensive bank stocks in the world relative to earnings, and its dividend yield — while solid — isn't enough to justify the premium for many investors.
So, where else could investors look?
If you're seeking diversification, quality, and potentially better value, here are three ASX ETFs that could be a smarter place to put your money right now. They are as follows:
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Vanguard Australian Shares Index ETF (ASX: VAS)
Rather than backing just one ASX stock, the Vanguard Australian Shares Index ETF gives you exposure to the entire ASX 300 Index — including the big banks, but also top names in healthcare, resources, consumer goods, and more.
This ASX ETF offers broad diversification, a solid dividend yield, and low fees, making it a core building block for many portfolios. It also allows you to participate in CBA's performance without being overly exposed to just one company — and reduces your risk by spreading your investment across hundreds of businesses.
iShares Global Consumer Staples ETF (ASX: IXI)
For investors looking beyond the Australian share market, the iShares Global Consumer Staples ETF offers exposure to a portfolio of global consumer staples giants — including household names like Nestle, Procter & Gamble, and The Coca-Cola Company.
These companies may not be the flashiest, but they tend to deliver consistent earnings, reliable dividends, and resilience during market downturns. In uncertain environments, consumer staples often shine. And with this ASX ETF, you get access to all these global defensive leaders through a simple click of the button.
Betashares Australian Quality ETF (ASX: AQLT)
Finally, a third alternative to CBA shares could be the Betashares Australian Quality ETF. This ASX ETF screens for high-quality Australian companies based on strong return on equity, low debt, and consistent earnings growth.
The result is a portfolio of durable, well-managed businesses that have demonstrated the ability to perform across different market cycles.
If you're looking for an ETF that prioritises quality over hype, this could be the one. It is also worth noting that among its 40 holdings are CBA shares at present. Though, its holding are not set in stone and will change periodically. Betashares recently tipped this fund as one to consider buying.
