It'd be understandable if investors are feeling a bit cautious about US shares right now. There are multiple aspects that could be weighing down the bull case for the US stock market, which is why I'd think about adding other ASX-listed exchange-traded fund (ETFs) to provide that international exposure.
The US share market recently hit a record high. I expect share prices to rise over time because of growing earnings, but a steadily rising price-earnings (P/E) ratio can be a valuation risk.
Additionally, the US tariff situation continues to be unpredictable and could lead to further volatility or even a market decline if it's not positively resolved, as we saw in April.
So, for concerned investors, the following two ASX ETFs could be appealing opportunities.
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Vanguard FTSE Europe Shares ETF (ASX: VEQ)
For investors still wanting significant diversification, this could be a good option to consider. It provides exposure to companies listed in major European markets.
Numerous countries are represented, including the UK, France, Germany, Switzerland, the Netherlands, Sweden, Italy, Spain, Denmark, Belgium, Finland, Norway, Poland, Austria, Ireland, and Portugal.
The portfolio has a large number of holdings, with over 1,200 businesses.
Investors may recognise some of the largest positions in the portfolio, including SAP, ASML, Nestle, Roche, Novartis, Novo Nordisk, AstraZeneca, HSBC, Shell, and Siemens.
There are four different sectors with a double-digit weighting, including financials (22.4%), industrials (19.1%), healthcare (13.2%), and consumer discretionary (10.1%).
This ASX ETF has actually performed quite strongly in recent history. In the past three years, it has delivered an average return per year of 16.5%, and in the last five years, it was 13.6% per year. That demonstrates European stocks can perform well.
Betashares FTSE 100 ETF (ASX: F100)
For Aussies wanting more targeted exposure to the UK share market, the F100 ETF could be a great choice.
This fund is about giving investors exposure to the 100 largest businesses listed in London. That means exposure to names like HSBC, Shell, AstraZeneca, Unilever, Rolls Royce, Relx, British American Tobacco, BP, BAE Systems, and GSK.
While these are listed in London, I would call many of them global companies and among the world leaders in what they do.
This ASX ETF has four sectors in its portfolio with a double-digit weighting: financials (23.7%), consumer staples (18.2%), industrials (16.3%), and healthcare (10.9%).
The performance of the UK share market has also been solid. It has delivered an average return per annum of almost 15% in the last three years and 13.8% per year in the past five years.
I think this is a solid ASX ETF worthy of investor consideration.
