Many Australian investors tend to have portfolios heavily weighted toward domestic shares. While the ASX offers access to some quality businesses, it represents just a tiny fraction of the global market. If your investments are only focused locally, you may be missing out on some of the world's biggest and fastest-growing companies.
That's where exchange-traded funds (ETFs) can be a game-changer.
With just a few simple trades on the ASX, investors can gain exposure to hundreds (or thousands) of global businesses across sectors, industries, and geographies.
If you're looking to broaden your horizons in 2025, here are some of the best ASX ETFs for international diversification to dig deeper into.
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Vanguard MSCI Index International Shares ETF (ASX: VGS)
For those wanting broad, simple, low-cost global exposure, it is hard to go past the Vanguard MSCI Index International Shares ETF. This ASX ETF holds over 1,000 large- and mid-cap stocks across developed markets, excluding Australia. That includes heavyweights like Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and Nestle (SWX: NESN).
With a low management fee and instant diversification across multiple countries and sectors, this popular fund could be an excellent core holding for global equity exposure.
iShares S&P 500 ETF (ASX: IVV)
If you want targeted exposure to the United States, the iShares S&P 500 ETF could be worth a look. It tracks the performance of the S&P 500 Index, which is home to the 500 largest publicly traded companies in the US.
This includes some of the world's most influential names, such as Alphabet (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), Walmart (NYSE: WMT), and Nvidia (NASDAQ: NVDA).
The S&P 500 has historically delivered strong long-term returns, which could make the iShares S&P 500 ETF a compelling option for investors seeking growth and stability from the world's largest economy.
VanEck Morningstar International Wide Moat ETF (ASX: GOAT)
Finally, for those seeking international diversification with a quality tilt, the VanEck Morningstar International Wide Moat ETF could be a top option. Unlike its sibling fund MOAT, which focuses on US companies, this one targets high-quality businesses across the globe that have wide economic moats.
This means the companies in the portfolio have sustainable competitive advantages – such as strong brand power, high switching costs, or efficient scale – that can help protect their profits over the long term.
Current holdings including Diageo, Roche, and Pernod Ricard. This ASX ETF could be a strong complement to an ASX-heavy portfolio.
