Forget Westpac shares, these ASX ETFs could be better buys

Here's why these funds could be quality picks for investors looking for alternatives to the banks.

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Key points

  • While Westpac has been a solid investment, its current high valuation might make exchange traded funds a smarter choice for those looking to invest on the ASX.
  • The iShares Global Consumer Staples ETF offers stability with investments in everyday essentials companies, providing a solid foundation for long-term growth.
  • For income-seeking investors, the Vanguard Australian Shares High Yield ETF presents an opportunity to reap high dividends from top ASX stocks.

Westpac Banking Corp (ASX: WBC) is a quality bank and its shares have been a great investment this year.

But given how its shares (and the rest of the big four) look expensive now, they may not be the best option for investors.

But if you aren't sure which ASX shares to buy instead of Australia's oldest bank, then you could turn to exchange traded funds (ETFs) instead.

But which ASX ETFs could be top buys? Here are three that could be worth considering:

iShares Global Consumer Staples ETF (ASX: IXI)

The first ASX ETF for investors to consider buying is the iShares Global Consumer Staples ETF. It provides the kind of stability that could make it a core building block of any long-term portfolio.

This fund invests in leading global stocks that produce everyday essentials. These are products people buy regardless of the economic climate. Its top holdings include Nestle (SWX: NESN), Procter & Gamble (NYSE: PG), and Coca-Cola (NYSE: KO). These businesses benefit from consistent demand, strong brand loyalty, and global reach.

It is for these reasons that consumer staples are often considered defensive stocks. They may not grow as fast as tech firms, but they compound steadily over time.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

Another ASX ETF for investors to consider buying instead of Westpac shares is the Vanguard MSCI Index International Shares ETF.

This popular fund provides investors with diversified exposure to more than 1,200 global stocks from across the US, Europe, and Asia. It includes many household names such as Nestle, Toyota (TYO: 7203), and Walmart (NYSE: WMT), giving investors a simple and cost-effective way to own a slice of the world's biggest businesses.

It also effortlessly allows investors to diversify their portfolio beyond the local share market and expose it to global economic growth.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

Finally, if income is your goal, then the Vanguard Australian Shares High Yield ETF could be worth a closer look.

This ASX ETF tracks a basket of ASX shares that have the highest forecast dividend yields based on broker expectations.

This gives investors exposure to some of Australia's best dividend payers, including Westpac. Its top holdings currently include BHP, Commonwealth Bank of Australia (ASX: CBA), and Telstra Group Ltd (ASX: TLS). These blue chips have long histories of delivering fully franked dividends, even during challenging market conditions.

This fund currently trades with a 4.2% dividend yield.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Nestlé. The Motley Fool Australia has positions in and has recommended Telstra Group and iShares International Equity ETFs - iShares Global Consumer Staples ETF. The Motley Fool Australia has recommended Vanguard Australian Shares High Yield ETF and Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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