Exchange-traded funds giant Vanguard has launched two new ETFs and a fund to give Australian investors access to the American market.
Like many ETFs, the new vehicles are designed as an easy way to access offshore markets and provide diversification, in this case across the world's largest share market.
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Invest in global leaders
The S&P 500 Index (SP: .INX) is one of the main benchmarks in the US market and, similar to the All Ordinaries Index in Australia, provides exposure to the top 500 companies listed in the US.
This, by its very nature, means it provides exposure to the major technology companies, with Nvidia currently the largest company by value in the S&P 500, followed by Apple, Microsoft, Amazon, Alphabet, and Meta Platforms.
Asia-Pacific head of investment management for Vanguard Capital Markets, Duncan Burns, said the new ETFs were an efficient way to gain exposure to the US market.
These new Australian‑based S&P 500 funds offer investors a straightforward, low-cost entry point to the world's largest economy. An S&P 500 allocation can also serve as a tactical satellite position within a broadly diversified portfolio, offering targeted exposure to the U.S. stock market.
The new products include the Vanguard S&P 500 US Shares Index ETF (ASX: V500), an unhedged ETF, and the Vanguard S&P 500 US Shares Index (Hedged) ETF (ASX: V5AH), which is currency hedged to reduce the impact of foreign exchange movements.
New fund also available
There is also a new unlisted fund, the Vanguard S&P 500 US Shares Index Fund, which investors can access through the Vanguard platform.
Mr Burns said investors' risk appetites would determine which fund was best for them.
By offering both hedged and unhedged options, as well as ETF and unlisted fund structures, we're giving investors greater choice in how they access that exposure in a way that suits their goals and preferences.
V500 and V5AH have management fees of 0.07% per annum and 0.09% per annum, respectively, while the unlisted managed fund has a management fee of 0.16% per annum.
The ETFs are available to be traded from today.
Vanguard said it is currently Australia's largest ETF manager with more than $90 billion in ETF funds under management at the end of January.
Other popular choices from Vanguard include Vanguard Australia Shares ETF (ASX: VAS) and Vanguard MSCI Index International Shares ETF (ASX: VGS), which provides diversification across about 1500 international companies from more than 20 countries.
