A growing number of investors are turning to exchange traded funds (ETFs) to build long-term portfolios on the ASX.
Instead of trying to pick individual winners, ETFs allow investors to gain exposure to hundreds or even thousands of companies with a single investment.
For those looking to keep things simple while still building a diversified portfolio, the following funds could be worth considering.
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Vanguard Australian Shares Index ETF (ASX: VAS)
The first ASX ETF that could be a strong foundation for a long-term portfolio is the Vanguard Australian Shares Index ETF.
This fund tracks the performance of the S&P/ASX 300 Index and provides exposure to many of the largest and most established companies in Australia. That includes household names such as Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), and CSL Ltd (ASX: CSL).
Because of its broad exposure, this fund gives investors a simple way to participate in the overall growth of the Australian share market. It also tends to deliver attractive dividend income thanks to the high-yielding nature of many ASX companies.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
Another ASX ETF to consider building a portfolio around is the VanEck Morningstar Wide Moat ETF.
This fund focuses on companies with sustainable competitive advantages, often referred to as economic moats. These advantages can help businesses defend their market position and generate strong returns over long periods.
Current holdings include companies such as United Parcel Service (NYSE: UPS), Fortinet (NASDAQ: FTNT), and Bristol-Myers Squibb (NYSE: BMY).
By targeting high-quality businesses trading at attractive valuations, the VanEck Morningstar Wide Moat ETF follows a philosophy that closely resembles an investment approach popularised by Warren Buffett.
Vanguard MSCI Index International Shares ETF (ASX: VGS)
The Vanguard MSCI Index International Shares ETF could be another key piece of a long-term portfolio.
This ASX ETF provides exposure to more than 1,000 stocks across developed markets outside Australia. It includes global leaders such as Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and Nvidia (NASDAQ: NVDA).
Owning this fund allows investors to diversify beyond the relatively small Australian market and gain exposure to industries and companies that are not heavily represented on the ASX.
Over the long term, this kind of global diversification can help smooth returns and broaden growth opportunities.
iShares S&P 500 ETF (ASX: IVV)
The iShares S&P 500 ETF is another popular option for investors wanting exposure to the world's largest economy.
It tracks the performance of the S&P 500 Index, which contains 500 of the biggest stocks on Wall Street. Major holdings include Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOGL), and Meta Platforms (NASDAQ: META).
The US market has historically been a powerful driver of global investment returns, thanks to its concentration of innovative companies and world-leading technology businesses. With a single trade, this fund allows Australian investors to participate in that growth.
iShares Global Consumer Staples ETF (ASX: IXI)
A final ASX ETF to consider is the iShares Global Consumer Staples ETF.
This fund focuses on companies that produce everyday products people continue to buy regardless of economic conditions. Its portfolio includes businesses such as Procter & Gamble (NYSE: PG), Coca-Cola (NYSE: KO), and PepsiCo (NASDAQ: PEP).
Consumer staples companies often generate steady earnings and strong cash flows, which can help add stability to a long-term portfolio.
By combining defensive businesses with global diversification, the iShares Global Consumer Staples ETF can provide balance alongside more growth-focused holdings.
