There are a few investments I believe are more likely to help build long-term wealth than many other options. The exchange-traded fund (ETF) Vanguard MSCI Index International Shares ETF (ASX: VGS) ticks a lot of boxes that I'm looking for.
There are plenty of other Vanguard ETF contenders, such as the Vanguard Australian Shares Index ETF (ASX: VAS) and the Vanguard Diversified High Growth Index ETF (ASX: VDHG).
But there are a few reasons why I'd rate the VGS ETF as the best option, particularly the first reason.
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Globally diversified share portfolio
The purpose of this fund is to invest in major companies listed in 'developed' countries.
I like the fact that this portfolio is 100% (global) shares – the long-term returns are not diluted by being invested in bonds, and I think that global blue chips have a better collective earnings growth outlook than ASX blue chips.
The VGS ETF portfolio is invested in shares from the US, Japan, the UK, Canada, France, Switzerland, Germany, the Netherlands, Spain, Sweden, Italy, Hong Kong, Singapore, Denmark, Finland, Belgium, Israel, Norway, Ireland, and more.
I'm a fan of how this fund's biggest industry exposure is IT, which is typically where the strongest long-term earnings growth is occurring this decade.
At the end of March 2026, IT had the largest allocation (26.1%), with financials (15.9%), industrials (11.9%), healthcare (9.7%), consumer discretionary (9.3%), and communication services (8.6%) as the other sectors with notable allocations.
In my view, the VGS ETF is an excellent option as an all-in-one investment.
High-quality businesses
There are numerous global leaders in the VGS ETF portfolio, though I wouldn't choose to invest in the fund for specific stock exposure.
Instead, I think it's important to recognise that the fund's financial characteristics are so appealing.
For example, at the end of March 2026, the Vanguard ETF reported a return on equity (ROE) of 19.6% and an earnings growth rate of 21.3%.
In my eyes, earnings growth is what supports long-term share price growth. The ROE tells us roughly what earnings return a business may be able to achieve on additional retained earnings, so the ROE is an important characteristic.
To me, it's not a surprise that the VGS ETF has returned an average of 13.26% per year over the last decade.
Low management fees
One of the best reasons to invest in Vanguard ETFs is because of their incredibly low management fees, allowing most of the returns to stay in the hands of investors, rather than being lost to management fees or performance fees.
The VGS ETF has an annual management fee of 0.18%, which I'd describe as low considering how much global diversification it provides.
How quickly this Vanguard ETF can grow into $1 million
I'm not sure what the next 10 years of returns will be, but if it's an average of 13.26% per year, then the outlook is very promising with the VGS ETF.
Investing $1,250 per month would become $1 million in less than 19 years if it returned 13.26% per year.
