Starting an investment portfolio can feel difficult. There are thousands of shares to choose from and plenty of market noise.
For beginners, ASX exchange traded funds (ETFs) can make things much easier.
They allow investors to own a collection of stocks through one investment, which means you do not have to identify the next great pick yourself.
So, which ASX ETFs could be top picks for someone starting out?
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iShares S&P 500 ETF (ASX: IVV)
The iShares S&P 500 ETF could be a great place to start for beginners.
It tracks the S&P 500 Index, giving investors a slice of the 500 largest companies listed in the United States.
Many of these companies have become global businesses. They sell phones, software, medicines, financial services, advertising, consumer products, and industrial equipment around the world.
This means an Australian investor can buy this fund and immediately own a slice of many businesses they probably interact with every day.
The S&P 500 also changes over time. Companies that grow can enter the index, while those that lose relevance can eventually leave.
That makes the iShares S&P 500 ETF a simple way to back corporate America over the long term without having to predict which individual companies will still be leading the market in 10 or 20 years.
Vanguard Australian Shares Index ETF (ASX: VAS)
For investors wanting to keep some money closer to home, the Vanguard Australian Shares Index ETF could be worth considering.
This fund tracks the S&P/ASX 300 Index (ASX: XKO) and therefore owns a large collection of Australian companies.
That includes banks like Westpac Banking Corp (ASX: WBC), miners like BHP Group Ltd (ASX: BHP), healthcare companies like CSL Ltd (ASX: CSL), retailers like Woolworths Group Ltd (ASX: WOW).
One benefit for beginners is familiarity. Many of the businesses inside the fund are companies Australians see, use, or hear about regularly.
The local market is also known for paying dividends, with many companies distributing a meaningful portion of their profits to shareholders.
As a result, the Vanguard Australian Shares Index ETF offers a straightforward way to participate in the performance and income generated by the Australian share market.
Vanguard MSCI Index International Shares ETF (ASX: VGS)
A final ASX ETF for beginners to look at is the Vanguard MSCI Index International Shares ETF.
This fund spreads investments across developed markets around the world.
I think this is valuable for Australians. Our share market represents only a small portion of the global investment universe. The Vanguard MSCI Index International Shares ETF opens the door to businesses and industries that are either underrepresented or largely absent from the ASX.
With more than 1,000 stocks inside the fund, beginners do not need to decide whether the next great opportunity will come from America, Europe, or somewhere else. They can own a piece of all of them.
