Investing in international shares is something Australian investors don’t do enough of, in my opinion.
I mean, think about it. ASX shares only make up something like 2% of all the available equity in the world. So, if you just stick to the S&P/ASX 200 Index (ASX: XJO), you’re excluding yourself from over 98% of the potential opportunities out there.
There’s nothing wrong with ASX shares, but how many of them have a truly global presence in the way overseas shares like Apple, Alphabet or Mastercard do?
So with this in mind, here are the three best shares that can, in my view, help you easily gain access to the wider world of investing available beyond our shores.
BetaShares FTSE 100 ETF (ASX: F100)
The FTSE 100 index is the United Kingdom’s equivalent to our own ASX 200 however, as the name suggests, it consists of the UK’s top 100 companies by market capitalisation. The BetaShares FTSE 100 ETF tracks the performance of this index, providing investors with exposure to the 100 largest companies traded on the London Stock Exchange. Queen Elizabeth II may still be our head of state, but the UK is a world away. Therefore, I think investing in the largest British companies through this ETF is a great way to invest overseas and diversify an ASX share-focused portfolio.
F100’s top holdings include HSBC Bank, GlaxoSmithKline, British American Tobacco, BP, Royal Dutch Shell and even our own Rio Tinto Limited (ASX: RIO), which is dual-listed on the London Stock Exchange.
Vanguard MSCI Index International Shares ETF (ASX: VGS)
If you want a simple, one-stop-shop solution to achieving global diversification in your ASX share portfolio, you needn’t look beyond this monster of an ETF. VGS holds more than 1,500 companies across the advanced economies of the world, including Japan, the UK, Switzerland, Canada and, of course, the United States. The biggest US companies like Microsoft and Amazon.com dominate this ETF, but you are also getting some other names like Toyota, LVMH, Nestle and Royal Bank of Canada.
For cheap, easy diversification across a portfolio of quality global companies, this ETF is definitely worthy of consideration.
MFF Capital Investments Ltd (ASX: MFF)
MFF is a slightly different investment to consider today if you want to invest overseas. It’s not an ETF, but rather a listed investment company (LIC). This means it is run by a fund manager rather than a computer algorithm. This fund’s manager is Chris Mackay. Mr Mackay is a co-founder of Magellan Financial Group Ltd (ASX: MFG) and an extremely well-regarded Aussie investor with considerable global experience.
MFF focuses mostly on US shares and has perennial performers like Visa and Mastercard as top holdings in its portfolio. Recently, MFF has stocked up on its cash position and is currently sitting with more than 45% of its assets in cash.
I like that MFF is making a bet against the crowd right now. I also think this LIC represents a great way of getting some contrarian investing strategies from the international stage into one’s ASX portfolio.
For some more ASX shares you might want to check out today, take a look at the report below!
3 “Double Down” Stocks To Ride The Bull Market
Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.
He’s so confident in their future prospects that he has issued “double down” buy alerts on each of these three stocks to members of his Motley Fool Extreme Opportunities stock picking service.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Magellan Flagship Fund Ltd, Mastercard, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Mastercard, and Visa. The Motley Fool Australia has recommended Alphabet (A shares), Mastercard, and Vanguard MSCI Index International Shares ETF. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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