I believe that this could be a good time to consider investing in the exchange-traded fund (ETF) Vanguard Msci Index International Shares ETF (ASX: VGS).
There are plenty of ETFs on the ASX to choose from. However, I believe that the VGS ETF may be one of the leading picks for investors to choose from in the ETF space.
The ETF is about investing in a portfolio of global shares from a wide variety of major developed economies.
When people talk about the ‘global’ share market, they are sometimes talking about the benchmark that this Vanguard ETF seeks to follow.
I believe that by simply tracking the long-term return of the global share market, investors can see decent results. There are a few different reasons why I like the VGS ETF.
Low fees
One of the main reasons why this ETF is so popular is because it enables regular investors to track the returns of the global share market for a very low fee.
According to Vanguard, this ETF has an annual management fee of just 0.18% per annum. It’s not the cheapest ETF that Vanguard offers, but I think that this low cost is very compelling because it means investors get a vast majority of the net returns that the underlying shares deliver.
I think that the fees are also reasonable when looking at the diversification of the ETF.
Diversification
For me, the Vanguard Msci Index International Shares ETF could be one of the best options for diversification.
According to Vanguard, at the end of April 2022, the ETF had around 1,500 different positions. That’s a lot different businesses. I think this level of holdings is useful for reducing the risk for individual companies.
It’s not just a technology ETF, though IT does get the biggest allocation at 22.1% of the portfolio as at April 2022. There are many different sectors represented including healthcare, financials, consumer discretionary, industrials, consumer staples, communication services, energy, materials, utilities, and real estate.
Strong portfolio holdings
The biggest positions in an ETF’s portfolio can have the largest effect on the returns.
Many of the world’s strongest technology names are held by the VGS ETF. Within the top ten holdings are names like: Apple, Microsoft, Alphabet, Amazon, Tesla, Meta Platforms, and Nvidia. Berkshire Hathaway is also one of the biggest holdings.
I think that strong businesses can generate good investment returns over time.
As always, past performance is not a reliable indicator of future performance. However, with the quality names in this portfolio, it’s not too surprising that even after the recent declines, the VGS ETF has returned an average of 11.4% per annum in the five years to April 2022.
Why invest now with the VGS ETF?
I’ve talked about what investors get with this ETF. I think the current price is now much more attractive after a fall of more than 10% in 2022.
Investing is about picking a good long-term investment, but it’s also about buying assets at a good price in my opinion. The VGS ETF is now cheaper and I think being able to buy a large group of businesses at a cheaper price is attractive.
The post Why now could be a good time to invest in Vanguard Msci Index International Shares ETF appeared first on The Motley Fool Australia.
Should you invest $1,000 in Vanguard Msci Index International Shares ETF right now?
Before you consider Vanguard Msci Index International Shares ETF, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Vanguard Msci Index International Shares ETF wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of January 13th 2022
More reading
- 3 fantastic ETFs for ASX investors to buy next week
- Why I think it’s a good time to buy the Vanguard MSCI Index International Shares ETF (VGS)
- 3 top ETFs for ASX investors to buy now
- VGS: Were you better off buying the S&P 500 ETF?
- 3 fantastic ETFs for ASX investors to buy this week
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Meta Platforms, Inc., Microsoft, Nvidia, Tesla, and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Meta Platforms, Inc., Nvidia, and Vanguard MSCI Index International Shares ETF. 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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