Exchange traded funds (ETFs) are a fantastic investment option for beginner investors, or for those who want ASX exposure and long-term growth without the short-term stress.
When it comes to the best options to buy and hold over the long-term. I think the Vanguard Australian Shares Index ETF (ASX: VAS) and the iShares S&P 500 ETF (ASX: IVV) are a no-brainer.
Here are three reasons why.
1. Instant diversification
As Australia’s largest ETF, VAS gives its investors exposure to the top 300 companies listed on the ASX, which means it offers incredible instant diversification across a broad range of Australian shares.
Meanwhile, IVV gives investors exposure to the largest stocks in the US. The ETF tracks the S&P 500 Index (INDEXSP: INX) which is based on the 500 largest US stocks by market capitalisation.
By combining these two ETFs together into a long-term portfolio, investors are able to spread their portfolio risk across a huge range of companies on two different indexes and therefore two different economic cycles and are subject to different aspects of risk.
2. They offer a balance of income and growth
Not all ASX ETFs offer both income and growth. But VAS is well-known for its access to long-term capital growth and potential for regular income through distributions. This includes any associated franking credits. As of 2026, the ETF has delivered 1-year total returns of roughly 9.34% and 3-year returns of 9.77%.
And IVV also pays out decent distributions via its dividends and also has a strong focus on long-term capital growth. Past performance isn’t a guarantee on future performance, but the S&P 500 Index has performed strongly in 2025, particularly in the latter half of the year, and it looks like that growth has continued through to 2026. In the past 10 years to 31st of December, the IVV ETF has returned an average of 15.56% per year.
3. They’re low cost
Both the ASX ETF’s have very low management fees. That means that more returns are paid into investors’ pockets rather than eroded down by excess fees.
VAS product fees are around 0.07% per annum for investment management costs. The EFT doesn’t charge indirect costs or net transaction fees. When it comes to platform fees, investors can expect a $9 brokerage fee when selling ETFs via a Vanguard Personal Investor Account but there is no fee for purchases.
IVV said it aims to provide investors with the performance of the S&P 500 Index, before fees and expenses. The ETF’s management fee is 0.04% plus any brokerage fees for buying and selling.
The post VAS and IVV: 3 reasons these two ASX ETFs belong in a long-term portfolio appeared first on The Motley Fool Australia.
Should you invest $1,000 in iShares S&P 500 ETF right now?
Before you buy iShares S&P 500 ETF shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and iShares S&P 500 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 may be better buys…
* Returns as of 1 Jan 2026
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More reading
- 5 ASX ETFs to buy for passive income
- 3 Australian ETFS to buy and hold forever
- Why these ASX ETFs could be perfect to buy and hold forever
- If I had $5,000 to invest on the ASX today, this is how I’d split it
- 3 excellent Vanguard ETFs I would buy with $3,000
Motley Fool contributor Samantha Menzies 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 iShares S&P 500 ETF. The Motley Fool Australia has recommended iShares S&P 500 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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