When it comes to building a long-term portfolio, I’m a big believer in keeping things simple. I’m not trying to own everything or chase the latest theme. I just want broad exposure, sensible diversification, and funds that I can hold through different market cycles without constantly second-guessing myself.
With that mindset, these are three Vanguard exchange-traded funds (ETFs) that I think make a lot of sense for most investors. Not as the only holdings in a portfolio, but as strong building blocks you can layer other ideas around.
Vanguard MSCI Index International Shares ETF (ASX: VGS)
If I had to pick one ETF to represent global growth outside Australia, this would be it.
The VGS ETF gives exposure to around 1,300 companies across developed markets, with heavy weightings to the US but meaningful representation across Europe and parts of Asia as well. What I like is how naturally it tilts toward the parts of the global economy that Australia simply doesn’t offer in size, particularly technology, healthcare, and global consumer brands.
This ETF doesn’t try to be clever. It just captures the long-term growth of some of the world’s most dominant businesses and lets compounding do the work. For investors who spend most of their time looking at ASX shares, the Vanguard MSCI Index International Shares ETF is an easy way to avoid being overly concentrated in one country or one economic cycle.
Vanguard Australian Shares Index ETF (ASX: VAS)
The Vanguard Australian Shares Index ETF is about home-ground exposure.
The Australian market has its quirks. It’s heavy in banks, resources, and dividend-paying businesses, but that can actually be a feature rather than a flaw. The VAS ETF provides broad exposure to the ASX’s largest shares, many of which generate strong cash flows and pay reliable dividends.
What makes the Vanguard Australian Shares Index ETF especially useful is how it complements international ETFs. Where global funds lean toward growth and innovation, this ETF brings income, franking credits, and exposure to sectors tied to population growth and infrastructure.
For investors who want simplicity, I think this fund could be the backbone of an Australian equity allocation without needing to pick individual shares.
Vanguard Global Value Equity Active ETF (ASX: VVLU)
This one adds a different flavour to a portfolio.
The Vanguard Global Value Equity Active ETF is actively managed, but in a very systematic way. It focuses on global stocks that look cheap relative to fundamentals like earnings, book value, and cash flow. That makes it a natural counterbalance to growth-heavy portfolios, especially after periods when expensive stocks have run hard.
I like the VVLU ETF because it gives exposure to global value without relying on discretionary stock picking. The rules-based approach keeps it disciplined, and the global remit means it’s not tied to the fortunes of any single region or sector.
In a world where market leadership can rotate quickly, having a value tilt alongside broad market exposure can help smooth returns over time.
Foolish Takeaway
I don’t think there’s such a thing as a perfect portfolio, but there are sensible foundations.
A combination of the VGS ETF for global growth, the VAS ETF for Australian exposure and income, and the VVLU ETF for valuation discipline covers a lot of ground with just three ETFs. From there, investors can add satellite positions, individual shares, or thematic funds depending on their goals.
The post 3 Vanguard ETFs I think deserve a spot in most portfolios appeared first on The Motley Fool Australia.
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More reading
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- Why this Vanguard ETF could be a wealth-generator
Motley Fool contributor Grace Alvino has positions in Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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.