When I look at where long-term wealth is likely to be created over the next decade, I keep coming back to one simple idea: owning the world’s best businesses, across many countries, at low cost, and holding them patiently.
That’s why I think the Vanguard MSCI Index International Shares ETF (ASX: VGS) is a particularly strong buy in 2026.
Rather than trying to guess which single country or sector will outperform, this exchange-traded fund (ETF) gives exposure to global growth engines that Australia simply doesn’t have in meaningful size.
This Vanguard ETF offers a genuinely global portfolio
The VGS ETF holds around 1,300 stocks across developed markets, excluding Australia. That means meaningful exposure to the US, Europe, Japan, the UK, Canada, and parts of Asia.
This matters because the Australian share market is heavily concentrated in banks and resources. This ETF fills the gaps by giving investors access to sectors like global technology, healthcare, industrial automation, and consumer brands that operate at enormous scale.
A look at its holdings
While the largest holdings include familiar US names like Apple and Microsoft, the depth of the portfolio is where the Vanguard MSCI Index International Shares ETF really shines. Many of its most interesting exposures sit outside the US.
One of the most strategically important companies inside the ETF is ASML Holding.
It is a Dutch company with a near-monopoly on extreme ultraviolet lithography machines, which are essential for producing the world’s most advanced semiconductors. These machines are so complex and specialised that no competitor has been able to replicate them at scale.
Every cutting-edge chip used in AI, high-performance computing, and advanced electronics relies on ASML’s technology. That gives it extraordinary pricing power, long-term visibility, and a competitive moat that is almost unmatched globally.
Another standout holding is Nestlé, the Swiss consumer giant.
Nestlé owns a vast portfolio of food, beverage, and nutrition brands that are embedded in daily life across the globe. Its strength isn’t just brand recognition, but distribution, scale, and pricing power across both developed and emerging markets.
What I like about Nestlé as part of the VGS ETF is how it balances growth and defensiveness. It may not deliver explosive returns in any single year, but it compounds steadily through economic cycles, which is exactly what you want inside a core ETF.
Why the VGS ETF works so well as a core holding
What makes this Vanguard ETF particularly attractive to me is that it doesn’t rely on any single theme working perfectly. It owns thousands of companies across regions, sectors, and economic conditions.
It also does this at very low cost, which quietly but powerfully boosts long-term returns. Over decades, minimising fees and staying invested often matters far more than trying to time markets or rotate between trends.
For investors building wealth in 2026 and beyond, VGS offers global diversification, exposure to world-class businesses, and a structure that rewards patience.
Foolish takeaway
I see Vanguard MSCI Index International Shares ETF as a cornerstone investment. It gives access to companies like ASML and Nestlé, alongside hundreds of other global leaders, in a single, low-cost ETF.
For anyone looking to grow wealth over the long term without overcomplicating things, I think this Vanguard ETF is a very strong buy in 2026.
The post Why I think this Vanguard ETF is a strong buy in 2026 appeared first on The Motley Fool Australia.
Should you invest $1,000 in Vanguard MSCI Index International Shares ETF right now?
Before you buy Vanguard MSCI Index International Shares 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 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 may be better buys…
* Returns as of 1 Jan 2026
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More reading
- How ETFs can help investors build significant passive income
- How I would aim to build a $500,000 ASX retirement portfolio
- 3 Vanguard ETFs I think deserve a spot in most portfolios
- How could I turn $500 a month into $50,000 with ASX shares?
- Passive income: How much do you need to invest to make $500 per month?
Motley Fool contributor Grace Alvino 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 ASML, Apple, and Microsoft. The Motley Fool Australia has recommended ASML, Apple, Microsoft, 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.