3 reasons why this ASX ETF could be an incredible buy-and-hold forever idea

The ASX-listed exchange-traded fund (ETF) Vanguard MSCI Index International Shares ETF (ASX: VGS) could be one of the best investments an Australian can buy for the ultra-long-term.

There are plenty of investments that an Australian could choose, but this offering from Vanguard has so many useful characteristics that it could be one of the very best ASX ETFs.

When I say it could be good for the long term, I’m thinking decades ahead. Let’s look at what makes it so compelling.

Global diversification

The ASX ETF’s investment strategy is to invest in a global portfolio of businesses from across numerous economically developed countries.

Some of the other most popular funds on the ASX are just focused on Australian shares or US shares. The global share market is an excellent place to invest, giving access to the biggest names from various countries, such as the US, Japan, the UK, Canada, France, Switzerland, and Germany.

By investing in such a widespread way, the fund helps lower risks while giving exposure to a lot of great businesses.

At the end of April 2026, the VGS ETF had 1,275 holdings. As time goes on, the holdings will change, allowing it to benefit from the rise of the latest winners. For example, the ASX ETF’s portfolio has benefited from the huge rise in the share price.

Impressive businesses

No returns are guaranteed, but I think the VGS ETF has a number of financial metrics that can help spur returns for investors.

For example, its portfolio’s earnings growth rate was reported in April 2026 as 21.3%. Growing profit is a key factor in supporting share prices, so it’s pleasing to see that level of progress. Over the long term, earnings growth may be the most important driver of success.

The return on equity (ROE) is a helpful measure showing how much money these businesses make on retained shareholder money, and it may also imply what sort of return additional retained profit could make. The ROE was 19.7% as of April 2026.

The biggest positions in the portfolio include names like Nvidia, Alphabet, Apple, Microsoft, Amazon, and Meta Platforms.

Low fees

One of the biggest contributors to how well an ASX ETF performs is the scale of its fees. The lower the fees, the better, because that’s leaving more of the money in the hands of the investor and more for compounding.

The VGS ETF has an annual management fee of 0.18%, which I’d describe as one of the lowest on the ASX for a globally-diversified portfolio.

All of the above helped the fund deliver an annual net return per year of around 13.5% per year, which I’d describe as a wonderful rate of compounding and can help wealth-building. Past performance is not a guarantee of future returns of course, but I think it can continue performing very well.

The post 3 reasons why this ASX ETF could be an incredible buy-and-hold forever idea appeared first on The Motley Fool Australia.

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• Can you get rich by investing $5,000 a year into ASX shares?
• 3 top ASX ETFs for Gen Z investors to buy
• How to become a millionaire on a $70,000 salary

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, Amazon, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Meta Platforms, Microsoft, 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.