Where to invest $5,000 in Vanguard ETFs in June

If I were putting $5,000 into Vanguard exchange-traded funds (ETFs) in June, I would be looking for long-term growth rather than a short-term trade.

The three ASX ETFs in this article give investors exposure to different parts of the share market. I think that can be useful because no one region, strategy, or market will always lead.

Here’s where I would consider investing.

Vanguard S&P 500 US Shares Index ETF (ASX: V500)

The first Vanguard ETF I would consider is the Vanguard S&P 500 US Shares Index ETF.

This fund gives investors exposure to the S&P 500, which includes 500 of the largest listed companies in the United States.

I like this ETF because the US market remains home to many of the world’s strongest companies. These businesses are often global leaders, with large customer bases, strong balance sheets, and the ability to keep investing in new products, technology, distribution, and acquisitions.

While technology has become a large part of this index, investors also gain exposure to healthcare, financial services, industrials, consumer brands, payments, communication services, and other major parts of the US economy.

The V500 ETF is unhedged, so currency movements can affect returns for Australian investors. But for investors seeking long-term capital growth, I think it is an appealing way to gain exposure to the US share market.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

The second Vanguard ETF I would consider is the Vanguard MSCI Index International Shares ETF.

The VGS ETF gives investors broad exposure to developed-market shares outside Australia. That includes the United States, but it also adds companies from markets such as Japan, the United Kingdom, Canada, France, Germany, Switzerland, and other major economies.

I like this ETF because it provides a wider global base than a pure S&P 500 fund.

There will be overlap with the V500 ETF, particularly through large US companies. But the VGS ETF adds more international depth, which can be useful for investors who want exposure to different economies, currencies, industries, and business cultures.

The fund can give access to areas that are harder to build through the ASX alone, including global healthcare leaders, luxury brands, industrial champions, semiconductor suppliers, software businesses, and consumer platforms.

It may not be exciting but it gives investors a simple way to own a large basket of global companies without needing to choose every market or stock individually.

For long-term investors, I think the VGS ETF remains one of the cleanest Vanguard options on the ASX.

Vanguard Diversified High Growth Index ETF (ASX: VDHG)

The third Vanguard ETF I would look at is the Vanguard Diversified High Growth Index ETF.

This is a very different option from the first two. The VDHG ETF is designed as an all-in-one diversified fund. It gives investors exposure to Australian shares, global shares, emerging markets, and some defensive assets in a single ETF.

I like it because it reduces the need to overthink the mix.

Some investors enjoy choosing between Australian shares, US shares, global shares, and emerging markets. Others may prefer a simpler option that does much of that asset allocation inside one fund.

The VDHG ETF is tilted strongly towards growth assets, so it can still move around when share markets fall. It is not a low-volatility fund. But for investors with a long time horizon, that growth focus can be useful.

I also think there is a behavioural benefit. A diversified ETF can make it easier to stay invested because the investor is not relying on one market, one country, or one theme to carry the whole return.

Foolish takeaway

I would keep a $5,000 investment in Vanguard ETFs simple.

The aim is not to find the perfect fund for the next few weeks. It is to put money into assets that can keep working over many years, across different markets and conditions.

That is why I like using simple, diversified ETFs for this type of investment. They can help investors avoid overthinking every short-term market move and focus on the bigger prize: staying invested long enough for compounding to make a meaningful difference.

The post Where to invest $5,000 in Vanguard ETFs in June appeared first on The Motley Fool Australia.

More reading

• 3 ASX ETFs to diversify away from a flat Aussie market
• 3 reasons why this ASX ETF could be an incredible buy-and-hold forever idea
• Top 10 ASX shares bought and sold by investors in May
• Why I’d buy these Vanguard ETFs with $3,000 in June
• Can you get rich by investing $5,000 a year into ASX shares?

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 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.