Why I’d put $2,500 into these top Vanguard ETFs

If I had $2,500 to invest in Vanguard exchange-traded funds (ETFs), I would look for exposure to parts of the global market that are harder to capture through ASX shares alone.

Australia has plenty of high-quality businesses. But some of the biggest long-term opportunities are tied to regions, industries, and companies that sit well beyond the local market.

With that in mind, there are two Vanguard ETFs I would consider buying.

Vanguard FTSE Asia Ex-Japan Shares Index ETF (ASX: VAE)

The first ETF I would buy is the Vanguard FTSE Asia Ex-Japan Shares Index ETF.

I like this fund because it gives investors a different type of global exposure. Many international ETFs are heavily weighted to the United States. That is not a bad thing, given the quality of many US companies. But I think investors can benefit from having exposure to Asia as well.

This part of the world is home to large populations, rising middle-class spending, major technology platforms, financial services groups, advanced manufacturing, and important semiconductor supply chains.

The VAE ETF gives investors access to companies across markets such as China, Taiwan, India, South Korea, Hong Kong, Singapore, and other parts of the region. That mix can add something quite different to a portfolio.

It is worth remembering that Asian markets can be affected by regulation, politics, currency movements, trade tensions, and shifts in global investor appetite. This could mean that some years could be frustrating. But I think the long-term case remains attractive.

Asia is likely to remain a major driver of global economic growth. Consumers in the region are spending more, companies are becoming more sophisticated, and several markets have industries that are difficult to replicate elsewhere.

For investors with patience, I think this Vanguard ETF offers a great way to own a broad slice of that opportunity without trying to pick individual winners.

Vanguard Global Technology Index ETF (ASX: VTEK)

The second ETF I would buy is the Vanguard Global Technology Index ETF.

Technology is one of the areas where I think global exposure is particularly useful.

The ASX has some strong technology names, but the deepest pool of global technology leaders sits overseas. This Vanguard ETF gives investors access to companies involved in semiconductors, software, cloud computing, digital platforms, artificial intelligence (AI), payments, hardware, and communications technology.

What I like about this fund is that it is not just about one hot trend. Technology keeps spreading into more parts of the economy, from the software banks use to manage security and payments to the digital platforms retailers need for online sales, logistics, and customer data. Healthcare, manufacturing, and consumer services are also becoming more dependent on chips, cloud infrastructure, automation, and connected devices.

That gives the sector several paths for long-term growth.

The VTEK ETF can also help investors avoid the pressure of choosing one technology winner. That is important because the industry changes quickly. Today’s leader may not always be tomorrow’s strongest performer.

By owning a basket of global technology companies, investors can gain exposure to the broader direction of the sector rather than relying on one stock to get everything right.

Foolish takeaway

If I were putting $2,500 into Vanguard ETFs, I would want more than broad exposure for the sake of it.

I would want funds that open the door to markets and industries where long-term growth could be substantial, but where picking individual winners can be hard. Asia and global technology both fit that description for me.

Both ETFs will have weak periods. But for investors willing to look beyond the ASX and think in decades, I think they could be excellent options to buy and hold.

The post Why I’d put $2,500 into these top Vanguard ETFs appeared first on The Motley Fool Australia.

More reading

• 3 ASX ETFs I’d buy if I wanted easy global investing
• Why I’d buy these Vanguard ETFs with $3,000 in June
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• 3 top ASX ETFs for Gen Z investors to buy
• Why I’d buy these ASX ETFs if I were a beginner

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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.