Why I think the VGS ETF is a strong buy and hold pick

The Vanguard MSCI Index International Shares ETF (ASX: VGS) is one of the ASX exchange-traded funds (ETFs) I would be comfortable owning for a very long time.

It gives investors access to a huge collection of global businesses through one investment, while keeping the strategy simple.

For me, that makes the VGS ETF a strong buy and hold option.

Global exposure in one investment

The VGS ETF invests across major developed markets outside Australia.

That gives investors exposure to the US as well as countries across Europe and Asia, spreading the investment across a much larger part of the global economy.

I think that is particularly valuable for Australian investors.

The ASX has some excellent companies, but many major global industries are better represented overseas. Software, semiconductors, global consumer brands, healthcare, industrial technology, and digital services are all areas where international markets offer far more choice.

The VGS ETF opens the door to those opportunities without requiring investors to research companies across dozens of countries.

It does not depend on one winner

Another reason I like the VGS ETF is that the long-term result does not rest on getting a handful of stock picks right.

The fund owns a large collection of companies, and their importance within the portfolio can change as markets evolve.

Some of today’s biggest businesses may continue growing for decades. Others could eventually lose ground to companies that are much smaller today.

With the VGS ETF, investors do not need to know in advance which ones will come out on top.

I think that is a strong feature when your investment holding period could stretch across 10, 20, or even 30 years.

It can complement Australian shares

I would also consider the VGS ETF alongside Australian investments rather than viewing it as a replacement for them.

Many ASX portfolios naturally end up with significant exposure to banks, resources, and domestic businesses.

Adding the VGS ETF can introduce companies operating in industries and markets that are less prominent locally.

It also means the portfolio is not relying entirely on the Australian economy.

For investors who already pick individual ASX shares, I think this can be an easy way to add international diversification without building a separate overseas portfolio one company at a time.

Foolish takeaway

The VGS ETF gives me access to opportunities around the world without requiring constant decisions.

I could buy it today, add more money over time, and let the underlying portfolio change as global markets develop.

For investors looking for a simple international investment they can potentially hold for decades, I think the VGS ETF is a strong choice.

The post Why I think the VGS ETF is a strong buy and hold pick appeared first on The Motley Fool Australia.

More reading

• Are these 2 top Vanguard ETFs still worth buying today?
• How to build an ASX portfolio you do not need to check every day
• 3 ASX ETFs to buy for simple investing
• VGS vs VHY: Which Vanguard ETF comes out on top?
• Why every Aussie investor should own one of these ASX ETFs

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.