2 ETFs I’d buy and hold for the next 20 years

One of the biggest advantages of exchange-traded funds (ETFs) is how simple they can make long-term investing.

Instead of trying to pick individual winners, investors can gain access to hundreds of stocks through a single fund. Over long timeframes, that diversification can make it much easier to stay invested through market cycles.

For investors thinking about the next couple of decades rather than the next couple of months, I think broad ETFs could be a very effective foundation for a portfolio.

Here are two ASX ETFs I believe could be worth buying and holding for the next 20 years.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

One ETF I would want in a long-term portfolio is the Vanguard MSCI Index International Shares ETF.

This fund provides exposure to a large portfolio of companies across major developed markets, including the United States, Europe, and parts of Asia.

That means investors gain access to many of the world’s largest and most influential businesses, such as Microsoft, Apple, and Nvidia.

What I like about this ETF is that it gives investors exposure to global economic growth rather than relying solely on the Australian market. Over the long run, global diversification can help smooth out the impact of regional market cycles.

For investors building wealth over decades, I think having exposure to the world’s biggest companies through a fund like VGS makes a lot of sense.

Vanguard Australian Shares Index ETF (ASX: VAS)

While global diversification is important, I also think there’s value in maintaining exposure to the Australian share market.

The Vanguard Australian Shares Index ETF tracks the performance of the S&P/ASX 300 Index (ASX: XKO) and holds a broad portfolio of Australian companies across many industries.

This includes major banks like Commonwealth Bank of Australia (ASX: CBA), resource companies like BHP Group Ltd (ASX: BHP), healthcare businesses like CSL Ltd (ASX: CSL), and consumer companies like Harvey Norman Holdings Ltd (ASX: HVN) that collectively represent a large portion of the Australian economy.

One reason Australian equities are popular with income-focused investors is their dividend culture. Many companies listed on the ASX pay relatively attractive dividends, often accompanied by franking credits.

For long-term investors, this combination of income and exposure to the domestic economy can complement international investments nicely.

Foolish Takeaway

Investing for the next 20 years doesn’t require complicated strategies. Sometimes the simplest approach is to build a diversified portfolio and let it grow over time.

By combining global exposure through the Vanguard MSCI Index International Shares ETF with Australian market exposure through the Vanguard Australian Shares Index ETF, investors can gain access to hundreds of companies across multiple industries.

The post 2 ETFs I’d buy and hold for the next 20 years appeared first on The Motley Fool Australia.

More reading

• What I’d buy if the ASX share market crashes
• 4 reasons not to panic-sell ASX shares during March
• The easy way to build a diversified ASX share portfolio
• 3 ASX shares perfect for beginners
• 5 simple ASX ETFs to build a long-term portfolio around

Motley Fool contributor Grace Alvino has positions in CSL, Commonwealth Bank Of Australia, and Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, CSL, Microsoft, and Nvidia and is short shares of Apple. The Motley Fool Australia has positions in and has recommended Harvey Norman. The Motley Fool Australia has recommended Apple, BHP Group, CSL, 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.