3 ASX ETFs to weather market turmoil

ASX ETFs can be a simple way to navigate market volatility.

When markets turn turbulent, many investors panic. But history shows downturns often create some of the best long-term opportunities.

Instead of trying to time the market or pick individual winners, exchange-traded funds (ETFs) offer a straightforward way to stay invested while spreading risk.

For Australian investors, a few well-chosen ASX ETFs can help ride out the bumps and position a portfolio for recovery.

Vanguard Australian Shares Index ETF (ASX: VAS)

First up is this popular Vanguard ASX ETF. It tracks the S&P/ASX 300 Index (ASX: XKO), giving investors exposure to around 300 of Australia’s largest companies in a single trade.

That diversification is powerful during market selloffs. Rather than relying on a handful of stocks, investors gain exposure across sectors like banking, mining, healthcare, and consumer goods. Major holdings include companies like BHP Group Ltd (ASX: BHP) and CSL Ltd (ASX: CSL).

Low fees are another advantage. Over time, keeping costs down can significantly boost returns. And when markets recover, a broad ASX ETF like VAS lets investors fully participate in the rebound.

VanEck Morningstar Wide Moat ETF (ASX: MOAT).

If volatility raises concerns about quality, this ASX ETF focuses on companies with strong competitive advantages. The strategy is built around the idea of economic moats, a concept made famous by Warren Buffett.

MOAT invests in US-listed companies that have durable advantages and attractive valuations. The portfolio often includes global leaders such as Microsoft Corp. (NASDAQ: MSFT) and Visa Inc. (NYSE: V).

These businesses tend to have strong balance sheets, dominant positions, and resilient earnings. During market downturns, companies like these often hold up better and recover faster.

SPDR S&P/ASX 200 High Dividend ETF (ASX: SYI).

Finally, investors seeking income might consider this ASX ETF. Market volatility can be unsettling, but dividends can help smooth returns. This fund focuses on higher-yielding Australian companies that return cash to shareholders.

The ETF typically includes banks, resource companies, and other mature businesses with strong cash flow. Holdings often feature names like Westpac Banking Corp (ASX: WBC) and Telstra Group Ltd (ASX: TLS).

While share prices may swing, dividend income can continue flowing. That gives investors the option to reinvest at lower prices or use the income as a buffer.

Foolish Takeaway

The bottom line is that market volatility doesn’t have to be a threat. For long-term investors, it can be an opportunity.

By combining broad market exposure like VAS, quality-focused strategies like MOAT, and income-generating ETFs like SYI, investors can build a portfolio designed not just to withstand volatility but potentially benefit from it.

The post 3 ASX ETFs to weather market turmoil appeared first on The Motley Fool Australia.

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• Shift your focus to passive income with these dividend ASX ETFs

Motley Fool contributor Marc Van Dinther has positions in BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Microsoft, and Visa. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended BHP Group, CSL, Microsoft, VanEck Morningstar Wide Moat ETF, and Visa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.