3 top ASX ETFs for Gen Z investors to buy

A new Vanguard survey has highlighted how younger Australians are getting more involved in investing.

According to the survey, 45% of Gen Z and Millennials say they invest in shares, exchange-traded funds (ETFs), or other financial products.

I think that is encouraging. The earlier someone starts investing, the more time they give compounding to do its work.

But for new and prospective Gen Z investors, I think the goal should be simplicity, diversification, and long-term growth. There is no need to build a complicated portfolio from day one.

Three Vanguard ASX ETFs I think could be strong options are named in this article.

Vanguard Global Technology Index ETF (ASX: VTEK)

I think the Vanguard Global Technology Index ETF could suit Gen Z investors.

I like this fund because technology is not just a sector anymore. It is becoming part of almost everything.

Work, shopping, entertainment, advertising, healthcare, finance, education, logistics, and communication are all being reshaped by digital tools. Artificial intelligence (AI) is accelerating that shift, but it is not the only driver.

The VTEK ETF gives investors exposure to a portfolio of global technology companies. This can include businesses involved in software, semiconductors, cloud computing, devices, digital platforms, and other parts of the technology ecosystem.

Importantly, this fund allows investors to benefit from the broader technology theme without needing to guess which individual tech giant will perform best.

It will inevitably be volatile at times. Technology shares can fall hard when valuations reset or interest rates rise. But for investors with decades ahead of them, I think long-term exposure to global technology makes sense.

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

Another ASX ETF I like for Gen Z investors is the Vanguard FTSE Asia Ex-Japan Shares Index ETF.

Gen Z investors are likely to live through a world where Asia becomes even more important economically. Rising middle-class wealth, digital payments, e-commerce, manufacturing, technology platforms, and changing consumption patterns could all support long-term growth across the region.

The VAE ETF gives investors exposure to Asian share markets outside Japan. This can add a growth angle that is not easily found on the ASX.

It also helps avoid building a portfolio that is too dependent on Australia and the United States.

There are risks. Asian markets can be more volatile, and some countries have higher political, regulatory, and currency risks. This is not the ETF I would use as an entire portfolio. But as part of a diversified long-term approach, I think it could be useful.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

The popular Vanguard MSCI Index International Shares ETF is another I would recommend to Gen Z investors.

It provides investors access to a broad portfolio of developed-market shares outside Australia. That includes companies from the United States, Europe, Japan, Canada, and other major markets.

I like this because many Australian investors start with local shares and never properly diversify overseas.

That can leave a portfolio heavily exposed to banks, miners, supermarkets, telcos, and local property. Those can be good sectors, but they do not represent the full global economy.

The VGS ETF helps solve that problem in one trade. It gives investors exposure to over a thousand global companies across many industries. For a young investor, that kind of broad base can be valuable because it reduces the pressure to get every individual stock pick right.

Foolish takeaway

Gen Z investors have one huge advantage that older investors cannot buy back: time.

That does not mean they need to chase every trend or take unnecessary risks. In fact, I think the smarter approach is to build a portfolio that can keep working quietly in the background for years.

ETFs like these can help with that. They provide access to global businesses, long-term growth themes, and markets beyond Australia without requiring constant tinkering.

The post 3 top ASX ETFs for Gen Z investors to buy appeared first on The Motley Fool Australia.

More reading

• How to become a millionaire on a $70,000 salary
• An easy 2 ASX ETF portfolio to fund retirement 
• If I could buy only one ASX ETF for the next 10 years, this could be it
• VGS vs IVV: Which ASX ETF is better?
• 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 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.