Exchange-traded funds (ETFs) can be an investor’s best friend. ASX ETFs provide instant diversification and can be used to invest in the broader market or a concentrated sector or geography.
Here are a few of my favourite ETFs on the market right now.
Vanguard Australian Shares Index ETF (ASX: VAS)
I’m a big fan of this ASX ETF for broad market exposure to the S&P/ASX 300 Index (ASX: XKO).
Some investors may be worried about home bias, where you overinvest in your local market. However, I think Aussie investors should have a large holding of Australian shares to reduce currency risk in their investments.
There’s also the boost that franking credits on Australian shares can provide, which is why I like this ASX ETF.
ETFS FANG+ ETF (ASX: FANG)
This ETF Securities fund provides exposure to some of the top tech stocks in the world. The fund comprises large holdings in US and other global tech stocks including the ‘FAANG’ group comprising Facebook Inc (NASDAQ: FB), Apple Inc (NASDAQ: AAPL), Amazon.com Inc (NASDAQ: AMZN), Netflix Inc (NASDAQ:NFLX) and Alphabet Inc (NASDAQ: GOOG).
The ETFS FANG+ ETF is up 44.2% since its inception in late February. This ASX ETF offers diversified exposure concentrated in the tech and telecom space with a management cost of 0.35% p.a.
ETFS Reliance India Nifty 50 ETF (ASX: NDIA)
This ETF Securities ETF provides a exposure to the Indian economy by attempting to track its Nifty50 benchmark index.
The ETFS Reliance India Nifty 50 ETF uses a full-replication strategy to track the index which means very similar holdings and weightings to the benchmark.
I think India’s economy is set to boom in the coming decades. It is forecast to be the world’s third largest by 2030, according to research by Standard Chartered. We could also see Australia diversify trade away from China towards India, which is good for business.
The coronavirus pandemic hit the Nifty50 hard, but now could be a good time to buy this ASX ETF on the cheap.
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More reading
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Motley Fool contributor Ken Hall owns shares of Vanguard Australian Shares Index. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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