If you’re looking to add some international diversity to your portfolio, then using exchange traded funds (ETFs) is a quick way to do this.

But which ETFs should you buy? There certainly is a lot of choice when it comes to ETFs. To narrow things down, I’ve picked out three that I think would be great additions to most portfolios. 

Here’s why I think they are worth considering:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

This first option to consider buying is the BetaShares NASDAQ 100 ETF. This ETF is an easy way for investors to gain exposure to the famous NASDAQ 100 index. This index is filled to the brim with household names from a wide range of industries. These include the likes of Amazon, Costco, Facebook, Starbucks, and video conferencing company, Zoom. I believe the majority of the companies on the index have very bright outlooks. As such, I wouldn’t be surprised to see the Nasdaq 100 continue to outperform the ASX 200 over the next decade.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

Another option that gives investors exposure to international shares is the Vanguard MSCI Index International Shares ETF. In fact, this ETF gives investors to some of the biggest companies in the world. The fund is invested in a total of 1,579 listed companies across major developed countries. Its holdings include the likes of Apple, Nestle, Proctor & Gamble, and Google parent, Alphabet

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

A final option for investors to consider buying is the Vanguard FTSE Asia ex Japan Shares Index ETF. It give investors exposure to some of the biggest and best companies in the Asia market (excluding Japan). In total the ETF is invested in over 1,250 shares across the continent. These include the likes of Tencent, Alibaba, and Samsung. Given how quickly the Asian economy is expected to grow in the future, I believe these companies are well-positioned for growth. This could lead to the ETF outperforming the ASX 200 in the future.

More reading

• 3 ASX shares for a beginner’s portfolio
• Are Macquarie Group shares worth investing part of $3,000 into this June?
• ETFs I’d pick to build a passive portfolio
• 3 top ETFs you can easily diversify your portfolio with immediately
• Where to invest $10,000 into ASX shares immediately

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. 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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Dividend shares could become increasingly popular among income-seeking investors in coming years. Low-interest rates may see shares offer the most attractive return profile among mainstream income-producing assets.

Therefore, buying a selection of cheap shares now which offer dividends could be a sound move. Although the recent market crash may or may not be over yet, the prospect of a long-term market rally may mean that shares offer strong capital returns in the coming years, helping you to retire early.

Low-interest rates

The uncertain outlook for the world economy could mean interest rates experience a prolonged period at low levels. This may help to support the economy while it faces an unprecedented crisis. But it also leaves income-seeking investors with a lack of choice in generating a return from their capital.

For example, mainstream income-producing assets such as cash and bonds may become relatively unpopular. They may fail to offer an inflation-beating return over the next few years. This could increase the demand for dividends with many companies now presenting relatively high yields following the market crash.

Certainly, there is scope for dividends to be cut across many sectors where sales and profitability are under pressure. But a number of companies and industries have reported solid financial performances of late. As such, their shares may experience increasing demand from investors. This is especially true if they are able to increase dividends at an above-inflation pace.

This could lead to a rise in share price to complement attractive income returns over the long run. It could also boost your portfolio returns.

Share market recovery

The share market’s long-term prospects appear to be relatively bright despite a sustained recovery seeming unlikely at the present time. This is due to the potential risk of a second coronavirus wave later in the year and geopolitical challenges concerning the US and China.

However, share market recoveries seemed unlikely during the previous crisis. And while they can sometimes take years to materialise, long-term investors building a retirement nest egg are likely to have sufficient time to benefit from them. As such, equities appear to offer the most obvious means of generating an attractive total return over the long run.

Increasing popularity of dividend shares

Dividend shares could be relatively popular during a market recovery. This is not only for their income prospects but because a growing dividend suggests financial strength and confidence among a company’s management regarding growth potential. Investors may view a company with the financial strength to maintain its growing dividend in a more positive light, relative to its peers.

This may increase demand for its shares and lead to a higher share price, which boosts your chances of retiring early.

More reading

• 3 of the best ETFs to give ASX investors international exposure
• Can you get rich by investing $5,000 a year into ASX shares?
• Where I’d invest $2,500 in ASX shares today
• Top brokers name 3 ASX 200 shares to sell next week
• Top brokers name 3 ASX 200 shares to buy next week

Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. 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.

The post Why cheap dividend shares could help you retire early in this market rally appeared first on Motley Fool Australia.

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