Exchange-traded funds (ETFs) could be the way to go for most regular investors.
ETFs allow us to buy large groups of shares with just one purchase, which helps lessen broker costs.
Many of the best ETF offerings also have very low operating costs which leaves higher returns for investors compared to most typical managed funds.
With the above in mind, these are two ETFs that could be ones to consider:
BetaShares NASDAQ 100 ETF (ASX: NDQ)
This is an ETF that helps Aussies invest in some of the best technology businesses in the world. It invests in 100 of the largest businesses on the NASDAQ with Microsoft, Amazon, Apple, Alphabet and Facebook all having a large presence in the top holdings.
The US tech blue chips offer a very different growth profile compared to many ASX blue chips, as well as having global earnings. This level of diversification is better than being focused on just one or two countries like the ASX banks in my opinion.
There are many new services that could be introduced over the next few years which could boost that FAANG shares even further. For example, Apple is growing Apple TV and has a Apple credit card, Alphabet isn’t too far away with automated driving service Waymo, Facebook may launch its own cryptocurrency and Amazon keeps expanding services in its existing markets.
With an annual management fee of only 0.48%, this ETF could be one to watch over the next decade, although there is some pressure on the FAANGs to be broken up.
Vanguard Australian Share ETF (ASX: VAS)
The best way to invest across the entire Australian share market could be with this Vanguard ETF. Vanguard is famed for its low operating costs that keep getting lower and lower. The Vanguard Australian Share ETF has a very low annual management fee cost of 0.14% per annum.
The ETF provides a large amount of exposure to Australia’s blue chips like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), Westpac Banking Corp (ASX: WBC), CSL Limited (ASX: CSL) and Telstra Corporation Ltd (ASX: TLS). It’s up to you to decide if that’s a good thing or a bad thing.
One of the best things about this ETF is the higher level of dividend income it provides compared to most other ETFs. According to Vanguard, this ETF has a partially franked (to a high percentage) dividend yield of 4.2%.
Both of these ETFs have attractive attributes, but I think I much prefer the idea of the NASDAQ ETF over the next decade because of the global and technology skews it can give Aussie investors.
These top ASX shares could also be excellent long-term picks due to the growth and income they could give investors.
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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS and Telstra Limited. 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 Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019