I think Vanguard All-World ex-U.S. Shares Index ETF (ASX: VEU) is a good way to invest globally into the international share market.
What is Vanguard?
Vanguard is a funds management business that is owned by its own investors. It was founded in 1975 and now has (or had) around AU$9.7 billion. It has 192 funds in the US, and 232 funds in markets outside the US. It’s a world leader in providing low cost ETFs.
Why choose Vanguard All-World ex-U.S. Shares Index ETF?
There plenty of different ETF options on the ASX to invest into the global share market. There are some ETFs that allow you to invest into American shares, UK shares, Asian shares, different sectors and so on. There are a few quality, cheap options to invest into ASX shares. American-focused ETFs are some of the biggest ETFs on the ASX.
But what if you want a catch-all option to invest most of the global share market that isn’t focused on the ASX or the US? I think Vanguard All-World ex-U.S. Shares Index ETF could be the answer
What it’s invested in
It’s largely invested in share markets in Europe and Asia. The 10 share markets it’s invested in most is Japan, China, the UK, Switzerland, France, Germany, Canada, Australia, Taiwan and South Korea.
The Vanguard All-World ex-U.S. Shares Index ETF holds over 3,400 holdings. Its top 10 holdings include Alibaba, Nestle, Tencent, Taiwan Semiconductor Manufacturing and Roche, Samsung, Novartis, Toyota, AstraZeneca and Royal Dutch Shell. That’s an interesting and diversified group, many of them are well suited to keep performing during COVID-19.
The management fee
Vanguard All-World ex-U.S. Shares Index ETF has one of the cheapest management fees for Australian investors. The annual management cost is just 0.09% per annum. Considering all of the countries it’s invested across, I reckon that’s a very cheap fee. Low fees are great. High fees can act like termites on your retirement nest egg. Smaller fees means less financial termites.
The statistics
Vanguard is helpful in providing a number of statistics for its ETFs. Having good quantitative factors alone won’t make good returns, but it certainly helps.
The Vanguard All-World ex-U.S. Shares Index ETF has a return on equity (ROE) of 13.1% with a dividend yield of 3.5%. That’s a pretty attractive combination when you consider how the world may get back to somewhat normal in a year from now.
Final thoughts
With this ETF you can decide how much non-US global shares you want in your portfolio. It’s extremely diversified with many of the world’s best companies outside of western technology names.
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