If you’re considering getting exposure to the International shares sector, the Vanguard MSCI Index International Shares ETF (ASX: VGS) might be one ASX ETF to watch in January.
How the VGS ETF fits into an ASX portfolio
The Vanguard VGS ETF provides exposure to listed companies from developed markets around the world, excluding Australia. This ETF is not hedged so it is exposed to currency fluctuations.
The VGS ETF could be used to build out the core of a portfolio and to diversify away from Australian equities. It may also be suitable for investors wanting exposure to the US market, as the majority of the companies in the ETF are US-based.
VGS meets our minimum level for FUM
The Vanguard VGS ETF had $4726.93 million of money invested when we last pulled the monthly numbers. Given VGS’s total funds under management (FUM) figure is over $100 million, the ETF has met our minimum criteria for the total amount of money invested, otherwise known as FUM. We draw the line at $100 million for ETFs in the International shares sector because we believe that relative to smaller ETFs, achieving this amount of FUM de-risks the ETF.
What about management fees and costs?
Vanguard charges investors a yearly management fee of 0.18% for the VGS ETF. This means that if you invested $2,000 in VGS for a full year, you could expect to pay management fees of around $3.60.
For context, the average management fee (MER) of all ETFs covered by Best ETFs Australia on our complete list of ASX ETFs is 0.51% or around $10.20 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years.
Next steps
Before buying any ETF based on what you read here on Best ETFs, check out our Vanguard VGS report – it’s completely free! Then, search our complete list of ASX ETFs to do a proper side-by-side comparison of your chosen sector or thematic.
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