Exchange-traded funds (ETFs) could be the best way for investors to become wealthy via simple investing.
Most ETFs allow investors to get exposure to a wide array of shares through a single investment, which can provide significant savings on brokerage costs.
Some of the most popular ETFs are globally-diverse ones like iShares S&P 500 ETF (ASX: IVV) and Vanguard MSCI Index International Shares ETF (ASX: VGS).
However, there are other quality alternatives:
Vanguard Australian Share ETF (ASX: VAS)
Vanguard is a world-leader in providing low-cost ETFs for investors. Vanguard founder Jack Bogle is crediting with creating more millionaires than any other investor because it gave regular people the chance to access the strong long-term growth of shares for a very low cost.
This particular ETF gives investors exposure to the ASX 300, being 300 of the biggest businesses listed on the ASX. You get a fairly large allocation to the big ASX banks of Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) as well as to other businesses like BHP Group Ltd (ASX: BHP), CSL Limited (ASX: CSL) and Macquarie Group Ltd (ASX: MQG).
Due to the weightings of the ETF, it has a high dividend yield of 4.3% excluding franking credits – this is one of the highest yields of any broad-based ETF.
BetaShares NASDAQ 100 ETF (ASX: NDQ)
The main issue with the ASX is that it has very little exposure to the IT and technology sector. You could make up for that lack of tech by investing in this NASDAQ ETF which gives exposure to the great American tech shares like Alphabet (Google), Facebook, Microsoft, Apple, Amazon and so on.
It has been a volatile time over the past 12 months for most of the tech giants, but they remain some of the most promising large cap growth shares in the world. The importance of internet services and other technology like automated cars and virtual reality is only going to grow over time. This ETF could be one of the best way to play those themes.
Foolish takeaway
At the current valuations I would much rather buy units of the NASDAQ ETF, I'm not a big fan of the ASX index as a whole due to the focus on financial and resource companies.
