Exchange-traded funds (ETFs) are becoming very popular for people to take a passive approach to invest in.
Some of the biggest ETFs have diverse portfolios such iShares S&P 500 ETF (ASX: IVV).
However, some investors may want their ETFs to be less US focused considering the uncertain direction that the US is headed either under Trump or two of the Democrats' leading candidates (Warren & Sanders).
Here are two ETF ideas for investors:
Vanguard MSCI Index International Shares ETF (ASX: VGS)
This ETF may be the best way to invest in the 'global' share market. There are plenty of ETFs that focus on just one country or region, but this one invests across many developed countries.
It has exposure to almost 1,600 businesses listed in the US, Japan, the UK, France, Canada, Switzerland, Germany, the Netherlands, Hong Kong, Spain, Sweden and so on.
The ETF's largest holdings are still the big US tech companies like Apple, Microsoft, Alphabet and so on, but it also has large non-US holdings like Toyota, HSBC, LVMH and SAP.
It won't be the strongest performing ETF year to year, but it will always benefit from the long-term growth of the global economy.
The ETF has a low cost of just 0.18% per annum and it has generated an average return of 15.8% per annum over the past three years.
I think it's the type of investment where it could be your only holding and you just add to it regularly over the months and years.
Vanguard Australian Fixed Interest Index ETF (ASX: VAF)
Investors are seeking yield and safety these days. Cash in the bank isn't doing much but shares may be too risky for you – capital loss is a legitimate worry.
Therefore, safe Australian government bonds could be the answer. More than 90% of this ETF's assets are allocated to government or government related bonds.
It has been a strong year for the ETF, returning almost 10% with Australian interest rates going lower.
It has a running yield of 3.3% and the ETF has an underlying annual management fee of 0.2%.
Foolish takeaway
Both of these ETFs offer different investment profiles compared to an ASX ETF. Out of the two I'd be more attracted to the idea of the Vanguard Fixed Interest ETF because of how different it is to most other investment ideas, but that's only useful if you want a safer investment.
