2 ETFs worth considering for a diversified ASX share portfolio today

These ETFs could be buys today…

| More on:
The letters ETF on wooden cubes with golden coins on top of the cubes and on the ground

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Exchange-traded funds (ETFs) can be a great and easy way of increasing an ASX share portfolio's diversification. Whilst there are many top companies on the ASX boards, the reality is that the world of investing is far more than just Australian companies. So with that in mind, here are 2 ASX ETFs that offer the opportunity for quality diversification for any ASX share portfolio today.

2 ASX ETFs for a diversified ASX share portfolio today

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

This ETF from VanEck holds a concentrated portfolio of US shares that are picked by Morningstar for the quality of their 'moat'. A moat is a concept first defined by the great Warren Buffett. It speaks to a company's intrinsic competitive advantage. If a company possesses a significant and permanent competitive advantage over its competitors, it acts as a 'moat' around a castle, preventing enemies from plundering it.

At the present time, this ETF holds such companies as Google-owner Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL), Kellogg Company (NYSE: K), Microsoft Corporation (NASDAQ: MSFT) and Salesforce.com Inc (NYSE: CRM). Not the sort of companies available on the ASX.

This strategy of picking these 'wide-moat companies' seems to be working well for this ETF recently. Since its inception in 2015, MOAT has returned an average performance of 20.48% per annum. It charges a management fee of 0.49% per annum.

BetaShares Nasdaq 100 ETF (ASX: NDQ)

Another ETF to look at today is this offering from provider BetaShares. NDQ tracks the world-famous Nasdaq 100 Index over in the United States. The Nasdaq tends to house the newer, 'cooler' companies on the ASX.

Amongst its largest holdings, you will find the tech giants like Apple Inc (NASDAQ: AAPL), Microsoft, Alphabet and Facebook Inc (NASDAQ: FB). You'll also get shares like PayPal Holdings Inc (NASDAQ: PYPL), Adobe Inc (NASDAQ: ADBE) and Netflix Inc (NASDAQ: NFLX).

Again, the ASX 200 is very lightweight when it comes to these kinds of technology leaders. As such, this ETF could help fill that gap in an ASX-dominated share portfolio quite nicely. It's also got some healthy performance history to back it up. Since its ASX inception in 2015, NDQ has averaged a return of 22.41% per annum. It charges a management fee of 0.48% per annum.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Motley Fool contributor Sebastian Bowen owns shares of Alphabet (A shares), Facebook, Kellogg, and VanEck Vectors Morningstar Wide Moat ETF. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Alphabet (A shares), Alphabet (C shares), Apple, BETANASDAQ ETF UNITS, Facebook, Microsoft, Netflix, PayPal Holdings, and Salesforce.com. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Adobe Inc. and has recommended the following options: long January 2022 $75 calls on PayPal Holdings, long March 2023 $120 calls on Apple, and short March 2023 $130 calls on Apple. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Adobe Inc., Alphabet (A shares), Alphabet (C shares), Apple, Facebook, Netflix, PayPal Holdings, Salesforce.com, and VanEck Vectors Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ETFs

Diverse group of university students smiling and using laptops
ETFs

5 ASX ETFs for beginners to buy in June

Let's see why these funds could be great options if you're starting your investment journey.

Read more »

A man activates an arrow shooting up into a cloud sign on his iPad.
ETFs

How can ASX investors gain exposure to cloud computing?

This ETF allows investors to buy a slice of 'the cloud'.

Read more »

Cybersecurity professional man inspects server room and works on iPad.
ETFs

$10,000 invested in HACK ETF a year ago is now worth…

This exchange-traded fund seeks to capitalise on growing global demand for cybersecurity services.

Read more »

A group of men in the office celebrate after winning big.
ETFs

Which 3 thematic ASX ETFs have surged between 20% and 50% since April?

These 3 ASX ETFs have beaten the market by a substantial margin.

Read more »

A graphic illustration with the words NASDAQ atop a US city and currency
ETFs

Why NDQ ETF and these ASX ETFs could be top buys in June

Let's see why these funds could be top picks for investors with money to put into the market.

Read more »

A woman holds a soldering tool as she sits in front of a computer screen while working on the manufacturing of technology equipment in a laboratory environment.
ETFs

Looking for diversified exposure to Nvidia shares after its result? Buy this ASX ETF

Nvidia delivered another impressive earnings result this week.

Read more »

ETF with different images around it on top of a tablet.
ETFs

I think it's a great time to invest in this top ASX ETF

This fund offers the potential for strong returns, in my opinion.

Read more »

Woman calculating dividends on calculator and working on a laptop.
ETFs

$10,000 invested in VDHG ETF a year ago is now worth…

This exchange-traded fund provides more stock diversification than you could imagine.

Read more »