2 excellent ETFs with compelling potential

The VGS ETF could be one of the compelling options for the long-term.

| More on:
The letters ETF with a man pointing at it.

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) could be a compelling way for investors to gain access to some great businesses but to do it in a diversified way.

Some ETFs are focused on a particular share market – like the Australian share market or European share market. But, there are other options that give the opportunity to invest in certain sectors or themes.

With that in mind, these two ETFs could be long-term options:

Vanguard MSCI Index International Shares ETF (ASX: VGS)

This is an ETF that is focused on the global share market. It has businesses from many different "major developed countries" in the portfolio. The US does represent 70% of the portfolio, though many US companies do earn international profit as well.

Readers may have heard of many of the biggest holdings in the portfolio including: Apple, Microsoft, Alphabet, Amazon.com, Tesla, Nvidia and Meta Platforms (formerly Facebook).

It's not all tech giants – other US names include JPMorgan Chase, Berkshire Hathaway, Proctor & Gamble, Home Depot, Visa and Mastercard.

However, there are lots of non-US businesses in the portfolio too such as Nestle, ASML, Roche, LVMH, Toyota, Shell, Novartis, AstraZeneca, Novo Nordisk and Royal Bank of Canada.

There is a total of around 1,500 businesses in the portfolio.

The VGS ETF offers a globally diversified portfolio for an annual management fee cost of just 0.18%.

Past performance is not a guarantee of future results, however over the past five years the Vanguard MSCI Index International Shares ETF has produced an average return per annum of 15.2%.

However, the dividend yield of the ETF is just 1.6% according to Vanguard.

VanEck Video Gaming and Esports ETF (ASX: ESPO)

This ETF is much more concentrated than the Vanguard. It has a total of 26 positions that give investors exposure to the global gaming sector.

VanEck says that this industry is a dynamic growth opportunity, which gives investors the ability to invest in the future of gaming. The companies are positioned to benefit from the increasing popularity of video games and eSports.

Each of the businesses in the portfolio generate a significant portion of their revenue from the video gaming sector.

In terms of the biggest positions in the portfolio, these are some of the names: Tencent, Activision Blizzard, Nintendo, Nvidia, Advanced Micro Devices, Netease, Electronic Arts, Take-Two Interactive, Nexon and Bandai Namco. Ubisoft and Zynga are two of the other positions.

There is a mixture between countries – this ETF is much less focused on the US than the VGS ETF. The US is 40.4% of the portfolio, Japan is a 21.4% weighting, China is 20.1%, South Korea is 4.6%, Singapore is 4.2% and so on.

Since listing in September 2020, the ESPO ETF has produced an average return per annum of 8.5%. However, the index that it tracks has produced an average return of 29% per annum over the last five years. Past performance is not a reliable indicator of future performance though.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has recommended VanEck Vectors ETF Trust - VanEck Vectors Video Gaming and eSports ETF and Vanguard MSCI Index International Shares 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

A smiling woman sits in a cafe reading a story on her phone about Rio Tinto and drinking a coffee with a laptop open in front of her.
ETFs

3 strong ASX ETFs for beginners to buy now

Starting your investment journey? Check out these funds.

Read more »

Smiling child playing video game
ETFs

Guess which ASX ETF is up 72% over the past 12 months?

This ASX ETF has been a home run lately.

Read more »

ETFs

Why Betashares Nasdaq 100 ETF and these ASX ETFs could be strong buys

Let's see what makes these funds stand out.

Read more »

The letters ETF sit in orange on top of a chart with a magnifying glass held over the top of it
Dividend Investing

Boosting passive income: With a 7.6% yield, is the YMAX ETF a good option?

Is this ETF's yield too good to be true?

Read more »

A man wearing a red jacket and mountain hiking clothes stands at the top of a mountain peak and looks out over countless mountain ranges.
ETFs

How much could $10,000 in these ASX ETFs be worth in 5 years?

These two set and forget options could suit long term investors. 

Read more »

ETF spelt out with a piggybank.
ETFs

Want to buy ASX growth shares? Consider these ETFs instead

Growth ETFs can be easier to invest in than shares.

Read more »

A young female investor with brown curly hair and wearing a yellow top and glasses sits at her desk using her calculator to work out how much her ASX dividend shares will pay this year
ETFs

Buy these ASX ETFs for an income boost after the RBA's interest rate cuts

These funds offer income investors some good yields.

Read more »

Woman relaxing on her phone on her couch, symbolising passive income.
ETFs

How to own a portfolio of blue chip ASX stocks in a single trade

This ETF gives you the top Aussie stocks in one foul swoop with an added twist.

Read more »