I've long been an advocate for ASX exchange-traded funds (ETFs) and the valuable role that they can play in ASX share portfolios of all stripes. But with so many ETFs to choose from in 2024, it can get overwhelming for investors to find the right funds that work for them.
So with that in mind, today, let's discuss three top ASX ETFs that I would recommend to any Australian investor today.
Image source: Getty Images
Three top ASX ETFs that I would buy right now
Vangaurd Australian Shares Index ETF (ASX: VAS)
First up we have this popular index fund from Vanguard. Not for nothing has VAS become the largest ASX ETF by assets under management on our market. This fund offers all investors a simple, effective pathway to investing in a broad swathe of Australian shares.
VAS does lean towards banks and miners. However, it contains around 300 different individual companies, ranging from Telstra Group Ltd (ASX: TLS) to Harvey Norman Holdings Ltd (ASX: HVN).
The Vanguard Australian Shares ETF has a long history of delivering solid capital growth as well as substantial (and franked) dividend income. I don't see any reason why investors shouldn't expect this to continue into the future. As such, this is one ETF that I believe any ASX investor can comfortably own today.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
Changing gears now, let's look at an actively managed ASX ETF in this offering from VanEck. The MOAT ETF is a fund that I've written extensively about before, and one I would continue to recommend to any ASX investor.
Instead of tracking an index, the Wide Moat ETF holds a concentrated portfolio of US shares. These shares are actively selected based on their perceived ownership of a wide economic moat. A moat is the Warren Buffett-coined term that refers to a company's inherent competitive advantage that helps keep its competition at bay and its customers coming back.
This moat could come in the form of a powerful brand, or perhaps a product that consumers find difficult to turn away from. As Buffett has told us, companies that have a strong moat tend to be amongst the highest quality investments on the market.
That's why MOAT's current holdings include names like Starbucks, Adobe and Amazon.
Past performance is never a guarantee of future success. However, I think that MOAT's strong track record (over 15% per annum since inception) means that this ETF's strategy is a winner.
BetaShares Nasdaq 100 ETF (ASX: NDQ)
Finally, let's take stock of another ASX ETF and index fund in this offering from Betashares. The Nasdaq 100 ETF tracks the largest 100 non-financial shares on the American NASDAQ stock exchange.
This exchange is one of the two major American markets, and is famous for housing most of the US' tech giants. You'll find the likes of Apple, Microsoft, Tesla and NVIDIA here, as well as other quality names like PayPal, Netflix, Airbnb and Monster Beverage Corp.
Put simply, I think this ETF is a great option for any ASX investor looking for some international diversification. NDQ houses many of the best companies in the world, all in one ticker code.
I wouldn't expect to keep enjoying the astronomical returns (22.24% per annum since 2019) that NDQ has put up in recent years by buying this ETF today. But even so, I think it's a solid long-term investment and one that would suit any ASX investor.
