The market is becoming increasingly worried about how Trump's upcoming tariff announcement could really shake up the global economy. With that announcement coming imminently, it could be a good idea to look at certain ASX-listed exchange-traded funds (ETFs).
President Trump has indicated that he's going to reveal a tariff plan to include all countries. According to reporting by CNBC, Trump said at the weekend:
You'd start with all countries. So let's see what happens. There are many countries.
Investment bank Goldman Sachs reportedly warned in a client note at the weekend that tariffs could increase inflation and significantly slow economic growth in the US.
While that could lead to a knock-on effect on other countries, I believe the impact could have a smaller effect on other countries.
If Aussie investors' international exposure is largely to US shares, it could be an idea to think about other investments that give geographic diversification. That's why I like the following ASX ETFs as ideas for diversification.
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Vanguard MSCI Index International Shares ETF (ASX: VGS)
If an Aussie investor has no international share exposure at all, the VGS ETF could be a smart choice because it gives exposure to both US shares (which are cheaper after the recent decline) and other global shares.
It's invested in more than 1,300 businesses. It gives significant exposure to the US tech juggernauts and the US stock market in general, but the following countries have a weighting of more than 0.1%: Japan (5.3%), the UK (3.7%), Canada (3.1%), France (2.8%), Switzerland (2.4%), Germany (2.4%), the Netherlands (1.1%), Sweden (0.9%), Spain (0.7%), Italy (0.7%), Denmark (0.7%), Hong Kong (0.5%), Singapore (0.4%), Finland (0.2%), Israel (0.2%) and Belgium (0.2%).
Whatever happens this week after Trump's Liberation Day, the VGS ETF can give a fairly close representation of the global stock market when it comes to major developed countries.
Betashares FTSE 100 ETF (ASX: F100)
UK shares went through a difficult time following the Brexit vote and then COVID-19. But, the UK stock market seems to have gained confidence and investors are more optimistic about the businesses listed in London.
In the last 12 months alone, the F100 ETF unit price has risen more than 15%. It invests in 100 of the largest businesses listed on the London Stock Exchange such as Shell, Astrazeneca, HSBC, Unilever, BP and Rolls-Royce.
While these companies are listed in London, they are global businesses with quality earnings. This ASX ETF's holdings could see less disruption from Trump's tariff Liberation Day.
Betashares Asia Technology Tigers ETF (ASX: ASIA)
The US isn't the only place with large technology companies. There are also a few giants in Asia as well – this fund aims to give exposure to 50 large tech and online retail stocks in Asia outside of Japan.
Looking at the largest holdings, the ASIA ETF is invested in companies like Alibaba, Tencent, Taiwan Semiconductor Manufacturing, Samsung Electronics and Xiaomi.
Technology is becoming increasingly important in the world, so these companies in the ASIA ETF could be a good way to profit from the changes happening in Asia.
Overall, I think all three of these ASX ETFs are good opportunities for diversification and long-term returns.
