ASX ETFs: The one-stop shop for diversification

When it comes to investing, diversification is one of the golden rules.

Spreading your money across multiple companies, sectors, and geographies can reduce risk and improve long-term returns.

But for many investors, building a well-diversified portfolio can be time-consuming and costly.

That's where exchange-traded funds (ETFs) come in. ASX ETFs allow investors to gain exposure to hundreds or even thousands of companies in a single trade, making them a simple and effective way to diversify a portfolio.

If you're looking for an easy way to build a strong, balanced portfolio, here are three top ASX ETFs that could be worth considering.

Vanguard Australian Shares Index ETF (ASX: VAS)

For those who want broad exposure to the Australian stock market, the Vanguard Australian Shares Index ETF is a popular choice. This ETF tracks the S&P/ASX 300 Index, meaning it provides instant diversification across 300 of Australia's largest companies.

The fund includes household names such as BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), CSL Ltd (ASX: CSL), and Woolworths Group Ltd (ASX: WOW), covering sectors like mining, banking, healthcare, and retail. It also offers a solid dividend yield, making it attractive for income-focused investors.

Vanguard US Total Market Shares Index ETF (ASX: VTS)

Investors looking beyond Australia might want to consider the Vanguard US Total Market Shares Index ETF. This ASX ETF provides exposure to over 4,000 US-listed companies, spanning large, mid, and small-cap stocks.

The US market is home to some of the world's most dominant businesses, and this fund gives investors access to companies to them. This includes Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), and Tesla (NASDAQ: TSLA). The US economy has historically been a strong performer, and its stock market is a major driver of global growth. This could make it a great long term pick for an ASX portfolio.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

Finally, for true global diversification, the Vanguard MSCI Index International Shares ETF is worth a look. This ASX ETF tracks the MSCI World ex-Australia Index, giving investors exposure to 1,500+ companies across major developed markets.

This fund includes businesses from the US, Europe, Japan, and other developed regions, with holdings such as Nvidia (NASDAQ: NVDA), Nestlé, LVMH, and Toyota. By investing in this ETF, Australians can reduce their reliance on the local market and gain exposure to global economic growth.

The post ASX ETFs: The one-stop shop for diversification appeared first on The Motley Fool Australia.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Apple, CSL, Microsoft, Nvidia, and Tesla. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Amazon, Apple, BHP Group, CSL, Microsoft, Nvidia, 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 Scott Phillips.

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