Australia’s Top ETFs Go Head-to-Head: VGS vs IVV
When it comes to investing in international shares, two ASX-listed ETFs stand out from the pack: the Vanguard MSCI Index International Shares ETF (VGS) and the iShares S&P 500 AUD ETF (IVV). Both funds offer a low-cost way to gain exposure to some of the world’s largest and most stable companies, but they track different indices and have distinct characteristics that set them apart.
VGS, which is listed on the ASX, tracks the MSCI ACWI ex-Australia Index, a broad measure of global shares excluding those listed in Australia. This means investors can tap into a diverse portfolio of international stocks, from large-cap giants like Apple and Alphabet to smaller, more growth-oriented companies in emerging markets. IVV, on the other hand, tracks the S&P 500 Index, a benchmark of the US’s top 500 companies.
So, how do these two ETFs compare? Both have a low expense ratio, meaning investors pay minimal fees to own the fund. IVV charges 0.225% per annum, while VGS has an expense ratio of 0.22% per annum. However, VGS has a higher holding of international shares, with more than 3,000 stocks in its portfolio compared to IVV’s 500 holdings.
What this means is that VGS offers a more diversified, globally-focused investment option that’s ideal for those seeking to spread their risk across multiple asset classes and geographies. IVV, on the other hand, is a more concentrated, US-focused fund that may be better suited to investors with a strong interest in the American market.
Ultimately, whether VGS or IVV is the better choice for you depends on your individual investment goals and objectives. If you’re looking to gain broad exposure to the global markets, VGS might be the way to go. However, if you’re specifically interested in investing in the US market, IVV could be the better option. Either way, both funds are solid choices for investors seeking low-cost access to international shares.
