I strongly believe that the best place for anyone's money over the ultra-long-term is (ASX) shares. You don't need to take on debt to buy shares and shares have proven to deliver the strongest returns over time. ETFs can offer easy investing and good returns as a way to access shares.
Most investors reading this article will have a good understanding of the businesses on the ASX, but it's much harder to be knowledgeable about the other 98% of the shares listed around the world.
The easiest way to get exposure to overseas investments could be through an exchanged-traded fund (ETF). These funds can give diversification to a whole range of good quality shares, with a low management fee.
Here are two ideas:
Vanguard MSCI Index International Shares ETF (ASX: VGS)
Vanguard is a worldwide leader in providing low-cost ETFs because it's run for the benefit of its members.
This particular ETF is about giving exposure to the entire global share market. There are 10 countries where 1% or more of this ETF's assets are allocated, with the biggest three being the US, Japan and the UK.
With this ETF you are getting diversification with nearly 1,600 businesses across a balanced set of industries. However, its top holdings are all the big tech name that we all know and use like Apple, Microsoft, Alphabet (Google), Amazon and Facebook.
Its annual management fee is only 0.18% and this ETF offers a dividend yield of 2.4% according to Vanguard.
Vanguard FTSE Asia Ex Japan Shares Index ETF (ASX: VAE)
It would be possible to make the above Vanguard MSCI ETF the only investment you make for your whole portfolio. However, you may already have exposure to the big US tech shares, or perhaps you want diversification to a certain region.
Asia is the place that's going through the biggest economic changes, so its businesses could be some of the best to own over the next decade. More than 10% of this ETF is allocated to each of China, South Korea, Taiwan, Hong Kong and India.
Some of its top holdings include Samsung, Tencent, Taiwan Semiconductor, Alibaba and Baidu. It has a total of around 850 holdings.
This ETF is definitely riskier than western or global ETFs. However, it's also cheaper with a price/earnings ratio of under 11, an earnings growth rate of 10.5% and a return on equity of 15.6%.
A bonus is that it comes with a dividend yield of 2.9% according to Vanguard.
Foolish takeaway
Past performance is not an indicator of future performance, so I won't say that recent history will be what these ETFs return over the longer-term. The current market volatility could mean now is a good time to buy.
I imagine over the long-term that both can generate returns of high single digits or low double-digits per year.
