I believe that investing in exchange-traded fund (ETFs) on the ASX might be the best way to go for a lot of regular investors. It takes a lot of time to potentially deliver long-term outperformance, so just achieving the market average could be a very attractive result for most people, whilst saving a lot of time.
So, with that in mind, here are three ETFs I'd consider buying with $50,000:
BetaShares Australia 200 ETF (ASX: A200) – $10,000
If you're going to go for an ASX-based ETF then you may as well choose the cheapest one. This ETF's annual management fee is only 0.07% per annum, which is the cheapest one for an ASX-focused ETF.
You get a sizeable underlying allocation to Australia's biggest companies like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP) and CSL Limited (ASX: CSL), but its biggest holdings are likely to change over the years to come.
One of the best things about this ETF is its high dividend yield of 4.9% which doesn't include the benefit of franking credits.
Vanguard FTSE Asia Ex Japan Shares Index ETF (ASX: VAE) – $20,000
I think Asia has a much stronger ultra-long-term future than Australia, which is why I think this ETF is worth holding.
The ETF owns shares of 890 businesses, which seems to be a good level of diversification. The industries of financials and technology make up more than half of the ETF, but I think those two sectors are going to be two of the stronger performers in Asia over the rest of this century as Asian citizens continue to become richer. Its top holdings like Tencent, Samsung, Alibaba and Baidu are likely to continue to report rising revenue over the coming years because of the technological tailwinds.
Despite a strong performance in recent months, the ETF as a whole still has a low price/earnings ratio of 13x and an earnings growth rate of just over 10% with a dividend yield of 2.6%. I think these are attractive metrics.
BetaShares NASDAQ 100 ETF (ASX: NDQ) – $20,000
I think Asia and US tech businesses are two broad areas that could be good to get exposure to for the coming years.
Microsoft, Amazon, Alphabet, Facebook, Apple and others are changing how we live our lives and regularly attract our money and/or our eyeballs.
All of the FAANG's core products are performing well and new services in the future could add significant value to their already-high market capitalisations. Some of the services I'm referring to are: automated cars, virtual reality, gaming and streaming subscriptions.
Foolish takeaway
The ASX is trading at a multi-year high at the moment, so I wouldn't want to commit much new money to an ASX ETF at the current level. However, both the US tech shares and particularly the Asian ETF look attractive right now to me.
