Why these Vanguard ETFs are on my shopping list

There are plenty of excellent exchange-traded funds (ETFs) available on the ASX, but I don't want to buy another fund simply for the sake of it.

When I'm considering a new investment, I want a clear reason to own it and confidence that it could reward me over the long term.

Right now, there are three Vanguard ETFs that stand out to me. Here's why they've made my shopping list.

Vanguard S&P 500 US Shares Index ETF (ASX: V500)

It's hard to look past the US share market when considering long-term investment opportunities.

America is home to some of the world's most successful companies, and many have spent decades expanding internationally and finding new ways to grow their earnings.

The V500 ETF offers a straightforward way to invest in that success. It tracks the S&P 500 Index (SP: .INX), providing exposure to approximately 500 of America's largest listed businesses.

What I like is how many of these companies have managed to reinvent themselves as the world has changed. Some have expanded into entirely new industries, while others have used their financial strength to develop technologies, enter new markets, and build businesses that would have been difficult to imagine a decade earlier.

I think that ability to keep adapting is an important reason why American businesses have created so much wealth over time.

I don't expect the US market to lead the world every year, but I see plenty of reasons why its largest businesses could continue growing their earnings well into the future.

Vanguard MSCI International Small Companies Index ETF (ASX: VISM)

This is where my shopping list gets a little more interesting. Most discussions about international investing seem to revolve around enormous companies that everyone already knows.

But there are thousands of smaller businesses operating across developed markets, and some could become considerably larger over time.

That's where the VISM ETF comes in. It invests in small caps across developed economies, including the US, Europe, and Japan.

What I like is the opportunity to benefit from businesses that are still building their market positions, expanding into new territories, or developing new products.

Some may eventually become much larger companies. And because the fund owns a diversified portfolio, investors don't need to correctly identify those individual winners.

Small caps can be more sensitive to economic conditions and borrowing costs, so I would expect volatility. Nevertheless, I think this Vanguard ETF could be a rewarding investment over a decade or longer, particularly for investors whose portfolios are already dominated by large companies.

Vanguard FTSE Asia ex Japan Shares Index ETF (ASX: VAE)

My final pick takes me to another part of the world. The VAE ETF invests in approximately 1,400 stocks across Asian markets, excluding Japan, Australia, and New Zealand.

Its major exposures include China, India, Taiwan, and South Korea.

I like this because the region offers several opportunities that are quite different from those driving the US market.

India has a growing consumer economy, Taiwan and South Korea are important participants in global technology manufacturing, and China remains a major economic force.

When I look at Asia over the next decade, I see enormous potential for businesses across the region to grow alongside their economies.

Rising incomes could support greater spending on everything from financial services to healthcare and technology. Meanwhile, Asian manufacturers are already central to global supply chains, and I expect their expertise to become even more valuable as demand for advanced technology increases.

That's something I'd like to have exposure to today, rather than looking back in 10 or 20 years wishing I'd invested earlier.

And with the VAE ETF, I can participate in that potential growth through a single investment.

Foolish takeaway

I think all three Vanguard ETFs deserve a place on my shopping list.

The V500 ETF would be my starting point, but I'm particularly interested in exploring opportunities beyond the world's biggest companies.

After all, the businesses dominating today's headlines won't necessarily be the only ones creating wealth over the next decade.

I'd like to give myself the opportunity to benefit from some of the others, too.

The post Why these Vanguard ETFs are on my shopping list appeared first on The Motley Fool Australia.

Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2026