For Australian investors who want to diversify their portfolios with international stocks, the Vanguard MSCI Index International Shares ETF (ASX: VGS) is a great option. VGS provides exposure to more than 1,300 large- and mid-cap firms in 22 developed markets—aside from Australia—by tracking the MSCI World ex-Australia Index.
Global Diversification Made Simple
VGS provides a straightforward avenue for investors to tap into the performance of leading global corporations. Its top holdings include renowned companies such as Apple (5.40%), Microsoft (4.13%), Amazon (2.15%), and NVIDIA (2.01%) StockAnalysis. This broad exposure spans various sectors, including technology, healthcare, consumer goods, and financials, offering a balanced international investment approach.
Performance Snapshot
VGS has demonstrated robust performance over the years. In 2024, it delivered an impressive total return of 30.94%, followed by a solid 13.93% return over the 12 months ending April 30, 2025 Yahoo FinanceInvestSMART. The ETF’s 10-year annualized return stands at 11.82%, underscoring its potential for long-term growth InvestSMART.
Cost-Effective Investing
One of VGS’s standout features is its low management expense ratio (MER) of 0.18% . This cost efficiency makes it an attractive option for investors seeking global exposure without high fees. Additionally, VGS offers an income return (yield) of 4.01% over the past year, providing a steady income stream for investors .InvestSMART+1InvestSMART+1
Considerations for Investors
- Currency Exposure: VGS is unhedged, meaning its returns can be influenced by fluctuations in the Australian dollar relative to other currencies. While this can enhance returns when the AUD weakens, it also introduces currency risk.Morningstar
- Market Volatility: As with all equity investments, VGS is subject to market volatility. Investors should be prepared for short-term fluctuations in value.
Is VGS Right for You?
VGS is well-suited for investors seeking:The Motley Fool
- Long-term capital growth through international diversification.InvestSMART+2The Motley Fool+2InvestSMART+2
- Exposure to a broad range of developed markets outside Australia.StockAnalysis+2InvestSMART+2InvestSMART+2
- A cost-effective investment vehicle with a history of solid returns.
However, investors should assess their risk tolerance, investment horizon, and currency exposure preferences before investing. Consulting with a financial advisor can provide personalized guidance tailored to individual financial goals.