5 top ASX ETFs for beginner investors in August

Exchange-traded funds (ETFs) can make investing much simpler for beginners.

Instead of researching and buying individual companies, one investment can provide exposure to dozens, hundreds, or even thousands of shares.

That said, here are five ASX ETFs I think are worth considering in August if you are starting out.

Betashares Australia 200 ETF (ASX: A200)

The A200 ETF provides exposure to 200 of the largest companies listed on the Australian share market.

This includes businesses from banking, mining, healthcare, retail, telecommunications, and other major industries.

I think it offers beginners a straightforward way to invest in Australian shares without needing to decide which individual companies will perform best.

The fund also pays distributions, although both the income and unit price can rise or fall over time.

Betashares Global Shares ETF (ASX: BGBL)

Australia represents only a small part of the global share market.

The BGBL ETF allows investors to spread their money across more than 1,000 companies from developed countries outside Australia, including the United States, Japan, and major European markets.

This gives beginners access to industries that are less prominent on the ASX, particularly global technology, healthcare, consumer brands, and industrial businesses.

I think the Betashares Global Shares ETF is a simple option for someone who wants broad international exposure rather than trying to select individual overseas shares.

Vanguard Diversified High Growth Index ETF (ASX: VDHG)

The VDHG ETF is designed for investors who want several types of investments bundled together.

The fund holds Australian shares, international shares, emerging market shares, and smaller companies. It also keeps a modest allocation to defensive investments such as bonds.

Vanguard manages the mix and regularly brings it back towards its target allocations.

I think that removes several decisions that can overwhelm a beginner. Investors still need to accept share market volatility, but they do not have to choose and manage several different funds themselves.

iShares S&P 500 ETF (ASX: IVV)

The IVV ETF follows the S&P 500 Index, which contains 500 leading US companies.

These businesses operate across technology, healthcare, financial services, consumer products, communications, and many other parts of the economy.

The fund can give beginners exposure to companies such as Apple, Microsoft, and NVIDIA through one ASX investment.

I think the strength and adaptability of major US businesses make the iShares S&P 500 ETF an attractive long-term option, although currency movements will affect returns for Australian investors.

Betashares Nasdaq 100 ETF (ASX: NDQ)

The NDQ ETF invests in 100 of the largest non-financial companies listed on the Nasdaq.

It has significant exposure to technology and businesses benefiting from cloud computing, artificial intelligence, semiconductors, software, and digital services.

I think the Betashares Nasdaq 100 ETF could suit beginners seeking stronger growth potential who are comfortable with larger price swings.

The NDQ ETF is more concentrated than a broad global fund, so I would expect greater volatility when technology shares fall out of favour. Its higher growth potential comes with more risk.

Foolish takeaway

There is no single ETF that will suit every beginner. The A200 ETF offers broad Australian exposure, while the BGBL and IVV ETFs provide different routes into international markets. The VDHG ETF handles much of the diversification work within one investment, while the NDQ ETF provides a more growth-focused choice.

I think the best starting point is the fund an investor understands and feels comfortable holding.

Each of these ETFs offers a simple way to begin investing in August, but I think beginners should consider their goals, time horizon, and tolerance for volatility before buying.

The post 5 top ASX ETFs for beginner investors in August 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 positions in and has recommended Apple, BetaShares Nasdaq 100 ETF, Microsoft, Nvidia, and iShares S&P 500 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Apple, Microsoft, Nvidia, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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