3 reasons to buy the Vanguard MSCI Index International Shares (VGS) ETF

The Vanguard MSCI Index International Shares ETF (ASX: VGS) is an exchange-traded fund (ETF) I would be comfortable owning for a very long time.

It provides broad exposure to international share markets in a single investment, which can make it a simple way to add global growth to a portfolio.

Here are three reasons I think it is a buy.

Broad global diversification

One of the biggest attractions of the VGS ETF is just how much exposure investors get through one fund.

It invests across developed markets outside Australia, giving investors access to companies in the United States, Japan, the United Kingdom, Europe, and other major economies.

That means an investor is not relying on the performance of one country or a small collection of businesses.

I think this can be particularly valuable for Australians whose other investments are already concentrated locally.

The Australian share market has plenty of strong companies, but many of the world's largest healthcare, industrial, technology, consumer, and financial businesses are based elsewhere.

The Vanguard MSCI Index International Shares ETF makes it easy to participate in those opportunities without having to open an overseas brokerage account or research dozens of individual companies.

Exposure to global leaders

The VGS ETF owns some of the world's most successful businesses.

Its portfolio includes companies such as Nvidia, Microsoft, Apple, and Amazon, alongside over a thousand other businesses operating across many industries.

I like that because investors can benefit if today's leading companies continue expanding, without having to decide which individual stock will ultimately perform best.

The portfolio also changes naturally over time. Companies that become more valuable can grow into larger positions in the underlying index, while businesses that lose ground become less influential.

Over a long holding period, I think that is attractive. The fund can continue evolving alongside global markets without investors having to constantly rebuild their portfolio themselves.

It is easy to keep adding

The third reason I like the VGS ETF is its simplicity.

There is no need to wait for the perfect stock idea every time new money becomes available.

An investor can buy more units and immediately spread that money across a large collection of international businesses. That can make regular investing much easier.

I would still expect volatility. Global share markets will go through recessions, bear markets, changing interest rates, and periods when valuations become stretched.

Currency movements can also influence returns for Australian investors.

But for someone investing over 10 years or longer, I think those short-term fluctuations are a reasonable price to pay for access to global economic and corporate growth.

Foolish takeaway

I think the VGS ETF gets a lot right without making investing unnecessarily complicated.

It gives investors exposure to a wide range of countries and industries, includes many of the world's strongest companies, and can be easily added to over time.

For me, those qualities make the Vanguard MSCI Index International Shares ETF one of the ASX ETFs I would be happy to buy and hold for the long term.

The post 3 reasons to buy the Vanguard MSCI Index International Shares (VGS) ETF 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 Amazon, Apple, Microsoft, and Nvidia. The Motley Fool Australia has recommended Amazon, Apple, Microsoft, Nvidia, and Vanguard Msci Index International Shares 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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