Best International Share ETFs

GOLD WINNERS ISHARES, MAGELLAN AND VANGUARD

US sharemarket’s bull run underpins an impressive performance

The three international share ETF winners have captured the US sharemarket’s bull run and scored impressive doubledigit performance.

The winners include two ultralow-cost, highly diversified index share funds, iShares S&P 500 and Vanguard US Total Market Shares, as well as an actively managed product, Magellan Global Equities.

Twenty-five per cent of the iShares S&P 500 ETF is invested in information technology companies such as Apple, Microsoft, Amazon and Facebook, a sector that is largely missing from the Australian sharemarket. It also gives exposure to healthcare and pharmaceutical companies. While iShares gives you exposure to the top 500 US stocks, or around 80% of the US sharemarket, the Vanguard fund gives you the entire US stockmarket, encompassing some 3600 large, mid, small and micro cap shares listed on the New York Stock Exchange and NASDAQ. It has 18% invested in information technology, 20% in financials and 13% in industrial companies. Both the iShares and Vanguard ETFs charge a tiny 0.04% annual fee. This means you pay $4 a year for each $10,000 invested to cover expenses. The Magellan fund is an actively managed exchange traded fund that is an ASX-listed version of Magellan’s successful, longstanding flagship global equity managed fund. It invests across the world, with 55% in the US, 15% in emerging markets, 12% in Europe and 18% in the rest of the world.

But Magellan’s fee is not cheap. It charges 1.35%, the same as for its unlisted fund. You have to pay brokerage on top, which you don’t have to do with the unlisted fund.

Investors with an active fund such as Magellan’s don’t get the same level of daily disclosure as with other ETFs.