International ETFs allow Australian investors to access shares in companies listed on global markets — from US tech giants to European industrials and Asian emerging markets — without having to open a foreign brokerage account. This article compares the major international ETFs available on the ASX.
Why International ETFs Matter for Australian Investors
Australia represents approximately 2% of world share market capitalisation. The ASX is concentrated in financials, mining, and resources. Without international exposure, an Australian-only portfolio misses:
- US technology (Microsoft, Apple, NVIDIA, Alphabet, Amazon)
- European consumer and industrial companies
- Japanese manufacturing
- Emerging market growth economies
International ETFs are how most Australian investors efficiently access these markets.
The Major International ETFs on the ASX
Broad Developed Market ETFs
| ETF | Provider | Index | Holdings | MER | Currency |
|---|---|---|---|---|---|
| VGS | Vanguard | MSCI World ex-Aus | 1,500+ | 0.18% | Unhedged |
| BGBL | BetaShares | Solactive Global 500 ex-Aus | ~500 | 0.08% | Unhedged |
| IVV | iShares | S&P 500 | ~500 | 0.03% | Unhedged |
| VGAD | Vanguard | MSCI World ex-Aus | 1,500+ | 0.21% | Hedged (AUD) |
Emerging Market ETFs
| ETF | Provider | Index | Holdings | MER | Coverage |
|---|---|---|---|---|---|
| VGE | Vanguard | FTSE Emerging Markets All Cap | 5,000+ | 0.48% | China, India, Taiwan, Brazil, etc. |
| EMKT | VanEck | MSCI Emerging Markets | 1,000+ | 0.69% | Emerging markets, equal country weight |
Thematic/Regional International ETFs
| ETF | Provider | Focus | MER |
|---|---|---|---|
| NDQ | BetaShares | NASDAQ-100 (US tech) | 0.48% |
| IJP | iShares | Japanese shares | 0.48% |
| IEU | iShares | European shares | 0.60% |
VGS vs BGBL — The Key Comparison
These two broad international ETFs are the most commonly compared:
| Feature | VGS | BGBL |
|---|---|---|
| Provider | Vanguard | BetaShares |
| MER | 0.18% | 0.08% |
| Index | MSCI World ex-Aus | Solactive Global 500 ex-Aus |
| Holdings | 1,500+ | ~500 |
| US weight | ~65–70% | ~65–70% |
| Track record | 2014 | 2020 |
| AUM | $7B+ | $1.5B+ |
BGBL at 0.08% is meaningfully cheaper than VGS at 0.18% — a $100 difference per year on $100,000. BGBL holds fewer companies (~500 vs 1,500+) but both are heavily weighted to US large-caps. The performance difference is likely to be small over long periods, with BGBL’s cost advantage compounding in its favour.
BGBL is a newer fund with a shorter track record. Some investors prefer VGS due to Vanguard’s longer history and larger AUM.
IVV — The Cheapest Option (US Only)
IVV (iShares Core S&P 500 ETF) at 0.03% MER is the cheapest international ETF on the ASX. However, it tracks only the S&P 500 — 500 US companies — with no international developed or emerging market exposure outside the US.
IVV vs VGS:
- IVV: cheaper (0.03%), US-only, 500 companies
- VGS: more expensive (0.18%), 22 countries, 1,500+ companies
For investors who want purely US exposure (and the US represents ~65–70% of VGS anyway), IVV is a cost-effective choice. For broader global diversification, VGS or BGBL are more appropriate.
Emerging Markets — VGE
Emerging markets (China, India, Taiwan, Brazil, South Korea) represent approximately 12–14% of world market cap but are excluded from the MSCI World ex-Australia index. Adding VGE provides exposure to:
- High-growth economies
- Higher risk (political, regulatory, currency)
- Diversification beyond developed markets
VGE at 0.48% MER is significantly more expensive than developed market ETFs, reflecting the higher cost of operating in emerging markets.
Related Articles
- VGS ETF Review
- NDQ ETF Review
- Hedged vs Unhedged ETFs
- Emerging Markets ETF Australia
- ETF Portfolio Australia
- ETFs hub
Frequently Asked Questions
Should I hold an international ETF alongside VAS? Holding only VAS (Australian shares) leaves a portfolio with no exposure to approximately 98% of global share market capitalisation. Many investors and financial educators consider combining Australian and international exposure to be an important principle of diversification — although individual circumstances vary. A licensed financial adviser can help assess the right allocation for your situation.
Do international ETFs pay Australian franking credits? No. Franking credits are only available on dividends paid by Australian companies that have paid Australian corporate tax. International ETFs hold foreign companies — their dividends do not carry Australian franking credits. You may receive foreign income tax offsets (FITOs) for taxes withheld overseas.
What does “unhedged” mean for international ETFs? An unhedged ETF does not protect against currency fluctuations. If you hold VGS (unhedged) and the Australian dollar rises against the US dollar, the value of your VGS holdings (in AUD) falls, even if US shares are unchanged. A hedged version (VGAD) uses currency derivatives to neutralise this effect — at a slightly higher cost. See Hedged vs Unhedged ETFs.
This article provides general financial information only. ETF mentions are for educational context. Past performance is not a reliable indicator of future performance. For advice tailored to your situation, speak with a licensed financial adviser. You can find one through the ASIC financial advisers register or MoneySmart.