Our favourite ETFs for exposure to the US share market

Morning Star AU03-12 00:00

Investors are increasingly turning to ETFs to get exposure to global markets. Our analysts have recently given their highest rating to two ETFs that provide exposure to US equity markets.The first ETF...

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Our analysts have recently given their highest rating to two ETFs that provide exposure to US equity markets.The first ETF...</p>\n\n<a href=\"https://www.morningstar.com.au/etfs/our-favourite-etfs-for-exposure-to-the-us-share-market\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"IVV.AU","symbol_name":"ISHARES S&P 500 ETF/AUS","start_time":0,"source_url":"https://www.morningstar.com.au/etfs/our-favourite-etfs-for-exposure-to-the-us-share-market","article_id":"2619164759","we_media_id":null,"thumbnails":[],"rights":{"source":"morningstar_stock","url":"https://www.morningstar.com.au/etfs/our-favourite-etfs-for-exposure-to-the-us-share-market","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2619164759","pubTimestamp":1773244800,"columns":[],"sourceInfo":{"source_id":"morningstar_stock","name":"Morning Star"},"weMediaInfo":null,"summary":"Investors are increasingly turning to ETFs to get exposure to global markets. Our analysts have recently given their highest rating to two ETFs that provide exposure to US equity markets.The first ETF","collect":0,"end_time":0,"defaultTopTitle":"morningstar.com.au","property":[],"viewcount":null,"language":"en","relate_stocks":{"IVV.AU":"ISHARES S&P 500 ETF/AUS","BK4588":"碎股","BK4534":"瑞士信贷持仓","VOO":"Vanguard标普500ETF","BK4585":"ETF&股票定投概念","BK4581":"高盛持仓","BK4559":"巴菲特持仓","VTS.AU":"VANGUARD TOTL ST MKT ETF-CDI"},"translate_title":"我们最喜欢投资美国股市的ETF","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"VOO":0.68,"IVV.AU":1,"VTS.AU":1},"content_text":"Investors are increasingly turning to ETFs to get exposure to global markets. Our analysts have recently given their highest rating to two ETFs that provide exposure to US equity markets.The first ETF to receive a Morningstar Gold Analyst Rating is the Vanguard US Total Market Shares ETF (ASX: VTS). The ETF holds 3,536 shares which represent the entire investable universe in the US spanning the largest to smallest publicly traded companies.The second ETF to receive a Morningstar Gold Analyst Rating is the iShares S&P 500 ETF (ASX: IVV) which tracks the S&P 500 index which makes up the 500 largest publicly traded companies listed in the US.Below is a summary of the views of our analysts. Vanguard US Total Market Shares ETFVanguard Total Stock Market accurately represents the large-cap US stock market, allowing its low fee and efficient portfolio to carve out a long-term edge.The fund tracks the CRSP US Total Market Index, which selects all investable US stocks and weights them by market cap. As a result, the fund experiences little turnover because of the minuscule average size of additions or deletions to the existing portfolio. Stocks must pass an eligibility screen that ensures they are easy to trade, and rebalancing is spread across a five-day period to minimize market impact costs. The fund holds a representative basket of stocks within the index, which further reduces unnecessary trading costs.Assigning position sizes based on a stock’s market cap is a simple and efficient method to weight the portfolio. Since US stocks are highly traded, they quickly reflect new information, and gaining an edge is difficult. Market-cap-weighting naturally adjusts to price changes without frequent rebalancing, lowering trading costs. That, and lower fees, give large-blend index funds a long-term performance advantage over most actively managed peers.The portfolio is broad and well-diversified. It typically holds around 3,500 stocks, and the top 10 represented 35% of the portfolio as of year-end 2025. Still, a portfolio’s market-cap weighting can contribute to concentration when a few stocks dominate the market. This has been the case lately with a handful of mega-cap technology stocks growing to prominence and commanding a greater share of the portfolio.When a few richly valued companies or sectors power most of the market gains, the strategy’s market-cap weighting may overexpose it to the fluctuations of one stock or sector. But this is not a fault in design, as it simply reflects the market’s composition. Its low turnover, low fee, and broad diversification across the US market more than offset these risks.The US exchange-traded fund share class returned 14.3% annualized over the past 10 years through 2025. It holds little cash, which should help it outperform cash-saddled active peers during market rallies. Likewise, low cash drag could hurt this fund when the stock market declines, but long-term positive returns give this efficient approach a clear edge. Performance across share classes will vary owing to differences in fees and currency exchange rates for non-US investors.Morningstar acquired the Center for Research in Security Prices, the provider of the index tracked by this fund, in February 2026. Morningstar analysts work independently from the index business, and the Morningstar Medalist Ratings for funds tracking CRSP indexes are based solely on the fund’s investment merits.iShares S&P 500 ETFIShares S&P 500 accurately represents the large-cap US stock market, allowing its low fee and efficient portfolio to carve out a long-term edge.The fund tracks the S&P 500. A committee selects 500 of the largest US stocks, or roughly 80% of the US stock market, and weights them by the market cap. The index committee has discretion over selecting companies that meet its liquidity and profitability standards. While a committee-based approach may lack clarity, it adds flexibility to reduce unnecessary changes during reconstitution, taming transaction costs compared with more rigid rules-based indexes.Assigning position sizes based on a stock’s market cap is a simple and efficient method to weight the portfolio. Since US stocks are highly traded, they quickly reflect new information, and carving an edge is difficult. Market-cap weighting naturally adjusts to price changes without frequent rebalancing, generating lower trading costs. That, and lower fees, give large-blend index funds a long-term performance advantage over most actively managed peers.The fund holds a broad, well-diversified portfolio. It typically includes around 500 stocks, and the top 10 represented around 40% of the portfolio at year-end 2025. Still, market-cap weighting can contribute to portfolio concentration when a few stocks dominate the market. This has been the case lately with a handful of mega-cap technology stocks growing to prominence and commanding a greater share of the portfolio.When a few richly valued companies or sectors power most of the market gains, market-cap weighting may overexpose the strategy to the fluctuations of one stock or sector. But this is not a fault in design, as it simply reflects the market’s composition. Its low turnover, low fee, and broad diversification across the US market more than offset these risks.The US exchange-traded fund returned 14.8% annualized over the past 10 years through year-end 2025. It holds little cash, which should help it outperform cash-saddled active peers during market rallies. Likewise, low cash drag could hurt this fund when the stock market declines, but long-term positive returns give this efficient approach a clear edge.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.36.2","shortVersion":"4.36.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2619164759","isCrawlerRequest":true}