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It has simply been an extraordinary time to own the Vanguard MSCI Index International Shares ETF (ASX: VGS). This popular Vanguard international shares index fund has had an incredible run over the past few years.
Back in June 2022, VGS units were going for just $85.40 each on the ASX. But today, those same units are currently trading for $129.37 at the time of writing, up a solid 1.26% for the day thus far.
Not only that, but VGS has also just hit a new all-time record high today. Just after market open this morning, this exchange-traded fund (ETF) climbed up as high as $129.41. That’s the highest this ASX index fund has ever traded at.
Today’s moves put VGS units up a healthy 17.56% in 2024 to date. The fund is also up 21.6% over the past 12 months and has gained a whopping 51.3% since that mid-2022 low. And that’s not even accounting for dividend returns.
It’s not hard to see where the Vanguard International Shares ETF’s returns have come from. Although its portfolio contains underlying stocks from more than 20 different countries, the major American stocks dominate it.
The likes of Apple, Amazon, NVIDIA, and Microsoft have more influence on VGS’ portfolio than any other stocks. And these stocks have been on a tear over the past few years too. Nvidia stands out with its near-200% rise over the past 12 months alone.
It’s those sorts of moves that have, in all likelihood, enabled this index fund to deliver these astonishing returns for its investors in recent months and years.
Is it too late to buy VGS units on the ASX?
But many investors who love broad-based ASX index funds like VGS might wonder whether it is sensible to invest additional money in this ETF at its new record highs.
Well, that’s a very tough debate to get into. Conventional investing wisdom dictates that we should always try to ‘buy low’ and ‘sell high’, which obviously doesn’t bode well for anyone who wants to invest in this ETF right now.
However, I would argue that sensible investors should ignore this ‘wisdom’. ASX index funds like VGS are perfect candidates for a regular investing strategy using dollar-cost averaging. Index funds tend to deliver solid, long-term returns, albeit with the stock market’s inherent volatility.
If you’ve been investing $100 a week or a month into something like VGS, rain, hail, or shine, the fact that it is currently at an all-time high shouldn’t dissuade you. No one knows when the next market downturn may come. For all anyone knows, it could be next week, next month, or in 2027.
Today’s new record high could prove fleeting or herald several more going forward. No one knows the answers to these questions. But what we do know is that the markets tend to go up far more often than they go down.
By that logic, it makes sense to invest as much as we can, as soon as we can.
So, if I were considering an investment in the Vanguard International Shares ETF today, I wouldn’t let that new record high put me off.