Many ASX investors have a natural home bias when it comes to building their portfolios.

It's easy to understand why—Australia has a stable economy, a collection of world-class companies, and a strong dividend culture.

However, by limiting investments to the ASX, investors miss out on exposure to some of the world's most dominant and innovative businesses.

This is where the Vanguard MSCI Index International Shares ETF (ASX: VGS) comes in.

The VGS ETF

The Vanguard MSCI Index International Shares ETF is designed to provide Australian investors with a simple way to gain exposure to a broadly diversified portfolio of global shares.

The ASX ETF tracks the MSCI World ex-Australia Index, which includes over 1,400 large and mid-cap companies from major developed markets, including the United States, Europe, and Asia. This means that instead of relying solely on the performance of the Australian economy, investors can tap into the economic growth of multiple regions, reducing risk and improving long-term return potential.

Access to high-growth sectors

One of the biggest benefits of global investing is sector diversification.

The ASX is heavily concentrated in financials and resources, which means local investors often have limited exposure to high-growth industries like technology and healthcare.

By investing in VGS, investors gain access to world-leading companies in sectors that are underrepresented on the ASX.

Take Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT), two of the largest holdings in the VGS ETF.

Apple is a global powerhouse in consumer technology, with a vast ecosystem spanning iPhones, MacBooks, and subscription services. The company's ability to generate massive cash flows and maintain customer loyalty has made it one of the most valuable businesses on the planet.

Microsoft, on the other hand, is deeply embedded in both enterprise and consumer markets, with its dominance in cloud computing, software, and artificial intelligence making it a major force in the digital economy.

Defensive exposure to global leaders

Outside of tech, healthcare giant Johnson & Johnson (NYSE: JNJ) is another key holding.

With a diversified portfolio of pharmaceuticals, medical devices, and consumer health products, the company benefits from the long-term trend of rising global healthcare demand.

Its steady revenue streams and strong research capabilities make it a defensive yet growth-oriented investment.

Meanwhile, Nestlé, the Swiss consumer goods giant, provides exposure to a different kind of stability. With a portfolio of globally recognised brands, including Nespresso, KitKat, and Purina, Nestlé benefits from steady demand and strong pricing power, making it a key defensive play in times of market volatility.

Foolish takeaway

There certainly is a lot to like about this ASX ETF.

By investing in VGS, Australian investors can own a slice of the world's most successful businesses, gain exposure to different economies, and reduce reliance on the ups and downs of the local market.

While the ASX clearly has its strengths, true diversification comes from looking beyond our borders. The Vanguard MSCI Index International Shares ETF makes it easy to do just that.