Looking for the best exchange-traded funds (ETFs) in Australia? This guide will show you the top ETFs by performance over different time frames.
It's worth noting that ETFs can be used for all investment strategies, so there's no "one-size-fits-all" ETF. Instead, this is simply the performance over 1, 3 and 5 years based on the latest Australian Securities Exchange (ASX) data.
10 Best ETFs in Australia over the last...
Jump straight down to our comparison tables of the top ETFs in Australia over the last 1 to 5 years and compare performance, fees and strategies.
The following ETFs are the best performing over the last 5 years in Australia. All performance figures are net of fees. To see how they compare over different time frames, scroll down to our 5-year performance comparison table.
The Betashares NDQ ETF is the top performing listed fund in Australia over the last 5 years. It focuses on technology, tracking the NASDAQ-100 Index, comprising 100 of the largest non-financial companies listed on the NASDAQ stock exchange.
It's known for its significant exposure to big tech firms like Apple, Amazon, and Google. Its performance over the past five years has been bolstered by the robust growth of the tech sector, especially in areas like cloud computing, e-commerce, and digital services.
Pros
Exposure to leading tech companies with high growth potential.
Strong historical performance, driven by the growth of the technology sector.
Cons
High concentration in tech can be risky if the sector underperforms.
Potentially high volatility due to market fluctuations in tech stocks.
The Betashares Geared US Equity Fund Currency Hedged (Hedge Fund) is a managed fund that gives Australian investors exposure to US equities. At the same time, it manages currency risk through hedging.The fund is internally geared, meaning it uses borrowing to boost the returns of its underlying assets. The share portfolio is largely diversified and consists of the largest 500 shares listed in the US by market capitalisation as measured by the S&P 500 Index.
Pros
Leveraged returns give you access to gains while the US market is strong.
Currency hedging can protect you fro losses due to fluctuations in the value of the Australian dollar.
This ETF invests in global companies that meet sustainability criteria, tracking an index of environmentally and socially responsible firms. It excludes companies with high carbon footprints and unsustainable business practices. The ETF has performed well due to its high exposure to US technology stocks and increasing investor interest in ESG (Environmental, Social, and Governance) factors.
Pros
Aligns with ethical and sustainable investment principles.
Diversification across various geographies and sectors.
Cons
May exclude potentially profitable sectors that don't meet ESG criteria.
High exposure to the US tech sector which may not suit all portfolios
This ETF focuses on the battery technology and lithium market, tracking companies involved in lithium mining, battery production, and related technologies. The growth in electric vehicles and renewable energy storage solutions has driven its performance, as these sectors heavily rely on advanced battery technologies.
Pros
Investment in the rapidly growing electric vehicle and renewable energy sectors.
High growth potential with the increasing demand for battery technology.
Cons
High risk associated with emerging technologies.
Vulnerability to fluctuations in raw material prices, especially lithium.
5. VanEck MSCI International Quality ETF (QUAL)
5-year return: 17.61% p.a.
Annual management fees: 0.40%
This ETF tracks the MSCI World ex Australia Quality Index, focusing on high-quality companies outside Australia. These companies are characterised by high return on equity, stable year-over-year earnings growth, and low financial leverage. The ETF's good performance is attributed to its focus on fundamentally strong companies with sustainable business models.
Pros
Investment in high-quality international companies with strong fundamentals.
Diversification across a range of geographies and sectors.
Cons
Exposure to currency risk due to international investments.
Potentially lower returns during market rallies dominated by riskier stocks.
This ETF provides exposure to global companies in the cybersecurity sector, tracking an index of firms involved in cybersecurity hardware and software. The rising demand for cybersecurity solutions, driven by increasing digitalisation and cyber threats, has bolstered its strong performance over the past five years.
Pros
Exposure to the growing cybersecurity sector
Potential for high returns due to increasing demand for cybersecurity solutions.
Cons
Sector-specific risk; vulnerable to technological changes and threats.
Potentially high volatility in a rapidly evolving industry.
This ETF provides exposure to 100 of the largest multinational corporations globally, tracking the S&P Global 100 Index. The ETF includes companies with significant international presence and diversified business operations, contributing to its resilience and steady performance over the past five years.
Pros
Diversified investment across various sectors and regions.
Stability and resilience due to investment in large-cap companies.
Cons
Limited exposure to emerging markets and smaller companies.
Large-cap focus might result in lower growth potential compared to mid
This fund tracks the Morningstar Wide Moat Focus Index, investing in global companies with 'wide economic moats' or sustainable competitive advantages. The selection includes firms with strong brand recognition, cost advantages, or unique products. Its solid performance is due to investing in companies that are well-positioned to maintain competitive advantages.
Pros
Investment in companies with sustainable competitive advantages.
Diversification across various sectors and geographies.
Cons
Moat companies can be overvalued, leading to high entry costs.
Limited exposure to small-cap and emerging market stocks.
The SPDR S&P 500 ETF Trust is an investment trust that aims to give results that match the price and yield performance of the S&P 500 Index. It was launched in January 1993 as the first ETF listed in the US.Australian investors can benefit from accessing exposure to 500 of the largest US-listed companies across 11 GICS sectors including industries that have limited representation in Australia.
Pros
Gain exposure to a diversified offering of sectors and companies within the S&P 500 Index.
ETFs are low cost an easily accessibly compared to actively managed funds.
Cons
The ETFs as a USD base currency and holds US-listed securities so investors are exposed to currency fluctuations.
The iShares S&P 500 ETF (IVV) is a fund that can give Australian investors exposure to the US stock market. It tracks the S&P 500 index, with the investment results aiming to correspond to the performance of the index before fees and expenses. The fund is managed by BlackRock Fund Advisors and can offer sustainable, long-term growth to Australian investors looking for a diversified portfolio.
Pros
The fund gives you access to a diversified portfolio.
It is low cost access to top 500 US stocks in one fund.
Cons
You are exposed to currency fluctuations.
What's our methodology for these best ETFs?
We show the 10 highest-returning exchange-traded products on the ASX (updated monthly) over the last 1-, 3- and 5-year periods. Our list includes all standard, synthetic and actively managed ETFs, which means some of them will be riskier than others. To understand more about what these terms mean, head to our guide to ETFs.
The returns shown are net, meaning the management fees have already been deducted to offer a clearer view of performance. Returns are also annualised, so for instance, a 5-year return of 2% equates to an average return of 2% every year over that period.
Remember past performance is no guarantee of future success. The best-performing ETF of the last year might decline in value in the future. The lesson here is that performance is one consideration, but you should also look at fees, how risky the product is, your investment goals and how long you can afford to invest.
Best-performing ETF in Australia over the last year
The latest data shows the Betashares Crypto Innovators ETF has taken the lead as the best-performing ASX ETF. This fund aims to give investors exposure to the crypto economy through up to 50 companies driving the crypto landscape. These companies are involved in the crypto economy in various ways, such as building crypto mining equipment, and include big-name crypto companies such as Coinbase.
Source: ASX | Period ending: 28 March 2024 | SP = Structured Product, MF = Managed Fund, Fees = %p.a.
Best ETF in Australia based on performance over the last 3 years
Betashares Geared Australian Equity Fund (Hedge Fund) is the top-performing ASX ETF of the last 3 years, thanks in part to the performance of the share market during that time. The aim of the fund is to provide investors with cost-effective, geared exposure to the returns of the Australian share market.
Source: ASX | Period ending: 28 March 2024 | SP = Structured Product, MF = Managed Fund, Fees = %p.a.
Best ETF in Australia based on performance over the last 5 years
The best-performing ASX ETF over the last 5 years is the BetaShares NASDAQ 100 ETF (NDQ). The ETF's price has gained in recent months as the tech-heavy NASDAQ recovers sharply from the 2022 correction driven by rising interest rates.
Source: ASX | Period ending: 28 March 2024 | SP = Structured Product, MF = Managed Fund, Fees = %p.a.
Did you know?
You could save $1,046 a year on average in brokerage fees by switching to a more suitable online broker, according to Finder research. You might even save money by having more than one platform, especially if you are investing both in Australia and internationally.
Why are these the best-performing ETFs?
As 2024 unfolds, the financial landscape is being defined by pivotal events from the end of 2023 and the start of this year. The intensification of the conflict in Ukraine in December 2023, and the escalation of tensions in the Middle East by January 2024, have had a significant impact on global markets, including Australia's. These geopolitical events have led to notable fluctuations in the prices of key commodities like oil, gas, and wheat, contributing to market volatility.
These dynamics, driven by the situation in Ukraine and the Middle East, have been central to the changes observed in both global and Australian markets. The volatility in commodity prices underscores this period of adjustment. Moreover, the ongoing effects of previous government stimulus packages, deployed to navigate through a global health crisis, continue to play a critical role. Inflation remains a key concern, influencing investment decisions and shaping the economic outlook.
In contrast to the downturn experienced by stock markets in 2023, prompted by rising interest rates, 2024 has seen a marked recovery. This rebound is especially evident in the technology sector, highlighting its capacity to adapt and grow despite economic uncertainties.
The top ETFs of the last 12 months have performed well thanks to the combination of these specific economic conditions. The best-performing ETFs of FY2023/2024 include:
US dollar ETFs: Due to rising interest rates in the US, the US dollar has been a top performer.
Energy and resources ETFs: Oil and commodity prices have been driven up because of the supply chain disruptions.
US tech ETFs: US technology stocks have rallied as investors view an end to rising interest rates and thanks to interest around artificial intelligence.
News update: March 2024
Betashares' growth in Australian ETF market: Betashares led the Australian ETF market in net flows, securing $5.6 billion, surpassing giants like iShares and Vanguard. Its top funds, the Betashares Australia 200 ETF and Betashares NASDAQ 100 ETF, both exceeded $4 billion in funds under management, driving a combined net flow of $1.4 billion.
Growth of the Australian ETF Market: VanEck projects that Australia's ETF market will expand to A$180 billion in assets by the end of 2024, marking a considerable growth from its present value.
BlackRock's shrinking market share in US ETF industry: As of November 2023, BlackRock's dominance in the US ETF market has declined, with iShares managing approximately 32% of the market, a decrease from 33.7% in late 2022.
Bitcoin ETFs and unit bias psychology: Gabor Gurbacs of VanEck suggests that Bitcoin ETFs could counteract the unit bias psychology, where investors prefer owning whole assets over fractions, making ETFs a more accessible investment option for those wanting to own complete units of Bitcoin.
How to pick the best ETF for you
Consider a time frame. Think about how long you can invest your money and when you may need to access it. Some ETFs rise quickly over the short term but pose the risk of falling over several years. Others rise slowly over the long term but may dip over the short term.
Have a strategy. What do you want to get from this ETF? Can you afford to take on a riskier short-term investment or would you prefer to be more sure of your returns over a longer period? If you'd prefer to avoid risk, you might want to consider index funds.
Understand the product. It's always important to thoroughly research the listed fund you wish to invest in, whether that's an index ETF, an active ETF or a structured product. Download the fund's product disclosure statement (PDS) and read through the details.
Check the returns. Look at the returns (including all fees) over different periods. How has it performed over 1 or several years?
Understand the fees. Fees strongly influence return on investment. Make sure the returns outshine the ETF's management fees and pick a broker with fees that match your trading habits.
Fully understand the product. Make sure you understand the nature of the product and the risks involved before you invest in an ETF. Some very complex products may appear to be simple on the outside. If you don't fully know how the investment is managed or how the fund manager aims to achieve returns, talk to a licensed financial adviser or don't invest in the product.
What are the cheapest ETFs?
At the time of writing, the cheapest ETF on the ASX is the Betashares Australia 200 ETF thanks to a management fee of just 0.04%.
That's followed by the iShares Core S&P/ASX 200 ETF (0.05%), iShares S&P/ASX 20 ETF (0.24%) and VanEck Australian Equal Weight ETF (0.35%).
By comparison, the average ETF management fee in Australia is 0.55% p.a.
At the time of writing, the 5 best-performing US-themed ETFs of the last 5 years are:
BetaShares Nasdaq 100 ETF (19.11% return p.a.)
VanEck Morningstar Wide Moat ETF (16.46% p.a.)
BetaShares Global Sustainability Leaders ETF (16.17% p.a)
SPDR S&P 500 ETF Trust (14.32% p.a.)
These ETFs are listed in Australia but track US stock markets. In most cases, US-themed ETFs try to mimic the S&P 500 index (the biggest 500 companies in the US) or the Nasdaq 100 index.
What are the best index funds?
At the time of writing, the best-performing broad-based index fund ETFs over the last 5 years are:
BetaShares Nasdaq 100 ETF (19.11% return p.a.)
VanEck Morningstar Wide Moat ETF (14.46% p.a.)
BetaShares Global Sustainability Leaders ETF (16.17% p.a)
VanEck MSCI International Quality ETF (14.79% p.a.)
iShares Global 100 ETF (14.71% p.a.)
Broad-based index funds aim to capture groups of stocks that represent a specific stock market, such as the ASX or NYSE. Over the last 5 years, the US markets have outperformed the Australian market, which is why the best performing index fund ETFs are all US-themed.
Keep ETF fees in mind
As is the case with super funds and savings accounts, there is a direct correlation between high fees and an ETF's overall performance. When fees are higher, returns tend to be lower and vice versa. There are 3 main costs involved when investing in listed funds:
Brokerage fees. As with shares, you're charged a transaction fee by your broker every time you invest money into an ETF. For example, CommSec charges $5 for every transaction of $1,000 or less while CMC Invest charges $11 or 0.1%, whichever is higher. This fee will come down to which trading platform or brokerage you choose to use.
Management fees. This is often displayed as the management expense ratio (MER), which is the percentage of your return charged as fees by the ETF's fund managers. Normally, the more work a fund manager has to do to keep the ETF profitable, the higher the fee – though this won't always be the case. This is why many active ETFs charge higher fees than index ETFs, which passively track an index. Examples of these passive ETFs include Vanguard, Blackrock's iShare products and BetaShares' market tracking ETFs. To see our full list of the cheapest ETFs in Australia, click here.
Performance fees. Some ETFs charge a performance fee taken as a percentage of your overall returns. This means if your fund is not performing above a certain level, you won't get charged the fee. Typically only actively managed hedge fund ETFs charge this fee.
What are the risks of investing in ETFs?
You could lose money. The value of ETFs and other types of listed funds rise and fall like any listed stock, which means there are similar risks involved.
Single-asset ETFs. Some ETFs bundle a diverse range of securities that protect the investor from market falls; others hone in on 1 asset class. For example, a commodity ETF that invests in a particular metal will do well when that metal's price goes up, but it will also fall quickly if prices don't have the protection of other asset classes.
Currency risks. If you invest in a global ETF, changes in the value of the Australian dollar will have a direct impact on the value of your investment.
International taxes. If you buy units in an ETF listed overseas, you may need to pay foreign taxes. Make sure you're aware of all tax implications of an ETF before you commit any funds.
Synthetic ETFs. These have all the same risks as physical ETFs, but they also expose you to other potential risks such as counterparty risks. There's also the possibility that the price of futures will differ from the price of an underlying asset.
Before deciding whether ETFs are the best investment solution for you, make sure you're fully aware of how they work and have an in-depth understanding of all the risks involved. Read the PDS closely, ask questions of the ETF issuer if you're unsure about anything and consider seeking help from a qualified financial adviser.
Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.
Frequently asked questions
You can buy and sell units in an ETF like any share on the stock market through a fund manager or an online trading platform.
For more information on ETF investing and how ETFs work, check out our guide to ETFs.
The best-performing Vanguard ETF in Australia over the last 5 years is the Vanguard US Total Market Shares Index ETF (VTS), with an average annual return of 15.78% after fees (as of Jan 2024).
If you only look at the last 12 months, the Vanguard FTSE Europe Shares ETF (VEQ) is the top-performer by Vanguard.
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.
Kylie Purcell is the senior investments editor and analyst at Finder. She has completed a Certificate of Securities and Managed Investments (RG146) and specialises in investment products including online brokers, robo-advisors, stocks and ETFs.
Hi Geoff, the simplest way to invest in ETFs is through an online share trading platform. This guide should help you get started: https://www.finder.com.au/share-trading/exchange-traded-funds-etfs. You may also find this helpful: https://www.finder.com.au/buy-shares-children. The main costs involved are the brokerage fees – charged by the trading platform – and the ETF management fees (MER). Brokerage fees are charged per investment transaction and can range from $0 to $50 depending on the platform you choose. The MER fee can range from 0.03% to over 2% of your invested funds per year.
Best of luck.
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Wanting to set up 2× $1000 Etf for 2 granddaughters. How do I do it and what costs are involved?
Hi Geoff, the simplest way to invest in ETFs is through an online share trading platform. This guide should help you get started: https://www.finder.com.au/share-trading/exchange-traded-funds-etfs. You may also find this helpful: https://www.finder.com.au/buy-shares-children. The main costs involved are the brokerage fees – charged by the trading platform – and the ETF management fees (MER). Brokerage fees are charged per investment transaction and can range from $0 to $50 depending on the platform you choose. The MER fee can range from 0.03% to over 2% of your invested funds per year.
Best of luck.