The best Australian ETFs of 2023 revealed
The top performing ASX fund delivered returns of more than 58% after fees.
ETFs are usually thought of as passive investments best kept over the long-term.
Yet the top performing ASX funds of FY22-23 prove that ETFs can be just as wild and fast moving as individual stocks.
That's right, you're unlikely to find these on any Barefoot Investor list of index funds.
The best performing ETF of the last 12 months, Global X FANG+ ETF (ASX: FANG), delivered a whopping return of 58.48% (to June 30, 2023).
Second on the list, the Global X Semiconductor ETF (SEMI) rose over 51% over that time.
Where traditionally ETFs track the market, many newer ETFs seek to outperform it by honing in on specific sectors or by using leverage. Comparatively, the S&P/ASX 200 index rose only 7% and the S&P 500 index is up 14% over that same time.
Other top performing ETFs follow similar themes of growth and tech innovation. These include the BetaShares Crypto Innovators ETF (CRYP), Hyperion Global Growth Companies Fund (HYGG), Global X Battery Tech & Lithium ETF (ACDC) and the Global X Ultra Long Nasdaq 100 Hedge Fund.
The best performing ETFs of 2023
*Total returns are to June 30, 2023 (source: ASX, Finder)
| Fund name | Ticker | Fee (% p.a.) | 1 year total return |
|---|---|---|---|
| Global X FANG+ ETF | FANG | 0.35 | 58.48% |
| Global X Semiconductor ETF | SEMI | 0.57 | 51.75% |
| Global X Ultra Long Nasdaq 100 Hedge Fund | LNAS | 1.00 | 49.73% |
| BetaShares Global Robotics and Artificial Intelligence ETF | RBTZ | 0.57 | 45.53% |
| Global X Battery Tech & Lithium ETF | ACDC | 0.69 | 41.32% |
| BetaShares Crypto Innovators ETF | CRYP | 0.67 | 41.26% |
| BetaShares Geared Australian Equity Fund (Hedge Fund) | GEAR | 0.80 | 38.62% |
| Global X EURO STOXX 50 ETF | ESTX | 0.35 | 37.67% |
| BetaShares NASDAQ 100 ETF | NDQ | 0.48 | 35.68% |
| Hyperion Global Growth Companies Fund (Managed Fund) | HYGG | 0.70 | 34.24% |
Before you hit the buy button, it's worth remembering that as with stocks, past performance does not guarantee future results.
Why these ETFs?
The top performing ETFs largely reflect the US tech sector rebound of 2023 where riskier assets are making a comeback.
Following the downturn of 2022, stocks, particularly in technology sectors, have made a sharp recovery this year as investors hold out hopes for an end to interest rate hikes.
Adding to this is the huge hype around artificial intelligence technology thanks to the arrival of ChatGPT and all the implications it brings.
Stocks linked to AI software and hardware, such as Nvidia, Microsoft and C3.ai Inc, have seen share prices surge as much as 100% in the last 6 months alone.
The Global X Semiconductor ETF, the BetaShares Global Robotics and Artificial Intelligence ETF and the BetaShares Cloud Computing ETF, which hold many of these stocks, are clear winners of this AI trend.
Thematic ETFs dominate
Many of the highest performing funds follow specific investment themes, such as US technology, cryptocurrency, semiconductors and battery tech.
While thematic ETFs make it possibly to invest in 'trends' they're also more volatile and therefore riskier than traditional index funds.
For instance, oil themed ETFs regularly dominate the top performers list when oil prices lift - only to fall off once oil production increases.
Actively managed ETFs may also be riskier than a traditional index fund if they use strategies that involve derivatives or leverage. Studies also show actively managed funds tend to underperform the market over the long run.
For more on how listed funds work, read our comprehensive guide to ETFs.
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