Although the ASX share market has had a rather rocky start to 2022, remember that 2021 was a pretty decent year for ASX shares overall. In the year that has just passed us by, the S&P/ASX 200 Index (ASX: XJO) returned roughly 13% (plus dividends and franking). That, in turn, means that any ASX index exchange-traded fund (ETF), which are perenially the most popular ETFs on the market, would have more or less matched that return.
But some ETFs managed a 2021 performance far exceeding that benchmark. So here are the ASX's best performing ETFs of 2021.
The 5 best performing ASX ETFs of 2021
iShares S&P 500 ETF (ASX: IVV)
This ETF from BlackRock's iShares is our first high flyer to check out today. IVV is a rather simple ETF, covering the most-tracked index in the world, the US S&P 500. This index tracks 500 of the largest companies on the US markets. These include everything from the US tech giants like Apple Inc (NASDAQ: AAPL) and Amazon.com Inc (NASDAQ: AMZN) to Warren Buffett's Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B), Adobe Inc (NASDAQ: ADBE) and Ford Motor Company (NYSE: F).
IVV returned 36.36% in 2021, making it the ASX's fifth best-performing ETF.
iShares Core MSCI World ex Australia ESG Leaders ETF (ASX: IWLD)
Another iShares ETF, this fund comes in next. IWLD is an ETF that focuses on mid- and large-cap companies from outside Australia, selected for "leading ESG practices within their industry". At the time of writing, this ETF has 720 holdings, the largest mostly coming from the US markets. We have Apple and Microsoft Corporation (NASDAQ: MSFT), as well as Tesla Inc (NASDAQ: TSLA), Mastercard Inc (NYSE: MA) and Toyota Motor Corp (NYSE: TM).
IWLD returned just over 38% for the 2021 calendar year.
SPDR Dow Jones Global Real Estate Fund (ASX: DJRE)
Our third top-performing ETF of 2021 is a little different. Rather than racking large baskets of shares, this ETF only holds real estate investment trusts (REITs) and other property-linked companies and funds from around the world. The ASX's Goodman Group (ASX: GMG) is a large holding here, as well as other shares like Prologis Inc (NYSE: PLD) and Public Storage (NYSE: PSA). Over 2021, DJRE returned 38.56%, of which 4.05% came from dividend distributions.
BetaShares Crude Oil Index ETF (ASX: OOO)
A whole different kettle of fish again, this EFT from BetaShares takes the silver medal for 2021 performance. OOO is a pure-play commodities fund. It tracks an index that reflects the performance of crude oil futures. As you may be aware, oil had a dramatic 2021, rising to levels we haven't seen for years. This is reflected in this ETF's performance, which gave investors a healthy return of 47.8% over the year just gone.
BetaShares Geared US Equity Fund (ASX: GGUS) and ETFS Ultra Long Nasdaq 100 Hedge Fund (ASX: LNAS)
In a 2-for-1 special, these two ETFs were the best performing of the entire ASX last year. We'll look at them together since they largely operate in a similar manner, and track similar markets. These two ETFs are 'leveraged' (or geared) which means they use borrowing to potentially magnify the gains (or losses) of the indexes they track.
BetaShares' GGUS covers the S&P 500 Index, while ETFS' LNAS covers the Nasdaq 100. Fortunately for investors, last year was a lucrative one for both of these indexes, which means that these ETFs recorded larger gains again due to their leveraged nature. LNAS returned a total of 64.7% in 2021, while GGUS gave back a very pleasing 66.25%, making it the best ASX ETF on the market.
