The ASX's most popular exchange-traded fund (ETF) to invest in is the Vanguard Australian Shares Index ETF (ASX: VAS). We know this because VAS currently has more than $10 billion in assets under management, far greater than its next rival with just over $5 billion.
But we also know that VAS was far from the best performing ETF in 2021. It didn't even make the top five. Some of the ETFs that beat out VAS, such the BetaShares Crude Oil Index ETF (ASX: OOO) had stellar years last year, but don't beat the Vanguard Australian Shares Index ETF over a longer period of time. But funds like those are not index funds; they instead cover specific corners of the market (in this case, oil futures).
But let's look at some of the index funds that can shine a light on VAS over the past decade.
How does VAS measure up against other ASX index funds?
As a benchmark, VAS has returned an average of 9.41% per annum over the past ten years (as of 31 January).
One index fund that has exceeded this return is the ASX's second-most popular ETF by assets under management, the iShares S&P 500 ETF (ASX: IVV). This ETF tracks the S&P 500 Index, which is the conventional pick for US share exposure as well as being the most widely-tracked index in the world. Over the past decade, IVV has more than doubled VAS's return, giving investors an average return of 20.07% per annum.
But that's not the only index fund that has pipped VAS over the past decade.
The iShares Global Consumer Staples ETF (ASX: IXI) has averaged a return of 13.72% over the same period.
The iShares Asia 50 ETF (ASX: IAA) has given investors an average of 12.59%. The iShares Global 100 ETF (ASX: IOO) Tracking 100 of the largest companies in the world, this fund has averaged 17% per annum since 2012.
Even the iShares MSCI Japan ETF (ASX: IJP) has beaten out VAS, giving investors a return of 11.39% over the past ten years.
So VAS is certainly not infallible. But that doesn't mean you shouldn't invest in it. Perhaps Australian shares may outshine those other markets over the next decade. Past performance is no guarantee of future returns, after all. But ASX investors have voted with their wallets and VAS still remains king of the ASX index fund hill.
