Over the last decade, exchange traded funds (ETFs) have exploded in popularity with investors.
One of the most popular ETFs out there with $5.8 billion in assets under management is the Vanguard MSCI Index International Shares ETF (ASX: VGS).
Vanguard highlights that the ETF provides exposure to many of the world's largest companies listed in major developed countries. This provides low-cost access to a broadly diversified range of securities that allow investors to participate in the long-term growth potential of international economies outside Australia.
Clearly this is something that investors want based on the amount of investor funds that are under management.
But is the popularity justified? Let's take a look and see what a $10,000 investment in the Vanguard MSCI Index International Shares ETF five years ago would be worth today.
Has the Vanguard MSCI Index International Shares ETF been a good investment?
The good news is that the Vanguard MSCI Index International Shares ETF has been a market-beater over the last five years.
During this time, its units have provided investors with an average gross return of 11.4% per annum. This compares to the benchmark return of 11.1% over the same period.
In light of this, if you had invested $10,000 into this ETF five years ago, you would have seen the value of your investment grow to approximately $17,160 today. That's a very nice 71.6% return on investment!
And while there's no guarantee that it will do the same over the next five years, if it were to do so, your investment would start to mushroom thanks to the power of compounding.
Five more years of 11.4% per annum returns would see your investment grow to just under $30,000. That's would mean the approximate tripling of your investment in just 10 years. Not bad!
