ASX ETFs or exchange-traded funds (ETFs) that hold global shares make it a whole lot easier for Australian investors to purchase international shares without having to buy on another exchange.
Buying international shares typically involves selecting and signing up to a trading platform that has direct access to other exchanges and paying higher brokerage fees and, often, currency conversion fees.
Buying global shares held in ASX-listed ETFs is just so much easier.
And now, new data released by the ASX gives us a snapshot of which global share-based ASX ETFs are providing the best returns to Australian investors.
Here are the top five performers for total investor returns over the three years to 31 July.
The top 5 ASX ETFs that hold global shares
For the purposes of this article, we're going to focus on the ASX ETFs and managed funds that invest in global shares only based on a certain strategy.
This means we're excluding the index-based and sector-based ETFs and managed funds.
According to the data, here are the top five global shares ETFs or managed funds over the past three years:
- The Vanguard Global Value Equity Active ETF (Managed Fund) (ASX: VVLU) ETF returned an average of 23.61% per annum. This includes reinvested dividends, which have historically averaged a yield of 4.39%.
- Vaneck Morningstar Wide Moat ETF (ASX: MOAT) returned an average of 19.63% per annum. This includes reinvested dividends, which have historically averaged 6.96%.
- BetaShares Geared US Equity Fund Currency Hedged (Hedge Fund) (ASX: GGUS) returned an average of 18.62% per annum. This ETF does not earn dividends.
- The VanEck MSCI International Quality ETF (ASX: QUAL) ETF returned an average of 14.71% per annum. This includes reinvested dividends, which have historically averaged 1.1%.
- Global X Ultra Long Nasdaq 100 Hedge Fund (ASX: LNAS) returned an average of 14.69% per annum. This includes reinvested dividends, which have historically averaged 7.26%.
More about the No. 1 ETF
Vanguard Global Value Equity Active ETF (Managed Fund) is an actively managed ASX ETF. It aims to outperform its benchmark by investing in value shares from around the world.
Value shares are stocks that are undervalued based on the company's earnings, assets, and cash flow.
The VVLU ETF's benchmark is the FTSE Developed All-Cap in Australian Dollars Index.
Vanguard describes what type of investor this ASX ETF would suit:
Buy and hold investors seeking outperformance against the index through exposure to the value factor, long-term capital growth, some income, international diversification, and with a higher tolerance for the risks associated with share market volatility.
The top five holdings of the VVLU ETF are Comcast Corporation, Verizon Communications Inc, General Motors Co, Ford Motor Co, and Altria Group Inc.
