ASX ETFs can give investors a quick and simple diversified portfolio.
One distinct positive of ASX ETF investing is getting exposure to overseas markets.
However, there are also funds that are designed to track specific sectors here in Australia.
This can be a way to increase your exposure to a select few companies in a sector you believe has upside.
There are two such funds that vastly outperformed the Australian market and doubled in the last 5 years.
For context, the S&P/ASX 200 Index (ASX: XJO) is up 43.89% over the last five years.
Let's look at the two.
Image source: Getty Images
VanEck Vectors Australian Banks ETF (ASX: MVB)
Australian banks make up a vital portion of the domestic economy, and it's no surprise that this ETF has outperformed over the last five years, given the sharp rise from the big four.
The fund is made up of 7 holdings with the following allocation at the time of writing:
- ANZ Group Holdings Ltd (ASX: ANZ): 20.11%
- Westpac Banking Corp (ASX: WBC): 20.02%
- Commonwealth Bank of Australia (ASX: CBA): 19.74%
- National Australia Bank Ltd (ASX: NAB): 19.69%
- Macquarie Group Ltd (ASX: MQG): 17.62%
- Bendigo and Adelaide Bank Ltd (ASX: BEN): 1.64%
- Bank of Queensland Ltd (ASX: BOQ): 1.23%
This fund's share price was hovering around $20 each in 2020, and today sits at $40.70.
MVB has surged over the past five years thanks to strong fundamentals, high dividend income from Australia's major banks, and margin expansion driven by rising interest rates since 2021.
It also comes with a 4% dividend yield.
BetaShares S&P/ASX 200 Financials Sector ETF (ASX: QFN)
This fund aims to track the performance of an index (before fees and expenses) comprising the largest ASX-listed companies in the financial sector, including the big four banks and insurance companies, but excluding real estate investment trusts.
During 2020, its share price was as low as $7.00 each.
Today, shares are trading at $17.48.
The big four banks represent roughly 70% of the fund, which has contributed to its sharp rise.
It also has small exposure to insurance companies such as QBE Insurance Group Ltd (ASX: QBE) and Suncorp Group Ltd (ASX: SUN).
