Looking for an ASX ETF with a track record of outperforming the S&P/ASX 200 Index (ASX: XJO)?
Then you might want to have a look into the BetaShares Australian Quality ETF (ASX: AQLT).
That's according to DP Wealth Advisory's Andrew Wielandt (courtesy of The Bull).
Wielandt, who has a buy recommendation on the exchange-traded fund, noted that after fees (0.35% annually), the fund's returns stood at 23.5% for the 12 months to August 29.
That compares to a 10.9% gain delivered by the ASX 200 over this same period.
Image source: Getty Images
How is the ASX 200 ETF outpacing the ASX 200?
Noting that he holds the ASX ETF in his self-managed super fund, Wielandt said, "This fund, comprising 40 high quality Australian companies, aims to outperform the S&P/ASX 200 Index over the long-term."
He added that the fund, which trades on a 12-month dividend yield of 3.3%, "targets companies with a high return on equity, low leverage and relative earnings stability".
The fund's top four holdings at the time of writing are: Wesfarmers Ltd (ASX: WES), Telstra Group Ltd (ASX: TLS), BHP Group Ltd (ASX: BHP), and National Australia Bank Ltd (ASX: NAB).
Which gives you some indication of how the ASX ETF has managed to charge higher.
Taking a look at those top four holdings:
- Wesfarmers shares are up 31.2% in a year and trade on a dividend yield of 2.2%.
- Telstra shares are up 22.8% in a year and trade on a dividend yield of 3.9%.
- BHP shares are up 2.8% in a year and trade on a dividend yield of 4.2%.
- NAB shares are up 12.6% in a year and trade on a dividend yield of 3.9%.
Comprising 6.4% of the fund's holdings, Wesfarmers shares are not only the best performing of the top four but also the biggest holding.
So, what's been sending Wesfarmers shares racing higher?
Wesfarmers shares boost BetaShares Australian Quality ETF returns
The ASX ETF has done particularly well with its significant investment in Wesfarmers shares.
And we need only look to Wesfarmers' FY 2025 earnings results to see why.
Highlights for the 12 months included a 3.4% year-on-year increase in revenue to $45.7 billion.
And on the bottom line, Wesfarmers reported an FY 2025 statutory net profit after tax (NPAT) of $2.93 billion, up 14.4% from FY 2024. Underlying NPAT (which excludes certain significant items) was up 3.8% to $2.65 billion.
And management pleased passive income investors with a fully franked final dividend of $1.11 a share, up 3.7% from the prior final dividend.
