Australia's mining giants play a major role in the national economy. A great way to gain exposure is through sector-focused ASX ETFs.
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Global presence
Sometimes, as investors, we tend to overcomplicate things.
While past performance doesn't guarantee future results, it's still important to recognise the influence and importance resources and mining companies have on portfolios.
In fact, over the last 10 years (from the end of 2015), the S&P/ASX 200 Resources Index (ASX: XJR) has risen roughly 170%.
There's a reason investors continue to put money into known blue-chip companies like BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO), etc.
These are not just some of the largest companies in Australia, but also among the largest in the world.
So if you are looking for a more focused investment in this sector, here are two ASX ETFs to consider that have brought 10% to 12% annualised returns over the last 10 years.
BetaShares S&P/ASX 200 Resources Sector ETF (ASX: QRE)
The QRE ETF aims to track the performance of an index (before fees and expenses) comprising the largest ASX-listed companies in the resources sector.
At the time of writing, it has 44 holdings in the fund.
It is largely focused towards BHP, with a 33% weighting. Its next largest exposure to any holding is 7% (Rio Tinto).
Largest exposure by sector allocation:
- Diversified Metals & Mining (52.8%)
- Gold (16.9%)
- Oil & Gas Exploration & Production (14.1%)
- Steel (6.1%)
- Electric Utilities (3.9%)
This year, it has risen an impressive 19.85%.
According to Betashares, the fund has returned 12% per annum over the last 10 years.
VanEck Australian Resources ETF (ASX: MVR)
MVR gives investors exposure to a diversified portfolio of ASX-listed resources companies with a market cap exceeding US$150 million.
It is made up of 31 holdings, with a much more balanced profile compared to the Betashares fund discussed above.
Its largest weighting by company:
- BHP (7.68%)
- Woodside Energy Group Ltd (ASX: WDS) (6.86%)
- Northern Star Resources Ltd (ASX: NST) (6.71%)
- Fortescue Metals Group Ltd (ASX: FMG) (6.69%)
- Rio Tinto (6.55%)
According to VanEck, this ASX ETF has provided an annualised return of 10.13% over the last 10 years.
