Which of the most popular ASX ETFs has brought the best returns this year?

Do you have exposure to these funds?

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Key points

  • Increasing cash flows into ASX ETFs are seen as investors seek set-and-forget options, with three major funds leading in market cap.
  • VAS has the largest market cap providing exposure to 300 ASX companies, while VGS and IVV focus on international equities, specifically large US tech companies.
  • The Vanguard MSCI Index International Shares ETF (ASX: VGS) outperformed others, rising by 10.47%, compared to Vanguard Australian Shares Index ETF (ASX: VAS) at 6% and iShares S&P 500 ETF (ASX: IVV) at 9.23%.

Data shows Aussie investors are pouring more and more cash into ASX ETFs. 

There are currently three funds that are significantly larger in terms of market cap

These funds are common choices for new and experienced investors looking for set and forget options. 

While past performance doesn't guarantee future returns, these funds have performed over the last 10-20 years. 

As the year approaches its end, let's see which one has performed the best in 2025. 

Vanguard Australian Shares Index ETF (ASX: VAS)

The Vanguard Australian Shares Index ETF is the largest ASX ETF by market cap. 

Recent data (October 2025) shows it has a market cap of more than $22 billion. 

Put simply, it offers exposure to the top 300 companies listed on the ASX.

Its largest exposure is to blue-chip companies like Commonwealth Bank of Australia (ASX: CBA) and BHP Group (ASX: BHP), with 10.3% and 7.9% exposure respectively. 

Historically, dating back to its initial inception in 2009, it has offered returns of roughly 9% per annum.

However this year, it has risen approximately 6%. 

Vanguard MSCI Index International Shares ETF (ASX: VGS)

This fund is often paired alongside the VAS ETF. 

That's because the Vanguard MSCI Index International Shares ETF provides exposure to around 1,300 companies from developed countries, excluding Australia.

It is Australia's second largest ETF, with a market capitalisation of approximately $13.8 billion. 

The ETF invests in companies from around 23 different countries including the U.S, Japan, U.K, Canada, France, and Switzerland.

It offers exposure to the largest global companies including Nvidia (NASDAQ: NVDA), Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT). 

Since inception in 2014, it has provided annualised returns of approximately 13%. 

In 2025, the fund has risen by 10.47%. 

iShares S&P 500 ETF (ASX: IVV)

The fund is different from the previous two. While the others focus on Australian and international stocks, the IVV ETF aims to provide investors with the performance of the S&P 500 Index, before fees and expenses. 

The index is designed to measure the performance of large capitalisation US equities.

It is the third largest ASX ETF, with a market capitalisation of just under $13 billion. 

In the last 10 years, it has provided annualised returns of approximately 15%. 

Its largest exposure by underlying holding is also to Nvidia Inc (NASDAQ: NVDA), Apple Inc (NASDAQ: AAPL) and Microsoft Corp (NASDAQ: MSFT). 

In 2025, it has risen by 9.23%. 

Motley Fool contributor Aaron Bell has positions in BHP Group and Vanguard Msci Index International Shares ETF. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Microsoft, Nvidia, and iShares S&P 500 ETF. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Apple, BHP Group, Microsoft, Nvidia, Vanguard Msci Index International Shares ETF, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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