A real estate investment trust (REIT) is a company that owns and operates property assets that typically produce income.

REITs can have various property types in their portfolios, or they might specialise in just one type. Some focus on commercial real estate, such as offices, hospitals, shopping centres, warehouses, and hotels.

Investors may choose to target this asset because they typically provide predictable income through regular distributions, supported by rental cash flows and a tax-efficient structure. 

REITs also offer potential capital growth and diversification benefits, making them attractive as a long-term investment option.

Recent underperformance 

Despite the favourable aspects of REITs, over the last few years, this asset class has largely underperformed relative to other sectors. 

Many REITs struggled through and post pandemic due to market shifts. 

For example, some REITs own and operate office buildings. 

COVID-driven shifts in work patterns combined with poorly timed new supply drove vacancies higher, and rents lower across Australia's major CBDs, with asset values following suit.

Similar headwinds impacted REITs engaged in retail spaces like shopping centres. 

However new insight from VanEck suggests the tide could be turning after years of underperformance. 

Supply demand dynamics improving

According to VanEck, office REITs were among the best-performing A-REIT subsectors in 2025. 

In a new report, the ETF provider said this momentum could continue in 2026 for several reasons. 

VanEck said supply pipelines are thinning, economic conditions are favourable and elevated 10-year yields may begin to provide a more supportive backdrop for sector performance.

We think the medium-term outlook for office REITs in particular is positive, albeit one that still demands selectivity.

Pranay Lal, Portfolio Manager, VanEck said vacancy rates have stabilised and are expected to trend lower, with the supply/demand office space dynamics potentially improving. 

High replacement costs, restrictive financing conditions and limited development pipelines are likely to constrain further supply, with leading leasing agent Jones Lang LaSalle Incorporated (JLL) forecasting new supply to be almost half the 20 year calendar average.

Economic conditions favourable

According to VanEck, valuations across office REITs are closely linked to broader macroeconomic conditions. 

Periods of strong economic activity, low unemployment and robust population growth have historically been supportive of structurally lower vacancy rates.

Australia has seen a marginal acceleration in GDP growth, supported by improving business investment and consumer spending. 

Additionally, unemployment is near a historical low and forecast to stay in the 4% range over the medium term.

This backdrop further supports a recovery in CBD office demand.

Office and retail REITs are currently offering compelling value, we think. Both sectors are trading at discounts to net tangible assets, suggesting scope for a re-rating toward more normalised valuation levels. This potential mean reversion could act as a catalyst for relative outperformance.

How to gain exposure

For investors looking to gain exposure to this sector, there are a few options to consider. 

For pure-play office REITs, Centuria Office REIT (ASX: COF) owns a portfolio of high-quality office buildings across Australian capital cities and key markets. 

Other office REIT options include: 

• Dexus (ASX: DXS)
• Charter Hall Group (ASX: CHC)
• The GPT Group (ASX: GPT).

Another option is to target a thematic ASX ETF such as VanEck Vectors Australian Property ETF (ASX: MVA). 

MVA ETF gives investors exposure to a diversified portfolio of Australian REITs, however this isn't exclusively office owners. 

The post Why 2026 could be the year of the REIT rebound appeared first on The Motley Fool Australia.

When you look at the S&P/ASX 200 Index (ASX: XJO), you notice it is heavily weighted towards sectors like financials (big banks) and materials/resource giants. 

In fact, these two sectors make up more than half of the ASX 200 in terms of market cap.

While it's important to have a diversified portfolio, investing in these markets can also capture strong returns when they outperform. 

If you are looking to ride the returns of Australia's largest sectors, here are some thematic ASX ETFs to consider. 

BetaShares S&P/ASX 200 Resources Sector ETF (ASX: QRE)

This ASX ETF offers exposure to the largest ASX-listed companies in the resources sector, including BHP, Rio Tinto, Woodside Petroleum and more.

Investors should be aware it is heavily weighted towards BHP Group (ASX: BHP) which makes up 33% of the fund. 

In total, it is made up of 43 holdings. 

A bet on Australian resources over the last 10 years has proved a strong investment. 

This ASX ETF is up more than 200% since January 2016. 

This includes a rise of more than 30% in the last 12 months. 

VanEck Vectors Australian Banks ETF (ASX: MVB)

Australian banks make up a massive part of the economy thanks to the dominance of the big four. 

This ASX ETF from VanEck offers a portfolio of ASX-listed banks and financial institutions in one trade. 

The fund is made up of 7 holdings: 

• Commonwealth Bank of Australia (ASX: CBA) 
• National Australia Bank Limited (ASX: NAB)
• Westpac Banking Corporation (ASX: WBC) 
• Australia And New Zealand Banking Group (ASX:ANZ) 
• Macquarie Group Limited (ASX: MQG)
• Bendigo and Adelaide Bank Limited (ASX: BEN)
• Bank of Queensland (ASX: BOQ)

The fund has an almost equal weighting of 20% each for the big four banks. 

Essentially, these four make up 80% of the fund, with Macquarie representing a 17.5% weighting and the final two, smaller banks combining for a 2.6% weighting. 

The fund has risen 66% in the last 5 years. 

VanEck Vectors Australian Property ETF (ASX: MVA)

While real estate isn't one of the biggest sectors on the ASX, it remains a vital component of the Australian economy due to its role in investment, employment, and housing.

This ASX ETF from VanEck gives investors exposure to a diversified portfolio of Australian REITs.

A real estate investment trust (REIT) is a company that owns and operates property assets that typically produce income.

This fund from VanEck is made up of 13 holdings, and includes a 4% dividend yield.

It has risen 13% over the last year. 

The post Best ASX ETFs to target winning Aussie sectors in 2026 appeared first on The Motley Fool Australia.

Despite last week's broad sell-off, there remain many ASX-focused ETFs that have brought big returns this year.

As the calendar year nears its end, let's look at the sectors or strategies that have paid off in 2025. 

VanEck Australian Resources ETF (ASX: MVR)

Australian resources have returned to form in 2025. 

MVR gives investors exposure to a diversified portfolio of ASX-listed resources companies. 

At the time of writing, the ASX ETF has 31 underlying holdings.

This includes blue-chip companies like BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO), and Woodside Petroleum Ltd (ASX: WDS). 

This fund's exposure to gold shares has also influenced its strong performance. 

Since the start of the year, it has risen 28.5%. 

BetaShares Australian Small Companies Select Fund (ASX: SMLL)

This ASX ETF offers a portfolio of ASX-listed companies that are generally within the 91-350 largest by free float market capitalisation. 

SMLL's index uses screens that aim to identify companies with positive earnings and a strong ability to service debt. 

Relative valuation metrics, price momentum, and liquidity are also evaluated as part of the selection process.

At the time of writing, it comprises 66 holdings, with no individual company accounting for more than 5.1%. 

Its largest exposure by sector is to: 

• Materials (27.2%)
• Consumer discretionary (25.1%)
• Industrials (12.7%)

This ASX ETF is up 25.6% year to date. 

VanEck Vectors Australian Property ETF (ASX: MVA)

Real estate stocks and REITs have broadly performed well this year as the Australian property market has continued to grow. 

Exposure to these kinds of holdings can be a foot in the door for investors looking for exposure to the sector, without having the cash to buy physical brick-and-mortar properties. 

The MVA ETF gives investors exposure to a diversified portfolio of Australian REITs.

MVA holds a minimum of 10 Australian REITs, with a maximum weighting of 10% for each REIT.  

At the time of writing, the fund has 13 holdings, with exposure ranging from 3%-10%. 

The fund has risen 15% year to date. 

It also offers a 4% yield.

The post Which Aussie-focused ASX ETFs have performed the best in 2025 appeared first on The Motley Fool Australia.

Investors in the VanEck Morningstar Wide Moat (AUD Hedged) ETF (ASX: MHOT) will receive the largest payment of $10.99 per unit.

Those who hold the unhedged VanEck Morningstar Wide Moat ETF (ASX: MOAT) will get the second-highest distribution of $7.56 per unit.

These two ETFs are different in that they do not try to mirror the performance of a major index like the S&P/ASX 200 Index (ASX: XJO).

Instead, the MOAT ETFs track about 50 US shares that have significant competitive advantages, or in other words, a wide 'moat'.

The wider the moat, the more protected a company's brand and its products or services are from competitors in the marketplace.

Here is a summary of VanEck ETFs that will be paying dividends to investors today.

It's payday for VanEck ASX ETF investors!

VanEck Global Clean Energy ETF (ASX: CLNE) will pay 7 cents per unit.

VanEck FTSE China A50 ETF (ASX: CETF) will pay $1.27 per unit.

VanEck Global Defence ETF (ASX: DFND) will pay 3 cents per unit. Find out more about this ETF here.

VanEck Morningstar Australian Moat Income ETF (ASX: DVDY) will pay 20 cents per unit.

VanEck MSCI International Sustainable Equity ETF (ASX: ESGI) will pay $2.34 per unit.

VanEck Video Gaming and Esports ETF (ASX: ESPO) will pay $1.04 per unit.

VanEck Gold Miners ETF (ASX: GDX) will pay 63 cents per unit.

VanEck Morningstar International Wide Moat ETF (ASX: GOAT) will pay $1.66 per unit.

VanEck MSCI Australian Sustainable Equity ETF (ASX: GRNV) will pay 57 cents per unit.

VanEck 5-10 Year Australian Government Bond ETF (ASX: 5GOV) will pay 11.5 cents per unit.

VanEck Global Healthcare Leaders ETF (ASX: HLTH) will pay 2 cents per unit.

Here are a few more…

VanEck Australian Property ETF (ASX: MVA) will pay 42 cents per unit.

VanEck Australian Banks ETF (ASX: MVB) will pay 40 cents per unit.

VanEck Australian Resources ETF (ASX: MVR) will pay 51 cents per unit.

VanEck Small Companies Masters ETF (ASX: MVS) will pay 32 cents per unit.

VanEck MSCI International Small Companies Quality ETF (ASX: QSML) will pay 9 cents per unit.

VanEck MSCI International Quality ETF (ASX: QUAL) will pay $1.23 per unit.

VanEck MSCI International Value ETF (ASX: VLUE) will pay $1.02 per unit.

VanEck ETFs among the market's top performers in FY25

According to ASX data, there were two VanEck ETFs among the six best-performing ETFs holding Aussie shares in FY25.

Ranked 4th, the VanEck Australian Banks ETF delivered a total annual return of 24.86%.

Ranked 6th, the VanEck Australian Property ETF produced a total annual return of 22.92%.

Another two VanEck ETFs featured in the six best-performing ETFs holding international shares in FY25.

Check them out here.

The post Invested in ASX MOAT or other VanEck ETFs? It's dividend day! appeared first on The Motley Fool Australia.

However, the median house price in capital cities currently sits at more than $1 million dollars. 

That means you're looking at a deposit of $200,000 to buy a house in a major city. 

While not all investors have that kind of cash to splash, you can still gain exposure to this sector through thematic ASX ETFs. 

Here's three to consider which focus on real estate investment trusts (REITs)

Vanguard Australian Property Securities Index ETF (ASX: VAP)

This fund offers a diversified blend of Australian real estate investment trusts (A-REITs) with residential, office, retail, and industrial assets.

A real estate investment trust (REIT) is a company that owns and operates property assets that typically produce income.

Some REITs focus on commercial real estate, such as offices, hospitals, shopping centres, warehouses, and hotels. Others specialise in residential property investment, such as aged care villages and apartment buildings.

This ETF seeks to track the return of the S&P/ASX 300 A-REIT index. 

At the time of writing it is made up of 31 holdings, with its largest allocation being to Goodman Group (ASX: GMG), which represents 39.50% of the fund. 

The fund has risen 44.66% over the past 5 years. 

The fund has a management fee of 0.23% per annum, and its next dividend payment is 161.2115 cents per unit. 

VanEck Vectors Australian Property ETF (ASX: MVA)

MVA ETF gives investors exposure to a diversified portfolio of Australian REITs. The fund is made up of a minimum of 10 Australian REITs, with a maximum weighting of 10% for each REIT.

This ETF currently has 14 holdings in the fund. 

Each company has a weighing of between 2% and 10%.

The fund has risen 33.40% in the last 5 years. 

MVA ETF offers more diversified positioning within A‑REITs compared to VAP ETF, which is heavily concentrated in Goodman Group.

The fund has a management fee of 0.35% p.a. Its dividend yield is currently 4.37%. 

SPDR S&p/asx 200 Listed Property Fund (ASX: SLF)

SLF ETF seeks to closely track, before fees and expenses, the returns of the S&P/ASX 200 A-REIT Index.

The ETF is managed by State Street Global Advisors. 

It is also heavily weighted (41.14%) towards Goodman Group. 

It currently has 20 companies making up the fund. 

Over the last 5 years, it has risen 36.61% 

The fund currently has a dividend yield of 3.15% and a management fee of 0.16% p.a.

The post Can't break into the housing market? Here's 3 REIT ASX ETFs to consider appeared first on The Motley Fool Australia.

Today, 425 ETFs are trading on the ASX and CBOE exchanges, according to the latest monthly ETF report from BetaShares.

Australian investors love ETFs for their ease and instant diversification.

Not to mention the single brokerage fee it takes to buy one big basket of ASX (or international) shares in just one transaction.

Here, we review newly published ASX data showing which ETFs holding ASX shares produced the best returns for investors in FY25.

Best 6 ASX ETFs for total returns in FY25

According to the data, here are the top six ETFs:

SPDR S&P/ASX 200 Financials ex A-REIT Fund (ASX: OZF)

The OZF ETF delivered a total one-year return of 30.76%. The historical distribution yield is 3.8%.

Its success in FY25 represents the ASX 200 financial sector's status as the No. 1 market sector of the year.

This ETF has a management expense ratio (MER) of 0.34%.

The SPDR S&P/ASX 200 Financials ex A-REIT Fund closed FY25 at $30.52 per unit.

BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)

The ATEC ETF delivered a total annual return of 30.44%. The historical distribution yield is 2.12%.

This ETF's second-place ranking is befitting, given that technology was the No. 2 market sector of FY25.

The ATEC ETF seeks to track the performance of the S&P/ASX All Technology Index (ASX: XTX) before fees.

In terms of capital growth, ASX tech shares outperformed US tech stocks by 2:1 in FY25.

This exchange-traded fund has a MER of 0.48%.

The BetaShares S&P/ASX Australian Technology ETF closed at $31.65 per unit on 30 June.

BetaShares Financials Sector ETF (ASX: QFN)

The QFN ETF delivered a one-year return of 30.17%. The historical distribution yield is 2.75%.

This ETF has a MER of 0.34%.

The BetaShares Financials Sector ETF ended the financial year at $18.12 per unit.

VanEck Australian Banks ETF (ASX: MVB)

The MVB ETF delivered a total annual return of 24.86%. The historical distribution yield is 4.13%.

This ETF has a MER of 0.28%.

The VanEck Australian Banks ETF closed at $42.86 per unit on 30 June.

Betashares Geared Australian Equities Complex ETF (ASX: GEAR)

The GEAR ETF delivered a total one-year return of 24.72%. The historical distribution yield is 1.45%.

This ETF has a MER of 0.8%.

The BetaShares Australian Quality ETF ended the financial year at $34.10 per unit.

VanEck Australian Property ETF (ASX: MVA)

The MVA ETF delivered a total annual return of 22.92%. The historical distribution yield is 4%.

Just one bank dominated the news for share price growth last year: Commonwealth Bank of Australia (ASX: CBA) shares (up 45%).

This ETF has a MER of 0.35%.

VanEck Australian Property ETF closed at $24.75 per unit on 30 June.

The post Top 6 ETFs holding ASX shares that produced the best returns in FY25 appeared first on The Motley Fool Australia.

The ex-dividend date for the distributions listed below is today, 1 July. The record date is 2 July.

The payment date is 25 July.

The biggest payment amount on the VanEck distribution list is a whopper at $10.99 per unit.

That will be paid to investors who own VanEck Morningstar Wide Moat (AUD Hedged) ETF (ASX: MHOT).

Investors in the unhedged version, the VanEck Morningstar Wide Moat ETF (ASX: MOAT), will receive the second-highest distribution of $7.56 per unit.

The VanEck Wide Moat ETFs are a bit different to the norm. They do not seek to track the performance of a major index, like most ETFs.

Instead, the ETFs hold a portfolio of about 50 US shares that have significant competitive advantages, or in other words, a wide moat.

Here is a condensed list of VanEck ETFs and how much each ETF will pay in dividends to their investors later this month.

Payday for VanEck ASX ETF investors

VanEck Global Clean Energy ETF (ASX: CLNE) will pay 7 cents per unit.

VanEck FTSE China A50 ETF (ASX: CETF) will pay $1.27 per unit.

VanEck Global Defence ETF (ASX: DFND) will pay 3 cents per unit. Learn more about this ETF here.

VanEck Morningstar Australian Moat Income ETF (ASX: DVDY) will pay 20 cents per unit.

VanEck MSCI International Sustainable Equity ETF (ASX: ESGI) will pay $2.34 per unit.

VanEck Video Gaming and Esports ETF (ASX: ESPO) will pay $1.04 per unit.

VanEck Gold Miners ETF (ASX: GDX) will pay 63 cents per unit.

VanEck Morningstar International Wide Moat ETF (ASX: GOAT) will pay $1.66 per unit.

VanEck MSCI Australian Sustainable Equity ETF (ASX: GRNV) will pay 57 cents per unit.

VanEck 5-10 Year Australian Government Bond ETF (ASX: 5GOV) will pay 11.5 cents per unit.

VanEck Global Healthcare Leaders ETF (ASX: HLTH) will pay 2 cents per unit.

Show us the money! Here are some more…

VanEck Australian Property ETF (ASX: MVA) will pay 42 cents per unit.

VanEck Australian Banks ETF (ASX: MVB) will pay 40 cents per unit.

VanEck Australian Resources ETF (ASX: MVR) will pay 51 cents per unit.

VanEck Small Companies Masters ETF (ASX: MVS) will pay 32 cents per unit.

VanEck MSCI International Small Companies Quality ETF (ASX: QSML) will pay 9 cents per unit.

VanEck MSCI International Quality ETF (ASX: QUAL) will pay $1.23 per unit.

VanEck MSCI International Value ETF (ASX: VLUE) will pay $1.02 per unit.

The post VanEck ASX ETF dividends: How much you'll get and when appeared first on The Motley Fool Australia.

When interest rates rise, property prices are expected to decline. However, this relationship only factors in the demand side of the equation. House prices are also impacted by the supply of homes on the market. Over the past few years, the housing supply has significantly declined. A major cause has been a reduced level of turnover (i.e. longer home ownership). 

The proportion of housing stock currently being transacted is roughly equivalent to the height of the 1990s recession, when interest rates were through the roof and unemployment was highest since the Great Depression. According to news.com.au, housing turnover was 4.6% in 2024, significantly down from the 2001 peak of 9.1%

Other factors that have limited housing supply over the past few years include strong immigration following the reopening of borders after COVID-19 and the impact of short-term rentals.

Unfortunately for aspiring property buyers, Australia's major property markets have become severely unaffordable. According to the Australian Institute, the size of the average home loan over the past 5 years has increased by more than $198,000 in Western Australia, South Australia, Queensland, and New South Wales. 

While media commentary has focused on Sydney being the most expensive city in the world, all states have been affected. For example, according to the Australian Institute, the average new home loan in South Australia has increased 56% over the past five years from $372,000 to $580,000. Meanwhile, the average full-time wage in South Australia has only increased by 18%.

The benefits of ASX ETF investing

With the housing shortage likely to continue, the outlook for owner-occupiers is likely to remain challenging. Fortunately, listed property, and in particular, ASX ETFs, provide several key advantages over direct real estate ownership. 

The secular decline in brokerage fees means that investors can regularly make small contributions to build up their property exposure. This is a huge advantage over direct ownership, given the typical requirement for a 20% deposit for a property purchase. 

ETFs also offer diversification within the property sector, including commercial property such as shopping malls, offices, warehousing, and healthcare clinics. By nature of being listed on the exchange, they offer liquidity. This allows investors to sell a portion of their investment at a very low cost compared to the fees charged by real estate agents.

Real estate ASX ETFs to consider

If you're interested in real estate exchange-traded funds (ETFs), there are several options available on the ASX.

The Vanguard Australian Properties Securities Index ETF (ASX: VAP) provides low-cost exposure to a mix of Australian real estate investment trusts (A-REITS). The VAP ETF contains 31 holdings from a range of property sectors, including residential, office, retail, and industrial. With a management expense ratio of just 0.23%, this ETF is an especially low-cost option. 

The VanEck Australian Property ETF (ASX: MVA) is another option to consider. For a management expense of 0.35%, the MVA ETF contains 17 holdings and seeks to track the MVIS Australia A-REIT Index. 

Finally, Australian investors looking for property exposure may wish to consider the VanEck FTSE International Property (Hedged) ETF (ASX: REIT). With 318 holdings, this ASX ETF is significantly more diversified than the VAP ETF and the MVA ETF. For a management expense of 0.20%, it invests in international property securities outside Australia with returns hedged into Australian dollars. This ETF is best suited for those looking to maximise diversification.

The post The advantages of ASX ETFs for real estate investing appeared first on The Motley Fool Australia.

S&P/ASX 200 Index (ASX: XJO) shares rose 7.83%, for total returns of 12.1% including dividends.

Meantime, the national median property value, which reflects all types of property in a single data point, rose by 8% with total returns of 12.2% after rental income is factored in, according to CoreLogic data.

But a combination of the two in the form of ASX property exchange-traded funds (ETFs) delivered far greater returns in FY24.

Shares vs. property: 2 ASX property ETFs outperform

There are three Australian property ETFs and three global property ETFs listed on the ASX.

The ASX recently published total returns data for all ASX shares, ASX ETFs, listed managed funds and listed investment companies (LICs) in FY24.

The two top-performing ASX property ETFs simply smashed it out of the park with above 20% gains.

SPDR S&P/ASX 200 Listed Property (ASX: SLF)

This ASX property ETF delivered total returns of 24.35% in FY24.

The SLF ETF tracks the returns of the S&P/ASX 200 A-REIT Index (ASX: XPJ) before fees and expenses.

State Street says the ETF is a low-cost way of investing in ASX property shares. The management expense ratio (MER) was 0.4% in FY24 (reduced to 0.16% from 1 July 2024).

The SLF ETF exposes investors to all types of global property, including retail, office, industrial and diversified. Its biggest position today is Goodman Group (ASX: GMG) at 39.98%.

Goodman was the best-performing stock in its market sector in FY24, with an astounding 73.1% share price gain. This was largely due to the excitement surrounding artificial intelligence (AI), with Goodman leveraging its industrial property expertise to build, convert, and acquire more data centres worldwide.

The ETF's second-biggest position today is Scentre Group (ASX: SCG) shares, with an 11.66% holding. The Scentre share price rose by 17.74% in FY24 as the company benefitted from several retail sector tailwinds.

Goodman and Scentre shares make up about half the value of the SLF ETF.

Their share price gains of 73.1% and 17.74%, respectively, help explain why the SLF ETF delivered better total returns at 24.35% vs. physical residential property, which delivered 12.2% total returns.

Vanguard Australian Property Securities Index ETF (ASX: VAP)

This ASX property ETF delivered total returns of 23.44% in FY24 — only slightly less than the SLF ETF.

The main difference between the two ASX ETFs is the VAP ETF tracks the return of the S&P/ASX 300 A-REIT Index before fees, costs and taxes. So, it incorporates the performance of 100 more ASX property shares and REITs than the SLF ETF. The MER is 0.23%.

Today, the VAP ETF's biggest holdings are the same as the SLF ETF, with Goodman shares representing 39.66% and Scentre shares 10.7%.

Here's how the other 4 ASX property ETFs did in FY24

• The VanEck Australian Property ETF (ASX: MVA) delivered 7.31% total returns
• The SPDR Dow Jones Global Real Estate ESG ETF (ASX: DJRE) delivered 4.66% total returns
• The iShares Core FTSE Global Property Ex Au (AUDH) ETF (ASX: GLPR) delivered 4.12% total returns
• The VanEck FTSE International Property (Hedged) ETF (ASX: REIT) delivered 2.35% total returns.

Here's how home values across Australia changed in FY24

Here is a further breakdown of how home values changed across the city and regions in FY24.

A key factor in the performance variance is the strongest markets had tight supply and demand. The impact of this was so significant that it trumped the usual dampening effect of higher interest rates.

Foolish takeaway on shares vs. property

Choosing between shares vs. property is a classic investor's dilemma. If you have enough time on your side, many people would say you should simply buy both.

Could ASX property ETFs be another way of doing so? In a way, yes.

But it's worth noting that very few ASX property shares or REITs have direct exposure to the residential market. And you obviously can't live in them or add value to them through renovations.

So, if you want exposure to the residential market, you'll have to go 'old school' and buy a bricks-and-mortar investment.

The post Shares vs. property: These 2 ASX property ETFs delivered 20%-plus returns in FY24 appeared first on The Motley Fool Australia.

But amidst the broader market weakness, some ASX exchange-traded funds (ETFs) lit up green across the month.

Let's take a look at the best-performing ETFs on the ASX in September. Before we dive in, it's worth noting that this list is limited to the ~190 ASX ETFs tracked by Google Finance.

VanEck Australian Property ETF (ASX: MVA)

According to Google Finance, MVA topped the ETF tables in September with a 7.7% gain.

The MVA ETF invests in a basket of ASX real estate investment trusts (REITs), such as Scentre Group (ASX: SCG) and Goodman Group (ASX: GMG).

The S&P/ASX 200 A-REIT Index (ASX: XPJ) actually shed 13.7% in September, yet the MVA ETF bizarrely shot up in the other direction.

Upon closer inspection, the MVA ETF was sitting well and truly in the red for most of the month. Had the ASX closed at 3pm on Friday last week, MVA would have finished September at $18.86, down 11.7%.

But a few (possibly errant) trades at the 11th hour saw the MVA price suddenly rocket to $23. 

Unsurprisingly, the MVA ETF fell back to earth yesterday, tumbling nearly 18% to close the day at $18.92, back in line with recent prices.

BetaShares US Dollar ETF (ASX: USD)

Had it not been for MVA's unusual trading activity, the BetaShares US Dollar ETF would have taken out the top spot as the best-performing ASX ETF in September.

The USD ETF notched up a monthly rise of 5.8% as the greenback grew even stronger.

The USD ETF aims to track the performance of the US dollar against the Aussie dollar. If the greenback goes up 10% against AUD, the ETF is designed to go up by 10% as well, before fees and expenses.

Across the month, the USD/AUD exchange rate soared from $1.46 to $1.56, representing a rough 6.8% rise. 

Swift interest rate rises from the US Federal Reserve and the relative health of the US economy have seen investors flood into the US dollar. This, in turn, has pushed up the value of the US dollar, particularly against currencies such as the British pound and Japanese yen.

VanEck Gold Miners ETF AUD (ASX: GDX)

Rounding out the top three is the VanEck Gold Miners ETF, which delivered a monthly gain of 4.5%.

The GDX ETF aims to provide investors with global exposure to a diversified portfolio of companies in the gold mining industry. Its top holdings include the likes of Newmont Corporation (NYSE: NEM), Barrick Gold Corp (NYSE: GOLD), and Newcrest Mining Ltd (ASX: NCM).

Gold is often seen as a safe haven for investors during times of market turmoil.

This rang true in September as gold shares held their ground while the market floundered.

This came despite the spot price of gold trending lower across the month, finishing at around US$1,672 an ounce. In fact, according to Reuters, the precious metal was headed towards its worst quarter since March 2021.

The post These were the best-performing ASX ETFs in September appeared first on The Motley Fool Australia.

In practice, this means you should have a basket of shares across a spread of industries and sectors, rather than a few large holdings in similar stocks. The theory is that by diversifying, your portfolio with be better able to withstand market volatility as the returns on the different shares will not be perfectly correlated.

The ASX has more than 2,000 shares available to trade, but is just a portion of the global investment universe. The New York Stock exchange offers 2,400 companies to trade, the NASDAQ more than 3,000. In the United Kingdom, the London Stock Exchange features more than 2,000 companies.

To diversify further, other asset classes such as property, bonds, and even gold or other commodities could be added to the mix. If these assets have a less than perfect correlation to your existing investments, you should reduce the risk of your portfolio even more.

The issue is how to achieve diversification on limited funds. It is just not practical to hold parcels of shares below a certain limit. Trading costs must also be taken into account.

So, with so many investment options, how can you diversify with $20,000?

Exchange traded funds (ETFs) are a great way to maximise diversifying power. Running the gamut from gold ETFs backed by physical bullion to ETFs tracking some of highest market capitalisation companies in the world, ETFs can offer both broad and specialised exposure. ETFs are traded on the stock market just like shares, and give the holder an interest in the assets of the fund, which could be gold, shares, bonds, or something else. 

Australian shares

VanEck Vectors Australian Equal Weight (ASX: MVW) covers approximately 75 blue-chip companies weighted equally. The fund aims to track the MVIS Australia Equal Weight Index before management costs. Management costs are 0.35% per annum. The index includes the largest and most liquid companies on the ASX with diversification across securities and sectors. Returns over 5 years were 8.78% per annum as at 30 September.

At 30 September the fund held 86 securities and had a price-to-earnings (P/E) ratio of 17.95 with a dividend yield of 3.93%. The number one holding was Afterpay Touch Group Ltd (ASX: APT), which accounted for 1.31% of holdings. Other top 10 holdings included Iluka Resources Ltd (ASX: ILU), Goodman Group (ASX: GMG), Northern Star Resources Ltd (ASX: NST) and Santos Ltd (ASX: STO).

US Shares

iShares S&P 500 ETF (ASX: IVV) tracks the performance of the S&P 500 index (before fees and expenses) providing broad exposure to large capitalisation US stocks. Management fees are 0.04% per annum and and distributions are made quarterly. As at 30 September, the fund had provided annual returns of 10.79% over 5 years and had a P/E ratio of 20.98.

Top 10 holdings as at 30 September include Microsoft (4.27%), Apple (3.83%), Amazon (2.90%), Facebook (1.72%), Berkshire Hathaway (1.64%), JP Morgan Chase & Co (1.51%) and Proctor & Gamble (1.25%). iShares offers both hedged and unhedged versions of the ETF, with the hedged version known as iShares S&P 500 (AUD Hedged) ETF (ASX: IHVV). The hedged version minimises the impact of Australian dollar volatility on returns and has a management fee of 0.10%. 

Property

VanEck Vectors Australian Property ETF (ASX: MVA) is designed to capture the performance of Australia's property market. The Fund tracks the performance of the MVIS Australia A-REITs Index, which includes the largest and most liquid real estate investment trusts. As at 30 September, 5-year returns were 9.83% per annum and the fund had net assets of $240 million.

The fund holds 12 property securities including Goodman Group (ASX: GMG), Charter Hall Group (ASX: CHC), Mirvac Group (ASX: MGR), Vicinity Centres (ASX: VCX), and Cromwell Property Group (ASX: CMW). The dividend yield of the fund was 4.55%, as at 30 September, and the P/E ratio was 15.11. Management fees are 0.35% per annum and dividends are paid twice annually. 

Gold

Betashares Gold Bullion ETF – Currency Hedged (ASX: QAU) is backed by physical gold bullion held in a London vault. The fund hedges its US dollar exposure to allow for transparent exposure to the price of gold. Fund returns over the year to 30 September were 23.84%.

Betashares discloses the actual gold holdings backing the fund and value of the fund's assets daily on the fund website. Details of each gold bar including serial number, refinery, purity, weight, and year of casting are available. Units in the fund can be bought and sold on the ASX like any share, providing for far greater liquidity than physical gold. Management costs are 0.59% per annum.

Bonds

Vanguard Global Aggregate Bond Index (Hedged) ETF (ASX: VBND) provides exposure to fixed income securities issued by government entities and investment-grade corporates from around the world. The fund seeks to track the Barclays Global Aggregate Float-Adjusted and Scaled Index hedged into Australia dollars before fees, taxes and expenses. Management fees are 0.20% per annum.

Investments by the fund are predominantly rated BBB- or higher by S&P or equivalent ratings agencies. Distributions are made quarterly and the fund's weighted average coupon is 2.6%. Top 10 holdings include securities issued by the United States Treasury, Japanese Government, Federal National Mortgage Association, and republics of France and Italy. Distributions are made quarterly.

Foolish takeaway

Diversification can be achieved relatively cheaply with the aid of a few well-chosen ETFs to round out your portfolio. ETFs can provide exposure a single commodity or as many as hundreds of securities depending on your pick. With $20,000 (or even $10,000) and the ETFs listed you could gain exposure to 86 Australian stocks, more than 500 US stocks, a dozen Australian property securities, gold, and fixed income securities issued by a variety of global government and corporate issuers.

Which ETFs you pick and how much capital you allocate to each will depend on your investing style and risk tolerance. Those with lower risk tolerances may prefer to devote more funds to fixed income, gold, and property ETFs. Those with higher risk tolerances will likely prefer a heavier weighting towards shares, both international and domestic. Either way, the strategic use of ETFs provides a cost effective method of increasing the diversification of your portfolio.

The post How to diversify your ASX portfolio for less than $20,000 appeared first on The Motley Fool Australia.