Vanguard, Betashares and iShares account for more than 60% of the market. 

Yesterday, iShares funds were under the microscope for their performance over the last 12 months. 

Exploring the best performing funds can give great insight into sectors and themes that are capturing returns. 

Today, let's look at the best performing ASX ETFs in the last year from the largest ETF provider – Vanguard. 

Vanguard FTSE Asia Ex-Japan Shares Index ETF (ASX: VAE)

An emerging theme over the last 12 months has been the outperformance of Asian markets and equities. 

This fund has increased over the last 12 months mainly because Asian markets rebounded, led by strong gains in Chinese technology stocks, Indian companies, and semiconductor firms such as Taiwan Semiconductor Manufacturing (NYSE: TSM), which benefited from the AI boom.

Improving confidence in China's economy, strong growth in India, and a weaker Australian dollar also boosted returns for Australian investors.

These tailwinds have pushed this fund 26% higher over the last 12 months. 

This fund includes roughly 1,400 companies from 12 markets across Asia, excluding Japan. The key markets of China, Taiwan, Korea, and India make up around 80% of the exposure.

Vanguard MSCI Index International Shares (Hedged) ETF (ASX: VGAD)

Another strong performing fund over the last year has been this internationally focussed ETF. 

The ETF provides exposure to many of the world's companies listed on the exchanges of major developed economies around the world.

At the time of writing, it includes over 1,200 underlying holdings, with its largest geographic exposure being to: 

• United States: 73.1%
• Japan: 5.8%
• United Kingdom: 3.7%. 

Because of its US dominant structure, it holds a large weighting towards technology and financial shares. 

This could make it an ideal compliment for an investor looking to diversify away from Australian markets. 

In the last 12 months, it has risen 18%. 

Vanguard Australian Shares High Yield ETF (ASX: VHY)

This high yield ASX ETF has also been a great investment over the last year. 

It provides exposure to companies listed on the Australian Securities Exchange that have higher forecast dividends relative to other ASX-listed companies. 

Security diversification is achieved by restricting the proportion invested in any one industry to 40% of the total ETF and 10% for any one company. Australian Real Estate Investment Trusts (A-REITS) are excluded from the index.

Over the last 12 months, it has not only provided strong dividends, but has also risen by 12% as well. 

The post 3 of the best performing Vanguard ASX ETFs over the last year appeared first on The Motley Fool Australia.

US stocks are particularly popular given the S&P 500 Index (SP: INX) has outperformed the S&P/ASX 200 Index (ASX: XJO) for three years.

The two biggest ETFs by market capitalisation that provide exposure to the US market are iShares Core S&P 500 AUD ETF (ASX: IVV) and Vanguard MSCI Index International Shares ETF (ASX: VGS).

IVV ETF tracks the S&P 500, while VGS tracks the MSCI World ex-Australia (with net dividends reinvested) AUD Index.

About 70% of the VGS portfolio is US stocks.

Neither ETF has currency hedging, and this eroded returns for Aussie investors last year given the weaker USD against the AUD.

The Aussie dollar rose from about 62 US cents in January 2025 to about 67 US cents by December.

Our currency reached a three-year high of 71 US cents last month. It is 69.65 US cents at the time of writing.

The US dollar has been weakening due to expectations of US interest rate cuts, concern over the economic impact of new tariffs, and broader geopolitical and trade uncertainties.

Meanwhile, the AUD is stronger amid expectations of rate hikes in 2026 and strong demand for Australia's commodities, particularly gold.

This extra demand supports our currency because foreign buyers must pay for our exports in Australian dollars.

Rising commodity prices amplify the total demand for the AUD even further.

With all this at play, should ASX ETF investors consider switching into, or buying, products with currency hedging to insulate their returns?

Vanguard's take on currency hedging

Major ASX ETF provider Vanguard describes the pros and cons of hedging as follows:

For investors, a strengthening AUD would be a headwind for unhedged portfolios, reducing returns on international assets. 

Conversely, a weaker AUD boosts unhedged returns and benefits Australian companies earning profits overseas.

Vanguard says short-term volatility in currencies is inevitable, and hedging is more about managing long-term risk rather than chasing returns. 

Hedging is not a one-size-fits-all decision.

The choice should come after building a plan, setting an asset allocation and considering costs. 

The decision doesn't have to be all-or-nothing either.

Many investors and their advisers aim for a "least regret" approach by hedging around 50% of the portfolio.

A word from Global X

Justin Lin, from ETF provider Global X, said foreign exchange and currency exposure has been front of mind for investors in recent times.

Lin says AUD currency-hedged ETFs are best viewed as "tools for short-term, tactical asset allocation rather than long-term buy and hold".

Investors may want to consider tactical currency hedging when they expect significant fluctuations in exchange rates that could impact their returns.

For example, if interest rates are rising in their home country but decreasing or unchanged in the country where they hold investments.

In this scenario, the home currency may appreciate, reducing the value of their foreign investments.

Hedging options with ASX ETFs

Vanguard and other ETF providers offer currency-hedged versions of some of their most popular ASX exchange-traded funds.

For example, VGS is unhedged, while Vanguard MSCI Index International Shares (Hedged) ETF (ASX: VGAD) is its hedged counterpart.

Take a look at their performance in 2025.

As you can see, the percentage of price growth between VGS and VGAD widened over the year as the AUD strengthened against the USD.

So, VGAD did better.

Here's another example.

Last year, the S&P 500 delivered total returns, including dividends, of 17.88%. However, IVV ETF investors received a total return of 10.75% due to the impact of the currency exchange.

The hedged version of IVV ETF is iShares S&P 500 (AUD Hedged) ETF (ASX: IHVV), which returned 16.88% (after fees).

As you can see below, IHVV began outperforming IVV in terms of the percentage of capital growth in April last year.

In the end, IHVV did best.

The post Should you consider currency-hedged ASX ETFs? appeared first on The Motley Fool Australia.

Vanguard said Aussie investors have ploughed $2,536 million into the Vanguard Australian Shares Index ETF (ASX: VAS) this year.

VAS is the largest ASX ETF on the market with 22,463.36 million in funds under management as of 30 September, according to ASX data.

Vanguard said Australians invested a record $36.8 billion into ASX ETFs over the first three quarters of CY25.

This is more than was invested over the entirety of 2024.

Cash inflows into Vanguard ETFs exceeded $11.9 billion over the first three quarters, giving the provider a 32% share of new investment.

Let's check out the five most popular Vanguard ETFs of the year so far.

5 most popular Vanguard ASX ETFs this year

1. Vanguard Australian Shares Index ETF (ASX: VAS)

The ASX VAS attracted $2,536 million in cash flow over the first three quarters of 2025.

The VAS ETF seeks to track the performance of the S&P/ASX 300 Index (ASX: XKO), which represents the 300 largest companies by market capitalisation.

This includes ASX blue-chip shares like Commonwealth Bank of Australia Ltd (ASX: CBA) and BHP Group Ltd (ASX: BHP) at the top of the index, and small-caps like Polynovo Ltd (ASX: PNV) and real estate investment trust (REIT) Dexus Industria REIT (ASX: DXI) at the bottom.

2. Vanguard MSCI Index International Shares ETF (ASX: VGS)

The ASX VGS brought in $1,882 million in new investment this year.

The VGS ETF tracks the MSCI World ex-Australia (with net dividends reinvested) in Australian dollars Index.

ASX VGS gives investors broad geographical diversification through its exposure to about 1,300 international shares across 23 nations.

US shares dominate the portfolio at 74%, followed by Japan 6%, Canada 3%, and the UK 3%.

The ASX VGS is focused on large-cap shares at 81% of the portfolio. The ETF's top holdings are Nvidia, Apple, and Microsoft.

3. Vanguard Global Aggregate Bond Index (Hedged) ETF (ASX: VBND)

VBND ETF brought in $1,499 million in new investment over the first three quarters.

The ETF tracks the Bloomberg Global Aggregate Float-Adjusted and Scaled Index hedged into Australian dollars.

The ETF provides exposure to high-quality, income-generating bonds issued by governments, government-owned or guaranteed entities, and corporations from around the world.

The investments are predominantly rated BBB- or higher by Standard & Poor's or an equivalent ratings agency. 

Vanguard says this ASX ETF suits buy and hold investors who want regular income from a diversified portfolio of fixed interest securities.

4. Vanguard MSCI Index International Shares (Hedged) ETF (ASX: VGAD)

The ASX VGAD attracted $1,136 million in cash flow over the first three quarters.

VGAD is an Australian-hedged version of the VGS ETF, so its returns are relatively unaffected by currency fluctuations.

5. Vanguard Australian Shares High Yield ETF (ASX: VHY)

Aussies invested $1,116 million in ASX VHY over the first three quarters.

VHY is the largest dividend-focused ETF on the market.

It seeks to mirror the FTSE Australia High Dividend Yield Index, investing in 75 companies across all sectors excluding REITs.

VHY ETF's top holdings are currently BHP shares, CBA shares, and National Australia Bank Ltd (ASX: NAB).

ASX VHY has a history of providing strong dividend income and impressive capital gains over the long term.

The post 5 most popular Vanguard ASX ETFs among Aussie investors in 2025 appeared first on The Motley Fool Australia.

Ongoing strength in the US market is lifting not just ASX ETFs holding US stocks but also those holding diversified international shares.

This is because US shares dominate diversified global ETFs as America is home to so many of the world's largest and most profitable businesses.

For example, the VGS ETF is invested in about 1,300 of the world's largest companies listed in major developed countries.

About 76% of those companies are in the US.

Another example is the iShares Global 100 AUD ETF (ASX: IOO), which seeks to track the performance of the 100 biggest global equities.

Just under 81% of IOO ETF holdings are US shares.

Last night, the benchmark index for the US market, the S&P 500 Index (SP: .INX), smashed another record high at 6,698.88 points.

The S&P 500 is up 13.8% in the year to date compared to an 8.2% bump for the S&P/ASX 200 Index (ASX: XJO).

Last night, the Dow Jones Industrial Average Index (DJX: .DJI) also hit a record 46,447.13 points, up 9% this year.

The tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) followed suit with its own record of 22,801.90 points, up 26.8% in 2025.

On the ASX today, the ASX 200 is up 0.74% and the S&P/ASX All Ordinaries Index (ASX: XAO) is up 0.69%.

Let's look at some of the ASX ETFs holding international shares that are setting new 52-week highs, if not all-time records, today.

International ASX ETFs smash records on Tuesday

The post Own IOO, IVV, or VGS ETFs? They're smashing records today! appeared first on The Motley Fool Australia.

This follows a big session on Wall Street, with the benchmark S&P 500 Index (SP: .INX) reaching another record close of 6,656.8 points.

Today's strong market appears to be having an outsized impact on ASX exchange-traded funds (ETFs).

At the time of writing, an extraordinary number of ETFs have hit new 52-week highs, or multi-year highs, on the back of today's exuberance.

In fact, at the time of writing, 68 ASX exchange-traded funds have hit new high prices.

Macroeconomic elements may be playing a role in the market surge.

Yesterday, we had the news that the US Fed Reserve has cut interest rates and Australia's jobless rate held steady last month.

ETFs are a favoured way for Aussie investors to access international markets without the hassle of trading on an overseas exchange.

The amazing three-year run for US equities has inspired Aussie investors to think beyond the ASX 200 and the local banks and miners.

The popularity of ETFs is a global trend playing out strongly in Australia.

Betashares data shows Australian investors ploughed a record $5.28 billion into ASX ETFs in July alone.

68 ASX shares setting new records today

Here is a sample of the 68 ASX exchange-traded funds smashing new highs today.

The post 68 ASX ETFs smash multi-year highs amid strong trading on Friday appeared first on The Motley Fool Australia.

It's been a great week for the market after an interest rate cut on Tuesday and data showing lower unemployment in July on Thursday.

Hence, the ASX 200's record high was reset on Tuesday, Thursday, and again this afternoon.

What's happening with the ASX 200 on Friday?

Reporting season continues, with ASX 200 healthcare giant Cochlear Ltd (ASX: COH) releasing its full-year FY25 results today.

Cochlear reported a 9% increase in statutory net profit after tax (NPAT) to $389 million for FY25 and a final dividend of $2.15 per share.

Investors appear nonplussed by the numbers, with the Cochlear share price down 0.25% to $305.35 at the time of writing.

Meanwhile, Ampol Ltd (ASX: ALD) shares are leading the ASX 200 today, rising 9.45% to an intraday peak of $29.64 after the company announced a $1.1 billion acquisition.

Here are the other top risers today.

Fastest rising ASX 200 shares on Friday

Source: asx.com.au at time of writing

ASX shares hitting multi-year highs today

Meanwhile, a bunch of ASX 200 shares have reached multi-year high share prices today.

Here is a sample.

Source: Google Finance at the time of writing

Popular ASX ETFs reach new price milestones on Friday

Some popular ASX exchange-traded funds (ETFs) also reached new record price levels today.

They include:

Source: Google Finance at the time of writing

Yesterday, we reported that Australians ploughed a record $5.82 billion into ASX ETFs last month.

What's on next week?

ASX 200 investors are gearing up for a big week next week.

Many ASX 200 heavyweights are due to release their latest financial reports.

They include BHP Group Ltd (ASX: BHP), CSL Ltd (ASX: CSL), Ampol, Woodside Energy Group Ltd (ASX: WDS), Goodman Group (ASX: GMG), Northern Star Resources Ltd (ASX: NST), and Xero Ltd (ASX: XRO).

There will also be strong interest in the results from Zip Co Ltd (ASX: ZIP), Charter Hall Group, and HUB24 Ltd (ASX: HUB).

The post Oops, the ASX 200 did it again! Another record high appeared first on The Motley Fool Australia.

Many investors use these funds to gain exposure to international markets like the S&P 500 Index (SP: .INX) or NASDAQ-100 Index (NASDAQ: NDX).

However when you choose funds that track these markets, you might be faced with the decision of hedged or unhedged funds. 

That's because these funds are tracking companies based in other countries. 

What is currency hedging?

Currency-hedged ETFs are exchange-traded funds that are designed to reduce (or eliminate) the impact of exchange rate fluctuations on investment returns when investing in foreign assets.

When you invest in international stocks or bonds, you're exposed not just to the performance of those assets, but also to changes in the foreign currency against your home currency.

This year, the Australian dollar has been volatile compared to the USD. The value of $1 AUD fell as low as 60 US cents in April, and has slowly climbed back to around 65 US cents at the time of writing. 

Let's look at how this has impacted ETFs that track the S&P 500 Index (SP: .INX). 

Impact on non-hedged ASX ETFs 

If you own a non-hedged ASX ETF that tracks a US index like iShares S&P 500 ETF (ASX: IVV), your returns are affected by:

• The performance of the S&P 500 (in USD)
• The AUD/USD exchange rate

When AUD is weak like it was in April (around 60¢), each USD of S&P 500 return converts into more AUD. This means your returns in AUD increase and you benefit from currency depreciation. 

However, when the AUD strengthens, each USD is worth fewer AUD. This means your AUD returns fall, even if the S&P 500 rises in USD. 

Hedged ETFs 

Now lets look at a hedged fund, like iShares S&P 500 AUD Hedged ETF (ASX: IHVV).

This ETF hedges currency exposure using derivatives, aiming to keep returns in AUD terms only reflecting the S&P 500.

Whether the AUD goes up or down doesn't materially affect returns.

You're only exposed to the S&P 500's actual performance, not currency fluctuations.

Are hedged ASX ETFs better?

Unfortunately, it's not as simple as which option is better or worse. It largely depends on your risk appetite and personal preference. 

Over the long term, currency fluctuations will likely balance out. 

However, some investors may prefer to avoid these rises and falls, particularly if you invest in funds that are exposed to more volatile economies. 

What are some common hedged funds?

If you are looking to invest in currency hedged ETFs, here are some to consider: 

• Betashares Nasdaq 100 ETF – Currency Hedged (ASX: HNDQ)
• Vanguard MSCI Index International Shares (Hedged) ETF (ASX: VGAD)
• Betashares Global Quality Leaders ETF – Currency Hedged (ASX: HQLT)
  

Some more thematic options include: 

• BetaShares Global Healthcare ETF – Currency Hedged (ASX: DRUG)
• Vaneck Msci International Small Companies Quality (Aud Hedged) Etf (ASX: QHSM)

The post Is it a good time to focus on currency hedged ASX ETFs? appeared first on The Motley Fool Australia.

Vanguard said the Vanguard MSCI Index International Shares ETF (ASX: VGS) attracted $861 million in net cash inflows from Australian investors during the quarter.

This represented a substantial chunk of the $12.7 billion that investors ploughed into all types of ASX ETFs over the quarter. This made the VGS ETF the most popular ETF product in Vanguard's stables by far.

There was a surge in ASX ETF investment in the September quarter, with less than half the amount flowing into exchange-traded funds in the previous two quarters.

Data from the ASX and Vanguard shows investors spent $5.38 billion on ASX ETFs in the June quarter and $5.28 billion in the March quarter.

Let's check out the five most popular Vanguard ETFs of the September quarter.

5 most popular Vanguard ASX ETFs

1. Vanguard MSCI Index International Shares ETF (ASX: VGS)

The ASX VGS attracted $861 million in net cash inflows from Australian investors during the quarter.

The VGS ETF gives investors great geographical diversification through its exposure to more than 1,500 international shares from many nations, including the United States, Japan, the United Kingdom, and Canada.

However, US shares dominate the portfolio at 73%, followed by Japan (6%), the UK (4%) and Canada (3%).

This ASX ETF provides exposure to some of the world's top-performing companies, including Microsoft and Nvidia. The ASX VGS is focused on major companies, with 80% of its holdings in large-cap stocks.

2. Vanguard Australian Shares Index ETF (ASX: VAS)

The ASX VAS attracted $436 million in net cash inflows from investors during the September quarter.

The VAS ETF seeks to track the performance of the S&P/ASX 300 Index (ASX: XKO).

This ETF gives investors exposure to ASX blue-chip stocks like Commonwealth Bank of Australia Ltd (ASX: CBA) and CSL Ltd (ASX: CSL), as well as small-cap stocks like Megaport Ltd (ASX: MP1).

Check out how $5,000 in the VAS ETF turned into $47,671 in just 10 years.

3. Vanguard Australian Shares High Yield ETF (ASX: VHY)

Investors spent $386 million on the ASX VHY during the quarter.

The ASX VHY is one of the best-performing Australian shares exchange-traded funds. It's full of ASX dividend stocks that are forecast to deliver bigger dividend yields than the market average of 4% to 4.5%.

Vanguard restricts the amount invested in any one industry to 40% and 10% for any one company. This means it's not overexposed to the ASX's major industries, being miners and banks.

The ASX VHY holds stocks including BHP Group Ltd (ASX: BHP), Super Retail Group Ltd (ASX: SUL), Transurban Group (ASX: TCL), Telstra Group Ltd (ASX: TLS) and Wesfarmers Ltd (ASX: WES).

4. Vanguard MSCI Index International Shares (Hedged) ETF (ASX: VGAD)

The ASX VGAD received $330 million in net cash inflows from investors during the quarter.

This ETF is the hedged version of the VGS ETF. It is hedged to Australian dollars, so the returns (income and capital gains) are relatively unaffected by currency fluctuations.

Its top holdings include the Magnificent Seven stocks as well as Broadcom and Eli Lilly.

5. Vanguard All-World Ex-US Shares Index ETF (ASX: VEU)

The ASX VEU attracted $212 million in net cash inflows from Australian investors during the quarter.

The ETF provides exposure to many of the world's largest companies listed in developed and emerging markets outside the US.

It is exposed to the fluctuating values of foreign currencies, as there is no hedging.

This ASX ETF provides exposure to 3,824 equities.

Its top three holdings are Taiwan Semiconductor Mfg. Co. Ltd. at 2.34%, the Ozempic and Wegovy maker Novo Nordisk at 1.19%, and tech company Tencent Holdings at 1.12%.

Find out the particular type of ASX ETF that has attracted 56% of all cash inflows in 2024.

The post 5 most popular Vanguard ASX ETFs for investment appeared first on The Motley Fool Australia.

But in volatile times, it's more important than ever to invest in shares for the long-term. That's the philosophy we follow and encourage here at The Motley Fool.

So when Vanguard this year launched an online investment platform that actually gave users no choice but to play the long game, we were intrigued.

"This challenging period will eventually pass," Vanguard Australia managing director Frank Kolimago said at the launch. 

"And Personal Investor will help long-term investors to be well-positioned to benefit when it does."

Vanguard Australia head of Personal Investor, Balaji Gopal, told The Motley Fool this week that the platform made it easier to invest directly into the company's fund products.

"Vanguard ETFs you can buy without any brokerage fee on our platform. But we also offer ASX300 securities," Gopal said.

With access limited to in-house exchange-traded finds (ETFs), managed funds and just the 300 largest ASX-listed companies, Vanguard is discouraging short-term trading.

"Everything we're doing is to enhance that long-term investing mindset," he said.

"Small caps can grow faster than large caps, but they can also lose their profitability due to their size. Large caps are better covered and more diversified."

It's not about broking

Vanguard obviously prefers Personal Investor users to put money into its own index and managed funds. 

"Broking is not going to be our business… We don't want to be a broker," Gopal said.

"We would rather investors invested in truly diversified portfolios, which is what our funds and ETFs offer."

But it added the ASX300 direct investment capability as a value-add, admitting some customers would become interested in ownership of specific companies.

Shares can be purchased with a brokerage fee of $19.95 or 0.15% per trade, whichever is greater.

Under the covers, the broking functionality is provided by an undisclosed "reputable" third party supplier.

Usage of the Personal Investor platform attracts an annual fee of 0.2% of the total account balance, capped at $600.

Stay the course

Regardless of whether they buy ETFs or direct shares, Gopal would like the Covid-19 novices to go about investing the right way.

"There are some investor groups that are chasing [quick] returns and high-yielding stocks," he said.

"But we think there's merit in talking about the benefits of low-cost, long-term investing. Just staying the course."

The post This share platform forces you to invest long-term appeared first on The Motley Fool Australia.