The top-performing ETFs of FY2023

Such are the FY2023 performance figures of the top five Australian equity exchanged-traded funds, you could almost throw a blanket over them. The recovery in commodity prices played a big role in the results delivered by the majority of the ASX index trackers that topped the league table. That’s because their exposure to Aussie mining companies range from 25% to 60%.

It should also be noted that the top performer in the list below, the Betashares Australian Equity Fund (Hedge Fund) is a geared product.

And on the performance figures themselves, bear in mind these returns are cycling off a previous 12-month period that was the worst for global equities since 2008. In isolation, these returns can be misleading – speak to a qualified financial adviser before making any changes to your investment portfolio.

How we compiled these lists

• In the “Fund type” box, select “ETFs”

• In “Asset Class”, select “Shares - Australian" or "Shares - Global"

• We then manually sorted results based on 1-year returns.

These ETFs are all listed on the Livewire 'Find Funds' menu (top right-hand side of your page). It should be noted that this is not an exhaustive list, there are others that are not listed in Livewire's 'Find Funds' marketplace.

#1 BetaShares Geared Australian Equity Fund (ASX: GEAR)

As detailed on its website, this fund is “internally geared,” which means the costs are built into the fund. The fund’s gearing ratio – referring to the total amount borrowed expressed as a percentage of its total assets – is managed at between 50% and 65% on any given day.

The five-year share price performance of GEAR. (Source: Market Index)

2. VanEck Australian Resources ETF (ASX: MVR)

As the name suggests, this fund is all about stuff that can be dug or pumped out of the ground and sold for profit. More than 40% of its portfolio weighting is in mining companies and 15% in oil and gas exploration and production companies, as of 30 June 2023. It also holds stocks of companies involved in the refining, processing, and transportation of natural resources, alongside affiliated chemical producers.

The five-year share price performance of MVR (Source: Market Index)

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

The outlier in this list, as the only tech-focused product, it holds more than 50% of its total weighting in information technology companies and almost 30% in communication services companies. Tracking the S&P/ASX All Technology Index (before fees and expenses), the fund also holds a double-digit exposure to industrial firms exposed to the technology and telecommunications sectors, alongside smaller allocations to financial technology and medical technology companies.

The five-year share price performance of ATEC (Source: Market Index)

4. SPDR S&P/ASX 200 Resources Fund (ASX: OZR)

This fund seeks to closely track, before fees and expenses, the returns of the S&P/ASX 200 Resources Index, as outlined on the website of the fund issuer, State Street Global Advisors.

More than 60% of the fund comprises Australian companies within the GICS sector category of Diversified Metals & Mining, with 16% in oil and gas exploration and between 10% and 0.5% in Gold, Steel, Coal and fuels, oil and gas refining, aluminium, and copper.

The five-year share price performance of OZR (Source: Market Index)

5. BetaShares Australian Resources Sector ETF (ASX: QRE)

Along very similar lines to the above, the Betashares resources product also tracks the S&P/ASX 200 Resources Index and shares the same 0.34% management expense ratio.

The five-year share price performance of QRE (Source: Market Index)

The top five performing global ETFs

Just as there was for the domestically-focused ETFs discussed above, there’s a clear theme that played out for the top-performing global ETFs over the 2023 financial year. 

In the last six-plus months the buzz around artificial intelligence has grown ever louder, which has been a key reason the share prices have skyrocketed for some of the biggest players in the space – most of which are in the US.

1. Global X ETFs Australia FANG+ ETF (ASX: FANG)

The staggering 60% return of this fund was underpinned by the earnings of a handful of the world’s largest companies. And 99.7% of them are in the US.

The return is all the more surprising when you consider the relative concentration of this ETF, which holds just 10 stocks, with Facebook-owner Meta Platforms, EV giant Tesla and consumer technology behemoth Apple the top three company holdings.

“FANG delivers access to multiple disruptive macro-trends arising from technological advancements, changing demographics and consumer preferences,” according to the Global X website.

The five-year share price performance of FANG (Source: Market Index)

2. Global X ETFs Australia Ultra Long Nasdaq 100 Hedge (ASX: LNAS)

This product differs from the others outlined here, given it is an exchange-traded managed fund – vehicles that are sometimes also known as “active ETFs.”

“An actively managed fund, it aims to provide investors with geared returns that are positively related to the returns of the Nasdaq-100 Index by investing primarily in a portfolio of long E-mini Nasdaq-100 Futures contracts listed on the Chicago Mercantile Exchange,” according to the Global X website.

The performance of LNAS since inception (Source: Market Index)

3. Global X ETFs Australia Semiconductor ETF (ASX: SEMI) 

This ETF invests in the nuts and bolts of the technology age – semiconductors.

“Internet of Things (IoT) connections could double to 26.4 billion by 2026 which is one of many categories that require semiconductors to operate,” according to the Global X website.

Another relatively concentrated ETF, it holds 30 stocks – 99.7% of which are information technology firms. But it differs from the previous two in having a slightly broader country exposure. Though still dominated by the US, which comprises the headquarters for just under 70% of the holdings, the Netherlands, Taiwan, Japan, Germany, South Korea and Switzerland are also represented in the portfolio.

The performance since inception of SEMI (Source: Market Index)

4. BetaShares Crypto Innovators ETF (ASX: CRYP)

The only cryptocurrency-focused ETF in the list, this one provides focused exposure to as many as 50 companies such as Coinbase, Riot Blockchain, and Microstrategy.

“The crypto economy has been growing strongly, aided by the performance of Bitcoin, Ethereum and other digital assets over the past ten years, with this growth anticipated to continue,” says the Betashares website.

The inherent risks of these companies is also clearly noted in the documentation: “Crypto-assets are highly speculative in nature and companies with significant exposure to crypto-asset markets can be expected to have a very high level of return volatility.”

The performance since inception of CRYP (Source: Market Index)

5. Perpetual Global Innovation Share Fund (Managed Fund) (ASX: IDEA)

Rounding out the list is the other tech-heavy ETF in these groupings, which is also the only other active ETF.

“The portfolio manager believes that changes in technology and innovation can have a significant impact on the future earnings and valuation of companies, and that by focusing on understanding changes in technology and innovation this can lead to early identification of companies with growth potential,” says the Perpetual website.

With a more than 30% exposure to information technology, the Perpetual Global Innovation Share Fund also holds 26% in communication services, 11% in medical technology alongside single-digit exposures to industrials, consumer discretionary, and financials.

The performance since inception of IDEA (Source: Market Index)

This article was first published on Livewire Markets on Thursday, 13 July 2023.