Your most-tipped ETFs for 2024

In the last five years, there is one type of investment product that has grown so much in terms of size and listings, that no other product even comes close. I'm talking about ETFs, with the market capitalisation of ASX-listed ETFs tripling over the period. 

Such is the popularity of the space, that inflows to the US ETF market outstripped unlisted managed funds in 2023, with the Australian market mirroring the trend – You can read more about it in this wire by my colleague Glenn Freeman.

The ETF market currently comprises 325 ASX-listings, having added 56 in 2023 (a new record). Given the sheer number of opportunities now available to investors, the ETF universe is not an easy place to navigate. Nor is it the once-simple, broad-based index tracking space it once was.

The ETF market spans the simple trackers covering such indices as the ASX200 and S&P 500, to thematic ETFs covering anything from eSports to robotics, as well as actively-managed funds. 

While ETFs are typically viewed as low-cost, this applies more to the index trackers than the more complex or actively-managed options, which can often have high costs or even additional performance fees.

Thematic ETFs have been particularly attractive to retail investors in recent times, especially during the COVID pandemic, although questions have been raised about their long-term performance and high fees - you can read more here. 

With such an abundance of options, which ETFs do investors view as top picks?

For the first time in 2023, we asked Livewire readers to share their top-tipped ETFs. It was a largely balanced list with broad-based indices such as the ASX200, S&P 500 and NASDAQ 100 featuring, alongside a few thematic choices.

In the second year, close to 5,000 respondents across Livewire Markets and Market Index shared their tips. It's largely consistent with last year, with two new additions. Given the events of 2023, it shouldn't come as any surprise these were linked to the AI-boom and the spike in uranium prices.

Interestingly, all of the top-tipped ETFs delivered positive returns in 2023, compared to 2022 where only two finished in the black. It's a timely reminder that investment performance is typically viewed over 3- or 5-year periods. 

Please note: We are sharing information from the Livewire and Market Index readerships by publishing this list. We hope it inspires ideas for your investment research. This information is not, nor is it intended to be, a set of recommendations. Please do your own research and seek advice from a professional. Past performance is not a reliable indicator of future return. 

Key metrics:

• Average performance for 2023 was 36.62%

• The best-performing ETF on a one-year basis was Global X FANG+ ETF (ASX: FANG) achieving 94.40%

• The average management cost was 0.38%, with the cheapest management fee 0.04% for the iShares S&P 500 ETF (ASX: IVV)

• 80% of the top 10 covered international investments, with commodities and technology sub-themes covered

• None of the tipped ETFs were actively managed

• New additions to the list: Global X FANG+ ETF (ASX: FANG) and Betashares Global Uranium ETF (ASX: URNM) representing two of the biggest performing areas of 2023 – AI-fuelled technology and uranium

1. Betashares Nasdaq 100 ETF (ASX: NDQ)

NDQ offers exposure to 100 of the largest non-financial companies listed on the US-based NASDAQ index by tracking the performance of the NASDAQ 100 Index. The Magnificent Seven account for 49.2% of the NASDAQ 100, so it’s hardly a surprise this ETF has been a popular choice, as well as a top-performer.

• 1-year performance - 53.22%

• 5-year performance - 22.68%pa

• Management fee - 0.48%pa

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

VAS seeks to provide exposure to the S&P/ASX300. The largest sector allocations are to financials and materials, it is also traditionally one of the most popular ETFs on the ASX.

• 1-year performance - 12.15%

• 5-year performance 10.27%pa

• Management fee 0.07%pa

3. Betashares Global Cybersecurity ETF (ASX: HACK)

HACK provides exposure to some of the world’s leading cybersecurity names, ranging from those you’ve heard of to those you might not.

• 1-year performance - 38.40%

• 5-year performance - 19.38%pa

• Management fee - 0.67%pa

4. VanEck MSCI International Quality ETF (ASX: QUAL)

QUAL gives investors exposure to a diversified portfolio of quality international companies listed on exchanges in developed markets around the world (ex Australia).

• 1-year performance - 31.29%

• 5-year performance - 17.07%pa

• Management fee 0.40%pa

5. iShares S&P 500 ETF (ASX: IVV)

IVV offers exposure to the largest 500 US companies by market capitalisation, seeking to replicate the S&P 500 index. The Magnificent Seven represents 29% of the S&P 500 so it has also benefitted from the AI-boom.

• 1-year performance 25.20%

• 5-year performance - 16.05%pa

• Management fees - 0.04%pa

6. VanEck Morningstar Wide Moat ETF (ASX: MOAT)

MOAT offers investors exposure to a diversified portfolio of attractively priced US companies with sustainable competitive advantages according to Morningstar’s equity research team. It’s a high-conviction approach and the biggest sector allocations are towards financials and healthcare.

• 1-year performance - 30.64%

• 5-year performance - 17.49%pa

• Management fees - 0.49%pa

7. Global X FANG+ ETF (ASX: FANG)

A new addition to the top 10 this year, FANG aims to invest in companies at the leading edge of next-generation technology that includes household names and newcomers. There are 10 holdings in this ETF, including all of the Magnificent Seven and a couple of extras, such as Snowflake Inc.

• 1-year performance - 94.40%

• 5-year performance - N/A (inception March 2020)

• Management fees - 0.35%pa

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

VHY seeks to provide low-cost exposure to the companies on the ASX that have higher forecast dividends relative to other ASX-listed companies by tracking the FTSE Australia High Dividend Index.

• 1-year performance - 11.71%

• 5-year performance - 11.59%pa

• Management fees - 0.25%pa

9. Global X Physical Gold (ASX: GOLD)

The world’s oldest physical gold ETF invests in physical gold bullion, with each unit of investment representing a 0.037956936 fine troy ounce as at 19 January 2024.

• 1-year performance - 12.60%

• 5-year performance - 10.20%pa

• Management fees - 0.40%pa

10. Betashares Global Uranium ETF (ASX: URNM)

URNM aims to provide exposure to a portfolio of leading companies in the global uranium industry. Given 2023 was the year uranium prices spiked, it’s not surprising that URNM has made the top 10.

• 1-year performance - 56.54%

• 5-year performance - N/A (inception June 2022)

• Management fees - 0.69%pa

This article was first published on Livewire Markets.