- ETFs are a financial product designed to track an underlying asset, which could be a commodity, a basket of stocks, an index, etc.
- They are traded on a recognised stock exchange just as shares.
- A200, ILC, VAS are some of the index ETFs that have performed well over the past one year.
Exchange traded funds or simply ETFs are a financial product designed to track an underlying asset, which could be a commodity, currency, a basket of stocks or an index. These ETFs are bought and sold in units just as shares of a company over a recognised stock exchange.
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The price of an ETF changes based on demand and supply as market participants keep on buying and selling those ETFs. One of the big advantages of ETFs is that they offer an exposure in some of those investment products which otherwise would not be possible for a retail investor, for e.g., global stock indices. If you are curious to know which ASX-listed ETFs have delivered hefty gains in the last one year, below is the list for you.
- BetaShares Australia 200 ETF (ASX:A200)
As the name suggests, BetaShares Australia 200 ETF tracks the Australian benchmark index, ASX 200. The ETF is designed to mimic the returns of the underlying index to deliver almost same returns (before fees and expenses).
The fund has a management fee of 0.07% per annum which is among the lowest in the industry. There is no minimum amount required to be invested in this fund. One unit of A200 last traded at AU$124.62 as of 19 October 2021, delivering a one-year return of 31.16% (after fees).
- iShares S&P/ASX 20 ETF (ASX:ILC)
This ETF aims to track the performance of S&P/ASX 20 Accumulation Index, which is essentially comprised of 20 largest companies listed on the Australian Securities Exchange (ASX). The management fee of the fund is 0.24%.
The fund is specifically designed for low-risk investors as it includes only blue-chip companies. The last net asset value (NAV) of the fund is AU$28.38, as of 18 October 2021, delivering a one-year return of 32.92%.
- Vanguard Australian Shares Index ETF (ASX:VAS)
The fund’s objective is to track the performance of the ASX 300 index, with a focus on low-cost structure. It is suitable for “buy and hold” investors looking for a long-term capital appreciation along with tax-efficient income.
The fund charges 0.1% as management fee and has US$9.52 billion of funds under management. The last NAV of the fund is AU$94.51, as of 19 October 2021. The one-year return of the fund stands at 30.96%.
ETFs are a good way to take exposure in a basket of companies at a much lower cost. It also provides exposure to global stocks and indices, which is the only way to invest in them in some countries. The above-mentioned ETFs have delivered over 30% return in the last one-year, but these kinds of good returns may not materialise every year. Therefore, investors need to do their own due diligence before investing.