Top 5 ASX ETFs Maintain Dominance, While U.S. Core ETFs Garner Attention

Australia’s top 5 largest ETF products have seen minimal changes over the past year. Despite this stability, the correlation between fund flow and investment performance isn’t always evident.

Vanguard stands out prominently with two of its ETFs securing the top spots based on assets under management (AUM).

The Vanguard Australian Shares Index ETF (ASX: VAS) commands $14.7 billion in AUM, tracking the S&P/ASX 300 Index. However, its unit price has only seen a modest increase of just over 10% in the past year, primarily due to its focus on Australian stocks.

On the other hand, the Vanguard MSCI Index International Shares ETF (ASX: VGS) holds $7.36 billion in AUM and has experienced a remarkable 27% rise in its unit price over the same period.

This surge can be attributed to its significant holdings in leading U.S. technology companies like Microsoft Corp., Apple Inc., NVIDIA Corp., Amazon.com Inc., and Meta Platforms Inc.

Ranking third with $7.3 billion in AUM is the IVV iShares S&P 500 ETF (ASXL: IVV), which has seen a substantial 30% increase in its unit price. Like VGS, IVV’s performance is bolstered by its exposure to the robust U.S. technology sector.

Breaking away from the passive trend is the MGOC Magellan Global Fund (Open Class) (Managed Fund) ETF (ASX: MGOC) with $6.6 billion in AUM. This actively managed ETF has achieved a commendable 24% gain for the year, attributed to its strategic allocation, with 23% of holdings dedicated to information technology stocks.

However, it comes with a higher fee structure compared to passive ETFs.

Rounding up the top 5 is the SPDR S&P/ASX 200 State Street ETF (ASX: STW) with $5.0 billion in AUM. While it has seen an 11% rise in its unit price, the volatility experienced over the past year underscores the challenges of relying solely on Australian stocks.

ETFs lacking exposure to U.S. technology stocks have struggled to match the gains observed in their U.S.-focused counterparts. However, the actively managed ETF has proven to be a resilient performer.

In summary, ETFs exposed to the thriving U.S. technology sector have emerged as the top performers in the share market over the past year, highlighting the importance of global diversification in investment strategies.

On the flip side, should U.S. information technology stocks face turbulence that halts their upward momentum for any reason, ETFs with large weightings could experience reversals in performance.

It underscores the importance of diversification and staying vigilant in monitoring market dynamics.

 

 

JustStocks Advisor
Compare ETFs is sourced by JustStocks employees from the websites of ETF providers, individual Product Disclosure Statements, and historical price data information.

 

 

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