What the ETF? The average ETF has returned 7 per cent this year – just ahead of the ASX
An ETF based on global agriculture shares has jumped out ahead of a basket of ETFs that have so far netted an average return slightly above the main bourse.
The ASX 200 is up 6.7 per cent since January 1 but ASX ETFs have an average gain of 7.1 per cent and all but a handful are in positive territory for the year.
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Sitting on top with a 28 per cent gain is the BetaShares’ Geared US Equities (ASX:GGUS) which after a solid 2020 continued to edge higher this year in conjunction with the US equity markets.
This ETF isn’t the only one exposed to the US market but differs in being “internally geared”, by combining equity investors’ money with debt investors’. It then invests in the top 500 shares listed in the US by market capitalisation.
Taking silver spot is Vanguard’s Global Value Equity ETF (ASX:VVLU) which is up 21 per cent. This ETF invests in “value stocks” globally, typically from the FTSE Developed All Cap Index and the Russell 3000 Index.
Some of the more peculiar entering the top few include BetaShares’ Global Agriculture ETF (ASX:FOOD) which invests in the world’s leading agriculture companies such as Tyson Meats and Deere & co. This ETF has gained 19 per cent this year.
Of the handful of ETFs to have only hit the market since 2021 began, the best performer is VanEck Vectors MSCI International Small Companies Quality ETF (ASX:QSML) which is up 9 per cent. According to Van Eck, QSML hosts some of the world’s highest quality small companies based on three key fundamentals: high return on equity, earnings stability and low financial leverage.
In a sign of how hot the equity markets are going, the bottom 3 ETFs by a long shot are all negatively hedged, or in other words designed to go up when the market goes down but go down when the market goes up.
BetaShares’ US Equities Bear Fund (ASX:BBUS) is down 26 per cent and two Australian focused bear funds (ASX:BBOZ and ASX:BBUS) are down 18 per cent and 8 per cent respectively.
Other laggards include the previously hot running Van Eck’s Gold Miners ETF (ASX:GDX) and ETF Securities S&P Biotech ETF (ASX:CURE).