Are these the best ETFs to buy and hold in Australia? [2024]

Decide which is the best ETF to buy and hold in Australia

Stock price and year to date data as of 15 May 2024. Rest of data as of 30 April 2024. Source: Stake, Google Finance and ASX Investment Products - April 2024.

*The list of funds mentioned is ranked by assets under management (AUM). When deciding what exchange traded funds (ETFs) to feature, we analyse the financials, the price point of an ETF unit, the AUM, management fees, and whether or not they are actively traded on Stake.

👉 If you need more information before diving in, check out this comprehensive guide on how to buy ETFs in Australia→

How have these ETFs performed long-term

Data as of 30 April 2024. Source: ASX Investment Products - April 2024.

Discover if these are the right ASX ETFs to buy and hold

1. Vanguard Australian Shares Index ETF ($VAS)

Assets under management (AUM): $14,689m

Stock price (as of 15/05/2024): $96.59

Stake Platform Bought / Sold (1 Jan 2024 - 30 Apr 2024): 86% / 14%

The Vanguard Australian Shares Index ETF is a popular choice amongst Stake investors. The ETF reflects the general performance of Australia’s share market by tracking the performance of the largest 300 companies by market cap. Buying the index fund is a low cost way to gaining broad exposure to established, dividend-paying, large-cap stocks, such as Australian banks, as it comes with an expense ratio of 0.07%.

2. iShares S&P 500 ETF ($IVV)

Assets under management (AUM): $7,684m

Stock price (as of 15/05/2024): $52.68

Stake Platform Bought / Sold (1 Jan 2024 - 30 Apr 2024): 92% / 8%

IVV ETF tracks 500 of the largest publicly traded companies in the U.S. by market cap and gives investors exposure to the American stock market. It’s amongst the more popular ETFs, which has well known holdings such as Apple ($AAPL) and Microsoft ($MSFT), as well as an expense ratio of 0.04%. 

It’s worth noting that while being a broad based index fund, this ETF does come with currency risk as shifts in the exchange rate between the Australian Dollar and U.S. Dollar could affect its overall performance.

It has been the most popular ETF on Stake so far in 2024, taking out the number 1 most traded ETF spot from $VAS.

3. Vanguard MSCI Index International Shares ETF ($VGS)

Assets under management (AUM): $7,590m

Stock price (as of 15/05/2024): $122.55

Stake Platform Bought / Sold (1 Jan 2024 - 30 Apr 2024): 92% / 8%

This index fund has holdings in approximately 1,500 companies in developed markets such as the U.S., Japan, Canada, and Switzerland. The international ETF can be part of a diversified investment strategy, as it excludes Australia stocks when tracking the return of the MSCI World index, but does not include exposure to emerging markets.

It provides access to larger firms when considering market cap, rather than being a small cap ETF or mid cap ETF.

🆚 Compare VGS and VAS→

4. BetaShares NASDAQ 100 ETF ($NDQ)

Assets under management (AUM): $4,409m

Stock price (as of 15/05/2024): $41.80

Stake Platform Bought / Sold (1 Jan 2024 - 30 Apr 2024): 87% / 13%

The Betashares NASDAQ 100 ETF is designed to track the performance of the NASDAQ-100 Index, which comprises 100 of the largest non-financial companies listed on the NASDAQ stock exchange. This asset grants exposure to prominent technology companies like Apple, Amazon, Microsoft, and Google, among others. 

The fund has $4.5b assets under management and has had a terrific 12 months, with a share price increase of 37%. This strong result is reflected in the overall positive sentiment towards tech and the stellar performance of some of the funds top holdings like Microsoft, Nvidia and Apple.

🆚 Compare IVV and NDQ→

5. Betashares Australian High Interest Cash ETF ($AAA)

Assets under management (AUM): $3,393m

Stock price (as of 15/05/2024):$50.17

Stake Platform Bought / Sold (1 Jan 2024 - 30 Apr 2024): 34% / 66%

The Betashares Australian High Interest Cash ETF provides access to bank and cash term deposits, held in Australian Dollars at Australian banks. The index fund aims to generate returns greater than the 30 day Bank Bill Swap Rate after its expense ratio. 

While not giving exposure to the stock markets, the product enables investors to buy ETFs and sell ETFs at any point, rather meeting the requirements of specific banks. The monthly distributions could also interest long term investors.

💡Related: What are the best bank shares to buy in Australia?→

6. BetaShares Global Cybersecurity ETF ($HACK)

Assets under management (AUM): $926m

Stock price (as of 15/05/2024):$11.46

Stake Platform Bought / Sold (1 Jan 2024 - 30 Apr 2024): 51% / 49%

HACK ETF focuses on companies whose products and services fall in the cybersecurity industry. It is an international ETF, but the stocks are predominantly listed in the U.S.

While ETF investing is known for providing diversification, these types of sector ETFs can be a way of gaining additional exposure to specific trends in global stock markets. This product has also been amongst the best performing ETFs in this list in terms of five year returns.

7. Global X FANG+ ETF ($FANG)

Assets under management (AUM): $549m

Stock price (as of 15/05/2024): $25.23

Stake Platform Bought / Sold (1 Jan 2024 - 30 Apr 2024): 58% / 42%

The Global X FANG+ product is another sector ETF, which contains large and influential tech firms. Popularly known as the "FAANG" stocks, these include Facebook ($META), Apple ($AAPL), Amazon ($AMZN), Netflix ($NFLX), and Alphabet's Google ($GOOG). 

The ETF only has ten holdings in total as of 15 May 2024, with Tesla ($TSLA), and NVIDIA ($NVDA) also featuring. The resurgence of the tech industry and emergence of artificial intelligence (AI) have helped it become the top ETF by one year returns at 65.82%.

💡Related: What are the best technology stocks to invest in?→

8. BetaShares Diversified All Growth ETF ($DHHF)

Assets under management (AUM): $379m

Stock price (as of 15/05/2024):$33.00

Stake Platform Bought / Sold (1 Jan 2024 - 30 Apr 2024): 81% / 19%

The BetaShares Diversified All Growth ETF provides access to large, mid and small cap equities from Australia, various developed and emerging markets. With a 100% allocation to shares and its holdings being over 8,000 companies across over 60 exchanges, it could be amongst the top ETFs for a diversified portfolio. 

However, the ETF doesn’t really have exposure to different asset classes, having no fixed income or currency hedging strategies. While having stocks across multiple geographies and sectors, this ETF is still set up for passive investing, rather than being an active equity ETF.

9. BetaShares Global Robotics and Artificial Intelligence ETF ($RBTZ)

Assets under management (AUM): $251m

Stock price (as of 15/05/2024):$14.24

Stake Platform Bought / Sold (1 Jan 2024 - 30 Apr 2024): 59% / 41%

The BetaShares Global Robotics and Artificial Intelligence ETF focuses on investing in firms that design, manufacture, and implement robotics and AI technologies across various industries. ETFs focused on the tech industry have been some of the best performing ETFs in 2023 and 2024, as this sector of the stock market trends has had particulary high returns. 

Many long term investors also expect that ongoing technological advancements in automation and AI could have a large impact across the economy in the years ahead.

💡Related: Are these the best AI stocks on ASX?→

10. BetaShares Australian Dividend Harvester Fund (Managed Fund) ($HVST)

Assets under management (AUM): $197m 

Stock price (as of 15/05/2024):$12.88

Stake Platform Bought / Sold (1 Jan 2024 - 30 Apr 2024): 78% / 22%

This dividend equity ETF product aims to generate income from franked dividends that exceed the amount from the general Australian share market on an annual basis. Their Australian equity fund portfolio usually has between 40 and 60 stocks from the largest 100 by market cap and is adjusted every three months to provide high dividend yields. 

Like other actively managed ETFs, it does have a relatively high expense ratio when compared to general passive ETFs. However, investors do benefit from monthly distributions.

What is the best ETF to buy and hold in Australia?

There is no ETF that can be considered the best ETF to buy and hold from the Australian share market. The best fund to invest in depnds on an individlas investment goals, time horizon and risk rolerance.

Some popular ETFs on the Stake platform have been listed above. It’s important to compare ETFs and consider different factors before making an investment decision.

Why are these ETFs worth investing in?

These ETF products are commonly traded on the Stake platform, being bought at a relatively high rate when compared to the number of sells. While some are newer products, the index funds all have at least a three year performance record and AUM of $150m. The average returns of various asset classes, such as fixed income and sector ETFs, are expected to fall across different ranges and usually have a tradeoff with other factors, namely risk. 

As the stock market moves, the best performing ETFs shift over time. Some ETFs can be used to access major indexes, whereas others following emerging megatrends that could become bigger parts of the economy in the long run. It really depends on an individual's investment strategy to determine which are the best ETFs. For some regular distributions are a key factor to finding the top ETF choices, while others might think there’s long term value in emerging markets. 

How to compare ETFs?

There are 300 ETFs products available on the ASX. While ETFs can be described as providing instant diversification, it really depends on the specific product and what role it could play in your investment portfolio. Investors can usually find information online about the expense ratios, which indexes are tracked by passive ETFs or whether it’s an actively managed ETF.  

Which geographies, sectors and companies the ETF provide exposure to should also be found on the ETF issuer websites. These could significantly differ between two products such as a commodity ETF or REIT ETF.  The ASX also has data on the funds under management and past returns of index funds. More funds usually means greater liquidity and a longer track record could indicate the product has been viable for multiple years.

If you want to compare ETFs check out the stock comparison tool and enter the two funds you are researching to compare metrics like share price, market cap and dividend yield.

Should you hold ETFs long-term?

ETFs can be well suited for long term investments and are commonly used in ‘set and forget’ scenarios, as index funds tend to follow general stock market or sector movements. 

Individual stocks can be impacted by events or internal matters specific to the firm and face constant pressure from competitors. Researching the financial situation and keeping up to date with all these potential situations for multiple firms can be a time consuming task. 

Whether the ETF fits with your investment strategy and provides diversification to your portfolio will be different for each person. Personal goals tend to shape investment choices, especially around time horizons and the idea of what’s a long-term period is not always the same. Simply being an ETF, does not mean the product will be a good investment decision so make sure to do your own research when deciding which funds are the best to add to your portfolio.

More resources:

✅ What is a core-satellite investing approach?→

✅ Looking for high dividends ETFs in Australia?→

✅ Find the best tech ETF in Australia for you→

This does not constitute financial product advice nor a recommendation to invest in the securities listed. Past performance is not a reliable indicator of future performance. When you invest, your capital is at risk. You should consider your own investment objectives, financial situation, particular needs. The value of your investments can go down as well as up and you may receive back less than your original investment. As always, do your own research and consider seeking appropriate financial advice before investing.

Any advice provided by Stake is of general nature only and does not take into account your specific circumstances. Trading and volume data from the Stake investing platform for reference purposes only, the investment choices of others may not be appropriate for your needs and is not a reliable indicator of performance.