Think VAS is the best ASX index fund? These ETFs have beaten it over the past decade…

Is VAS all it's measured up to be?

a woman in a business suit uses an old fashioned tape measure holding it up against the tallest bar in a bar graph on a wall.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Vanguard Australian Shares Index ETF (ASX: VAS) is the most popular index fund on the ASX
  • But other index funds have beaten it over the past decade
  • Let's see how VAS compares to these other index funds.

The ASX's most popular exchange-traded fund (ETF) to invest in is the Vanguard Australian Shares Index ETF (ASX: VAS). We know this because VAS currently has more than $10 billion in assets under management, far greater than its next rival with just over $5 billion.

But we also know that VAS was far from the best performing ETF in 2021. It didn't even make the top five. Some of the ETFs that beat out VAS, such the BetaShares Crude Oil Index ETF (ASX: OOO) had stellar years last year, but don't beat the Vanguard Australian Shares Index ETF over a longer period of time. But funds like those are not index funds; they instead cover specific corners of the market (in this case, oil futures).

But let's look at some of the index funds that can shine a light on VAS over the past decade.

How does VAS measure up against other ASX index funds?

As a benchmark, VAS has returned an average of 9.41% per annum over the past ten years (as of 31 January).

One index fund that has exceeded this return is the ASX's second-most popular ETF by assets under management, the iShares S&P 500 ETF (ASX: IVV). This ETF tracks the S&P 500 Index, which is the conventional pick for US share exposure as well as being the most widely-tracked index in the world. Over the past decade, IVV has more than doubled VAS's return, giving investors an average return of 20.07% per annum.

But that's not the only index fund that has pipped VAS over the past decade.

The iShares Global Consumer Staples ETF (ASX: IXI) has averaged a return of 13.72% over the same period.

The iShares Asia 50 ETF (ASX: IAA) has given investors an average of 12.59%. The iShares Global 100 ETF (ASX: IOO) Tracking 100 of the largest companies in the world, this fund has averaged 17% per annum since 2012.

Even the iShares MSCI Japan ETF (ASX: IJP) has beaten out VAS, giving investors a return of 11.39% over the past ten years.

So VAS is certainly not infallible. But that doesn't mean you shouldn't invest in it. Perhaps Australian shares may outshine those other markets over the next decade. Past performance is no guarantee of future returns, after all. But ASX investors have voted with their wallets and VAS still remains king of the ASX index fund hill.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended iShares Global Consumer Staples ETF. The Motley Fool Australia has recommended iShares Trust - iShares Core S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ETFs

A group of young ASX investors sitting around a laptop with an older lady standing behind them explaining how investing works.
ETFs

3 top ASX ETFs that could be perfect for beginners

Let's see why these funds could be good picks if you're starting your investment journey.

Read more »

A picture of a satellite orbiting the earth.
ETFs

Add these 2 satellite ETFs to your core ASX stock portfolio

These funds can compliment almost any diversified ASX portfolio.

Read more »

ETF spelt out with a piggybank.
ETFs

Which ASX ETF delivered better returns in FY25: VAS, VGS, or VTS?

Investors in these popular Vanguard ETFs enjoyed solid returns last financial year.

Read more »

Happy man holding Australian dollar notes, representing dividends.
ETFs

How $1,000 a month in this ASX ETF could turn into $500,000

This could be a simple way to build serious wealth in the share market.

Read more »

Woman on her laptop thinking to herself.
Index investing

Here's my big problem with the ASX's Vanguard International Shares ETF (VGS)

This popular ETF has one major caveat that investors should know about.

Read more »

Woman relaxing on her phone on her couch, symbolising passive income.
Dividend Investing

Own IVV ETF or other iShares ASX ETFs? It's dividend payday for you!

Thinking TGIF? There's a better reason to celebrate. It's dividend payday for iShares investors!

Read more »

Man holding out Australian dollar notes, symbolising dividends.
ETFs

5 excellent ASX ETFs to buy with $2,500 today

Let's see why these funds could be worth a closer look.

Read more »

The letters ETF sit in orange on top of a chart with a magnifying glass held over the top of it.
ETFs

How did the Vanguard Australian Shares Index ETF go in FY25?

Investors in Australia's biggest ASX ETF enjoyed solid returns last financial year.

Read more »