Beating the market is an aspiration that most investors have. The good news is that it has been possible to do this without much effort in recent years. This is thanks to the development of exchange-traded funds (ETFs).
Over the last five years, the S&P/ASX 200 Index (ASX: XJO) has generated an average total return of 7.5% per annum. Whereas these ETFs have delivered returns that far exceed this. Here's what you need to know:
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BetaShares NASDAQ 100 ETF (ASX: NDQ)
The first market-beating ASX ETF is the BetaShares NASDAQ 100 ETF. This ETF gives investors exposure to the 100 largest non-financial shares on the famous NASDAQ index. These are many of the largest companies in the world and household names such as Amazon, Alphabet, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla.
Over the last five years, it has smashed the market and generated an average return of 19.4% per annum.
VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)
Another market-beating ASX ETF has been the VanEck Vectors Morningstar Wide Moat ETF. This popular ETF gives investors access to a diversified portfolio of companies with sustainable competitive advantages and fair valuations. The ETF contains approximately 50 companies that tick these boxes. At present, this includes the likes of Alphabet, Boeing, Kellogg Co, Meta Platforms, and Walt Disney.
Since this time in 2018, the ETF has generated an average return of 17% per annum.
Vanguard MSCI Index International Shares ETF (ASX: VGS)
A final ASX ETF that has beaten the market has been the popular Vanguard MSCI Index International Shares ETF. This ETF provides easy access to around 1,500 of the world's largest listed companies. Among its holdings are global giants such as Amazon, Apple, Nestle, Nvidia, Procter & Gamble, Tesla, and Visa.
Over the last five years, its units have delivered a return of 11.6% per annum.
