Which Australian shares ASX ETFs are delivering the best returns for investors?

We reveal the top 5 performing ASX ETFs over the past three financial years.

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

ASX ETFs or exchange-traded funds (ETFs) are an increasingly popular investment method for Australian shares investors, providing instant diversification in a single trade with loads of options to choose from.

Leading ETF provider BetaShares estimates $4.8 billion of net inflows into ETFs in January to May alone this year. Fixed-income ETFs have received the most inflows at $2.5 billion, with Australian shares ASX ETFs attracting $1.6 billion of net inflows, and cash ETFs bringing in $688 million of net inflows.

BetaShares says ETF investing has recorded a compound annual growth rate (CAGR) of 43% since they were first invented and launched in 2001.

New data from the ASX quantifies the returns of ASX ETFs over the past three financial years.

In this article, we take a look at the top five performers for total investor returns.

The top 5 ASX ETFs for total returns

For the purposes of this article, we're going to focus on the ASX ETFs that invest in Australian shares only, based on a certain strategy.

We're excluding the index-based and sector-based ETFs that do not have a manager executing a defined strategy.

This way, we get a peek at which ETF providers are performing best, and also which investing strategies are delivering the top results right now.

According to the data, here are the top five ASX ETFs:

The BetaShares Geared Australian Equity (Hedge Fund) (ASX: GEAR) ETF returned an average of 24.95% per annum. This includes reinvested dividends which have historically averaged a yield of 4.89%.

Vanguard Australian Shares High Yield ETF (ASX: VHY) returned an average of 17.13% per annum. This includes reinvested dividends which have historically averaged 5.04%.

The SPDR MSCI Australia Select High Dividend Yield (ASX: SYI) ETF returned an average of 14.62% per annum. This includes reinvested dividends which have historically averaged 5.76%.

Russell Investments High Dividend Australian Shares ETF (ASX: RDV) returned an average of 12.41% per annum. This includes reinvested dividends which have historically averaged 5.36%.

Russell Investments Australian Responsible Investment ETF (ASX: RARI) returned an average of 11.02% per annum. This includes reinvested dividends which have historically averaged 3.94%.

More about the No 1 ETF

ASX ETF BetaShares Geared Australian Equity Fund (Hedge Fund) gives investors a cost-effective way to access geared exposure to the returns of the S&P/ASX 200 Index (ASX: XJO).

So, it's like an index fund for the ASX 200 but with a special strategy.

That strategy is to use leverage — or borrowed funds — to magnify returns.

The GEAR ETF currently has a leverage of 2.3x. That means it seeks a return of 2.3x the ASX 200 on a daily basis. But leverage goes both ways. It also magnifies losses in the same multitude.

The old saying is that leverage can provide 'an elevator to the ceiling — and the basement'.

Here is a chart documenting the performance of this Australian shares ASX ETF against the ASX 200 over the past three years.

Created with Highcharts 11.4.3BetaShares Geared Australian Equity Fund (Hedge Fund) + S&P/ASX 200 Price Return (AUD) PriceZoom1M3M6MYTD1Y5Y10YALL11 Aug 202011 Aug 2023Zoom ▾Sep '20Jan '21May '21Sep '21Jan '22May '22Sep '22Jan '23May '230www.fool.com.au

Should you invest $1,000 in Calix Limited right now?

Before you buy Calix Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Calix Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Bronwyn Allen 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 has recommended Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ETFs

A business woman flexes her muscles overlooking a city scape below.
ETFs

3 ASX ETFs that could be strong buys in May

Looking for some investment ideas? Here are three to consider in May.

Read more »

Army man and woman on digital devices.
ETFs

3 reasons why Vaneck Global Defence ETF could beat the ASX 200 over the next year

Let's take a look at why this fund could be a top pick for investors.

Read more »

Five young people sit in a row having fun and interacting with their mobile phones.
ETFs

5 ASX ETFs to buy and hold until 2035

Check out these funds if you are looking to make buy and hold investments.

Read more »

Excited couple celebrating success while looking at smartphone.
ETFs

3 strong ASX ETFs to buy in May

These funds could be top picks for Aussie investors next month. Let's see why.

Read more »

hands holding up winner's trophy
ETFs

3 of the best ASX ETFs I'd buy today for long-term growth

Here are three funds that could be quality picks for the long term.

Read more »

A crown sits on a pile of money, indicating the richest people
ETFs

Picking an ASX ETF: why quality is king in a turbulent market

Looking for quality investments? Check out these two.

Read more »

Cubes placed on a Notebook with the letters "ETF" which stands for "Exchange traded funds".
ETFs

3 popular ASX ETFs that are down more than 10% this year

Check out these 3 options while on sale.

Read more »

Robot hand and human hand touching the same space on a digital screen, symbolising artificial intelligence.
ETFs

Want to invest in artificial intelligence ahead of Magnificent 7 earnings reports this week? Check out this ASX ETF

Looking for AI exposure? Check out this fund for easy access.

Read more »