Exchange traded funds (ETFs) aren't just good for diversifying a portfolio, they can deliver incredible market-beating returns for investors.
For example, the two ASX ETFs listed below have made its investors rich over the last five years.
Let's see what a $50,000 investment in these ASX ETFs could have turned into:
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Betashares Global Quality Leaders ETF (ASX: QLTY)
The Betashares Global Quality Leaders ETF. has been a very strong performer over the last five years.
This appears to have been driven by its focus on investing in the world's highest quality companies (never a bad idea!).
The Betashares Global Quality Leaders ETF gives investors access to a portfolio of approximately 150 global companies (outside Australia) that rank highly on four key metrics. These metrics are return on equity, debt-to-capital, cash flow generation, and earnings stability.
At present, the fund includes global giants such as ASML, L'Oreal, Microsoft, Novo Nordisk, Nvidia, and Visa.
Over the last five years, this ASX ETF has delivered an average return of 15.9% per annum. This would have turned a $50,000 investment into approximately $104,000.
VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)
Another ASX ETF that has delivered very strong returns to unitholders is the VanEck Vectors Morningstar Wide Moat ETF.
This popular fund invests in a group of companies that have wide moats (sustainable competitive advantages) and fair valuations. These are qualities that legendary investor Warren Buffett searches for when he makes his investments for Berkshire Hathaway (NYSE: BRK.B).
And with Berkshire Hathaway smashing the market since 1965, it could pay to follow Buffett's lead.
At present, its holdings include Wells Fargo, Walt Disney, Estee Lauder, Campbell Soup, Nike, and Etsy.
Over the last five years, this ASX ETF has generated an average annual return of 16.4%. This would have turned a $50,000 investment into approximately $107,000.
