Best Performing Australian ETFs & Morningstar Best ETF Picks
Exchange-traded funds (ETFs) are typically easy to buy, transparent, and offer instant diversification into global equity and bond markets.
Compare 200+ ETFs, find the best performing ETFs, discover our best Australian & global ETF picks & learn about investing in ETFs.
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How to choose an ETF in Australia
Morningstar analysts evaluate over 200 ETFs trading on the ASX and identify those they think will be able to outperform in years to come.
When analysing ETFs, Morningstar considers:
PeopleIt is important to understand who is managing your money. There are a few considerations in our ETF analysis, some obvious, like tThe amount of experience the team has in managing ETFs. Analysts also tend to favour parent firms that put investors’ interests ahead of commercial goals and monitor how the ETF is trading on the exchange. ETFs sometimes trade with wider than normal buy/sell spreads, or deviate substantially from their net asset value, or NAV, which can jack up the costs to investors.
PriceMorningstar analysts consider explicit costs like the expense ratio, and implicit costs like the cost of portfolio turnover. We understand the significance of fees and costs, and the detrimental impact that it can have to performance outcomes. Top-rated funds are among the lowest cost options in their category, relative to their actively and passively managed peers.
ProcessFor passive products, analysts examine the fund's process – that is how the ETF are constructed, their underlying benchmarks, and the systems managers have put in place to achieve precise tracking of the benchmark.
For active funds, analysts focus on the fund mandate and distribution policies, the overall levels of transparency and how the portfolio managers attempt to minimise trading costs which can add implicit costs for investors.
PerformanceAlthough past performance is not an indicator of future performance, our analysts do consider performance in the context of evaluating people and process.
Medallist ratings are reserved for funds that analysts expect to deliver precise tracking of sensibly constructed indexes at a very low cost and backed by experienced managers. ETFs that analysts expect to outperform by the widest margin are rated Gold; next-highest conviction picks are rated Silver, followed by Bronze.
Medals are accompanied by the “analysts take” on the ETF – which includes their views on its suitability for investors, portfolio construction, fee and alternatives to consider.
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