Three outperforming ETFs over the past five years
We look at ETFs, why they’re taken into consideration, and a few outperforming ones over the past five years.
What is an ETF?
An Exchange-Traded Fund, or ETF, is a way in which an investor can invest in multiple securities such as stocks and bonds at once. As an example, instead of buying tech stocks individually, you can buy an ETF that is composed of those stocks giving you the exposure you’re looking for. They can then be traded, and with relatively lower fees.
Why an ETF?
There are those of us who know exactly which stocks we’d like to own and precisely how many of each we’ll purchase. But as an investor with less time to monitor each company’s performance and pour over its earnings results, it’s easier to purchase an ETF – or several – that offer the necessary exposure to regions and sectors we’re interested in. And that’s especially true when it’s tracking the most popular indices like the S&P 500, an obvious one for those looking to invest in the most established companies in the US and has made the Vanguard S&P 500 ETF one that’s heavily sought after.
Aside from the obvious ones, we're looking at three of the better non-leveraged performing ETFs over the past five years. Let’s not forget that past performance is not a guarantee of future performance, and that the goal is to look for long-term growth avoiding attempts at timing the market and its short-term volatility.
VanEck Semiconductor ETF
It's not a surprise to see tech generally on top, including the VanEck Semiconductors ETF with 5-year annualized returns averaging above 34% per year. The charts below (from IG’s stock trading platform) are set to a monthly time frame:
iShares US Home Construction ETF
But it isn't always about tech, you will find for example a couple which offer exposure to the US homebuilding industry, including the iShares US Home Construction ETF nearing 25% 5-year average annual returns:
iShares MSCI India Small-Cap ETF
Lastly, it’s important to note that growth isn't always specific to a single region. Take the iShares MSCI India Small-Cap ETF compromising nearly 240 small-cap Indian stocks, so far, also enjoying significant annual gains over the past five years, just over 20%:
*Past performance is not a guarantee of future performance.
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