ETFs or exchange-traded funds have quickly emerged as the world’s preferred financial instrument for investing and wealth appreciation. They have several advantages working in their favour that have boosted their demand and popularity compared to mutual funds, and more and more people increasingly rely on them to ensure that their wealth grows by leaps and bounds in the long term.
The largest ETFs in the world today manage billions of dollars, and investors across the US, Europe, other advanced economies, and India are leveraging the various benefits they offer to boost their portfolio returns.
So, without further ado, here are a few of the world’s largest ETFs
| ETFs | AUM | Expense Ratio | 1-year annual returns | 5-year average annual returns | 10-year average annual returns |
| SPDR S&P 500 ETF Trust | $536.15 B | 0.09% | 29.71% | 14.96% | 12.86% |
| iShares Core S&P 500 ETF | $454.64 B | 0.03% | 29.85% | 15.02% | 12.92% |
| Vanguard S&P 500 ETF | $1.11 T | 0.03% | 29.85% | 15.01% | 12.92% |
| Invesco QQQ Trust | $259.27 B | 0.20% | 39.32% | 20.65% | 18.60% |
| Vanguard FTSE Developed Markets Index Fund ETF Shares | $191.36 B | 0.05% | 14.91% | 7.39% | 5.04% |
| Vanguard Growth Index Fund ETF Shares | $226.52 B | 0.04% | 38.84% | 17.92% | 15.07% |
| Technology Select Sector SPDR Fund | $65.42 B | 0.09% | 39.12% | 24.24% | 20.69% |
| Health Care Select Sector SPDR Fund | $41.32 B | 0.09% | 15.99% | 11.93% | 11.51% |
A few of these ETFs are index funds that invest their funds in the stock constituents of the specific index, as per the market cap weightage of the particular stock. Investors who have a long-term outlook and a low-risk tolerance can invest in these passive index funds to see their portfolio wealth appreciate handsomely over the course of 7-10 years.
The functioning of an index fund is geared towards “being the market” rather than “beating the market” by actively picking stocks. Index funds are free from the behavioural biases of the fund manager. They also capture the underlying market trend that they represent, while keeping the expense ratios low, effectively helping the investors earn great returns in the long run.
Should investors invest in the largest funds?
It will be a grievous flaw if investors start co-relating the AUMs of an ETF with the returns furnished by it. Asset of an ETFs and the returns don’t necessarily have a positive correlation. Depending on the market sentiment and its direction, large, mid, small or a particular group of stocks may be in demand.
There are a lot of ETFs with a smaller asset base that have delivered stellar returns to investors as well. However, many of these ETFs with small asset bases have volatile returns, which can slump or appreciate by large margins. On the other hand, large index funds have a healthy track record of delivering outstanding returns provided investors stay the course for 7-10 years.
As an investor, it is necessary to conduct in-depth research, ascertain the future growth prospects of a particular sector or theme, and then proceed ahead with one’s investment.
Investing through the Appreciate app
The Appreciate app can help investors zero in on the sectoral and thematic ETFs, they are most comfortable investing in, not to mention the risk they are willing to take on. Investing in US stocks and ETFs has never been this simple, secure and seamless. With the Appreciate app, investors can invest in rupee and earn stellar returns, not just from the increase in stock and ETF holding but also from the currency fluctuations between the US dollar and the Indian rupee.
