Best ETFs for 2026 in Australia – Top Performing Investment Options
Australia’s Best ETF Landscape Entering 2026
As we look forward to 2026, investing in a solid portfolio for the year ahead starts with picking the right Exchange Traded Funds (ETFs). These need to strike the right balance between growth, income and risk.
Below are 5 Australian-listed ETFs that are on top form for size and cost-effectiveness, and have a great track record. They cover a bunch of key areas – domestic shares, global shares, growth tech, fixed income, cash and real asset hedging.
VAS (Vanguard Australian Shares) – S&P/ASX 300: With a management fee of just 0.07% per year, and considering it has $22.49 billion invested and has returned 12.86% over 5 years, VAS offers a great way to get exposure to the Aussie market. It’s also relatively cheap with a dividend yield of 3.2%, P/E ratio of 21.8 and holding over 311 stocks.
Its low cost makes it perfect for a core investment in local shares and will be especially useful if the Reserve Bank of Australia (RBA) is looking to ease off on interest rates over the next year.
VGS (Vanguard MSCI International Shares – unhedged) – MSCI World ex-Australia: With a management fee of 0.18% per year, and AUM of $13.16 billion, VGS works well for adding some global diversification to your portfolio. The fund is heavily weighted towards the US, with stocks that have a yield of 1.6% and a P/E of 24.6.
With the global economy due to stabilise going into 2026, this fund is a good addition to a domestic core before then.
NDQ (BetaShares Nasdaq-100) – Nasdaq 100: With a fee of 0.48% per year and AUM of $7.71 billion, NDQ offers a 5 year annualised return of 18.73% and 10 year return of 20.49%. By keeping hold of the long term earning leadership of technology and semiconductors this ETF adds a high-growth tilt for 2026, but does come with higher volatility.
IAF (iShares Core Composite Bond) – Australian investment grade bonds: With a fee of 0.10% per year, AUM of $3.50 billion, a 12 month trailing yield of 2.87% and a duration of 4.88 years, IAF offers both exposure to high-quality bonds and as a safe haven in times of interest rate cuts.
If the RBA embarks on an 80bp interest-rate cut cycle in the next year then IAF could provide a good diversification and potential capital gains from the bond duration.
AAA (BetaShares High Interest Cash) – Cash deposits with major banks: With a management fee of 0.18% per year and AUM of $4.49 billion this ETF returned 4.25% over the year to 30 September 2025. With interest rates moving in 2025-26 this fund is the best place to keep your ‘dry powder’ as a liquidity buffer.
GOLD (Global X Physical Gold) – Physical gold exposure: With a fee of 0.40% per year this AUD-priced bullion ETP can be used as a real asset hedge if real interest rates fall or global events become more unstable in 2026.
On a wider economic view, the RBA thinks the underlying inflation should converge to about 2.5% by 2026 but look for it to stay just above 3% ’til the end of 2025 before returning to the mid target on the back of an 80bp cut in interest rates.
Meanwhile the IMF’s 2025 World Economic Outlook has global growth at 3.2% for 2025 and 3.1% for 2026, so global diversification is key.
In the context of these forecasts a portfolio built around VAS and VGS as core anchors, IAF and AAA as ballast, GOLD as a hedge and NDQ for growth tilt makes sense for 2026.
Adjust for risk appetite—more IAF/AAA for conservative, or VGS/NDQ for growth.
A200 – Australia’s Low-Cost Broad Market Powerhouse
The Betashares Australia 200 ETF (A200) is the lowest cost broad market ETF in Australia and a favourite among long-term investors seeking efficient exposure to the top performing companies in the country.
This ETF tracks the Solactive Australia 200 Index which represents the 200 largest companies listed on the ASX by market capitalization.
That means it covers around 90% of the Australian share market and gives you instant diversification across multiple sectors such as financials, materials, healthcare and consumer staples.
A200 and Market Coverage
Ultra-low management fee: Just 0.04% p.a., compared to the industry average of 0.10–0.20%.
Strong performance consistency: Over the past 5 years the Australian market has averaged ~7.5% p.a. and A200 has tracked that.
Dividend yield advantage: Australian shares are known for fully franked dividends and A200 delivers an average 3.5–4.5% dividend yield p.a.
Sector Allocation Snapshot and Market Depth
This balanced exposure means the A200 isn’t overly reliant on one company or sector, which is a big help during market downturns when risk needs to be mitigated.
Strategic Benefits for Long-term Investors
Cost efficiency: A200’s low fee structure lets investors hang onto a lot more of their returns over time – which is a massive advantage for long-term wealth building.
Liquidity and scale: With over $10 billion in assets and an average daily trading volume of $30 million plus, investors get tight spreads and easy market access.
Ideal for dollar-cost averaging: Its simplicity and low entry cost make it a no brainer for investors who are contributing a regular amount each month.
To sum it up, A200 is a simple, diversified and low-cost investment option – the holy trinity of successful investing. For Aussies looking for a steady long-term growth without overpaying in fees, A200 is the go-to for a broad-market backbone in a well-structured portfolio.
VAS – Vanguard’s All-Market Australian Equity Leader
Vanguard’s Australian Shares Index ETF (VAS) is one of the most trusted and established ETFs in Australia.
It gives you exposure to the 300 biggest companies listed on the Australian Securities Exchange (ASX), covering around 92-95% of the total market capitalisation.
This ETF basically mirrors the performance of the S&P/ASX 300 Index. So if you’re a long-term Aussie equity investor looking for both growth and income , it’s a great benchmark to go by.
And VAS stands out for its diversified structure, reliable dividend distributions, and Vanguard’s reputation for keeping costs and transparency transparent.
Broad Exposure Across Australia’s Economic Landscape
Comprehensive coverage: Unlike those narrower ETFs (like A200), VAS includes mid-cap and emerging large-cap companies, giving you a broader exposure across market segments.
Attractive dividend payouts: Australian shares usually do pretty well when it comes to dividends. In FY2024, VAS gave investors a 4.1% dividend yield with franking credits picking up after-tax returns.
Cost efficiency: With a management fee of 0.07% per annum, its one of the lowest-cost options out there for such a broad range of companies.
A proven performer: Over the last 10 years the S&P/ASX 300 Index – which VAS tracks – has averaged around 7% annualised total returns (which includes dividends).
Major Holdings Defining the Index
These holdings account for around 37% of the ETF, so you get a big exposure to Australia’s backbone – mining, banking and healthcare.
Key Performance Drivers and Investment Strengths
Diversification: By spreading across 300 companies, VAS reduces concentration risk – important during market volatility.
Income: Consistent dividend history attracts retirees and income focused investors.
Liquidity: With over $12 billion in assets under management, VAS is one of the most liquid ETFs in Australia, so tight bid-ask spreads for large or frequent trades.
VAS is the foundation ETF for Australian investors looking for domestic exposure, income and long term growth. It’s the broadest, cheapest and best performing – the true all-market Australian equity fund.
NDQ – The Gateway to US Tech Giants
The Betashares NASDAQ 100 ETF (NDQ) gives Australian investors direct access to the 100 largest non-financial companies listed on the NASDAQ Stock Exchange, the home of the world’s most innovative and dominant technology leaders.
This ETF is designed to capture the growth of US technology and innovation driven sectors which have outperformed global markets over the last 10 years.
For investors looking for long term growth, NDQ gives you exposure to the companies that define the digital age – software, cloud computing, artificial intelligence and semiconductors.
How NDQ captures America’s Innovation Growth
High growth: Over the last 10 years, the NASDAQ 100 Index has returned ~14% per annum, almost double the ASX 200.
Leading innovation: NDQ includes global leaders like Apple, Microsoft, Nvidia, Amazon and Alphabet – the companies that shape global technology and consumer trends.
Simple international diversification: By buying NDQ on the ASX you get USD exposure and global reach without needing a US brokerage account.
Liquidity: With over $4 billion in assets under management and daily volumes of $25 million, NDQ is one of the most traded international ETFs in Australia.
Top Technology Leaders Powering the Index
These five companies together make up more than 35% of the ETFs weighting, which really highlights just how concentrated it is in high-growth tech areas.
Global Advantages and Portfolio Integration
Exposure to the global megatrends that are really driving the 20s: AI, digital advertising, semiconductors, and cloud computing are some of the fastest-growing industries out there at the moment.
The potential for a currency benefit: When the Aussie dollar weakens against the US dollar, we might expect to see NDQs returns get a bit of a boost.
The power of compounding growth: If you’d invested $10,000 in NDQ five years ago (in 2019) you’d be looking at a return of over $20,000 by 2024, based on average index growth.
Overall, NDQ is a great way for Australia to tap into the US tech boom. It brings together innovation, performance and diversification – all the things that make it an attractive option for investors who believe in the ongoing dominance of the world’s biggest and best tech companies.
CLDD – Australia’s Cloud Computing Growth Pioneer
The Betashares Cloud Computing ETF (CLDD) is your ticket to the global cloud computing revolution – one of the fastest growing sectors of the digital economy if you can believe it.
This ETF invests in the companies leading the charge when it comes to how data is stored, processed and accessed – and that includes giants like Amazon Web Services (AWS) , Microsoft Azure, Snowflake, and CrowdStrike.
Cloud computing’s not just a trend though – it’s a core piece of tech infrastructure that’s driving industries from finance and healthcare right through to entertainment and AI. As the global economy gets more digital, demand for cloud based services just keeps on growing.
The Rapid Growth of Cloud Infrastructure Investments
Exposure to an industry valued at over $680 billion in 2024 and projected to exceed $1.6 trillion by 2030, according to Gartner and Statista – that’s a multi-trillion-dollar market.
Stocks with super-charged growth rates: Many of the companies in CLDD have been posting annual revenue growth rates of 25% plus – that’s way ahead of the pack compared to traditional industries.
Sector leadership: By investing in CLDD you’re getting access to both established cloud providers (like Amazon and Microsoft) and innovative disruptors (like Snowflake, ServiceNow, and Cloudflare) – that gives you a good spread of exposure.
Global diversification too: CLDD holds companies all over the world – in the US , Europe and Asia – so you get a really global tech footprint as an Aussie investor.
Leading Cloud Companies Driving CLDD’s Returns
These companies are the backbone of digital transformation, securing and scaling cloud operations around the world.
Future Opportunities in Digital Transformation
Future-focused theme: Cloud infrastructure supports the growth of artificial intelligence, remote work and global digital ecosystems making CLDD a long term growth opportunity.
Strong historical returns: Since inception CLDD has delivered double digit annualised returns, as the sector has grown globally.
Ideal growth complement: Pairs well with diversified ETFs like NDQ or DHHF to add a high conviction technology tilt to a balanced portfolio.
CLDD is a cutting edge investment vehicle for Australians to get exposure to the next frontier of digital innovation. It captures the momentum of the cloud computing industry and allows you to participate in one of the biggest growth stories of the decade.
IXI – Global Consumer Staples for Economic Stability
The iShares Global Consumer Staples ETF (IXI) is for investors seeking stability, reliability and resilience through all market cycles.
It invests in multinational consumer staples companies — businesses that sell everyday goods people buy regardless of the economy, such as food, beverages and household products
By investing in IXI you get exposure to defensive global leaders like Procter & Gamble, Nestlé, Coca-Cola and Unilever which have historically maintained earnings through recessions.
Resilient Market Exposure Through Everyday Brands
Defensive sector exposure: Consumer staples companies have lower volatility and more consistent returns even when markets decline.
Steady dividend income: Many of IXI’s holdings pay regular dividends with yields of 2.5%–3% per annum.
Global diversification: IXI gives you access to major consumer brands across North America, Europe and Asia spreading risk across economies.
Resilient performance: Over the past decade the global consumer staples sector has outperformed broader equity markets during major downturns — 2008, 2020 and 2022.
Global Leaders in Food, Beverage, and Essentials
These brands have a Global customer base selling billions of units every day – with the result that they have a Steady revenue stream regardless of inflation, interest rates, or economic cycles because they’re able to keep churning out sales.
Defensive Qualities and Inflation Protection
Inflation resistance: Consumer staples companies have a knack of Passing on increased costs to the customer, so that they can protect their profit margins even when inflation starts to rise.
Low correlation to Tech and cyclical sectors: Including IXI in a portfolio helps to Keep the portfolio balanced between high-growth ETFs like NDQ or CLDD which can be a bit of a wild ride.
Consistent long-term growth: From 2015-2024, the MSCI World Consumer Staples Index – which IXI tracks – returned an 8% average annual return which is pretty impressive, especially when you look at some of the cyclical industries that struggled over that period.
In a nutshell, IXI makes a great global stabiliser for any diversified portfolio.
It combines the predictability of essential goods, the Brand recognition of leading companies and the Reliability of steady dividend income – making it a great fit for investors who value Long-term stability over short-term speculation and want a solid anchor to hang onto through economic ups and downs.
ETHI – A way to Invest with your Values
The Betashares Global Sustainability Leaders ETF (ETHI) lets you use your investment to align your values with the global shift towards sustainability while also chasing long-term capital growth.
It invests in a select range of large-cap global companies that tick all the right boxes for sustainability – and excludes those companies involved in industries like fossil fuels, weapons, tobacco, gambling and other ones that can have a damaging impact.
ETHI stands out as one of Australia’s most popular ethical ETFs – and that’s because it appeals to investors who want to Make a positive impact with their investments.
Its holdings reflect the global shift towards Renewable energy and clean technology, and companies that are setting a high standard for corporate responsibility.
Investing Ethically in Global Market Leaders
The growth of sustainable investing is remarkable: Between 2019 and 2024, global assets in sustainable ETFs surged from $250 billion to over $2.6 trillion – which just shows how much investors are now demanding ESG-aligned products.
Strong long-term returns: Over the past five years ETHI has achieved an annualised return of 11% – which is on a par with mainstream global equity benchmarks.
Climate-focused portfolio: ETHI’s unique approach means that all its holdings have a carbon intensity that’s at least 60% lower than the global average – which positions it as a leader in low-emission investing.
A diversification advantage: And because it invests in over 200 international companies across North America, Europe and Asia-Pacific it’s a great way to spread your investment risk.
Environmentally Responsible and Profitable Holdings
These companies are combining innovation, profitability and sustainability – really well, in fact. That makes ETHI a powerful tool for driving both profit and ethical growth.
ESG Performance Metrics and Long term Outlook
Future-proof investment: As global climate policies get tougher, ESG leaders are very likely to outperform their carbon heavy rivals
Investor appeal: a 2024 survey of Australian investors found that one in four now actively seek out ethical funds over traditional investments.
Risk mitigation: the companies which have got the strongest ESG practices in place tend to be the ones with lower regulatory and reputational risks – which improves their long term stability.
To cut a long story short, ETHI is bridging the gap between making a profit and doing the right thing – and that’s great news for investors who want to throw their money behind sustainable global leaders who are driving the next big wave of economic change.
It’s a great choice for anyone who genuinely believes that you can get strong returns from doing good – and want their portfolio to reflect the values and aspirations they have for their future.
AQLT – Top Aussie Stocks with a Solid Track Record
The Betashares Australian Quality ETF (AQLT) is a fund that homes in on a select group of high quality Aussie companies which consistently show high profitability, low debt levels and strong earnings growth.
It’s based on the simple idea that financially strong companies have a much better chance of outperforming over the long term – especially when markets get volatile or uncertain.
By investing in AQLT, you get to tap into a portfolio of proven winners, rather than companies that are a bit of a gamble or are totally dependent on the state of the market.
What We’re Looking for in Companies
Quality-focused strategy: AQLT uses key indicators like return on equity (ROE), earnings stability and low debt-to-equity ratios to pick the best companies.
Less volatility: Historically, quality-based portfolios have been less of a rollercoaster ride – 20-25% less drawdown during market downturns compared to the ASX 200.
Reliable growth: Over the past five years, Aussie quality stocks have delivered average annualised returns of 9-10% – outperforming the overall market’s 7% or so.
Strong diversification within Australia: Exposure spans across sectors such as healthcare, industrials, and consumer staples, offering stability and growth.
Sample of Australia’s High-Quality Market Champions
These companies are financially strong and market leaders, which means they can make money in both up and down markets.
Value Investing for Preservation
Downside protection: Quality ETFs like AQLT tend to fall less in bear markets, so your portfolio will be smoother.
Consistent income: Many AQLT holdings have stable payout ratios and long dividend histories.
Performance resilience: In 2022’s wild market, quality ETFs globally outperformed broader benchmarks by 4–6%, so this strategy is defensive.
AQLT is a premium Australian ETF built on financials and discipline. It’s for investors who want stability, consistent returns and long term compounding, a portfolio of Aussie blue chip leaders that thrive in every market.
DHHF – The All-in-One Global Growth Fund
The Betashares Diversified All Growth ETF (DHHF) is a complete global growth fund in one fund.
It’s for investors who want a hands free long term solution that’s simple, diversified and performs.
DHHF holds a mix of Australian and international shares, rebalanced to maintain a 100% equity exposure so you get maximum participation in global growth.
Global in one ETF
Global diversification in one fund: DHHF spreads your money across more than 8,000 companies worldwide, across developed and emerging markets.
Auto rebalancing: The portfolio is adjusted regularly to maintain its target allocations, no active management required.
Low fees: With a cost of 0.19% p.a. it’s global diversification at a fraction of the cost of most managed funds.
Strong performance: Since inception DHHF has returned ~10% p.a. driven by the US, Europe and Australian markets.
Strategic Asset Allocation and Regional Mix
This diversified mix gives investors exposure to every major region and sector, reducing country-specific risks.
Compounding and Cost Benefits
Set and forget: Perfect for investors who want a single ETF strategy for long term wealth creation.
Auto compounding: Dividend reinvestment and rebalancing optimises growth over time.
Resilience through diversification: During 2022–2024’s wild market, globally diversified portfolios like DHHF recovered 40% faster than single market ETFs.
For cost conscious investors: Lower fees means more capital stays invested and compounding.
DHHF is global, diversified and simple. It’s a modern investment for those who want to be in global equities without managing multiple funds — a one stop growth shop for long term success.
VGAD – A Low-Risk Route to Global Markets
The Vanguard MSCI International Shares Index ETF (VGAD) offers Aussie investors a sensible way to invest abroad, shielding their returns from foreign exchange fluctuations.
It tracks the MSCI World ex-Au Index (hedged to Aussie dollars), giving exposure to big names in more than 20 developed countries like the US, Japan, the UK and Europe.
What really sets VGAD apart is its smart currency-hedging strategy which helps keep the impact of an unpredictable Aussie dollar in check – great news for investors looking for smooth, stable returns from their international shares.
Reducing Currency Exposure When Investing Overseas
Protecting your returns: When the Aussie dollar surges, your foreign holdings tend to drop in value if you’re not hedged. VGAD’s strategy helps you avoid this hit and keep your returns looking more predictable.
Superb global diversification: Get access to over 1,400 big-name companies around the world, including tech giants, healthcare leaders and consumer brands.
Proven by results: Over five years up to 2025, VGAD saw average annual growth of about 9% – a great track record considering it tracks its benchmark while beating unhedged funds by around 30% in terms of volatility reduction.
Low costs: With a management fee of just 0.21% pa, VGAD remains one of the most affordable global equity ETFs out there.
Key Global Corporations Represented in VGAD
By choosing VGAD, investors can gain exposure to both growth and defensive global leaders, ensuring balanced returns across economic cycles.
Consistency Through Hedging and Diversifying Your Portfolio
Smoothening out the ride: Hedging shields investors from the worst of currency fluctuations – especially when the Aussie dollar is on a tear.
Long-term reliability: In 2022, when the Aussie dollar surged 10% against the US dollar, VGAD outperformed its unhedged counterpart by almost 8%. This shows the value of stability in times of currency volatility.
Exposure to global markets: Access sectors and economies that often outperform Australia, like US tech and European healthcare.
Diversification done right: VGAD complements local ETFs like A200 or VAS by expanding your international exposure without the risks associated with currency fluctuations.
VGAD is the perfect choice for investors wanting steady, international growth and reduced foreign exchange volatility. It’s a cornerstone holding for balanced portfolios looking to spread their risk.
IAF – A Reliable Core Bond Stabiliser for Aussie Portfolios
The iShares Core Composite Bond ETF (IAF) is one of Australia’s most trusted fixed-income ETFs – designed to provide stability, regular income and diversification to an equity-heavy portfolio.
It invests in a wide mix of Aussie government, semi-government and corporate bonds, giving investors solid, dependable returns and capital preservation, especially during market downturns.
IAF’s role as a defensive core holding makes it a fundamental piece in balanced and conservative portfolios.
Interest Rate Trends and Yield Outlook
Regular income: IAF delivers quarterly distributions, with a current yield to maturity around 4.2% (as of 2025) — for income focused investors.
Capital protection: Bonds generally move inversely to equities. When share markets fall, high quality bonds like IAF rise in value, helping to reduce portfolio losses.
Broad diversification: The ETF holds over 500 individual bond securities, spreading risk across multiple issuers and maturities.
Low cost: With a management fee of 0.15% p.a, IAF is one of the cheapest ways to access Australia’s bond market.
Bond Allocation for Defensive Strategies
This structure provides a high credit quality portfolio, with over 90% of holdings rated “A” or higher by major rating agencies.
Benefits of holding IAF in a Mixed Portfolio
Defensive balance: IAF in a diversified portfolio reduces overall volatility by an estimated 25–35%, according to ASX investor studies.
Inflation and rate sensitivity: When interest rates fall, bond prices rise, so IAF investors get capital gains and income.
Recession resilience: During the 2020 COVID-19 market crash, IAF rose 3.4% while the ASX 200 fell over 30%, proving its protective qualities.
For retirees and conservative investors: Regular income and low volatility makes it suitable for capital preservation.
IAF is a stabilising force in any diversified portfolio. It provides regular income, defensive performance and broad exposure to Australia’s safest bonds — making it an essential tool for investors seeking long term stability and protection from equity market volatility.
Originally Published: https://www.starinvestment.com.au/best-etfs-for-2026-australia/
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