The Five Best ETF Investments Ever

April 25, 2012


Last week, I looked at the Five Worst ETF Investments Ever. I took all of the nonlevered ETFs on the market, sorted them by total return since inception, and found the five that had lost the most money. It wasn't pretty.

This week, we decided to flip that on its head and look for the five best ETF investments ever.

I had my own notions going in about what would rise to the top. For starters, I assumed that the SPDR S&P 500 ETF (NYSEArca: SPY) would end up somewhere on the list. After all, it is the oldest ETF, with a nearly 20-year track record. That's a long time to compound returns.

But SPY didn't make it. Its total returns of 333.65 percent put it sixth overall, just a hair short of the top five.

I also thought the list would be dominated by funds focused on the BRIC countries—Brazil, Russia, India and China. I thought China in particular would stand out. After all, that's all we've heard about for most of the past decade. But the BRICs barely make an appearance, and China, the BRIC everyone talks about, is nowhere to be seen.

What was the best-performing ETF ever? Honestly, I wouldn't have guessed it in a dozen tries …

Number 5: iShares MSCI Brazil Index Fund (NYSEArca: EWZ)
Date of Inception: 7/10/2000
Returns Since Inception: 355.17%
Assets Under Management (4/12/2012): $9.06 billion
Total Inflows Since Inception: $7.05 billion

Who knew EWZ would turn out to be the only BRIC fund to make an appearance on my list? Launched in 2000, EWZ provides broad-based exposure to Brazil, which has been the best-performing BRIC country by far in recent years.

EWZ's great returns can be tracked back to a couple of things. First, iShares launched this ETF in July 2000, which just happened to be the perfect time to catch and ride the wave of booming investor interest in emerging markets that was the early 2000s.

Secondly, for U.S. investors, EWZ allows exposure to currencies. With currencies, one can't go up without another losing value, and the Brazilian real has appreciated sharply against the American dollar since the fund's launch in 2000.



Number 4: iShares MSCI Canada (EWC)
Inception Date: 3/18/1996
Returns Since Inception: 359.24%
Assets Under Management (4/12/2012): $4.62 billion
Total Inflows Since Inception: $4.15 billion

The iShares MSCI Canada Index Fund (NYSEArca: EWC), which tracks the MSCI Canada Index, is the second-oldest ETF on the list. Like a good Canadian, EWC is quietly impressive. It offers plain-Jane exposure to the Canadian market, but somehow, has racked up a 359 percent gain since inception.

This success can be partially and undeniably traced back to its age, since no fund could have made it past its 18th birthday without showing some positive returns along the way.

It probably doesn't hurt that 26 percent of EWC's holdings are in energy, which has been booming ever since the Internet bubble burst. And finally, like EWZ, EWC has benefited from currency impact: The Canadian dollar, or loonie, has soared since 1996, rising from around $0.70 USD to $1.01 today.




Want to learn more about smart-beta ETFs? Check out our smart-beta guide, essentials library and ETF screener!


International equity funds like 'IEMG' led inflows on Monday, May 18, as rising markets lifted U.S.-listed ETF assets to a record $2.174 trillion.

'SPY' and 'GLD' paced SSgA's issuer-leading outflows on Monday, May 18, as rising markets lifted total U.S.-listed ETF assets to a record $2.174 trillion.


By Olly Ludwig

Yields will one day head higher, so is it time to get bond exposure outside the U.S.?

By Rachael Revesz

Stop dancing around the subject, call women ‘women’ and let’s be a more visible part of this industry.

By Olly Ludwig

It’s no secret that hedge funds love ETFs, but what’s less appreciated is that their love of ETFs will likely spell their demise.

By Olly Ludwig

Yes, bond yields are ticking higher these days, but it’s important to keep the whole yield-curve picture in mind.


By Nasdaq Global Indexes

Bond exposure or bond performance? Only defined maturity indexes provide the latter.

By Invesco PowerShares

Invesco PowerShares and Market Strategies International’s second annual survey provides vital insights about smart beta and ETFs overall.

By Invesco PowerShares

Investors are implementing smart-beta exchange-traded funds (ETFs) in their portfolios in a variety of ways and for different reasons.