After a bearish 2022, we are finally starting to see some recovery in the markets. Year-to-date, SPY is up 8% while QQQ is up a good 26%!
But! If you’re a long term investor, it is pointless to look only at YTD returns. Instead, you’ll be wondering which ETFs delivered the highest 10 year returns.
Here, we unveil the top 10 ETFs that have delivered exceptional results over the past decade, all of which have outperformed QQQ and SPY. Hint, you’ll notice that they are all in the tech industry.
But before we proceed, do remember that past performance does not guarantee future returns. And, these ETFs have different investing objectives and costs, so if you plan to invest your own money into them, do your own due diligence and know what you’re putting your capital into!
10 top performing ETFs with the highest 10 year return
| Fund Name | Ticker | 10 Year Return | YTD Return | Expense Ratio | AUM (USD) |
|---|---|---|---|---|---|
| Invesco Dynamic Semiconductors ETF | PSI | 23.19% | 19.82% | 0.56% | $571.16M |
| iShares Semiconductor ETF | SOXX | 23.11% | 27.98% | 0.35% | $7.97B |
| VanEck Semiconductor ETF | SMH | 23.06% | 31.26% | 0.35% | $8.44B |
| SPDR S&P Semiconductor ETF | XSD | 22.81% | 16.87% | 0.35% | $1.38B |
| Vanguard Information Technology ETF | VGT | 19.47% | 26.20% | 0.10% | $48.62B |
| Technology Select Sector SPDR Fund | XLK | 19.10% | 27.07% | 0.10% | $45.04B |
| iShares U.S. Technology ETF | IYW | 18.95% | 33.13% | 0.39% | $11.37B |
| iShares Global Tech ETF | IXN | 17.74% | 26.77% | 0.40% | $3.28B |
| iShares Expanded Tech Sector ETF | IGM | 17.56% | 28.49% | 0.40% | $2.99B |
| Invesco QQQ Trust | QQQ | 17.54% | 26.99% | 0.20% | $179.46B |
1) Invesco Dynamic Semiconductors ETF (PSI): 23.19%
The Invesco Dynamic Semiconductors ETF (PSI) tracks the Dynamic Semiconductor Intellidex Index. It gives you exposure to a portfolio of 30 listed U.S. companies involved in the manufacturing of semiconductors.
PSI was featured under our list of Best Semiconductor ETFs.
Key information on the Invesco Dynamic Semiconductors ETF (PSI)
- 10 year return: 23.11%
- Inception Date: 23 June 2005
- Expense Ratio: 0.56%
- AUM: US$571.16B
The semiconductor industry is likely to continue growing in the coming decade as demand keeps up.
That said, the two superpowers, US and China, are in a power tussle over the semiconductor industry. You should keep in mind that PSI only includes US semiconductor companies and may be impacted depending on the outcome of the battle between the superpowers.
2) iShares Semiconductor ETF (SOXX): 23.11%
The iShares Semiconductor ETF (SOXX) tracks the ICE Semiconductor Index. It gives you exposure to a portfolio of listed U.S. companies involved in the design, manufacture and distribution of semiconductors.
Key information on the ICE Semiconductor Index (SOXX)
- 10 year return: 23.06%
- Inception Date: 10 July 2001
- Expense Ratio: 0.35%
- AUM: US$7.97B
SOXX is highly similar to PSI and would be exposed to similar geopolitical risk in the semiconductor space.
3) VanEck Semiconductor ETF (SMH): 23.06%
The VanEck Semiconductor ETF (SMH) tracks the MVIS® US Listed Semiconductor 25 Index. It gives you exposure to a portfolio of listed companies involved in the production of semiconductors and related equipment.
SMH was also featured under our list of Best Semiconductor ETFs.
Key information on the VanEck Semiconductor ETF (SMH)
- 10 year return: 23.19%
- Inception Date: 20 Dec 2011
- Expense Ratio: 0.35%
- AUM: US$8.44B
Unlike PSI and SOXX, SMH is not restricted to US companies and could offer a more geographically diversified portfolio. However, its future performance would be dependent on the growth of the semiconductor industry.
4) SPDR S&P Semiconductor ETF (XSD): 22.81%
And yes, we have another semiconductor ETF in the list.
The SPDR S&P Semiconductor ETF (XSD) tracks the S&P® Semiconductor Select Industry Index. It gives you exposure to a portfolio of listed US semiconductor companies.
XSD was also featured under our list of Best Semiconductor ETFs.
Key information on the SPDR S&P Semiconductor ETF (XSD)
- 10 year return: 22.81%
- Inception Date: 31 Jan 2006
- Expense Ratio: 0.35%
- AUM: US$1.38B
XSD has similar risks as PSI and SOXX, as mentioned above.
At this point it seems as though the semiconductor industry has dominated the scene over the past 10 years. But, if semiconductors are not something you’re comfortable investing in, let’s move on to the next ETF.
5) Vanguard Information Technology ETF (VGT): 19.47%
The Vanguard Information Technology ETF (VGT) tracks the MSCI US Investable Market Information Technology 25/50 Index. It gives you exposure to a broad portfolio of large, medium-size, and small U.S. companies in the information technology sector.
Key information on the Vanguard Information Technology ETF (VGT)
- 10 year return: 19.47%
- Inception Date: 26 Jan 2004
- Expense Ratio: 0.1%
- AUM: US$48.6B
6) Technology Select Sector SPDR Fund (XLK): 19.10%
The Technology Select Sector SPDR Fund (XLK) tracks the Technology Select Sector Index. It gives you exposure to a portfolio of U.S. companies within the S&P 500, that are in the technology sector.
Key information on the Technology Select Sector SPDR Fund (XLK)
- 10 year return: 19.1%
- Inception Date: 16 Dec 1998
- Expense Ratio: 0.1%
- AUM: US$45.04B
7) iShares U.S. Technology ETF (IYW): 18.95%
The iShares U.S. Technology ETF (IYW) tracks the Russell 1000 Technology RIC 22.5/45 Capped Index. It gives you exposure to a portfolio of U.S. equities in the technology sector.
Key information on the iShares U.S. Technology ETF (IYW)
- 10 year return: 18.95%
- Inception Date: 15 May 2000
- Expense Ratio: 0.39%
- AUM: US$11.37B
8) iShares Global Tech ETF (IXN): 17.74%
The iShares Global Tech ETF (IXN) tracks the S&P Global 1200 Information Technology 4.5/22.5/45 Capped Index. It gives you exposure to a portfolio of global equities in the technology sector.
Key information on the iShares Global Tech ETF (IXN)
- 10 year return: 17.74%
- Inception Date: 12 Nov 2001
- Expense Ratio: 0.4%
- AUM: US$3.28B
If you’re looking for exposure to a global tech portfolio, IXN is a good place to start.
9) iShares Expanded Tech Sector ETF (IGM): 17.56%
The iShares Expanded Tech Sector ETF (IGM) tracks the S&P North American Expanded Technology Sector Index. It gives you exposure to a portfolio of North American equities in the technology sector.
Key information on the iShares Expanded Tech Sector ETF (IGM)
- 10 year return: 17.56%
- Inception Date: 13 March 2001
- Expense Ratio: 0.4%
- AUM: US$2.99B
10) Invesco QQQ Trust (QQQ): 17.54%
QQQ requires little introduction, it is usually used as a benchmark for the state of US tech stocks. It tracks the Nasdaq-100® Index which gives you exposure to the largest non-financial companies listed on the Nasdaq stock exchange (which happens to be mostly high growth tech stocks currently).
Key information on the Invesco QQQ Trust (QQQ)
- 10 year return: 17.54%
- Inception Date: 10 March 1999
- Expense Ratio: 0.2%
- AUM: US$179.46B
Which ETF has the highest 10 year return?
In the last decade, Invesco Dynamic Semiconductors ETF (PSI) delivered the highest 10-year return at 23.19%.
If you’ve looked through the top 10 ETFs listed above, you’d noticed that the top 4 are semiconductor ETFs and all 10 are technology ETFs. This trend looks like it’ll continue, even the bear market of 2022 didn’t manage to kick these technology ETFs off their long term growth trajectory.
Remember that past performance doesn’t guarantee future returns! So, while I think that tech ETFs will continue to deliver good returns in the future, you should also remember to diversify your portfolio to reduce your risk.
