Exchange-traded funds, or ETFs, are often low-cost instruments for investors to track popular indexes or leverage experienced manager choices in an attempt to beat the market. The best ones serve as building blocks for a portfolio, and unlike open-end mutual funds, all ETFs are traded throughout the day on an exchange.
In the third quarter of 2024, the top-performing ETFs included equity technology fund Invesco MSCI China Technology All Shares Stock Connect UCITS ETF MCHT and Thailand equity fund Xtrackers MSCI Thailand UCITS ETF XCS4. Data in this article is sourced from Morningstar Direct.
Screening for the Best-Performing ETFs
To find the quarter's best-performing ETFs, we screened those in Morningstar's Equity, Allocation, or Fixed-Income categories that are available in the UK. We excluded exchange-traded notes, known as ETNs, and ETFs with less than $25 million (£19.1 million) in total assets. We also excluded funds that fall into Morningstar's "trading" categories, as these funds are designed for active traders and are not suitable for long-term investors.
The 10 Best-Performing ETFs for Q3 2024
1. Invesco MSCI China Technology All Shares Stock Connect UCITS ETF MCHT
2. Xtrackers MSCI Thailand UCITS ETF XCS4
3. KraneShares CSI China Internet ETF USD KWEB
4. USETF - Solactive China Technology UCITS ETF CQQQ
5. Amundi MSCI China Tech ESG Screened UCITS ETF CC1
6. Xtrackers FTSE China 50 UCITS ETF XX2D
7. iShares China Large Cap UCITS ETF FXC
8. UBS (Lux) Fund Solutions – MSCI China ESG Universal Low Carbon Select UCITS ETF CNESG
9. Franklin FTSE China UCITS ETF FLXC
10. Amundi MSCI China UCITS ETF LCCN
Metrics for the Best-Performing ETFs
Invesco MSCI China Technology All Shares Stock Connect UCITS ETF
• Morningstar Rating: 1 star
• Expense Ratio: 0.49%
• Morningstar Category: Equity Technology
The £36 million Invesco MSCI China Technology All Shares Stock Connect was the best-performing ETF in the third quarter, with a 21.62% return. The passively managed Invesco ETF beat the 3.04% decline on the average fund in Morningstar’s equity technology category for the quarter. Over the last 12 months, Invesco MSCI China Technology All Shares Stock Connect has returned 10.11%, underperforming the 21.74% gain on the average fund in its category, leaving the ETF in the 81st percentile.
Invesco MSCI China Technology All Shares Stock Connect has a Morningstar Medalist Rating of Bronze. It was launched in June 2021.
Xtrackers MSCI Thailand UCITS ETF
• Morningstar Rating: 4 stars
• Expense Ratio: 0.54%
• Morningstar Category: Thailand Equity
The second-best performing ETF in the third quarter was the £68 million Xtrackers MSCI Thailand. The passively managed Xtrackers ETF returned 21.42%, outperforming the average Thailand equity fund, which gained 18.15%. Looking back over the last 12 months, Xtrackers MSCI Thailand has returned 6.10%, outperforming the 1.33% return on the average fund in its category, leaving the ETF in the first percentile.
The Silver-rated Xtrackers MSCI Thailand was launched in June 2010.
KraneShares CSI China Internet ETF USD
• Morningstar Rating: 1 star
• Expense Ratio: 0.75%
• Morningstar Category: Equity Technology
The £467 million KraneShares CSI China Internet ranked third for the quarter, returning 21.02%. The Krane ETF, which is passively managed, topped the 3.04% average loss on funds in the equity technology category for the third quarter. Over the last 12 months, the Krane ETF has returned 17.59%, behind the 21.74% gain on the average fund in its category, leaving the ETF in the 63rd percentile.
KraneShares CSI China Internet, launched in November 2018, has a Morningstar Medalist Rating of Bronze.
UBS ETF - Solactive China Technology UCITS ETF
• Morningstar Rating: 1 star
• Expense Ratio: 0.50%
• Morningstar Category: Equity Technology
With a 20.05% return, the £30 million UBS ETF Solactive China Technology ranked fourth in the quarter. The passively managed UBS ETF outperformed the 3.04% loss on the average equity technology fund. Over the last 12 months, the fund has gained 0.16%, behind the 21.74% return on funds in its category, placing it in the 92nd percentile for the period.
UBS ETF Solactive China Technology has a Silver Morningstar Medalist Rating. It was launched in March 2021.
Amundi MSCI China Tech ESG Screened UCITS ETF
• Morningstar Rating: 2 stars
• Expense Ratio: 0.55%
• Morningstar Category: China Equity
The fifth-best performing ETF was the £39 million Amundi MSCI China Tech ESG Screened, which gained 20.00% in the third quarter. This passively managed Amundi ETF beat the 10.68% average return on funds in the China equity category. Over the past year, Amundi MSCI China Tech ESG Screened fell 4.18%, underperforming the 4.26% return on the average fund in its category and placing it in the 89th percentile.
Amundi MSCI China Tech ESG Screened takes environmental, social, and governance criteria into consideration. This fund has a Morningstar Medalist Rating of Neutral.
Xtrackers FTSE China 50 UCITS ETF
• Morningstar Rating: 2 stars
• Expense Ratio: 0.60%
• Morningstar Category: China Equity
The £180 million Xtrackers FTSE China 50 was the sixth-best performing UK ETF in the third quarter, with an 18.33% return. The return on the passively managed Xtrackers ETF topped the 10.68% gain on the average fund in Morningstar’s China equity category. Looking back over the last 12 months, Xtrackers FTSE China 50 has returned 14.88%, outperforming the 4.26% return on the average fund in its category, leaving the ETF in the fourth percentile.
Xtrackers FTSE China 50 has a Negative Morningstar Medalist Rating, meaning that our analysts expect it to be one of the worst performers within its category and think it is unlikely to deliver positive returns after fees.
iShares China Large Cap UCITS ETF
• Morningstar Rating: 2 stars
• Expense Ratio: 0.74%
• Morningstar Category: China Equity
The seventh-best performing ETF in the third quarter was the £574 million iShares China Large Cap. The passively managed iShares ETF returned 18.29%, outperforming the average China equity fund, which gained 10.68%. Looking back over the last 12 months, the iShares China Large Cap UCITS ETF has returned 14.69%, outperforming the 4.26% return on the average fund in its category, leaving the ETF in the fifth percentile.
iShares China Large Cap has a Morningstar Medalist Rating of Negative. It was launched in October 2004.
UBS (Lux) Fund Solutions – MSCI China ESG Universal Low Carbon Select UCITS ETF
• Morningstar Rating: 3 stars
• Expense Ratio: 0.30%
• Morningstar Category: China Equity
The £203 million UBS MSCI China ESG Universal Low Carbon Select ranked eighth for the quarter, returning 18.09%. The UBS ETF, which is passively managed, topped the 10.68% average gain on funds in the China equity category. Over the last 12 months, the UBS ETF has returned 7.64%, ahead of the 4.26% return on the average fund in its category, leaving it in the 32nd percentile for performance.
The Silver-rated UBS MSCI China ESG Universal Low Carbon Select was launched in July 2019.
Franklin FTSE China UCITS ETF
• Morningstar Rating: 3 stars
• Expense Ratio: 0.19%
• Morningstar Category: China Equity
With a 16.56% gain, the £685 million Franklin FTSE China ranked ninth in the third quarter. The passively managed Franklin Templeton ETF outperformed the 10.68% return on the average China equity fund. Over the last 12 months, the fund has returned 12.02%, ahead of the 4.26% return on funds in its category, placing it in the 16th percentile.
Franklin FTSE China, launched in June 2019, has a Morningstar Medalist Rating of Bronze.
Amundi MSCI China UCITS ETF
• Morningstar Rating: 3 stars
• Expense Ratio: 0.29%
• Morningstar Category: China Equity
The tenth-best performing ETF was the £295 million Amundi MSCI China, which gained 16.42% in the third quarter. The passively managed Amundi ETF beat the 10.68% average return on funds in the China equity category. Over the past year, Amundi MSCI China rose 12.89%, outperforming the 4.26% return on the average fund in its category and placing it in the 10th percentile.
Amundi MSCI China has a Morningstar Medalist Rating of Bronze. It was launched in July 2018.
What Are ETFs?
Exchange-traded funds are investments that trade throughout the day on stock exchanges, much like individual stocks. They differ from traditional mutual funds – known as open-end funds – which can only be bought or sold at a single price each day. Historically, ETFs have tracked indexes, but in recent years, more ETFs have been actively managed. ETFs cover a range of asset classes, including stocks, bonds, commodities, and most recently cryptocurrency.
The Best ETFs: More Ideas to Consider
Investors who would like to find more of the top-performing or cheapest ETFs can do the following:
• Read the latest articles on ETFs.
• Use the ETF screener to find the best ETFs according to your specific criteria. You can search for funds based on their fees, Morningstar Medalist Ratings, manager tenures, and more.
• Compare funds and ETFs side by side and easily follow their valuations, ratings, and fees.
This article was compiled by Bella Albrecht, edited by Lauren Solberg, and reviewed by Sunniva Kolostyak.
This article was generated with the help of automation and reviewed by Morningstar editors.
