Lots of investors want to use active investment strategies, where the portfolio managers are backing their skill to choose stocks that will outperform, and sell those that won’t. Because they’re actively managed, ETMFs are a little different to ETFs. Here are four of the best ETMFs.
Every investor needs to have some part of their portfolio invested overseas to gain access to industries, sectors and growth opportunities in overseas markets that are not available to a domestically focused investor. Global equity exchange-traded funds (ETFs) that track major share market indices have been an excellent development in allowing Australian investors to access global markets in one share transaction, investing any amount of money, and having their investment managed very cheaply – the Vanguard US Total Market Shares Index ETF, for example, is managed for just three basis points (0.03% of the value of your holding) per year; and the broad iShares and SPDR global index ETFs come in under ten basis points.
These ETFs are passive vehicles that represent and track indices: you know that you will get the performance of that particular index, but there is no scope to outperforming the index. For many investors, that’s fine.
But a lot of other investors want the ability to use active investment strategies, where the portfolio managers are backing their skill to choose stocks that will outperform, and sell those that won’t, based on their research and insights into the companies – and thus, hopefully, beat their benchmark index.
Investors can do this at any stage through unlisted managed funds, which have limited liquidity; but only relatively recently have they been able to do this on the Australian Securities Exchange (ASX), using their regular brokerage account, and investing whatever amount suits them – not being subject to fund manager or platform ‘minimum investment’ levels, or required minimum investment level. But the exchange-traded managed fund – or “active ETF” – allows that; investors can buy or sell at any time, subject to normal market liquidity, and settle on the ASX’s T+2 (settlement two days after trading) schedule.
Because they are actively managed, ETMFs are a little different to standard ETFs.
The ETMFs typically do not disclose their holdings every day; because they are trying to implement a strategy, and they do not want competitors to know what they are doing.
This gives managers more freedom to adjust the portfolio without revealing their strategy in real time – more typically, they will do it monthly.
Also, they use a unit pricing model: instead of trading based on the bid-ask spread (what buyers are willing to pay, and seller willing to accept) the price of an EMTF will reflect the value of the fund’s assets, that is, the net asset value (NAV), which is the total value of the assets in the fund, minus its liabilities. This means that the ETMF will not move to a discount (or premium) to NAV, a propensity that investors don’t like in listed investment companies (LICs).
The mechanism by which the trading price is kept as close to NAV as possible is the use of ‘market-makers,’ which are firms that undertake, on a commercial basis, to help match buyers with sellers and manage the supply of units on the market. The market-makers help keep the trading price in line with the fund’s value.
Essentially, ETMFs combine the accessibility and cheapness of ETFs with the capabilities of traditional managed funds, and the high-quality professional investors to which the ETMFs give access. The ASX accessibility means investors can invest any amount and redeem any amount, at any time, simply paying normal ASX brokerage to do so.
Here are four of the best ETMFs as at the end of the most recent financial year: 30 June 2025. Each of these (all unhedged) funds gives you access to the skills of some of the best professional investment managers you can find. Any of these four stocks would make a very good addition to a portfolio that was primarily Australian based.
1. WCM Quality Global Growth Fund (WCMQ, $9.97)
One-year total return: 32.60% p.a.
Three years: 27.03% p.a.
Five years: 15.47% p.a.
MER: 1.35% a year
Benchmark: MSCI All Country World Index, in A$.
WCMQ is an exchange managed trading fund (EMTF) managed by WCM Investment Management, a fund manager based in Lagune Beach, California. WCM’s point of differentiation is that it very firmly believes that corporate culture is the biggest influence on a company’s ability to grow its competitive advantage, or ‘moat.’
The manager puts massive importance on the cultural aspect of the companies it selects; WCM also believes that not being based on Wall Street enables its portfolio management team to think independently of the herd. It is a very high-conviction manager that will at any time hold no more than between 30 to 40 companies, chosen from a universe of more than 2,000 businesses, drawn mainly from the high-growth consumer, technology, and healthcare sectors. That’s good for Australian investors, because those sectors represent a relatively small proportion of the local ASX market.
At 30 June 2025, the top five holdings of WCMQ were:
• AppLovin
• 3i Group
• Saab
• Amazon
• Siemens Energy
There is also a performance fee, which is 10% of the portfolio’s outperformance relative to the benchmark, subject to a high-water mark (the highest value a fund or portfolio reaches in a given period) and capped at 0.375% of the value of the portfolio in each calculation period.
The performance objective of the portfolio is to exceed its benchmark over rolling three-year time periods, and to experience lower volatility than the benchmark.
The portfolio is based on WCM’s Quality Global Growth Equity Strategy, which has outperformed the MSCI World Index by an annualised 4.6% a year over more than a decade (inception 31 March 2008).
2. Hyperion Global Growth Companies Fund (HYGG, $7.02)
One year: 40.1% p.a.
Three years: 33.9% p.a.
Five years: 19.6% p.a.
MER: 0.7% p.a.
Benchmark: MSCI World Accumulation Index, in A$
Australian funds manager Hyperion – a specialist in the ‘growth’ investment style – has offered the Hyperion Global Growth Companies Fund ETMF since March 2021, and it has been an excellent performer. The Fund invests in what the Hyperion team believes are growth-oriented companies that pass Hyperion’s rigorous investment process; the fund is highly concentrated, holding only 15-30 stocks at any one time. These companies will be high-quality business franchises; that have above-average long-term growth potential; have low levels of gearing; and have earnings streams that the Hyperion team is confident should be sustained and grow in the long run.
At 30 June 2025, the top five holdings of HYGG were:
• Tesla, Inc. (12.0% of the portfolio, versus 1.2% of the benchmark)
• Microsoft Corporation (10.6% of the portfolio, versus 4.7% of the benchmark)
• ServiceNow, Inc. (8.6% of the portfolio, versus 0.3% of the benchmark)
• Amazon.com (7.7% of the portfolio, versus 2.8% of the benchmark)
• Spotify Technology (7.2% of the portfolio, versus 0.2% of the benchmark)
Which gives an indication of how heavily the management team will load-up on a stock if they believe in it (the benchmark is the MSCI World Accumulation Index, in A$).
On top of the management fee, there is a performance fee of 20% of the difference in the fund’s return (net of management fees) relative to its benchmark return, multiplied by the net asset value of the fund. The performance fee is calculated and accrued each business day and is reflected in the daily unit price. The performance fee is payable half-yearly, as at 31 December and 30 June.
3. Antipodes Global Value Active ETF (AGX1, $6.16)
One year: 25.2% p.a.
Three years: 29.4% p.a.
Five years: 14.5% p.a.
MER: 1.1% a year
Benchmark: MSCI World (ex-Australia) Total Return Net Index, in A$
Australian-based fund manager Antipodes Partners is also a high-conviction manager, looking for at least 30 “great but undervalued” companies for the Antipodes Global Value Active ETF. The fund offers investors access to a long-only global securities portfolio through a single trade; as distinct from the firm’s unlisted flagship, the Antipodes Global Fund, which will also use derivatives and short-selling with the aim of profiting from both rising, as well as falling, share prices. The style is ‘contrarian global value,’ meaning the fund offers good diversification relative to growth-heavy funds.
Antipodes says the product is intended for use as a ‘core’, ‘minor’ or ‘satellite’ allocation for a consumer who is seeking capital growth and has a high or very high risk-and-return profile for that portion of their investment portfolio. The firm recommends that investors take at least a five-year investment timeframe when investing in AGX1.
At 30 June 2025, the top five holdings of AGX1 were:
• Microsoft, 3.5% of the portfolio
• Barrick Mining, 3.3% of the portfolio
• Alphabet, 3.3% of the portfolio
• Capital One Financial, 3.3% of the portfolio
• TotalEnergies, 2.7% of the portfolio
In addition to the management fee, AGX1 charges a performance fee of 15% of the net return in excess of the benchmark; this fee is applied annually, based on the performance of the fund up to June 30 each year.
4. Munro Concentrated Global Growth Fund (MCGG, $14.71)
One year: 27.9% p.a.
Three years: 29.4% p.a.
Five years: N/A (listed February 2022)
MER: 0.7% a year
Benchmark: MSCI World (ex-Australia) Total Return Net Index, in A$
Melbourne-based global ‘growth’ fund manager Munro Partners is a high-calibre investor that is focused on finding long-term winners by identifying sustainable growth trends that are under-appreciated, not well understood, and/or mis-priced by the market. The firm has a very strong conviction that finding tomorrow’s winners comes from understanding how and why the world is changing and investing to benefit from this – and its investment track record bears this out.
Founded in 2016, Munro Partners manages the Munro Global Growth Fund, Munro Climate Change Leaders Fund, Munro Concentrated Global Growth Fund and Munro Global Growth Small & Mid Cap Fund.
At 30 June 2025, the top five holdings of MCGG were:
• NVIDIA, 7.9% of the portfolio
• Microsoft, 5.7% of the portfolio
• Amazon, 4.8% of the portfolio
• Meta Platforms, 4.6% of the portfolio
• Taiwan Semiconductor Manufacturing Company (TSMC), 3.4% of the portfolio
Munro builds its portfolio by looking at eight main ‘Areas of Interest,’ or AoIs: Consumer, Internet Disruption, Security, Climate, Digital Enterprise, E-commerce, High-Performance Computing; and Innovative Health.
MCGG also includes a performance fee of 10% of the excess fund performance above the hurdle rate and the high watermark. The hurdle rate is the higher of the MSCI World (ex-Australia) Total Return Net Index in A$ and the annualised yield of the 10-year Australian government bond. The fund needs to exceed both the hurdle rate and the high watermark prior to a performance fee being payable.
