Take the following funds, for instance: iShares Core S&P 500 ETF (LSE:CSPX), Franklin FTSE India UCITS ETF (LSE:FLXI), and VanEck Semiconductor ETF (NASDAQ:SMH). Between them, they’ve delivered an average annual return of 19.5% since November 2020%.

Want to know what makes them stock market winners?

Tapping US shares

The iShares Core S&P 500 fund proved one of the best ETFs out there for reliably high returns. There are are several good reasons behind its strong performance.

The US stock market has comfortably outperformed overseas shares for decades, and I’m confident it will continue doing so given the eternal appeal of Wall Street shares. With holdings in hundreds of multinational companies, it isn’t dependent on one sector or region to drive returns, either.

I also like the ETF’s enormous exposure to high-growth tech shares. Businesses like Nvidia, Apple, and Microsoft comprise roughly 36% of its stock holdings.

This can lead to extra volatility during downturns. Yet, as we’ve seen, it can also deliver outsized returns as the digital revolution rolls on. The fund has delivered an average yearly return of 17.3% since November 2015.

Looking to Asia

Investing in emerging market shares is another attractive wealth-building opportunity to consider. One I like is the Franklin FTSE India ETF, which — as the name implies — provides targeted exposure to Asia’s fastest-growing major economy.

Over the last half a decade, the fund has delivered an average annual return of 13.4%. It’s done so by providing exposure to large- and mid-cap companies like HDFC Bank, Bharti Airtel, Hindustan Unilever, and Sun Pharmaceutical.

As this list shows, the fund is also well diversified by sector, protecting it from industry-specific weaknesses. A bright outlook for India’s economy suggests it could keep outperforming — latest data showed national GDP growth accelerate to 8.2% during Q3.

Be mindful, though, that confidence in emerging market equities can be volatile. This in turn can have an impact on funds like this from time to time.

A top tech fund

Thanks chiefly to the artificial intelligence (AI) boom, the VanEck Semiconductor ETF has delivered a staggering 27.9% average annual return over five years.

Companies like Nvidia, Taiwan Semiconductor Manufacturing Co, and Broadcom are enjoying rocketing sales as AI adoption takes off. Nvidia’s latest results showed data centre revenues leap 66% during Q3.

But the uses of their products are far and wide, from smartphones and robotics to cloud computing and electric vehicles. These markets are also all tipped for rapid growth during the next decade.

A focus on cyclical semiconductor shares leaves the fund vulnerable to economic downturns. But it still means less risk to investors’ cash than purchasing individual stocks. I think the ETF can keep delivering high double-digit returns.

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Invesco EQQQ Nasdaq 100

What it does: This ETF tracks the Nasdaq 100 index, which represents the largest 100 non-financial companies on the Nasdaq Stock Exchange.

By Harshil Patel. The Invesco EQQQ Nasdaq 100 ETF (LSE:EQQQ) might sound like a mouthful, but it offers a simple way to own the largest growth shares.

In fact, it’s one of the largest individual holdings in my Stocks and Shares ISA. In recent years, it has become dominated by the global tech giants.

25% of the fund is invested in Apple, Microsoft and Nvidia. A further 25% of the fund is invested in Amazon, Broadcom, Meta, Tesla, Costco and Alphabet.

I find this ETF an efficient and low-cost way to own these tech heavyweights.

Performance has been stellar in recent years. For instance, over the last five years it gained 125%. And over the past decade, it’s up by a whopping 460%.

This far exceeds that of the S&P 500 and FTSE 100.

But note that returns in the Nasdaq 100 can be more volatile. In the most recent downturn in 2022, it fell by 26% vs a 10% decline in the S&P 500.

Harshil Patel owns shares in Invesco EQQQ Nasdaq 100 ETF .

iShares Core EURO STOXX 50 EUR 

What it does: the ETF tracks the performance of a diversified index made up of the 50 largest companies in Europe

By Gordon Best. I’m a big fan of investing in markets which may be undervalued. Europe has stood out to me in recent years as a region with plenty of uncertainty, but just as much quality too. iShares Core EURO STOXX 50 EUR (LSE:EUE) tracks 50 of the largest stocks across the Eurozone. It offers diversification across various sectors, including financials, consumer goods, and technology.

Of course, the European market maybe isn’t quite as dynamic as many companies in the US, but with very solid growth numbers, and experienced management, it could well capitalise on the same trends. With specialist semiconductor companies like ASML, the same growth as US companies could be seen, but as a much more reasonable valuation. 

I do have some concerns though. A strong Dollar can severely impact European companies operating in other currencies, plus there is a constant risk from geopolitical escalation as the conflict in Ukraine continues.  

Gordon Best owns shares in iShares Core EURO STOXX 50 EUR.

iShares Edge MSCI World Quality Factor ETF

What it does: The iShares Edge MSCI World Quality Factor ETF seeks to track the performance of an index composed of stocks with strong and stable earnings.

By Paul Summers. To say that I like the iShares Edge MSCI World Quality Factor ETF (LSE: IWFQ) is putting it mildly. It’s easily the biggest holding in my Stocks and Shares ISA. 

With a portfolio including the usual tech suspects as well as pharma giant Novo Nordisk, this $4bn passive vehicle has returned almost 80% in the last 5 years (at the time of writing).

The ETF focuses only on ‘quality’ stocks with track records of high returns on equity, stable earnings growth and sound finances. In other words, it avoids owning the dross. 

None of this comes free but the ongoing charge of 0.3% is reasonable compared to actively-managed funds with the same objective. 

My only real concern is that 70% of the portfolio is devoted to US stocks. With the election coming next month, there could be a bit of volatility on the cards. 

Paul Summers owns shares in iShares Edge MSCI World Quality Factor ETF.

L&G Cyber Security UCITS ETF

What it does: L&G Cyber Security ETF is made up of cybersecurity stocks and tracks the ISE Cyber Security UCITS Index.

By Ben McPoland. Warren Buffett said something really interesting a few months ago. He predicted that AI-enabled scamming is going to be “the growth industry of all time“. 

I think he’s right. As well as tricking people, AI can be used to create malware that adapts its behaviour to avoid detection by traditional antivirus software.

This is partly why I have the L&G Cyber Security ETF (LSE: ISPY) in my ISA. The ETF holds a basket of cybersecurity giants, including Palo Alto Networks and CrowdStrike.

Barely a week goes by nowadays without some major hacking incident. So this investment offers me thematic exposure to an industry that research firm McKinsey thinks could one day be worth $1.5trn.

Naturally, the ETF is closely tied to the performance of certain cybersecurity companies. These may face hacks, innovation challenges, or competitive pressures.

But since launch in 2015, the share price is up around 150%. I expect it to continue climbing over time as earnings in the cybersecurity sector grow.

Ben McPoland owns shares in CrowdStrike and L&G Cyber Security UCITS ETF. 

VanEck Semiconductor ETF

What it does: The ETF invests in the 25 largest US-listed companies producing semiconductors, or semiconductor equipment. 

By Dr James Fox. The semiconductor sector is fast-moving with consistent technological developments and innovation cycles. In fact, this fast-paced environment can make it challenging for shareholders to stay updated on the latest developments and trends.

So, while I do invest in individual semiconductor stocks, an ETF which invests in the 25 largest US-listed companies producing semiconductors, or semiconductor equipment allows me to spread risk and hedge my bets. 

The VanEck Semiconductor ETF (NASDAQ:SMH) has performed very well in recent years, up 46% over 12 months and 269% over five years. However, potential investors may be intrigued to see that the share price has pulled back in recent months. 

This does create an interesting entry point, but also reflects the constantly shifting sentiment relating to artificial intelligence and data centres – these sectors have driven demand for high-end chips over the past 18 months – which may represent a risk. 

Personally, I’m looking beyond the near-term volatility and thinking about where this stock could be in a decade as our economies become increasingly reliant on semiconductor technology. 

James Fox owns shares in VanEck Semiconductor ETF

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