ETFs · Beginner
How to think about choosing your first ETF
Search for the 'best ETF' and you'll get a hundred confident answers. The truth is there isn't one — there's only the one that fits what you're trying to do. So instead of chasing a ticker, start with a few honest questions.
Three questions before the ticker
- How long is this money invested for? Longer horizons can usually ride out more ups and downs.
- Do I want Australia, the world, or both? The Australian market is concentrated in banks and miners; a global fund spreads you across far more.
- How will I feel if it drops 20%? Be honest. The right fund is one you won't panic-sell in a bad year.
Broad before narrow
Most people are well served starting with one broad, low-cost fund rather than a clever, narrow one. A 'whole market' or 'diversified' fund gives you a sensible base. You can always add a smaller, more specific holding later once you understand how it changes your overall exposure.
Look through to what you'll really own
Before you buy, check what's inside. Two funds with different names can hold many of the same giant companies, leaving you doubled up without realising. The goal isn't to own more funds — it's to own different things.
Your first ETF doesn't need to be perfect. It needs to be something you understand and can stick with.
See it on your own portfolio
Find out which of these forces your ASX portfolio is most exposed to — in 60 seconds.
Keep reading
What is an ETF, in plain English?
ETFs are how most Australians now start investing. Here's the plain-English version of what they are, why people like them, and what to watch.
Hedged vs unhedged: what it really means for your global investments
When you invest overseas, the Aussie dollar comes along for the ride. 'Hedged' and 'unhedged' just describe whether you've taken it off the table.
PortLens provides general information only — not personal financial advice. Examples are illustrative. Always do your own research or speak with a licensed adviser before making investment decisions.
New to a term used here? See the plain-English glossary.