Money hack: Invest in ETFs for free
Keen to invest in exchange traded funds (ETFs)? Here's how you can do it without any brokerage fees.
ETFs are taking off in Australia. ETFs are investment products that track a particular market index, for example the ASX200, offering investors exposure to all the underlying assets without actually owning them. The performance of the ETF mirrors the performance of the index it tracks. A recent report by BetaShares and InvestmentTrends revealed there are more than 314,000 ETF investors in Australia, up from 265,000 in 2016 and up from just 69,000 5 years ago.
There are a few reasons ETFs are becoming increasingly popular: they offer instant diversification in one trade, they're easily accessible on an exchange and they're very low-cost. In April last year, we saw the world's lowest-cost Australian shares ETF launch on the ASX, called A200 and provided by BetaShares, with ongoing fees of just 0.07% p.a.
You can invest in an ETF like you would regular shares. You'll need an online share trading account and you'll need to pay brokerage fees on each trade you make, which could be as high as $19.95 per trade (or more). However, if you invest in ETFs before 30 June 2019 you can avoid paying any brokerage fees. Here's the hack.
Australian online share trading platform Bell Direct is currently running a special offer to waive any brokerage fees on ETF trades placed before 5pm (AEST) on 30 June 2019. Follow these steps to take advantage of the deal.
- Create an account. You need to create a trading account with Bell Direct. This offer is only available to new customers, who don't already have an account with Bell Direct.
- Place your trades. Once your account is verified, place your trade orders for the ETFs you want to buy. This simply involves locating the ETF (you can search by its ticker code) and placing a buy order. You can buy as many different ETFs as you want.
- Fees are refunded. For all ETF trades you place before 5pm (AEST) 30 June 2019, your brokerage fees will be refunded back into your account. However, trades placed after this date will not have the brokerage fees refunded.
Remember, with this deal, it's just the brokerage fees that are refunded not the ETF management fees. So make sure you consider the fees charged by the ETF itself before investing.