How do ETFs work?
An exchange traded fund is a bundle of shares or options that is listed on a stock exchange that you can purchase through a single trade.
In layman's terms, it is a pooled investment security that typically tracks a market index, a theme, a commodity or other assets. The original ETFs were passive index funds, but over the last decade, the sector has exploded.
An example of an index fund would be the iShares Core S&P/ASX 200 ETF, a market-tracking ETF made up of the 200 biggest companies in Australia. Investors in this ETF own a small percentage of each company based on market weighting. So, larger companies like BHP and Commonwealth Bank make up a larger holding than say a smaller company like Corporate Travel Management.
Each ETF is allocated an ASX code and can be bought and sold by investors the same way that you would buy and sell shares.
The good thing about ETFs is they instantly create a diversified portfolio. By default, you own an entire section of a market, but you can easily add other assets including Australian shares, global shares, fixed income, debt, foreign currencies, commodities and metals.

I don’t have a clue what to do, can I speak to someone!
Hi Jen, taking the first step is always the hardest! While we don’t currently assist over the phone, you can always talk to a financial advisor. If you’re looking to invest in an ETF, you’ll need to sign up to a share trading platform. Check out our list of beginner apps here: https://www.finder.com.au/share-trading/exchange-traded-funds/best-etf-trading-platforms. Or if you’re not sure which ETF to invest in, you can try a micro-investment app like Raiz or a robo-advisor. These platforms offer ready made investment portfolios, so all you need to do is decide how much to invest and how often.
Good luck!
which is the best ETF for gold
Hi Kathy, we can’t recommend any products however the following ASX-listed ETFs are gold-themed: The VanEck Gold Miners ETF, Betashares Global Gold Miners ETF, Global X Physical Gold, VanEck Gold Bullion ETF, Perth Mint Gold ETF, Betashares Gold Bullion ETF. Which you pick depends on your personal goals and circumstances. Remember that some gold-themed ETFs track gold mining companies and other track the price of gold bullion in either AUD or USD.
are there any Australian Vanguard etfs that pay monthly?
Hi Alexander, I’m not aware of any Vanguard ETFs that pay monthly. Distributions are typically paid once a quarter or once a year. However it’s worth reaching out to Vanguard directly to double check this.