Exchange Traded Funds (ETFs) are having a positive impact on Aussies’ understanding of how investing works, with benefits being particularly felt by younger investors.
40% of ETF investors noted that investing in ETFs helped them to improve their understanding of investing more broadly, with almost one third of this group stating they have since explored investment opportunities outside of ETFs.
81% of those aged 34 or younger noted an improvement in their understanding of investing as a result of investing in ETFs, according to a recent survey by Money magazine.
Of those surveyed, 93% invest in ETFs directly, with the remainder investing through a financial planner or broker.
The most common methods of investing were infrequent lump sum investments or dividend re-investing.
“Only 17.8% noted they use dollar cost averaging as their only method of investing in ETFs, while another 13% include a mix of dollar cost averaging and lump sum or dividend re-investments,” said Vanessa Walker, managing editor at Money.
31% of survey respondents noted they invest monthly or more frequently, with 43.3% investing a few times a year.
Two of the key factors determining the investment was the reputation of the issuer and the investment theme, with 60.5% and 51.8% respectively noting the importance of these factors.
Dividend yield was the next most important factor at 46.0%.
“Trust is a key factor when it comes to ETFs. Investors are entrusting their money to institutions and want to be sure they are partnering with a trustworthy organisation,” said Walker.
“More technical elements of investing such as liquidity and expense ratios were less of a concern.”
Diversification is far and away the main reason survey respondents invest in ETFs, with low fees and easy access ranking as the second and third main reasons for survey respondents.
“Consumers value being able to invest smaller amounts from their phones at any time knowing they can access a range of underlying assets at a low price,” said Walker.
“The trade-off of course is the loss of voting rights in the underlying shares, and it’s always worth noting your fees when investing smaller amounts – a broking platform may take a $2 fee, so you’re starting at -2% on an investment of $100.”
For those that don’t invest in ETFs, the main factors for why they do not invest came down to education and understanding.
67.4% stated they have a lack of understanding of how ETFs work, and 35% said they were unsure of which ETFs performed well. Only 7.7% said they’d rather invest somewhere else.
“There were 370 ETFs in market as of June 30, 2025, which has grown from 212 over five years, according to Rainmaker Information,” said Walker.
“Helping consumers navigating through the increasing range of choices will be important, something that Money will be supporting as we are set to announce our 2026 ETF Manager of the Year on December 1, 2025,” said Walker.
Money received 676 responses to the survey that ran from October 24 until November 9, 2025.
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