For most beginners, one diversified all-in-one ETF is enough to start. DHHF is the cheapest at 0.19% a year and returned 9.2% a year over five years to 30 September 2026; VDHG (0.27%) adds about 10% in bonds for a little cushioning. If you prefer two funds, an Australian ETF such as A200 (0.04%) plus a global one such as BGBL (0.08%) is cheaper still. Then invest regularly and leave it alone.
What an ETF is, in one minute
An exchange traded fund, or ETF, is a basket of investments you buy on the ASX like a single share. Buy one unit of an Australian shares ETF and you own a small slice of the 200 or 300 largest Australian companies. Buy one unit of an all-in-one ETF and you own thousands of companies worldwide.
- Low cost. Broad index ETFs charge from 0.04% to about 0.30% a year. That is $40 to $300 on $100,000.
- Instant diversification. No single company can sink you.
- Easy to buy and sell. Through any online broker, during market hours.
Are you ready to invest?
Before buying anything, check three things:
- High-interest debt is paid off. Paying off a credit card at 20% is a guaranteed return no ETF can match.
- You have an emergency fund. A few months of expenses in a savings account, so you never have to sell in a hurry.
- You can leave the money for five years or more. Share ETFs can fall 20% or more in a bad year. Money needed sooner belongs in cash.
Which ETF to start with
Here are the most popular beginner choices, all broad, low-cost and among the largest ETFs on the ASX.
| ETF | What you get | Fee | Fund size | 1 year | 5 years (a year) |
|---|---|---|---|---|---|
| DHHF | All-in-one, 100% shares | 0.19% | $1.7bn | +8.1% | +9.2% |
| VDHG | All-in-one, 90% shares | 0.27% | $4.1bn | +7.5% | +7.7% |
| VDAL | All-in-one, 100% shares | 0.27% | $0.5bn | +8.8% | n/a (2025) |
| VAS | Australian shares (300) | 0.07% | $26.7bn | +2.2% | +6.5% |
| A200 | Australian shares (200) | 0.04% | $11.1bn | +2.9% | +6.9% |
| VGS | Developed world shares | 0.18% | $18.7bn | +10.1% | +11.8% |
| BGBL | Developed world shares | 0.08% | $5.5bn | +10.4% | n/a (2023) |
Total returns including distributions to 30 September 2026. Source: TMX Australia monthly funds report.
Beginner ETFs side by side
A few points to help you choose:
- One fund, no upkeep: DHHF, VDHG or VDAL. They hold Australian and global shares in one code and rebalance themselves. Compare VDHG vs DHHF and DHHF vs VDAL.
- Two funds, lowest cost: A200 or VAS plus BGBL or VGS. Cheaper, but you choose the split and rebalance yourself. See VAS vs A200 and VGS vs BGBL.
- Australian shares alone are not enough. Australia is about 2% of the world's share market, and VAS is more than half banks and miners. Over five years, global shares did much better. Over other periods, Australia has led.
What $10,000 grew to
Fees look tiny, but they compound. Here is what each option would cost over two decades on a $100,000 balance.
What fees cost on $100,000 over 20 years
The all-in-one funds cost more because they do the mixing and rebalancing for you. For many beginners, that convenience is worth it.
What to avoid as a beginner
- Geared ETFs. GHHF borrows to invest, so it rose 12.0% last year against DHHF's 8.1%, but it will also fall harder. Read how geared ETFs work first.
- Last year's top performer. Funds like SEMI (semiconductors, +109% in a year) are narrow bets that can drop sharply.
- Crypto ETFs. Bitcoin ETFs such as VBTC fell about 31% over the past year. Not a starting point.
- Owning near-duplicates. VAS and A200 are about 94% the same. Holding both doubles the admin, not the diversification.
How much to invest, and how often
You can start with as little as about $500, the minimum first purchase on the ASX. What matters more is the habit. Investing a fixed amount every month, called dollar cost averaging, means you buy more units when prices are low and fewer when they are high, and it removes the temptation to time the market.
Investing $500 a month
Brokerage matters for small, regular purchases. A $10 fee on a $500 purchase is 2%, so many beginners invest less often in larger amounts, or use a broker with low or no fees on ETF trades. See how to buy ETFs: brokers compared.
Placing your first order
- Open a brokerage account that gives you your own HIN (holder identification number), so the units are registered in your name.
- Trade during market hours, ideally after the first 15 minutes, when prices are settled.
- Use a limit order at or near the current price, so you never pay more than you intended.
- Check the ticker before you press buy. VDHG and VDGR, or VDAL and VDBA, are easy to confuse.
Costs and tax, briefly
You pay the ETF's annual fee (taken from the fund, not billed to you), brokerage when you buy or sell, and tax on distributions each year, even if they are reinvested. Australian shares ETFs pay franked distributions, which come with tax credits. If you sell after holding more than 12 months, individuals get a 50% discount on the capital gain. Your ETF issuer sends an annual tax statement to make tax time simple. More in ETF tax in Australia.
Compare the all-in-one ETFs side by side →
Common questions
What is the best ETF for beginners in Australia?
There is no single best, but a diversified all-in-one fund such as DHHF, VDHG or VDAL suits many beginners because one purchase covers thousands of companies in Australia and overseas. DHHF is the cheapest at 0.19% a year.
How much money do I need to start buying ETFs?
The ASX minimum first purchase is about $500. After that, you can add smaller amounts, though brokerage makes very small trades expensive.
Is VDHG or DHHF better for beginners?
DHHF is cheaper and holds only shares; VDHG holds about 10% in bonds, which softens falls slightly. Over five years to 30 September 2026, DHHF returned 9.2% a year and VDHG 7.7%.
Should I buy VAS or VGS first?
Many beginners hold both, or an all-in-one fund that contains both. VAS gives Australian shares with franking credits; VGS gives global companies the ASX lacks. They share no holdings, so they complement each other.
Joshua Stega is a financial adviser with 20 years' experience and the founder of ETF Adviser. He built ReviewETF to make every Australian ETF easy to find and compare.
General information only. It does not take into account your objectives, financial situation or needs. Consider the PDS and TMD before investing. Past performance is not a reliable indicator of future performance. Data as at 30 September 2026.