ETF Adviser's approach has two parts. Core and satellite: a low-cost, diversified core does most of the work, and smaller satellite positions add themes the core misses. Follow the trend: satellites are bought as a new uptrend forms and sold when it breaks, with a stop-loss. Australia is about 2% of the world share market, yet about a third of the money Australians hold in share ETFs sits in Australian shares.
How have ETFs changed in 20 years?
Q: What did the ETF market look like when you started?
"Tiny. There were a handful of index funds such as STW for the ASX 200, and a few sector funds. There was nothing like the all-in-one funds we have now. When VDGR and VDHG arrived in late 2017, you could suddenly hold a complete balanced or growth portfolio in one trade. That changed things for everyday investors."
"Today the choice is enormous. There are more than 500 exchange-traded products in Australia, holding about $388 billion, covering everything from global shares to uranium miners, South Korea and bitcoin. The flip side is that it has never been easier to buy the wrong thing."
Australia's six largest ETFs
Are Australians using ETFs well?
"Better than before, but home bias is still strong. VAS is still the largest ETF in the country at $26.7 billion. Australia is only about 2% of the world share market, and it is concentrated in banks and miners. Across all the money Australians have in share ETFs, about a third is in Australian shares."
Where Australians invest in share ETFs, vs the world
"The good news is the money is moving. In September, VGS took in more new money than any other ETF, about $532 million. Franking credits are a genuine reason to hold Australian shares, especially for retirees. But most of the world's growth companies are listed somewhere else, and ETFs are the easiest way to own them."
What do people misunderstand about ETFs?
"Two things. First, how trading works. When you buy an ETF, you are usually trading with a market maker, a firm paid to quote buy and sell prices all day. They make money on the spread, the gap between those prices. In the big funds it is tiny. In small or niche funds it can be ten times wider or more."
Average buy and sell spread
"A simple habit helps: avoid the first 15 to 30 minutes after the market opens. Market makers need time to price the underlying shares, so early spreads tend to be wider. Wait for things to settle and use a limit order on smaller funds."
"Second, two ETFs with similar names can hold very different things. QRE and MVR are both Australian resources ETFs. But BHP is about 40% of QRE and only 8% of MVR. They overlap by about 59%. It is like two burger chains: both sell burgers, but the recipe is different."
Top holdings: QRE vs MVR
"Always look under the bonnet. Check the holdings, the sector mix and the fee before you buy." You can do that with MVR vs QRE or the overlap calculator.
What is the single best way to use ETFs?
"Core and satellite. The core is one diversified fund, or a few broad funds, that owns Australian and global shares, and bonds if you need them. It is cheap, it rebalances, and you leave it alone. The satellites are smaller positions in sectors, regions or themes the core barely owns: semiconductors, gold miners, copper, Asian tech."
"The core gives you the market. The satellites give you a chance to do better than the market, and because they overlap so little with the core, each one genuinely adds something."
Read more: building your core and building your satellites.
How do you decide when to buy a theme?
"Follow the trend. Markets move through long quiet bases and then trends. I want to buy a satellite as it breaks out of a base into a new uptrend, not after it has already doubled. And I set an exit before I buy, usually a stop-loss, so a fading theme cannot turn into a long-term loss."
"Defence is a good example. DFND listed in September 2024 and ARMR and DTEC followed within weeks. For once, Australians could get in early on a strong global theme, and it ran well into 2025. But themes cool. Over the 12 months to 30 September 2026 all three fell between 12% and 18%. That is exactly why satellites need an exit plan."
Themes run hot and cold
See DFND vs ARMR and our defence ETF guide.
Any other lessons from 20 years?
- "Cash is a position. When the trend is down, it is fine to sit in cash and wait. You do not have to be fully invested all the time."
- "Judge total return, not the dividend. Income plus growth is what builds wealth."
- "Know the limits of ETFs. An ETF is only as good as the index or strategy inside it. Low fees do not fix a poor exposure."
- "Keep it simple. A clear core and a few deliberate satellites beat a drawer full of overlapping funds."
Explore every ETF in the directory →
Common questions
What is a core and satellite ETF portfolio?
It splits a portfolio into a large, low-cost, diversified core that is held long term, and smaller satellite positions in sectors, regions or themes that add exposure the core lacks. The satellites are managed more actively.
What does "follow the trend" mean for ETFs?
It means buying a satellite ETF when its price shows a new uptrend forming, and selling when that trend breaks, often using a stop-loss. It is applied to volatile themes rather than broad core funds.
Why avoid trading ETFs at the market open?
In the first 15 to 30 minutes, market makers are still pricing the underlying shares, so the gap between buy and sell prices tends to be wider. Waiting usually gets you a fairer price.
Do ETFs with similar names hold the same shares?
Not always. QRE and MVR are both Australian resources ETFs, yet BHP is about 40% of QRE and 8% of MVR. Check holdings and overlap before choosing.
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.