The Best ETF Brokers in Australia

Newcomers to equity investing face several critical decisions, the first being the kind of investment that best suits their needs. Some basic reading on alternatives available will lead to the advice to diversify your investing dollars. That advice follows the adage – don’t put all your eggs in one basket.

The experts tell us to create a diversified portfolio of stocks, so many investors select their stocks one by one.

The alternative is to invest in a ready-made basket of stocks through either mutual funds or exchange-traded funds – ETFs.

Both offer investment vehicles covering a wide range of investing interests, from entire sectors, such as health care, to “niche” markets within the broader sector – such as biotechnology, life sciences or medical devices.

Both vehicles offer choices between active and passive investing. Passive funds track an index, while active funds are professionally managed, targeting the selection of stocks according to different criteria.

It might seem counterintuitive to begin by selecting an ETF broker to place investments. However, the best ETF brokers Australia has to offer can help the research process with available search tools on the broker’s trading platform.

While fee structure, ease of use, and investment education options are all worthy criteria for selection, the ability to evaluate an ETF on the same platform where you will ultimately make the purchase saves a  substantial amount of time.

Some of the best ETF brokers do not charge commission fees on ETF trades, but inactivity fees are something to consider. ETFs are generally long-term purchases, and if you are content to stay with a select few, you may go “inactive” for periods without buying. Inactivity fees can vary substantially.

Navigating the trading platform is another consideration, with some ETF brokers’ trading platforms overloaded with “bells and whistles” more suitable for active traders.

Once you have settled on the best ETF broker for your needs, signing up online is relatively simple.  You will need to provide some basic information as well as a TFN (tax file number), proof of identity, and a bank to link to your trading account.

Here are four of the best ETF Brokers in Australia

eToro

On most Internet sites comparing ETF Brokers, eToro typically comes first or second in the rankings.

eToro was one of the first Australian brokers to offer $0 commission trades on Australian stocks, now extended to most of the 16 global markets the company reaches. The company has an inactivity fee of $10 monthly for investors who have not traded on the site for 12 months.

Founded in 2007 eToro’s registered customers approached 30 million as of March 2022. As opposed to other ETF brokers that can confuse new investors with multiple trading platform options, with many being directed towards the needs of advanced investors, eToro offers three simple and friendly platforms – web-based and on a mobile app.

In addition to stocks and ETFs, investors can trade cryptocurrencies, forex, commodities, and contracts for difference (CFDs) on the eToro platforms.

The company’s website is loaded with helpful features for all levels of investing needs. Starting with the Education section, ten investing lessons are offered in the eToro Academy for new investors. The News and Analysis section features weekly articles on market trends, while eToro Plus features more detailed analyses. Their Digest and Invest section features various educational videos for investors of all experience levels.

What makes eToro stand out is the company’s link to social media. The company claims its social trading network connects “millions of users from over 140 countries.”  The firm maintains an active presence on Twitter, Facebook, YouTube, and LinkedIn, posting investment asset class updates, videos, announcements, and market updates. An agreement between eToro and Twitter sends Twitter users who have entered a valid stock symbol directly to the eToro website.

Copy Trading is another unique feature offered by eToro. Here investors have access to the trades of successful investors, with the ability to “copy” what these more experienced investors are doing.

With no deposit needed, newcomers who join eToro can access a Demo Account, funded with $100,000 of virtual money, where investors can practice various investing strategies targeting different asset classes.  Check out the eToro website for a complete look at what the company offers and how it operates.

eToro AUS Capital Ltd ACN 612 791 803 AFSL 491139. OTC Derivatives are speculative and leveraged. Not suitable for all investors. Capital at risk. See PDS and TMD

IG Markets

If a successful track record over time is important to you, IG Markets is a choice to consider as your ETF broker.

The company has been in business since 1974, offering investment opportunities in all asset classes in markets worldwide. IG Markets also ranks highly among reviewers mainly due to the broad scope of its offerings and the considerable number of tradeable investment symbols – 19,537 compared to 3458 at eToro. IG also offers hedging and spread betting.

IG has seven trading platforms, from iOS and Android to two MetaTrader platforms and desktop and web platforms.  The company offers three accounts, each geared toward investor interest and expertise.

IG has a community forum for investors to share ideas with more experienced investors and traders. The company has not yet linked directly to social media platforms.

IG’s commission fees vary depending on the investment. The inactivity fee is $18 monthly for accounts that have not traded for two years.

IG Market has won multiple awards, most notably for its broad range of investor education tools for all types of investing and all levels of expertise. The IG Academy reflects the tone of the entire operation – focusing heavily on more advanced traders and investors, offering numerous webinars on specific trading strategies.

IG was the first brokerage to offer spread betting and remains renowned for its forex trading operation.

In 2017 IG collaborated with global investment firm Blackrock to create five “smart” portfolios for ready-made diversification, including stocks, bonds, and commodities, all actively managed by IG.

AvaTrade

AvaTrade specialises in forex, CFDs, and cryptocurrencies. The company’s approach to investing in stocks and ETFs is unique – they are traded as contracts for difference (CFDs), allowing investors to go long or short at low cost with leveraged trading up to 20:1.

AvaTrade has ample educational resources for its investment classes, but they are limited. The company’s trading fees vary by trade, and the inactivity fee is $50 per quarter for accounts with no transactions for three consecutive months.

The company has both user-friendly web and mobile platforms, with some pointing to difficulties in customising the platforms. The mobile platform is available in English only. Web platforms include  AvaTrade’s own WebTrader along with MetaTrader 4 and AvaOptions.

AvaProtect is a unique feature found in few if any, other brokerage websites. AvaProtect acts as a hedge or an insurance policy against losses on trades made on any AvaTrade platform for any of the investment types offered. Investors specify a time frame on any market orders, and should a loss occur during the period the insurance is in force, AvaTrade will cover the loss.

Go Markets

Go Markets is something of a niche online broker, offering investments in forex, shares, and commodities — all via CFDs. Go Markets offers spread-based and commission-based accounts, with fees varying depending on the trade, but there is no inactivity fee.

The company offers web and desktop trading platforms and claims Go Markets is “widely recognised as Australia’s first MT4  broker”. Go Markets now also offers MT5 and a newly added mobile platform.  The mobile platform features the same analytical tools, speed, and other features as the desktop application.

Australian Research Institute Investment Trends named Go Markets the Winner in Customer Service in 2022, as well as top in Education Materials Programmes for four consecutive years.

The News & Analysis section provides daily market insights, updates, analysis, and a chart of the day, along with video reviews of the trading week ahead.

Go Markets offers a dedicated account manager to clients of both their accounts – Go Plus+ and the Standard Account. The company boasts leverage of up to 30:1 in both versions. Australian review site Trustpilot rates Go Markets as Excellent, with a 4.5 rating from 182 user reviews.

Final thoughts

There are now two alternatives for investors with neither the time nor the temperament to follow the advice to build a diversified portfolio of stocks; mutual funds available through a full-service brokerage house or online through exchange-traded funds (ETFs).

ETFs trade like stocks – they can be bought and sold at any time the market where they trade is open. Mutual fund holders must wait until the end of the trading day to sell.

Australia has many ETF brokers from which to choose. No matter your investing strategy, finding one of the best ETF brokers in Australia involves nothing more than searching and assessing what the broker has to offer against what you need.

FAQs

What is an ETF?

An Exchange Traded Fund, or ETF for short, is a type of investment that pools together various kinds of securities and is similar to a mutual fund. The difference is ETFs can be traded on an exchange just like stocks. ETFs can contain all kinds of assets such as stocks, commodities and bonds.

How to Buy ETFs

ETFs are traded on stock exchanges and can be bought and sold just like stocks. There are many different kinds of ETFs covering a whole range of assets so it is important to do your research and choose the ETF that meets your investment needs. There are many brokers in Australia that offer ETFs