How Do I Invest Into ETFs?

Once you understand what an ETF actually is, the next question is always the same: how do I actually go and buy one? Here’s the practical, step by step process.

Step 1: Choose a Broker

To buy an ETF, you need a broker, which is essentially the platform or middleman that lets you place buy and sell orders on the ASX (or an overseas exchange).
There are plenty of options in Australia, ranging from the big bank brokers to newer, low cost online platforms. 

What to Look For in a Broker

Brokerage fees This is the fee charged every time you buy or sell. Some brokers charge a flat fee per trade (say $5 to $10), some charge a percentage, and a growing number offer $0 brokerage on a selected range of ETFs. On smaller trades, brokerage eats up a bigger percentage of your investment, so this matters more than people think when you’re just starting out.

CHESS sponsored vs custodial

  • A CHESS sponsored broker registers your shares directly in your own name on the ASX’s official settlement system, and you get your own Holder Identification Number (HIN). Your shares are legally and clearly yours.
  • A custodial broker holds your shares in a pooled account on your behalf, under the broker’s own HIN. This structure often comes with lower fees and fewer restrictions (like allowing fractional shares), but you don’t hold the shares directly in your own name.

Neither is automatically “better,” it depends what you value more: direct legal ownership, or lower costs and flexibility.

Range of ETFs available Make sure the broker actually offers access to the ETFs you’re planning to invest in, especially if you’re looking at international exchanges down the track.
Ease of use As a beginner, a clean, simple app or platform makes a genuine difference to whether you’ll actually stick with investing regularly.
Extra features Things like auto-invest (automatically buying on a set schedule), Dividend Reinvestment Plans (DRP), and portfolio tracking tools can save you a lot of manual effort over time.

Step 2: Open and Fund Your Account

Once you’ve picked a broker, opening an account is usually quick, generally under 10 minutes. You’ll need your ID and personal details on hand. From there, you transfer money into your brokerage account via bank transfer, ready to invest.

Step 3: Understand the Minimum Order Amount

Here’s something that catches a lot of beginners out. On the ASX, the first time you buy into a particular share or ETF, there’s a minimum order size of $500, known as the minimum marketable parcel (MMP). This is a rule set by the ASX itself, not just your broker.
Once you’ve made that first $500 purchase, any additional top ups into the same ETF can usually be much smaller (some brokers allow top ups as low as $20 to $100).

A couple of things worth knowing:

  • This $500 minimum excludes brokerage fees.
  • Some custodial brokers with fractional share investing waive this $500 minimum entirely, letting you start with much smaller amounts.
  • Because ETFs trade as whole units on the ASX (fractional shares aren’t standard on CHESS sponsored platforms), your minimum will also depend on the ETF’s current unit price.

Step 4: Place Your Order

Search for the ETF using its ticker code (for example, VAS or IVV), decide how much you want to invest, and place your order. You’ll generally have two options:

  • Market order – buy immediately at the current market price
  • Limit order – set the maximum price you’re willing to pay, and the order only executes if the ETF hits that price

For most long term investors buying a well established, liquid ETF, a simple market order is usually fine.

Step 5: Consider Setting Up a DRP or Auto-Invest

Once you own an ETF, you can typically opt into a Dividend Reinvestment Plan (DRP), which automatically uses your distributions to buy more units instead of paying out cash. Many brokers also offer auto-invest features, letting you set up a recurring investment (weekly, fortnightly, or monthly) so you’re consistently investing without having to remember to log in and do it manually.

Summary

Buying your first ETF isn’t complicated once you understand the moving parts: pick a broker that suits how you want to invest, fund your account, clear the $500 minimum on your first purchase, and place your order. From there, it’s really about consistency, not complexity.