ASX ETFs Versus Shares Explained In Under 30 Seconds

January 21, 2020

Owen Raszkiewicz

Owen is the Chief Investment Officer of Rask Invest and Founder of Rask. Since founding The Rask Group in 2017 in the hillside suburb of Upwey, Victoria, Owen has overseen the growth of the Rask platform to over 200,000 investor followers. Today, Owen oversees the Rask Analyst team, which helps more than 4,000 Aussies build core portfolios from ETFs and shares, he hosts Australia's biggest investing podcast, The Australian Investors Podcast, appears on Rask's other channels, covering Property, Business and Finance; and leads Rask Education - our education platform which has enrolled over 25,000 Australians into free finance courses. Prior to founding Rask, Owen was an investment analyst at the highly regarded managed funds research business and a writer/analyst for one of the most well-known share market publications. Owen’s formal qualifications include a Master of Applied Finance and Master of Financial Planning from Kaplan Professional, Bachelor of Technology (Information Systems) from Swinburne University of Technology, Advanced Diploma of Financial Services (Financial Planning) and Diploma of Mortgage Broking Management. He's also completed level 1 of the Chartered Financial Analyst (CFA) program.

More analysis

ETF (not EFT!) stands for Exchange Traded Fund. In Australia, the most popular ETFs can be found on the ASX, Australia’s largest sharemarket.

ETFs are:

A bunch of investments (e.g. shares) put in one basket
You buy the ‘basket’ just as you would any other share on the stock exchange
The company that operates the ETF collects a small yearly fee, taken out of your investment automatically

Just imagine you walk into a florist.

Instead of buying one stem or flower (a share), the florist puts together a posy or ‘basket’ of flowers (an ETF). You can buy the entire basket.

We can use this analogy to think about the difference between investing in individual shares and investing in an ETF.

To avoid picking the wrong type, I’ll almost always buy a full bunch of flowers for my wife.

Still confused?

In the Rask Education video below, I explain ETFs inside-and-out. If you want to learn more about ETF investing for beginners, you can take our free course by clicking here.

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