For most Australian beginners, the best starting investment is a diversified, low-cost ETF (exchange-traded fund) on the ASX — specifically an all-in-one fund like DHHF or VDHG. These funds provide instant global diversification across thousands of companies, charge minimal fees (0.19–0.27% per year), and require no ongoing management. This guide explains why, and outlines the alternatives worth knowing about.
What Makes a Good Investment for Beginners?
A suitable first investment for most Australians has these characteristics:
- Low cost — high fees compound into large losses over time
- Diversified — not concentrated in a single company or sector
- Simple — easy to understand, buy, and hold
- Liquid — can be sold if needed (though ideally held long-term)
- Regulated — invested through ASIC-authorised platforms
Option 1 — All-in-One ETFs (Recommended Starting Point)
All-in-one diversified ETFs are the most popular first investment choice for Australian beginners. Two dominate:
DHHF — Betashares Diversified All Growth ETF
| Feature | Detail |
|---|---|
| What it holds | ~8,000 companies globally (Australian, US, international, emerging markets) |
| Asset allocation | 100% shares (growth) |
| Annual fee (MER) | 0.19% |
| ASX ticker | DHHF |
| Suited to | Long time horizon (10+ years), comfortable with full share market volatility |
DHHF is the simplest and lowest-cost all-in-one option. You own the global stock market in one fund and never need to rebalance.
VDHG — Vanguard Diversified High Growth ETF
| Feature | Detail |
|---|---|
| What it holds | ~13,000 companies globally + bonds |
| Asset allocation | 90% shares, 10% bonds |
| Annual fee (MER) | 0.27% |
| ASX ticker | VDHG |
| Suited to | Long time horizon, slightly more conservative than DHHF |
VDHG’s 10% bond allocation provides marginal volatility reduction. The difference between DHHF and VDHG in terms of long-term outcome is modest — both are excellent starting points.
Option 2 — DIY Two-ETF Portfolio
Investors who want slightly more control and transparency often start with:
| ETF | Allocation | What it does |
|---|---|---|
| VAS (Vanguard Australian Shares) or A200 | 30% | Australian share market |
| VGS (Vanguard MSCI International Shares) | 70% | International developed markets |
This provides full transparency over the Australian/international split and may be marginally lower cost than all-in-one ETFs. However, it requires annual rebalancing.
Option 3 — Micro-Investing Apps (For Absolute Beginners with Small Amounts)
| Platform | Minimum | What it invests in | Annual fee |
|---|---|---|---|
| Raiz | $5 | ETF portfolios (5 risk levels) | $3.50/month (under $20k) |
| Spaceship Voyager | $1 | Tech-focused or index portfolio | 0.10%+ (varies) |
Micro-investing apps are useful for building the savings habit with very small amounts. However, flat monthly fees (Raiz charges $3.50/month) are proportionally very expensive on small balances — calculate the fee as a percentage before committing long-term.
Option 4 — Superannuation (For Retirement Savings)
For Australian employees, super is already working for you. With 11.5% of your salary contributed by your employer (FY2024–25), and the 15% concessional tax rate on contributions and earnings, super may be the most tax-efficient place to invest additional money for retirement (via salary sacrifice or personal concessional contributions).
However, super is inaccessible until preservation age (age 60 for most Australians). Non-super investments should also be built for goals before retirement.
What to Avoid as a Beginner
| Product | Why to be cautious |
|---|---|
| Individual ASX stocks | High concentration risk — one bad pick is devastating |
| Actively managed funds with high fees | Most underperform passive ETFs after fees long-term |
| Cryptocurrency as a first investment | Extreme volatility, complex tax, immature asset class |
| Leveraged products (CFDs, options, margin) | Amplify losses, complex, unsuitable for beginners |
| Unlisted property schemes | Illiquid, complex, often high risk |
The Simplest Starting Recommendation
For a beginner Australian investor with a 10+ year time horizon, a straightforward starting point:
- Open a Superhero or Pearler account
- Invest in DHHF (lowest cost, simplest, globally diversified)
- Set up regular monthly contributions — even $200–$500/month
- Do not sell during market downturns
- Review annually, increase contributions as income grows
This approach requires minimal knowledge, minimal time, and historically delivers strong long-term outcomes.
Related Articles
- How to Start Investing in Australia — Step-by-Step
- DHHF Review 2026
- VDHG Review 2026
- Best ETFs Australia (2026)
- Best Broker Australia 2026
- Getting Started hub
- Investing hub
Frequently Asked Questions
What is the best ETF for beginners in Australia? DHHF (Betashares Diversified All Growth ETF) is widely considered a strong starting choice for beginners — it holds approximately 8,000 global companies, charges a low 0.19% annual fee, and requires no rebalancing. VDHG (Vanguard Diversified High Growth) is the alternative with a small bond allocation. Both are general information recommendations only — your personal circumstances should guide your choice.
Should I invest in super or a separate investment account? Ideally both. Super is highly tax-efficient for retirement savings (15% tax on contributions and earnings) but inaccessible until age 60. Non-super investments are taxed at marginal rates but accessible anytime. Building both provides flexibility for both pre-retirement and retirement goals.
How long should I hold my first investment? Growth-oriented investments (shares, ETFs) are best held for 7–10+ years to ride out market cycles. In any given year, your portfolio may fall 20–30% — this is normal for share market investments. Investors who held through the 2008 GFC and 2020 COVID crash recovered their losses within a few years and continued to grow.
This article provides general financial information only and does not constitute personal financial advice. Product comparisons and general information are provided for educational purposes. For advice tailored to your situation, speak with a licensed financial adviser. You can find one through the ASIC financial advisers register or MoneySmart.