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How to buy ETFs

How to buy ETFs

If you’re on the path to financial independence and follow a few bloggers as they save and invest their way to freedom. You no doubt have come across an investment vehicle that just keeps on popping up everywhere you look.


Exchanged Traded Funds (ETFs)!


ETF meme


The holy grail of investing, according to most in this space. I’m more open to other types of investment classes such as real estate (I can almost hear the boos and hisses) and believe that each asset class has its strengths and weaknesses. But honestly, ETFs are recommended by so many people (Warren Buffett included) for very good reason:

  • Extremely low management costs (one of my ETFs charge 0.04%)
  • Great diversification
  • Low buy in and exit fees ($20 a pop depending on how much you buy/sell)
  • Can start investing with little capital (investment properties, on the other hand, require considerable start-up costs)

And there’s more but you get the idea.


So ETFs are awesome right! But how does one actually go about purchasing these little bundles of investment goodness?









Directly through Vanguard vs Buying ETFs

This is the most confusing part of the whole thing. So you decide that you want to buy Vanguard ETFs because you’ve been hearing how awesome they are so you naturally do what any computer literate person would do.


You go to Google.


You punch in Vanguard, head to their site expecting it to be awesome and have them basically walk you through buying their product.


Errrrrr not so fast muchacho’s!


Vanguard’s site is crap. Yes, it has all the information you need on there in the form of whitepapers. But they have absolutely no funnel for a user to purchase their product. You sorta have to figure it out on your own. And to be honest, Vanguard doesn’t really need to rely on a fancy website or app (they don’t even have an app ffs). Their product is so good they don’t waste time and money on advertising and marketing.


Back to the point. You have two choices when it comes to buying a Vanguard product. You can either buy it directly from them (called managed funds) or you can purchase an ETF through a broker.


In a nutshell:

  • Good if you make large or irregular investments
  • Requires trading flexibility
Managed Funds
  • Good if you make ongoing, small contributions
  • Does not require trading flexibility


The biggest factor is probably cost. Because depending on how often you’re going to make contributions, will dictate which method is right for you. There is a really good article that goes into detail about the costings of investing directly through a mutual fund vs ETFs on the Betterment website.


I have never purchased Vanguard products directly from them becuase it works out better for me to buy ETFs, so I can’t comment. But I have seen videos and it’s basically a signup, get your details, pick your fund type deal. If you have experience please comment below.


I do have experience buying Vanguard products through a broker though (see the video below to see me literally buying some).


Buying ETFs Walkthrough

  1. Log into your broker (I use Commbank) and head to trading
  2. Select your account that you want to buy (or sell) for
  3. Select the ASX (Australian Stock Exchange) code that you want to purchase (a list of all Vanguard listed ETFs can be found here)
  4. Enter in how many units you wish to purchase
  5. Select at market value or list a price you’re happy with
  6. Set an expiry for the transation
  7. Review your order and hit submit

This is what mine looked like yesterday



It’s that simple. Proceed to the next screen and confirm the order and you’re done. It will take a few days to process and the money will then come out of your nominated account and boom. You have now bought some ETFs.


If you have any specific questions please let me know and I’ll answer them to the best of my abilities.


Now go forth and fear not the simple process of purchasing ETFs!




55 Responses to How to buy ETFs

  1. Ah fantastic! I have been trying to decipher Vanguard but I haven’t even managed to get to the investment part yet as I realised they have an entry point of $5000 minimum and while I have that money sitting around, I’m not quite ready to just toss that sum into the great open world of ETFs just yet. So this was very helpful, thank you!

  2. Thanks for the walk through. I don’t own any Vanguard but I also have found their website to be very hard to navigate. Hopefully one day they will make it a little easier for all to invest in. Thanks for sharing.

    • No worries mate. Yeah, they really need to improve their website. I don’t think it’s a priority for them though.

  3. I just made the signup jump on the Vanguard site yesterday and have to heartily agree that their site is useless. Putting the starter $5000 doesn’t seem so bad though, I’m just going to BPay it.

  4. I bought into a Vanguard managed fund. I’m just beginning, and wanted to be able to contribute regularly. It wasn’t difficult, but you do still have to fill in a piece of paper, sign it, then fax or email a scan to them. I needed to call them to ask a question about the PDS. The call was answered by an Australian, and they were able to explain what I didn’t understand. Note that they have a sliding scale of fees based upon the amount of money you have invested with them: $100,000.

  5. Why are you still using Commsec? I dumped them months ago for SelfWealth. When you sign up with a promo you’ll get 10 free trades. Thereafter you’ll never pay any more than $9.50 per trade no matter what size the parcel is — and that’s the end of it. I got so sick of the Commsec gouge. Nice to be freed up. The SelfWealth platform is also so much nicer than the ugly and clunky Commsec. Check it out and thanks for today’s post.

    • Googling that as we speak mate. I have used Commsec out of laziness. I didn’t know there were such cheaper options out there. Thanks for the tip ?

      • Thanks for a great and informative post. I also looked into SelfWealth and looks like they don’t trade internationally, does that mean you wouldn’t be able to purchase for example VTS and VEU through their platform? I’m looking for a cheaper option but can’t seem to find anything other than your average Commsec or ANZ.

        • Not sure. I’d say they do though because VTS and VEU are trading on the ASX. I’ve heard good things about CMC markets but have never used them. I’m going to try to interview self wealth and ask the CEO some questions

      • Thanks for an informative post. I also looked into SelfWealth and it says they don’t trade internationally, does that mean you wouldn’t be able to purchase for example VTS or VEU? I’m a bit of a newbie to all this. I’m looking for a cheaper option but can’t seem to find anything other than your average Commsec or ANZ.

  6. I will second Mrs. ETT comment. I have had investments direct with Vanguard for about 10 years, and have always had good service from them. They were helpful getting old records, answering investment questions. Of course, this is true whether you are direct or ETF customer, except that for ETFs it is Computershare you need to chase down for your statements, tax etc.

    Direct, Vanguard have the 500k limit to reach their ‘wholesale’ level. If you are not at this level (like me), then ETFs have a clear advantage. See, Relatively for Retail, Wholesale, ETF the Australia Share Index MER is 0.75%, 0.18%, 0.14%.

    I spoke with Vanguard recently, they noted movements from Retail to the ETF, which I think may lower the ETF’s MER even more?

      • The support person indicated no preference at all, the underlying fund being the same, just the account handling and bookkeeping is done by Vanguard or Computershare and for reasons which still don’t make sense to me; Computershare is cheaper. They simply noted that this change in customer preference was going on.

        One action that probably did make a difference was that the Retail/Wholesale threshold used to be 100k, but changed to 500k (not sure when). This would mean the bulk of their new direct customers were paying 0.61% more than the ETF. That would seem rather intentional, given the predictable outcome of driving all small investors into the ETF. Why not say 200k or 300k?

  7. Thanks for this post, Firebug. We’ve also bought ETFs through our stockbroker (Interactive Brokers) but I’m yet to find out how the management fees are charged. Do they just get taken out of your stockbroking account at the end of the financial year?

    • The management fees are included in the units price. You don’t get charged management fees separately.

    • I run a three fund split of VAS (Aus shares), VTS (US Shares) and VEU (World ex US).

      I try for 40, 30, 30.

      Check out my net worth posts for details.

      • Is there a reason you have gone for VTS and VEU instead of just getting VGS?
        I’m about to take the first jump into ETF’s and after reading MMM and jlcollins it is awesome to find an Aussie website!

        • Lower management fees, exposure to emergings markets and I like that they are unhedged which means I can capitalize if the AUD were to rise.

          Technical analysis can be found HERE

          But honestly, both are great options. I think for tax simplicity and DRP abilities, VGS would be more suited for a beginner.

          • VGS is domiciled in Australia which is a obvious benefit. VGS also does not include Australian shares in its mix and thus is more accurate indicator of your international share holding percentage. (VEU has Aussie shares)

  8. This is a decision I’ve been trying to make for a while: ETF vs managed fund.
    Very similar product, both with pros and cons. I think it depends on your life situation.

    E.G. putting money away for kids. I don’t have kids yet but if I do, I’ll open a managed fund, with the plan of transferring it to their name when they turn 18. Good deposit for a house, a car, or whatever they want to do with their life.

    The main benefit is the ease of small Bpay payments, a genuine set and forget situation.
    Some quick calculations for a Vanguard managed fund, opened when a baby is born:
    – Starting balance of $5,000
    – Contribute $100 per month (the minimum contribution amount), set up automatic Bpay and forget about it
    – Estimated return of 7.5%, taking fees into account
    – $55,806.41 estimated value on their 18th birthday! What a nice little present that would be.

    You could even just wait to see how their attitude towards money has developed during their teens, and make the decision about handing it over later. ;P

    • Love that idea Nick. Still waiting for my folks to surprise me with a secret fund worth millions lol.

  9. I’m a big fan of REITs for those interested still being “in real estate”. Vanguard has a somewhat affordable ETF for lower net worth investors too. Although the site was never a problem for me I’ve heard that from many people as well, definitely worth the management fees tho 🙂

    Jordan @ New Retirement

  10. Bit late to the party but thanks for this post. We are property investors and have done pretty well from it, as I have always been a little hesitant buying shares (we have some but nothing major). I wish I was open minded enough to discover EFTs back in the day. Oh well better late than never.

  11. There is one other important point that I think has been left out. NAV – Net Asset Value. Although the ETFs appear cheaper in terms of expense ratios due to the recent popularity of ETFs the cost to buy them are priced by the market. They do not track the index, only retail managed funds do.

    For instance: VTS (ETF) is currently trading at $165.62 with a 0.04% expense ratio. The NAV on the Vanguard website is $125.42 (

    When you buy that ETF you are essentially paying $165.62 for an asset worth $125.42. That is 32% overvalued + the trading fee. If markets go down or are volatile your overvalued asset will go much lower than the NAV and then if you want to sell you must find a market buyer.
    Where as in the retail managed fund, you pay 0.9% as an expense ratio but you get the actual value per unit ($1.5662) of the assets in the fund. These are less volatile in price because they only track the index and you can sell regardless of the market buyer.

    Would you rather pay 0.04% p.a. fee and possibly loose at least 30% or 0.09%

    Warren Buffet did not recommend ETFs he recommended Index Funds. They are not the same thing. ETFs of an index do not track the index.

    • Hi Stan,

      The NAV you have referenced to is in $USD not $AUD. When converted to AUD is works out to be $166.38 Australian Dollar which is roughly how much the ETF is being traded for (give or take a dollar to account for today’s rates and such).

      An ETF and a fund that tracks the same index will be nearly identical in terms of return. It’s the brokerage fees vs the higher management costs that are the deciders.

      I would like to link to a video of the founder of Vanguard (Jack Bogle) and paraphrase him:

      “I couldn’t care less if an investor decides to go into the Vanguard S&P 500 ETF or the Vanguard traditional index fund. They both own exactly the same portfolio, they are both part of the same portfolio. Their returns will be identical”


      You’re correct that Warren Buffet does not explicitly say ETFs, rather that he is a believer in TIFs (traditional index funds).

      But as I’ve explained above, they are pretty much the same portfolio just bought and sold differently.

      Thanks for the comment.

      • I stand corrected. I did not see that the different ETF NAVs have different currencies specified, even between the international ETFs. Thanks for setting me straight, I was trying to figure out why the VGS was so much cheaper compared to VTS, but it looks like a currency issue.

        Funny though that the Jack Bogle video is titled – Why Jack Bogle Doesn’t Like ETFs. But I guess he understands that the tendency for people to want to trade is stronger for them to just sit tight and ride out the volatility.

        • Yeah that’s such a click bait title. He doesn’t like the way some people day trade ETFs not the actual ETF. If you’re trading ETFs on a regualr basis, you’re doing it wrong.

  12. I buy direct through Vanguard and you’re absolutely right about their website – it’s an absolute mess – I’ll find great graphs and information one day, then the next day find similar information presented in a completely different way in a completely difference place. Nightmare.

    But, once you’ve figured out where to sign up it’s actually really easy. Paperwork was pretty simple, and once you have your account set up you get a list of BPay codes – one for each product. To open a new fund deposit 5k (minimum buy in) then after that you can BPay in $100 at a time whenever you want.

    It works really well with banks that have no fees for multiple payments. I set up reoccurring BPAY transfers to Vanguard 2 years ago and now the only maintenance I have to do it change the amounts (generally up).

  13. This is exactly the content I was looking for in regards to Vanguard ETF vs Funds and I am also thrilled to finally find an Aussie FIRE blog (I currently follow frugalwoods, millennial revolution and mmm amongst others). I am a very active investor tracking the pulse of all my investments pretty much weekly. Thanks for this blog… I just need to figure out how to subscribe to new posts.

    • Glad you’re enjoying the blog 🙂

      I checked my email list and you’re on it now so you must have figured it out.

  14. Looking at making our own spreadsheet to track our NetWorth.

    The spreadsheet you use in the video – how do you calculate your “Total ETF Worth” column?

  15. Hi Firebug, I just bought my first lot of VAS, I’m very excited!

    Question- How did you set it up for Dividend reinvestment, do they contact you?

  16. HI Firebug,

    A new fan on the blog-thanks so much.

    Quick question on ETF’s; how often or not often should you be ‘trading’ them? I assume they’re a long term investment but when would you consider selling them, do you only do it to stick to your 40/30/30 balance?

    Thanks in advance.

    • Hi Ajbay,

      I won’t be selling unless I need to. I plan to live off the dividends in the future but won’t rule out selling some units in retirement if it makes sense. Ideally though I plan to hold forever and live off the income stream generated by the dividends.

      I hope this answers your question 🙂

      • Sure does! Which leads to my next question; are you currently reinventing your current dividends?

        And how often to you reassess your 40/30/30 balance?

        Cheers, Firebug!

        • Hey,

          I somehow missed this comment.

          Anywho, I do reinvest my dividends.

          I reassess my 40/30/30 split every time I buy.

          It guides me to what to buy. I look at all my splits and buy whatever ETF is most out of whack!

          It’s a clever way to ensure that you are always buying low

  17. Why did you choose the 40 30 30 balance and not something different? I’m thinking of doing the same as you but I’m not sure how great an impact currency risk would be on the returns.

    • 40/30/30 is what I’m comfortable with.

      VAS because of the sweet sweet franked dividends.
      VTS because of the diversification into the US market. And I liked the fact that is unhedged as I think the AUD is likely to drop in the current years.
      VEU because of diversification into the global market minus the US.

      I just made up the splits. 40% Oz/60% International is what I’m cool with.

      I also looked at what other professional companies such as Stockspot and Acorns had in their splits to make sure I wasn’t way off.

      • I was looking at purchasing the same ETf’s as you but I’ve decided to get VAS and VGS. VGS seems to be a combination of VTS and VEU except the dividends are automatically reinvested. Initially I thought that I would purchase one ETF each month and then just rotate the three each month but I’ve decided to just buy every second month and stick with rotating the two that way I can cut my purchasing costs down by half. I did read an article from Vanguard tha Australians should transition from about 25% international through to eventually holding 60% international which is what you have.

        • VAS+VGS is a great 2 funds portfolio. Have you checked out the new ETFS released just this week?

          Have a look at this:

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