How to Invest Money in Australia: Top 10 Strategies for 2025
A $100,000 in Australia has many options across many asset classes. ETFs give you diversification, low fees and high liquidity, managed funds give you professional management for broad based diversified portfolios.
Real Estate Investment Trusts (REITs) get you into the property market without direct ownership, passive income and potential growth. Direct property investments, especially in high demand areas, get you capital growth and steady rental income.
For a more conservative approach fixed income securities and high interest savings accounts give you predictable returns, and contributing to super gets you long term retirement growth.
Exchange-Traded Funds (ETFs)
Investing $100,000 in Exchange-Traded Funds (ETFs) is a great way to grow your wealth. This investment strategy gives you diversification, accessibility and relatively low fees and exposure to many markets and assets. Here’s an updated guide with statistics, examples and insights for Australian investors.
What are ETFs
ETFs are investment funds listed on stock exchanges that track a specific index, sector, commodity or asset class. As of 2023 Australia’s ETF market has over $135 billion in assets under management (AUM) and has grown at a compound annual growth rate (CAGR) of over 20% over the past 10 years.
ETF Benefits:
Diversification: One ETF can give you exposure to hundreds or thousands of underlying securities.
Low Fees: The average management fee for Australian ETFs is 0.25% compared to 1.5% for traditional managed funds.
Liquidity: ETFs like Vanguard Australian Shares Index ETF (ASX: VAS) have an average daily trading volume of $25 million so you can buy or sell easily.
Define Your Investment Approach
Investment Objectives:
For growth, focus on equity ETFs that track growth sectors like tech or healthcare.
For income, focus on ETFs with high yields like iShares S&P/ASX Dividend Opportunities ETF (ASX: IHD) which yields around 6% p.a.
Risk:
Low Risk: Fixed income ETFs like BetaShares Australian Government Bond ETF (ASX: AGVT).
Moderate Risk: Diversified portfolios like Vanguard Diversified Balanced Index ETF (ASX: VDBA).
High Risk: Sector specific ETFs like BetaShares Global Cybersecurity ETF (ASX: HACK) which targets high growth industries.
Time Horizon:
Short Term (1-3 years): Focus on stable assets like government bond ETFs.
Long Term (5+ years): Go for growth oriented equity ETFs for higher returns.
Diversified Portfolio
Australian Equities:
The S&P/ASX 200 has returned 9.4% p.a. over the past 30 years so it’s a great choice for domestic exposure.
Example ETF: Vanguard Australian Shares Index ETF (ASX: VAS) which tracks the S&P/ASX 300 Index.
Performance: VAS returned 8.7% p.a. over the last 10 years.
International Equities:
Global markets give you the opportunity to invest in high performing companies like Apple, Microsoft and Tesla.
Example ETF: Vanguard MSCI International Shares ETF (ASX: VGS).
Performance: VGS has returned 11.2% p.a. since inception.
Fixed Income:
Fixed income ETFs stabilise your portfolio by generating regular income and reducing market volatility.
Example ETF: iShares Core Composite Bond ETF (ASX: IAF).
Performance: IAF yields around 3.2% p.a.
Real Estate:
The Australian real estate sector (via REITs) has returned 6.5% p.a. since 2000.
Example ETF: SPDR S&P/ASX 200 Listed Property Fund (ASX: SLF).
Performance: SLF yields around 4.9%.
Commodities:
Gold ETFs for example can hedge against inflation and currency devaluation.
Example ETF: ETFS Physical Gold (ASX: GOLD).
Performance: GOLD has returned 7.1% p.a. over the last 10 years.
Sample Portfolio
Using $100,000 here’s an example portfolio:
40% Australian Equities: $40,000 in VAS.
30% International Equities: $30,000 in VGS.
20% Fixed Income: $20,000 in IAF.
10% Real Estate: $10,000 in SLF.
This allocation gives you growth, income and stability with geographic and asset class diversification.
How to Invest in ETFs
Open a Brokerage Account: Popular Australian platforms are CommSec, SelfWealth and Pearler. For example SelfWealth has flat brokerage fees of $9.50 per trade.
Fund your Account: Deposit $100,000 and check transfer limits with your bank.
Choose ETFs: Use brokerage tools to compare ETFs by performance, fees and underlying assets.
Place Your Order: Example: Buy 200 units of VAS at $100 per unit to allocate $20,000.
Monitor and Rebalance: Check your portfolio quarterly. If international equities outperform and grow to 40% of your portfolio, rebalance to your intended allocation.
Important Notes
Expense Ratios:
The average ETF fee in Australia is 0.25% but high performing ETFs may charge a bit more. For example HACK’s expense ratio is 0.67% because it’s a niche industry ETF.
Tax:
Australian investors get franking credits on dividends from local ETFs. For example VAS’s dividends often come with franking credits which reduces your taxable income.
Market Trends:
Stay up to date with market news. For example technology ETFs like BetaShares NASDAQ 100 ETF (ASX: NDQ) rose 28% in 2023 due to the growth of AI tech.
Managed Funds
Investing $100,000 in managed funds is a smart way to achieve your financial goals through professional management. This option gives you diversification, expertise and convenience which is perfect for Australian investors.
What are Managed Funds
Managed funds pool money from multiple investors to invest in various assets like shares, bonds or property managed by professionals. By 2023 Australia’s managed fund industry has grown to $4 trillion and is growing 8% per annum.
Benefits of Managed Funds:
Professional Management: Fund managers make investment decisions for you, saving you time and effort and providing expertise in portfolio management for better returns and risk management.
Diversification: Managed funds hold multiple assets, spreading risk across different sectors, reducing the impact of poor performance in individual investments and overall stability.
Flexibility: Managed funds offer various options, from conservative funds focused on fixed income to growth funds targeting equities and emerging markets, for different investment strategies.
Choose Your Investment Strategy
Investment Objectives:
For Capital Growth: Growth funds like the Platinum International Fund which has returned 10.5% per annum over the last 5 years, for strong capital growth.
For Income: Income oriented funds like Vanguard Australian Shares High Yield Fund which yields around 5.8% and provides income through dividends.
Risk:
Low: Conservative funds like AMP Capital Wholesale Cash Fund.
Medium: Balanced funds like Perpetual Diversified Growth Fund.
High: Aggressive funds targeting emerging markets like Magellan Global Fund.
Time Horizon:
Short term (1-3 years): Low volatility options like fixed income funds.
Long term (5+ years): Equity focused funds for higher returns.
Portfolio Construction
Australian Shares:
Example Fund: Colonial First State Australian Share Fund.
Performance: 8.2% p.a. over the last 10 years.
International Shares:
Example Fund: Magellan Global Fund.
Performance: 12.3% p.a. since inception.
Fixed Income:
Example Fund: PIMCO Australian Bond Fund.
Performance: 3.4% p.a. yield.
Property:
Example Fund: Charter Hall Direct PFA Fund.
Performance: 6.1% p.a. over the last 5 years.
Commodities:
Example Fund: Schroder Real Return Fund.
Performance: 7.5% p.a. by diversifying across asset classes including commodities.
Sample Portfolio
Using $100,000 here’s a balanced portfolio:
40% Australian Shares: $40,000 in Colonial First State Australian Share Fund.
30% International Shares: $30,000 in Magellan Global Fund.
20% Fixed Income: $20,000 in PIMCO Australian Bond Fund.
10% Property: $10,000 in Charter Hall Direct PFA Fund.
This is a growth, income and diversification focused portfolio.
How to Invest in Managed Funds
Choose a Platform: Use platforms like Netwealth, Praemium or HUB24 to access a wide range of managed funds and ensure they align with your investment objectives and preferences.
Fund: Deposit $100,000 and make sure the platform supports your preferred banking methods for easy deposits and withdrawals.
Choose: Evaluate funds on historical performance, fees and asset types to ensure they fit your risk profile and goals.
Allocate: Example: Invest $25,000 in each of 4 funds to diversify your portfolio and spread risk across different asset classes.
Monitor and Adjust: Review your portfolio every 6 months and adjust if any funds outperform or underperform significantly. Rebalance to stay on track with your overall strategy.
Key Points
Fees:
Managed funds have annual fees ranging from 0.8% to 2.5%. Magellan Global Fund’s fee is 1.35%.
Tax:
Distributions from managed funds may include capital gains and income, both taxable. But funds with imputation credits can reduce tax.
Market Trends:
Stay up to date on trends in sectors or regions. For example, sustainable managed funds are on the rise as ESG (Environmental, Social, and Governance) investing becomes more popular.
Real Estate Investment Trusts (REITs)
Invest $100,000 in REITs and get exposure to the property market without owning physical property. It’s passive income, diversification and capital growth without the hassle of managing physical assets.
What are REITs
REITs are publicly listed companies that own and manage income producing properties like shopping centres, offices and residential complexes. By 2023 Australia’s REITs sector (A-REITs) was over $150 billion in size, global.
Benefits of REITs:
Passive Income: REITs are required to distribute at least 90% of taxable income as dividends so you get regular cash flow as an investor, making them a source of passive income.
Diversification: REITs give you exposure to different properties and sectors so you can diversify your portfolio with one investment that covers different types of real estate and locations.
Liquidity: REITs like Dexus (ASX: DXS) are liquid with an average daily volume of $40m so you can easily buy and sell units.
Define Your Investment Strategy Real Estate Investment Trusts (REITs)
Investment Objectives:
Income: Consider REITs with high yields like Stockland (ASX: SGP) which has a 6.3% yield for regular income through dividends.
Growth: Prioritise REITs that invest in high demand sectors like industrial properties or data centres which tend to benefit from increasing demand and have strong long term growth.
Risk:
Low: REITs in essential sectors like healthcare, Arena REIT (ASX: ARF).
Medium: Diversified REITs across multiple sectors, GPT Group (ASX: GPT).
High: Niche REITs like Goodman Group (ASX: GMG) which targets high growth industrial and logistics properties.
Timeframe:
Short (1-3 years): REITs in stable sectors like residential.
Long (5+ years): Growth REITs in emerging sectors like green buildings.
Diversify your REIT portfolio
Retail:
Despite e-commerce, prime retail spaces are in demand.
Example REIT: Scentre Group (ASX: SCG).
Performance: SCG 5.7% p.a. dividend yield over the last 10 years.
Commercial:
Office spaces in CBDs are stable but demand is evolving with hybrid work models.
Example REIT: Dexus (ASX: DXS).
Performance: DXS 6.1% p.a. total return over 5 years.
Industrial:
Warehousing and logistics hubs are in high demand driven by e-commerce growth.
Example REIT: Goodman Group (ASX: GMG).
Performance: GMG 13.4% p.a. over the last 10 years.
Specialised:
Healthcare, childcare and aged care facilities are recession proof.
Example REIT: Arena REIT (ASX: ARF).
Performance: ARF 5.8% dividend yield.
Residential:
Build to rent is taking off in Australia.
Example REIT: Mirvac Group (ASX: MGR).
Performance: MGR 7.2% p.a. over the last 10 years.
Sample Portfolio
Here’s a diversified REIT portfolio with $100,000
30% Industrial: $30,000 in GMG.
25% Commercial: $25,000 in DXS.
20% Retail: $20,000 in SCG.
15% Specialised: $15,000 in ARF.
10% Residential: $10,000 in MGR.
This is an income, growth and resilience balanced portfolio.
How to Invest in REITs
Open a Brokerage Account: Platforms like CommSec or NABTrade allow you to easily buy REITs, with tools to research and trade property related securities.
Fund your Account: Deposit $100,000 into your brokerage account so you have enough funds to buy into each sector.
Choose REITs: Choose REITs based on yield, sector focus and growth potential. Pick properties or sectors that suit your risk tolerance and investment strategy.
Buy: Example: Buy 1,500 units of SCG at $3.50 per unit for $5,250. Make sure your order size and price is aligned with your portfolio goals and funds available.
Monitor and Rebalance: Review your REIT holdings every quarter to check performance, rebalance according to market or sector changes and adjust allocations for maximum return.
Points to Consider
Dividend Yields:
REIT dividends are taxed but often have tax advantaged components like capital return.
Market Trends:
Keep an eye on sector specific changes, like the rise of data centre REITs due to cloud computing.
Economic Factors:
Interest rates can impact REIT values. Watch the trends to align with your investment strategy.
Direct Property
Investing $100,000 in direct property can be a strategic way to build wealth through capital growth and rental income. This is tangible ownership, long term stability and tax benefits.
What is Direct Property Investment
Direct property investment means buying residential, commercial or industrial real estate. Australia’s $10 trillion residential market with 6.8% annual median price growth over 20 years shows its potential for long term capital growth.
Benefits of Direct Property Investment
Capital Growth: Properties in high demand suburbs like Arncliffe (Sydney) or Werribee (Melbourne) often see significant long term growth, so potential for strong capital growth over time.
Rental Income: Properties generally return 3-5% pa, returns vary depending on location and property type, so a steady income stream for investors.
Tax Benefits: Investors can claim tax deductions for property depreciation, negative gearing and related expenses to reduce taxable income and boost returns.
What’s Your Investment Strategy
Investment Objectives:
For capital growth: Target suburbs with infrastructure development like Rockbank in Melbourne or New Norfolk in Tasmania.
For steady yields: Go for regional areas with high rental demand like Gladstone in Queensland where yields are over 5% pa.
Risk Tolerance:
Low Risk: Established suburbs like Box Hill in Melbourne.
Moderate Risk: Emerging suburbs with growth potential like Cranbourne in Victoria have affordability and appreciation.
High Risk: Regional towns like Bundaberg in Queensland have high yields but market volatility.
Investment Timeframe:
Short-Term (1-3 years): Focus on areas with planned developments that will drive quick growth.
Long-Term (5+ years): Invest in growth corridors like Tarneit in Melbourne for long term capital growth and rental returns.
Diversify Your Property Portfolio
Residential Property
Australian residential market has seen long term growth, Sydney and Melbourne leading in price growth.
Example: 2 bedroom apartment in East Perth averages $600,000, 4.2% pa rental return.
Commercial Property
Commercial properties have higher yields but require larger upfront investment and longer lease terms.
Example: Office in Adelaide CBD is $800,000, 6.5% pa rental return.
Regional Property
Regional hotspots like Launceston in Tasmania are becoming more popular due to affordability and lifestyle.
Example: 3 bedroom house averages $450,000, 5%+ rental return.
How to Invest in Direct Property
Research Locations: Use CoreLogic or SQM Research to research market trends, vacancy rates and property performance in the area to make an informed decision.
Get Financing: Apply for a mortgage, choose an offset account and weigh up the pros and cons of fixed and variable rates based on your goals.
Get Professionals: Engage a buyer’s agent, conveyancer and building inspector to make the process easier, thorough due diligence and legal support during the purchase.
Buy Property: Example: Invest in a $600,000 property with a $100,000 deposit and 80% LVR, aligns with your risk profile and financial capacity.
Key Points
Interest Rates:
As of 2023 Australian mortgage rate is 5.5%, affects loan affordability. Fixed rate options can provide stability in a rising rate environment.
Market Trends:
Stay up to date with government policies like First Home Buyer Scheme which can impact demand in certain areas. For example suburbs near transport hubs tend to have higher demand and growth.
Tax:
Australian investors have negative gearing, property expenses can offset rental income. For example a $20,000 shortfall between rental income and property expenses can reduce taxable income significantly.
Fixed Income Securities
Invest $100,000 in fixed income securities for stability, predictable returns and risk reduction in your portfolio. Suitable for conservative investors looking for steady income and low volatility.
What are Fixed Income Securities
Fixed income securities are debt instruments that provide regular interest payments and principal repayment at maturity. In Australia’s $1.2 trillion market, government bonds are the most popular, followed by corporate bonds and fixed income ETFs.
Fixed Income Securities Benefits:
Predictable Income: Fixed income investments like government bonds pay regular interest, guaranteed. For example Australian Government Bonds yield 4% pa.
Capital Preservation: High grade securities like government bonds have low risk of principal loss, perfect for conservative investors looking for stability and safety in their portfolio.
Diversification: Fixed income securities reduce portfolio risk by reducing volatility, a counterweight to equities and smooth out market fluctuations.
What’s Your Investment Strategy
Investment Objectives:
For income: Invest in long term government bonds yielding over 3.5%.
To get more returns: Consider corporate bonds like NAB Capital Notes yielding over 5%.
Risk:
Low: Government bonds like Australian Treasury Bonds 2033.
Moderate: Investment grade corporate bonds from Telstra or Westpac.
Investment Period:
Short Term (1-3 years): Short duration bonds or fixed income ETFs.
Long Term (5+ years): Inflation linked bonds to preserve purchasing power.
Create a Fixed Income Portfolio
Government Bonds:
Example: Australian Government 10 Year Bond.
Performance: 4% pa with AAA credit rating.
Corporate Bonds:
Example: Westpac Subordinated Notes.
Performance: 5.2% pa with moderate credit risk.
Fixed Income ETFs:
Example: BetaShares Australian Government Bond ETF (ASX: AGVT).
Performance: 3.8% pa with diversification and liquidity.
Sample Allocation
Using $100,000 here’s an example:
50% Government Bonds: $50,000 in Treasury Bonds 10 year maturity.
30% Corporate Bonds: $30,000 in NAB Capital Notes.
20% Fixed Income ETFs: $20,000 in AGVT.
This will give you a mix of safety, income and liquidity.
How to Invest in Fixed Income Securities
Open a Brokerage Account: Use Australian platforms like CommSec or NABTrade to set up your brokerage account so you can buy bonds and trade various securities easily.
Choose Securities: Research bonds or ETFs based on credit ratings, yields and maturities. For example, look at high grade bonds or ETFs that match your risk tolerance and investment objectives.
Place Orders: Example: Buy $20,000 in AGVT and $30,000 in Westpac Subordinated Notes, adjust order sizes to suit your investment strategy and portfolio allocation.
Monitor Portfolio: Review your holdings every 6 months to check performance, manage risk and reinvest any proceeds to get the best returns and keep your portfolio in line with the market.
Things to Consider
Interest Rate Risk
Interest rates go up, bond prices go down. Diversify with short duration bonds to reduce risk.
Credit Risk
Focus on high grade securities to reduce default risk.
Tax
Income from bonds is taxable but franking credits can offset tax on dividends from fixed income ETFs.
High Interest Savings Accounts or Term Deposits
Invest $100,000 in high interest savings accounts or term deposits and grow your wealth safely. These options give you guaranteed returns, low risk and fixed interest rates. Here’s an updated guide with statistics, examples and insights for Australian investors.
What are High Interest Savings Accounts and Term Deposits
High interest savings accounts give you flexible access to your money with interest rates up to 5% pa, often with bonus conditions. Term deposits lock your money in and offer 4.5% to 6% pa depending on term and institution.
Advantages of High Interest Savings Accounts and Term Deposits:
Guaranteed Returns: Fixed interest rate options remove market risk, give you predictable growth and are a safe option for those who want stability and consistency.
Capital Security: Deposits up to $250,000 are covered by the Australian Government’s Financial Claims Scheme so your money is safe in case the bank fails or is in financial trouble.
Flexible vs Fixed: High interest savings accounts give you liquidity and easy access to your money, term deposits give you discipline with fixed terms and penalties for early withdrawal.
Set Your Investment Strategy
Investment Objectives:
For flexibility choose savings accounts like ING Savings Maximiser, 5% pa with monthly deposits.
For higher returns choose term deposits like UBank’s 12 month term deposit, 5.5% pa.
Risk:
Low Risk: Both savings accounts and term deposits are low risk options for capital preservation.
Investment Timeframe:
Short Term (1-3 months): High interest savings accounts or short term term deposits.
Long Term (1-3 years): Lock in higher rates with long term term deposits.
Building a Balanced Portfolio
Savings Accounts:
Example: Westpac Life Savings Account.
Rate: Up to 4.85% pa with regular deposits and no withdrawals.
Short Term Term Deposits:
Example: ANZ Term Deposit.
Rate: 4.75% pa for 3 months.
Long Term Term Deposits:
Example: NAB Term Deposit.
Rate: 5.8% pa for 24 months.
Sample Portfolio
Using $100,000 here’s an example:
40% High Interest Savings Account: $40,000 in ING Savings Maximiser.
30% Short Term Term Deposits: $30,000 in ANZ Term Deposit for 3 months.
30% Long Term Term Deposits: $30,000 in NAB Term Deposit for 24 months.
How to Invest
Compare Rates: Use comparison tools like Canstar to compare the rates. For example UBank offers 5.5% pa for 12 month term deposits so you can get competitive returns.
Open an Account: Many Australian banks offer online applications for savings accounts and term deposits so it’s easy to open and manage your investment accounts.
Deposit Funds: Make sure you meet the bonus interest conditions, like regular deposits, to get the most out of your savings accounts and higher interest rates.
Check Rates: Review your portfolio as term deposits mature and compare current rates to get the best rates and optimise returns as the market changes.
Points to Consider
Fees:
Savings accounts have no fees, term deposits have fees for early withdrawal.
Tax:
Interest earned is taxable income. For example a $5,000 return on a term deposit at 5% pa is taxed in your tax bracket.
Market:
The Reserve Bank of Australia’s cash rate changes affect savings and term deposit rates. In 2023 rates went up 2% so deposit returns increased.
Super Contributions
Making super contributions is a smart way to have a comfortable retirement and tax benefits. By contributing strategically you can grow your retirement savings.
What are Super Contributions
Super contributions are payments into your retirement fund, either by your employer or yourself. In 2023 Australia’s super system managed over $3.5 trillion in assets, one of the largest in the world.
Types of Super Contributions:
Employer Contributions: Employers have to contribute 11% of your ordinary earnings to your super under the Superannuation Guarantee (SG) so you can build your retirement savings.
Personal Contributions: Individuals can make additional contributions to their super through concessional (pre-tax) or non-concessional (after-tax) contributions to get more for retirement.
Government Co-Contributions: Low income earners may be eligible for government co-contributions up to $500 a year if they make eligible personal contributions to super so more for retirement.
Plan Your Contributions
Concessional Contributions (Pre-Tax):
Limit: $27,500 per year.
Tax Rate: 15% on contributions, lower than most tax brackets.
Example: Salary sacrifice $10,000 to reduce taxable income and get more for retirement.
Non-Concessional Contributions (After-Tax):
Limit: $110,000 per year or $330,000 under the bring forward rule (if under 75).
Example: Contribute $100,000 from an inheritance to grow your super tax free.
Spouse Contributions:
Offset: Get up to $540 in tax offsets for contributions up to $3,000 to a lower earning spouse’s super fund.
Building a Super Growth Strategy
Investment Options:
Super funds offer diversified portfolios, conservative, balanced and growth options.
Example: A balanced option with 70% growth assets (equities) and 30% defensive assets (bonds) has returned 7% pa over the last 10 years.
Diversification:
Spread your super investments across asset classes for stability and growth.
Example: Australian shares, international shares, property, fixed income.
Tax Effective Strategies:
Example: Transition to a retirement account at preservation age (60) where earnings are tax free.
Example Contribution Plan
Using $100,000 here’s how you might split your contributions over a year:
Employer Contributions: $11,000 under SG.
Salary Sacrifice: $10,000 (pre-tax).
Non-Concessional: $20,000 (after-tax).
Total: $41,000 into your super fund.
This plan maximises tax savings and stays within the limits.
How to Get More for Your Super
Review Your Fund: Compare fees, performance and features of different super funds. For example industry funds like AustralianSuper have delivered strong returns with low fees.
Consolidate Accounts: Merge multiple super accounts to reduce fees and simplify your super so you have fewer accounts and less to manage for your retirement.
Contribute: Set up salary sacrifice or direct deposits for personal contributions. For example, ask your employer to redirect $500 a month into your super to get more.
Check Your Performance: Review your superannuation statements at least quarterly to track performance and adjust your investment strategy as needed to stay on track for your retirement goals.
Key Points
Contribution Caps:
Going over contribution caps means penalty tax rates. For example going over the $27,500 concessional cap means extra tax, which reduces the effectiveness of your super strategy.
Government Incentives:
Low income earners may be eligible for co-contributions and the low income superannuation tax offset (LISTO). These can add a lot to your super with minimal extra cost.
Market Trends:
Economic changes impact super returns. Diversified funds did well in 2023 with an 8.3% average return, so a balanced approach is key.
FAQs
How can I invest with a small amount of money?
You can start small with micro-investing platforms like Raiz or Spaceship. They allow investments from as little as $5, pooling funds into diversified portfolios for simplicity and minimal effort.
Or invest in exchange traded funds (ETFs) or shares through a brokerage account with no minimum balance. Platforms like CommSec Pocket are for small investors who want to grow their money over time with ease.
What’s the minimum to invest in the Australian stock market?
The minimum trade size for stocks on the ASX is $500 plus brokerage. This makes it accessible to start and build a portfolio.
For smaller amounts micro-investment apps allow you to invest in fractional shares, so there’s no big barrier to entry. This diversifies your investments and reduces the amount required to get started.
Shares, ETFs or managed funds?
Shares give you direct ownership with higher potential returns but require research and active management. ETFs give you diversification, liquidity, low fees and easy portfolio management.
Managed funds are for investors who want professional management and access to many assets. Although the fees are higher, they’re worth it if you don’t want to manage your own investments.
What are the tax implications in Australia?
Capital gains tax (CGT) applies when you sell assets like shares or property for a profit, with discounts available if you hold assets for over a year before selling them.
Dividends from Australian shares may have franking credits which reduce the tax on your income. Tax effective strategies can help you get the most out of your returns while aligning with your overall financial goals.
How do I diversify my portfolio?
Diversification means spreading your investments across different asset classes like shares, bonds, property and cash. It reduces risk by balancing returns in different market conditions.
Geographic diversification, such as investing overseas, minimises dependence on Australia’s economic trends. ETFs and managed funds make diversification easy and affordable.
What are the risks of property vs shares?
Property investments give you stability and income through rent but are exposed to market downturns, illiquidity and maintenance costs. Shares give you liquidity but can be volatile.
Shares often give you higher returns over the long term but their value can move more. Property investments give you predictable income but may struggle to keep up with inflation in some areas.
How do I work out my risk tolerance?
Assess your financial situation, investment goals and time horizon to see how much risk you can take. A longer time horizon gives you more room for market volatility.
Risk tolerance assessments can be based on age, income, time frame and past experience. For example younger investors can take on more risk for long term growth.
What are the benefits of investing through super?
Super has tax concessions, concessional contributions are taxed at 15% which is lower than personal income tax rates. Investment earnings in super are taxed at a maximum of 15%.
Investing through super also grows your retirement savings over time. Contributions like salary sacrifice are a great way to boost your super balance while reducing your taxable income in the short term.
How do I invest ethically or in sustainable funds in Australia?
Ethical investing is about companies that reduce their environmental impact. Sustainable funds often focus on green energy, clean tech or companies with good governance.
In Australia, sustainable investment options include ETFs like the BetaShares ESG ETF. These funds align to environmental, social and governance (ESG) criteria so you can get financial returns responsibly.
What are the top performing ETFs in Australia?
Top performing Australian ETFs include the SPDR S&P/ASX 200 Fund (STW) which tracks Australian large caps. The BetaShares Australian High Interest Cash ETF is for conservative investors who want stable returns.
Other options include the Vanguard Australian Shares Index ETF and iShares MSCI Emerging Markets ETF. Performance will depend on market conditions but these funds have shown consistent returns and diversification.
How do I invest in international markets from Australia?
You can invest in international markets via ETFs and managed funds. International funds like the Vanguard Global Shares Fund gives you exposure to global equities from multiple countries.
Or you can buy shares directly on overseas exchanges through brokerage accounts like SelfWealth or Interactive Brokers and get access to foreign markets with some fees applying.
What to look for in a financial adviser?
When choosing a financial adviser make sure they have the right certifications like CFP or ASIC licenses. Check their experience, fees and specialisations to find someone who aligns with your financial goals.
A good adviser will take a holistic approach to your finances. Understand their service fees, consider their fiduciary duty to act in your best interest and review any conflict of interest policies they may have.
How do I check my investments?
To check investment performance compare your returns to the relevant benchmarks. Review the performance of funds, assets or portfolios using tools like Morningstar or investment app features.
Consider other factors like volatility, dividend yield and long term growth not just short term returns. Check your portfolio against your investment objectives to make sure it’s still aligned to your risk profile and goals.
What are the costs and fees for each investment platform?
Investment platform fees include brokerage fees, management fees and sometimes financial advice commissions. Compare the total cost of each platform before you commit to get value.
ETFs and managed funds have management expense ratios (MERs). Low cost platforms like Robinhood and SelfWealth charge flat fees per trade while traditional brokerages have higher commission structures or extra platform fees.
How do bonds compare to shares in terms of returns and risk?
Bonds offer stable lower returns than shares but with less risk and more predictability. Bonds are for investors who want income generation without equity market volatility.
Shares offer higher returns but are subject to market fluctuations so higher risk. Investors who want safety and lower volatility go for bonds and those who are willing to take risk invest in equities.
What’s happening in the Australian property market?
The Australian property market has been resilient especially in the major cities but housing affordability is still a issue. Interest rates and housing supply are the key drivers of the current trends.
Regional areas are becoming more popular for long term investments because of lifestyle and affordability. Higher demand in certain suburbs means continued price growth and investment opportunities in urban and regional areas.
How do I protect my investments during a downturn?
Spread your portfolio across asset classes to reduce risk. During downturns a diversified portfolio can reduce losses and maintain stable returns in other sectors.
Consider increasing exposure to defensive sectors like utilities, consumer staples or bonds. And keep some cash reserves so you can take advantage of opportunities when the market recovers from a downturn.
How does inflation impact investment decisions?
Inflation erodes purchasing power over time so you need to consider it in your investment decisions. Inflation protected assets like inflation linked bonds can be a safety net against rising prices.
Investors can beat inflation by allocating to assets that perform well during inflationary times like real estate and stocks in sectors with pricing power. Long term returns to consider here.
How do I get access and invest in emerging technologies or start-ups in Australia?
You can invest in emerging technologies or start-ups in Australia through venture capital funds, early stage ETFs or direct equity in companies listed on platforms like EquityCrowd.
Start up funds offer high returns but higher risk. Or technology focused ETFs like the BetaShares NASDAQ 100 ETF gives you exposure to a basket of innovative high growth companies.
Originally Published: https://www.starinvestment.com.au/how-to-invest-money-in-australia-2025/
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