Understanding the Basics of Starting in the Share Market
Getting started in the share market doesn’t have to be complicated. In fact, I believe that the simpler the approach, the better, especially during the early stages. With a modest amount like $5,000 and exchange-traded funds (ETFs), it’s possible to gain exposure to quality assets, build a diversified portfolio, and develop the habit of investing.
Here are three ASX ETFs that I think are a great place to start for anyone looking to enter the market.
Vanguard Australian Shares Index ETF (ASX: VAS)
If I were starting out with ETFs, I would want exposure to the local market. The Vanguard Australian Shares Index ETF provides that. It gives you access to a broad range of Australian companies, from the largest names like BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and Telstra Group Ltd (ASX: TLS), through to mid and smaller companies such as Elders Ltd (ASX: ELD) and DroneShield Ltd (ASX: DRO).
This level of diversification is important because it means you’re not relying on a single company or sector. Instead, you’re participating in the overall performance of the Australian economy. Additionally, there is the benefit of dividends, with Australian shares typically offering income supported by franking credits. For a beginner, this is a very straightforward foundation.
Vanguard MSCI Index International Shares ETF (ASX: VGS)
Australia is only a small part of the global market. That’s why having international exposure is also essential. The Vanguard MSCI Index International Shares ETF gives access to around 1,300 large and mid-cap companies across developed markets. This includes global leaders like Apple, Microsoft, NVIDIA, and Johnson & Johnson.
What I like about this ETF is how it complements Australian exposure. The ASX is heavily weighted toward banks and miners. The VGS ETF brings in sectors like global technology, healthcare, and consumer brands, which helps balance a portfolio. For me, this is about broadening the opportunity set.
BetaShares Nasdaq 100 ETF (ASX: NDQ)
The final ETF I would consider has a growth tilt. The BetaShares Nasdaq 100 ETF focuses on the Nasdaq 100 index, which includes many of the companies driving innovation globally. Top holdings include Alphabet, Amazon.com, Meta Platforms, and Tesla Inc. This ETF gives exposure to areas like artificial intelligence, cloud computing, electric vehicles, and digital platforms.
It is more concentrated and can be more volatile than a broad market ETF. However, I think having a portion of your portfolio exposed to these kinds of businesses makes sense, especially over a long time horizon. It adds a different growth dynamic alongside the broader exposure of the VAS and the VGS ETFs.
Foolish Takeaway
Starting with ETFs is one of the easiest ways to begin investing. The VAS ETF gives you broad exposure to the Australian market, the VGS ETF opens the door to global developed markets, and the NDQ ETF adds a focused growth component tied to innovation. Together, they create a simple, diversified starting point. And from my perspective, that is what a beginner investor needs.
Additional Resources for Investors
For those interested in further exploration, there are several articles that provide insights into various aspects of investing. These include:
- How long does it take to become a millionaire with ASX shares?
- 3 ASX ETFs to fund a comfortable retirement
- Why now could be the time to buy these popular ASX ETFs
- What are the ASX’s top 3 index funds for passive investing?
- 5 ASX ETFs to buy in April and hold until 2036
These resources offer a deeper understanding of investment strategies and options available to investors. Whether you’re just starting out or looking to refine your approach, there is valuable information to be found.
