Best ETFs (Exchange Traded Funds) For Kids In Australia
Investing for your child’s future is a powerful way to give them a head start in life—whether it’s for education, their first home, or simply building wealth.
Exchange-Traded Funds (ETFs) make this easier than ever. They’re affordable, flexible, and designed to grow over time, making them perfect for long-term goals. This guide is written just for parents, breaking down everything you need to know about ETFs in Australia—from why they’re a smart choice to how to pick the best ones for your child.
We’ll keep it simple, avoid confusing terms, and give you clear steps to get started.
Last updated: March 2025
Picking the Best ETFs for Your Child
Choosing an ETF depends on what you’re saving for, how much risk you’re okay with, and how long you’ll invest. Since kids have years ahead, you can lean toward growth (higher potential, some ups and downs) or mix in safer options as they get closer to needing the money. Here’s what to think about:
- Fees: Lower is better—look for fees between 0.04% and 0.18% per year.
- Growth: Check how the ETF has done over time (though past results aren’t a promise for the future).
- Values: Want to support green or ethical companies? There are ETFs for that.
- Risk: Growth ETFs can bounce around more; safer ones (like bonds) stay steady.
We’ve grouped the top ETFs into three types: broad market (all-purpose growth), thematic (focused on trends or values), and conservative (low-risk stability).
1. Broad Market ETFs
These cover big markets—like Australia’s top companies or global stocks—for steady, long-term growth.
| ETF Name | ASX Code | What It Covers | Fee (per year) | 5-Year Growth* |
|---|---|---|---|---|
| SPDR S&P/ASX 200 ETF | STW | Top 200 Australian companies | 0.05% | 8.5% |
| iShares S&P/ASX 200 ETF | IOZ | Top 200 Australian companies | 0.04% | 8.7% |
| Vanguard Australian Shares Index ETF | VAS | Top 300 Australian companies | 0.07% | 9.0% |
| iShares S&P 500 ETF | IUS | Top 500 US companies | 0.07% | 12.5% |
| Vanguard MSCI Index Intl Shares ETF | VGS | Global stocks (ex-Australia) | 0.18% | 11.0% |
*Growth as of March 2025—can change over time.
- Why Pick These?: They’re cheap and spread your money across lots of companies. VGS, for example, adds international flavor so you’re not just tied to Australia.
2. Thematic ETFs
These focus on specific areas—like sustainability or tech—for parents who want investments that match their values or future trends.
| ETF Name | ASX Code | Focus | Fee (per year) | 5-Year Growth* |
|---|---|---|---|---|
| BetaShares Aust Sustainability Leaders ETF | FAIR | Aussie green companies | 0.49% | 7.5% |
| iShares Core MSCI Aust ESR Leaders ETF | IESG | Aussie ethical leaders | 0.15% | 8.0% |
| BetaShares Global Sustainability Leaders ETF | ETHI | Global green companies | 0.49% | 9.5% |
| BetaShares Global Cybersecurity ETF | HACK | Cybersecurity firms | 0.49% | 10.0% |
| BetaShares Future Leaders ETF | BFT | Tech innovators | 0.49% | 9.0% |
*Growth as of March 2025—can vary.
- Why Pick These?: They let you invest in what matters to you. ETHI supports ethical global companies, while HACK bets on the growing need for cybersecurity.
3. Conservative ETFs
These focus on bonds (loans to governments or companies) for lower risk and steady returns—great for balance or shorter goals.
| ETF Name | ASX Code | Focus | Fee (per year) | 5-Year Growth* |
|---|---|---|---|---|
| iShares Core Composite Bond ETF | IAF | Australian bonds | 0.10% | 2.5% |
| SPDR S&P/ASX Australian Bond Fund | BOND | Australian bond index | 0.15% | 2.0% |
| BetaShares Aust Government Bond ETF | AGVT | Aussie government bonds | 0.20% | 2.3% |
*Growth as of March 2025—lower because they’re safer.
- Why Pick These?: They’re less bumpy than stocks, perfect for protecting money as your child gets closer to using it.
Why ETFs Are Great for Kids
ETFs are funds you can buy and sell on the stock market, like the Australian Securities Exchange (ASX). They often follow a group of investments—like the top 200 companies in Australia or global tech giants—so your money isn’t tied to just one stock. Here’s why they work so well for kids:
- Low Costs: ETFs have small fees, so more of your money stays invested and grows.
- Spread-Out Risk: One ETF can include hundreds of companies, making it safer than betting on a single stock.
- Easy to Manage: You can buy or sell them anytime, just like shares.
- Growth Over Time: With years ahead (like 10 or more), ETFs can smooth out market ups and downs and build wealth.
Starting early is key. The longer your money is invested, the more it can grow through compounding—where your earnings make more earnings. Let’s explore how to make this work for your child.
Setting It Up: The Legal Basics
Kids under 18 can’t open investment accounts themselves in Australia, so you’ll need to step in as their trustee. This just means you’ll manage the investments for them until they’re adults. Here’s what to know:
- Trustee Accounts: You can open an account in your name “in trust” for your child. Platforms like SelfWealth or CommSec let you do this easily.
- Tax File Number (TFN): Use your child’s TFN when you set up the account. Without it, any money the investments earn could be taxed at a high rate—using their TFN keeps things fair.
Quick Tip: For tricky setups (like a family trust), chat with a financial advisor to make sure everything’s done right.
Taxes: Keeping It Simple
Taxes can eat into your child’s savings if you’re not careful. Here’s the basics:
- Earnings: If the investments make more than $416 a year, it might get taxed at a high rate unless you use your child’s TFN.
- TFN Trick: Adding their TFN keeps taxes normal instead of punishingly high.
- Selling Later: Hold investments “in trust,” and you can pass them to your child at 18 without a tax bill. Selling or gifting otherwise might mean paying capital gains tax.
Quick Tip: A tax advisor can help with clever ideas, like trusts, to save even more.
Where to Buy ETFs: Kid-Friendly Platforms
You’ll need a brokerage account to buy ETFs, and some are set up perfectly for kids’ investments:
SelfWealth: Has a Kids Share Trading Account—$9.50 per trade, start with $500. Great for small, regular buys.
CommSec: Lets you open a trustee account for your child. Popular, reliable, and gives you access to all ASX ETFs.
Pearler: Simple to use, with tools to add small amounts regularly—perfect for beginners.
Why These?: They’re affordable, easy, and built for parents investing for kids.
How to Choose the Right ETF
With so many choices, here’s a quick guide to pick the best ETF for your child:
- Know Your Goal: Education? A house? Just wealth? This sets your timeline.
- Risk Comfort: Okay with ups and downs? Try VGS or HACK. Prefer steady? Go for IAF.
- Check Fees: Low fees (like IOZ at 0.04%) keep more money growing.
- Match Your Values: Care about the planet? Pick FAIR or ETHI.
- Mix It Up: Blend ETFs—like VGS (global), IOZ (Aussie), and IAF (bonds)—for balance.
Sample Mix:
- 60% VGS (worldwide growth)
- 20% IOZ (Australian boost)
- 20% IAF (safe and steady)
This combo spreads risk and aims for solid growth over time.
Investing for your child is easier than you think with ETFs. Pick the right ones, set up a trustee account, and watch their future grow. Key points to remember:
- Start Now: Time is your superpower—compounding works best over years.
- Add Regularly: Even small amounts add up big.
- Ask for Help: A financial advisor can fine-tune your plan.
Whether it’s VGS for global growth, ETHI for ethical values, or IAF for safety, there’s an ETF for your family. Take that first step—your child will thank you later!