A Simple Guide to ETFs for New Investors
ETFs are like playlists for investing – curated collections you can buy in one go. But how do you pick one that fits your values?
What Is an ETF?
An Exchange-Traded Fund (ETF) is a basket of investments – like shares or bonds – that you can buy and sell on the stock market. Think of it as buying a slice of an entire market, industry, or idea, all in one trade.
Why ETFs Are Popular
Lower cost than buying lots of individual shares
Instant diversification (your risk is spread out)
Easy to access via most trading platforms
Available in ethical, sustainable, or tech-themed formats
Types of ETFs
Index ETFs: These ETFs reflect well-known indices like the ASX200 or S&P 500. They are a low-cost way to invest broadly across a market and are perfect if you want steady exposure to large companies.
Thematic ETFs: This group of ETFs focus on specific trends or industries like clean energy, robotics, cybersecurity or future mobility. Great if you’re excited about where the world is heading and want your money to follow the theme.
Ethical ETFs: This is a set of ETFs that aim to include companies that meet certain social, environmental or governance standards and avoid those that don’t. But not all “ethical” means the same thing. Ethical ETFs are further broken down into ESG, SRI and Impact ETFs. Find out more here.
How to Evaluate an ETF
What’s inside the box? Look at the top holdings – are they aligned with your values?
What’s the fee? This is listed as the Management Expense Ratio (MER). Lower is generally better.
How is it screened? Look for ESG (Environmental, Social, Governance), SRI (Socially Responsible Investing), or Impact-based filtering.
Greenwashing Warning
Just because it says “ethical” doesn’t mean it is. Some ETFs include fast fashion, big tech reliant on fossil fuels, or companies with poor labour practices. Always read the fine print. For deeper research, try tools like Morningstar’s ETF screener or Rask’s ETF research guide.
Examples of Ethical ETFs
ETHI: Global sustainability leaders.
FAIR: Australian companies with high ethical standards.
VESG: Vanguard Ethically Conscious International Shares Index ETF.
GRNV: VanEck MSCI Australian Sustainable Equity ETF.
How does inaam fit in?
Instead of decoding ETF jargon yourself, inaam simplifies the process. You tell us what matters to you - climate action, fast fashion or renewable energy – and we build a values-aligned portfolio that can include curated ETFs where they genuinely make sense.
Final Thoughts
ETFs can be a smart, accessible first step into investing. Just make sure yours lives up to its label, because impact starts with intention.
Note: This is general information, not financial advice. Always do your own research or speak to a licensed advisor before investing.