Why more young Australians are turning to ETFs
By Vanguard
Investing strategy
ETFs
New research from Vanguard Australia shows that nearly half of Gen Z and Millennials (45%) are already investing in shares, exchange-traded funds (ETFs) or other investment products. And of the Gen Z investors who aren’t yet investing outside of their super funds, 52% want to start.
At a glance:
- Nearly half of young Australians (45%) are investing in shares, ETFs or other products.
- ETFs are more popular with younger investors, with 1 in 5 Gen Z (19%) holding them.
- Investors under 45 are the fastest-growing group on Vanguard’s platform.
Why ETFs are gaining attention
Vanguard Australia’s latest research report – Sitting on the sidelines: What’s holding Australia back from investing? – highlights that younger Australians are more likely to use a wider mix of investments compared to older Australians, with ETFs playing a key role.
Around 1 in 5 Gen Z investors aged 18 to 28 (19%) hold ETFs, compared to just 4% of Australians aged over 60. That suggests a shift towards newer ways of investing. However, direct shares remain the most popular option, held by 27% of Gen Z investors.
The research also shows young investors aren’t just sticking to one type of asset. Many are exploring different investments, with Gen Z investors more likely than any other group to hold cryptocurrencies and listed investment and property trusts.
While 57% of Australians remain on the sidelines, Gen Z are keen to start investing
Importantly, the research found that nearly six in 10 Australians (57%) remain on the sidelines with no investments outside standard superannuation funds.
While financial factors are a key barrier, the research found that misperceptions, low confidence, and knowledge gaps are holding people back. Among non-investors, more than half of Gen Z (52%) say they are interested in starting to invest, well above the overall average (34%) and those aged over 60 (18%).
A growing generation of investors
Vanguard data shows that around two-thirds of accounts on its Personal Investor platform belong to people under 45 – and this group is growing the fastest.
The data suggests that more young Australians are getting started, and ETFs are often part of that journey.
The research suggests that for many younger investors, the appeal is not just access – it’s simplicity, diversification and a more flexible way to build a portfolio over time.
About the Sitting on the sidelines report
Sitting on the sidelines: What’s holding Australia back from investing? explores how Australians engage with investments outside of standard superannuation funds and considers how these behaviours shape long-term financial outcomes.
The research is based on a survey of a nationally representative sample of 1,002 Australians aged 18 years and over, conducted in February 2026 by FiftyFive5 (part of Accenture Song) on behalf of Vanguard Investments Australia. The achieved sample closely reflects the Australian population by age, gender, and geographic location, with post survey weighting applied to align results to national population benchmarks.
For the purposes of this research, individuals are considered investors if they report holding shares, managed funds, ETFs, cryptocurrencies or listed investment trusts (including REITs), either directly or through superannuation accounts they manage themselves (such as SMSFs or member-direct options). Superannuation assets managed by super funds on members’ behalf are excluded.