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Top brokers Aussies use to invest in stocks and ETFs

by Stephanie Stefanovic, Content Manager, Sharesight | Aug 31st 2023

With the ever-growing number of stockbrokers available to Australian investors, many investors are left wondering which is the best broker to suit their needs. Priorities differ depending on the individual investor; for example, are they a frequent trader or more of a long-term investor? And do they prefer stocks or ETFs? With some of these questions in mind, we take a look at the most popular brokers among Sharesight users in FY22/23.

Best brokers for Australian investors

To determine the most popular Australian broker, we looked at the brokers with the highest number of trades amongst our user base. In this case, CMC was the clear winner, followed by CommSec and Selfwealth.

top aussie brokers

While CommSec topped this list in FY21/22 with 449,843 trades, this past financial year CMC has come out on top with 399,774 trades compared to 363,814 trades in FY21/22.

What makes CMC such a popular choice for Australian investors? The broker’s expansive global market support – including $0 brokerage fees for international trades – is likely one reason why CMC has been so popular with Australian investors. CMC is also connected to the Sharesight API, allowing CMC customers to effortlessly track their trades in Sharesight.

"We’re always trying to evolve our user experience and meet changing customer needs,” says Andy Rogers, Director of Stockbroking at CMC Markets.

“The API makes it easy to bring Sharesight features onto our platform and as a result, we can move quickly to enhance our customer's experience."

CommSec also remained a clear favourite for Australian investors in FY22/23, which can likely be attributed to CommSec’s long history as a leading Australian broker. It’s also easy for Australian investors to get their CommSec trades into Sharesight, with support for CommSec CSV files (spreadsheets) to import historical trading data into Sharesight, plus the ability to automatically forward trade confirmation emails to Sharesight to capture any ongoing trades.

Selfwealth maintained its third place ranking in FY22/23, with Australian investors likely gravitating towards the broker due to its low-cost flat fee trading and access to US markets. Much like CommSec, Selfwealth also supports CSV files and trade confirmation forwarding, making it easy for investors to keep their trading information up to date in their Sharesight portfolio.

“Our customers have commented on the ease of use of Sharesight, and it’s regularly come up as a point of interest in our Selfwealth Live YouTube sessions,” says Selfwealth’s Brand and Content Lead, Robert Marfell.

Top Australian brokers for ETF investors

With ETFs continuing to grow in popularity, especially among new investors or those seeking diversification, we also felt it was important to highlight the most popular brokers for ETF investing. As shown in the chart below, CMC came out on top, followed by Pearler, with Selfwealth in third place.

Top Aussie brokers for ETFs

With CMC being Sharesight users’ preferred broker overall, it makes sense that the broker also topped the list of investors’ favourite brokers for investing in ETFs.

It’s also not hard to see why Pearler was a close second, considering the platform’s focus on long-term investing, with ETF investing being a key strategy for many long-term investors. And much like CMC, Pearler has integrated with the Sharesight API – allowing investors to measure their long-term portfolio performance with ease.

According to Selfwealth, ETFs are one of the most sought-after assets among its customers – and they are growing in popularity.

“Selfwealth sees ETFs as the investment product of the future,” says Robert.

“Across ages, uptake increases as generations get younger. Baby Boomers hold the least, with ~20% of their portfolio in ETFs, while Gen Z holds the most with nearly 60% of their portfolios in ETFs.

“But that doesn’t mean ETFs are for those with smaller portfolios, just that differing categories of wealth use them in different ways. Selfwealth millionaires, for instance, are very fond of Betashares’ AAA ETF, and use it to optimise interest from cash.”

As can be seen from the chart below, the most popular ETF amongst our Australian user base was Vanguard’s Australian Shares Index (ASX: VAS), followed by Vanguard’s MSCI Index International Shares (ASX: VGS) and Betashares’ Nasdaq 100 (ASX: NDQ). These rankings remain unchanged from FY21/22, with the only notable difference being a significant increase in the number of trades in VAS and VGS, while trades in NDQ have marginally decreased. This is likely due to tech stocks’ lagging performance throughout most of FY22/23, with investors potentially preferring to hold or put off trades in NDQ until there was more certainty in the market.

Most traded ETFs by Australian investors

In general, it’s easy to see why VAS remains a popular choice for Australian investors, as this ETF tracks the ASX 300, making it a good choice for investors looking to diversify and balance their portfolio while still focusing on Australian shares.

VGS also tends to be a popular ETF for Australian investors looking to diversify their portfolio, as it provides exposure to many of the world’s biggest companies listed in developed countries, and is exposed to fluctuating values of foreign currencies.

At the same time, NDQ tends to be popular with investors seeking exposure to the US tech industry, as this ETF tracks the NASDAQ 100, which includes a diverse range of tech stocks, including some of the world’s largest companies by market capitalisation.

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