Most investors know the usual ETF suspects.
VAS. VGS. IVV. A200. Maybe NDQ if you like a little more sizzle with your long-term investing.
And to be clear, there is absolutely nothing wrong with the classics. They are popular for a reason. They are simple, diversified, low-cost, and for many investors, they may do the heavy lifting in a portfolio.
But once you understand the basics, a new question often appears:
What else is out there?
That was the idea behind a recent Pearler community webinar I ran. Not “which ETF should everyone buy?” and definitely not “here are seven secret ETFs that will change your life”.
More like:
What can different ETFs teach us about portfolio construction?
Because once you realise an ETF is simply a basket, the interesting question becomes: what’s inside the basket, and why?
First, a quick ETF refresher
An ETF, or exchange traded fund, is an investment fund that trades on the stock exchange. The ETF itself is the basket. Inside that basket, there may be hundreds or even thousands of investments.
Some ETFs track an index. Some focus on a sector. Some follow a theme. Some use active management. Some target a specific factor, such as company size, quality, value, or momentum.
That’s why saying “I invest in ETFs” is a bit like saying “I eat food”.
Helpful, but not very specific.
A broad Australian shares ETF and a robotics ETF are both ETFs, but they can behave very differently.
So, rather than looking at seven ETFs as recommendations, let’s look at them as seven examples of how ETFs can work.
1. STW : the old-school Australian shares ETF
Let’s start with a history lesson.
STW was Australia’s first ETF. It launched in 2001, which means it has been around longer than many investors realise.
This matters because ETFs are sometimes spoken about as if they’re shiny new financial products. In reality, they’ve been through market crashes, recessions, recoveries, and plenty of investor panic.
STW tracks the S&P/ASX 200, giving exposure to 200 of Australia’s largest listed companies.
It’s not the most talked-about Australian shares ETF anymore. Vanguard’s VAS tends to get more attention. Betashares’ A200 often enters the conversation because of fees.
But STW is a reminder that sometimes the “boring” end of the ETF world is also the most battle-tested.
And boring can be underrated.
2. MOAT : investing in companies with a competitive edge
One of my favourite investing concepts comes from Warren Buffett and Charlie Munger: the moat.
A moat is the thing that protects a business from competitors.
It might be a powerful brand, a network effect, switching costs, scale, patents, or some other advantage that makes a company difficult to dislodge.
The MOAT ETF looks for companies that Morningstar believes have strong competitive advantages and attractive valuations.
That second part matters.
A wonderful company can still be a poor investment if the price is too high.
MOAT is interesting because it combines two ideas: quality and value. It asks:
Is this a good business?
And is the price reasonable?
That doesn’t mean it will always outperform. No ETF does. But it’s a useful example of how some ETFs go beyond simply buying the biggest companies in an index.
3. IXI : the companies hiding in your pantry
Some ETFs sound exciting.
Robotics. AI. Space. Cybersecurity.
IXI is not that.
IXI focuses on global consumer staples companies. Think businesses that sell the products people tend to buy regardless of what markets are doing.
Food. Drinks. Household goods. Personal care. Supermarket staples.
Companies like Costco, Walmart, Procter & Gamble, Nestlé, Coca-Cola, PepsiCo, and Unilever can appear in this kind of portfolio.
These are not usually the companies that make headlines on finance TikTok.
But they are the companies many of us interact with every week.
That’s what makes IXI interesting. It reminds investors that not every portfolio idea needs to be futuristic. Sometimes, resilience comes from the very ordinary things people keep buying.
Toothpaste may not be thrilling.
But people do tend to keep brushing their teeth.
4. VISM : going smaller than the giants
Most broad global ETFs are dominated by large companies.
That makes sense. The biggest companies take up the most space in market-cap weighted indexes.
But what about smaller companies?
VISM gives exposure to international small companies. These are businesses outside Australia that are generally smaller than the global giants most investors already know.
Why might someone look at small companies?
Because smaller businesses may have more room to grow.
Of course, they may also be more volatile. Smaller companies can be riskier, less established, and more sensitive to economic conditions.
That’s why VISM is a good example of a factor-based idea.
The factor here is size.
Instead of saying, “I want the biggest companies in the world,” this kind of ETF says, “I want exposure to smaller companies that may behave differently over time.”
It’s not automatically better.
It’s just different.
And understanding those differences is a big part of becoming a better investor.
5. FAIR : values, sustainability, and the awkward dinner-party questions
A few years ago, ethical investing was everywhere.
Then performance became more mixed, interest faded a little, and some investors started asking harder questions about what “ethical” really means.
That’s a good thing.
Because ethical investing is personal.
One person’s “responsible” investment may not match someone else’s values.
FAIR is an Australian sustainability-focused ETF. It uses negative screens to exclude certain industries, and positive screens to tilt toward companies considered to have stronger sustainability characteristics.
In plain English, it tries to avoid some of the “naughty” stuff and include more of the “doing better” stuff.
That doesn’t make it perfect.
No ethical ETF can represent every investor’s personal values.
But FAIR is useful because it shows how ETFs can be built around more than geography or company size.
They can also be built around values.
If you care about what you own, it’s worth understanding how an ETF decides what gets included and what gets left out.
6. FHNG : the currency lesson hiding inside a tech ETF
FANG is a well-known ETF that gives exposure to a concentrated group of large US technology companies.
FHNG is its currency-hedged sibling.
That might sound like a boring detail.
It is not.
Currency can have a huge impact on returns for Australian investors buying international assets.
If the Australian dollar falls, unhedged overseas investments may receive a boost when translated back into Australian dollars.
If the Australian dollar rises, the opposite may happen.
For much of the past decade, many Australian investors have become used to currency movements helping their overseas investments.
But that is not guaranteed to continue forever.
FHNG is interesting because it shows how two ETFs can hold similar underlying companies but produce different outcomes because of currency exposure.
That’s a powerful lesson.
Sometimes the investment isn’t just what you own.
It’s also the currency you own it in.
7. DACE : when academic theory meets an ETF
Dimensional is one of the most interesting fund managers in the world, particularly for investors who like evidence-based investing.
DACE is an example of an ETF that draws on decades of academic research around factors.
Factor investing looks at characteristics that may influence long-term returns, such as value, size, profitability, and momentum.
That doesn’t mean the strategy will work every year.
It won’t.
But it does show how ETFs can be built using more than simple index tracking or thematic storytelling.
Some ETFs are designed around research, data, and systematic rules.
DACE is a good reminder that the ETF world has become far more sophisticated than many people realise.
You can build simple portfolios with ETFs.
You can also build very nuanced ones.
The trick is knowing which version you actually need.
A smarter portfolio is not always a more complicated one
After looking at ETFs like these, it can be tempting to think a smarter portfolio means owning more.
More ETFs.
More themes.
More sectors.
More cleverness.
I’m not sure that’s true.
A smarter portfolio may actually be one where every investment has a job.
One ETF might provide broad Australian exposure.
Another might provide global exposure.
Another might add small companies.
Another might tilt toward quality, value, sustainability, or a specific sector.
But if you can’t explain why something is in your portfolio, it might be worth asking whether it belongs there.
Because complexity can make a portfolio look sophisticated while quietly making it harder to manage.
The point isn’t to find hidden gems
The title of this article is “7 ETFs No One Talks About”.
That’s partly true.
These ETFs don’t always get the same airtime as the big broad-market funds.
But the real point is not that these seven ETFs are hidden gems.
The point is that each one teaches a different portfolio lesson.
STW teaches history.
MOAT teaches competitive advantage.
IXI teaches defensiveness.
VISM teaches size.
FAIR teaches values.
FHNG teaches currency.
DACE teaches evidence-based investing.
That’s what makes ETFs so useful as learning tools.
They give investors a way to understand how markets can be sliced, filtered, tilted, and packaged.
And once you understand that, you start seeing portfolios differently.
Not as a random collection of tickers.
But as a set of decisions.
Final thought
There is nothing wrong with keeping investing simple.
In fact, for many investors, simplicity may be a strength.
But simple should not mean uninformed.
The more you understand how different ETFs are built, the better equipped you may be to decide what belongs in your portfolio — and what doesn’t.
So, if you’re looking beyond the usual suspects, don’t just ask:
“Has this ETF performed well?”
Ask:
“What role would this play?”
That one question may do more for your portfolio than chasing whatever ETF happens to be trending this month.
Want to dive deeper? Watch the full webinar with Pearler and Owen Rask, where we unpack investing platforms, common beginner mistakes and how to approach your first investments with confidence.
General information disclaimer
This article is for general informational purposes only and does not take into account your objectives, financial situation or needs. Investing involves risk, including the risk of loss. Rules, products and market conditions can change, so consider seeking advice from a licensed professional and checking relevant official sources before making decisions.
