Why are Aussies investing in ETFs (and what are they)?

Record low interest rates are driving a radical shift in the way Australians save and invest their money.

With money stashed in the bank earning only about 1 per cent – if you’re lucky – many are turning to the sharemarket, in hopes of higher returns. About a million Aussies dipped their toe into the sharemarket for the first time over the past year.

One of the ways they’re doing it is via Exchange Traded Funds, or ETFs, which have just celebrated 20 years in the Australian market.

They’re proving particularly popular among Millennials and those seeking instant diversification.

But what are the things you should look out for and how do they actually work?

Today on Please Explain, personal finance editor John Collett joins Jess Irvine to discuss.

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