How to make money from ASX ETFs? Here are 5 strategies to consider!

Ask anyone how to make money from ASX ETFs and you’ll be told it is just buying, holding and selling for more than you bought them for. Now yes, that is true. But everyone is trying to do that.

To make money, you need to consider your own investment goals and pick an ETF that will meet them. It may involve buying funds no one else is buying or that you may not have otherwise considered. But you may be able to make money where others don’t. So here are 5 strategies to consider.

How to make money from ASX ETFs? Here are 5 strategies to consider!

1. Picking particular growth thematics

Making money from ETFs by investing in growth thematics involves targeting sectors, trends, or technologies expected to outperform the broader market over time. This strategy isn’t just about riding the wave of what’s hot right now, it’s about identifying long-term, structural shifts in the economy or society and investing early (or at least not too late) through well-chosen ETFs.

You need to look for areas where either demand is increasing, innovation is accelerating and where policies or social change is supporting growth. Preferable all 3 or at least 2. Examples include AI, clean energy, cybersecurity and fintechs. There are not shortage of thematic ETFs focused on areas like robotics and cybersecurity.

2. Considering Short/Inverse ETFs

If you’re a bear rather than a bull (in other words, if you think the market, or just certain sectors, are going down) you may opt to ‘go short’. When investing in ETFs, you may opt to buy an inverse ETF, one that aims to deliver the opposite return of their benchmark index. That is to say if the index (i.e. ASX 200) falls 2%, the inverse ETF should go up 2%.

So anticipate a downturn, buy such an ETF, then sell at the right time for a profit. Of course you could buy mostly long and invest in a short ETF just to hedge long positions and offset potential losses. Some of these on the ASX include BBOZ, BBUS and BEAR.

It is important to note that most inverse ETFs are daily reset, meaning their inverse performance only matches daily movements—not long-term ones. Compounding effects can cause slippage over time if held too long.

3. Consider international ETFs

It is common knowledge that more opportunities are avaliable in overseas markets and possibly higher returns. The trouble is dealing with the red tape that comes with investing in international stocks.

With international ETFs, you don’t have this headache, just buy and sell like any other security on the ASX. And then you can access opportunities like the US tech space and global renewable energy.

Of course, buying international ETFs can be a way to beat the market—but only under the right conditions and with a well-informed strategy

4. Dollar cost averaging/Topping up

Dollar-cost averaging (DCA) is a strategy where you invest a fixed amount of money into an asset (like an ETF) at regular intervals, regardless of the price. It’s designed to reduce the impact of short-term volatility and help build wealth over time with less emotional stress. It is like microinvesting but done repeatedly.

Basically you invest a certain amount at regular intervals into an ETF. Let’s say you buy $5,000 in one ETF. You might ‘top up’ with $100 per week or at certain intervals when prices are lower. Microinvesting magnifies your returns, especially if you buy when prices are a bit lower – it leads to a lower average cost per unit than if you made a lump-sum purchase at a high point.

This strategy allows you to consistently build a position. Moreover, it builds discipline and removes emotional decisions (like buying high or selling low).

5. Consider Covered Call ETFs

Covered call ETFs aim to generate enhanced yield by using options strategies—specifically, by selling covered call options on the stocks they hold. They’re popular with investors who want regular income and are willing to sacrifice some upside in exchange for it. The idea is You’re being paid to “cap” your upside in exchange for regular income.

These ETFs own a portfolio of shares and sell (write) call options to generate premiums. The option premiums are paid out to investors, typically regardless of whether or not the underlying shares move much. Crucially, the price growth is capped and you may miss out on larger gains given the calls sold. Examples of ASX ETFs with this strategy include YMAX, QMAX and UMAX.

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