Learn MoomooWhat is an ETF? Explained from zero for people who have never invested
ETFs in the simplest language — the basket idea, how an ETF differs from a single company's shares and from unit trusts, what S&P 500 means, Shariah ETFs, the annual fee (expense ratio), the cost of buying in Moomoo, the risks you should know, and how to find ETFs in the app.
“What exactly is a US ETF? Daus always mentions VOO, SPUS. I don’t understand what those are.”
If you have never invested at all, this page is for you. No strange terms without an explanation.
Picture a basket of fruit
You want to eat some fruit, but you’re not sure which fruit is good this week. Instead of buying one durian and hoping it’s sweet, you buy one mixed basket: a few apples, a few oranges, a few bananas, a few mangoes. If the oranges are sour, your basket is still fine because the other fruit is there.
An ETF (Exchange-Traded Fund) is a basket like that, but filled with shares. One ETF can hold dozens, hundreds, even thousands of company shares. When you buy one unit of an ETF, you hold a little of every share in that basket.
The best-known example is an ETF that follows the S&P 500 index, a list of roughly 500 large American companies (Apple, Microsoft, Nvidia and hundreds more). VOO, SPY and IVV are three ETFs that follow that list.
Why people like ETFs
Risk is spread out. If you buy one company’s shares and that company runs into trouble, you can lose a lot. In an ETF that holds hundreds of companies, one company falling is only a small part.
No need to study every company. You don’t need to know which company will win. You hold all of them, and follow the performance of the whole market.
Cheap to hold. Most index ETFs have a small annual fee (see below).
Easy to buy. ETFs are bought and sold like ordinary shares in a broker app, at the market price, during market hours.
ETFs, shares, and unit trusts: what’s the difference
| One company’s shares | ETF | Unit trust (fund) | |
|---|---|---|---|
| Contents | One company | A basket of many companies | A basket of many assets, picked by a fund manager |
| Where to buy | Stock exchange (Bursa Malaysia or a US exchange), through a broker | Stock exchange, through a broker | Agent or fund platform |
| Price | Changes throughout the day | Changes throughout the day | One price (NAV) a day |
| Fees | Order fees | Order fees + a small annual fee | Usually a sales charge + a higher management fee |
| Risk | Most concentrated | Spread out | Spread out |
The annual ETF fee (expense ratio)
Every ETF has an Expense ratioA fund's annual management fee, shown as a percentage.See it in the glossary →, an annual fee for running the fund. You don’t pay it separately. It’s taken bit by bit from inside the fund, and is already reflected in the ETF’s price.
Examples from the Moomoo app (6 Oct 2026): SPUS 0.45% a year, HLAL 0.50%. A regular S&P 500 ETF like VOO is lower. For a RM1,000 investment, a 0.45% fee works out to about RM4.50 a year.
This is separate from the fees each time you buy and sell in Moomoo.
Orders below 1 share (fractional, including most small RSP buys): platform fee is 0.99% of the order, capped at USD0.99, with no commission. Orders of 1 share or more: USD0.99 platform fee per order (commission 0.03% is covered by the new-user 0-commission voucher). Every order also pays Malaysian stamp duty of RM1 per RM1,000 or part of it (about USD0.24).
Real example from Daus’s account: a USD25 VOO buy cost USD0.25 platform fee + USD0.24 stamp duty = USD0.49 (about 2%). Full table: Moomoo fees.
Shariah ETFs
A regular ETF like VOO holds every company in the index, including conventional banks, conventional insurers, and companies with too much interest-bearing debt. That’s why it’s not Shariah-compliant.
Shariah ETFs like SPUS and HLAL filter those companies out through Shariah screening. The full explanation is in are shares halal?.
Risks you need to know
- ETFs can still fall. A basket that holds the whole market will fall when the whole market falls. For example, S&P 500 ETFs once fell about 34% within a few weeks in 2020.
- US ETFs are in USD. Their value in ringgit also follows the exchange rate.
- Dividends from US ETFs are taxed 30% before they reach your account.
- Not every ETF is a broad basket. There are theme ETFs (for example, chips only), leveraged ETFs (moving 2 or 3 times as much) and inverse ETFs. Those are far riskier. Get to know them first in the world of ETFs.
ETFs suit money that can sit for 5 years or more. Money you need soon, for example for a wedding or a house deposit in 1–3 years, is better kept somewhere with a stable price. Read where to keep short-term money.
How to find ETFs in Moomoo
- Search the ETF’s name or code (for example SPUS), then tap the result marked US.
- Markets → ETFs for a list of index ETFs and theme ETFs.
- Markets → MY → ETFs for ETFs listed on Bursa Malaysia.
Want to compare two ETFs side by side? Use the Compare feature: compare stocks and ETFs tutorial. Ready to buy your first? Buy your first US ETF.
ETF names on this page are examples for you to understand and research yourself, not a recommendation to buy. This content is educational sharing, not financial advice.
Understand ETFs now? Next step, see how to choose one.
Once you have RM1,000 ready: register through Daus's link, enter the code DAUSDK37 under "Special Deposit" BEFORE your first deposit, deposit RM1,000 within 30 days of registering, tap Claim yourself, and keep the deposit in for 60 days. About RM150 for a RM1,000 deposit, up to RM1,500 for a larger one.
Sign Up & Claim Your RewardDaus is an official Marketing Representative for Moomoo Malaysia and earns a commission when you register and deposit. It costs you nothing extra.