How I would build a simple $100,000 ASX portfolio using ETFs

BetaShares Global Cybersecurity ETF (ASX: HACK) is one of the ETFs in my $100k model portfolio

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Exchange traded funds (or ETFs) are a great way to add diversity, balance and ballast to a portfolio. By investing in dozens or hundreds of stocks and assets in one fund, you can easily gain exposure to a tricky field of investing (such as small-cap stocks or bonds) that you might otherwise feel uncomfortable with.

Here's a $100,000 model portfolio, using some diverse ASX ETFs that you may want to check out if you're interested in pursuing a similar strategy.

iShares Core S&P/ASX 200 ETF (ASX: IOZ) – $25,000

This ETF tracks the ASX200 benchmark, which is what we generally use to measure the performance of the Aussie stock market. This is because the ASX200 follows the biggest 200 public companies in Australia – every big Australian company you can think of will be in there – Coles Group Ltd (ASX: COL), Afterpay Touch Group Ltd (ASX: APT) and National Australia Bank Ltd (ASX: NAB) to name a few. Throwing in a bit of home bias, IOZ would make a good foundation for any portfolio and I'm very happy with its presence here.

Vanguard International Shares Index Fund (ASX: VGS) – $25,000

With this ETF, you are getting a slice of 1,595 companies that reside beyond our shores – which adds some much-needed international balance (in my opinion).  VGS holds companies across the USA, UK, Japan and other advanced economies but is not hedged to our Australian dollar, so any currency fluctuations may impact your investment's value. Some of VGS's top companies include Johnson & Johnson, Visa, Amazon and Royal Dutch Shell. Australia only makes up about 2% of the global share market, so looking beyond our shores seems prudent to me.

Vanguard International Credit Securities Index (Hedged) ETF (ASX: VCF) – $25,000

Adding some ballast to your portfolio is always a good idea, and especially pertinent at our current point of the share market cycle. VCF invests in bonds rather than shares and is also currency hedged – meaning currency changes won't affect the fund's value. Bonds are considered a safer and more conservative investment which often outperform shares during bear markets. VCF invests in investment grade bonds issued from government-owned entities as well as corporations, giving you a slightly higher income than you may get from pure Treasury bonds.

BetaShares Global Cybersecurity ETF (ASX: HACK) – $25,000

I've thrown this one in for a bit of fun, but I also think it might have some real growth potential! HACK (yes, that's the ticker) invests in the Nasdaq Cybersecurity Index, tracking mostly US companies that are at the forefront of the cybersecurity and cyber-safety industry, which (I think) is only going to grow in importance over the decades to come as we become ever-more connected online. Some of its top holdings include Symantec Corporation, Cisco Systems Inc. and Raytheon Co.

Foolish Takeaway

With this model portfolio, you can see how simple crafting a balanced investment strategy can be using ETFs. The first three, in particular, can be used very well as diversification vehicles, and if you're feeling confident, HACK might be a good bet as well.

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO, BETA CYBER ETF UNITS, and National Australia Bank Limited. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ⏸️ Portfolio Construction

asx shares versus cash represented by man in dinosaur mask withdrawing cash from atm
⏸️ Portfolio Construction

Top fund manager Dalio warns investors to stay away from cash

Top global fund manager, Ray Dalio, has told investors to stay away from cash and bonds in the current economic…

Read more »

three reasons to buy asx shares represented by man in red jumper holding up three fingers
⏸️ ASX Shares

How these 3 letters could see your ASX shares outshine

With the ASX 200 still down 13% from its 20 February all-time highs, these 3 letters could give some ASX…

Read more »

ASX mining shares iron ore price share price falling represented by cartoon of little business men falling off broken graph arrow
⏸️ Portfolio Construction

How I'd position my ASX share portfolio for the next market crash

The S&P/ASX 200 Index (ASX: XJO) is climbing higher today but I'm looking ahead to the next potential ASX market…

Read more »

A man holds up his hand with 3 fingers up
⏸️ Portfolio Construction

Why now is a great time to buy ASX shares

It's easy to get spooked out of buying ASX shares right now. Here are a couple of reasons why I…

Read more »

rise in asx share price represented by one hundred dollar notes flying freely through the air
⏸️ Portfolio Construction

How to make money by investing in ASX 200 shares

It's tough to know how to invest right now. Here are a few tips to help boost your chances of…

Read more »

A man scratches his head wondering if the BHP share price is a buy or not
⏸️ Portfolio Construction

Is it time to save more or invest more in ASX shares?

It's a scary time to invest in ASX shares. But here's why I won't be sitting on cash and waiting…

Read more »

⏸️ Portfolio Construction

5 blue chip ASX 200 shares a beginner can use to start a share portfolio

Here are 5 ASX shares like Wesfarmers Ltd (ASX: WES) that a beginner can use to start building a diversified…

Read more »

New ASX share buy ideas
⏸️ Portfolio Construction

3 tips for beginners investing in ASX shares

Here are a few simple investing tips for beginners looking to build out their ASX share portfolio in the current…

Read more »