The Motley Fool

5 ASX shares to build a portfolio around

As any investor would tell you, building a proper ASX investing portfolio takes a lot of time, money and effort. Picking the right stocks in the right proportion at the right time is a big ask, and most investors take years of practice before telling you they think they’ve got it right.

A central part of your portfolio picking (literally) is choosing the core holdings – the shares that you are most confident will either be the safest investment, or will give the biggest returns (depending on your goals) and that you will devote the most capital to.

Here are 5 ASX shares that I think are good candidates for such a core.

Vanguard Australian Shares Index ETF (ASX: VAS)

The first cab off the rank is this exchange traded fund (ETF) from Vanguard. VAS tracks the largest 300 companies on the ASX – essentially a snapshot of the entire share market in one stock. Therefore, I think this ETF is one of the best ‘core’ holdings you can possibly start with, especially considering VAS comes with a 4% dividend yield.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

Complementing our first pick is another Vanguard ETF. This fund follows the largest companies in the world outside Australia – think names like Apple, Microsoft, Visa and Nestle. Exposure to these successful businesses beyond our shores would also form a fantastic core in an Australian investing portfolio.

BHP Group Ltd (ASX: BHP)

An individual stock to consider is BHP – the largest miner on the ASX and one of the largest in the world. The global economy is always going to need iron, steel, copper and other commodities that BHP extracts, and so I think this stock is a pretty safe long-term bet.

CSL Limited (ASX: CSL)

CSL is the largest healthcare company on the ASX and specialises in treatments for blood and plasma disorders as well as researching and manufacturing vaccines for the flu and other diseases. This company has enjoyed phenomenal growth over the past decade and I think it is well poised to continue this growth over the coming ten years and beyond.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is perhaps the most diversified company on the ASX – owning the Officeworks, Kmart, Target and Bunnings, a 15% stake in Coles Group Ltd (ASX: COL) as well as a bunch of other unrelated businesses. In my view, such a broad portfolio of companies means Wesfarmers is an ideal candidate for a core holding in a portfolio.

Foolish takeaway

There you have it, five ASX stocks to build your portfolio around. I think all five are great, low-risk choices to consider and you would do well holding any or all of them as long-term investments.

NEW. The Motley Fool AU Releases Five Cheap and Good Stocks to Buy for 2020 and beyond!….

Our experts here at The Motley Fool Australia have just released a fantastic report, detailing 5 dirt cheap shares that you can buy in 2020.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading over 40% off its high, all while offering a fully franked dividend yield over 3%...

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click here or the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.


Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of Wesfarmers 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.