The Motley Fool

Why this is the only ASX stock you need for retirement

Planning for your retirement with ASX stocks can be pretty difficult at times. There’s a bunch of options available and plenty of people looking to help you invest your money in their funds.

But there’s a simpler way to invest – you could be all set up with just a 1-stock portfolio in 2020.

Your 1 stock retirement portfolio

One ‘set and forget’ fund for your portfolio is Vanguard Diversified High Growth Index ETF (ASX: VDHG).

This Vanguard fund was established to give passive investors the capital growth they wanted in a fully diversified vehicle.

The VDHG ETF has a 90% allocation to growth asset classes and 10% allocated towards income asset classes. This means 90% of the portfolio is diversified across global and domestic equities with 10% in fixed income and cash.

The 0.27% per annum management fee is higher than some other ETFs on the market, but better than any actively managed fund.

The long-term investment horizon and heavy diversification makes VDHG a great ASX stock for retirement.

The fund is up 20.18% year-to-date, which is a slight underperformance against the S&P/ASX 200 Index (INDEXASX: XJO). 

VDHG is essentially a fund of other wholesale Vanguard funds. These include Australian Shares (36.1%), International Shares (26.7%) and AUD hedged International Shares (16.1%).

The great thing about VDHG is the simplicity and low-cost nature of the investment strategy. Rather than investing in 20 different stocks, you can just buy one ticker and live happily from one ASX stock in retirement.

Foolish takeaway

It is important to remember that your optimal portfolio allocation will depend on your overall risk and return preferences.

If you’re happy with 90% of your portfolio in a mix of stocks around the world, then VDHG could be a one-stop-shop in 2020.

If you're after more individual ASX dividend stocks then check out these 3 high income earners below!

Top 3 Dividend Shares To Buy For 2020

When Edward Vesely -- our resident dividend expert -- has a stock tip, it can pay to listen. With huge winners like Dicker Data (up 147%) and Collins Food (up 105%) under his belt, Edward is building an enviable following amongst investors that are planning for retirement.

In a brand new report, Edward has just revealed what he believes are the 3 best dividend stocks for income-hungry investors to buy now. All 3 stocks are paying growing fully franked dividends giving you the opportunity to combine capital appreciation with attractive dividend yields.

Best of all, Edward’s “Top 3 Dividend Shares To Buy For 2020” report is totally free to all Motley Fool readers.

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Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

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