Building a truly well-balanced and diversified $100,000 ASX portfolio is a daunting task – and one that can take years. But the rewards are lucrative enough that I think all ASX investors should aspire to hit the 6-figure mark – whether that takes 5 years or 20.
But choosing the right shares across the right sectors is equally important. Here at the Fool, we are always preaching the benefits of diversification, of not having all of your eggs in one basket.
So in saying that, here are 10 ASX shares that I think would make the perfect (in my eyes, anyway) balanced portfolio with $10,000 invested in each.
Vanguard Australian Shares Index ETF (ASX: VAS)
As a starter, I think this exchange-traded fund (ETF) forms a solid bedrock of an ASX portfolio. By having the largest 300 companies as holdings, VAS gives us instant diversification and a well-rounded foundation for our other companies to sit upon.
CSL Limited (ASX: CSL)
The big dog of the ASX, I think it would be amiss to exclude CSL from any ASX-based portfolio. CSL is one of the best blue chips money can buy in my view. It’s a diversified healthcare giant that’s active on the global stage. It’s also the most growth-orientated ASX blue chip in my view and has been quietly building its dividend over the last few years. Therefore, I think an investment in CSL is a great place to have your money over the coming decade.
Woolworths Group Ltd (ASX: WOW)
A stalwart of ASX consumer staples and a highly defensive, mature business, Woolworths earns a place in our balanced portfolio today. It’s dominance of the Aussie groceries market and its familiar and powerful brand give this company an edge in my view and one that can protect your portfolio in any kind of downturn.
Telstra Corporation Ltd (ASX: TLS)
Telstra is the dominant telco in Australia and commands a healthy market share across both fixed-line internet and mobile. Its mobile network is inarguably the best in the country and leaves its rivals like Optus and Vodafone/TPG Telecom Ltd (ASX: TPM) in the dust in my view. It’s also a healthy dividend payer, and I’m excited about its foray into 5G technology.
Macquarie Group Ltd (ASX: MQG)
I’m not too excited about the ASX banks like Commonwealth Bank of Australia (ASX: CBA) right now, and so I think Macquarie is a great alternative. It does do traditional banking services like mortgages, but most of its business these days is in asset management and investment banking. Macquarie also pays a healthy dividend, but I think of this company as more a growth stock compared with the major ASX banks.
Wesfarmers Ltd (ASX: WES)
I don’t think we can have a balanced portfolio without including this conglomerate. Wesfarmers is already a highly diversified company. It owns the Bunnings, Target, Kmart and Officeworks chains, as well as a plethora of other businesses across different sectors of the economy. Most recently, it’s expanded into the lithium space with its acquisition of Kidman Resources. As such, I think Wesfarmers is one of the best blue chips on the ASX and a must for our portfolio.
BHP Group Ltd (ASX: BHP)
This year has already well and truly proved the value of holding ASX resources shares in my view. Big miners like BHP have held up remarkably well in the face of the coronavirus crash we saw earlier in the year. Commodity prices can be volatile, but they can also act independently of the rest of the economy, which can be a very handy cushion for a portfolio to have. BHP is one of the largest miners in the world, but also one of the most diversified. It has operations across the coal, oil, copper and iron ore spaces.
As such, I think the ‘Big Australian’ is a great stock to have in our $100,000 portfolio.
Altium Limited (ASX: ALU)
Altium is more of a high-growth, high-volatility share, but that’s why I think its a great inclusion in our portfolio. This company provides software that assists with the design of printed circuit boards – which are an essential component of most electronic devices. It’s been growing rapidly and has a very scalable software as a service business (SaaS) model to boot.
Afterpay Ltd (ASX: APT)
I would feel amiss if I didn’t include this superstar of an ASX company in our $100,000 portfolio. Yes, Afterpay is one of the most volatile shares on the ASX. We’re talking about a company that has had a ~470% swing in value over the last 3 months, after all. But I think Afterpay’s potential is too great to ignore and anyone who has ever bet against this company has always lost. As such, it joins our portfolio with aplomb.
Magellan Global Trust (ASX: MGG)
Our last share to finish off our portfolio is actually a listed investment trust (LIT). MGG invests in a basket of global shares, which include quality names like Microsoft, Alphabet and Tencent. I think all ASX portfolios should have at least some international exposure thrown in, and here MGG is a great candidate for the job in my view. It has a stellar track record of delivering for its investors and also has a top-notch fund manager in Magellan Financial Group Ltd (ASX: MFG)’s Hamish Douglass.
As such, I think this trust is a great stock to round out our $100,000 portfolio.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares) and Telstra Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares). The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO, Altium, and CSL Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Telstra Limited. The Motley Fool Australia owns shares of Wesfarmers Limited and Woolworths Limited. The Motley Fool Australia has recommended Alphabet (A shares). 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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