Creating an ASX portfolio purely with growth shares can be a high-risk strategy. But due to the very nature of a good ASX growth share, it can also be a highly lucrative path to tread, if you have the stomach for it. ASX growth shares can often outperform the broader S&P/ASX 200 Index (ASX: XJO) during a bull run. But equally, this strategy can lead to underperformance in a bear market. Riding out these extremes is the key to successful long-term growth investing. So here’s how I would construct such a portfolio:
Start with $25,000 in growth share Openpay Group Ltd (ASX: OPY)
Openpay is a newer addition to the ranks of the ASX payments and buy now, pay later (BNPL) companies. It operates in a similar manner to the platforms offered by Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P). But rather than focusing on ‘small’ purchases, Openpay instead targets the larger transactions of life – things like hardware, automotive and medical expenses. As such, I think this company is well poised to exploit an underserved niche of the BNPL market and deserves a slot in our $100k growth portfolio.
Back it up with $25,000 in BetaShares Global Cybersecurity ETF (ASX: HACK)
This exchange-traded fund (ETF) solely invests in what I consider to be one of the ultimate growth areas of the 21st century. With revelations just this week that Twitter has been embarrassingly hacked by scammers, I think the importance of cybersecurity has never been more important and is one of the most fertile grounds for future growth. Thus, I think it’s a great area for an across-the-board investment which the HACK ETF can provide. Some of the shares that this ETF holds include Okta, Cisco and Broadcom.
Add $25,000 of Nanosonics Ltd (ASX: NAN) shares
Nanosonics is one of the most promising healthcare shares on the ASX, in my view. The company’s Trophon and Trophon 2 devices provide cutting edge sterilisation techniques that medical professionals can use for disinfecting equipment. Nanosonics’ shares have almost doubled over the past 2 years. But, with the rave reviews its devices are attracting from the medical community, I still think this company has a lot of potential growth ahead of it. As such, it’s a top growth share that deserves a place in our $100,000 ASX portfolio.
Finish off with $25,000 in the BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)
This is another ETF and one of the newest funds to hit the ASX boards at that. Even so, I find this fund very exciting. It’s the first of its kind in tracking the S&P/ASX All Technologies Index (INDEXASX: XTX), which houses the most notable ASX shares in the tech space. Afterpay dominates this fund’s holdings with a current weighting of 17.1%. But you’ll also find Xero Limited (ASX: XRO), as well as Seek Limited (ASX: SEK), Computershare Limited (ASX: CPU) and Altium Limited (ASX: ALU) as well. If you’re bullish on the future of Aussie tech, then you’ll agree that this ETF has a well-deserved place in our $100,000 growth portfolio.
ASX growth shares can be emotionally taxing investments to hold, but can also offer outsized returns. I think the shares named above offer such outperformance over the medium to long term, and, as such, I would be very happy to add any of them to my ASX portfolio today.
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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 Altium, Nanosonics Limited, Xero, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO and BETA CYBER ETF UNITS. The Motley Fool Australia has recommended Nanosonics Limited and SEEK Limited. 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.