If I had $25,000 to invest right now and wanted to keep things simple, low-cost, and diversified, I would lean heavily on Vanguard exchange-traded funds (ETFs).
The goal would be to build a core portfolio I could hold for years, add to regularly, and not lose sleep over during volatility.
Here's how I'd allocate it across funds today.
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Vanguard MSCI Index International Shares ETF (ASX: VGS)
For me, the Vanguard MSCI Index International Shares ETF would be the foundation of a portfolio.
It provides exposure to around 1,300 large and mid-cap stocks across developed markets, excluding Australia. That means access to global leaders in technology, healthcare, industrials, and consumer sectors that simply aren't well represented on the ASX.
Think global heavyweights like Nvidia, Microsoft, and Nestlé sitting alongside Japanese, European, and North American giants.
Australia is a small slice of the global economy. I believe any long-term portfolio should reflect that reality. The VGS ETF provides broad diversification across countries and sectors in a single trade.
Vanguard Australian Shares Index ETF (ASX: VAS)
While I want global exposure, I also think it makes sense to maintain a meaningful allocation to Australian shares.
The Vanguard Australian Shares Index ETF tracks the S&P/ASX 300 Index (ASX: XKO), giving exposure to the country's largest stocks across banks, miners, healthcare, retail, and infrastructure.
This ETF also provides investors access to franked dividends, exposure to Australia's strong banking and resources sectors, and a simple, low-cost core holding.
For investors planning to live and retire in Australia, having a home-market anchor can also help reduce currency risk relative to a fully offshore portfolio.
Vanguard FTSE Asia Ex-Japan Shares Index ETF (ASX: VAE)
To round things out, I'd add targeted exposure to faster-growing Asian economies.
This can be achieved with the Vanguard FTSE Asia Ex-Japan Shares Index ETF. It invests across countries such as China, Taiwan, India, South Korea, and Hong Kong. It includes stocks like Taiwan Semiconductor Manufacturing Company and Tencent.
Asia's middle class continues to expand, technology manufacturing remains concentrated in the region, and long-term economic growth rates are often higher than in developed Western economies.
This allocation adds a bit more growth potential to the portfolio without going all-in on emerging markets.
Foolish Takeaway
If I were investing $25,000 today, I wouldn't try to outsmart the market.
I'd build a diversified Vanguard ETF portfolio covering Australia, global developed markets, and Asia. Then I'd let compounding do its work over the years.
