For new investors, building a portfolio can be an overwhelming task.
The ASX currently has more than 2,000 listed companies to choose from, not to mention access to international stocks as well.
That's why a base portfolio of a few ASX ETFs can be a great starting point.
ASX ETFs offer instant diversification in one simple trade.
This can be especially attractive when the market is experiencing significant volatility, as has occurred over the past couple of weeks.
Current conflict in the Middle East is causing significant fluctuations day to day for many Australian and global blue-chip stocks.
With this uncertainty and volatility likely to continue in the short-term, it is important to have a portfolio spread across various sectors and countries.
These three funds would make an ideal starting point for a new investor aiming for a broadly diversified portfolio.
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Global X Australia 300 Etf (ASX: A300)
As the name suggests, this fund offers exposure to the 300 largest Australian companies listed on the ASX.
Typically, investors track the performance of the S&P/ASX 200 Index (ASX: XJO).
However, this fund offers exposure to a broader set of companies than the typical 200 Australian companies.
Its largest exposure is to Australia's two largest companies by market cap:
These two holdings represent roughly 20% of the fund.
BetaShares NASDAQ 100 ETF (ASX: NDQ)
With Australia's market covered by the A300 fund, adding the BetaShares NASDAQ 100 ETF provides a US focus.
This ASX ETF comprises 100 of the largest non-financial companies listed on the Nasdaq market, and includes many companies that are at the forefront of the new economy.
The NASDAQ 100 is often referred to as the "new economy."
With its strong focus on technology, NDQ ETF provides diversified exposure to a high-growth potential sector that is under-represented in the Australian sharemarket.
It includes some of the biggest global companies like Apple Inc (NASDAQ: AAPL) and Amazon.com Inc (NASDAQ: AMZN).
It has a strong track record, rising 84% over the last 5 years.
Betashares Global Shares Ex Us Etf (ASX: EXUS)
With bases covered in Australia and the US, this ASX ETF provides a more global outlook.
It provides exposure to 900+ large and mid-cap companies from 22 developed markets excluding the US and Australia.
Its largest exposure by country is to:
- Japan (23.8%)
- Britain (13.2%)
- Canada (12.6%).
With the US historically representing the majority of developed markets, adding exposure outside the US provides both geographic and sector diversification.
Compared to US focused exposures, EXUS WTF has a higher weighting to sectors such as financials and industrials, and a lower weighting to technology.
