I designed this portfolio with regard to my individual financial situation and opinions.
Let me highlight what makes this portfolio mine:
1. I only want exposure to the Australian market relative to it’s global market share
The Australian share market represents only 2% of the global share market value. If I invested 50% of my portfolio into the ASX then Australian shares would be 25 times over represented in my portfolio.
This is a phenomenon known as ‘home bias’.
There is nothing wrong with having a home bias. But it doesn’t suit my individual circumstances when you consider that:
2. I am an Australian Expat and spend considerable time and money overseas
I earn money in USD.
I spend money in USD, EUR, GPB, CFA – you name it!
Therefore I need to have more exposure to international equities than your average Australian who lives, works and spends in Australia.
So why not go with a ready made Vanguard Growth portfolio?
Well, besides the fact that none of Vanguard Australia’s ETF Portfolios align with my stated objectives above:
3. I want to have control over my Asset Allocation
I am a tinkerer.
I want to be able to make changes to my allocations based on my research and I want to increase my allocation to income as I age.
…and approach early retirement!
I don’t want to rely on a portfolio that is made for Joe Bloggs – I want a portfolio made specifically for ETF Bloke!
My ETF Portfolio
Growth – 70%
- 58% in VGS
- 5% in IJR
- 5% in VGE
- 2% in VAS
Income – 30%
- 21.5% in VBND
- 5% in VAF
- 3.5% in AAA
Now that you know what is in my portfolio it is time for you to learn how to create your own Australian ETF Portfolio.