The Lazy Portfolio is the Australian version of an ETF portfolio made famous by Paul B. Farrell.
Paul could well have been a closet Australian having written a book titled ‘The Lazy Person’s Guide to Investing’.
Maybe I should have called this one the Laid Back Portfolio to make it more Aussie.
The portfolio made famous as the Lazy Portfolio is also known as the Three Fund portfolio.
It doesn’t take a rocket surgeon to understand where these nicknames come from when you dive a little deeper into the portfolio allocation.
Features of a Lazy Portfolio
Your typical Lazy portfolio is made up 3 ETFs with the asset allocation split evenly between all three funds.
- Take 3 ETFs
- Allocate 33% to each ETF
And that’s your asset allocation done!
No really. That is all there is to it.
The seppos version of the 3 fund portfolio invests as follows:
- 33% in Total Stock Market Index
- 33% in Total International Stock Market Index
- 33% in Total Bond Market Index
Or written for mere mortals to understand:
Invest one-third in US Stocks, one-third in International Stocks and one-third in Bonds.
Now when you translate that into Aussie ETF speak the Australian Lazy Portfolio looks like this:
- 33% invested in VAS (Australian Stocks)
- 33% invested in VGS (International Stocks)
- 33% invested in VGB (Bonds)
Reasons to invest in the Australian Lazy Portfolio:
Lazy portfolios are diverse yet simple
- You can invest in the total universe of stocks and bonds by buying only 3 ETFs.
It is easy to re-balance your asset allocation
- Do you have the same amount invested in all 3 ETFs? No?
- Then make it so
Frugality: These 3 ETFs are very low cost
- Management fees per annum are 0.173% for this 3 fund portfolio
- That’s $1.73 per $1,000 invested
Maybe you are just getting started on building your own Australian ETF Portfolio. Or maybe you aren’t satisfied with the complexity of your existing ETF Portfolio.
If so then the Australian Lazy Portfolio might be just what you are looking for.
The Australian Lazy Portfolio will give you a simple, diverse and low cost ETF portfolio.
Thanks for your easy to understand information. I am really new to this and found this site so helpful, even right down to explaining the exact amount of the fees per $1,000.
Nice simple website. Less is more these days.