All Weather ETF Australian Portfolio

Retire Rich

I recently took a community webinar on how I think about ETFs and how one can build a time positive passive ETF portfolio, the webinar is now available on YouTube here

This post is an extension on how my thinking has resulted in building on what I think is a good all weather portfolio for my passive Australian long term funds. Some ground rules

• I can’t access invested funds for at least 20 years, so the positions are truly long term

• Every year new funds would be added to this pool, so rebalancing would be required

• Only equities no GOLD or Crypto, they will be only added as trade bets during the year when I think trade is favourable but will be limited to 5% of portfolio position maximum each

Now the portfolio snapshot then followed by logic for picking these funds

Australian Exposure - VAS - 25%

VAS invests in top 300 companies in Australia and as I showed in Webinar, Long term Australian markets have given similar returns compared to other developed markets, also they throw a decent dividend that helps in rebalancing as well.

US Exposure - IVV,FANG,CRYP - 30%

I don’t see world order as far as innovation is concerned changing

USA would still lead the pack, IVV which tracks 500 biggest companies in USA is perfect to capture returns from growth in largest economy in the world.

However I am overweight on Magnificent 7 through FANG, they have managed to come on top in each of the last big waves of innovation in last 30 years. Internet, Mobile, Cloud, Social Media and now AI. That’s hell of a track record for Microsoft, Amazon, Apple, Facebook and Google to ignore.

A moonshot bet is small allocation of mostly US companies working in crypto space with a 1% position in CRYP

China Exposure - IZZ, CETF - 10%

China is on cusp of value migration from doing labour intensive manufacturing to value add complex manufacturing and its the only real competitor to US on almost all fonts. the reason on picking two ETFS is that one of them focuses on mainland China traditional companies CETF and other one on HongKong based IZZ which focusses on some of there well know new age technology business like Alibaba

India Exposure - NDIA - 10%

I was born in India and I have seen how equity culture is maturing, it is one of the most safe and well regulated markets in the world with great growth years ahead. A lot of focus is to catch up to China on manufacturing font and it’s pulling millions out of poverty every year.

Result of world excluding US - VEU - 10%

Betting on human progress as the human race make progress, economic activity improves and markets go up in long term

Cash - 15%

In High saver interest account, To allow trading bets

Note there is 2% allocation to Individual Company Share - Telstra , that was taken on back of a special situation where company was undergoing demerger, this is temporary and likely to be closed when favourable during the year

What do you think about this? Leave your thoughts in comments. I will do annual update on this every year