When I think about building long-term wealth, I’m a fan of simplicity.
Not necessarily because simple is easy, but because simple is repeatable.
The more complicated a portfolio becomes, the harder it is to stick with when markets get volatile. And in my experience, sticking with a strategy matters far more than constantly tweaking it.
If I were building a simple portfolio from scratch today, this is a three-exchange-traded funds (ETF) combination I would be very comfortable holding for years.
iShares S&P 500 ETF (ASX: IVV)
For me, any long-term portfolio needs exposure to the United States.
The iShares S&P 500 ETF gives access to 500 of the largest stocks in the US, but what stands out to me is not just the scale. It is the quality of earnings.
Many of these businesses generate significant cash flow, have global revenue streams, and sit at the centre of industries that continue to evolve. Technology, healthcare, financials, consumer brands. It is all there.
Even after a recent 11% pullback from its highs, I still see this as one of the most reliable ways to access global growth.
It is not about picking the next big winner. It is about owning the ecosystem where many of those winners are likely to come from.
BetaShares Australian Quality ETF (ASX: AQLT)
Where the IVV ETF gives broad exposure, the BetaShares Australian Quality ETF adds a filter.
This ETF is not trying to own everything in the Australian share market. It is trying to own what it considers the better parts of it.
That means focusing on companies with stronger balance sheets, more consistent earnings, and higher returns on capital.
I like that approach.
The Australian market can be heavily influenced by banks and miners, which have their place. But I think adding a quality tilt helps smooth out some of that cyclicality.
For me, the AQLT ETF is about refining the local exposure. It is not replacing the market, but shaping it in a way that leans toward resilience and consistency.
Vanguard FTSE Asia Ex-Japan Shares Index ETF (ASX: VAE)
This is where things get more interesting. Asia is not always the easiest region to invest in directly. There are different markets, different regulatory environments, and varying levels of economic development.
That is why I like having it packaged into a single ETF.
The VAE ETF gives exposure to a wide range of economies that are still evolving, industrialising, and expanding their middle classes. It is a different growth profile compared to the US and Australia.
What I find compelling is that many of these economies are deeply embedded in global supply chains.
From semiconductors to manufacturing to digital platforms, Asia plays a critical role. And over time, I think that importance is likely to grow.
It will not always be smooth. But I believe that volatility is part of the opportunity.
Foolish Takeaway
Building long-term wealth does not require a complicated portfolio. For me, a simple combination of ETFs that covers global leaders, high-quality Australian shares, and Asian growth markets is more than enough.
The real challenge is not choosing the portfolio. It is staying invested and letting it work over time.
The post A simple 3-ETF portfolio I’d use to build long-term wealth appeared first on The Motley Fool Australia.
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More reading
- Why this looks like a great time to buy the iShares S&P 500 ETF (IVV)
- Is it too late to start investing in ASX shares in your 40s?
- 5 of the best ASX ETFs to buy in April
- This simple ASX ETF strategy matters more than ever in today’s uncertain market
- Here are 5 ASX ETFs that I would buy with $50,000
Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended iShares S&P 500 ETF. The Motley Fool Australia has recommended iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.