How I’d build a $50,000 ASX share portfolio today

If I were starting fresh with $50,000 to invest today, I would keep things fairly simple.

I would want a portfolio with exposure to different parts of the economy, some global diversification, and businesses I would be comfortable holding for many years.

Rather than spreading the money across dozens of investments, I would use one broad exchange-traded fund (ETF) as a foundation and build around it with a handful of ASX shares I particularly like.

Here is how I would allocate the full $50,000.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

I would start with $12,000 in the VGS ETF.

The fund gives investors exposure to a large portfolio of companies across developed markets outside Australia, including major businesses from the United States, Europe, and Asia.

For me, this provides an important diversification base. Instead of relying entirely on the Australian economy and a handful of individual companies, part of the portfolio would be spread across over a thousand global businesses and numerous industries.

That would make the Vanguard MSCI Index International Shares ETF my largest single allocation.

Commonwealth Bank of Australia (ASX: CBA)

I would put $8,000 into Commonwealth Bank.

CBA gives the portfolio exposure to Australia’s banking sector through a business with leading positions across home lending, deposits, and digital banking.

I also like the combination of earnings resilience and dividends it can bring to a long-term portfolio.

The valuation can become stretched at times, so I would not want to make the position too large. But I would still want CBA as part of my starting portfolio.

BHP Group Ltd (ASX: BHP)

Another $8,000 would go into BHP shares.

The mining giant adds exposure to commodities including iron ore and copper, providing a source of earnings quite different from CBA and the global companies held through the VGS ETF.

I am particularly positive on copper’s long-term outlook as investment in power networks, renewable energy, data centres, and electrification drives demand.

BHP would also add some dividend income to the portfolio, although payouts will naturally move with commodity conditions.

CSL Ltd (ASX: CSL)

I would allocate $6,000 to CSL shares.

The healthcare giant has global operations across plasma therapies, vaccines, and specialised medicines.

After a difficult period for the shares, I think there is an attractive opportunity if CSL can continue improving earnings and margins over the coming years.

It also gives the portfolio another source of growth that is less dependent on Australian economic conditions.

ResMed Inc. (ASX: RMD)

I would put $6,000 into ResMed shares.

The company is a global leader in devices and masks used to treat sleep apnoea, giving it exposure to a substantial healthcare market.

For example, management estimates that there are over 1 billion sufferers of sleep apnoea globally, with the majority undiagnosed.

As a result, ResMed is the type of high-quality global business I would be comfortable owning for many years.

Wesfarmers Ltd (ASX: WES)

I would allocate $5,000 to Wesfarmers shares.

Through businesses including Bunnings, Kmart, and Officeworks, Wesfarmers provides exposure to some of Australia’s strongest retail operations.

I also like its history of disciplined capital allocation and willingness to invest across different industries when opportunities arise.

That makes it a strong long-term portfolio holding in my view.

Xero Ltd (ASX: XRO)

Finally, I would invest $5,000 in Xero shares.

Its accounting software is deeply embedded in the operations of small businesses and accountants, while its international presence gives the company plenty of room to grow.

This would be one of the portfolio’s more growth-focused positions and provide additional technology exposure alongside the global holdings inside the VGS ETF.

Foolish takeaway

If I were investing $50,000 from scratch, this is the sort of balance I would want.

The VGS ETF would give me broad global diversification from day one, while CBA, BHP, CSL, ResMed, Wesfarmers, and Xero would let me put additional money behind individual businesses I believe can perform well over the long term.

I think that gives the portfolio a strong foundation without overcomplicating it.

The post How I’d build a $50,000 ASX share portfolio today appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in CSL, Commonwealth Bank Of Australia, and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, ResMed, Wesfarmers, and Xero. The Motley Fool Australia has positions in and has recommended ResMed and Xero. The Motley Fool Australia has recommended BHP Group, CSL, Vanguard Msci Index International Shares ETF, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.