Portfolio percentage split for ASX 200, S&P 500 and Nasdaq

Hi Dave,

Building an ETF portfolio is a great way to diversify your investments across different markets and sectors. When deciding on the allocation of your investment capital among different indices like the ASX 200, S&P 500, and Nasdaq, there are a few general guidelines you might consider:

1. Risk Tolerance and Investment Horizon: Your allocation should align with your risk tolerance and investment horizon. The S&P 500 and Nasdaq, for instance, are heavily weighted towards technology and can be more volatile, whereas the ASX 200 offers exposure to a more diverse range of sectors.

2. Geographical Diversification: Allocating investments across different geographical regions can help mitigate risk. The S&P 500 and Nasdaq provide exposure to U.S. markets, which are the largest in the world, while the ASX 200 covers the Australian market. Depending on your view of economic conditions globally and locally, you might adjust your allocations.

3. Economic Outlook: Consider the economic outlook of each region. For example, if you believe the U.S. technology sector will continue to outperform, you might allocate a higher percentage to the Nasdaq.

4. Market Representation: The S&P 500 represents a broad spectrum of the U.S. economy and is often used as a benchmark for the overall American market. The Nasdaq is more tech-oriented, and the ASX 200 covers the top 200 companies in Australia, offering a good mix of all sectors.

A common starting point for many investors might be to have a heavier allocation towards the S&P 500 due to its broad representation of the U.S. market, followed by the ASX 200 for home country bias and familiarity with the market, and a smaller allocation to the Nasdaq if you’re seeking specific exposure to the technology sector.

For example, an initial allocation might look something like:
– 50% in S&P 500

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Hi David,

I wrote an article below which might help with this…

https://pearler.com/explore/learn/blog/whats-...

There isn’t a rule of thumb to be fair, everyone invests differently. The most common options I see are something like 20-70% Aussie shares, and the rest US or global.

Given you have NDQ and S&P, these overlap quite a lot, you might want to count those as one big US bucket.

One example might be:
ASX: 40%
S&P: 40%
NDQ: 20% (since it has less companies + more volatile)

But this is just one variation of a large amount you could choose from. The article should help you think more about the country allocation.

All the best!