Building a beginner investment portfolio can be fun. However, it can also be a daunting task because there are so many products one can invest in today.
Here, I’m going to discuss how I’d start a portfolio today with £10k. These are the investments I’d go with in an effort to begin building long-term wealth.
Building a foundation
So my first investment would be the Vanguard FTSE Global All Cap Index. This is an index fund that provides exposure to around 7,200 stocks listed globally.
This product could provide a great foundation for my portfolio. It would give me exposure to all the big names in the stock market such as Apple, Microsoft, and Amazon.
And it would keep my costs low as the ongoing charge is just 0.23%.
Also as a foundation for my portfolio, I’d invest in Fundsmith Equity. This is an actively-managed, global fund that’s run by Terry Smith.
This fund – which aims to invest in high-quality businesses – has a fantastic track record, having returned about 16% per year since its inception in 2010 (past performance is not an indicator of future returns, of course).
And I think it could complement the Vanguard fund nicely.
I’d invest £2k in each of these products.
Spreading my capital
With my core holdings in place, I’d look to add in some investments that are a little more narrow in their focus.
Here, I’d go for the Allianz Technology Trust, which is an investment trust that’s focused on technology stocks.
The world today is in the midst of a powerful technology revolution that looks set to last for years, if not decades. And I see this trust as a good way to get exposure.
I’d also snap up a UK-focused fund at this point. I’d go for Royal London Sustainable Leaders.
I’d choose this product over a FTSE 100 or FTSE All-Share index fund due to the fact that it has outperformed the UK market by a wide margin over the long term.
I also like the fact that it has an ethical focus and aims to invest in high-quality businesses.
I’d want some exposure to smaller companies as well, and here I’d go for Smithson Investment Trust, which is run by the team at Fundsmith.
I’d select this trust due to the fact that it has a global focus and a similar investment approach to its big brother, Fundsmith Equity.
I’d invest around £1.33k in each of these three products.
Two top stocks for the long term
With my final £2k, I’d buy a couple of individual stocks.
Here, I’d go for Alphabet (Google), which is listed in the US.
Owning Alphabet shares would give me exposure to a number of high-growth markets including artificial intelligence, cloud computing, digital advertising, self-driving cars, and more.
I think they have a lot of potential.
But tech shares can be volatile. So, to balance things out, I’d also invest in FTSE 100 consumer goods giant Unilever.
Buying this stock would make me a part-owner of brands such as Dove, Magnum, and Ben & Jerry’s and give me exposure to emerging market economies.
And there’s a decent dividend on offer. Currently, the yield is nearly 4%.
Overall, I think this portfolio would set me up nicely.
It wouldn’t be immune to market volatility, of course. However, it should provide solid returns over the long run.
The post Building the ultimate beginner investment portfolio with £10k (and 7 top stocks and funds) appeared first on The Motley Fool UK.
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Ed Sheldon has positions in Fundsmith Equity, Smithson Investment Trust, Alphabet, Amazon.com, Apple, Microsoft, and Unilever Plc. The Motley Fool UK has recommended Alphabet, Amazon.com, Apple, Microsoft, and Unilever Plc. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
Motley Fool UK 2023
