Two Fund Vanguard Australia Portfolio - VAS & VGS ETFs (+ Alternatives)

Vanguard’s VAS ETF and VGS ETF are two of the most popular Index Funds in Australia for Passive Investors. This 2 fund portfolio tailored for Vanguard provides long term growth with minimal fees.

Follow Me On Socials:

Low Fee Stock Brokerages (My Referral Links):

So in this video we're actually going to talk about what the two fund portfolio is at a conceptual level, the benefits of a two fund portfolio, how to actually build the Vanguard version, some alternative two fund portfolios to consider (which are actually really quite good) and then finally be sure to stick to the end where I’ll share a really easy way to actually stick to your target allocation percentages for the portfolio.

So very simply, the original three fund portfolio comprises of three different asset classes, you have US stocks, US bonds and international stocks, and the Australian version of this is Australian stocks and bonds, plus international stocks. The concept of the three fund portfolio was popularised by “Bogleheads”, a group of investors named after the original founder of Vanguard and the grandfather of passive investing, Jack Bogle. Now this doesn’t mean you can go out and buy any Australian stock, Australian bond, and international stock, and say that you have a 3 fund portfolio.

The point is to achieve a highly diversified portfolio using low cost index funds or ETFs. If you’re not sure what an index fund is, it’s a way to by a whole basket of stocks through a single transaction, imagine if you wanted to buy the largest 500 companies in the world, it would be pretty cool if you could do that by just buying a single stock, rather than all 500 individually, well that’s what an index fund or ETF allows you to do.

So back to the two fund portfolio, well this is just a version of the three fund portfolio but without the bond allocation. And the Australian version would comprise of an Australian Shares index fund and an International Shares Index Fund.

What is a 2 fund portfolio
The benefits of a 2 fund portfolio
- Performance
- Simple and easy, More likely to keep balanced
- Low cost
The Vanguard version of the Australian two fund portfolio and the shares that are actually inside of it
I’ll provide some alternatives options to the Vanguard 2 fund portfolio
- Swap VAS for A200
- Swap VGS for IVV
Automate your target portfolio allocation balancing

All opinions expressed in the video and this description are for entertainment only. You should consult a licensed professional before buying any securities, stocks, cryptocurrency or digital assets. Everything in this YouTube channel is for entertainment only.

[gwendolyngwen]

Is it a good idea to have a stock broker in Uk?

[GabrielPitchford]

Been watching, listening, and paying attention to all of predictions and forecasts since early Covid. He hasn't disappointed yet 👌

[Nick-ypeo]

VAS/VGS are my two highest holdings. Interesting to hear your take on the 75/25 split as I lean slightly higher in VAS than 25%. This is definitely some food for thought and awesome information for investors. Keep it up, mate!

[joshmcgillicuddy]

This video was uploaded at the perfect time! Looking to buy my first ETFs buy the end of the month. Great content btw, get the info across in an entertaining way without the fuss 👍

[cynthiakk]

You are my favourite youtuber and very clearly explain. BTW, your videos qualities improve so much and background is super. You look super smart with white colour.

[funcool]

Have you looked at VTS? Seems to be a direct competitor for IVV, with 0.03% management fee, 99.18% in US shares, and similar returns, and half the price of IVV per ETF. Excellent video by the way!

[Southeastasiantraveler]

Thanks for the informative video. I agree with having a simple structure for your investments and holding for the long term. If however, you wanted to add a little more control and also lower your fees, I would suggest considering splitting the 75% for international stocks between VTS (US total stock market) and VEU (non US international stocks). Both have extremely low management fees around 0.04%. The downside is that you need to make the decision of how much to allocate to both ETF’s. In other words, how much exposure you want to the US market. But your approach is fine and certainly keeps things simple.

[andrewklink]

You are a total legend thank you for making these vids! I hope that YouTube algorithm starts snowballing for you

[martyscott]

Hi mate great videos! Question VGS - IVV at 0.04% versus VGS - VTS at 0.03% I know it’s nothing - but still what’s your thoughts?

[dajackalz]

Would A200 + BGBL be the ideal pick for a 2 fund portfolio? What are your thoughts on hedging for international shares? (HGBL)? Fees for the Betashares ETFs are 0.04% and 0.08% which is substantially lower than VAS and VGS

[theniceguy]

the way i see it with bonds (might be something i havent thought of) i am already putting money into paying off my mortgage thus saving a small amount in interest i would have to pay to the bank if i didn't. so why would i buy bonds to get an interest payment similar to or lower than the amount i'd save paying down my mortgage...and also having to pay tax on each payment too.

[chinahuman]

I like A200 and IVV. They have the lowest fee and I plan to hold them for a long time.

[pradeepanandraj]

What is your opinion about holding VAS, VGS and VHY as 3 fund portfolio?

[MM-rhyo]

Thanks for sharing your knowledge! Seriously listening to you.

[travismayne]

Ive been looking at VGS, IVV and ETHI and ive really been looking at ethi because everything seems to be going renewable and to me it just seems smart to focus on investing in the future

[VideoAssociates]

I sold my afterpay

Im 39% A200 and 61% IVV

[AlexsMoneyBehaviours]

Good content and video. Only comment I have. I wouldn’t be investing such a big share in Australia. It’s not reflecting the size Australia plays in the economy.

Due to home bias that’s what people will do. Because we like to invest in what we know and not what’s best. I’d recommend Small caps and emerging markets considering the role they play in the economy.

[shawnfrank]

Thanks for a wonderful video ... I was just wondering .. Is there any etf to get exposure to bonds, developed countries and emerging markets ?

[scottd]

VAS will keep coming down in price as it already has since I began in 2016. Vanguard is a NFP organisation so lower fees are a given. Therefore I wouldn't waste my time with A200.

[andrewwilliams]

Great vid new to all of this so can I ask that if you invest a sum each month do you have to pay brokerage each month.

Thanks.