Betashares vs VanEck: The battle to build the ultimate 5-ETF super portfolio

I've always been reasonably proud of how I've managed my super. I salary sacrificed in my 20s, switched from balanced to growth and, now at 40, I'm happy-ish with where I've landed. My balance is well above the median for my age, so I must have done something right.

So why only “happy-ish”, you ask? Because when I look at the sub-10% returns from my super fund and compare them with what a simple international shares index fund has delivered, I can't help but wonder whether I could have done a better job just plonking the money into a bunch of low-cost ETFs.

But, of course, managing your own super isn't that simple. It's a big responsibility. This is potentially hundreds of thousands - eventually millions - of dollars that you'll rely on in old age.

A portfolio therefore needs to be constructed carefully. Every investment should have a reason for being there, and they need to come together in a way that makes sense.

And that's the challenge I put to ETF heavyweights Betashares and VanEck. I asked them to forget the default MySuper option and show us how they would build a growth portfolio from scratch. The rules were simple:

1. Create a portfolio for long-term accumulators in their 20s through to their 50s
2. Use no more than five ETFs
3. Allocate 80–100% to growth assets

Important note: Before we get into it, these are model portfolios, not personal recommendations or investment advice.

Betashares: An ‘All Weather’ approach to growth

First up is Cameron Gleeson, Senior Investment Strategist at Betashares, who has taken inspiration from the famous "All Weather" approach pioneered by U.S. hedged fund titan and Bridgewater founder, Ray Dalio.

The guiding philosophy behind the portfolio is that it should be capable of navigating four key economic regimes, with different parts of the portfolio designed to provide returns and diversification as conditions change:

1. Moderate growth and low inflation: Broad-market equities and government bonds
2. Strong growth and rising inflation: Broad-market equities, royalties and credit
3. Stagflation: Gold and royalties
4. Recession and disinflation: Government bonds and gold

Where the growth comes from

The bulk of the portfolio is built around the Betashares Diversified All Growth ETF (ASX: DHHF), which provides an all-in-one equity allocation across Australian and international shares.

Over time, DHHF should help the portfolio power along, delivering returns broadly in line with a blend of international and Australian equities. The Betashares Global Royalties ETF - Currency Hedged (ASX: ROYL) gives the growth allocation another string to its bow.

Gleeson says royalties have historically benefited from their exposure to commodity prices and held up well during inflationary periods - a useful characteristic if Betashares is right that inflation will remain a more persistent feature of the investment landscape.

Together, DHHF and ROYL make up 80% of the portfolio and provide the bulk of its growth exposure.

Preparing for when the weather turns

The remaining 20% is where Gleeson prepares for when the economic weather turns. In keeping with the All Weather philosophy, bonds and gold are designed to provide additional resilience during stagflationary or recessionary environments, when equities may struggle.

With bond yields now offering meaningful income again, Gleeson nominated two fixed income ETFs to diversify the portfolio and provide additional upside if economic conditions deteriorate and interest rates fall. That's because bond prices generally move inversely to yields - when yields fall, bond prices rise, and vice versa.

The Betashares Australian Investment Grade Corporate Bond ETF (ASX:CRED) provides exposure to Australian investment-grade corporate bonds, while the Betashares Wealth Builder Australian Bond Fund – Geared (ASX: GGAB) adds geared exposure to Australian Treasury bonds, offering what Gleeson describes as a capital-efficient way of adding duration.

"Based on current yields, both ETFs offer an expected return of around 6% p.a. after fees, and more if yields fall," he says.

And finally, there is gold, which Dalio himself has described as an “excellent diversifier”. Unlike many financial assets, gold isn't dependent on credit or someone else's ability to pay, which can make it particularly valuable when the financial system is under stress.

“The Betashares Gold Bullion ETF – Currency Hedged (ASX: QAU) provides exposure to gold, a potential hedge against tail risks such as concerns about government debt and currency debasement,” Gleeson says.

The behavioural case for not going 100% equities

Some readers may look at Gleeson’s portfolio and wonder why, with decades until retirement, you wouldn’t simply go all-in on equities? His answer is partly about diversification, but also behaviour.

“While past performance is not a reliable indicator of future performance, the portfolio’s hypothetical return over the last three years has been similar to that of a 100% growth benchmark, but with lower volatility and a smaller drawdown over the Liberation Day sell-off,” Gleeson says.

The idea is that by sacrificing some equity exposure for assets that can perform differently across economic regimes, investors may be less tempted to abandon the strategy when markets turn ugly.

“The portfolio builds in resilience through exposures that can benefit in different market regimes, which reduces the temptation to react to an unexpected shock, just when emotion tends to override rational decision making,” he says.

That doesn’t mean the portfolio can be completely set and forgotten. Gleeson suggests regularly reviewing and rebalancing it to ensure each investment continues to do its job.

The cost: The Betashares portfolio has a weighted management fee of approximately 0.28% p.a.

VanEck: Take more equity risk, but take it differently

If Betashares wants growth with shock absorbers, VanEck Senior Portfolio Manager Cameron McCormack  is willing to put considerably more faith in equities. But what he's modelled isn't a typical equity allocation.

McCormack looks to diversify the risks within equities themselves - with a splash of gold - using smart beta ETFs to reduce reliance on traditional market-cap-weighted indices, where a handful of very large companies can come to dominate.

"Each ETF targets a specific, well-documented return premium ... historically, this combination has delivered stronger upside capture than a traditional market-cap-weighted growth portfolio" he says.

Looking beyond market-cap weighting

McCormack's largest allocation is 40% to the VanEck Australian Equal Weight ETF (ASX: MVW).

Rather than giving the largest Australian companies the biggest weights, MVW invests equally across its holdings, reducing concentration risk and increasing exposure to mid-caps, which McCormack says currently offer higher forward earnings growth at more reasonable valuations than the S&P/ASX 200.

While BHP (ASX: BHP) and CommBank (ASX: CBA) each account for around 10–12% of a traditional Australian index, MVW's top holdings currently include <2% weights to Codan (ASX: CDA) and QBE (ASX: QBE), with the portfolio relatively more tilted towards industrials and less dominated by the banks and miners.

Another 35% goes to the VanEck MSCI International Quality ETF (ASX: QUAL), which screens international companies based on key factors including high return on equity, earnings stability and low leverage.

"Screening companies for these factors results in a portfolio of high-quality international companies which typically outperform in more challenging economic environments due to their defensive characteristics," McCormack says.

That doesn't mean avoiding the technology giants. Microsoft (NASDAQ: MSFT), Meta (NASDAQ: META), Apple (NASDAQ: AAPL), Nvidia (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO) are among QUAL's largest holdings, each accounting for roughly 5% of the portfolio. The difference is that they earn their place through the quality screen rather than their sheer size.

Rounding out the portfolio

McCormack then adds a different flavour with a 10% allocation to the VanEck MSCI International Value ETF (ASX: VLUE), which targets ‘cheap’ international companies that he says have historically outperformed during resilient economic environments and periods of higher interest rates.

A further 10% goes to the VanEck MSCI Multifactor Emerging Markets Equity ETF (ASX: EMKT), which combines exposure to emerging markets with factors including value, size, momentum and quality.

Rounding out the portfolio is the one area where both VanEck and Betashares agree: gold. McCormack allocates 5% to the unhedged VanEck Gold Bullion ETF (ASX: NUGG), giving the otherwise equity-heavy portfolio a small defensive counterweight.

“A small allocation to gold through NUGG adds diversification, with gold’s low correlation to equities offering the potential to improve risk-adjusted returns,” McCormack says.

The case for going harder on equities

Asset allocation is one of the trickiest parts of investing, and one of the biggest decisions investors have to contend with is: how much equity is too much equity?

As a general guide, a growth strategy typically allocates 80% or more to growth assets such as equities and private assets. McCormack has gone much further, with 95% of his portfolio invested in equities.

His rationale is that, historically, growth portfolios have typically outperformed balanced funds, which tend to split their asset allocation into around 60% growth and 40% defensive.

That being said, VanEck attempts to diversify some of that risk by reducing reliance on market-cap weighting and spreading the portfolio across different geographies and investment factors. But McCormack makes no pretence that this removes equity-market risk.

“Investors should expect drawdowns consistent with a fully equity-oriented portfolio,” he says.

As the saying goes, volatility is the price of admission for long-term returns. And what better place to ride out that volatility than super, where investors can have decades for their money to compound?

“Investing through super can support wealth accumulation through concessional tax treatment, allowing more of the returns to compound over time,” he says.

The cost: The VanEck portfolio has a weighted management fee of approximately 0.40% p.a.

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Would you take control?

Since I reported on the top-performing super funds of FY26, I've received plenty of comments and emails from investors and advisers arguing the same thing: “There is no better option than taking control of your own money.”

When the best-performing growth funds have delivered just shy of 9% p.a. over the past decade, while a simple international or S&P 500 index fund has returned around 15% p.a., I can understand the frustration - and the temptation to take control of your super.

But while the answer may seem as simple as chucking everything into U.S. equities, that's an easy strategy to advocate when the going is good. Diversification still matters.

That's why I enjoyed this exercise, and I hope it helped you get inside the minds of professional portfolio constructors and see how they piece together different investments into a coherent growth portfolio.

And remember, managing your own money also takes effort. As both Gleeson and McCormack point out, as retirement approaches, portfolios need to be carefully recalibrated from growth towards defensive assets as the focus shifts from building wealth to preserving it - so this is an ongoing process.