Building the right portfolio is one of the most important, but difficult tasks for every investor. There's no one-size-fits-all. The composition of your portfolio is dependent on your appetite for risk, your age and your income.

In this article we're going to dig deeper on how to build the right portfolio of ETFs for you. We'll start by showing why ETFs are a great investment. We'll then explain how you can figure out what risks you can take and discuss stocks and bonds, the two types of assets we think any investor should consider. We'll finish with concrete example portfolios that you can inspire yourself from.

What's an ETF?

An ETF (or exchange-trade fund) is a collection of tens, hundreds, or sometimes thousands of stocks or bonds. This spreading is one of the most attractive aspects of owning an ETF compared to individual stocks and bonds. By investing in a single ETF, you become invested in thousands of companies in one go. The majority of ETFs are designed to track a market index, which is why they're also called trackers.

The style of investing based on indexes is called index investing (also called passive investing), as you typically purchase and hold your investments over the long-term. When passively investing, you choose to ignore day-to-day price changes knowing that the market will keep growing long-term. Data shows that this strategy is most likely to give you the highest return.

Why invest in ETFs?

There are several reasons why ETF investing is one of the best ways to grow your wealth.


Index investors pay low fees because ETFs are very cheap to run. It's simple to track an index: all that is required is buying the stocks in the index, and update when the index changes. It doesn't require expensive analysts or other specialists.


One of the goals of index investing is to diversify as much as possible. Through diversification across many countries and sectors, you eliminate unnecessary risk. And you also benefit from the growth of the best companies in the world, not just the large German, French or American companies you know. By investing in as many companies as possible, you're almost sure of including the winners, namely the minority of stocks that are responsible for the majority of the returns.

Rooted in the real economy

Most index funds invest either in stocks or bonds. Those are backed by real companies, with real factories, employees, intellectual property, and so on. This is unlike, for example, the crypto space, where the value of a currency or token is mostly determined by its potential rather than by concrete applications.

It just works

One of the most famous indexes is the S&P 500, which contains the 500 biggest American companies. Large companies such as Apple, Google or Amazon are represented in the S&P 500. The graph below shows the growth of the S&P 500 index since 1992. A €10,000 investment in 1992 in an ETF that tracks the S&P 500 index would have resulted in over €210,000 by the end of 2022, or an average 10.4% return per year!

Buy and sell whenever you want

ETFs are very easy to buy and sell. If you wish to, you can trade any ETF within minutes. In finance jargon, we say that ETFs are "liquid". This is an advantage compared to other types of investments such as real estate or art. For instance, when selling a house, it can take a long time before finding the right buyer.

Invest with low amounts

An advantage with ETF investing is that you don't need a lot of capital to get started. You can even invest with as little as €50. This makes ETF investing possible for everyone, especially young people who just started their career and want to grow their wealth by putting their savings. In contrast, real estate is much less accessible. Just the down-payment for a property requires several tens of thousands of euros.


In most countries, investing in the stock markets is tax-efficient compared to other types of investments. Some countries like Belgium even don't tax profits from investments in stocks, making index investing particularly tax-efficient for them.

You're convinced of ETFs. But how do you put them together to build an optimal portfolio that will bring you success on the long term?

Define your investment goals and risk tolerance

The first step is to seek clarity on your goals. For most people, a single ETF is not enough to constitute a balanced portfolio that will bring them success over the long term. You must choose the right mix of indices to build a portfolio that fits you and your goals by answering the following questions for yourself.

What's your investment goal?

This is an important initial question. Why are you investing your savings? Is it for your retirement, to make the most of your savings, to buy a house, to save for your children or to live off your investments?

How long are you investing for?

Your investment goal will also depend on your time horizon, which is the amount of time you plan to hold your investments. If you have a short-term investment goal, such as saving for a down payment on a house in a couple of years, you'll likely want to invest in less risky assets. If you have a long-term investment goal, such as saving for retirement, you may be more comfortable with riskier investments that have the potential for higher returns.

Riskier assets like stocks need a longer investment horizon to increase the chances of a positive return (from Backtest)

What is your tolerance for risk?

This can be a tough one. Your risk tolerance is your willingness to take on risk in pursuit of higher returns. Some people are comfortable taking on a high level of risk, while others prefer to invest in lower-risk assets. Your risk tolerance will depend on your financial situation, your investment goal but more importantly your personality.

There are four factors at play to rate your appetite for risk which can help guide you:

  • Experience: How long have you had experience with investing?
  • Expectations: Do you believe riskier products with higher potential return to be more attractive than less riskier products with a lower potential return over the long term?
  • Risk awareness: How would you split your assets according to certain risk/return frameworks?
  • Loss sensitivity: How would you react if your portfolio were to drop by 30%?

What is your capacity for taking risk?

Your capacity for taking risk refers to the amount of risk you can afford to take on without jeopardising your financial situation. Assessing your financial situation is the first step in determining your capacity for taking risk. You should consider your income, expenses, debts, and assets. Understanding where you stand will help you determine the level of risk you can afford to take on.

This isn't based on your feelings but rather on your financial situation:

  • Savings capacity: How much can you save on a yearly basis, taking every expense into account?
  • Time horizon: Have a look at the assets at your disposal. Do you need a substantial sum in the future? If so, when?
  • Loss of income: Assume you lose your job, how long will your savings last to maintain your standard of living?

You also need to recognise that your financial situation and goals (and even your attitude to risk) may change over time. It's also why this process needs to be repeated regularly to make sure that your investment strategy always remains aligned to you and your needs.

If you choose to manage your own investments, you will have to answer these questions for yourself and build your portfolio accordingly. We realise that this can be a challenging task. So when investing through Curvo's app in one of NNEK's portfolios, you are asked these questions when you create your account. And based on your answers, your best portfolio is built for you.

Building your right portfolio of ETFs

Properties of a good portfolio

A good portfolio of ETFs should have several properties to ensure diversification, minimize risk, and optimize returns. Here are some important properties to consider:

  • Diversification: A well-diversified portfolio should include ETFs that cover different asset classes (stocks, bonds, commodities, etc.), sectors, industries, and geographical regions. This spreads risk and reduces the impact of any single investment on the overall performance.
  • Low expenses: Choose ETFs with low expense ratios, as high fees can significantly erode long-term returns. This is an important reason to choose index ETFs rather than actively managed funds.
  • Tax efficiency: Some ETFs are more tax-efficient than others. So choose wisely to help minimize your tax burden. Italian investors can take a look at our piece on taxes for Italian investors and Belgian investors can look at our piece on taxes for Belgians.
  • Asset allocation: As we saw in the previous section, the portfolio should be built based on your goals, risk tolerance, and time horizon. This involves balancing between stocks and bonds, depending on your individual circumstances.

By carefully considering these properties, you can build a well-rounded ETF portfolio that is tailored to your investment needs and objectives.

Types of assets: stocks, bonds, commodities and others

Let's unpack what you can invest in to build your ideal portfolio of ETFs. There are indices for different types of assets: stocks, bonds, commodities, precious metals, crypto... We prefer stocks and bonds because they generate an income. Stocks pay out a dividend, and bonds pay an interest. On the other hand, a precious metal like gold does not generate any income. In fact, it actually costs money to store and a secure it.

Stocks and bonds have a different role in an investment portfolio. Stocks are the main drivers for returns, whereas bonds tame the fluctuations of your investments.

Investing in stock ETFs

What's a stock?

A stock represents partial ownership of a company. Companies issue stock to raise money in order to grow their business. As an investor, your stocks become more valuable as the company grows.

Why adding stocks to your portfolio?

For the last hundred years, companies around the world have continued to innovate and grow, thereby providing returns for investors.

Benefits of investing in stocks

Stocks are the main drivers for returns. Throughout the decades, companies all over the world have continued to innovate and thereby yield solid gains to their investors. Global stocks have made an average annual return of 5.2% over the last 120 years, and that's after inflation. There is no sign that this trend will stop: the drive to create and innovate is an innate trait of human beings.

Investing in bond ETFs

What's a bond?

Governments issue bonds to borrow money from investors that they spend on public services. So a bond is a loan to a government.

Why bonds in your portfolio?

Government bonds tend to maintain their value during a downturn. Their role is to stabilise your portfolio and protect from wild fluctuations.

Benefits of investing in bonds

Government bonds tend to maintain their value during a downturn. Their role is to stabilise your portfolio and protect from wild fluctuations.

Whereas stocks are very exciting (and scary when they sharply drop), bonds are very boring. They don't fluctuate as much. But that means their returns are lower, at an average 2.0% per year. So one way bonds are used in your portfolio is to tame the volatility of stocks. Portfolios with more bonds relative to stocks will be better suited for investors with a lower appetite for risk.

Beyond their role of stabilising a portfolio, bonds are also great diversifiers. It turns out that often times when stocks are dropping, bonds are rising, and vice versa. So the losses of one type of asset can be partially offset by the gains of the other. In finance speak, we say that there is little correlation between stocks and bonds.

Blending both stock and bond ETFs

In many situations in life, it’s wise to not put all your eggs in one basket. The same holds for investing. That is what asset allocation is about: choosing the right mix of securities (i.e stocks and bonds) in your portfolio in order to reduce risk while maintaining a high expected return.

The ratio between stocks and bonds in a portfolio is used as a knob to change the degree to which the portfolio fluctuates. When more stocks are added at the expense of bonds, the portfolio becomes riskier. But as a consequence, you get a higher expected return over the long term. Conversely, replacing some stocks with bonds makes your portfolio less volatile, but also lowers its expected return.

Let's make this concrete with some example portfolios.

Example portfolios of ETFs

We highlight 4 different portfolios, each corresponding to a different risk profile.

100% stocks

This portfolio is composed of 88% MSCI World and 12% MSCI Emerging Markets, so it's a mix of stocks from developed markets and emerging markets. Because it invests only in stocks, this portfolio is suited for those with a long investment horizon and a high appetite for risk.

Sustainable 100% stocks

This portfolio invests everything in the MSCI World ESG Screened index. This is a variant of the MSCI World index that excludes the most destructive companies.

60% stocks 40% bonds

Composed of 53% MSCI World, 7% MSCI Emerging Markets, and 40% FTSE EMU Government Bond, this portfolio fluctuates less because of the bonds. So it may be better suited for you if you don't tolerate risk as much.

100% bonds

A very defensive portfolio consists of only bonds, in this case 100% invested in the FTSE EMU Government Bond index. This portfolio is suitable for you if you have a very low risk tolerance, or your investment horizon is only a couple of years.


The graph below shows the historical performance of all four portfolios. As you can tell, stocks offer a better return than bonds over the long term. However, they also cause the portfolio to be more volatile. The fluctuations are more extreme. Not everyone can emotionally handle big drops in the value of their investments!

A comparison of the historical performance of the example portfolios (from Backtest)

When building your own portfolio, you may use the portfolios as inspiration that are offered through the Curvo app and managed by NNEK. Our free backtesting tool Backtest can also be useful to help you understand your portfolio.

How many ETFs should be in a portfolio?

There is no one-size-fits-all approach to portfolio construction. And while the optimal number of ETFs in a portfolio varies depending on your individual preferences, risk tolerance, and investment goals, a simpler portfolio with fewer ETFs is generally preferred.

First of all, a portfolio with fewer ETFs is easier to manage and monitor. This reduces the likelihood of errors and allows you to make more informed decisions. A smaller portfolio is also cheaper because you incur less broker fees for every round of investments. Lastly, having many ETFs in your portfolio increases the chance of overlap. For instance, we see many investors having an ETF that tracks the MSCI World index, as well as an ETF tracking the S&P 500 index. As the S&P 500 index is mostly contained within the MSCI World, this is unnecessary complexity that adds little to no diversification.

What about rebalancing?

Rebalancing your portfolio is an important strategy that can help you maintain the desired asset allocation and reduce risk. Over time, the performance of the assets in your portfolio can shift, leading to an uneven distribution of your investments. Rebalancing can ensure that your portfolio remains aligned with your investment goals and risk tolerance.

There are two main ways to rebalance your portfolio:

  • Calendar-based rebalancing. The portfolio is rebalanced at fixed time intervals regardless of how unbalanced the portfolio is, for instance every 6 months, or every year.
  • Tolerance-based rebalancing. The portfolio is rebalanced only when its imbalance passes a certain threshold. For instance, consider a portfolio consisting of two funds in a 60/40 allocation. If the tolerance is 10%, the portfolio will be rebalanced when the allocation reaches 50/50 or 70/30.

At Curvo, the portfolios are monitored on a weekly basis to see whether they're still in line with the intended asset allocation. It's rebalanced when any of the assets is 5% out of balance.

Using the "Rebalancing strategies" analysis on Backtest, you can see for yourself what the impact of different rebalancing strategies is on the performance of your portfolio. The graphic below shows the result of the analysis for a portfolio of 60% stocks and 40% bonds.

Analysis of different rebalancing strategies on a 60/40 portfolio (from Backtest)

Investing through Curvo: the easiest way

Establishing the right portfolio for you is one of the hardest parts of investing. But that's not all. You have to understand the intricacies of investing, comprehend the impact of taxes on your portfolio, learning how to use your broker, and know when to rebalance your portfolio.

You don't need to waste energy figuring out the intricacies of good investing. Open an account and spend your free time on the things that matter most to you.

Get the best portfolio tailored to you and your goals

Invest in one of five portfolios, each optimised for a particular financial goal and appetite for risk. When you sign up, you're asked a series of questions to get to know you and learn what type of investor you are. Based on your answers, you are matched with the best portfolio. Each portfolio is managed by NNEK, a Dutch investment firm supervised by the Dutch regulator (AFM).

Your financial situation and goals (and even your attitude to risk) may change over time. That's why this process is repeated regularly to make sure that your investment strategy always remains aligned to you and your needs.

Curvo's app makes it easy to get a portfolio tailored to you

Diversification at its core

Each portfolio is globally diversified and invests in over 7,500 companies.

All your money is invested

Your investments work with fractional shares. This means that all your money is put to work. There will never be cash sitting on your account doing nothing.

Invest sustainably

Sustainable investing is challenging because everyone has different beliefs and values. That's why your investments focus on one guiding principle: none of the portfolios invest in companies that are considered destructive to the planet.

Built for monthly investing

You can set up a monthly savings plan where your selected amount is automatically debited from your bank account and invested in your portfolio at the start of each month. This way, it's easy to adopt the best saving habits. Also, Curvo does not charge any transaction fees. And your investments with NNEK, through the Curvo application, support fractional shares meaning all your money is invested. So Curvo is ideal for monthly investing.

Discover how Curvo's app works.


Building a portfolio of ETFs can be an excellent way to grow your wealth due to their low-cost, diversification, rootedness in the real economy, and ease of buying and selling. Investing in ETFs also provides an opportunity to invest with low amounts and is tax-efficient in most countries.

However, to build an optimal portfolio, you must define your investment goals and risk tolerance, as well as choose the right mix of indices that fit your goals. By answering these questions, you can create a balanced portfolio that will bring success over the long-term. If you're looking for an easier option that takes care of everything, then do check out Curvo!

Questions you may have

How do I invest in ETFs?

There are several ways! Read our guides for Belgium and Italy. You can do it through one of the many brokers available, or use an app like Curvo.

What are the best ETFs to buy in 2023?

Unfortunately, there's no direct answer because it depends on you and your goals. However, we suggest you go through our list of best ETFs to buy in 2023.

What's an example of a defensive portfolio?

A defensive portfolio is designed to provide more stable returns and protect you from market downturns by focusing on less volatile, lower-risk assets. This means to favour bonds over stocks. The following example of a defensive portfolio is inspired from the Calm portfolio accessible through Curvo:

  • 70% Vanguard EUR Eurozone Government Bond (IE00BH04GL39): it tracks the Bloomberg Euro Aggregate Treasury index, composed of Euro-denominated government bonds issued by members of the eurozone.
  • 30% Vanguard FTSE All-World (IE00BK5BQT80): it tracks the FTSE All-World index, composed of stocks from developed and emerging countries worldwide.

You can analyse the historical performance of this portfolio on Backtest.

What's an example of an offensive portfolio?

An offensive portfolio is designed to generate higher returns by focusing on more aggressive, higher-risk investments that have greater potential for growth. Stocks are the ideal instrument for that. The following example of a defensive portfolio is inspired from the Growth portfolio:

  • 100% Vanguard FTSE All-World (IE00BK5BQT80): it tracks the FTSE All-World index, composed of stocks from developed and emerging countries worldwide.

However, note that this strategy isn't for everyone.

What you should do now

If haven't done so already, you need to focus on the initial step which is to determine your investment goals and risk profile through these four questions:

  1. What's your investment goal?
  2. How long are you investing for?
  3. What is your tolerance for risk?
  4. What is your capacity for taking risk?

Once you've got your answers, you'll be in a good position to choose between stock and bond ETFs and setting up your portfolio.