ETF Investing - Part 2 (Sample ETF Portfolio)

This is Part 2 in the series of posts about ETF Investing. Click here to read part 1 about ETFs and their advantages/disadvantages. This post is dedicated to building a sample ETF portfolio.

Some things to keep in mind:
-First things first, you got to decide if you want to dedicate a part of your portfolio to ETFs or your entire portfolio.
-Think about your risk appetite
-Think about your rewards expectation

Higher risk = Higher volatility = Higher profits OR Higher losses

Sample Portfolio 1 -Aggressive (Stock ETFs constitute your entire portfolio):
If you are like me, you would want to dedicate about 30-40% of your portfolio to US, and the rest 60-70% international. Out of the 60-70% international, I would set aside maybe 20% for developed economies like Western Europe and the rest 40-50% for emerging economies, and maybe 10-20% for sector-specific ETFs. Here are the specific ETFs I would allocate money to:
1. Domestic US ETFs:

• SPDR S&P 500 (AMEX: SPY) [10%]: Invests in US S&P 500 companies, usually large caps. I would put this at low risk, low rewards. Seeks to correspond to the growth and yield of the US S&P 500 index. Expense ratio 0.08%.

• Vanguard Mid-cap growth (AMEX: VTI) [20%]: Invests in US mid-cap companies, I would put this as medium risk, medium reward. Seeks to track the MSCI US Mid Cap Growth Index. Expense ratio 0.13%.

• Vanguard Small-cap growth (AMEX: VOT) [10%]: Invests in US small-cap companies, I would put this as high risk, high reward. Seeks to follow the MSCI US Small Cap Growth index. Expense ratio 0.12%.

2. International ETFs:

• Vanguard Emerging Markets Stocks (AMEX: VWO) [30%]: Invests in stocks of emerging market economies. I would put as very high risk, very high reward. Seeks to track the MSCI Emerging Markets index. Expense ratio 0.3%.
  

• iShares Pacific ex Japan (AMEX: EPP) [15%]: Invests in stocks of Pacific markets except Japan. Seeks to track the MSCI Pacific ex-Japan index which constitutes economies like Australia, Hong Kong, New Zealand, and Singapore markets. Expense ratio 0.5%.
  

3. Sector specific ETFs:

• Oil and Energy - Energy Select SPDR (AMEX: XLE) [5%]: Like most investors, I am bullish on oil and energy, since these are limited natural resources with increasing demand. I would devote 5% of my portfolio to this ETF, which invests in oil, gas, energy equipment & services companies. Expense ratio 0.24%.
  

• Technology Select SPDR (AMEX: XLK) [5%]: Technology has become or is becoming a part of every field, and considering that tech demand will continue to increase, I would also devote 5% of my portfolio to this ETF, which invests in technology economic sector - which includes hardware, software and telecom companies. Expense ratio 0.24%.
  

• Market Vectors Steel ETF (AMEX: SLX) [5%]: Considering a bullish demand for steel especially from emerging economies, I will also devote 5% to this steel ETF. Expense ratio 0.54%.
  

More sample portfolios to follow.

Part1
Part2
Part3