Have £20k to invest? Consider a FTSE 100 share and an ETF this July!

[miachel]

 

Building a balanced portfolio is key for steady and strong returns over time. Investing in an exchange-traded fund (ETF) is a smart way to achieve this.

Diversification helps protect against the risk of any single asset doing poorly. It also reduces the portfolio's ups and downs during different economic times.

As an investor, I can buy individual stocks to achieve this, but I can also buy an ETF. This way, I spread my money across many shares (and other assets like bonds and commodities).

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This strategy also helps me cut trading costs. Buying an ETF means just one transaction fee, while buying many shares means several fees.

A top FTSE stock I think a balanced approach of buying both individual companies and ETFs is the best way to go. This reduces risk while also giving me a chance to make higher returns by picking specific shares.

If I had £20,000 to invest, Coca-Cola HBC (LSE

 

) would be a great FTSE 100 stock to consider this July. Thanks to popular brands like Coke, Sprite, and Fanta, the company has stable revenues at all times.

But it’s not a boring business. It has excellent growth opportunities in Eastern European and African markets and is successfully moving into fast-growing areas like energy drinks.

Intense competition is always a threat for consumer goods, but analysts expect Coca-Cola HBC’s earnings to rise strongly over the next few years, starting with a 26% jump in 2024.

Because of this, Coca-Cola HBC shares currently have a price-to-earnings growth (PEG) ratio of 0.6. A PEG below 1 suggests a share is undervalued. Right now, I think it could be one of the FTSE 100’s best cheap shares.

… and a great ETF With a £20,000 investment, a good strategy could be to split it equally between Coca-Cola HBC shares and an ETF. There are many funds to choose from, but I think the iShares Core S&P 500 ETF (LSE

 

) may be one of the best.

This fund gives me exposure to all the businesses in the S&P 500 index in the US. This is great for those who usually focus on UK shares and indices, as it provides geographical diversification and exposure to many different industries and companies.

This helps balance risk while also offering the potential for strong long-term returns. The iShares ETF has provided an average annual return of 12.92% over the past decade.

One potential downside is that around 30% of the fund is in tech stocks, which could fall sharply if the economy worsens. However, I still think this is a great fund to consider holding today.

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