Higher Return Portfolios: Part 2
Our previous newsletter has drawn considerable interests from readers. Some are particularly excited on P Composite Momentum Scoring ARK ETFs. As this portfolio only invests in a subset of technology ETFs, we want to caution our readers that, from risk point of view, its diversification sits at the bottom of the chain Global Asset Allocation, Factors and Styles in US stocks, Industry sectors and then technology sector subgroup. The following table summarizes the types of the portfolios (see also Advanced Strategies):
|Ticker/Portfolio Name||Diversification Level|
|P Composite Momentum Scoring Global Risk Assets||Global Asset Allocation|
|P Composite Momentum Market VFINX||US Stocks Index Level|
|P Composite Momentum Scoring Factor ETFs||US Stocks Factors|
|P Composite Momentum Scoring Style ETFs||US Stocks Styles|
|P Composite Momentum Scoring Fidelity Select Funds||US Stocks Industry Group|
|P Composite Momentum Scoring Industries ETFs||US Stocks Industry Group|
|P Composite Momentum Scoring ARK ETFs||US Tech Stock Sub Group|
So the ARK ETF portfolio has the least diversification and thus highest risk/volatility.
In this newsletter, we want to look at the Industries ETFs portfolio in the above in more details and see that one can probably reap most benefits from this more diverse portfolio than the pure ARK ETF portfolio.
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