A little side note (and I think it is just a side note, but still worth commenting on), value funds in general and VLUE as well have a large position in Micron (MU). It is currently 20% of that ETF. It accounts for large amounts of that ETFs gain, which is feeding into the momentum that keeps that fund in your system. MU's margins are at about 85% (incredible and unsustainable) and the stock is up like 150% in the last 6 months. While your system is a system that does not require analysis of the components of the ETF (and it could be said that doing that analysis would shift the system from system to stock picking), it is an interesting factor when an ETF has such consolidation inside it. XLE also has Exxon (XOM) at 20% of the ETF, but with a much more modest up 30% YTD. Your system has been pointing to the same ETFs in a row that, frankly, doesn't give you the best material for writing your own content, even if it is actually a great result for the simplicity of execution in your system. Maybe it is worth exploring how you think about single name concentration in the ETFs.
Hi! You're absolutely right that in periods like this when the allocations were the same for several months, it was great for simplicity and execution of the strategy. But while it may seem "boring" it was never my intention to write a lot about how or why the allocations change :)
My general approach is to not have opinions on things that I can't affect anyway. And like you said, the system does not require analysis of the businesses or components of the ETFs. It is very common that sector- and factor-focused ETFs has one or two major components that take up a large fraction of the size. This is a natural side effect of using focused ETFs instead of tracking the whole market. I don't have data to back this up (yet), but it's not my impression that this has changed much over time. Focused ETFs have always had a tendency to have larger core positions, and that's a pattern you will also see in most of the others, especially inside the sector ETFs.
But thanks for the inspiration, I might some day write more about this :)
Keep crushing it, those are good returns. I invest in 5 dividend ETFs authorized in Europe (I'm in Germany), and they outperformed my growth stocks and Bitcoin in July. Value investing still works.
I reviewed the performance of this strategy from January to July (included) using Tradingview and without taking into account fees or taxes.
From my calculations the results are even better than what you are stating:
Strategy results in Eur: +27.775%
S&P500 Eur Hedged (Acc): +9.41%
MSCI World Eur Hedged (Acc): +8.53%
Truly impressive.
Thank you! 🙏
A little side note (and I think it is just a side note, but still worth commenting on), value funds in general and VLUE as well have a large position in Micron (MU). It is currently 20% of that ETF. It accounts for large amounts of that ETFs gain, which is feeding into the momentum that keeps that fund in your system. MU's margins are at about 85% (incredible and unsustainable) and the stock is up like 150% in the last 6 months. While your system is a system that does not require analysis of the components of the ETF (and it could be said that doing that analysis would shift the system from system to stock picking), it is an interesting factor when an ETF has such consolidation inside it. XLE also has Exxon (XOM) at 20% of the ETF, but with a much more modest up 30% YTD. Your system has been pointing to the same ETFs in a row that, frankly, doesn't give you the best material for writing your own content, even if it is actually a great result for the simplicity of execution in your system. Maybe it is worth exploring how you think about single name concentration in the ETFs.
Hi! You're absolutely right that in periods like this when the allocations were the same for several months, it was great for simplicity and execution of the strategy. But while it may seem "boring" it was never my intention to write a lot about how or why the allocations change :)
My general approach is to not have opinions on things that I can't affect anyway. And like you said, the system does not require analysis of the businesses or components of the ETFs. It is very common that sector- and factor-focused ETFs has one or two major components that take up a large fraction of the size. This is a natural side effect of using focused ETFs instead of tracking the whole market. I don't have data to back this up (yet), but it's not my impression that this has changed much over time. Focused ETFs have always had a tendency to have larger core positions, and that's a pattern you will also see in most of the others, especially inside the sector ETFs.
But thanks for the inspiration, I might some day write more about this :)
Keep crushing it, those are good returns. I invest in 5 dividend ETFs authorized in Europe (I'm in Germany), and they outperformed my growth stocks and Bitcoin in July. Value investing still works.
Thank you! Yes, different factors work at different times 👍 That’s one of the core pillars of my strategy. Great that you had good returns as well 🙌
Impressive!
Thanks, it’s been a good month 🙏