NASDAQ25 Portfolio
Portfolio Overview
The NASDAQ25 Portfolio is an investment solution designed to meet a client's needs with an aggressive risk tolerance focused on long-term returns. Our portfolio is crafted to focus on equities with a growth slant by investing in the largest companies in the NASDAQ Index. This strategy is ideal for investors seeking growth potential over the long term.
Details
The NASDAQ25 Portfolio selects the top 25 companies weighted by market cap within the NASDAQ Index. Our approach focuses on investing in growth-oriented equities. By targeting the companies with the highest market cap in the NASDAQ, the NASDAQ25 Portfolio aims to provide the growth potential of namely tech-centric stocks.
Key Benefits
High-Growth Companies: This portfolio includes tech-focused, influential, and high-growth companies.
Market Capitalization Weighting: Investments are weighted based on each company's market capitalization, providing greater exposure to larger companies.
Monthly Rebalancing: The portfolio is rebalanced monthly to maintain optimal performance and alignment with market conditions.
Direct Indexing: Avoids ETF fees by directly purchasing individual stocks, enabling investors to potentially harvest tax losses at the individual stock level while maintaining the portfolio's overall market exposure.
Results
Compared to actively managed portfolios and passive benchmarks, the NASDAQ25 Portfolio has demonstrated consistent results, showcasing its ability to generate returns through market growth. Historical data indicates consistent growth, highlighting the portfolio’s potential to outperform standard market benchmarks in various economic conditions, such as a pandemic, rising inflation & interest rates, and economic slowdown and recovery over the backtested time frame. See Disclosures below.
Performance
The following graph and table compare the NASDAQ25 Portfolio to our active management and passive investment holdings. These results illustrate the strength of performance backtested from January 2018 to December 2023. The table below shows the estimated value at the end of the period of each portfolio type if $100,000 were invested on January 1, 2018.
*The timeframe used for the information in this visual is between January 2018 and December 2023
Risk Comparison
From the table above, the NASDAQ25 Portfolio outperformed across many risk metrics compared to even the most aggressive benchmark. The stand-out risk measures are the Sharpe and Sortino Ratios—these measure returns on a risk-adjusted basis, meaning the higher the number, the better the portfolio's performance relative to the risk taken. The Sharpe Ratio evaluates return per unit of total risk, while the Sortino Ratio focuses on downside risk, providing a more nuanced view of performance by considering only negative volatility.
While the maximum drawdown, the largest peak-to-trough decline in value through the period beginning January 2018 through December 2023, was greater than any of the aggressive or moderate portfolios, the risk-adjusted return outperformed. With a portfolio focused on growth, you may expect greater drawdowns than a diversified portfolio, but the additional gains are also evident in the performance.
Methodology
The NASDAQ25 Portfolio employs a systematic investment selection and portfolio management approach. The portfolio consists of the top 25 companies in the NASDAQ index weighted according to their market capitalization,
Results were calculated using publicly available price, market capitalization, dividend, and share count information from Yahoo Finance. When market capitalization was unavailable, it was estimated using the latest price multiplied by the number of shares outstanding during the period. Holdings were identified by selecting top market capitalization companies in the NASDAQ.
The portfolio is rebalanced on the first of each month, and investment weights are adjusted based on the weighted market cap for the start of the month. Dividend distributions from companies held during the month are included in the portfolio's net performance. Results shown are net of fees, assuming a 0.8% annual fee (0.06667% monthly).
Disclosures
All data provided on Yahoo Finance is provided for informational purposes only and is not intended for trading or investing purposes.
Past results are not indicative of future performance.
Performance was obtained through hypothetical or back-tested strategies that did not result from actual trading, and there is no market risk involved in the results.
“Results” are hypothetical and often created with the benefit of hindsight, and it may be difficult, if not impossible, to account for all of the factors that might have affected our decision-making process.
Hypothetical or back-tested performance often involves certain material assumptions in applying investment decisions that might have been made, based on the investment methodology espoused, during the relevant historical period, and the data set chosen may not be indicative of present or future market conditions.
There are often sharp differences between hypothetical performance results and actual returns subsequently achieved. Due to the benefit of hindsight, hypothetical performance almost invariably shows attractive returns, while actual results going forward may not be as attractive.
The timeframe used for backtesting is between January 2018 and December 2023 due to various economic conditions, such as a pandemic, rising inflation and interest rates, and economic slowdown and recovery.