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How to create an instant portfolio with QV for ETFs

August 26, 2020
QQQ, charted above, is one of the world’s most popular ETFs and tracks the Nasdaq 100, which is almost certainly the world’s best performing index over almost any timescale you care to choose. If you do nothing else, buying some shares in this ETF is a great thing to do. QQQ is doing well because the Nasdaq 100 is doing well. The Nasdaq 100 is doing well because of its heavy weighting of the world’s most successful big US technology shares. They are leading an accelerating global technology revolution, which is driving the Nasdaq 100 relentlessly higher, which is powering the performance of the QQQ ETF.

QQQ has been alerted 16 times in QV for ETFs. All the alerts are in profit with gains ranging between 89pc and 6.9pc (the most recent alert).

Almost every single ETF in the QV for ETFs portfolio is powering ahead. The average gain since QV for ETFs launched in June 2017 is 31.9pc; that is on ALL the ETFs alerted and assumes no sales. Well chosen ETFs are ideal for buy and hold or even buy and forget. Take a look at how your portfolio is performing once a year and most years you will be favourably surprised.

As a point of comparison the FTSE 100 index is down around 18pc on its average level since June 2017 so you do need to choose wisely.

I have just been through the table and picked 22 ETFs you could buy to create an instant portfolio. The choice is fairly arbitrary since virtually all the QV selections are doing well but I think if you put say £1,000 in each of these you would have an instant £22,000 portfolio, full of potential world beaters. If you bought and really forgot one day (a few years from now) it could be worth £100,000; that’s how bullish I am about prospects for the world economy, the technology revolution and the heavily US and technology weighted ETFs that I have selected.

There is almost a can’t lose element to well-chosen ETFs if you hold them long enough. They are regularly rebalanced around winners so, in the long run, as long as there are winners they will win. If Amazon, say, lost the plot, that would hurt short-term because of its heavy weighting in many ETFs but it would be replaced by other monster success stories and the ETFs would power ahead anyhow.

Below is my list of ETFs for an instant portfolio. There are two newcomers to the portfolio; the rest have all been previously alerted, often many times. This strategy of alerting/ buying again and again is very much part of my investment strategy. It is a kind of pound cost averaging approach, which allied to the natural defensive qualities of ETFs (they don’t go bust, just keep rebalancing their portfolios around the latest success stories) makes for a very bullet-proof style of investing.

ARKF  Buy @ $40        Fintech Innovation

ARKQ  Buy @ $58.25  Autonomous Technology @ Robotics (new entry)

CHIQ   Buy @ $27        China Consumer Discretionary (Internet focused)

FNGS  Buy @ $96.50   FAANG stands for Facebook, Apple, Amazon, Netflix, Google and similar stocks

QQQ3  Buy @ $3,333   Same as QQQ (see below) but with 3x leverage (so expect a scary, exciting ride)

SKYY  Buy @ $82        Cloud Computing

FPXI   Buy @ $59        International IPOs (50 largest international firms with recent IPOs)

EBIZ   Buy @ $28.75   Global E-Commerce

AIQ     Buy @ $24        Artificial Intelligence & Technology

MILN   Buy @ $32       Millennial themed stocks (Square and Paypal are two biggest holdings)

IYW     Buy @ $316     US Technology

IWMO  Buy @ $54       World Momentum

IGM     Buy @ $326     Expanded Technology (holdings capped at 8.5pc to give wider spread of stocks)

IUSA   Buy @ $29        Tracks S&P 500

IHI       Buy @ $295      US Medical Devices

MTE    Buy @ 1365p   European smaller capitalisation stocks

PNQI   Buy @ $216     Nasdaq Internet

QQQ    Buy @ $290     Broadly tracks Nasdaq 100

OGIG    Buy @ $45      Global Internet Giants (also many sexy smaller technology stocks)

SOXX   Buy @ $306     Tracks Philadelphia Semiconductor index

PCT      Buy @ 2215p    UK investment trust with great record of technology investing

XWEB   Buy @ $128     S&P Internet (new entry)

Since 2009 there have been some sharp reactions in share prices, most recently and dramatically with the virus-inspired economic lockdowns but none of the reactions has lasted much more than three months. Hang in there and even buy when downturns show signs of bottoming out and you should do very well.My mantra for all investors is that only three things matter in investment in the 21st century – technology, technology and technology.

Don’t worry that shares have already risen a lot. In a bull market it always seems to late to buy but if you buy and hold time will pass, values will rise and you will be glad you took the plunge.

If you are having trouble finding a way to buy non UCITS (non European regulated) ETFs, which is an issue with many US-based ETFs, there is a way to buy. Open an account with IG and you can buy, not in a share account but in a leveraged CFD account. This is not as risky as it sounds. Limit yourself to no more than two times leverage (put in £500 for every £1000 you plan to invest) and you will be fine. You could buy the above portfolio (putting £1,000 in each share) for an investment of roughly £11,000, which I think makes great sense.

The effect of the leverage is that gains and losses are magnified by two times (less the interest you pay which is charged at a very reasonable mortgage-style rate given that these are secured loans). I am bullish on prospects so having two times leverage seems like a good idea to me.

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