What do you think about the ETF SPHQ?

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I currently own SPMO but after some research I believe it’s way to overweighting on MAG 7 stocks plus it’s chasing performance. I’m looking at the quality line for S&P500 SPHQ, what do you think about that ETF? Is next year a good time to stop chasing performance?

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Asked on November 21, 2024 4:26 pm
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Keep in mind, SPMO is a momentum fund. Its sole purpose is to chase performance. It invests in stocks that exhibit higher levels of momentum to the upside, and then rotates out of them if they don't display any sort of momentum anymore.

SPHQ is a very solid fund, but it hasn't really performed all that well over and above just holding the S&P 500. 3%~ outperformance cumulatively over the course of a decade. It doesn't really move the needle for me to be honest, especially considering it has 5x the fees of something like VOO.

In terms of your question "Is next year a good time to stop chasing performance"

We should never be chasing performance. Chasing returns is one of the main reasons why retail investors underperform. It can work well over the short-term, but eventually you'll get bit. You should be buying strong companies and funds and holding them for the long-term, not investing in what has worked in the past, as there is no guarantee it will work in the future.

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Posted by Dan Kent
Answered on November 22, 2024 11:45 am