AutoWealth Plus+ Pandemic Turnaround portfolio

January 26

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AutoWealth Plus+ Pandemic Turnaround portfolio

In this article, I provide a detailed breakdown on Pandemic Turnaround, one of the portfolios that AutoWealth is offering in their AutoWealth Plus+ product. You will also learn about all the Exchange Traded Funds (ETFs) that this portfolio will be investing in.

AutoWealth Plus+ charges an annual performance fee of 8% on the profits at the end of each calendar year, based on the portfolio value at the beginning and the end of the calendar year net of all fund deposits and withdrawals in USD terms throughout the calendar year.

I have also included a simulation of this portfolio based on a starting investment of $10,000 (minimum amount to start) and a monthly investment of $500 (minimum top-up amount) into the portfolio.

Please remember that the information presented is accurate as of the time of this post and past performance is not an indicator of future results.

Enjoy $20 direct top-up into your account when you sign up

Here's a sweet deal that the folks from AutoWealth has specially extended for my readers. Sign up with AutoWealth using referral code get20jan2018 and receive a $20 direct top-up into your account after it's created.

PS: When you sign up using my referral code, I will also receive a $20 direct top-up into my AutoWealth account.

Portfolio Objective

The Pandemic Turnaround Portfolio is suitable for investors looking to capitalise on the multi-year pandemic turnaround and aims to provide above-market returns through its allocation to consumer discretionary, lithium, clean energy, home construction & aerospace companies and some defensiveness against economic contraction & market volatility through its diversification in minimum volatility companies. Consumer discretionary companies capitalise on the turnaround in automotive, consumer durables, consumer services and retailing demand. Lithium & clean energy companies capitalise on the heightened demand from the Biden Administration’s economic recovery plans and the European Union’s pandemic recovery package. Home construction companies capitalise on the turnaround in real estate demand. Aerospace companies capitalise on the turnaround in airlines and general transportation. Minimum volatility companies exhibit relatively lower volatility & drawdowns than comparable companies and are relatively more defensive against economic contraction & market volatility.

Portfolio summary

  • Min to Invest: $10,000
  • Total Holdings: > 500 stocks
  • Dividend Yield: 0.67%
  • Annual Fees: 8% on profits
  • Geographic: U.S.
  • Risk Rating: High
  • Overall Rating: 4 out of 5 stars

Annual performance fees on USD profits, no fee will be charged if there is no profit for the calendar year.

Asset allocation

  • Fidelity MSCI Cons Disc Index ETF (52.7%)
  • Global X Lithium & Battery Tech ETF (12.8%)
  • Invesco WilderHill Clean Energy ETF (11.8%)
  • iShares U.S. Home Construction ETF (7%)
  • SPDR S&P Aerospace & Defense ETF (5.7%)
  • iShares MSCI USA Min Vol Factor ETF (10%)

Risk statistics

  • Annualized Volatility: 25.58%
  • Maximum Temporary Drawdown: -39.75%
  • Sharpe Ratio: 0.54
  • Recommended Investment Horizon: > 5 years

In view of the higher portfolio volatility, this portfolio is only recommended for users with idle cash and unwavering holding power.

Portfolio exposure

Here's a look on this portfolio's asset allocation, market capitalization and sector exposures. 

Asset allocation

Market capitalization

Sectors

Portfolio growth

Below is a simulation of AutoWealth Plus+ Pandemic Turnaround portfolio from 2014 to 2021, assuming a starting investment of $10,000 and a monthly investment of $500 into the portfolio.

Annual returns

Here are the annual returns and trailing returns based on the simulation above.

Header

Annualized Return

Annualized Volatility

Name

3 Month

1 year

3 year

5 year

Full

3 year

5 year

Pandemic Turnaround

24.87%

63.21%

24.86%

22.32%

16.48%

25.19%

20.36%

AutoWealth Plus+ performance-based fees

As an AutoWealth Plus+ portfolio, an annual performance fee of 8% on the profits in USD terms at the end of each calendar year, based on the portfolio value at the beginning and the end of the calendar year net of all fund deposits and withdrawals in USD terms throughout the calendar year. In the event the AutoWealth Plus+ portfolio is not in a profit position at the end of the calendar year, there will be no fees & charges for the calendar year. AutoWealth absorbs all brokerage fees, exchange clearing fees and custody fees irregardless.

Here's what the annual performance fees look like based on the simulation above.

Year

Return

Portfolio Balance

Annual Fees

2014

3.88%

$16,497

$43.19

2015

2.28%

$22,826

$28.64

2016

6.17%

$30,368

$134

2017

32.48%

$46,213

$856

2018

-8.46%

$47,740

$0

2019

30.30%

$67,565

$1,202

2020

63.21%

$115,367

$3,635

Cell
Cell

Total

$5,898.83

Portfolio breakdown

Here is a breakdown of all the ETFs in AutoWealth Plus+ Pandemic Turnaround portfolio.

Fidelity MSCI Consumer Discretionary Index ETF (FDIS)

Total annual fund operating expenses: 0.084%

The fund seeks to provide investment returns that correspond, before fees and expenses, generally to the performance of the MSCI USA IMI Consumer Discretionary 25/50 Index.

Investing at least 80% of assets in securities included in the fund’s underlying index. The fund’s underlying index is the MSCI USA IMI Consumer Discretionary 25/50 Index, which represents the performance of the consumer discretionary sector in the U.S. equity market.

Using a representative sampling indexing strategy to manage the fund. “Representative sampling” is an indexing strategy that involves investing in a representative sample of securities that collectively has an investment profile similar to the index. The securities selected are expected to have, in the aggregate, investment characteristics (based on factors such as market capitalization and industry weightings), fundamental characteristics (such as return variability and yield) and liquidity measures similar to those of the index. The fund may or may not hold all of the securities in the MSCI USA IMI Consumer Discretionary 25/50 Index.

Top 10 holdings (as of 21 Jan 2021)

Holdings

Weight (%)

Amazon.com Inc.

21.81%

Tesla Inc.

12.19%

Home Depot Inc.

5.9%

Nike Inc.

3.47%

McDonald's Corp

3.14%

Lowe's Cos Inc.

2.58%

Starbucks Corp

2.42%

Target Corp

1.91%

MercadoLibre Inc.

1.74%

Booking Holdings Inc.

1.72%

Click here to learn out more about Fidelity MSCI Consumer Discretionary Index ETF.

Global X Lithium & Battery Tech ETF (LIT)

Total annual fund operating expenses: 0.75%

The Global X Lithium & Battery Tech ETF ("Fund") seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Global Lithium Index ("Underlying Index").

The Fund invests at least 80% of its total assets in the securities of the Underlying Index and in American Depositary Receipts ("ADRs") and Global Depositary Receipts ("GDRs") based on the securities in the Underlying Index. The Fund also invests at least 80% of its total assets in securities of companies that are economically tied to the lithium industry. Companies economically tied to the lithium industry include those engaged in lithium mining and lithium battery production. The Fund's 80% investment policies are non-fundamental and require 60 days prior written notice to shareholders before they can be changed. The Fund may lend securities representing up to one-third of the value of the Fund’s total assets (including the value of the collateral received).

The Underlying Index is designed to measure broad-based equity market performance of global companies involved in the lithium industry, as defined by Solactive AG, the provider of the Underlying Index ("Index Provider"). As of December 31, 2019, the Underlying Index had 39 constituents, 33 of which are foreign companies.

Top 10 holdings (as of 22 Jan 2021)

Holdings

Weight (%)

Albemarle Corp

11.76%

Ganfeng Lithium Co Ltd

7.26%

Eve Energy Co Ltd

5.96%

BYD Co Ltd

5.66%

Samsung SDI Co Ltd

5.65%

Tesla Inc.

5.54%

Contemporary Amperex Technology Co Ltd

5.28%

Panasomic Corp

4.87%

LG Chem Ltd

4.57%

Sociedad Quimica y Minera de Chile

4.33%

Click here to learn out more about Global X Lithium & Battery Tech ETF.

Invesco WilderHill Clean Energy ETF (PBW)

Total annual fund operating expenses: 0.7%

The Invesco WilderHill Clean Energy ETF (the “Fund”) seeks to track the investment results (before fees and expenses) of the WilderHill Clean Energy Index (the “Underlying Index”).

The Fund generally will invest at least 90% of its total assets in the securities that comprise the Underlying Index.

Strictly in accordance with its guidelines and mandated procedures, WilderShares (the “Index Provider”) compiles and maintains the Underlying Index, which is composed of stocks of publicly traded companies in the United States that are engaged in the business of the advancement of cleaner energy and conservation. Stocks are included in the Underlying Index based on the Index Provider’s evaluation that such companies will substantially benefit from a societal transition toward the use of cleaner energy and conservation.

As of June 30, 2020, the Underlying Index was comprised of 40 constituents with market capitalizations ranging from $187.7 million to $201.2 billion.

Top 10 holdings (as of 22 Jan 2021)

Holdings

Weight (%)

ReneSola Ltd ADR

5.76%

Daqo New Energy Corp ADR

2.94%

Lithium Americas Corp

2.94%

Plug Power Inc.

2.58%

Maxeon Solar Technologies Ltd

2.25%

SunPower Corp

2.20%

Ballard Power Systems Inc.

2.17%

NIO Inc ADR

2.11%

XPeng Inc. ADR

2.10%

Arcimoto Inc.

2.09%

Click here to learn out more about Invesco WilderHill Clean Energy ETF.

iShares U.S. Home Construction ETF (ITB)

Total annual fund operating expenses: 0.42%

The Fund seeks to track the investment results of the Dow Jones U.S. Select Home Construction Index (the “Underlying Index”), which measures the performance of the home construction sector of the U.S. equity market, as defined by S&P Dow Jones Indices LLC (the “Index Provider” or “SPDJI”).

The Underlying Index includes companies that are constructors of residential homes, including manufacturers of mobile and prefabricated homes; manufacturers and distributors of furniture; retailers and wholesalers concentrating on the sale of home improvement products; and producers of materials used in the construction and refurbishment of buildings and structures. The companies selected for inclusion in the Underlying Index must meet minimum market capitalization requirements, as determined by the Index Provider. The Underlying Index may include large-, mid- or small-capitalization companies.

As of March 31, 2020, a significant portion of the Underlying Index is represented by securities of companies in the consumer discretionary, home construction and industrials industries or sectors.

Top 10 holdings (as of 21 Jan 2021)

Holdings

Weight (%)

Masco Corp

2.47%

Toll Brothers Inc.

3.13%

TopBuild Corp

3.87%

Sherwin-Williams

4.07%

Home Depot Inc.

4.19%

Lowe's Companies Inc.

4.29%

PulteGroup Inc.

6.94%

NVR Inc.

8.47%

Lennar Corp

12.52%

D.R. Horton Inc.

13.82%

Click here to learn out more about iShares U.S. Home Construction ETF.

SPDR S&P Aerospace & Defense ETF (XAR)

Total annual fund operating expenses: 0.35%

In seeking to track the performance of the S&P Aerospace & Defense Select Industry Index (the “Index”), the Fund employs a sampling strategy, which means that the Fund is not required to purchase all of the securities represented in the Index. Instead, the Fund may purchase a subset of the securities in the Index in an effort to hold a portfolio of securities with generally the same risk and return characteristics of the Index. The quantity of holdings in the Fund will be based on a number of factors, including asset size of the Fund. Based on its analysis of these factors, SSGA Funds Management, Inc. (“SSGA FM” or the “Adviser”), the investment adviser to the Fund, either may invest the Fund’s assets in a subset of securities in the Index or may invest the Fund’s assets in substantially all of the securities represented in the Index in approximately the same proportions as the Index, as determined by the Adviser to be in the best interest of the Fund in pursuing its objective. The Fund is classified as “diversified” under the Investment Company Act of 1940, as amended; however, the Fund may become “non-diversified” solely as a result of tracking the Index (e.g., changes in weightings of one or more component securities). When the Fund is non-diversified, it may invest a relatively high percentage of its assets in a limited number of issuers.

Under normal market conditions, the Fund generally invests substantially all, but at least 80%, of its total assets in the securities comprising the Index. In addition, in seeking to track the Index, the Fund may invest in equity securities that are not included in the Index, cash and cash equivalents or money market instruments, such as repurchase agreements and money market funds (including money market funds advised by the Adviser). In seeking to track the Index, the Fund’s assets will generally be concentrated in an industry or group of industries to the extent that the Index concentrates in a particular industry or group of industries. Futures contracts (a type of derivative instrument) may be used by the Fund in seeking performance that corresponds to the Index and in managing cash flows.

The Index represents the aerospace and defense segment of the S&P Total Market Index (“S&P TMI”). The S&P TMI is designed to track the broad U.S. equity market. The aerospace & defense segment of the S&P TMI comprises the Aerospace & Defense sub-industry.

Top 10 holdings (as of 21 Jan 2021)

Holdings

Weight (%)

Maxar Technologies Inc.

5.00%

Axon Enterprise Inc.

4.78%

Aerojet Rocketdyne Holdings Inc.

4.37%

Kratos Defense & Security Solutions Inc.

3.82%

Cubic Corporation

3.78%

Spirit AeroSystems Holdings Inc. Class A1

3.76%

Virgin Galactic Holdings Inc.

3.76%

Textron Inc.

3.73%

Howmet Aerospace Inc.

3.69%

Teledyne Technologies Incorporated

3.62%

Click here to learn out more about SPDR S&P Aerospace & Defense ETF.

iShares MSCI USA Min Vol Factor ETF (USMV)

Total annual fund operating expenses: 0.15%

The Fund seeks to track the investment results of the MSCI USA Minimum Volatility (USD) Index (the “Underlying Index”), which has been developed by MSCI Inc. (the “Index Provider” or “MSCI”) to measure the performance of large and mid-capitalization equity securities listed on stock exchanges in the U.S. that, in the aggregate, have lower volatility relative to the large- and mid-cap U.S. equity market.

In constructing the Underlying Index, MSCI uses a rules-based methodology to select securities from the MSCI USA Index (the “Parent Index”), which is a capitalization-weighted index, and to determine the weightings of such securities in the Underlying Index.

Under the rules-based methodology, securities and weightings of the Underlying Index are established based on pre-established parameters and discretionary factors are not relied on.

Top 10 holdings (as of 21 Jan 2021)

Holdings

Weight (%)

NextEra Energy Inc.

1.62%

Vertex Pharmaceuticals Inc.

1.62%

Johnson & Johnson

1.61%

Eli Lilly

1.57%

Microsoft Corp

1.54%

Gilead Sciences Inc.

1.5%

T-Mobile US Inc.

1.5%

Newmont

1.48%

Merck & Co. Inc.

1.48%

Accenture plc Class A

1.48%

Click here to learn out more about iShares MSCI USA Min Vol Factor ETF.

What do you think about this portfolio?

What do you like or dislike about this portfolio? Share your opinion with me in the comment section.

Photo by Edwin Hooper on Unsplash

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About the author 

Mickey J

Mickey is your typical white-collar Singaporean who works regular hours in a job with a strong passion on personal finance. He writes mostly about personal finance, investing, insurance and retirement planning. He also embraces the Financial Independence and Retire Early movement (FIRE), tweaking the FIRE concept to his lifestyle.

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