Hi everyone.
My portfolio has been very aggressive with 70% QQQM and 30% BTC for the last six years, and it has performed very well. However, now that I’ve reached pretty large sum and started thinking more seriously about long-term risk, I’m seeing less and less sense in staying fully concentrated in QQQM and BTC. I decided to build a new portfolio and after reading many articles I became interested in factor investing. I’m planning to hold this portfolio long term (30 years).
Here’s what I came up with:
US (50%)
\- VOO: 20% (Blend) — 99 / 1 / 0
\- SPMO: 10% (Momentum) — 100 / 0 / 0
\- XMMO: 10% (Momentum + Size) — 55 / 44 / 0
\- AVUV: 10% (Value + Size) — 0 / 58 / 42
International Developed (20%)
\- IDMO: 10% (Momentum) — 92 / 5 / 0
\- AVDV: 10% (Value + Size) — 1 / 44 / 54
International Emerging (20%)
\- AVEM: 10% (Blend) — 62 / 25 / 13
\- AVES: 10% (Value) — 46 / 32 / 21
Speculative (10%)
\- FBTC: 5%
\- Pre IPO companies: 5%
\* After the dash, I listed size exposure (Large / Mid / Small caps) in percentages.
Things I’m unsure about:
\- Should I keep VOO, or move fully into Momentum and Value?
\- Does it make sense to keep XMMO, given that it has the highest expense ratio (0.35%) of all the ETFs listed?
\- Should I replace SPMO and XMMO with a single momentum fund like VFMO with ER 0.13%, which has Large / Mid / Small exposure of 56 / 21 / 22? It defiantly painful to watch how VFMO (combined momentum in small, mid, large) underperform VOO but I guess it is part of factor investment.
\- Should I add AVDE (cap ratio 67 / 24 / 9) to International Developed and split equally between it and IDMO?
\- I feel like AVEM overlaps too much with AVES, but I’m not sure what a better alternative would be. Momentum strategies don’t seem to work well in emerging markets (e.g., EEMO). Another option could be AVEE (size tilt, 0 / 23 / 77).
\- I feel the portfolio has too little exposure to Value (30%). In theory, Value should be one of the best-performing assets over the long run (30 years). Should I increase my allocation at least for US Value (AVUV)? I still want to have some top companies that not always be in SPMO but presented in VOO. Same with AVEM it has companies I want to own that AVES and AVEE do not have.
\- I also found multi-factor rotational funds (DYNF, PALC, OMFL) but not sure what to think about them
Overall, I feel that while momentum is nice to have, I still want consistent exposure to big tech, so I need to have VOO as well.
Any other advice is really appreciated. Thanks!