Strategy
US

US Growth Portfolio

4 Jan 2021
By
The US Growth Portfolio is a 14-stock portfolio, suitable for investors looking to grow their investment capital. The portfolio is a combination of two systematic strategies, being US Value and US Momentum, of which we hold the top-ranked seven stocks from both strategies. The portfolio aims to make the bulk of its return through capital appreciation as opposed to earning dividend income.

Latest Update – 4 January 2021

Following our systematic criteria, the below table shows the top seven US momentum stocks and the top seven US value stocks.

Being the first trading day of January, it is time to rebalance our US Growth portfolio.

Regarding the Momentum component, we are selling DOCU, JD, and FDX, and buying PTON, PDD, and ALGN.

From Quality, just the one stock is changing, with ORCL being replaced by AMGN.

As a reminder, this portfolio rebalances on the 1st of each month (or the next business day if the 1st is a non-trading day).

For historical trade updates please click here.

Stock codeStock nameSectorCurrent priceReturn 12mMom rank
NVDA
NVIDIA Corp
Information Technology
$549.46214.71%
1
AMD
Advanced Micro Devices Inc
Information Technology
$84.48199.75%
2
DXCM
DexCom Inc
Health Care
$374.89177.95%
3
ETSY
Etsy Inc
Consumer Discretionary
$134.56144.28%
4
AAPL
Apple Inc
Information Technology
$113.16113.35%
5
REGN
Regeneron Pharmaceuticals Inc
Health Care
$581.64107.25%
6
SWKS
Skyworks Solutions Inc
Information Technology
$147.27101.64%
7
WST
West Pharmaceutical Services I
Health Care
$290.33100.43%
8
NOW
ServiceNow Inc
Information Technology
$491.5499.52%
9
PYPL
PayPal Holdings Inc
Information Technology
$191.6697.47%
10
NFLX
Netflix Inc
Communication Services
$505.8796.81%
11
QRVO
Qorvo Inc
Information Technology
$131.0889.28%
12
AMZN
Amazon.com Inc
Consumer Discretionary
$3,099.9688.02%
13
ADBE
Adobe Inc
Information Technology
$478.9887.32%
14
CTLT
Catalent Inc
Health Care
$88.8583.45%
15

*Quantities are based on investing US$5,000 per stock on the entry date
**All dollar values are in US dollars, and therefore returns are calculated as a US dollar return. Depending on whether or not you use hedging to manage your currency, exposure will determine whether you need to adjust returns to account for exchange rate effects.

US Growth Portfolio

MethodSystematic
GoalGrowth
MarketUS
RiskHigh
RebalanceOnce a month
HorizonMulti-year
Minimum Suggested Investment$2000 per stock (model uses $5000)

Over the years, we have realized that Rivkin Investors have been using US Momentum and US Value strategies together to have a growth portfolio with a similar return profile but lower short term volatility than the individual strategies. As a result, starting from November 2020, we have aligned these 2 strategies re-balance dates set up a 14 stock portfolio to make it easier for our members to implement.

Within the portfolio, the US Momentum strategy is based purely on the performance of the stock’s share price.  This strategy takes advantage of the “momentum effect” by buying the top 10 momentum stocks which are a member of either the S&P100 or the Nasdaq100. On the other hand, the US Value strategy sources a pool of large-capitalization US stocks based on two key financial metrics, being Return on Capital Employed (ROCE), and Earnings Sustainability, from which the final portfolio is generated by ranking on dividend yield. The lower the yield, the higher the ranking.

In general terms, the Momentum strategy uses technical factors, while Value uses fundamental factors. If you want to know about individual strategies and how they work, please use the following links.

Click here to learn more about our US Momentum strategy.

Click here to learn more about our US Value strategy.

How To Follow this Portfolio

To follow the US Growth portfolio, investors need to buy the stocks in the above table in equal weights. Weights can drift over time as stock prices move, but we only recommend re-balancing stock weights if they stray too far from the target weight. The stock volumes shown in this table are based on a $5,000 investment per stock.  Being a US strategy, this is priced in US dollars, and therefore, to get the Australian dollar value, the current exchange rate should be applied.

Once per month, the list of stocks will be updated in what we call a ‘re-balance’. This means investors will need to look at the new list and sell any stocks that are no longer on the list. After these stocks are sold, the new stocks from the current table can be bought.

Please note that the underlining strategies remain unchanged and those members who wish to continue to follow the 10 stock portfolios, can consult the strategies at any time.

If you have any questions, please contact us at [email protected] 

Important notice:

Quantities and calculations in this post use the Rivkin Model and might differ from yours. This post does not constitute an invitation to buy or sell any securities. Before conducting any transaction, make sure you fully understand the terms of the product and the relevant risk factors involved. You can seek professional advice to determine the appropriateness and cost of any transaction from the broker you use.

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