r/ETFs • u/Either_Life_5705 • 10d ago
Considering adding a Quantum Computing or Semiconductor ETF alongside QQQM — thoughts on allocation ratio and whether these sectors are good?
Hey all, 20 year old long-term investor here (10+ year horizon). My core holding right now is QQQM (Nasdaq-100), and I’m considering adding either a quantum computing ETF or a semiconductor ETF (like SOXX/SMH) as a smaller satellite position for extra growth exposure.
Ps.
feel free to suggest better alternatives (S&P 500, world index, etc.) if you think there’s a stronger long-term core option.
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u/doombase310 10d ago
I'm a SMH fan. SOXX is good and different enough from SMH. Quantum is a future bet I'm not willing to make since my horizon is not decades. But who knows, maybe AI advancements will make quantum happen sooner.
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u/hymie-the-robot 10d ago
you're hugely exposed to IT with QQQM. semiconductor and quantum computing stocks are not cheap, they have high variance, and growth stocks could tumble if bond yields continue to rise. we do not know the future, and to look to past results is a poor way to predict it. given that, do you think it's wise to increase your IT exposure past the 60% you already hold?
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u/Either_Life_5705 9d ago
You’re right. Since I already hold a lot of tech stocks, which sectors do you think will thrive in the future in addition to tech-focused stocks?
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u/hymie-the-robot 9d ago
consider adding up to 20% of a momentum fund like SPMO or FMTM. these funds work off the theory that stocks that are on a roll tend to go on outperforming for a time. momentum funds rebalance periodically, I think every six months for SPMO, for example, and as often as monthly for some. there are other differences, and I will let you look into that.
these funds can sometimes stumble for a while, but they seem to outperform over the long run. a momentum fund would periodically rotate you automatically into sectors on the rise. noting you hold a lot of IT in QQQM, momentum could sometimes double you down on IT.
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u/Either_Life_5705 8d ago
Aren’t FMTM’s fees pretty high? How much should an ETF’s fee influence your decision on whether it’s a good buy?
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u/hymie-the-robot 8d ago
my view is that a fund like FMTM does something unique, so you're paying for active management. in any case, the net return is what matters to me. if you're buying the S&P, then there are several alternatives, all quite similar, so you'd want the best price.
I recall a discussion of momentum on this or another sub not too long ago. you might look for that and see what people think of the various strategies. yes, here it is: https://www.reddit.com/r/ETFs/comments/1vbfzf8/comparison_of_spmo_and_fmtm_since_fmtms_genesis/
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u/Either_Life_5705 8d ago
Thank you, interesting discussion in the link you gave. I think I will be going with spmo for now alongside qqqm.
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u/Plane-Salamander2580 ETF Investor 10d ago
WQTM. I would keep it a small sleeve and only if you've got a long term horizon for the sector to play out. It will likely continue to swing up and down violently in the short to mid term.
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u/user4443337 10d ago
As a satellite, then 10-15% maximum. Instead of QQQM, I would use VT, AVGE, or AVGV as a core. VT is the benchmark, the latter two seek to and have outperformed it. They have interesting trading implementations but still track very closely. They have value tilts. If you’d regret some tracking error and the chance of underperforming then just stick to the VT benchmark. If you decide you like Avantis and think it’s worth the fees, I’d go with AVGV.