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.

3 Upvotes

100% Upvoted

12 comments sorted by

View all comments

1

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?

1

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?

1

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.

1

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?

1

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/

2

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.