CONCENTRATED PORTFOLIO IDEAS USING MOMENTUM FACTOR
QAS GLOBAL NEW ECONOMY 20 STOCKS SELECTION STRATEGY OUTPERFORMED S&P 500 INDEX BY +13% 2025 YTD
QAS Global New Economy Equity Strategy is a 20-stock concentrated portfolio with a monthly rebalancing process. All stocks are selected from our proprietary Global New Economy investment universe, representing innovative global companies across various sectors.
Each month, our fully automated algorithm analyzes current portfolio holdings. Stocks exhibiting deteriorating momentum factor profiles (a combination of absolute and relative momentum) are replaced with those showing a positive configuration.
Year-to-date (YTD), this strategy has returned +20.5% vs. +7.9% for the SPY.
Here are some of the current holdings that have contributed most to the strategy’s alpha:
- ALAB – Astera Labs
- BILI – BiliBili
- CPNG – Coupang
- RTX – RTX Corp
- SNPS – Synopsys
- DASH – DoorDash
- VOD – Vodafone Group
- AVGO – Broadcom
- COIN – Coinbase
The current sector breakdown is as follows:
Our research indicates that using the momentum factor for stock selection and position maintenance can enhance risk-adjusted returns in long-only concentrated portfolios—particularly during positively biased market periods.
Historically, the U.S. stock market has operated under positively biased conditions roughly 80% of the time. Therefore, incorporating concentrated thematic strategies into a portfolio makes sense for achieving higher long-term returns. Otherwise, unless over-diversification is your specific investment objective, portfolios tend to become overly correlated to the benchmark.
We expect positively biased market conditions to persist in the second half of 2025. As a result, increased portfolio concentration is likely to deliver above-average returns.
Our advanced momentum factor methodology allows us to apply various parameters across key aspects of portfolio management:
a) Portfolio construction (concentration vs. diversification)
b) Rebalancing and position sizing
c) Risk management (exposure reduction or stock replacement)
Concentrated portfolios (with a relatively small number of holdings) are typically considered an active or hedge fund-style investment. In contrast, passive investments are generally designed with larger portfolio sizes. A concentrated portfolio tends to have lower correlation to a broad-based benchmark. Mathematically, any portfolio with 50 or more stocks will exhibit high benchmark correlation. Conversely, the optimal size for a concentrated portfolio is typically 20–30 stocks (with some hedge funds holding as few as 8–10), allowing for significantly reduced benchmark correlation.
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