Thematic Funds For The Tactical Sleeve

I recently closed my ARKK position due to a large percentage gain, that I wanted to protect from market volatility (also indications are perhaps too much hot money at the moment). I invested the gain portion of the proceeds into a real estate qualified opportunity zone fund. I am holding back the principal recovered for a better moment to reinvest in that particular fund.

I will close my MITEX position tomorrow, also because of a large gain, and invest that gain in the same real estate fund, and then the next day reinvest some of the principal recovered back into MITEX, and apportion the balance of the recovered principal to LOUP and KOMP to better allocate between the funds.

MITEX/MATFX is the most attractive Asia-only (ex Japan) fund investing in innovative and disruptive companies.

Among the other four (world authorized funds heavily biased to US companies), if I could only invest in two, today those would be LOUP and KOMP, if for no reason other than they are more reasonably valued at this time (see Figure 8), although they are all good long-term. They are also the most complementary in terms of number of holdings and diverse multi-themes versus tightly related themes, and because of a rules-based versus individual manager judgement approach.

The Figures that follow provide lots of information about each fund to help you see what they do and how they are different.

Happy to discuss any of these funds or the information below with you if they pique interest.

Figure 1:

XITK and KOMP are index funds (although the index methodologies create effectively rules-based active management).

The stocks for XITK are from categories defined by rules developed by FACTSET The stocks for KOMP are from lists developed by computer scans of the narratives in each SEC filing of each listed stock.

LOUP, ARKK and MITEX/MATFX are actively managed in the traditional sense of the word.

The stocks for LOUP, ARKK and MATFX are selected by basic research and manager judgement as to innovation or disruption impact.

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Disclosure: I am/we are long LOUP, XITK, KOMP, MITEX.

Disclaimer: "QVM Invest”, “QVM Research” are service marks of QVM Group LLC. QVM Group LLC is a registered ...

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