Aggressive Growth Portfolio Construction

I want to lay out what I think can be a good portfolio to create, and what the strategy would be.

This assumes that the personal finance of the investor is already settled and that general diversification has been attained via other means.

The core goal would be to develop a fund that outperforms and attains strong capital gains via select stock picks and active management.

The focus would be on US and international equities, with particular focus on tech, consumer, and strategic sectors. Some utilities and energy stocks could enter the universe, but they are secondary.

Risks would be relatively high at a full equity allocation rate. The markt index to benchmark against would be an international equities benchmark.

Strategies

I look at those stocks which are misunderstood and stand to gain in a secondary manner from secular trends. Think AMD and CATL from the AI boom over NVIDIA.

I also aim to look at stock that will gain in the long run, say EU stocks and defence industries as the global order shifts. When firms and states diversify their links, there will be long-run impact. Also consider the re-emergence of Korean and Japanese firms as corporate governance reforms take place.

In the medium-run, look to immediate opportunistic rotation. This focuses on specific multi-year trends and catalysts, in the range of 2-3 years looking forward. Examples include the buildout of domestic chip manufacturing in America, such as with Intel, the expansion of fiscal spending in Europe, and broadening of tech-gains in other industries.

The ballast of this will be with niche picks in Southeast Asia. Consider tech-firms and other financial or consumer services in the region. Rather than a nationalist lens, we look at the region holistically to see which segments each state can specialise in. Take commodities from Indonesia, financials and healthcare from Singapore, and mid-end manufacturing in Malaysia and Vietnam. Australian commodities are also an opportunity.

We have opportunistic picks as overcorrections occur and prices fall below our targets.

Portfolio Construction

The core allocation, say 60-70%, will thus take the medium-run lens with a core pick of stocks that chase immediate gains and valuations against medium-term catalysts. This will focus on the broadening of earnings in America, Europe, and East Asia. Current focus is on consumer, tech, and financial sectors.

Rotation will occur with an eye on evolution into the long-run view as we see it. In that way, we aim to be ahead of the market to pick up gains as structural factors make themselves felt.

The secondary allocation of 20-30% will go to niche strategies for select picks as mentioned above, with a geographic focus on Southeast Asia.

A last potential 10% will be a revolving buffer of dry powder to deploy when targets fall below their thresholds and for other tactical trades.