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Moving From MGK to FNGS

Byadmin

So I’ve been thinking about big tech this month. The more I think, the more opportunity I see.

I previously thought about going “all in” on big tech. And more recently, Amazon.

To reduce the risk, and to make things easier for myself, I previously chose an ETF that focuses on Mega Cap Growth from Vanguard called MGK.

But MGK has 110 holdings. These include companies like Accenture (an accountant?) and Visa/Mastercard. These might be profitable large companies, but they’re not specifically all tech stocks.

I want to find a low-fee ETF that has far fewer holdings. It also needs to have a decent trading volume since many ETFs only trade small volumes which makes them unnecessarily volatile.

One of the problems in finding such a magical ETF is that most ETFs try to mimic the S&P 500, and thus contain 503 stocks. Any ETF that is more actively managed, has higher fees.

There is one ETF that seems to check several boxes:

  • Issued by Bank of Montreal, a trustable source
  • Fees of 0.58%, not great, not bad
  • Only has 10 stocks in it – TWTR, TSLA, AAPL, FB, GOOG, BABA, NFLX, AMZN, BIDU, NVDA

That ETF is called FNGS – MicroSectors FANG+ ETN.

It’s missing some notable names like Microsoft. But does contain a concentrated mix of big tech.

There is also a 2X leveraged ETF called FNGO. And a 3X leveraged ETF called FNGU. That sounds dangerous. But if you think FANG is going up 40% in two years, then FNGU should go up 120%, right?

I think I’m going to make a big shift here. Don’t know why, but it’s one of those decisions that come from the gut.

I will sell my QQQX (Nasdaq 100 Overwrite Fund) and Blackrock (BLK). That adds up to roughly 2% of my total investable portfolio (including cash). I will also take 1.5% of my cash on top of that. So this is a 3.5% total investment.

And transfer the money to FNGS. This is really the play I had in mind when I bought it. I’ll keep some MGK to keep access to these other names, but be more concentrated in tech. 3.5% of my investment in “big tech” at these price levels seems pretty smart. Plus the MGK that I still have.

If the TSLA sale to Elon Musk goes through, I’ll benefit from that. And I’ll get Amazon, Facebook, and Google too!

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