In a recent episode of “Behind the Ticker,” John McHugh, founder of WealthTrust Asset Management, shared his extensive experience in portfolio management and the innovative strategies his firm employs. McHugh, who began his career at Merrill Lynch in 1988 and later joined Oppenheimer and Wells Fargo Advisors, eventually founded WealthTrust in 2015. His motivation stemmed from a desire to manage portfolios on a discretionary basis and offer superior performance, which he has successfully achieved with WealthTrust’s long-term growth portfolio outperforming the S&P 500 65% of the time since 2000.
About John McHugh and WealthTrust Asset Management
WealthTrust Asset Management provides a wide range of portfolio management services across six turnkey asset management platforms. The firm manages 12 different strategies, including small-cap, mid-cap, fixed income, and large-cap portfolios, as well as two balanced portfolios. WealthTrust is notable for its GIPS (Global Investment Performance Standards) compliance, a testament to its rigorous performance measurement and presentation standards. McHugh emphasizes the firm’s commitment to educating advisors and their clients through webinars and collaborative presentations, highlighting the importance of understanding their investment methodology.
Investment Strategy and Approach
A significant focus of the podcast was on WealthTrust’s flagship ETF, WLTG (WealthTrust Long-Term Growth ETF). This ETF employs a growth-at-reasonable-price strategy, competing with benchmarks like the Russell 1000 but with a stronger growth orientation. McHugh detailed the rigorous screening process used to identify companies with high-quality earnings and dividends, aiming to construct a portfolio of 25 to 30 large-cap and mega-cap stocks. The selection process relies heavily on quantitative analysis, including earnings quality, dividend quality, and quantitative rankings that signal the likelihood of companies beating earnings estimates.
In addition to its fundamental analysis, WLTG incorporates an AI-driven momentum overlay, which enhances the portfolio’s performance by identifying stocks with strong momentum. This dual approach allows WealthTrust to dynamically adjust its holdings based on market trends, ensuring the portfolio remains well-positioned for growth while managing risk. McHugh highlighted the flexibility of the ETF to shift between growth and value stocks and even include passive ETFs or defensive assets like treasuries and gold during market downturns.
Portfolio Construction and Implementation
WealthTrust’s innovative approach to portfolio management and the WLTG ETF provides a compelling option for advisors and investors seeking to enhance their large-cap growth exposure. McHugh’s extensive experience and commitment to rigorous analysis and education underscore the firm’s dedication to delivering superior investment solutions. For more information about WealthTrust and their ETF offerings, visit their websites at WealthTrustETF.com and WealthTrustAM.com.
Deeper Dive: Insights from the Full Conversation
Beyond the headline strategy, the full conversation between Brad and John McHugh covered several additional themes worth highlighting for advisors and investors.
On Process and Philosophy
So, it allows us, that's what we did in 2022. We identified when it was time to get out of growth, and put some more investments into value. So, we sold a lot of these ETFs that 25 percent of these passive ETFs and bought value ETFs in depth to a important time. So, the Russell 1000 growth, I think, was down 38 percent in 2022. And we were done significantly less than that because of our move from growth to value.
And it's still a four the day before we will sell it. 99% of the time, that results in us missing or actually only having, let's look at the other way. Our earnings be 95% of the time with the market only beats 75% of the time. Like I said, we look at companies that we think have good growth potential to them. Have somewhat of a dividend. And the quantity of analysis helps us have lower standard deviation. Our downside risk factor is, I was just looking at our larger growth portfolio, our downside risk factor is 0.85 on the downside downcatcher.
Market Context and Positioning
Well, I mean, John, I think, you know, the investment advisors that are listening this and model portfolio providers, that this product, I think, is a great compliment to just traditional large cab growth exposure. I don't think it's just a small account solution. There's a lot of people that are running ETF only. Model portfolios are delivering to tamps. And I think this would be a great compliment to help drive some alpha. And that large cab growth bucket is their building portfolios.
No, it depends what the market's doing. For example, in 2022, our trend analysis program told us to go from growth to add some value into it. And so we are actually taking some trades off of, we had some of the max 7s, different than 7s in our portfolio, they do very well in 2001. So but in 2022, we actually took some money off of that and start bailed banks and value. So in 2022 is smart to do some trades.
I'm Brad Roth, chief investment officer of Thor Financial Technologies, and portfolio manager of THLV, the Thor Low Volatility ETF. Behind the ticker uncovers the inner workings of the ETF industry. We will interview portfolio managers and ETF service providers to dive deep into their work lives and their businesses. We will learn the inner workings of their strategies and what drives them as they continue to grow their company. Many of these individuals are entrepreneurs, and will have unique and compelling insights to share as much goes on behind the ticker.
Key Takeaways
- WealthTrust Asset Management provides a wide range of portfolio management services across six turnkey asset management platforms.
- McHugh emphasizes the firm’s commitment to educating advisors and their clients through webinars and collaborative presentations, highlighting the importance of understanding their investment methodology.
- This dual approach allows WealthTrust to dynamically adjust its holdings based on market trends, ensuring the portfolio remains well-positioned for growth while managing risk.
- WealthTrust’s innovative approach to portfolio management and the WLTG ETF provides a compelling option for advisors and investors seeking to enhance their large-cap growth exposure.
What This Means for Advisors
For financial advisors evaluating options for client portfolios, this conversation with John McHugh highlights important considerations around quantitative investing. Understanding the strategy behind each fund—not just the ticker—helps advisors make more informed allocation decisions and better communicate the rationale to clients.
The themes of quantitative investing and income investing discussed in this episode are particularly relevant in the current market environment, where advisors are increasingly looking for differentiated solutions that go beyond traditional benchmarks.
Listen to the Full Episode
This article is based on an episode of Behind the Ticker, hosted by Brad Roth, Founder and CIO of THOR Financial Technologies. For the full conversation with John McHugh, including additional nuances and details, listen on Spotify, Apple Podcasts, or watch on YouTube.