John McHugh
Building a Multi-Strategy Portfolio at WealthTrust
John McHugh is the founder of WealthTrust Asset Management. He started at Merrill Lynch in 1988 and was one of the few advisors in the firm's Omega Program allowed to manage portfolios on a discretionary basis. From Merrill, he moved to Credential (which became Wells Fargo Advisors), where he was one of two groups permitted to manage money for other advisors' clients. That experience managing portfolios under the regulatory microscope of a major wireframe led him to eventually launch WealthTrust, building the strategies he'd been running for decades into SMA and model portfolio formats for advisors. On this episode of Behind the Ticker, John joins Brad to discuss WLTG, the WealthTrust Long-Term Growth ETF.
The WealthTrust Process: Quant Rank and Earnings Revisions
WLTG's investment process is built on a proprietary quantitative ranking system that John has been developing and refining since 1988. The system, which he calls Quant Rank, analyzes roughly 9,000 companies and ranks them on a scale from Quant 1 (highest conviction) to Quant 5 (lowest). The core signal driving the ranking is earnings estimate revisions from sell-side research analysts. John's logic is straightforward: analysts get paid their bonuses based on how close their estimates come to actual results, so they have a strong incentive to get their numbers right. When analysts are revising earnings estimates upward for a company, it's a powerful signal that fundamentals are improving.
The numbers are compelling. Since 1988, Quant 1 and Quant 2 companies have averaged roughly 25% annual returns. Quant 4 and Quant 5 companies, where estimates are declining, average only 2-3% per year. That spread of 20+ percentage points annually between the best and worst quintiles, sustained over 35+ years of data, forms the foundation of WealthTrust's approach.
Portfolio Construction: 75% Stocks, 25% ETFs
WLTG's portfolio is approximately 75% individual stock positions and 25% indexed ETFs. The individual stocks are selected based on three criteria: quality companies with strong fundamentals, dividend payers (providing an income component), and companies that are beating or expected to beat their earnings estimates (showing up as Quant 1s or 2s in the ranking system). The 25% ETF allocation provides diversification and risk management, filling in broad market exposure that the concentrated stock picks might miss.
On top of this structure sits a momentum indicator that drives tactical buy and sell decisions. When the momentum indicator signals that a sector or stock is losing its upward trajectory, positions can be trimmed or sold regardless of their Quant ranking. Conversely, the momentum signal helps identify new opportunities in sectors that are rotating into favor. John describes this as tactical in nature, and it applies to both the stock and ETF sleeves of the portfolio.
John makes an important point about his approach to market cycles. Since 1988, he says, there has been an asset class or sector that performed well in every single year except 2008. And even in 2008, Treasuries made money. The Quant Rank system naturally surfaces whatever is working because analyst estimate revisions reflect real-time fundamental trends. When home builders are performing well, they show up as Quant 1s. When commodities are leading, commodity companies rise in the rankings. The system is sector-agnostic and follows the earnings data wherever it leads.
SMA Heritage and the Move to ETF
WealthTrust has been running these strategies in SMA format for advisors for years, providing model portfolios through TAMPs and other distribution channels. The ETF launch was a natural extension: take the same process that's been producing results in separate accounts and package it for broader distribution. John notes that WLTG gives advisors access to the strategy in a single trade rather than having to implement 30+ individual stock positions plus ETFs across every client account.
The performance track record from the SMA history gives the firm credibility that many first-time ETF issuers lack. WLTG's construction, with its blend of concentrated individual stocks and diversified ETF ballast, positions it as a large cap growth allocation in an advisor's model portfolio. John sees it fitting naturally into the growth bucket alongside or as a replacement for traditional large cap growth funds, with the added benefit of the systematic Quant Rank process driving security selection rather than subjective stock picking.
Brad noted that the ETF's construction feels intelligently differentiated. The combination of quantitative earnings-based stock selection, dividend requirements, momentum overlay, and ETF diversification ballast creates a multi-factor approach that doesn't fit neatly into any single existing category. It's not pure quant, not pure fundamental, not pure income, and not pure momentum. It's a blend that reflects three and a half decades of real-world portfolio management experience.
Key Takeaways
- WLTG uses a proprietary Quant Rank system analyzing 9,000 companies based on earnings estimate revisions. Quant 1-2 stocks have averaged ~25% annually since 1988 versus 2-3% for Quant 4-5.
- The portfolio is approximately 75% individual stocks (quality, dividend-paying, earnings-beating) and 25% indexed ETFs for diversification and risk management.
- A momentum overlay drives tactical buy/sell decisions on top of the Quant Rank security selection, helping the fund rotate into sectors where analyst estimates are trending upward.
- John started managing discretionary portfolios at Merrill Lynch in 1988 and has refined this system through multiple market cycles spanning 35+ years.
- The ETF packages WealthTrust's SMA strategy into a single trade for advisors. Learn more at wealthtrustetf.com and wealthtrustam.com.
Listen to the full conversation on Spotify, Apple Podcasts, or YouTube.
Full Transcript
5,791 wordsMachine transcribed from Brad Roth's conversation with John McHugh, with speakers identified automatically. Timestamps link to that moment on YouTube. Lightly cleaned, otherwise unedited.
Welcome to Behind the Ticker. 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. Please note, nothing in this show is investment advice and it is meant solely for educational and entertainment purposes only.
Welcome to Behind the Ticker. Today we have on John McHugh. He is from Wealth Trust and we are talking about the Wealth Trust Long-Term Growth ETF, ticker WLTG. It's a very interesting product and Wealth Trust has a long history providing SMA and model portfolios through TAMS to advisors, but this is their first crack in the ETF space. The product is very unique. It's done very well. 75% of the portfolio is in individual stock names that are quality, that are paying a dividend, and that are likely to be beating their earnings estimates. The other 25% is in indexed ETFs for diversification as well as risk management. And over top of it all, he has a momentum indicator to help drive buy and sell decisions as well as find some unique opportunities. So without further
Ado, please enjoy this conversation with Mr. John McHugh. Hey, John, welcome to the show. Well, thank you. I'm happy to be here. So before we get started, can you give everybody just a little bit about your background and how you eventually started Wealth Trust?
Sure. Well, I started with Merrill Lynch back in 1988. So I've been around for a little while anyway. And after joining Merrill Lynch, I kind of wanted to manage portfolios on a discretionary basis. So Oppenheimer brought me over in, I believe it was 1994. So I actually started in a program there called the Omega Program. So I was one of the few advisors that was allowed to manage portfolios at that time on a discretionary basis for our clients. The cool thing about it, when I was at Merrill, and you probably know this, they would tell you, you got to build a position in a particular stock, right? And so the nice thing about being able to do it on a discretionary basis, that you could take care of your small clients as well as your larger clients. So that's when I
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Actually started managing portfolios on a discretionary basis. From there, I went to Prudential, which actually became Wells Fargo Advisors. So I was one of the two groups at Wells Fargo Advisors that was allowed to manage portfolios for the clients of other advisors at Wells Fargo. So by the way, I was audited by Wells Fargo legal team a lot. That was kind of like the fish out of water, if you know what I'm saying. And so after a while, and I guess it was 2015, I said, I need to farm my own RIA. And at that point in time, I left Wells and started Wellthrust Asset Management. So at that point, we had to actually start our performance over again. And just to relate back
To that, Wells Fargo would not allow me to take our statements with us because our long-term growth portfolio basically has outperformed the S&P 500 65% of the time since, for the last 21 years. So that's how we got started with managing the Wellthrust long-term growth portfolio.
It's wonderful. You and I have a similarity. We both started at Merrill. I didn't, I probably didn't last as long as you though. I think I was only there for about nine months, but yeah. So I always like to ask though, before we start talking about, the business and the ETF that we're going to talk about today is what do you like to do when you're not behind the desk? Any hobbies, interests?
Oh, that's a good one. Well, I am a golf widower. I don't know if you've ever heard of one. There are very few of us. My wife is the golfer in the family. She actually, I met her on a blind date playing golf and she actually, fell in love with golf. She wanted to play golf so she could meet a man. And so she met a man, but she fell in love with golf. So to this day, she's the golfer in the family. I'm a boater. I like being out on the water and do a little fishing, watching the sunset go down, late in the afternoon. Down here, we live down here in Destin, Florida. So we have a, down here, everything is named after Indians. So we live on Indian Bayou. So we have a direct
Access to Akawachi Bay and that bay is just beautiful. And so I like to go out there and just relax. That's my time to unwind, if you know what I'm saying.
Yeah. A lot of boaters on this show. It's funny, but there's something with managing money and the love of water. I'll maybe figure that out at one point, but before we talk about WLTG, which is your long-term growth ETF, let's talk about Wealth Trust as a whole. I know, like I said, you have the ETF, but are there any other services the firm provides? Is there any way you're working with clients outside the CTF?
Sure. We manage portfolios on six turnkey asset management platforms. So we actually manage portfolios for advisors. We have 12 strategies that we currently manage from small cap, bid cap, fixed income, conservative fixed income, and a large cap and long-term growth portfolio. And we have two balanced portfolios. So we do that. The two balanced portfolios are five-star, morning-star portfolios. And the long-term growth portfolio is a four-star portfolio. We just got GIFS approved in January of this year, which is, if that's a very difficult thing to do. So now our firm is GIFS approved. I guess we can call themselves a four- or five-star portfolio managers. So we manage portfolios on other turnkey asset management platforms like InvestNet or SmartX, Orion Communities. So clients can have access to us through those programs,
Use our other advisors. We really enjoy managing portfolios for other advisors. And one of the things that we do that's very different is that we actually do webinars with advisors and their clients. And we try to get it to where the advisor themselves participated to the webinars. So they can actually, after a while, they understand our methodology and they like to talk about it. So we work with advisors and their clients to present our methodology. I like teaching. In fact, my daughter said to me, Dad, why don't you just become a teacher because you love teaching what you do? I said, well, I think I'll stick with what
I'm doing. So you bring up methodology. I think you have a really interesting methodology. I want to jump into it. I want to talk about it in depth. And the ticker is WLTG, which is the Wealth Trust Long-Term Growth ETF. Before we get into the weeds and the details about the product, at a very high level, what is this ETF trying to accomplish?
Okay. Well, it's a growth at reasonable price ETF. So it competes with the Russell 1000, although it has more of a growth stint to it than the Russell 1000 or the S&P 500. I like to identify companies that have good quality earnings, good quality dividends, basically that I know I can depend on them. I worked for a company in St. Louis when I left, when I graduated from college. It was a S&P, it was a 500 company. And we would actually do things to manage expectations for the quarterly earnings. So we would have the chief financial officer, I was the director of financial reporting for the company. The chief financial officer would come into me all the time and say, hey, we want to beat the consensus estimate this quarter by two cents.
Okay. Well, guess what? We would do things. They were generally accepted accounting principles. By the way, my wife says to me, honey, if you don't brag about yourself, I'm not going to brag about you. And so we, at Wells Fargo, and excuse me, at this company that I work for, we would actually do what's GIFS approved. We passed the CPA exam the first time, or I passed the CPA exam the first time I took it. And so therefore, I know what GIFS allows or what they don't allow. And so we would do things. So my background basically was in industry itself, working for, a 500 company. And so what we try to accomplish is to identify companies that have great quality earnings, great quality dividends. for example,
If they have a company has a lot of deferred expenses, that's not quality, right? They got to come back onto the onto the books eventually. If they have no deferred income, that's a good, or they have some good deferred income, that's a good thing. So the goal is to outperform on a reasonably priced basis. Our PE is very close to the S&P 500, but our growth rate is around 19%. So our peg ratio, PE divided by the growth rate is 1.1. So our goal, make it longer, make it short, is to outperform on a reasonably priced basis.
Makes a ton of sense. And so if I understand this correctly, you guys, this particular fund is broken out into almost two distinct strategies, right? So first, let's talk about the analysis piece. So you're running a screen to find high probabilistic companies that are more likely to be earning estimates. And then there's a kind of a secondary strategy, which we'll talk about later, which is momentum based, or you're combining them to get your outcome. So are you able to talk about some of the factors you're using to isolate a company that would have a high probability of beating their earnings estimates?
That's a good question. The database that we have has 9,000 companies, and I've been using it for 21 years. Back when I started using it, there was about 3,000 companies. So it's now it's 9,000. It has about 1,700 American depository receipts in it. So it's kind of like the who's who of all the companies that you would consider buying. So I started screening that. I built my own screening criteria for the things that I think is important. my peg ratio, my PE ratios. So when I do my initial screen, I could do that anytime. So, once, two, three times a week, I'll run my screens and, I ended up with about 400 companies out of those 9,000 companies that meet my screening criteria.
And so we call that the art of portfolio management. It's taking those 400 companies and identifying what you like in those companies. For example, we talked about earnings quality, dividend quality, quantitative ranking. Quantitative ranking is probably one of the most important things as far as us identifying companies that's going to consistently beat their estimates. So let's just say that three research analysts, they go out and visit a company today and tomorrow. And let's say one of those research analysts is a five-star analyst. And let's say the company actually beat their consensus estimate last quarter. So they come out, they visit the company, and they all raise their estimates in a significant way. Let's say, for example, there's 20 companies that follow, 20 research analysts that follow their company.
So three of them raise their estimates. And that falls into a buy signal or strong buy signal for us. Let's say those three analysts, they go out and they do just the opposite. They lower their estimates for this quarter. And so in a significant way. So that throws us into a strong sell discipline. Now, there might be a time when, the three analysts disagree with each other. So one might, or two might increase and one might make just be neutral or decrease. That could fall into just a normal buy category. So we have five levels of quant analysis, strong buy, buy, hold, sell, and strong sell. Now, the market, the problem with the market or any index itself is that it has a lot
Of companies that are in them that have estimates that are going down. In the S&P 500, at any particular point in time, the S&P 500, between 15 and 20% of the companies in the S&P 500 are what we call quant fours or fives. So those estimates are going down. So we don't buy those fours or fives in the first place. So let's say we buy a quant two, a company that's estimates are going up. And all of a sudden, it goes from a two to a four. So in other words, estimates start going down. So that becomes our sell signal. So if we have a four or five, you have up between a 70 to 90% chance of that company missing its estimates. The market misses 25% of the time. Since we don't buy the
Fours and fives in the first place. And since the, if it does go to a four or five, if it goes to a five, we sell it immediately. If it goes to a four, we will watch it until maybe the day before earnings come out. If 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 it the other way. Our earnings beat 95% of the time where the market only beats 75% of the time. So that's quantitative analysis. Like I said, we look at companies that, that we think have good growth potential to them, have somewhat of a dividend. And the quantitative analysis helps us have lower standard deviation. Our downside risk factor is,
I was just looking at our long-term growth portfolio there, our downside risk factor is 0.85 on the downside, down capture, which is pretty good. So we're more concerned about having a lower down capture and having close to equal on the up capture. Standard deviation is below. Great alpha,
Great beta. So John, when you're running your screen, looking at the portfolio gets fairly concentrated. So you're going through all of these, you go through the screen, then you go through quantitative factoring, you're finding your buys, you're finding your cells. How many names are you targeting to get into this portfolio at any particular rebalance?
We're looking at potentially 25 to 30 names. Okay. We really like to get it up to about 30. And by the way, since they are large cap or mega cap companies, like I said, I work for a fortune 500 company. They have a better opportunity of beating their estimates. Now they might only be a average on a quant ranking, like a quant three, but large cap and mega caps can do things that small companies or mid cap companies can't. So we're looking at 30, 25 to 30 large cap or mega cap companies. And then they also have a strong possibility of beating their estimates.
So how often, you said you're kind of rerunning the screen, maybe one to three times a week. Is, are you rebalancing this portfolio quite frequently or do you have it on, a weekly, monthly schedule?
No, it's, it depends what the market's doing. For example, in 2022, our, 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 mag sevens, magnificent sevens in our portfolio that did very well in 2001. So, but in 2022, we actually took some money off of that and start buying some value. So in 2022 is smart to do some trades prior to that, there might be three, four year time period where we have the same stocks in it for a very long period of time. When growth is in value, in vogue, we want to have as many long-term growth portfolios as we can. We want to keep our
Capital gains down, down to the lowest minimum that we possibly can. But at the right time, you got to switch. You can't just stay with one particular sector or asset class.
So that being said, you're holding on to names for quite some time when kind of initially put building the portfolio, are you equally waiting these 25 to 30 names? Are you providing some overweight to your strong buys? Are you letting things run? Like, do you ever pull things back into maybe a more strategic line?
That's a good question. It's actually something that we're in the process of doing now. We've had some great runs on NVIDIA. it's kind of like maybe now might be a time to, we're up to like four and a half percent, I believe, in the ETF with NVIDIA. This might be a time to take it, bring it back down to a 3% level. So that that is possibly going to happen currently. If you think about it, since 1988, there's always been an asset class or sector that performed well, except for one year. And that was 2008. And even in 2008, if you would have treasuries in your portfolio, you made money. So for example, from 2000 to 2002, if you remember that the market was
Down 45%, right? It was because technology, the technology bubble, QQQ was down, 70% from 2000 to 2002. People don't even talk about that anymore. So, but if you would have started buying home builders in 2002 or housing related stocks in 2002, you actually made money during that year because you're in the right asset class, the right sectors. So that's what we do. So basically, it's ethical in nature. So our quant rankings and our methodology of identifying these 9,000 companies will give us, research analysts know what their sector's doing. They know what their stocks or the companies in their sectors are doing better than anybody. They get paid their bonus money based on how close their estimates come to actual results. So, they do a good job of
Estimate earnings revisions because that's how they get paid. So if home builders are performing well, they will show up as quant ones and quant twos. If commodities are performing better, they will show up as quant ones or quant twos because the research analysts are telling us that their earnings estimates are going up.
So this is a pretty loaded question, John, but I figured if anybody would have a insight into this, it'd probably be you. Historically, companies that are consistently beating earnings, what level of outperformance are they kind of exhibiting over a benchmark or over, let's say, the S&P or Russell? Like if you're consistently quarter in, quarter out beating estimates, I know this is going to be a wide range. I guess I'll simplify the question. If you have consistent earnings beats within a particular company, are you expecting them or do they historically always kind of beat the benchmark?
That's a good question. If you look at the quant rank, it's just to give you an example. Quant ones and quant twos average around 25% per year since 1988. Okay. So if you can identify a company that let's say it's a quant two, you're outperforming about, you're getting about 20% return since 1988. Guess what? Quant fours or quant fives have averaged about 2% or 3% per year. Estimates are going down. they missed their estimates. So I would say I've never done that analogy before, but I would say that it's significant to have long-term growth companies that pay somewhat of a dividend, that can consistently beat their estimates. And by doing so, I say you outperform, I can't quantify it, but I know based on my history that that's how we make
A lot of money. Yeah. So when you get down into your screen, you again, selected 25, 30 names. Do you have any sector or industry guardrails to prevent kind of maybe over concentration, or do you just let the screen drive allocation? Yeah. That's a good question too. It goes back to the
To the quantitative analysis. Okay. It goes back to overweighting sectors that are the right sectors to be. For example, in 2005, the Fed started raising interest rates, right? Why were they raising interest rates? Because commodity prices went up so much. Well, we bought an offshore drilling company, a Chinese offshore drilling company at $3 a share. It went to $130 a share. So there's times to be in the right sector, the right asset class at the right time. And there's times where, we try to, we look at what's, we can actually look into the S&P 500 and see the actual allocation. Okay. Last year, which is amazing, Google for a while, it was in the S&P 500 two times, and it was 10% of the S&P 500. So, did we have 10% in Google? No, there's no way we would
Do that. Did we have 4% in Google? Yes. So I don't know if that answers your question or not. I think it's,
Well, I think, I think a follow up to that would be, you run the screen, let's just say, 80% of the companies are in one particular sector. Do you just let that be? Or do you say, Hey, look, we're not going to let more than 40% of the portfolio be in technology?
I will typically never go more than what's the technology, for example, in technology, right now it's, 40% of the S&P 500. I will never go above that. Okay. I want to make sure that I'm at least, but I want to have the best companies in technology, right? That's the difference. you could have technology, you could buy a technology index, but then you have a lot of companies in technology that aren't performing. So do you really want to own Intel
Or do you want to own NVIDIA, right? So part two of your process is, is an AI momentum overlay. So what is it about that momentum factor that can help provide kind of additional confidence or even outperformance over just running the screen itself?
Yes. That's probably the most exciting thing I've, I've been doing in the last three years. So our, our portfolio basically has two, two groupings. One, 25% is in passive ETFs. Okay. 75% is in these large cap and mega cap stocks. So let's talk about the 75% first. So starting last year, 12 months ago, I identified the ability to find out which companies in the Russell 1000 are in QQQ, are in VTV, the Vanguard values, which companies have the most momentum. Now, what I do is I can pull those and I take them and I put them into our screening process using our quant ranking, our quant analysis, a normal quantitative fundamental analysis. How do you, when do you sell a company that's up 30% this year? Or do you buy a company that's up 30% this year?
Okay. A lot of the money managers, they look at it's up 30%. I'm not going to touch it. It's already up 30%. Well, it could be up 60% by the end of the year. So when do you sell it? Well, you sell it before earnings estimates go down. Well, when earnings estimates start going down, you sell it when they have a possibility of missing their estimates. So that's the cool thing where we're able to identify the companies in these ETFs basically, or it could be any ETF that have the most momentum. We take them and then we double screen them with our quant analysis. All right. By the way, we go the other direction too. So for example, of those 400 companies, we might identify a
Company that's not a perfect match on momentum. Maybe it's just an average match. And we take that and we put it back into our watch list. Okay. Let's say we buy it. Like I think Tyson Foods is one of the stocks that's in our portfolio. We identified it as a average match, even though it's not a, a perfect match for momentum. And now it's gone from an average to a good match. So we'll track it both ways. So it's a double check on each other. So we check through the momentum. We have momentum stocks. By the way, in the Russell 1000, we get a, we get a email basically that has the top momentum stocks. It'd be about 125 companies in the Russell 1000. Take those 125
Companies. We put it into our quantitative analysis, our normal fundamental, our 21 year analysis. And we say, okay, we'd like this stock, this stock, and that stock. And it helps us identify companies that have good momentum, but also what we'd like in a company, low pay ratios, quality of earnings, quality of dividends. Does that make sense? Yeah. Makes a ton of sense. Can go ahead. Sorry, please. The other 25% we've been doing for about three and a half years. So the other 25%, we use a trend analysis program. We have 14 ETFs that we identify as potential additions to those to that 25%. So right now we have four passive ETFs, QQQ, mostly growth ETFs that are, they're in that portion of the portfolio. So let's say that the trend analysis says, okay,
QQQ is trending down. SPYG, the S&P growth index is trending down. And guess what's trending up? It's the Russell 2000, it's small caps, or it's the mid caps, or it's value. Okay. 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, 25% of these passive ETFs, and bought value ETFs at that particular point in time. So the Russell 1000 growth, I think, was down 38% in 2022. And we were down significantly less than that because of our move from growth to value. Now, the best thing about it, I'm sorry.
No, please go. No. The best thing about it, if there's no momentum in any of those 14 ETFs, guess what we can do? We can buy a treasury, a, a BIL, a short term treasury. If we're going, if we think we're going to recession, we can buy a TLT, a 20 year treasury, we can buy gold, and we have the ability to buy an inverse ETF if we think it's necessary. We haven't done that yet. But if we really think that we're going into a recession, we can buy an inverse ETF for that 25%. And by the way, I did a study on inverse ETFs. They're really good for a sharp period of time where it's one-on-one. But if they're held for a year or longer, they only protect for about 37.5%.
They're not a one-for-one. If the market's down 50, they'll be down, they'll be up 37.5%. So I've done that analysis and I know that it's still better than not having that inverse ETF correctly. But it's not a one-on-one if you hold it for 12 months or longer.
Yeah. So you kind of answered my question, but I'll ask it directly. So from a portfolio manager's perspective, you have a ton of confidence in, 75% of your names. And this 25% using kind of broad-based ETFs is your way to add either in an upmarket, diversification or when a market cycle starts to change, it gives you the ability to manage risk.
You said it. I couldn't say it any better.
So is momentum the only driving factor for the ETF selections? Are you running any quantitative, screens on kind of these large indexes or is it just purely a momentum play?
On the indexes, it's purely a momentum play. On the individual stocks, we do the screening down to 400 and then we go back and we watch momentum on that. But, individual stocks, it's more quantitative. On the ETFs, it's more trend analysis. If that makes sense.
Yeah. It makes a ton of sense. And just to follow up on that. So on the stock side of the portfolio, can waning momentum ever be an indication for you to cut exposure or sell? Is it, or is it a change in rank that's going to be your sell signal?
That's a very good question. And right now, QQQ, when I did an analysis on QQQ, and I wanted to identify the top 10% that have the most momentum in QQQ, there was about 30 stocks in QQQ that had that high momentum. Today, it's down to 10. Okay. So, and so what's happening, which is really funny, the Russell 1000, the top 10% was about 100 stocks. Now it's up to 185. So we're starting to see this broad base, okay, return where it's going from mostly QQQ technology, Magnificent 7. And we're starting to see at this particular point where it's actually broadening out to the rest of the Russell 1000, to the rest of the market, the large cap market.
So if you're sitting down with an advisor kind of today, where are you putting this in an already diversified model portfolio? where is WLTG sitting?
Well, it's, it's probably should be part of an SMA, okay, for a large account, for a small account, for, for a family member that only has $10,000, it's probably a good thing to use for that. So it could be core for smaller accounts. And I think it should be part of an SMA for larger accounts. But, I like what it does. So I, I kind of, I'm kind of prejudiced on how much it should be used.
So the ETF is, is fairly new, kind of two part question, what drove you to start it and get it out there? Since you have a successful SMA business, you're working with a ton of, really great TAMPs. So what kind of drove the decision to launch? And then how are you kind of thinking about growing this ETF over the next handful of years as you kind of get your three and five year numbers?
That's a good question too. I started at the wrong time. I started in December of 2021. So I think that's what a lot of people do. They kind of make that mistake and they think, oh, the market's doing great. It'd be nice to have an ETF to provide for, for the advisors that I work with. I work for, hundreds of advisors with hundreds of advisors. So I thought I'd have that for their smaller accounts and, so they could actually use our long-term growth for, for larger accounts. So that's why I started it. And so what we're trying to do, we're on a couple of different programs where we're actually Wealth Advisor Magazine. I don't know if you've heard of them. Wealth Advisor Magazine is promoting us on their, on their website.
We're doing it through LinkedIn. We have a company called Be Seen. So we're doing on LinkedIn, we're identifying so we can send information out to our eyes. And we're at the point now, we got it up to close to $29 million in assets. Okay. So that's kind of like, we're trying to get to that $30 million point. And so the next thing to do is get our, get our spreads narrowed more. I think when we do that, it'll be more attractive to advisors and clients. So there's ways that we can do that. And it's something that I can't really talk about now, but there's ways that we can narrow that spread. But I want to say this to those individuals that were thinking about buying it.
We have 11 market makers. Okay. And so if somebody wants to buy a large block, they can go to their block trader, whether it's Schwab or Fidelity, and they can say, go to the market makers. I want to buy 10,000 shares of WLTG. So they can go to the market makers and they will get a great execution if they do that. As opposed to, you don't put a 10,000 shares of market on our ETF. You have to go maybe a hundred shares. You can do that, but 10,000 share, 25,000 share purchase. You want to go to the market makers and make sure that you're getting
A great execution somewhere between the bid and the ask. Yeah. Well, John, I think, the investment advisors that are listing this and model portfolio providers, that this product, I think is a great compliment to just traditional large cap 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 in that large cap growth bucket as they're building portfolios. I think the ETF is really intelligently constructed. The performance has been great. So kudos to you. But before I let you go, and I really, really appreciate your time. This has been really great.
Where can people learn more about you, your firm and the fund?
Okay. The best thing is go to our ETF website. It's just wealththrustetf.com. Okay. Well, again, John, go ahead, please. If they want to know more about the firm, then they go to wealththrustam.com. Wealththrustetf.com is the ETF website. Wealththrustam.com is our website for the entire firm. They can actually access the ETF website from wealththrustam.com.
Again, well, John, thank you so much for your time. This has been wonderful. Yeah. I really appreciate it. Thanks, man. Take care.
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