If you give me 15 minutes, I’ll show you four dead simple investments to get rich without getting lucky. That’s it, that’s the whole pitch for this video. Your time is valuable, so let’s get right into it. First things first, I’m not here to hold you hostage. So here’s a table showing all four funds I’ll be covering in this video, SPMO, the triple Qs, chat, and SMH, all funds I’ve covered many times before.
The second column shows the weights I’d personally assigned to each fund, and the rest of this table summarizes why. Let me point out two quick things before we jump into the first fund. One, this isn’t some random list of AI funds and stocks like you’ll see in other videos. I pick these specific funds and these specific weights based on how their holdings overlap to get the most exposure to the best AI stocks while still managing my risks.
That’s what it means to get rich without getting lucky. And two, I’m not a financial advisor, so I’m sharing my research for educational purposes only. My background is in electrical engineering and data science, blah blah blah, But let’s get to what you’re actually here for. The first fund on my list is the S&P 500 Momentum ETF, ticker symbol SPMO. Don’t let the name fool you. This fund does not track the S&P 500 and its holdings are balanced completely differently. Here, let me show you.
The S&P 500 is a basket of 500 stocks from the biggest publicly traded U.S. companies and it’s weighted by their market cap. So the bigger the company, the bigger the weight inside the basket. The thing is, 500 companies is a lot. the S&P 500 tends to grow slow and steady, even when its biggest holdings are making massive moves. For example, the top 5 companies in the S&P 500 right now are Nvidia, Microsoft, Amazon, and Google if you combine their Class A and Class C shares.
Google is up by 25% in the last year, Amazon and Microsoft are up by around 30%, and Nvidia stock is up by over 50% in the last year alone. But even though these massive AI market winners sit at the very top of the S&P 500, it’s only up by around 20%. Don’t get me wrong, 20% is a great 1-year return, especially for how safe and diversified the S&P 500 is. But the S&P 500 Momentum ETF grew almost twice as fast.
It’s called the S&P 500 Momentum ETF because it holds the 100 stocks in the S&P 500 with the highest momentum score, which is just the stock’s 12-month change in price divided by its volatility. Then, that momentum score is multiplied by the company’s market cap to get the final weightings for the fund, which changes the order of its holdings.
As a result, the top 5 companies in SPMO are Nvidia, Meta Platforms, Amazon, Broadcom, and JPMorgan Chase, while we have companies like Apple, Microsoft, and Google sitting at the top of the S&P. So, I get 3 big benefits from holding this fund. First, while every other fund on my list is rebalanced quarterly, this one is only rebalanced twice a year, which lets its winners ride even longer. 2. I’m also diversifying the way that my funds get managed.
While the rest of my funds are either market cap weighted or actively managed, SPMO is balanced by this momentum score metric. And 3.
This fund literally manages its own risks, since any stock with high volatility would get a lower momentum score That means the stocks at the top of this fund aren just the biggest companies or the ones with the most gains They the ones with the best risk returns And speaking of risks I found out that over 100 online data brokers were selling my personal data, and they might be selling yours too. That’s why I joined DeleteMe, the sponsor of this video.
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So I just got my 11th report, and these data brokers had way more than just my personal information. They had my wife’s and my mom’s too. But here’s the best part. They’ll keep scanning these websites even after they remove my data and I get my own privacy advisor if I want to talk to a real person and make a customer removal request.
So if you care about your data and your family’s privacy, you can get 20% off any consumer plan with my code SYMBOL20 by going to joindeleteme.com slash symbol20 or with my link in the description. And a big thank you to Delete Me for supporting the channel and for keeping my family’s data safe. Alright, so I gave SPMO a 15% weight, which is big enough to tilt our portfolio towards the current AI market winners but small enough to let more concentrated funds do the heavy lifting.
I’d put another 25% in the NASDAQ 100, ticker symbol QQQ, really for the same reasons. The NASDAQ 100 tracks the 100 biggest non-financial companies listed on the NASDAQ exchange. So, while SPMO holds stocks like JPMorgan Chase, Goldman Sachs, Bank of America, and Wells Fargo, this fund focuses exclusively on tech, communications, and consumer platforms benefiting from this massive AI boom.
And while the S&P 500 Momentum ETF is limited to US companies, the Nasdaq 100 includes companies like Arm Holdings, a UK-based company that designs power-efficient chip architectures for smartphones and data centers, and then licenses those designs to other chip makers. Or companies like ASML, the only company on Earth that builds the $300 million ultraviolet lithography machines used to make those advanced chips. And that company is based in the Netherlands.
And while SPMO is rebalanced twice a year based on momentum scores, QQQ is rebalanced quarterly by market cap, which means bigger and more stable companies will always stay near the top. That’s what I mean when I say I picked these funds to work together. Case in point, here’s a table showing the S&P 500’s returns each year for the last 10 years. Both the S&P 500 momentum ETF and the NASDAQ 100 outperformed the S&P 500 more often than not, and sometimes by double digits.
And because they’re managed so differently, they’ll outperform the market at different times. At least one of these two funds has beat the S&P 500 in 8 out of the last 10 years, making holding them both a great way to get rich without getting lucky.
Key Takeaways
Alright, while the first two funds are great foundations for our portfolio, these next two funds are much more targeted for the AI revolution itself One big thing that all investors need to understand is that foundational AI models like GPT Gemini and Claude are the digital infrastructure for AI software applications That’s why I picked Roundhill’s Generative AI Technology ETF, ticker symbol CHAT. Chat tracks just under 50 companies that are actively involved in four key areas of generative AI.
Platforms, which are the companies developing, training, and commercializing AI tools that developers use to build AI applications, products, and services. Infrastructure companies that provide the IT hardware and chips powering foundational AI models and workflows, and enterprise and consumer software companies, which are building generative AI applications for businesses and for consumers respectively.
That’s why companies like NVIDIA, Estera Labs, Palantir, Google, and Arista Networks sit at the top of this fund. All of them have hardware or software ecosystems filled with real services and applications used by end consumers and that other companies pay to build on top of. One thing I really like about the chat ETF is that it doesn’t have a lot of smaller AI companies in it.
The biggest thing I took away from OpenAI’s presentation for GPT-5 last week was that AI is becoming much more agentic. That means foundational models like GPT, Gemini, and Claude are constantly adding new features, tools, and actions that end up killing apps focused on a single task. think tutoring, pair programming, or real-time translation. I still think it’s too early in the AI tech cycle to be picking winners and losers when it comes to software.
And the few pure play software companies that chat does hold are ones that I’d actually want to invest in. Companies like Palantir, Oracle, and Meta Platforms. Chat has a 0.75% expense ratio, making it the most expensive fund on my list in terms of fees. But unlike the last two funds, this one is actively managed, which means it also diversifies how our four-fund portfolio gets rebalanced and how often.
An actively managed fund is one where somebody is constantly looking at the companies and can rebalance the fund’s holdings as often as they need, based on new information right as it comes out. That means this fund doesn’t have to wait until the end of the quarter to cut its losers and double down on its winners.
The chat ETF launched in May of 2023, which also makes it the youngest fund on my list, but it’s returned over 30% year-to-date and well over 100% since inception, so I think it more than justifies its fees. The global artificial intelligence market is expected to more than 8x in size over the next 8 years, which would be a compound annual growth rate of 30% through 2033.
This chart shows the split between cloud and on-premise, but the AI market is also split between hardware, software, and services, which makes chat an awesome ETF to capture all of that growth. But you can’t talk about AI without talking about the chips that power it, which is where the fourth and final fund on my list comes in. And if you feel I’ve earned it, just keep watching this video to the end, that way YouTube shows it to more people.
Thanks, and with that out of the way, let’s talk about the fourth and final fund on my list. This one is my personal favorite, it’s the VanEck Semiconductor ETF, ticker symbol SMH. Look AI training and inference need massive ongoing investments in the hardware that powers them A company revenues and profit margins live and die by how cost their compute is and hardware plays a huge role in that But SMH doesn’t just bet on one kind of chip leader.
Its holdings are spread across the entire hardware ecosystem. NVIDIA, AMD and Broadcom for chip and infrastructure design, TSMC for chip manufacturing, and companies like ASML and Advanced Materials for semiconductor equipment, all of which are stocks that I cover on this channel. The top 10 holdings in SMH make up over 70% of the fund, with just Nvidia, TSMC and Broadcom taking up over 40% by themselves.
That’s incredibly concentrated, which is why I started this video with SPMO and the Triple Qs, which hold 100 companies each. SMH has annual fees of 0.35%, but the fund has returned 22% year-to-date and over 250% over the last 5 years. In fact, if you invested $10,000 in SMH when it was created back in 2011, you’d have almost $240,000 today. And the next few years look just as good for semiconductors, since the global AI chip market is expected to almost 9x in size over the next 8 years.
compound annual growth rate of over 31% through 2033. SMH is a great way to capture that growth and get rich without getting lucky. Alright, I started this video by saying I picked these funds and their weights based on how they work together. So here’s that summary table again of everything I covered.
The S&P 500 Momentum ETF and the NASDAQ 100 make up the foundational 40% of this four-fund portfolio, while the Roundhill Generative AI ETF and the VanEck Semiconductor ETF are our funds focused specifically on targeting the winners of the AI revolution. Chat focuses on the 50ish companies winning the overall AI revolution, while SMH concentrates on the hardware that powers it.
But this isn’t just about outperforming the market, it’s about managing our risks, which is why we’re getting exposure to well over 100 individual stocks and rebalancing our holdings based on a wide variety of factors, like momentum, market cap, and active fund management. Outperforming the S&P 500 is just the byproduct.
Here’s the final table of how these four funds performed versus the S&P 500 over the last 10 years, as well as the total performance of my four fund portfolio and check marks showing every time it outperformed the S&P 500. That’s 10 out of the last 11 years so far, if you’re counting. And again, don’t just look at the check marks. Look at the actual performance difference between my final four fund portfolio and the S&P 500.
Consistent, double digit outperformance without having to worry about picking individual stocks. Four dead simple investments to get rich without getting lucky. If you found this video valuable, consider hitting the like button and subscribing to the channel. And maybe even sharing it with someone else you think will find it valuable too. And if you want to see what else I’m investing in to get rich without getting lucky, check out this video next.
Either way, thanks for watching and until next time, this is Ticker Symbol You. My name is Alex, reminding you that the best investment you can make is in you.
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