Analyzing Newport Wealth Strategies' Q2 to Q3 2021 Portfolio Changes

As the second quarter of 2021 came to a close, and the third began, Newport Wealth Strategies prepared itself for a flurry of changes in its portfolio holdings. The firm, like many other professional portfolio managers, is required to file a quarterly 13F report with the SEC, disclosing its holdings in the US equity markets. The most recent filing, comparing Q2 2021 to Q3, shows a number of changes to the fund's holdings across various sectors, including technology, finance, and energy. This blog post will analyze these changes and their implications.

Insights From the Comparison

Starting with the largest holding in the firm's portfolio, we can see that Newport Wealth Strategies slightly increased its position in SCHWAB STRATEGIC TR (SCHG) during Q3 2021, adding over 1800 shares and increasing the value of its holdings by over $400,000. This decision to add to this holding is surprising given the lackluster returns of the financial sector during this period. It will be interesting to watch whether this bet pays off in the coming months as we await the Q4 2021 filing. Looking to other sectors, the filing shows that Newport Wealth Strategies reduced its holdings in VANGUARD INDEX FDS (VUG). The reduction took place across both the number of shares held (a decrease of over 1200) and the value of the position (a decrease of over $200,000). This decision to trim holdings in VUG seems to indicate concerns that the technology sector, typified by firms like Apple (AAPL), Alphabet (GOOGL), and Amazon (AMZN), may be overvalued as it has powered past pre-pandemic levels to reach new record highs. The filing also revealed a major shift in the firm's interest in RSP and EFA, where they significantly reduced their holdings by 58% and 39%, respectively. This move comes as both funds underperformed during the previous year, with RSP returning about 30% versus the average large-cap blend fund returning over 50%. Although the selling did not appear to be market-timed, it’s notable that Newport Wealth Strategies used the proceeds of these sales to fund the purchases mentioned above.

Conclusion

Overall, the Q2 to Q3 2021 filing shows that Newport Wealth Strategies has made some interesting changes to its portfolio holdings, which should bring some surprises to its investors. While the firm still holds stakes in popular tech stocks like Apple, Alphabet, and Amazon, it appears to be taking a cautious approach while seeking out other opportunities in the market. In looking at the changes made during this period, it is clear that the team at Newport Wealth Strategies is focused on balancing return and risk in the current market environment. By keeping an eye on these and other holdings, investors can gain insights into Newport Wealth Strategies' overall approach to its investment decisions.