Deciding slice percentage

Hi all,

I’m creating myself a semi-conductors Pie to invest in long-term.

Just wondering how you guys determine the slice percentage of all your holdings, do you use any metrics in particular? And do you also actively manage the slice percentages?

As a baseline, I’m using top holdings from top semi-conductor ETFs & then adjusting with whatever my due diligence brings about, but also doing general market research.

Any feedback would be appreciated.


Personally, I have several scenarios and corresponding methods to create pie weights, hope it helps!

Equal weight
Used for when a there’s a big company and several smaller companies for which I believe all could provide similar returns.

Example: data center reits, it has several big players (Equinix, Digital Realty) but returns in smaller players (Cyrusone, Coresite etc.) could also be very competitive.

When larger companies have significant benefits over smaller companies or are in a sector in which a company had to provide better returns to get bigger. Especially useful for when due diligence hasn’t been done as bigger companies tend (isn’t always the case) to have outperformed competitors in a way which required better management, product etc. which could continue to provide competitive return.

Due diligence weighted
This will differ the most from sector to sector, company to company. If I have just researched several stocks I will automatically overweight stocks which I know and understand better, especially if I believe that they will provide superior returns.

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