In the world of innovative investment solutions, WealthTrust Asset Management’s WLTG ETF (ticker: WLTG) stands out as a distinctive option for growth-oriented investors. Launched with a focus on long-term growth, the WLTG ETF embodies WealthTrust’s disciplined approach to portfolio management.
Behind the firm and its vision is John McHugh, a seasoned industry expert with over two decades of experience in asset management and strategic investment. McHugh’s journey through firms including Merrill Lynch, Oppenheimer, and Wells Fargo Advisors refined his investment philosophy and ultimately led him to launch WealthTrust in 2015. Reflecting on his career, he notes, “I wanted to manage portfolios on a discretionary basis.”
McHugh’s work at Oppenheimer’s Omega Program in 1994, where he became one of the first advisors permitted to manage portfolios on a discretionary basis, was pivotal moment. Years later, at Wells Fargo, his role grew further, where he became one of two groups at Wells Fargo Advisors allowed to manage portfolios for other advisors’ clients, underscoring his expertise and establishing him as a trusted portfolio manager within the industry.
In 2015, McHugh took a decisive step, founding WealthTrust Asset Management LLC to independently pursue his vision. With the launch of the WLTG ETF, he now offers investors a growth-oriented solution shaped by his decades of experience. McHugh shares his insights on the WLTG ETF, its approach to long-term growth, and how WealthTrust Asset Management sets itself apart in the competitive ETF market.
The Strategy Behind WLTG: Growth at a Reasonable Price
At the core of WealthTrust’s WLTG is a “growth at reasonable price” philosophy. “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,” McHugh says. “I like to identify companies that have good quality earnings, good quality dividends, basically that I know I can depend on them.”
Drawing on his extensive industry experience, McHugh uses rigorous criteria to select companies with consistent, dependable earnings. “What we try to accomplish is to identify companies that have great quality earnings, great quality dividends,” he explains. “If a company has a lot of deferred expenses, that’s not quality, they must come back onto the books eventually. If they have deferred income, that’s a good thing.”
With a price-to-earnings (P/E) ratio close to that of the S&P 500, WLTG differentiates itself with a growth rate of about 19%, and the PEG ratio is 1.3. “Our goal is to outperform on a reasonably priced basis point basis,” McHugh adds.
A Two-Pronged Screening Process
McHugh’s approach combines fundamental analysis with momentum indicators to create a balanced portfolio with strong growth potential. His screening process taps into a proprietary database of 9,000 companies, honed over two decades and including 1,700 American depositary receipts (ADRs).
“When I do my initial screening, I’ll end up with about 400 companies out of those 9,000 companies that meet my screening criteria,” he says. “The art of portfolio management is taking those 400 companies and identifying what you like in [them].”
The quantitative ranking system plays a crucial role in this analysis. “Quantitative ranking is probably one of the most important things as far as us identifying companies that are going to consistently beat their estimates,” McHugh states. Companies with estimates raised by multiple research analysts tend to be strong buys, while those with lowered estimates are flagged as potential sells. “We have five levels of quant analysis: strong buy, buy, hold, sell, and strong sell,” he notes.
By avoiding companies with declining estimates, McHugh claims that WealthTrust has managed to outperform the market, which typically misses earnings estimates 25% to 35% of the time. “Our earnings beat 90% to 95% of the time, whereas the market only beats 65% to 75% of the time,” he adds.
Concentrated Portfolio Approach
WLTG maintains a focused portfolio of about 35 to 40 large-cap and mega-cap companies, reflecting WealthTrust’s belief in the stability and growth potential of established companies. “Large caps and mega caps can do things that small companies or mid companies can’t,” McHugh notes.
With a concentrated selection, WealthTrust aims to invest in quality companies with a strong likelihood of meeting their earnings estimates. By maintaining a relatively small number of holdings, WealthTrust can focus on high-quality names while minimizing exposure to lower-performing stocks.
The firm’s approach to rebalancing the portfolio is tactical and data-driven, with adjustments based on market conditions and valuations—rather than a rigid schedule—and rebalances when necessary. For instance, in 2022, WealthTrust’s trend analysis prompted a shift from growth to value stocks, with McHugh selling some high performing growth stocks to buy value-oriented ones. While he tries to minimize capital gains taxes, McHugh emphasizes the importance of adapting to market trends rather than staying confined to a single sector or strategy.
“We want to have as many long-term growth portfolios as we can, and we want to keep our capital gains down to the lowest minimum that we possibly can,” McHugh says. “But at the right time, you have to switch. You can’t just stay with one particular sector or asset class.”
Momentum Overlay for Strategic Rebalancing
A unique aspect of WealthTrust’s methodology is its AI-powered momentum overlay, which helps guide portfolio decisions and provide additional signals for buy or sell actions, aiming to enhance confidence in stock selection and improve potential returns. McHugh explains that the portfolio is divided into two main components: 75% in large- and mega-cap stocks and 25% in passive ETFs.
For the 75% portion, McHugh uses the AI overlay to identify high-momentum stocks within indices like the Russell 1000, QQQ and Vanguard’s value ETFs. He then applies WealthTrust’s quantitative and fundamental analysis to double-check each company’s momentum and quality. The process helps McHugh determine when to hold or sell stocks based on earnings projections. He emphasizes that high momentum can indicate further gains, even for stocks already up 30%.
For the remaining 25%, McHugh uses a trend analysis tool to monitor the market direction for selected ETFs. When indicators show growth is declining, McHugh can shift investments toward value-focused ETFs. This tactical shift helped WealthTrust reduce losses in 2022 by reallocating from growth to value ETFs, in contrast to the broader market’s decline. Additionally, if no ETF shows positive momentum, WealthTrust can invest this segment in Treasuries, gold, or even inverse ETFs to hedge against downturns, though McHugh notes that inverse ETFs are more effective for short-term protection than long-term holdings.
McHugh emphasizes that the momentum overlay is a pivotal factor in managing the WLTG ETF, particularly by identifying companies with strong momentum in the Russell 1000 or other indexes that can then be integrated into the existing screening process.
“It helps us identify companies that have good momentum, but also what we’d like in a company, low p/e ratios, quality of earnings, quality of dividends,” he says.
WealthTrust’s Broader Services Beyond ETFs
In addition to the WLTG ETF, WealthTrust offers a range of investment strategies for advisors and clients. The firm manages portfolios on seven turnkey asset management platforms (Schwab Marketplace, SMArtX, Orion Communities, Envestnet, Simplicity, Advyzon, and 925 Advisory), spanning 12 strategies across various asset classes, from small cap to fixed income.
WealthTrust’s commitment to quality management is underscored by its Global Investment Performance Standards (GIPS®) compliance, achieved in early 2024. “We just obtained GIPS approved, which is a very challenging accomplishment, “ McHugh shares, highlighting the achievement as a mark of credibility.
WealthTrust provides personalized webinars for advisors and their clients, explaining the firm’s methodology and educating clients on investment strategies. “One of the things we do differently is that we do webinars with advisors and their clients,” says McHugh, adding that educating clients is something that he finds immense fulfillment in as part of his job.
“My daughter said to me, ‘Dad, why don’t you just become a teacher? You love teaching what you do.’ I said, ‘Well, I think I’ll stick to what I’m doing,’” he jokes.
A Quality-Driven Path Forward with WLTG
WealthTrust’s WLTG ETF is reflective of McHugh’s extensive experience and disciplined methodology. Focused on high-quality growth at reasonable prices, the fund provides investors with a carefully managed portfolio that aims for consistent earnings growth and reliability. With its rigorous screening process, momentum-driven overlay, and tactical rebalancing, WLTG stands as a compelling option for investors seeking a growth-focused ETF designed to navigate today’s markets with resilience.
For additional resources, contact WealthTrust.
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Important Information
The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost, and current performance may be lower or higher than the performance quoted.
Click on the link below for the Website to WealthTrust DBS Long Term Growth ETF, Symbol: WLTG.
FUND – WealthTrust Funds (wealthtrustetf.com)
Fund Holdings for the ETF’s top 10 holdings and Fund Performance for the ETF’s standardized performance to the most recent month-end may be viewed at https://wealthtrustetf.com/fund/.
Investing involves risk including the possible loss of principal. The Fund’s performance depends on the skill of the Adviser in evaluating, selecting, and monitoring the growth rates and values of portfolio assets using tactical trend models and quantitative analysis. There can be no assurance that use of this methodology will enable the Fund to achieve positive returns or outperform the market. To the extent the Fund invests in ETFs, the Fund will indirectly bear its proportionate share of any expenses as well as risks. Some of these risks are investments in foreign securities which may involve currency fluctuations, political and social instability, and reduced market liquidity. Investments made in small and mid-capitalization companies may be more volatile and less liquid due to limited resources or product lines and more sensitive to economic factors. The fund may invest in inverse ETFs and the value of such investment will decrease when the index underlying the ETF’s benchmark rises, a result that is the opposite from traditional equity or bond funds. The net asset value and market price of an inverse ETFs are usually more volatile than the value of the tracked index or of other ETFs that do not use leverage. This is because inverse ETFs use investment techniques and financial instruments that may be considered aggressive, including the use of derivative transactions which may be more sensitive to changes in market conditions and may amplify the risk of loss for the Fund. Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses.
This and other information are in the prospectus or summary prospectus, a copy of which can be downloaded here or by calling 844-444-3863. Please read the prospectus or summary prospectus carefully before you invest. The WealthTrust ETF is distributed by Foreside Fund Services, LLC.
