For over a decade, while many advisors adopted widespread use of mutual funds and ETFs, WT Wealth Management has developed and managed an individual equity strategy centered around what we consider the most culturally significant equities (CSE) of today.
“Culturally significant" refers to something that is widely accepted, adopted, and frequently used in society today.
More than 10 years ago, we uncovered a key insight: clients like to know what they own. Equity investing means owning a piece of the underlying company. However, when investing through a mutual fund or exchange traded fund (ETF) —often represented by a random ticker symbol—there’s little connection to the actual holdings beyond performance. If returns are strong, clients are satisfied; if not, the investment is replaced with yet another esoteric symbol.
The idea of owning individual equities is not new. In fact, for the better part of the last century, that’s how most investors accessed the equity markets. It wasn’t until the early 1990s that mutual funds, and later ETFs became the clearly dominant investment vehicles.
So how did we build our list of culturally significant companies?
Over the years, we’ve actively engaged with our clients—asking thoughtful questions, listening closely, and learning about how they live, and which brands are indispensable in their daily lives. In many ways, our equity selections have been “crowdsourced” from these conversations. We asked ourselves questions such as:
- Which companies do our clients genuinely enjoy being customers of?
- Which companies are at the core of our increasingly tech-focused lifestyles?
- Which companies are driving greater ease and efficiency in everyday life?
- Which companies have redefined their industries by displacing legacy brands?
Our original list included names like Google, Amazon, Meta, Microsoft, Apple, Visa, MasterCard, Walmart, Costco, Uber, Nike, Starbucks, eBay, PayPal, Southwest Airlines, T-Mobile, Verizon, Netflix, Home Depot, and Adobe. Many of these names have been in the portfolio for over a decade. Some have rotated off and returned, while other names were added during life-altering events like the 2020 pandemic or the 2022 inflationary spike.
While one could live without Amazon, Netflix, Google, or Costco—do you really want to? And today, living without a smartphone is virtually impossible, making companies like Verizon and T-Mobile resilient across nearly all market conditions. Meanwhile, Visa and MasterCard have effectively replaced cash and checks in modern commerce.
In especially challenging market conditions, our clients often find comfort in knowing exactly what they own. Clients recognize that these companies are not just popular, they’re essential.
Often, when equity markets are weak, clients review the names in their portfolios and decide they’d like to own more of these companies while they’re trading at a discount. This rarely happens when the investment is just a random, unrecognizable ticker symbol—there’s simply no identifiable connection. Yet sometimes, that very connection is what gives investors the conviction to add to an existing position or remain invested through a particularly challenging period.
Of course, there are practical considerations. To own the full list of companies we favor, with appropriate diversification and allocations, a portfolio of at least $150,000 is typically required. For clients with smaller portfolios, we continue to use ETFs to ensure proper diversification, which remains a foundational pillar of our investment philosophy.
Additionally, we selectively use ETFs to complement our Culturally Significant Equity names in sectors where broad industry exposure is desired, but no clear market leader exists. Current examples include Aerospace & Defense, Healthcare, Financials, Energy, and Pharmaceuticals.
If you’d like more information about the WT Wealth Management Culturally Significant Equity Portfolio and want to understand how it could be useful in your overall financial plan, please contact your financial advisor.
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