2018 has drawn to a close. So it’s time to look at the best-performing portfolios on WhoTrades Live. WhoTrades Live provides an integrated investment platform featuring thousands of traders where you can check out strategies of interest, track their progress over time, and generate trade ideas for your own portfolio. Various portfolios can be directly plugged into your own account through such features like Copy and Autoinvest. As part of the screening process, the maximum drawdown was limited to 25%. Granted, for some, even 25% is too high. But to achieve high absolute returns, it’s unavoidable that there will be some degree of volatility. Accordingly, 20%-25% is a reasonable balance. Anything less will tend to be a fairly conservative strategy. If you were to Copy or Autoinvest in several portfolios, having one be down 20% is probably nothing to worry about so long as you’re investing in portfolios that aren’t too highly correlated to each other. With that said, let’s look at the Top 5 performers this year using these criteria. Current past-twelve-months' returns and maximum drawdown of the portfolio are highlighted: Portfolio #1: Long volatility____ 93.9% Yield | 7.2% Drawdown (Source: Portfolio page) The most concentrated portfolios tend to do both the best and worst. Exposure to one asset class or a select number of assets generally leads to large fluctuations in the value of a portfolio. This portfolio has made bets being long volatility through ETFs, with a smaller portion being long a Brazilian equities ETF ( $EWZ ). Most of the portfolio’s gains were made in the first week of February when there was a 3x-4x jump in the VIX. Recent gains were made in Q4 with the fall in equities. Stocks and the VIX share a -0.80 correlation.==== Portfolio #2: Tech____ 66.6% Yield | -21.6% Drawdown (Source: Portfolio page) This trader has concentrated exposure in stocks, trading them long. While indices were down in 2018, stock picking was still good if you were in the right names. Even as badly as the sector did in Q4 falling approximately 17%, tech still had many companies up by decent margins in 2018, including this trader’s top picks of Amazon ( $AMZN ), Fortinet ( $FTNT ), Red Hat ( $RHT ), and Microsoft ( $MSFT ). (Red Hat was purchased by $IBM in late October.) ==== Portfolio #3: Tech____ 58.8% Yield | 13.3% Drawdown (Source: Portfolio page) Most of this portfolio’s gains were made between late-July and early-September, when it gained 53%. It has since given back some of those gains, but it's still up almost 60% over the past year. The trader currently has about 96% of the portfolio committed to Apple ( $AAPL ) and Alibaba ( $BABA ), both of which are off markedly from their all-time highs. ==== Portfolio #4: Small caps ____ 57.4% Yield | 19.1% Drawdown (Source: Portfolio page) This trader mostly sticks to small cap names and currently holds 14 positions, though four names still make up a majority of the portfolio ( $BKCC $ORC $NYMT $AGNC ). The trading volume is relatively high, having made 124 transactions over the past twelve months. The trader has a bias toward high-dividend stocks such as REITs and royalty trusts. ==== Portfolio #5: One nano cap holding____ 53.4% Yield | 9.6% Drawdown (Source: Portfolio page) This portfolio is exclusively in one nano cap stock, Mind CTI ( $MNDO ), a customer service software company. Obviously this is a very risky strategy unless you have a clear edge. Nonetheless, since institutional investors largely can’t invest in the smaller names in much capacity, it may be possible for smaller investors to gain an edge if they have a unique insight. ==== Conclusion The above five strategies provide some examples of the best-performing portfolios on WhoTrades Live over the past calendar year to go along with minimal drawdowns. It should nevertheless be noted that strategies that return north of 50% are not indefinitely sustainable. All of these portfolios employed heavily concentrated asset allocation strategies that relied heavily on equities, volatility, and possibly leverage. Granted, concentrated strategies should not be an issue if you Copy or Autoinvest in several portfolios because you will get the diversification effect by investing across a wide variety.