Josh Brown, one of Wall Street’s most recognized financial advisors, said the rise of passive investing has created a need for a different type of product: a concentrated portfolio aimed at capturing the market’s biggest winners.
The CEO of Ritholtz Wealth Management and CNBC contributor recently launched Porterhouse, a separately managed account named after a premium cut of steak and built to manage what he considers the best opportunities in the market. The rules-based momentum strategy, run in partnership with Franklin Templeton, favors companies with strong earnings growth and continued share price strength.
“Everybody has equity market diversification. It costs three points, one click and you can own the S&P 500,” Brown said in an interview. “There are people looking for the best stocks in the market. The best stocks today will not necessarily be the best stocks tomorrow.”
The launch comes after years of advisers steering clients to the low-cost index funds popularized by Vanguard founder Jack Bogle. Brown said broad market exposure remains a staple of many portfolios, but he said some investors are looking for a more selective approach that can adapt as market leadership changes.
“Historically, buying a large market company is a bad strategy,” Brown said. “I think it ultimately means that change will come, and it won’t be that easy – Just buy an apple again Nvidiai can’t lose”
Porterhouse grew on Brown’s list of CNBC Pro’s “Best Stocks in the Market” but takes a selective approach. Despite the focus of the momentum strategy, none of this The Magnificent Seven shares are among its 58 shares.
The momentum
Instead of trying to predict which sectors or themes will dominate, Brown said the strategy relies on the collective judgment of investors who are already voting with their dollars.
“The market is very smart. I believe in the wisdom of crowds,” Brown said. “You have 100 million people around the world trying to figure out which stocks to buy, which is why momentum as a factor works.”
“What we don’t do is predict,” he added. “I don’t know what the total market will be in the second half of 2026.”
The methodology can sometimes lead the portfolio to be the less obvious beneficiaries of major market trends.
Brown pointed to a manufacturer of telecommunications equipment Ciena as one of the strongest players in this strategy this year. The company has benefited from the development of AI infrastructure as data centers need greater communication power to move information between increasingly powerful computer clusters. The stock is up more than 140% in 2026.
Ciena’s year so far
“We have several names from industrials, materials and technology directly seeing higher earnings reviews and stock price rallies because of AI,” Brown said.
Brown said momentum remains strategic because investors tend to continue to reward companies that benefit from cycles of innovation and positive industry change, creating trends that can last longer than many expect.
“In the end, companies that do well attract a lot of consumers,” he said. “If it’s not a fluke, you’re going to see investors continue to call those stocks over time, and that’s what we’re trying to capture.”
Brown also said the separately managed account structure gives Porterhouse flexibility not found in many dynamic ETFs. Unlike most exchange-traded funds, which typically remain fully invested, the strategy can hold cash when stocks break their selling rules.
“We’d rather hold cash than hold a stock that’s going down less than the market,” Brown said.
The ability to get cash can leave a strategy underinvested after a big market selloff, but Brown said trading helps avoid holding volatile stocks just to stay fully invested.
The Porterhouse will be available to eligible Ritholtz customers from June 1.
