Card 3 | Energy Basket | Lesson + CTA

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Education . Energy Basket . 3 of 3

The Lesson

High-CAGR thematic baskets are satellite sleeves. Not the engine.

Three honest questions to ask before any 35-percent-CAGR card lands in the core of your portfolio.

Are you sized for a -40 percent paper loss without panic-selling?

The card paid -14.6 percent in 2025 alone. Worst week was -11.29 percent. The CAGR exists because somebody held through that. Position size is the whole conversation. Five to fifteen percent of total equity is the institutional answer for a thematic satellite. More than that and the headline number is borrowed against your sleep.

Test . If 5 percent of your equity dropped 40 percent overnight, would you sell, hold, or buy more? The honest answer picks the size.

Do you understand that 100 percent of one sector is the feature, not the bug?

The Energy Basket is 10 names from CNX Energy. By design. Three of them are Adani group. By design. Power generation is six of ten. By design. The 1W rebalance rotates within the universe . it does not diversify out of it. If the energy capex cycle turns, the rotation will not save the portfolio. The thesis on the universe has to be yours.

Test . Read the methodology. If you cannot defend "100 percent energy" in two sentences, the universe is not your thesis.

What is the CAGR of the boring core sleeve next to it?

A satellite only earns its place when the core it sits next to is doing the heavy compounding work. The Allcap card, 50 stocks broad-market, paid 48 percent CAGR with a 22 percent drawdown over the same window. Sharper Sharpe. Shallower drawdown. Calmer ride. The Energy Basket only makes sense as 5 to 15 percent of a portfolio that has the boring core already running. Without that, the satellite becomes the planet. That is when investors get hurt.

Test . Name your core strategy first. If you cannot, build the core. Skip the satellite for now.

A 35 percent CAGR with a -40 percent drawdown is not the prettiest card on the marketplace. It is the most honest one about what concentration actually costs to hold.

Read the full Energy Basket factsheet before you size it. Satellite, not core.

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