Scenario
Rates rise sharply — Long-end yields jump; long-duration Treasuries (TLT) fall, pressuring rate-sensitive growth.
Portfolio impact
A portfolio with this exposure would have an estimated move of -1.3% under this scenario (driver: TLT -8% (scenario assumption), applied via each holding's downside beta to TLT).
Contributions
| Holding | Weight | Beta-implied shock | Contribution |
|---|---|---|---|
| SMH | 30% | -1.4% | -0.4% |
| IGV | 20% | -1.8% | -0.4% |
| SOXX | 20% | -1.3% | -0.3% |
| QQQ | 30% | -0.9% | -0.3% |
Vulnerabilities
Largest negative contributors: SMH (-0.4%), IGV (-0.4%), SOXX (-0.3%). Concentration: QQQ is 30% of the book; SMH is 30% of the book.
Possible adjustments
Common ways investors reduce exposure to a rate shock shock include trimming the highest-beta names and adding lower-beta or defensive exposure. Position sizing and any changes remain the investor's own decision.
Reality check
A single-factor, downside-beta estimate with a scenario-assumption shock — directional only, not a prediction or personalized advice. Betas and shock sizes shift across regimes.