Certainly! While the selection and allocation of stocks in an Alpha Portfolio is determined by Spotalpha’s algorithms, investors can customize their investments.
Here are some common customizations among users of Alpha Portfolios.
- Preference to specific Alpha Portfolios: The India Mid-Cap Alpha Portfolio has consistently delivered better ‘Alpha’ or outperformance to the benchmark in terms of risk-adjusted-returns than the Large-Cap and Small-Cap Alpha portfolios. On the other hand investors looking to take less risk (in terms of volatility of their investment) prefer Large-Cap Alpha Portfolio. While investors looking for higher absolute returns prefer Small-Cap Alpha Portfolio.
- Preference to stocks with high allocation percentage: Each Alpha Portfolio typically allocates to around 8 to 15 stocks. This means that the number of holdings can get as large as 45 stocks if an investor wanted to replicate the exact performance. However, some investors find it comfortable to hold fewer stocks, say less than 20. Such investors typically select only the top 4 to 6 stocks by allocation from each Alpha Portfolio. This helps them to almost get a similar performance profile as the Alpha Portfolios while improving manageability.
Such approaches allow investors to customise their investments while benefiting from the optimized stock selection, allocation and rebalancing notifications provided by Alpha Portfolios.