Alpha Portfolios are dynamically re-balanced rule based portfolios. They are rebalanced based on these three rules:
- Risk-on and Risk-off: If Spotalpha’s algorithms identify that the specific market segment (Large-Cap, Mid-Cap or Small-Cap) has turned bullish (Risk-on) then they allocate to equities in that segment. If the algorithms identify that the specific market segment has turned bearish (Risk-off) then they shift allocation from equities to 100% cash.
- Change in Selection: If Spotalpha’s algorithms identify new stocks within the same market segment that can significantly improve risk-adjusted return performance in comparison to the current portfolio.
- Change in Allocation: If Spotalpha’s algorithms identify that changing allocation/weightages of stocks within the current portfolio can significantly improve risk-adjusted return performance in comparison to the current portfolio.
In summary, there is no fixed rebalancing date or frequency that Alpha Portfolios follow. Spotalpha automatically evaluates the portfolios at the end of every day to check if there is any opportunity for rebalancing or if the current portfolio is optimum.
Useful Links:
Alpha Portfolios India
How to Use Alpha Portfolios (YouTube)