What Metrics Should I Consider When Selecting Alpha Portfolios?

The primary objective of Alpha Portfolios is to outperform the benchmark S&P500 index. The specific characteristics of an alpha portfolio can vary based on the investment category (Large-Cap, Mid-Cap, or Small-Cap) and market conditions. Here are the key parameters you might want to consider when selecting an Alpha Portfolio.

Volatility of equity curve is a measure of risk. The Large-Cap Alpha Portfolio shows considerably less volatility than Mid-Cap and Small-Cap Alpha Portfolios.

Alpha is a measure of outperformance against a common benchmark, such as S&P500, on a risk-adjusted-return basis. Historically, the Mid-Cap Alpha Portfolio has shown significantly more Alpha than Large-Cap and Small-Cap Alpha Portfolios.

Annualised Return is another common parameter considered by investors. The Small-Cap Alpha Portfolio has historically delivered more return than Large-Cap and Mid-Cap Alpha Portfolios.

Regular rebalancing is a crucial aspect of alpha portfolios. Spotalpha evaluates the market daily to determine if rebalancing is necessary. Subscribers receive notification emails when rebalancing occurs. This process ensures that the portfolio remains aligned with investment objectives and takes advantage of market opportunities as they arise.

In summary, when selecting alpha portfolios, investors should consider the specific characteristics of the portfolios based on the investment category and market conditions. Additionally, evaluating the strategies of timing, selection, and allocation, as well as the frequency and process of rebalancing, are important metrics to consider.

Useful Links:
Alpha Portfolios US
How to Use Alpha Portfolios (YouTube)