I do not mean to be too critical ,but your are engaged in double speak. Your holdings are purported to be superior to that of an index that is included as > 50% of your holdings. If your holdings are uniquely superior to the index, then you would not hold the index fund at all, because it can only be a negative drag on your holdings' performance.
Yes; all positions besides VOO are chosen as I believe they will generate alpha vs the index.
But to manage risk, there's a limit to the exposure I have on any active position. So at any point in time, in the absence of a full set of alpha opportunities, the funds remaining after active allocations according to their size limits will track the index.
You can’t claim to be a superior to the index investors and hold a majority of your $ in the index.
Thanks for the comment.
How do you measure superiority vs an index?
I measure it by looking at alpha, Information Ratio (for consistency of alpha), and downside deviation vs the index (for risk comparison)
According to these measures (that are also widely accepted in the industry), it is superior.
By the way, my index exposure varies with time; it is not always a majority of my exposure.
I do not mean to be too critical ,but your are engaged in double speak. Your holdings are purported to be superior to that of an index that is included as > 50% of your holdings. If your holdings are uniquely superior to the index, then you would not hold the index fund at all, because it can only be a negative drag on your holdings' performance.
Yes; all positions besides VOO are chosen as I believe they will generate alpha vs the index.
But to manage risk, there's a limit to the exposure I have on any active position. So at any point in time, in the absence of a full set of alpha opportunities, the funds remaining after active allocations according to their size limits will track the index.