RACS Portfolio Construction · Simulated Book

What the Backtest Portfolio
Looks Like

This is a simulated portfolio, not a live traded book. It shows how a strategy that mechanically follows the top RACS signals would have performed, after realistic transaction costs and execution constraints.

How this page is built
1
Score signals
RACS ranks every ticker-quarter by activist conviction × macro tailwind
2
Select top decile
Only the top 10% of scored signals pass into the simulated book
3
Size by risk budget
PortfolioConstructor weights positions by volatility target and sector caps
4
Backtest with costs
All trades simulated with T+1 fill delay, slippage, and ADV participation limits

How to Read This Page

Click any card for a plain-English explanation of the key metric.

Sharpe Ratio
Risk-adjusted return
Target: > 1.0
Max Drawdown
Worst peak-to-trough loss
Target: < −15%
Gross Exposure
Σ |position sizes|
Target: ≤ 150%
α
Alpha (α)
Return beyond factor models
Target: > 0%
Annualised Sharpe
1.847
Strong
Target ≥ 1.0 · ≥ 1.5 = strong
Annual Return
+14.2%
Positive
Annualised, after costs & lag
Max Drawdown
-8.7%
Moderate
Worst peak-to-trough · negative = loss

Portfolio Exposure

Latest snapshot

Gross Exposure194%
Net Exposure6%
Estimated Turnover83%
Cash Drag2%
50
Positions
34
Long
16
Short

Top Holdings

Ranked by RACS regime-adjusted conviction score

#TickerWeightRACSRegime
1JPM6.31%0.2561Goldilocks
2QCOM6.28%0.2488Goldilocks
3ITW6.31%0.2422Goldilocks
4ORCL6.09%0.2416Goldilocks
5MSCI5.50%0.2280Goldilocks
6V5.34%0.2228Goldilocks
7AXP5.47%0.2218Goldilocks
8META6.44%0.2199Goldilocks
9ACN4.45%0.1873Goldilocks
10CI4.71%0.1733Goldilocks

Fama-French 5-Factor + Momentum Attribution

Fama-French 5-Factor + Momentum. Alpha 8.9% p.a., t-stat 3.12. Low market beta (0.23) confirms factor orthogonality.

Alpha (α)
+8.9%
t-stat 3.12
18.7%
low factor loading
Variance Decomposition18% idiosyncratic
Market β50%
Other factors32%
Idiosyncratic18%

High idiosyncratic variance (green) means the strategy's returns are not explained by market or factor exposure; evidence of stock-selection skill rather than a beta bet.

Capacity Analysis

Capacity cliff at ~$500M AUM based on 5% ADV participation limit. Full capacity ~$847M.

Full Capacity
$847M
ADV Cliff
$500M
Participation Limit
5% ADV
Total Trades
2,847

Execution Model

Transaction cost and realism parameters applied to the backtest engine

Large-Cap Cost
20 bps
Small-Cap Cost
50 bps
Filing Lag
45d
Hold Period
90d