Take Profits Rule Added to AI Factor S&P1500 and Profitable Leaders

Announcements
1

Two positions in our live strategies have appreciated significantly, pushing their portfolio weights well above the strategies' target size for a new position:

Strategy Ticker Current Weight
Profitable Leaders KLAC 40.0%
AI Factor S&P1500 SNDK 20.4%

To manage this concentration risk, we've added a conservative Take Profits sell rule that will trim these positions at the next automatic rebalance:

Rule: Eval(Weight > 15, 0.5, 0)

Effect: Any position exceeding 15% of the strategy will be reduced by half at rebalance.

This rule applies going forward to both strategies and will help keep individual positions within a more reasonable range of the portfolio.

2

Does the rule add value?

3

Adding the Take Profits rule has almost no effect on backtest results. Over the full backtest period, the rule triggers only once for Profitable Leaders and twice for AI Factor S&P 1500.

The rule was added for a different reason. Exceptional gains in AI-related stocks have left the two holdings mentioned earlier significantly overweight. This is a problem for new users who want to start following the model, because the model's initial transactions would replicate those extreme weightings. The Take Profits rule addresses this by trimming oversized positions.