Ultimate Position Sizing Guide - Part 1 - Sizing Matters, But How Much?

Hi, this is Cameron Hight from Alpha Theory.

We've recently released a new white paper called The Ultimate Position Sizing Guide.

The reason is because we've had lots of conversations with lots of analysts and lots of portfolio managers about that exact subject, position sizing.

And we've learned through our thirteen years worth of data that our managers are really good at position sizing.

And to prove that out, we measured their long portfolios compared to an equal weighted version of themselves and they generate about 2% of return from sizing.

Now how does that compare to the average fund?

Well, our friends at Novus did an analysis where they compared 1200 managers and they did the exact same analysis where they created an equal weighted portfolio and compared that to their actual portfolio.

When they saw that they generated about 33 basis points of return from sizing.

That's 6X return from sizing from Alpha Theory managers.

And it's our belief that their process orientation, their process based position sizing is critical to their position sizing success.

We talk about that in our new white paper, The Ultimate Position Sizing Guide, and I hope you get a chance to read it.