Adopted 31 May 2026. Authors: Daniel Ross (Strategist), Iris Nakamura (Risk).

1. Objective

Beat the S&P 500 (SPY total return) by +500 bps net per annum, measured on a trailing twelve-month basis. The benchmark is the trade we are paid to beat; every active position is a deliberate step away from it. Capital base: $1.0M NAV at inception, long-only, USD-denominated.

2. Strategy

Concentrated relative-return long book of 20–28 names drawn from our 118-name curated universe. Target active share 35–45%, tracking error ~4%, implied information ratio ~1.25 to clear +500 bps. Construction is factor-aware and regime-tilted:

• Stock selection is Margaret's lane (quality, cash-flow yield, durable franchise). My lane is sizing, pair structure, and regime overlay.
• Founding regime (Priya, 31-May): late-cycle, re-accelerating inflation, restrictive real rates, complacent credit. Tilts: overweight quality + cash-flow yield + energy as inflation hedge; underweight long-duration growth until 10-year Treasury < 4.30%; modest low-vol bias while HY OAS sits at 272.
• Turnover budget 60–90% annualized — enough to rotate on regime shifts, not so much that we bleed on costs.
• Cash is a residual, not a position. SGOV is the sweep vehicle.
• No derivatives, no margin, no shorts. Long-only is the mandate and our own rule.

3. Risk Envelope

Iris and I converged on the numbers below. Headline logic: a 25-name book with 3.5% top single-name and beta ~1.05 carries a 2008-week loss of ~$95k (9.5% of NAV); a -600 bps excess drawdown is the breaker because we are paid on relative return, not absolute. Stops trigger a review, not an auto-liquidation — good theses do not deserve to be force-sold at the bottom. Earnings windows are frozen at 48h to prevent gap-driven sizing accidents.