Mid-year may not come with a formal checkpoint, but it’s the right time to slow down and take inventory. What’s in your book, why is it there, and does it still reflect the world you’re investing in now?
By mid-year, patterns emerge: some are intentional, others less so. A few positions have earned their place, while others are just still around. This is the time to make small, deliberate adjustments.
Let’s start with a map: where’s your capital deployed—and what is the portfolio's capital efficiency today?
Recalculate position-level contribution to both YTD return and risk. Rank exposures not just by weight, but by return on capital. Revisit sizing logic:
- Is top-heaviness justified by differentiated insights or recent performance?
- Are you underweighting high-conviction names due to old volatility assumptions?
- Are any holdings delivering subpar return on risk despite material weight?
Check if your capital is sitting where your process says it should.
If you wouldn’t buy it today, why is it still in the book? If it’s grown into a top 3 name, has your conviction grown with it—or have you just been busy?
Look at the book like you didn’t build it:
- What would you double down on today?
- What would be hard to pitch, even to yourself?
- What looks like a placeholder but talks like a position?
Every portfolio drifts, the question is only whether you’re tracking the right metrics to see it.
Run updated factor exposures, sector/industry decomposition, and geographic attribution. Compare to your intended allocation bands or historical profiles. Metrics to watch:
- Active share vs. benchmark, then vs. yourself in January
- Aggregate style exposures (e.g., size, quality, momentum)
- Beta and duration sensitivity relative to macro regime shifts
Six months in, your net exposure may be fine—but your book could be leaning into a style, region, or story harder than you think. Maybe you’ve backed into a macro call or picked up a soft momentum tilt. Maybe your short book is mimicking your long.
None of that is wrong - if you spot it early on enough.
Theses rarely unravel overnight. More often, they decay in stages—catalysts slip, timelines stretch, and original assumptions go untested.
This is the point in the year to revalidate:
- What are the key drivers of this position—and are they still in motion?
- Has the expected payoff period extended or changed shape?
- Is the thesis intact, delayed, or quietly obsolete?
Run a clear attribution breakdown. Identify which names are driving returns—and which are just driving volatility. Make the distinction between true alpha and factor exposure. Focus on:
- Contributors and detractors, both by basis points and standard deviation
- Clustering effects within your long and short books
- Dispersion among your highest-conviction names
The book has a structure, and by mid-year, it’s visible. Use the data to confirm what you think you know.
Revisit the distribution of returns, not just the totals. What’s carrying more weight than expected? What’s quietly lagging? Which names now require more narrative support than they used to?
Sharpening The Edges
There’s no need to overhaul a functioning portfolio, but you do need to interrogate it: what’s in it, why it’s still there, do your assumptions still hold.
A mid-year reset is a good time to cut the autopilot and make sure the second half reflects what you now know, and not just what you once believed. If you’d like support reviewing exposures, catalysts, or performance attribution in your portfolio, our team can help you get started.
