Monthly Review: August 2026

Watch: August 2026 Review

Our August 2026 review in video form: the performance, the biggest movers, the risk overlay, and what comes next. Prefer to read? The full written review is below.

Performance Snapshot

AlphaWizzard returned +0.1% in August 2026 versus +2.7% for the S&P 500 (SPY) and +4.2% for the Nasdaq (QQQ), leaving outperformance of -2.6 percentage points vs SPY and -4.1 percentage points vs QQQ. Year-to-date the strategy stands at +12.0% against +12.5% for SPY and +16.6% for QQQ, with a since-inception return of +21.2%.

The F1 Dashboard

Equity exposure started and ended the month at 81%, a net change of 0 percentage points. The path was not flat: the overlay moved four times. It dropped to 45% mid-month in Cruising mode, then moved to 100%, then back to 81%, finishing in Accelerating mode. See Pillar 3: Risk Overlay in Action below for the full daily journey.

What Happened in Markets

August 2026 was a month where the headlines were far more nervous than the index prints. The S&P 500 hit an all-time high in early August and slipped later in the month. It still finished above July's close, with the Nasdaq leading. The month ended with the S&P 500 at 7,686.14 (-0.33% on the day) and the Nasdaq at 26,370.89 (-0.12%). The Dow closed at 53,185.90 (-0.7%), while the Russell 2000 gained roughly 1.4% for the month. Beneath that, the macro data was genuinely conflicting. The July jobs report on August 7 showed nonfarm payrolls unexpectedly falling 23,000 against a consensus of +83,000, driven by a 53,000 drop in government jobs. Unemployment edged down to 4.1% only because the labor force shrank. Average hourly earnings rose two cents, taking the 12-month rate to 3.2% versus 3.5% expected, the lowest since May 2021. May and June were revised down a combined 103,000.

Inflation then behaved. July CPI on August 12 printed +0.1% m/m and 3.4% y/y, in line with consensus, with core at +0.2% m/m and 2.5% y/y. Odds of the Fed holding in September rose to roughly 60% from about 45% a week earlier. But the Fed itself was anything but settled. The FOMC held its benchmark rate at 3.50%–3.75% on a 9-3 vote, the most dissents since 1970, and all of them favoring a hike rather than a cut. At Jackson Hole on August 28, Chair Kevin Warsh used his debut keynote to warn that stubborn inflation could push the Fed toward a hike. He described financial conditions as not broadly restrictive and explicitly rejected forward-guidance framing. US stocks were mostly unchanged after the remarks, while front-end Treasury yields drifted higher. Layered on top, the US imposed tariffs of up to 50% on Canadian goods, with Canada preparing matching tariffs on roughly 700 American products worth $20 billion annually. Q2 GDP slowed to a 1.5% annualized pace from 2.1% in Q1. The ongoing war in Iran pushed US oil above $83 a barrel on August 12 as hopes for a reopening of the Strait of Hormuz faded.

For AlphaWizzard, the shape of the month mattered more than its direction. Average equity exposure across August was 66%, well below our 81% start and finish. That meant the portfolio participated only partially in a tape that investors kept buying on every dip. Investors appeared to bet that corporate profitability would outlast the tariff, war and rate drags. Our Technology sleeve (40% of the book) returned +5.0% against +6.4% for XLK, and Energy (13.3%) delivered +13.8% against +7.4% for XLE. Both were genuine wins. The damage came from two places: Healthcare at -14.4% versus +4.9% for XLV, and Real Estate at -12.7% versus -2.1% for XLRE. Nvidia's August 26 report sent its shares up 8.7%. The S&P 500 rose 0.72% to 7,730.99 and the Nasdaq 1.57% to 26,541.35 on August 27, the best day for tech since August 4. That came when our throttle had only recently reopened. Strong stock selection in two sectors, weak selection in two others, and reduced exposure through the mid-month rally together explain a flat month.

Monthly Top Performers

Memory and refining did the heavy lifting: Sandisk and Micron led on the semiconductor side while Phillips 66 and HF Sinclair converted firmer crude into double-digit gains. Healthcare and lodging were the drag, with DaVita and Host Hotels & Resorts accounting for the bulk of the month's negative attribution.

Pillar 1: Stock Universe Update

Pillar 1 is the scouting operation: a systematic ranking of the investable universe on quality, growth, valuation and momentum, refreshed at month-end without regard to what we owned before. Coming out of August 2026, the ranking tilted hard toward cash-generative energy midstream, insurance and regional banking, and AI-infrastructure semiconductors — and away from healthcare services, lodging and steel. The resulting September 2026 book carries 15 names.

Notable Shifts

• Energy midstream moves to the front of the grid: ET and PAA join on high free-cash-flow yields and distribution support, with ET showing +78.4% revenue growth and a 6.25% dividend yield.
• Refining stays on the track but consolidates: MPC joins alongside incumbents DINO and PSX, keeping the crack-spread exposure (the profit margin between crude and refined fuel prices) that drove August's +13.8% Energy return.
• AI infrastructure broadens beyond memory: MRVL and HPE enter the book, adding data-infrastructure silicon and enterprise compute to the existing SNDK/MU/STX memory core.
• Financials rotate from Canadian banks to US insurance and regional banking: ALL, BPOP and VIRT replace BMO and BNS, reducing direct exposure to the US–Canada tariff crossfire.
• Healthcare and real estate exit entirely: DVA, BTSG and HST leave after the sectors' -14.4% and -12.7% returns, replaced by cash-flow names in energy and financials.

Sector Performance

The table below compares each sector sleeve against its benchmark ETF for the month, with the resulting contribution to portfolio return.

*Our Return is the average return of our holdings in each sector while held, weighted by their share of the portfolio. ETF is the sector benchmark ETF's calendar-month return. Impact is the sector's contribution to portfolio return in percentage points, after the Risk Overlay's equity exposure.*

Earnings Scorecard

Nine holdings reported during August 2026. Eight beat on EPS, several decisively, including PSX at $9.41 versus $7.51 and ARW at $5.45 versus $4.50. Our analysis suggests the fundamental screen was picking up genuine earnings momentum even where price action disagreed.

Pillar 2: Portfolio Changes

At the end of August 2026 the optimizer rebuilt the grid for September 2026: nine new positions in, nine out, six maintained, for a total of 15 equally weighted holdings at roughly 6.7% each. That is a high turnover month by our standards, and it reflects how decisively the ranking shifted toward cash-generative energy and financials.

New Positions

• ALL (The Allstate Corporation) — Financial Services | Insurance - Property & Casualty. A hardened P&C underwriter compounding at a 46.1% return on equity while trading at a single-digit earnings multiple. Market Cap: $65B, Profit Margin: 19.0%, Revenue Growth: +11.8%. Highlight: ROE 46.1%
• BPOP (Popular Inc) — Financial Services | Banks - Regional. Puerto Rico's dominant bank, with a 41.0% operating margin, a 4.1/5 analyst consensus and forward EPS growth of 17.3%. Market Cap: $11B, Profit Margin: 31.6%, Revenue Growth: +7.6%. Highlight: Fwd EPS Growth +17%, ROE 15.7%
• DAR (Darling Ingredients Inc) — Consumer Defensive | Packaged Foods. Sustainable natural ingredients and renewable fuels, with the strongest analyst consensus in the book at 4.5/5 and forward EPS growth of 50.9%. Market Cap: $11B, Profit Margin: 9.1%, Revenue Growth: +16.4%. Highlight: Fwd EPS Growth +51%
• ET (Energy Transfer LP) — Energy | Oil & Gas Midstream. Toll-road cash flows across the US energy complex, a 6.25% distribution yield and a PEG of 0.68. Market Cap: $74B, Profit Margin: 4.9%, Revenue Growth: +78.4%. Highlight: Fwd EPS Growth +17%, P/E 14.8
• HPE (Hewlett Packard Enterprise Co) — Technology | Communication Equipment. Direct leverage to the data-center build-out that has been boosting tech profits all year, with forward EPS growth of 281.6%. Reports September 2. Market Cap: $69B, Profit Margin: 4.0%, Revenue Growth: +40.0%. Highlight: Fwd EPS Growth +282%
• MPC (Marathon Petroleum Corp) — Energy | Oil & Gas Refining & Marketing. The largest US independent refiner, generating a 42.1% return on equity with crude above $83. Market Cap: $108B, Profit Margin: 5.5%, Revenue Growth: +53.7%. Highlight: ROE 42.1%, P/E 12.9
• MRVL (Marvell Technology Group Ltd) — Technology | Semiconductors. Custom AI silicon and data-infrastructure networking, with 23 Strong Buy ratings and a 4.5/5 consensus. Market Cap: $189B, Profit Margin: 27.9%, Revenue Growth: +36.5%. Highlight: Fwd EPS Growth +13%, ROE 16.5%
• PAA (Plains All American Pipeline LP) — Energy | Oil & Gas Midstream. Permian crude gathering and transportation with a 6.37% yield and forward EPS growth of 60.9%. Market Cap: $18B, Profit Margin: 5.3%, Revenue Growth: +66.3%. Highlight: Fwd EPS Growth +61%, Dividend Yield 6.4%
• VIRT (Virtu Financial, Inc.) — Financial Services | Capital Markets. A market maker that structurally benefits from the volatility our other positions have to endure, at a 36.3% operating margin and 53.6% ROE. Market Cap: $6B, Profit Margin: 16.9%, Revenue Growth: +29.1%. Highlight: Fwd EPS Growth +16%, ROE 53.6%

Positions Closed

• DVA (DaVita) — the month's largest detractor at -26.7% while held; the fundamental ranking deteriorated sharply and the position was cut rather than defended.
• HST (Host Hotels & Resorts) — -12.7% while held, with a mixed August 5 print ($0.35 EPS versus $0.36 estimate) and the whole Real Estate sleeve trailing XLRE by more than ten points.
• BMO (Bank of Montreal) — -5.1% while held despite an adjusted beat at $3.96 versus $3.79; the headline 25% decline in net income on the transportation and vendor finance sale, plus escalating US–Canada tariff risk, pushed it down the ranking.
• BNS (Bank of Nova Scotia) — closed on ranking rather than results: the August 25 print was a clear beat at $2.28 adjusted versus $2.12, with record Global Banking and Markets earnings of $647M, up 37% year-on-year. Canadian bank stocks were up 24% year-to-date into the prints, and the valuation edge had narrowed.
• DOCN (DigitalOcean) — -5.8% while held on a mixed August 4 report: EPS of $0.45 beat the $0.27 estimate but revenue of $281M missed at $285M.
• ATI, BTSG, NUE, SNX — exited on relative ranking as basic materials and distribution names were displaced by higher-scoring energy and financials candidates. ATI left despite a solid August 6 beat at $1.23 versus $1.05.

Positions Maintained

Six names carry into September 2026: ARW, DINO, MU, PSX, SNDK and STX. That core is deliberately concentrated in memory semiconductors and refining — the two engines that produced August's positive attribution. SNDK, MU, PSX and DINO were four of our five largest contributors, and the fundamental case behind each survived the month-end re-ranking unchanged. STX is retained despite a -3.2% month as its position in the storage cycle remains intact; MU reports on September 30.

Pillar 3: Risk Overlay in Action

August 2026 Exposure Journey

August began and ended at 81% equity, a flat month on the face of the dashboard, but the path between those two points was anything but flat. The overlay moved four times. On August 4 exposure came down from 81% to 74%, shifting the car into cruising. On August 5 exposure moved from 74% to 45% equity and held there through the middle of the month. On August 19 exposure moved from 45% to 100% equity and into accelerating mode. On August 24 the system trimmed from 100% to 81%, which is where the month closed. Four discrete steps, one round trip, and an average equity exposure across the month of 66%.

We are transparent about the cost as well as the benefit. Running at 45% through the middle of August meant the portfolio participated only partially in a tape that was grinding back toward its highs, and the intra-month drawdown of -4.0% shows the defensive posture did real work while it was on. The re-acceleration to 100% on August 19 put us back at full throttle ahead of the strongest stretch of the month — the Nvidia-driven session on August 27 that lifted the S&P 500 0.72% and the Nasdaq 1.57%, the best day for tech since August 4. The trim on August 24 moderated that back to 81%. The overlay does not attempt to predict headlines like Jackson Hole or the tariff escalation; it responds to measurable conditions, and in a month where the index round-tripped, it kept the strategy's since-inception maximum drawdown at -19.1% while still finishing in accelerating mode.

“The risk overlay is not there to beat the market in a straight line. It is there to make sure we are still on the track when the straight line arrives.”

Pit Stop

Every month we pull two cars into the garage: the one that won us the most time, and the one that cost it. Every trade, position and the full performance history are publicly visible on eToro.

SNDK (Sandisk Corp) — Top Contributor

Sector: Technology | Computer Hardware. Sandisk returned +29.0% while held and added 1.1 percentage points to the portfolio, taking its return since added to +146.6%. The August 5 print was emphatic: EPS of $39.25 versus $35.14 expected on revenue of $9.0B versus $8.6B. Revenue rose 51% sequentially and GAAP net income was $6.90B ($43.97 per share). Roughly two-thirds of the sequential growth came from higher pricing. The board added a $14B buyback (total $15.5B) and guided FQ1'27 revenue to $10.30–10.80B with EPS of $44–46. Shares still fell on the print as some investors judged guidance short. The stock was down roughly 20% month-to-date at one point on profit-taking and rotation into hyperscalers. Memory still remained the year's standout group, with SNDK up around 490% year-to-date and the best S&P 500 performer of 2026. An Investor Day followed on August 13.

Fundamentals: Market Cap $229B, Revenue Growth +371.6%, Profit Margin 56.5%, Operating Margin 78.5%, ROE 91.6%, P/E 20.1, Forward EPS Growth 173.5%, Analyst Consensus 3.8/5 (5 Strong Buy, 1 Buy, 5 Hold, 1 Sell). Sandisk develops, manufactures and sells data storage devices and solutions using NAND flash technology across the Americas, Europe, the Middle East, Africa and Asia. Held going forward into the September 2026 portfolio: yes.

DVA (DaVita HealthCare Partners Inc) — Top Detractor

Sector: Healthcare | Medical Care Facilities. DaVita returned -26.7% while held and cost 1.0 percentage points, with a return since added of -26.7%. The August 4 report was, on the face of it, a beat: EPS of $4.02 versus $3.92 and revenue of $3.6B versus $3.5B. The market rejected the underlying trajectory, and the position was the single largest drag on the month. This is the model working as designed: the screen acts on quantitative evidence, and when the evidence deteriorates, the position leaves the book.

Fundamentals: Market Cap $11B, Revenue Growth +5.2%, Profit Margin 6.0%, Operating Margin 16.1%, ROE 88.5%, P/E 14.9, Forward EPS Growth 46.2%, Analyst Consensus 3.1/5 (1 Strong Buy, 0 Buy, 8 Hold, 1 Sell). DaVita provides kidney dialysis services for patients with chronic kidney failure in the United States, operating dialysis centers and related lab services. Held going forward into the September 2026 portfolio: no.

Looking Ahead

September 2026 opens with a fully reconstituted 15-stock book, 81% equity exposure and the engine in accelerating mode. The macro calendar is dense: payrolls on September 4, CPI on September 11 and the FOMC decision on September 16. The committee dissented 9-3 toward a hike, and Chair Warsh signalled that elevated prices must be the Fed's main focus. Our analysis suggests September carries genuine two-sided risk. Our answer is a process that re-ranks the universe monthly and adjusts the throttle continuously.

The Three Pillars Remain Active

• Pillar 1 — Stock Universe: the full investable universe is re-scored every month on quality, growth, valuation and momentum, with no attachment to prior holdings.
• Pillar 2 — Portfolio Construction: a concentrated, equally weighted 15-30 stock portfolio, currently sitting at 15 names at roughly 6.7% each, rebuilt at month-end.
• Pillar 3 — Risk Overlay: continuous adjustment of equity exposure between full brake and full throttle, acting on measurable market conditions rather than headlines.
• Publicly visible record: every trade, position and the full performance history are publicly visible on eToro, including the ones that cost us, like DVA at -26.7%.

Key Themes

• AI Infrastructure & Semiconductors — MRVL, MU, SNDK, STX, ARW, HPE: memory pricing, custom silicon and enterprise compute, all levered to the data-center build-out that continues to boost tech profits.
• Energy Refining & Midstream — MPC, PSX, DINO, ET, PAA: crack spreads with crude above $83 on Strait of Hormuz risk, paired with fee-based midstream cash flows yielding above 6%.
• Financials — ALL, BPOP, VIRT: property & casualty underwriting, regional banking and a market maker that monetises volatility, now sourced domestically rather than across the Canadian border.
• Consumer Defensive — DAR: sustainable ingredients and renewable fuels, the book's ballast with a 4.5/5 analyst consensus.

Month Ahead

Two portfolio names report in September 2026 — HPE on September 2 and MU on September 30 — bracketing a macro calendar that includes the ISM survey (September 1), payrolls (September 4), PPI (September 10), CPI (September 11), the FOMC decision and retail sales (September 16) and PCE inflation (September 30). Markets are closed Monday, September 7 for Labor Day.

Portfolio earnings in September 2026

Headline economic releases

Market holidays

Why Copy AlphaWizzard?

• A genuinely systematic process: three pillars, namely universe ranking, portfolio construction and risk overlay, applied the same way every month, with no discretionary overrides when a position goes against us.
• Concentrated conviction with diversification discipline: 15-30 equally weighted names, so no single position can dominate the outcome, while each holding is large enough to matter.
• Fundamentals that show up in the results: eight of our nine reporting holdings beat on EPS in August 2026, including PSX at $9.41 versus $7.51 and SNDK at $39.25 versus $35.14.
• A publicly visible record: every trade, position and the full performance history are publicly visible on eToro, including entries, exits, exposure steps and mistakes. DVA cost 1.0 percentage points this month and we say so plainly.
• Willingness to cut losers fast: nine positions were closed at the end of August 2026, including names that had beaten on earnings, because the ranking governs the book rather than our attachment to a story.
• Real diversification across themes: AI infrastructure, energy refining and midstream, financials and consumer defensives, rather than a single-factor bet dressed up as a strategy.

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