Monthly Review: February 2026

Performance Snapshot

February delivered exceptional alpha generation as AlphaWizzard gained 13.3% while broad markets declined, with the S&P 500 down -0.9% and Nasdaq falling -2.3%. Our strategic positioning in precious metals and information technology drove significant outperformance of +14.2% versus SPY and +15.6% versus QQQ.

The F1 Dashboard

Current equity exposure: 83%. Mode: Accelerating.

What Happened in Markets

Equity markets encountered significant headwinds in February as investors grappled with multiple risk factors. Persistent inflationary concerns intensified following the release of PCE and PPI data, while mixed signals from FOMC meeting minutes added to monetary policy uncertainty. Escalating geopolitical tensions between the US and Iran further contributed to market volatility. These pressures manifested in broad-based equity declines, with the S&P 500 falling 0.9% for the month. Growth-oriented sectors bore the brunt of the selloff, as investors reassessed valuations amid the challenging backdrop. Technology stocks were particularly affected, driving the Nasdaq to a more substantial 2.3% decline as high-multiple names came under pressure. The prevailing risk-off sentiment prompted a notable sector rotation, with capital flowing from speculative growth positions toward value and defensive sectors as investors sought refuge from market turbulence.

Despite this challenging backdrop, our quantitative approach identified pockets of strength that drove exceptional performance. Precious metals miners benefited from renewed inflation hedging demand and supply constraints, while our technology holdings focused on essential infrastructure and specialized components rather than consumer-facing growth names, providing crucial differentiation.

The month's pronounced rotation from speculative growth to high-quality value equities created favorable conditions for our systematic investment approach. As investors reassessed risk preferences amid market volatility, our quantitative framework's focus on profitability metrics, balance sheet strength, and earnings quality positioned portfolios advantageously within this shifting landscape. Market dynamics during the period provided compelling validation of our multi-pillar methodology. Our disciplined quantitative analysis successfully identified attractive opportunities across sectors, demonstrating the framework's effectiveness in navigating periods of heightened uncertainty. The resulting performance differential highlighted the value of active quantitative management over passive strategies, particularly as significant sector and style rotations created dispersion in individual security returns. These results reinforce our conviction that systematic, fundamentals-driven selection can generate alpha through different market cycles, with particular strength during periods when quality factors drive investment flows.

Monthly Top Performers

Portfolio performance this month was primarily driven by our strategic allocations to precious metals mining companies and specialized industrial technology institutions, both of which delivered substantial gains. These sector positioning decisions accounted for the majority of our outperformance relative to benchmark indices during the period.

Pillar 1: Stock Universe Update

February's quantitative screening revealed significant opportunities in value-oriented sectors as market volatility created pricing dislocations. Our systematic approach identified compelling risk-adjusted opportunities across defensive and cyclical names with strong fundamental profiles.

Notable Shifts

• Canadian Banking Strength: Superior capital ratios and strong exposure to commodity sectors created attractive entry points in diversified financial services
• Precious Metals Momentum: Supply constraints, geopolitical threats and inflation hedging demand elevated scores for established gold and silver miners
• Industrial Technology Value: Essential infrastructure and specialized component manufacturers showed compelling metrics amid broader tech weakness
• Defensive Consumer Rotation: High-quality consumer staples with pricing power maintained strong quantitative rankings
• Materials Cycle Position: Base metals and specialty materials companies demonstrated improving fundamental momentum

Pillar 2: Portfolio Changes

Our February rebalancing for March resulted in substantial portfolio turnover as our systematic methodology identified enhanced risk-adjusted opportunities across our investment universe. The rebalancing encompassed eight new position initiations and eight position closures, while maintaining twelve core holdings that continued to satisfy our quantitative selection criteria. Notably, we realized significant gains on the majority of our closed positions during the period.

New Positions

• ATI (Allegheny Technologies Incorporated) — Industrials | Metal Fabrication. Leading specialty materials producer with strong aerospace and defense exposure. Market Cap: $22B, Profit Margin: 8.8%, Revenue Growth: +0.4%
• BMO (Bank of Montreal) — Financial Services | Banks - Diversified. Premier Canadian banking franchise with diversified North American operations. Market Cap: $102B, Profit Margin: 27.1%, Revenue Growth: +10.0%
• BNS (Bank of Nova Scotia) — Financial Services | Banks - Diversified. International banking leader with strong Latin American presence. Market Cap: $94B, Profit Margin: 27.2%, Revenue Growth: +17.5%
• CM (Canadian Imperial Bank Of Commerce) — Financial Services | Banks - Diversified. Diversified financial institution with exceptional profitability metrics. Market Cap: $94B, Profit Margin: 33.5%, Revenue Growth: +16.7%
• JCI (Johnson Controls International PLC) — Industrials | Building Products & Equipment. Global leader in smart building technologies and solutions. Market Cap: $88B, Profit Margin: 14.2%, Revenue Growth: +6.8%
• NGD (New Gold Inc) — Basic Materials | Gold. Intermediate gold producer with strong operational improvements. Market Cap: $8B, Profit Margin: 20.1%, Revenue Growth: +83.5%
• SNDK (Sandisk Corp) — Technology | Computer Hardware. Data storage leader benefiting from AI and cloud infrastructure demand. Market Cap: $94B, Profit Margin: -11.7%, Revenue Growth: +61.2%
• TTMI (TTM Technologies Inc) — Technology | Electronic Components. Specialized electronics manufacturer serving mission-critical applications. Market Cap: $11B, Profit Margin: 6.1%, Revenue Growth: +19.0%

Positions Closed

As part of our systematic rebalancing process, we executed eight strategic position replacements on Friday prior to market close. The portfolio optimization resulted in the closure of positions in B, BE, CHRW, CIEN, EMBJ, GH, GLW, and KGC. Capital from these exits was reallocated to new opportunities that exhibited superior risk-adjusted return potential according to our quantitative screening methodology and analytical framework. These replacements align with our disciplined approach to maintaining higher-conviction positions within the portfolio.

Positions Maintained

Twelve core positions continued to satisfy our rigorous quantitative criteria and were retained in the portfolio. These high-conviction holdings span six key sectors: precious metals (AU, CDE, IAG, NEM), technology infrastructure (LITE, MU, STX, WDC), Canadian banking (RY), global mining (RIO), aerospace and defense (RTX), and specialty beverages (MNST). Each position reflects our disciplined, data-driven approach to identifying superior risk-adjusted return opportunities within the current market environment.

Pillar 3: Risk Overlay in Action

February Exposure Journey

Throughout February, our risk overlay maintained a steady 83% equity exposure as market conditions supported our accelerating stance. Despite headline market weakness, our systematic risk indicators identified that the selloff represented sector-specific pressure rather than broad systemic risk, allowing us to maintain full exposure to capitalize on the value opportunities emerging from market dislocations.

The risk overlay's decision to hold steady proved crucial as it allowed us to benefit from the rotation into our preferred sectors without the timing risk of tactical adjustments. Our defensive positioning in Canadian banks, precious metals, and quality industrials provided natural protection while still maintaining upside participation. This demonstrates how proper stock selection can provide risk management.

“Our risk overlay doesn't just protect capital during downturns—it ensures we're positioned to capture opportunities when markets reward quality and value over speculation.”

Looking Ahead

March positioning reflects continued confidence in our systematic approach as market volatility creates ongoing opportunities for alpha generation. Our quantitative framework remains focused on identifying quality companies with strong fundamentals across our core investment themes.

The Three Pillars Remain Active

• Stock Universe: Daily screening of 3,000+ global equities for optimal risk-adjusted opportunities
• Portfolio Construction: Maintaining 15-30 position concentrated portfolio with systematic rebalancing
• Risk Overlay: Dynamic exposure management based on market regime and systematic risk indicators
• Quantitative Edge: Leveraging data-driven insights to identify market inefficiencies and exploit them systematically

Key Themes

• Precious Metals Leadership: AU, CDE, IAG, NEM, NGD positioned for continued inflation hedge demand
• Canadian Financial Strength: BMO, BNS, CM, RY benefiting from superior financial ratios and linked commodity exposure
• Technology Infrastructure: LITE, MU, SNDK, STX, TTMI, WDC focused on essential rather than speculative tech
• Quality Industrials: ATI, JCI, RTX providing exposure to aerospace, defense, building efficiency, and specialty materials
• Defensive Consumer: MNST maintaining pricing power in challenging consumer environment
• Global Mining: RIO providing diversified commodity exposure with strong balance sheet

Why Copy AlphaWizzard?

• Systematic Alpha Generation: Quantitative approach consistently identifies market inefficiencies for sustainable outperformance
• Transparent Strategy: Complete visibility into methodology, positions, and decision-making process
• Risk-Managed Growth: Dynamic exposure control protects capital while maintaining upside participation
• Institutional Quality: Professional-grade portfolio management with systematic rebalancing and position sizing
• Concentrated Conviction: Focused 15-30 stock portfolio maximizes impact of highest-confidence opportunities
• Global Opportunity Set: 3,000+ stock universe ensures optimal risk-adjusted selections across all markets
• Proven Track Record: Consistent alpha generation across different market environments and cycles
• Data-Driven Discipline: Emotion-free investing based on quantitative analysis and systematic execution