Monthly Review: July 2026

Watch: July 2026 Review

Our July 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

July 2026 was a difficult lap for AlphaWizzard. The strategy returned -12.7% for the month, trailing the S&P 500 (SPY) at 0.0% and the Nasdaq (QQQ) at -6.6%, for an outperformance of -12.7% versus SPY and -6.1% versus QQQ. Despite the setback, we remain up +11.9% year-to-date and +21.1% since inception.

The F1 Dashboard

Equity exposure moved from 49% at the start of the month to 81% by month-end (accelerated during the month), with the strategy ending in Accelerating mode. See Pillar 3: Risk Overlay in Action below for the day-by-day path.

What Happened in Markets

July 2026 presented a deceptively calm surface with turbulent undercurrents. The S&P 500 finished flat at 0.0% for the month, masking sharp rotation beneath the index level. Large-cap breadth held up thanks to defensive and value-oriented names, while the more growth-heavy Nasdaq (QQQ) slipped -6.6% as investors trimmed exposure to richly valued technology and momentum leaders. In other words, the headline index was steady, but the composition of returns shifted meaningfully away from the areas that had driven the first half of the year.

That rotation worked against our positioning. With six technology names and additional cyclical exposure across financials, energy, industrials, and basic materials, our portfolio was concentrated in precisely the corners of the market that faced the heaviest selling pressure. Higher-beta, growth-tilted holdings were marked down more aggressively than the broad index, and the concentrated nature of our book — by design, a focused set of high-conviction names — amplified the drawdown when those factors reversed. Our -12.7% result reflects this factor headwind rather than a breakdown in the underlying process.

In direct response to this concentration, we added two new selection rules to the Optimizer during July, and both are already live. The first caps how much of the portfolio any single sector can hold. The second limits correlation clusters, groups of stocks whose prices tend to move together, so no more than half of our positions can share one risk driver. We explain both rules in How the Optimizer Limits Concentration.

This is the nature of a rules-based strategy. Months like July are the cost of participating in the compounding the strategy is engineered to capture over full cycles. Our since-inception maximum drawdown of -19.1% remains within the range we would expect for a concentrated equity approach.

Monthly Top Performers

Even in a down month, pockets of resilience emerged, with select financials and materials names holding firmer than the broader technology and growth complex that dragged on results.

Pillar 1: Stock Universe Update

Our Pillar 1 engine continuously re-scores the investable universe on quality, value, momentum, and growth. Heading into August 2026, the rankings reflected the month's rotation away from momentum and toward companies with more grounded valuations and durable cash flows. That tilted our candidate set toward electronics and IT distributors, healthcare services, and refining businesses.

Notable Shifts

• Inside technology, the ranking rotated away from chipmakers and toward distributors — companies that resell electronic components and IT equipment to businesses (ARW, SNX). They screened well on strong revenue growth and reasonable valuations.
• Healthcare services gained ground, with home-based care and dialysis providers (BTSG, DVA) offering forward earnings growth at defensible multiples.
• Energy refining and marketing strengthened as downstream margins and cash returns (PSX, DINO) improved the sector's composite score.
• Real estate re-entered favor through lodging REITs (HST) trading at attractive yields relative to underlying asset value.
• Semiconductor and optical-networking names cooled, dropping several prior leaders out of the top decile. Technology as a whole lost ground. Even with the two distributors added, the sector falls from seven of our fifteen holdings in July to six in August.

Pillar 2: Portfolio Changes

At the close of July 2026, the optimizer refreshed the book for August 2026, rotating six new positions in and six out while maintaining a core of nine high-conviction holdings. The result is a balanced 15-stock portfolio that leans into improving fundamentals while trimming names whose signals had deteriorated.

New Positions

• ARW (Arrow Electronics Inc) — Technology | Electronics & Computer Distribution. A global technology distributor pairing strong top-line momentum with a reasonable valuation and forward earnings acceleration. Market Cap: $11B, Profit Margin: 2.2%, Revenue Growth: +39.0%. Highlight: Fwd EPS Growth +53%, PEG 0.94
• BTSG (BrightSpring Health Services, Inc.) — Healthcare | Health Information Services. A home and community-based healthcare platform with rapid growth and near-unanimous analyst support. Market Cap: $12B, Profit Margin: 2.5%, Revenue Growth: +23.0%. Highlight: Fwd EPS Growth +98%
• DVA (DaVita HealthCare Partners Inc) — Healthcare | Medical Care Facilities. A dominant kidney-dialysis provider with exceptional returns on equity and a compelling PEG ratio. Market Cap: $15B, Profit Margin: 5.7%, Revenue Growth: +6.0%. Highlight: Fwd EPS Growth +66%, ROE 81.0%
• HST (Host Hotels & Resorts Inc) — Real Estate | REIT - Hotel & Motel. A self-managed lodging REIT offering a 3.19% dividend yield and high margins across a premium asset base. Market Cap: $17B, Profit Margin: 16.4%, Revenue Growth: +2.8%. Highlight: Operating Margin 19.2%, Dividend Yield 3.19%
• PSX (Phillips 66) — Energy | Oil & Gas Refining & Marketing. An integrated downstream energy provider with strong forward earnings growth, a 2.31% dividend yield, and disciplined capital returns. Market Cap: $85B, Profit Margin: 3.1%, Revenue Growth: +6.9%. Highlight: Fwd EPS Growth +88%, Analyst Consensus 68% Buy/Strong Buy
• SNX (Synnex Corporation) — Technology | Electronics & Computer Distribution. A large-scale IT solutions aggregator combining robust revenue growth with a modest valuation and strong analyst backing. Market Cap: $20B, Profit Margin: 1.6%, Revenue Growth: +31.0%. Highlight: Fwd EPS Growth +53%, Revenue Growth +31.0%

Positions Closed

Six positions were exited as their composite rankings weakened, largely reflecting the month's rotation away from richly valued technology and momentum leaders:

• AMAT (Applied Materials) — Semiconductor equipment momentum faded as growth factors reversed.
• BEN (Franklin Resources) — Deteriorating relative score within financials.
• C (Citigroup) — Trimmed as the optimizer favored higher-conviction financial holdings.
• CFG (Citizens Financial Group) — Weakening momentum and relative value signals.
• CIEN (Ciena) — Optical networking name rolled off amid the growth pullback.
• LITE (Lumentum) — Photonics exposure exited on softening rankings.

Positions Maintained

Nine core holdings carried into August 2026, anchoring the portfolio through the rotation: ATI, BMO, BNS, DINO, DOCN, MU, NUE, SNDK, and STX. These names retained strong composite scores across our quality, value, and growth screens.

Pillar 3: Risk Overlay in Action

July 2026 Exposure Journey

We began July 2026 at 49% equity exposure, in Cruising mode. Exposure held at that level through July 17. It then stepped up to 74% on July 20, and to 81% on July 24, where it stayed through month-end. The move was about 32 percentage points, and it arrived in two steps rather than as a gradual climb.

Holding roughly half the book in equities through the first three weeks limited how much of the early technology-led selling we took. That is what the overlay is for: it sets total equity exposure for the whole book, and it manages drawdown in broad market declines. It does not protect a single holding that falls on its own. July's damage sat in our own names while the S&P 500 finished flat, so a lower exposure level softened the month without offsetting it.

“The risk overlay is not about predicting the future — it is about responding to it. We brake when conditions demand caution and accelerate when the road opens up, letting the signals, not our emotions, decide the speed.”

Looking Ahead

Entering August 2026 at 81% exposure and in Accelerating mode, AlphaWizzard is positioned to participate more fully should the constructive backdrop persist. A difficult July does not alter the disciplined, rules-based process that has delivered +21.1% since inception; if anything, it underscores why we let the three pillars, not short-term noise, guide every decision.

The Three Pillars Remain Active

• Pillar 1 continuously re-ranks the investable universe on quality, value, momentum, and growth.
• Pillar 2 optimizes a focused 15-30 stock portfolio from the highest-ranked candidates each month.
• Pillar 3 dynamically scales equity exposure between braking and full throttle based on live risk signals.

Key Themes

• Technology: ARW, SNX, DOCN, MU, SNDK, STX
• Financial Services: BMO, BNS
• Healthcare Services: BTSG, DVA
• Energy Refining: PSX, DINO
• Materials & Industrials: ATI, NUE
• Real Estate: HST

Why Copy AlphaWizzard?

• A fully systematic, rules-based process that removes emotion and behavioral bias from every decision.
• Three complementary pillars — stock selection, portfolio construction, and dynamic risk management — working in concert.
• A dynamic risk overlay that brakes in danger and accelerates in opportunity, aiming to smooth the ride through full market cycles.
• Every trade, position and the full performance history are publicly visible on eToro.
• A focused, high-conviction portfolio of 15-30 quality names rather than diluted, index-hugging exposure.
• Institutional-grade methodology made accessible to everyday investors on eToro.
• Monthly educational updates that help you understand not just what we did, but why we did it.

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