Fixed Weights Allocation – How It Works in Fincanva

What It Is

Fixed Weights allocation allows you to manually assign a specific percentage of capital to each asset or model, which stays constant unless you change it. This method provides full control over how your capital is distributed.

What It Does in Fincanva

• Logic: The weights are user-defined and fixed. Once set, each model or asset maintains its assigned allocation during rebalancing.

• Simulation Behavior: During each rebalance, capital is reallocated according to the fixed percentages. No dynamic adjustments are made unless you change the weights.

• Constraints: In portfolios, fixed weights follow a positive-weights-only rule—shorting is not allowed at the model level.

Pros

• Gives full control over capital allocation

• Useful when you have clear investment convictions or want to replicate a known allocation

• Simple and predictable behavior across rebalancing periods

• Good for building custom blends of models or assets

Cons

• Does not adapt to market conditions or asset behavior

• Requires manual rebalancing or updates if your preferences change

• May result in suboptimal risk-return profiles if not carefully calibrated

• Lacks flexibility and responsiveness to changes in asset performance

Where You Can Use It

• Portfolios: Yes - Positive weights only

• Models: Yes

When to Use It

• Ideal when replicating known strategies or benchmarks

• Useful when mixing specific themes or exposures in predefined proportions

• Best when you want consistent exposure and don't need dynamic allocation

• Suitable for users who prioritize strategic allocation over tactical adjustments

Example
In a model with 3 assets, you can set Asset A to receive 50%, Asset B 30%, and Asset C 20% of the total capital. These percentages will remain unchanged across rebalance cycles unless edited manually.
In a portfolio, you might allocate 60% to a long-term growth model and 40% to a defensive income model.

• Portfolios: Available on Starter, Advanced, Ultimate, and Professional plans

• Models: Available on Starter, Advanced, Ultimate, and Professional plans