Floating

Also seen as: drift-and-realign weighting, let-winners-run weighting

How does Floating differ from a normal rebalance?

A normal rebalance snaps every holding back to its target weight on each scheduled date; Floating leaves the existing holdings where the market has moved them. Existing holdings are not reset between realignments — so a holding that has run keeps the larger share it earned rather than being trimmed back each period, and the relative weights between the existing holdings are preserved.

A position the strategy opens between realignments is the other half of the rule: a new position is sized by the base method — the Realignment method you picked — while the existing holdings keep their drifted relative weights. Only a realignment resets everything: at that point every holding is put back on the base method's weights and the drift starts again from there.

How is the Floating frequency counted?

The Floating frequency is counted in calendar months since the last realignment — not in number of rebalances. Elapsed months are checked at the strategy's scheduled rebalance dates, so the rebalance that first falls on or after the frequency you set is the one that also realigns the strategy. With a frequency of 6, a monthly-rebalancing strategy realigns roughly twice a year and drifts freely in between; the other rebalances still happen, they simply do not reset the existing weights.

Be aware that the field's own in-app hint and the unit suffix shown on its input currently describe the count differently, tying the unit to the strategy's rebalance cadence rather than to calendar months, so the two do not agree in the product today.

Defaults in Fincanva

• Realignment method defaults to Equal Weights; the alternative is Inverse Volatility. The app's note reads "When realigning, redistribute equally across instruments OR weight by inverse volatility (less volatile instruments get more)."
• Frequency defaults to 25 and accepts whole numbers from 1 to 25.
• Floating is available inside a single strategy only. It is not one of the six methods a Combined can use to split capital across its member strategies.
• The calculation window does not apply to Floating — the field is not shown for this method, because the drift itself reads no history.
• Floating changes what a rebalance does to existing weights; it does not change how often rebalances happen. The rebalance cadence stays whatever the strategy's own Rebalance every setting says.

Worked example

A strategy holds four instruments at 25% each, with Equal Weights as the realignment method and a Frequency of 12. Over the following year one holding doubles while the other three are flat. Its share drifts from 25% to about 40% (50 out of a total of 125) and the other three fall to roughly 20% each — the winner is left to run, where a monthly rebalance would have trimmed it back to 25% every month. Twelve calendar months after the last realignment, the next scheduled rebalance realigns the strategy: all four holdings go back to 25%, the accumulated drift is given up, and the cycle restarts. Set the Frequency to 25 instead and the same strategy drifts for over two years before anything is reset.