The four reads
Strategy 03 Allcap on the left. Typical "systematic" PMS brochure on the right.
Four lines decide whether a strategy is a process or a paragraph. The same four reads apply to any mutual fund factsheet or smallcase methodology too. Print them on a card and run the audit.
Process = Universe + Entry rule + Weight method + Rebalance cadence
Universe
Which names are even eligible
Nifty Total Market ~750 stocks
Named index. Liquidity floor inherited. Anyone can reproduce the eligibility set.
"Large and mid quality companies"
Adjective. Not a list. Manager picks the eligibility set every quarter without disclosing it.
Pass vs Paraphrase
Index name is a contract. An adjective is not.
Entry rule
Which 50 of the 750 actually get in
Top 50 by ranked screen
Same ordering applied every fortnight. Names rotate when the ranks rotate. No phone call required.
"Bottom up high conviction selection"
Conviction is a feeling not a rule. The screen is the manager. Same input two days running can produce two different baskets.
Rule vs Discretion
If you cannot replicate the basket from public data, it is discretion.
Weight method
How much of each name
Equal weight 2 pct per name
Single sentence. No top-up at the manager's discretion. Concentration declared not negotiated.
"Conviction weighted up to 9 pct"
Bound declared. Method behind the bound is not. One name at 8.5 pct another at 1.2 pct on the same conviction word.
Declared vs Floating
A weight range is not a weight rule.
Rebalance cadence
When the rule fires again
Every 2 weeks 26 per year
Calendar driven. Trade list published. Cost line measurable at 0.2 pct per leg.
"As and when warranted by market conditions"
Could be once a quarter could be once a year. Cost line moves with cadence and cadence moves with whoever is at the desk.
Cadence vs Vibe
If you cannot write the cadence in days, the cost line is unknowable.
The arithmetic the brochure does not run
Four lines. One side prints them. The other side paraphrases all four and calls the paraphrase a process. The audit takes thirty seconds and works on any product on any shelf. Card three is the three rules and the closer.