Fund Policies

Read-only Investment Policy Statements for DogBone Capital's transparent virtual books.

These policies describe an educational paper-trading simulation. They are not an offer to invest and do not authorize real-money trading.

How we operate

IPS changes are audit-logged.
Every trade is journaled.
The drawdown ladder is enforced by the platform, not by discretion.
A post-mortem is required after a book freeze, before it can restart.

DBC Ballast

INCOME_DEFENSIVE | benchmark Schwab US Dividend Equity ETF

50% virtual deployment target

A conservative, income-oriented anchor of high-quality dividend payers and defensive ETFs - designed to dampen program volatility and deliver steady yield.

Objective

SCHD-like total return at lower drawdown with yield at or above the benchmark; tracking error 2-4% vs SCHD, volatility under 10%.

Risk Tolerance

Low. Mega-cap defensives, no leverage or shorts; single position <=8%. Hard drawdown -15% re-underwrites and suspends new buys, no forced beta selling.

Liquidity

Mega-cap and large ETFs; fully liquid.

Review

Quarterly dividend-safety and drawdown review; -15% hard drawdown re-underwrites and suspends new buys.

DBC Catalyst

EVENT_DRIVEN | benchmark S&P 500

50% virtual deployment target

Capture defined-catalyst situations - mergers, spinoffs, restructurings, index and earnings events - where outcomes are event-driven rather than market-driven.

Objective

Merger-arb-like absolute return with low SPY correlation (<0.4); target volatility 6-10%.

Risk Tolerance

Moderate. Deal/event risk sized by probability times downside; single position <=8%, gross <=80%. Hard drawdown -18% de-grosses.

Liquidity

Avoid illiquid deal stubs; each position <= 15% of 20-day ADV.

Review

Weekly catalyst calendar and deal-risk review. Every event position must record catalyst date/window, expected upside, expected downside, probability-weighted return, and an explicit exit rule before deployment.

DBC Contra

Policy generation is pending.

DBC Core Equity

LONG_ONLY | benchmark S&P 500

50% virtual deployment target

Own a diversified book of high-quality, durable-growth US large caps that compound through cycles; the program's core equity sleeve and a fundamental-quality training ground. By construction it tilts to mega-cap quality/growth, monitored under the program theme limit.

Objective

Beat SPY by 100-300 bps annualized over a full cycle at comparable or lower drawdown; tracking error 3-6% vs SPY.

Risk Tolerance

Moderate. Full market beta accepted; single-name (<=10%) and sector (<=30%) concentration capped. Hard drawdown -20% triggers re-underwrite and suspension of new buys, not forced beta selling.

Liquidity

Large-cap only; every position fully exitable within one trading session.

Review

Monthly performance and IPS-compliance review; quarterly thesis refresh. Hard -20% drawdown forces position-by-position re-underwrite and a new-buy suspension until review completes.

DBC Deep Value

DEEP_VALUE | benchmark Russell 2000 Value

50% virtual deployment target

A concentrated, contrarian book of statistically cheap, out-of-favor small/mid caps trading below intrinsic value - the program's high-conviction value sleeve.

Objective

Beat IWN (small-cap value) by 300-600 bps over a cycle, accepting a lumpier path; tracking error 8-15% vs IWN.

Risk Tolerance

High. Concentration, small-cap illiquidity and value-trap risk, managed by a 15% normal / 20% committee position cap, balance-sheet screens and ADV limits. Hard drawdown -30% cuts the weakest names.

Liquidity

Small/mid caps sized to liquidity: each position <= 8% of 20-day ADV; build and exit staggered over at least 5 sessions; min price $5, mkt-cap >= $150M.

Review

Quarterly thesis and hard valuation re-underwrite; -25% soft (re-underwrite) / -30% hard (cut weakest two) drawdown triggers. Every name verified for live status and ADV before sizing.

DBC Digital

CRYPTO | benchmark Bitcoin USD

50% virtual deployment target

A long-only digital-asset book anchored in large-cap crypto, giving the program measured exposure to the asset class with strict concentration in the most liquid coins.

Objective

Track or modestly beat BTC via a diversified major-coin basket; volatility 40-70% (asset-class normal).

Risk Tolerance

High. Crypto volatility managed via a cash buffer and large-cap focus; counts toward the 15% program crypto cap. Hard drawdown -40% raises the cash buffer and concentrates to BTC/ETH.

Liquidity

Top-liquidity coins only; spot holdings.

Review

Weekly volatility and concentration review; -30% soft / -40% hard drawdown triggers.

DBC Directional Alpha

LONG_BIAS | benchmark S&P 500

50% virtual deployment target

Express the desk's highest-conviction directional ideas with a long bias, using modest shorts to fund longs and hedge. A concentrated, opportunistic complement to Core Equity.

Objective

SPY + 300-600 bps with higher dispersion; tracking error 6-12% vs SPY.

Risk Tolerance

Moderate-high. Concentrated single names, nets long (target net 70-85%). Hard drawdown -25% de-grosses by >=1/3 and re-underwrites.

Liquidity

Liquid large/mid caps both legs; shorts only in easy-to-borrow names with a confirmed locate.

Review

Bi-weekly conviction and gross/net review; cover shorts on borrow deterioration or buy-in risk.

DBC Global Compass

GLOBAL_MACRO | benchmark iShares Core Growth Allocation ETF

50% virtual deployment target

Express top-down macro views across global equities, rates, commodities, FX and crypto via liquid ETFs and major coins - the program's diversifying macro engine.

Objective

AOR (global 60/40) + 200-400 bps as a diversifying return stream; target volatility 8-14%.

Risk Tolerance

Moderate-high. Directional macro with strict per-theme sizing; non-ETF/coin position <=15%, single ETF <=20%, single coin <=10%, gross <=150%. Hard drawdown -20% de-grosses.

Liquidity

Liquid ETFs and top-liquidity coins only.

Review

Bi-weekly macro dashboard and scenario stress; -15% soft / -20% hard drawdown triggers.

DBC Neutral

MARKET_NEUTRAL | benchmark 1-3 Month Treasury Bill ETF

50% virtual deployment target

Low-volatility, market-independent returns from paired longs and shorts at near-zero net market exposure. Framed honestly as low-gross educational pairs trading, not a full hedge-fund-style market-neutral book.

Objective

BIL + 300-500 bps with target volatility under 6% and net beta to SPY approximately zero.

Risk Tolerance

Low net-market, moderate idiosyncratic. Single position <=5%; gross <=60%. Hard drawdown -10% de-grosses.

Liquidity

Both legs liquid and borrowable; locate confirmed.

Review

Weekly net/beta and pair-correlation review; portfolio beta finalized from measured pair betas at deployment.

DBC Systematic

QUANT_SYSTEMATIC | benchmark S&P 500

50% virtual deployment target

A rules-based multi-factor book (quality, value, momentum, low-vol) holding a broad, diversified basket sized by signal - the program's disciplined, repeatable systematic sleeve.

Objective

SPY + 150-300 bps via breadth; tracking error 2-5%.

Risk Tolerance

Moderate. Diversified and factor-balanced; no single name above 5%; >=20 names. Hard drawdown -20% triggers model review.

Liquidity

Large/mid-cap basket; all positions liquid.

Review

Monthly factor-exposure and turnover report; -20% hard drawdown triggers a model (not discretionary) review.