DBC Directional Alpha — Seed Book Summary (2026-07-11)

Mandate recap

DBC Directional Alpha runs a classic 130/30 long-bias long/short book: alpha on both sides of the tape with net long discipline. Benchmark SPY. Universe: US equities >=$1B market cap, ETB shorts only. Constraints: net exposure +60% to +100%; gross <=160%; max long position 8%; max short position 4%; shorts carry a mandatory -25% hard stop at entry; max sector net 25%.

Screen / selection criteria

Long sleeve (11 names, mega-cap/quality compounders with a near-term alpha driver vs. SPY): AI-infrastructure monetization (MSFT, NVDA, GOOGL, AMD), e-commerce/cloud re-acceleration (AMZN), a duration-extending pharma franchise (LLY), a Q2-earnings bank re-rate (JPM), asset-light travel take-rate expansion (BKNG), aerospace aftermarket monetization (GE), reshoring/data-center power-gen capex (CAT), and an AI-agent software re-rate (CRM).

Short sleeve (designed, 3 names, department-store/apparel secular decline): KSS, VFC, M -- each was to be sized at ~3% ($30k) with a mandatory protective buy-stop at -25% from entry. See Gaps below -- the short sleeve is designed but not yet live.

Position table (as resting, pre-Monday-fill)

| Ticker | Intended Wt | Actual Resting Wt | Actual $ | Catalyst / mechanism | |---|---|---|---|---| | MSFT | 7.0% | 7.0% | $69,701 | Azure/AI-infra monetization (Copilot attach) | | NVDA | 7.0% | 7.0% | $69,838 | Data-center GPU AI-capex share | | AMZN | 7.0% | 10.5%* | $105,010 | AWS re-acceleration + retail margin expansion | | GOOGL | 7.0% | 7.0% | $69,648 | Search AI monetization + Cloud GAAP profit | | LLY | 7.0% | 6.9% | $68,937 | GLP-1 franchise compounding | | JPM | 7.0% | 7.0% | $69,967 | NII scale; Q2 bank-earnings catalyst (mid-July) | | BKNG | 7.0% | 10.5%* | $104,917 | Travel take-rate expansion (Connected Trip) | | GE | 7.0% | 7.0% | $69,700 | Aerospace aftermarket/LEAP installed base | | CAT | 6.0% | 6.0% | $59,955 | Reshoring capex + data-center power-gen demand | | CRM | 6.0% | 6.0% | $59,953 | Agentforce agentic-AI re-acceleration | | AMD | 6.0% | 8.9%* | $89,326 | Data-center GPU (MI-series) share gains | | Long book total | 73.7% | 83.7% | $836,953 | | | KSS / VFC / M (short) | 3% each (9% gross) | 0% (not yet seeded) | $0 | See Gaps |

* Inflated by duplicate resting orders -- see Gaps, item 1.

Est. net / gross vs. bands

• Net exposure (no shorts yet): ~83.7% resting -- within the 60-100% IPS band, above the ~74% design target due to the duplicate-order overshoot.
• Gross exposure: ~83.7% (no shorts live) -- well within the <=160% cap; would be ~92-93% once the designed 9% short sleeve is added.
• Per-position: 8 of 11 longs sit at design (6-7%, within the 8% max-long cap). Three longs currently breach the 8% max-long cap: AMZN (~10.5%), BKNG (~10.5%), AMD (~8.9%) -- see Gaps.