Introducing The Asymmetric Quality Index
25 large-cap stocks ranked by asymmetric potential, rebalanced monthly
To read our full disclaimer, click here.
I'm excited to launch something I've been working on behind the scenes - a new way to think about quality investing with an asymmetric twist.
What is the AQI?
The Asymmetric Quality Index tracks 25 high-quality large-cap companies (minimum $2B market cap), but here's the twist: instead of equal weighting or market cap weighting, each stock’s position is set according to my personal assessment of its asymmetric potential – the balance I see between possible upside and downside.
How It Works
Each month, I set upside and downside price targets for every stock based on my personal analysis. The asymmetry ratio determines the weighting - a stock I think can rise 50% with only 15% downside gets a much bigger allocation than one with 20% upside and 25% downside risk.
This creates a dynamic framework that highlights where, in my view, the asymmetry looks most interesting, rather than simply following size-based weightings.
Important: This reflects my personal opinion on these companies' asymmetry and is not investment advice. This is simply how I sort quality companies by opportunity cost. The performance tracking isn't set up yet but will be ready by next week's update.
At the end of every month, I'll rebalance the weightings based on price changes and business fundamentals, and decide which positions fall out or enter the index.
Your Input Wanted
This project will work best with subscriber input. I want to know what quality companies you think deserve to be in the index - I'll analyze them and see if I want to personally add them.
Again, this isn't a model portfolio or anything of the sorts. It's an experiment for me and hopefully an example of weighting your best ideas appropriately.
What You Get
Free subscribers see:
Monthly AQI performance vs benchmarks
Top-ranked stocks and biggest movers
Which companies entered or left the index
My analysis on why rankings shifted
Premium subscribers get additional context and deeper insights:
My actual portfolio holdings (which often differ significantly from AQI weightings)
Small-cap positions and specialized plays - I analyze lots of companies, and quite a lot of my portfolio holdings are much more asymmetric than this large-cap list, but they're smaller market caps reserved for paid subscribers only
The ‘off-index’ companies that I personally find most interesting.
Detailed reasoning behind position sizing differences
For those interested in upgrading, annual plans are 34% cheaper - a good deal for those that like value.
Here is the index:
We hope you found this post useful.
Have a great week,
Dom
Schwar Capital