Leigh Eichel, Co-Founder and CEO of Alpha Vee Solutions, has spent nearly 15 years building a firm around a single premise: traditional buy-and-hold investing has evolved into what he calls “buy and hope.” Hoping for markets to recover—without a systematic approach to managing risk when conditions deteriorate—leaves clients vulnerable to the emotional decisions that erode long-term returns.
In conversation with The Wealth Advisor, Eichel outlined how Alpha Vee’s approach to dynamic risk management aims to address the fundamental challenge advisors face—keeping clients invested through volatility while managing downside exposure.
“We don’t want to have client assets in a buy-and-hope scenario,” Eichel explains. “We want to be much more disciplined and diverse and moving with the markets.”
Alpha Vee’s methodology combines quantitative analysis of income statements and balance sheets with a rules-based framework that adjusts portfolio exposures quarterly. Rather than attempting to time markets or chase performance, the firm’s strategies seek to respond systematically to changing market conditions across multiple dimensions: overall market risk, inflation, sector rotation, and individual stock selection.
The Foundation: Rules-Based Exposures and Risk Overlays
Beginning with fundamental research, Alpha Vee delivers the kind of rigorous analysis that institutional investors have long employed, now scaled to work systematically across individual advisory accounts. The firm manages 28 portfolios, each following documented methodologies grounded in fundamental factors validated by academic research.
The framework employs four risk overlays, or “lenses,” through which portfolios and market conditions are evaluated: overall risk, sector rotation, stock selection, and inflation. Quarterly, the team sets equity exposure levels, sector allocations, and individual security selections—driven by quantitative signals rather than subjective market calls.
“This isn’t guesswork. It’s all clearly documented. It’s rules-based exposures that are academically proven based on boring fundamentals,” Eichel emphasizes.
What sets Alpha Vee’s approach apart is how the overlays work together, with the goal of maintaining equity exposure while responding to deteriorating conditions, rotating to stronger sectors as leadership shifts, all without requiring perfect market predictions. “That’s key,” he says. “Not trying to chase performance, not trying to time the market but keep them invested in a more novel approach. That combination you see of fundamental insights, the quantitative approach, and making it dynamic has worked out well.”
By examining reported financial data, the firm determines positioning for the next 90 days. The forward-looking horizon is deliberately short, limited to one quarter, acknowledging the limits of long-term predictions while maintaining disciplined rebalancing.
Between quarterly reconstitutions, the team conducts what Eichel calls “temperature checks” of market conditions. “We’re doing temperature checks of the market every two weeks—evaluating the signals, and when we get to the end of the quarter, we make all of our calls,” he says. The approach aims to stay responsive to evolving market dynamics while avoiding the trap of constant trading based on short-term noise.
The Market Risk Component: Managing Equity Exposure Dynamically
The first overlay addresses overall market risk—the systematic risk that affects even high-quality companies during broad market declines. Alpha Vee’s methodology can shift portfolios anywhere from 100% equities to complete Treasuries exposure, depending on market conditions as measured by quantitative indicators of market quality and valuation. The iShares 7- 10 Year treasury Bond ETF (IEF) serves as the firm’s primary defensive holding during risk-off periods.
“If the market goes down, even good companies that’re doing great, they go down,” Eichel says. “So, we just want to shift away during that time period and go to something that’s non-correlative to the market. And that’s why we use IEF. We will shift more to Treasuries as a shock absorber.”
The defensive positioning is systematic rather than discretionary. “If volatility is increasing, markets are dropping, we want to have an automatic way to shift,” Eichel explains.
However, Alpha Vee doesn’t apply a static allocation model. The exact mix between equities and Treasuries varies based on readings of market quality and valuation metrics, creating a spectrum of possible allocations from fully invested to fully defensive.
During 2020, the framework demonstrated its adaptive capacity by moving completely out of equities and into Treasuries twice during the year—a highly unusual pattern that Eichel notes had not occurred previously in his historical research.
“It shows the power of this more flexible, malleable approach to risk management,” he says.
Sector Rotation: Identifying Economic Leadership
The second overlay is sector rotation, identifying which parts of the economy appear positioned to outperform over the coming three months. Rather than attempting to predict which sectors will lead, Alpha Vee’s methodology evaluates current fundamental momentum across industries.
“We look at which half of the economy is more likely to accelerate in this coming quarter, which half we want to steer away from,” Eichel explains. The firm’s proprietary Alpha Vee Sector Indicator (AVSI) grades sectors based primarily on quality metrics—profitability trends, capital expenditure patterns, and other fundamental factors that vary by industry.
The approach acknowledges that different sectors require different analytical frameworks. The factors that signal strength in industrial companies differ markedly from those that matter for technology firms or cyclical consumer businesses. Rather than applying uniform criteria across all sectors, Alpha Vee employs sector-specific models. “We have different models for each and every sector,” Eichel notes.
By identifying five sectors that modeling indicates have the potential to demonstrate leadership, the strategy seeks to maintain meaningful diversification while concentrating exposure where fundamental trends appear favorable—aiming to capture broad economic shifts without requiring perfect foresight about which single sector will dominate.
Stock Selection: Finding Leadership Within Sectors
Once sector allocations are determined, the next overlay involves selecting individual securities within each chosen sector. Alpha Vee’s large-cap strategy typically holds 50 individual stocks plus one ETF for the Treasuries component when applicable—creating a portfolio that resembles direct indexing but with dynamic sector weights.
“I’m going to find the right leadership in each of those sectors and allocate to what’s working and what we think is going to work for the next 90 days,” Eichel says. The selection process evaluates companies within each sector based on fundamental factors relevant to the specific industry, seeking to identify which firms demonstrate the strongest fundamental momentum.
The stock selection methodology emphasizes quality metrics and current performance within peer groups rather than attempting to identify undervalued situations that might take years to realize returns. “When the market does drop, that’s an opportunity to rebalance into great value,” Eichel notes. “We’re value- and quality-oriented people, so we want to, again, not time the market. We want to have that opportunity to get those quality and value events, companies, leadership, into the portfolio.”
The quarterly rebalancing frequency serves multiple purposes. On a practical level, the cadence makes implementation manageable for advisors—meaningful portfolio changes occur just four times annually rather than requiring constant monitoring. More fundamentally, the 90-day timeframe aligns with corporate reporting cycles and provides sufficient time for fundamental trends to manifest in price action while remaining responsive enough to shift when conditions change meaningfully.
The Inflation Overlay: Adapting Defensive Positioning
Alpha Vee incorporates an additional consideration into its defensive positioning (and one that’s been an increasingly hot and persistent topic): inflation. When reported inflation exceeds 5%, the strategy shifts its Treasuries allocation from IEF to Treasury Inflation-Protected Securities (TIPs), acknowledging that traditional nominal Treasuries become less attractive hedges in high-inflation environments.
The inflation rule offers a straightforward, defensible adjustment that can be easily explained to clients. Rather than making subjective predictions about Federal Reserve policy or economic conditions, the methodology responds to reported inflation data with a predetermined shift in defensive holdings.
The clarity is intentional, and simplicity is increasingly important for client communication, as Eichel explains. “I find more and more products are getting hard to explain,” he says. “You have to have a simple, easy to explain, logical set of portfolio construction rules in common speak to keep people at ease and so they understand how things are being managed, and there’s documentation around all that.”
Transparency and Accountability: Publishing Performance
In an unusual move for a separately managed account (SMA) provider—where strategies typically remain visible only at the account level—Alpha Vee assigns tickers to many of its strategies and publishes them on exchanges, allowing for real-time tracking and independent verification of performance.
“Transparency is our mantra,” Eichel emphasizes. “Let’s publish a methodology document, an audit report. Calc and disseminate them so anyone can follow them at any time.”
The commitment to transparency extends to detailed methodology documents, audit reports, and daily updated fact sheets available on the firm’s website. Advisors and their clients can track strategy performance through Bloomberg, CBOE, and other financial data platforms—a level of accessibility typically reserved for ETFs rather than SMAs.
“We document exactly how we manage portfolios, so there should never be a question, ‘Hey, why is there a small cap in my large-cap portfolio?’ That won’t happen with Alpha Vee, period. Call us on the carpet—not going to happen,” Eichel insists.
Performance Through Cycles: The Case for Long-Term Evaluation
Eichel addresses performance expectations directly, acknowledging that no strategy outperforms in all environments. The firm’s Risk Managed Large-Cap Top 5 Sector Equities (AVT5EQTB) fund generated approximately 47% returns during 2020’s volatile year, Eichel says, in part by shifting to Treasuries twice while maintaining exposure to sectors including technology and healthcare that benefited from pandemic conditions. As of December 5, 2025, the fund was up 22.44% year to date.
The strategy encountered more challenging conditions in 2022, a difficult year for most equity strategies. However, Eichel points to the cumulative results as the relevant metric. “We have plenty of advisors that are still invested with client money back from 2020 and just add it up,” he says. “Yeah, we had that one negative, but add up how they’ve done in the last five years. No one’s complaining.”
The firm recommends evaluating dynamic risk-managed strategies over 60-month periods, reasoning that shorter timeframes don’t allow the full benefits of the approach to manifest. “No matter what strategy you’re in, especially a risk-managed strategy, evaluate it as often as you evaluate the price of your house,” Eichel says. “If you’re looking at your house price every single day—I trust you don’t—maybe you look at it every couple of years. That’s when you should look at this.”
Keeping Clients Invested
For Eichel, the ultimate challenge he sees for advisors is keeping clients invested through volatility. When clients panic and sell during downturns or chase returns after rallies, even the best-designed portfolios fail to deliver long-term results. “To keep people in the market, to keep the phone from ringing, we need to keep a dynamic process in place and keep people invested,” he observes.
The approach aims to address emotional decision-making—the tendency for investors to sell at market bottoms or chase performance at peaks. “Markets don’t ruin portfolios,” he adds. “It’s the reaction to it that ruins the portfolios, chasing the market or timing and just letting your emotions drive your portfolio.”
By providing a systematic framework that responds to market conditions while maintaining equity exposure during favorable periods, Alpha Vee’s methodology seeks to deliver what Eichel describes as both participation and protection. “We’re responding to data not to the emotions,” he says. “When leadership rotates, we’re going to rotate to follow that leadership, and when risk rises, we go into a defensive mode.”
The firm positions its strategies as core equity replacements, suggesting allocations of 30–40% or even higher given the multi-asset nature of the portfolios. “Having 30–40% allocations into risk-managed strategies is very, very normal,” Eichel explains. “And remember, this isn’t just pure equity. It’s going to replace equity, but at times, there’s going to be that Treasuries component in there also.”
The Evolution Beyond Static Portfolios
As market volatility persists, Alpha Vee offers one response to the limitations of traditional static allocation models. Rather than relying on targeted asset allocation to provide adequate risk management, the firm’s strategies attempt to adjust tactically based on quantifiable signals.
“To have your cake and eat it too isn’t always achievable. But in a lot of cases with a dynamic risk-managed approach, it is,” Eichel says. The claim is bold but reflects the firm’s confidence in its quantitative framework, long-term track record, and rigorous methodology. “That’s what is behind these returns,” Eichel adds. “I let the results speak for themselves.”
Beyond the core system, Alpha Vee has built substantial infrastructure around implementation. The firm provides full customization of exposures and can handle transition management for accounts with embedded gains or losses, incorporating tax-loss harvesting into the onboarding process. Alpha Vee’s strategies are available on more than a dozen major platforms, and the firm also works directly with advisors through subscription agreements for platforms where strategies aren’t yet available.
For advisors seeking alternatives to conventional index-based portfolios or concerned about managing client expectations through uncertain markets, Alpha Vee’s documented, rules-based approach offers a systematic framework. Whether the methodology delivers on its objectives over full market cycles remains the ultimate test—one that Eichel welcomes, provided evaluations occur over appropriate timeframes.
With nearly 15 years of operation and thousands of advisory accounts, Alpha Vee has accumulated a substantial body of evidence. Advisors considering dynamic risk management approaches now have detailed methodology documents, independent performance data, and transparent implementation to consider—exactly the kind of accountability Eichel argues the industry needs more of.
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