Invested portion

Also seen as: invested capital, share of capital deployed, portfolio leverage

How is the deployed amount calculated?

Multiply the profile's capital by the invested portion; the remainder is the reserve, and a negative remainder is borrowed money.

$$D = p \times C \qquad R = (1 - p) \times C$$

where $p$ is the invested portion as a fraction between 0 and 3 (0% to 300%), $C$ is the capital the profile has, $D$ is the amount deployed into strategies, and $R$ is the cash reserve. The deployed amount $D$ is what the allocation method then splits across the strategies the Combined holds; $R$ never reaches them. When $p$ is above 1, $R$ is negative: $(p - 1) \times C$ is borrowed, and the Combined's cash balance is negative by that amount.

What are the invested-portion presets?

Four presets cover the common cases, with a slider for anything else:

The presets stop at 100% on purpose: investing above it is always a Custom value, set on the slider.

What happens to the cash reserve?

The reserve stays as cash: it is not allocated to any strategy and takes no market exposure, so it neither rises nor falls with the instruments the Combined holds. It accrues interest in the simulation only when the Costs & interests simulation assumption is on; that assumption is off by default, so on the figures you meet first the reserve earns nothing at all — see interest received and paid.

Its effect on results is symmetric: a reserve dampens gains and losses in the same proportion, because only the deployed share of capital is exposed to the market. Holding half in cash halves the impact of a market move, in both directions. The return the reserve gives up over a rising window is cash drag, which is the same arithmetic read from the other side.

What happens when the invested portion is above 100%?

Above 100% the Combined invests more than its capital and borrows the difference: at 150% it deploys one and a half times its capital, and its cash balance goes negative by half its capital — a margin debt. The borrowed part works exactly like leverage on a single strategy: gains and losses on the deployed amount are magnified in the same proportion, in both directions. The debt is financed the same way, at the same rate, and only when the Costs & interests assumption is on — what leverage costs is the canonical statement.

How does Fincanva handle it?

• A new allocation profile starts fully invested at 100%. The range runs from 0% up to 300%, bounded by your plan's leverage ceiling.
• Investing above 100% is included on any plan that includes a Combined at all — from the Advanced plan on — up to 300%, bounded by the plan's leverage ceiling, which is stated once on leverage. The invested portion exists only on a Combined, so there is no lower plan step where it applies. Where the plan narrows the range, the control shows the cap with a tag naming the plan level that raises it. See what each plan includes.
• A volatility target can sit inside the same block and rescale the invested portion at every rebalance; the exposure it produces never exceeds 300% either.
• The value belongs to the profile, not the Combined, so a Risk-Off profile can hold a different invested portion from the Risk-On one — see Risk condition.
• At 0% nothing is deployed and the run simply tracks an uninvested balance.
• The invested portion is a Combined-level control. A single strategy's exposure is set on its own allocation profile with leverage instead.
• A profile that differs from the default is summarised under the allocation method as, for example, "Invested 150%".
• Deploying $D$ does not mean spending exactly $D$: whole-share rounding leaves a little of it unspent, which is target vs deployed.

What does it look like in practice?

A Combined holds 10,000 and its allocation profile is set to Mostly invested (75%). Deployed is 0.75 × 10,000 = 7,500, and the cash reserve is 0.25 × 10,000 = 2,500. The allocation method then splits the 7,500 across the strategies in the Combined; the 2,500 sits in cash and is allocated to nothing.

Now suppose the deployed holdings fall 10% over a month. The loss is 10% of 7,500 = 750, which is 7.5% of the Combined's 10,000 — not 10%, because a quarter of the capital was never exposed. The same arithmetic runs upward: a 10% rise would be 750, or 7.5% of total capital. The reserve did not protect the deployed part; it simply kept a quarter of the capital out of the move.

Set the same Combined to a Custom 150% instead. Deployed is 1.5 × 10,000 = 15,000, and the reserve is (1 − 1.5) × 10,000 = −5,000: 5,000 borrowed. The same 10% fall now costs 1,500, or 15% of the Combined's capital, before the interest on the 5,000 — and a 10% rise gains 15%.

Fincanva does not tell you how much of your capital to put to work or how much to hold in cash — see Is this financial advice?.

How do invested capital and the cash reserve work?

The invested portion is the share of a combined strategy's capital that the allocation profile puts to work; whatever is left over is held as a cash reserve. You set it as a single percentage, so an invested portion of 75% deploys three-quarters of the capital and keeps one-quarter in cash.

How does the invested portion work?

The invested portion scales how much capital the allocation profile deploys before the strategies it holds are weighted against each other. At 100% the profile is fully invested; below that, the profile deploys only that share and the remainder stays uninvested as cash. It is set on a combined strategy, one value per allocation profile, and it does not change which strategies are held — only how much of your capital is at work in them.

Where do you set the invested portion?

You set it in a combined strategy's Allocation, on the allocation profile, using the Invested portion control — its helper reads "Share of capital this profile deploys" and its unit is "%". Pick a preset or set a custom value with the slider:

Control value	What it deploys
Fully invested	100% — no cash reserve
Mostly invested	75%
Half invested	50%
Lightly invested	25%
Custom	any value you set with the slider

To reach the Allocation card, open the strategy's settings — see Editing a strategy: the settings cards.

What happens to the capital you don't invest?

Capital above the invested portion is held as a cash reserve — it is not deployed into any strategy. In a backtest what the reserve does depends on your simulation assumptions: with the Costs assumption off — its default — idle cash earns nothing, so the reserve neither gains nor loses on its own; with Costs on it can earn interest. See interest received and paid for the rate. Holding more in cash lowers how much of the strategy is exposed to the market, which usually means smaller swings — see What happens when you run a backtest? for what a backtest computes. Fincanva doesn't tell you the right amount to hold in cash — see Is this financial advice?.

How can risk conditions lower the invested portion?

A defensive stance holds a smaller invested portion, and therefore more cash, than a fully-invested one. When a combined strategy turns defensive under its Risk conditions — its Risk-Off state — it can hold a lower invested portion, moving capital out of the market and into the cash reserve until conditions ease. How and when that switch happens is set in the Risk card, covered under Editing a strategy: the settings cards.

What are the limits and edge cases of the invested portion?

A new profile starts fully invested at 100%; the invested portion can go below that, and above it up to 300% on any plan that includes a Combined — the range and what investing above 100% means are covered in What happens when the invested portion is above 100%?. Setting it to 0% holds everything in cash and puts nothing to work — the backtest then just tracks an uninvested balance. The invested portion is a combined-strategy control: a single strategy manages how much capital is at work through its own allocation profile, not through this control.

Which pages go further on invested capital?

To see where this control sits among the other settings, read Editing a strategy: the settings cards. For what a strategy and a combined strategy are, see How is a strategy different from a Combined?.