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Your portfolio was built for a market that no longer exists.

ETFs changed how markets move. The Cap8 Strategy Diagnostic shows how your strategy has behaved in every market environment of the past twenty years, and what to change.

Request a Strategy Diagnostic See what the Diagnostic covers

Research begun at MIT in 2018. Published in the Journal of Portfolio Management.

The problem

The market changed. Most portfolios didn't.

Three things explain why a portfolio built on old assumptions can surprise you.

Money now moves in baskets.

Trillions of dollars sit in ETFs. When a basket is bought or sold, everything inside it moves together.

Diversification thins out when you need it most.

Holdings that looked independent start falling together, and drawdowns run deeper than the model expected.

Averages hide it.

A strategy can look fine over ten years and still break in specific market environments. You only see it regime by regime.

The Strategy Diagnostic shows you where, and what to change.

Under the hood

Our 2022 and 2025 papers in the Journal of Portfolio Management document how ETF adoption changed the macro efficiency and the risk structure of the market. They also explain why risk models built on the old structure misjudge it.

Read about the research

Market environments, 2005 to 2025

0 100 200 300 400 200520152025 Current: Expansion

A line chart from 2005 to 2025 with shaded bands for contraction, late-cycle and recovery regimes. The strategy line falls less than the benchmark during the contraction bands in 2008, 2011, late 2018, 2020 and 2022. Data is synthetic and illustrative.

Colored bands mark market regimes. The line shows one strategy against a benchmark, each indexed to 100. Simulated and illustrative. Does not represent live performance and is not an indication of future results.

Strategy Diagnostic

See your strategy regime by regime.

You share your holdings and weights. We run them through the Cap8 engine across twenty years of market history. You get a results call and a written report: where the strategy is strong, where it is fragile, and what you could change.

Strategy Diagnostic, sample report1

Drawdown by market environment

Beta and correlation over time

Regime history2

Findings and options to improve

  • Drawdowns run deepest in contraction regimes.
  • Beta rises faster than it falls when the regime turns.
  • Three changes reduce the depth without changing the strategy.

Options to improve

  1. 01Add a regime-aware overlay that cuts exposure when the contraction signal turns on.
  2. 02Rebalance on regime changes as well as on the calendar.
  3. 03Hold a larger share in assets that diversify in stress, not only on average.
  1. Drawdown by market environment
  2. Beta and correlation over time
  3. Options to improve

A mock report spread. Page one shows a drawdown chart and a rolling beta and correlation chart. Page two shows a regime timeline and a box of findings and options to improve. All data is synthetic.

A sample Strategy Diagnostic report: two facing pages built from the same charts you receive. Simulated and illustrative. Does not represent live performance and is not an indication of future results.
Request a Strategy Diagnostic

A fixed-fee engagement, scoped with you before we start. NDA available.

Diagnose, improve, build

The Diagnostic is where it starts.

The same engine that analyzes your strategy today can improve it, and later help you build new ones.

  1. Diagnose

    How your current strategy behaves in each regime.

  2. Improve

    Same strategy, better outcome. ETF substitutions, an overlay, or new versions with a different risk profile.

  3. Build

    Design, test and run your own actively managed, ETF-based, regime-aware strategies on the Cap8 platform. You own them and run them in your own accounts.

Explore the platform

Who we serve

Built for firms that own their investment process.

You own the strategy and run it in your own accounts.

RIAs

For firms that run models on a calendar and want to see how they behave when the regime changes.

Read more

Family offices

For principals who care more about a deep drawdown than a benchmark gap.

Read more

Endowments and foundations

For committees that need to know what a stress regime does to the portfolio and the spending draw.

Read more

In production

Research first, then strategies in production.

2018
Research begun at MIT
2
Papers in the Journal of Portfolio Management
Dec 2024
Live in production since December 2024
12
Strategies live across 5 firms
  • US RIA, more than $15 billion. Runs five strategies on the platform, designed with Cap8 and traded on its own desk.
  • New England RIA, $1.2 billion. Launched a tactical global allocation strategy for its clients.
  • Family office. Two strategies live, a third launching.
  • French regulated European asset manager. Manages its US equity leg with one of the strategies.

Client identities withheld under confidentiality agreements. Assets under management are the clients' own reported figures, not assets managed by Cap8. Cap8 manages no assets and executes no trades. As of October 2026.

Strategy Diagnostic

Find out how your strategy behaves before the next regime shift does it for you.

A fixed-fee engagement, scoped with you before we start. NDA available.