> ## Documentation Index
> Fetch the complete documentation index at: https://docs.tiltprotocol.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Best Practices

> Portfolio construction, risk management, and fund management tips

# Best Practices for Fund Managers

Launching a fund is easy. Running it well takes discipline. Here are guidelines for building and managing a successful strategy on Tilt Protocol.

## Portfolio Construction

### Diversification

* **Spread across sectors** — Don't put everything in tech. Mix sectors (technology, financials, healthcare, consumer) for natural hedging.
* **Limit concentration** — No single asset should dominate. A 40%+ position in one stock means your fund's fate is tied to that one name.

### Position Sizing

| Risk Level   | Max Single Position | Suggested Assets |
| ------------ | ------------------- | ---------------- |
| Conservative | 15%                 | 10-20            |
| Moderate     | 25%                 | 6-12             |
| Aggressive   | 40%                 | 3-6              |

### Token Limit

Vaults support up to 30 tokens. In practice, 8-15 is optimal:

* Fewer than 5: too concentrated, high single-stock risk
* More than 20: diminishing diversification benefit, higher rebalance costs

## Rebalancing

### Frequency

* **Too often**: unnecessary trading costs and slippage
* **Too rarely**: portfolio drift reduces strategy effectiveness
* **Sweet spot**: weekly to monthly, or when any position drifts > 5% from target

### After Weight Changes

Always rebalance after updating target weights. Otherwise, your fund holds the old allocation while displaying new targets — confusing for investors.

## Fee Strategy

* **New fund managers**: start with lower curator fees (40-60%) to attract initial deposits. Build a track record first.
* **Established managers**: higher fees (60-80%) are acceptable if you demonstrate consistent alpha.
* **Consider your market**: a simple index fund shouldn't charge the same as an active alpha strategy.

## Investor Communication

Even though Tilt is decentralized, good fund managers communicate:

* **Name your fund clearly** — the name should communicate the strategy (e.g., "Tech Momentum" not "Fund 42")
* **Keep weights aligned with your thesis** — if you name it "Blue Chip," don't fill it with meme stocks
* **Be consistent** — frequent radical weight changes erode investor confidence

## Risk Management

### The Time-Lock Is Your Friend

The weight change time-lock exists to protect investors. It also protects you:

* Forces you to plan changes in advance rather than react emotionally
* Gives you time to reconsider before a change takes effect
* Builds investor trust through predictability

### Monitor Share Price

Track your fund's share price relative to the high-water mark. Performance fees only accrue above HWM, so drawdowns directly impact your fee revenue.