Stop Building From Scratch: TuneUp's 15 Evidence-Based Model Portfolios

The previous posts in this series established a consistent finding from multiple directions. Individual stock pickers systematically underperform the market, driven by disposition bias, overconfidence, under-diversification, and lottery preference. Most actively managed funds do not solve this problem — they replicate it at the portfolio level through closet indexing or speculative concentration. Financial education raises awareness but does not reliably change behavior.

At some point, a reader is entitled to ask: fine, so what should I actually do?

This post answers that question directly.

The Diversification Problem, Made Concrete

The under-diversification finding from our own research bears repeating because its scale is striking. When we analyzed a cohort of nearly 100,000 Turkish retail investor accounts over a five-year period, only 4.8 percent earned a Sharpe ratio — return per unit of risk — above that of Borsa Istanbul. The remaining 95.2 percent bore more risk than the market while earning lower returns. The median investor held roughly two stocks. Nearly 90 percent held fewer than four.

The theoretical case for diversification is one of the oldest results in financial economics. The empirical case is equally well-established: investors who diversify more earn better risk-adjusted returns, even if their raw stock-picking skill is unchanged. The practical barrier is not knowledge. Most investors know, in the abstract, that diversification is good. The barrier is implementation — which stocks, in what weights, updated how often, and on what basis? In the absence of a clear framework, investors default to familiar names and the diversification benefit is never captured.

A model portfolio removes this barrier entirely.

What Makes a TuneUp Model Portfolio Different

A model portfolio is a pre-constructed, continuously maintained set of holdings built according to an explicit methodology and updated on a regular schedule. The investor does not need to select individual securities, estimate correlations, or decide when to rebalance. They adopt the portfolio and the methodology does the rest.

What makes TuneUp model portfolios distinct is the underlying engine: every portfolio is built from SmartSkor rankings. Each security must clear a threshold of expected-return quality, assessed across valuation, profitability, investment discipline, momentum, and informational transparency. Securities that score poorly — high volatility, retail attention intensity, sentiment inflation, idiosyncratic distress — are excluded regardless of recent performance or media presence. The portfolio is not trying to match the index. It is trying to own the highest-expected-return subset of the investable universe within its defined scope.

This is also why model portfolios solve a behavioral problem, not just a construction problem. The disposition effect requires a discretionary decision — the investor evaluates each position against its purchase price and decides whether to sell. A SmartSkor-based portfolio replaces this with a rules-based discipline: when a security's ranking falls below threshold, it is replaced, regardless of gain or loss. The purchase price is never consulted. Overconfidence and excessive turnover are constrained by a defined rebalancing schedule rather than a reactive trading trigger. Lottery stocks are excluded at the construction stage, before the investor can allocate to them impulsively.

In this sense, a model portfolio is a behavioral commitment device — a structure that removes the conditions under which the most costly investment mistakes occur.

The 15 Portfolios: A Framework Built for Every Investor

TuneUp currently offers 15 model portfolios, organized across three dimensions: breadth of universe, size focus, and sector or thematic mandate. Together they cover the full spectrum of how a Turkish retail investor might want to approach the BIST — from maximum conviction to sector-specific exposure to values-aligned investing.

Broad Market Portfolios

SmartSkor Top 10 draws the 10 highest-ranked securities from the entire BIST universe by SmartSkor composite score. This is maximum conviction — an undiluted expression of where the evidence points for expected returns across all listed Turkish equities, with no index or sector constraint. It is the right starting point for an investor who wants full SmartSkor exposure without restriction.

SmartSkor Top 20 broadens the same mandate to 20 securities. The wider net provides more diversification while maintaining the same evidence-based selection discipline. For investors who want the full-universe SmartSkor approach with lower single-stock concentration, this is the natural alternative to the Top 10.

Index-Constrained Portfolios

BIST 30 Top Picks selects the 10 highest SmartSkor-ranked stocks from within the BIST 30 index. The BIST 30 is the most liquid segment of the Turkish market — large, well-covered companies with lower bid-ask spreads and lower execution risk. This portfolio is appropriate for investors who want SmartSkor's expected-return discipline applied within the most liquid universe available.

BIST 100 Top Picks extends the same logic to the BIST 100, offering a broader opportunity set while remaining within the index-constituent universe. This is the right choice for investors who want exposure across a wider swath of the market without venturing into smaller, less-liquid names.

Size-Based Portfolios

Large Cap Portfolio selects the top 10 SmartSkor-ranked stocks from the upper half of the BIST by market capitalization. Large-cap stocks offer liquidity, analyst coverage, and lower idiosyncratic volatility — important for investors managing larger portfolios or with shorter investment horizons.

Small Cap Portfolio selects the top 10 SmartSkor-ranked stocks from the lower half of the BIST by market capitalization. Small caps offer a different return profile: the academic literature documents a persistent small-firm premium in many markets, and within that universe, SmartSkor selection is particularly valuable because small-cap securities are less efficiently priced and behavioral mispricings are larger and slower to correct.

Best Small Caps is a tighter version of the small-cap mandate, drawing specifically from companies not in the BIST 100. This is the most concentrated small-cap expression in the TuneUp lineup — highest potential return premium, highest idiosyncratic risk, most appropriate for investors with longer horizons and higher risk tolerance.

Sector Portfolios

Top Banking & Finance selects the top 10 SmartSkor-ranked stocks from the BIST Financials index. Turkish banks and financial institutions represent a large and often volatile segment of the BIST. Within this sector, SmartSkor identifies the institutions with the strongest expected-return profiles — those that score well on valuation, earnings quality, and informational transparency rather than those attracting the most retail attention.

Top Manufacturing selects the top 10 SmartSkor-ranked stocks from the BIST Industrials index. Manufacturing companies in Turkey span a wide range of quality — from export-competitive, capital-efficient producers to domestically protected firms with deteriorating fundamentals. SmartSkor's profitability and investment discipline signals are particularly powerful here for identifying which companies are genuinely creating value.

Top Services selects the top 10 SmartSkor-ranked stocks from the BIST Services index, covering retail, transportation, media, and technology services. The services sector has been among the fastest-growing segments of the Turkish economy, and SmartSkor's ability to distinguish between genuine growth stories and sentiment-inflated glamour stocks is especially valuable here.

Thematic Portfolios

Top Sustainable selects the top 10 SmartSkor-ranked stocks from the BIST Sustainability index. For investors with ESG mandates or preferences, this portfolio provides evidence-based expected-return discipline within the universe of companies that meet BIST's sustainability criteria. Critically, it does not sacrifice return quality for sustainability alignment — it applies the same rigorous SmartSkor filter within the sustainable universe.

Top Dividend selects the top 10 SmartSkor-ranked stocks from the BIST Dividend index. High-dividend stocks are often held for income, but dividend yield alone is a poor predictor of total return and can reflect financial distress as easily as shareholder discipline. This portfolio identifies dividend-paying companies that score well on SmartSkor's full expected-return framework — dividend income combined with evidence-based capital appreciation potential.

Top Halal selects the top 10 SmartSkor-ranked stocks from the BIST Participation (Katılım) index, which screens for compliance with Islamic finance principles. For the large segment of Turkish retail investors who require Sharia-compliant investments, this portfolio provides SmartSkor-based expected-return discipline within the participation-compliant universe — without the sacrifice of investment quality that often accompanies values-based screening.

Geographic Portfolios

Top Istanbul selects the top 10 SmartSkor-ranked stocks from companies headquartered in Istanbul. Istanbul-headquartered firms span virtually every sector of the Turkish economy and tend to be larger, more diversified, and more internationally connected than their Anadolu counterparts.

Top Anadolu selects the top 10 SmartSkor-ranked stocks from companies headquartered outside Istanbul. Anadolu-based companies are an underanalyzed segment of the BIST — less covered by sell-side research, less visible to retail investors, and consequently more likely to carry the informational inefficiencies that SmartSkor is designed to identify and exploit. For investors who believe in the long-run growth story of Turkey's industrial heartland, this portfolio provides a disciplined, evidence-based way to express that view.

How to Use the Portfolio Suite

The 15 portfolios are not mutually exclusive. An investor can hold a core broad-market portfolio — the SmartSkor Top 10 or Top 20 — and complement it with a sector or thematic overlay based on their specific convictions or constraints. An investor with a Halal mandate holds Top Halal as their core. An investor who believes small-cap mispricings are the most attractive opportunity in the current environment adds Best Small Caps alongside a large-cap core.

The geographic split — Top Istanbul and Top Anadolu — is particularly interesting as a pair. Held together, they provide broad national coverage with SmartSkor discipline applied separately within each geography, ensuring the final portfolio is not inadvertently concentrated in either segment.

What all 15 portfolios share is the same foundation: SmartSkor's forward-looking, empirically grounded expected-return rankings, applied systematically within a defined investment universe, updated on a regular schedule, and free from the behavioral biases that drive the underperformance documented throughout this series.

The Complete Picture

The argument across this series has been cumulative. Individual stock picking fails because behavioral biases drive investors toward the wrong securities at the wrong time. Fund selection fails because historical performance is a poor predictor of future returns. Education is necessary but insufficient to change behavior.

The solution is infrastructure: tools that remove the conditions for behavioral error rather than simply warning investors about them. SmartSkor provides forward-looking security rankings grounded in evidence. SmartFundSkor extends that logic to the fund level. Model portfolios translate both into a single, actionable structure — 15 of them, calibrated to different mandates, constraints, and risk preferences — that any Turkish retail investor can adopt today.

The question is not whether the evidence supports this approach. It does, consistently, across decades of academic research and our own transaction-level analysis of the Turkish market. The question is whether you are building your portfolio with that evidence, or against it.

TuneUp's 15 model portfolios are available on the SmartSkor platform and updated on a regular schedule based on current SmartSkor rankings. All underlying methodology is grounded in peer-reviewed empirical asset pricing research.