Innovation That Matters

Platform lets investors clone experts' stock ideas

Financial Services

Last fall we covered Covestor Investment Management, a company that lets investors follow the trades of experts with their own managed funds. Approaching the topic with a like-minded spirit, San Francisco-based AlphaClone lets investors intelligently apply the publicly disclosed stock ideas of top hedge fund and institutional money managers. Also known as piggyback investing, cloning lets investors create a portfolio of stocks—known as a “clone”—based on the stock ideas of one or more fund managers at the time those ideas become public. The strategy has been found to outperform the overall market by a significant amount over time, AlphaClone says, so the company offers an online research service that enables investors to create customized clones and quickly determine via instant 10-year backtests if the strategies have added value over time. Investors can follow the stock picks of a single manager or a custom group of managers–AlphaClone currently tracks more than 280 in its database. Cloning strategies can be based on position size, recency or popularity, but AlphaClone also offers a family of Core Strategies that rebalance automatically via its investment accounts. Either way, once they find a good strategy, users purchase the stocks that the system suggests and rebalance quarterly when new holdings are disclosed. A YouTube video demonstrates the platform in action. A full membership on AlphaClone is priced at USD 99.95 per month; basic service costs USD 29.95 monthly. Users of the site’s free Guest Pass, meanwhile, get access to the “Top 3 Holdings” clone strategy for any individual fund manager. Two heads are better than one, as the saying goes, and therein lies the dizzying power of the global brain. Just as the consumer crowds often come up with winning innovations, so it makes perfect sense to tap the expert crowds for investment guidance. One to emulate on a local or niche basis? Spotted by: Sam Mar



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