Trading and investment platform eToro has partnered with fintech STRATxAI, experts in smart investment systems, to launch a new portfolio.
Called “Cut”, this portfolio leverages proprietary STRATxAI technology and analytical tools previously only available to institutional investors to identify the most “high value” US stocks on the eToro platform.
Dani Brinker, Head of Investment Portfolio at eToro, commented:
“At eToro, leveraging new technology is in our DNA and at the core of our mission to provide retail investors with tools previously only available to institutional investors. We’ve recently seen the launch of several partner portfolios, working with companies at the forefront of AI-powered financial analytics. We are excited to welcome our new partner, STRATxAI, and offer retail investors an innovative product that offers sophisticated exposure to the US market.”
The portfolio includes 15 US stocks and is rebalanced monthly. Monthly rebalancing aims to provide an allocation that consistently delivers risk-adjusted returns that exceed the S&P 500 benchmark.
Each month, the STRATxAI backtest engine evaluates the performance of more than 5,000 US mid- to large-cap stocks over the past two decades. Stocks are then evaluated based on a mix of five key factors that are positive indicators of future performance:
- Value: Identifying undervalued stocks at a discount to their intrinsic value, capitalizing on potential undervaluation.
- Quality: Prioritizing strong financials, focusing on stable, profitable and financially sound businesses.
- Low Volatility: Target stocks with lower market volatility to reduce significant portfolio swings.
- Liquidity: Assessment of liquidity to maintain the ability to execute transactions quickly and efficiently.
- Diversification: Limit three stocks per sector to spread risk and mitigate sector downturns.
Paul Clifford, CEO of STRATxAI, said:
“Investors want to be at the forefront of the digital revolution and artificial intelligence, but are held back by the sheer computing power required to exploit the opportunities and the scale of high-quality data required. Our formidable STRATxAI engine has the computational and analytical power to curate unique investment portfolios like Cutting-Edge. We are excited to offer this portfolio exclusively to eToro customers, enabling them to stay ahead of the ever-evolving landscape of innovation.”
eToro’s range of Smart Portfolios offers exposure to various market themes. By combining multiple assets under a defined methodology and applying a passive investment approach, they provide long-term investment solutions that offer diversified exposure. Initial investment starts at $500 USD and every investor can access tools and charts to monitor portfolio performance, while eToro’s social media feed will keep them updated on developments in the sector. This portfolio is not available to US users.