A little while ago, my favorite investing platform etoro, launched CopyFunds.    I wanted to write a little post about my experiment with CopyFunds and whether or not it’s a viable investment.

What is a CopyFund?

The idea behind etoro’s copyfunds is simple.  They group together the top performing traders on their platform and allow you to invest in them as a group.

This is a really cool concept because it removes some of the risk associated with social trading.    I love to social trade, but you can’t always avoid picking traders who will have a bad month or two.   Copyfunds diversify your portfolio and spread the risk across lots and lots of traders instead of just one or two.

Furthermore it’s all automated so that if a trader suddenly starts losing too much, they get booted out of the fund and everything is rebalanced.

Making Money with CopyFunds

So the big question is, can you actually make money with CopyFunds.  I decided to put them to the test with a $5000 position.  That’s the minimum investment size for a copyfund which makes sense – you need enough capital to invest in lots of positions at once.

Remember all these positions are opened and closed automatically behind the scenes by the fund.   You’re just investing in the fund.

Here is how the fund has performed over the last month:

As you can see, it has gained around 1.5% or $75.  This is a pretty good return and has easily beaten what my high interest savings account would have returned.  Obviously I don’t expect it will return this much every month but so far I’m seeing really positive signs.

Which CopyFund to Choose?

For this experiment I used the ActiveTraders fund, but etoro also offers other copyfunds to invest in.  Some of them aren’t just people based.  For example, you can invest in the “big banks” or the top “tech stocks”.

It really depends on what you believe to be the least risky and will deliver the best return.  As CopyFunds have only recently launched, it’s hard to say how well each fund will perform.  In my research I felt “ActiveTraders” would work best for me.  But I want to also try out the others to see how they perform with an actual investment.

A real alternative Investment

Copyfunds look like a really good alternative investment.  I love the fact the etoro is making good use of technology and automating something that would have been nearly impossible to do before.  What I also love is everything is out in the open and you can clearly see where your money is being invested and you’re free to close your position at any time and almost instantly.

This is the future of investing!

If you’d like to try out CopyFunds, make sure you take advantage of the latest etoro bonus offer – that way you’ll be able to start investing in a copyfund using less cash 🙂

I’ll be keeping this blog updated over the comings months tracking my progress so you can see how I’m making money with etoro and copyfunds and how you can copy what I do to do the same.  If you’d like to keep updated, make sure you subscribe to my newsletter.