Last year, eToro launched CopyFunds. A way to invest in the top guru traders on the social trading platform eToro.
I thought this was a great idea, and would further progress all the amazing benefits of social trading. So to really test it out, I started an experiment to see what a $5000 investment would return if invested in a copyfund.
In theory, copyfunds should work out really well. eToro uses algorithms to pick the top performing traders on their network to add to a fund. And then the progress of each trader is automatically managed to make sure that poor performers are removed from the fund. This is all in theory though. How does it actually work in a real world test.
Let’s take a look at how my $5000 experiment has been performing.
As you can see, over the past month or so, this investment has increased in value about around 2.6% and is worth around $5.1k. This has been inline with what I had expected even possibly a little better. If this growth rate was to continue, it would be by far my best investment.
Obviously it’s too early to make that call yet and it will be interesting to see how this performs over the entire year.
This is experiment was for the ActiveTraders copyfund. You can also invest in other funds including a bundle of tech stocks, trending traders, and the top quarterly gainers. Personally I felt this one would be the most interesting, as I believe that active traders perform the best over the long term. Where as the top gainers, often perform well for a month or two and then crash and burn. It will be interesting to see how etoro’s algorithms counter this.
So far, copyfunds look to be a good bet. But like all investments, make sure you do your research and only invest capital you can afford to lose. I believe copyfunds and social trading will be the future of investing and I’m excited to be following this for the very beginning.
You can find out more about copyfunds here.