For those who have not heard about Covestor.com, it is an investment management platform where anyone can share their real money portfolios and track their performance. Anyone who wants to build a public track record, should consider them strongly.
The best thing about Covestor is that they are trying to offer a new way for retail investors to invest compared to mutual funds and possibly hedge funds.
Both individuals and investment advisors can use it to earn money via the platform. They do this by licensing their portfolio data to Covestor who in turn markets it as a ‘model’.
Check out a simple video to learn a bit more
Covestor allows anyone to copy or mirror a model manager’s account. The way it works is the following:
1) My real money portfolio (IRA account) is on Interactivebrokers.com. The account has about 10-15% of my total assets in this portfolio. Check my profile on Covestor at http://covestor.com/adib-motiwala/.
2) This portfolio is then marketed as the model ‘Dividend Value Plus’.
3) When someone subscribes to this model, the portfolio is replicated in his account in the same proportion as the model portfolio. When I make any change to my portfolio ( buy / sell a stock) , it is automatically and almost instantly replicated in the accounts of the subscribers of the model.
Subscribe:To subscribe via a mirroring account, you can click Subscribe on the page or you can contact the Director of Client Relations, Bhargav at 866-825-3005. You will be guided to open a new brokerage account at InteractiveBrokers.com (IB) The account will be in your name. When you open the mirroring account, Covestor will be the Advisor for the account and the account can be used to mirror ( copy ) as many model managers you want. See http://site.covestor.com/invest
Minimums: Covestor requires $10,000 to open an account with them. Various models have different minimum investment levels from $5,000 to $20,000. My model requires $5,000 minimum. So, if you open a covestor account with $10,000, you can invest it fully in my model or two models with $5000 minimums.
Fees: To mirror a model, Covestor charges a typical asset management fee from 0.5% to 2.3%. In the case of my model its 1.5% annually. Covestor will display all the details when you sign up and select a model. Brokerage fees for placing buy and sell orders are separate. IB typically charges $1 per trade upto 250 shares ( or a minimum of $10 per month) .
Follow for free: You can also sign up to receive weekly performance updates. There is no cost or obligation to do this and the updates include:
- Full details of executed transactions
- Summary of my investment performance
- Commentary and analysis
Use “Follow for Free” button on my page to take advantage of this feature.
To access the model, visit ‘Dividend Value Plus’.
