Three enhancements to Covestor performance calculations

By Covestor Markets Covestor


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By Alex MacAndrew, Investment Director of Covestor

At Covestor, we believe investors deserve fully transparent accounts, clear performance and risk reporting, understandable language, and no hidden fees.

In that spirit, we have made a number of enhancements to the way we present investment performance in our charts and tables. These changes were made to ensure the fairest possible representation of results to our clients and to align our performance presentation with industry best practices.

Manager portfolio returns

Manager performance is now presented net of the Covestor management fee. We believe this provides clearer indication of the returns a prospective client may achieve from a Covestor strategy.

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Average subscriber returns

This performance metric helps you see how well our trading technology replicates the investment performance of Covestor managers. At times, client performance does not precisely track the manager’s performance, and we want to present this ‘performance drift’ in a fully transparent manner.

For this metric, we calculate a weighted average, which is compatible with industry best practices for client composite calculations. We present the last 365 days to indicate the current run-rate of our replication technology’s efficiency.

We exclude days where new clients subscribe or redeem from a portfolio from the calculated average. Clients subscribe and redeem from Covestor portfolios every day; including these extra acquisition or liquidation trades can distort the calculated average. Excluding them presents a fairer representation of what you may experience as a client subscribed to the portfolio over a period of time.

Benchmark returns

All benchmarks displayed on Covestor are now total return benchmarks, which means they include the impact of reinvesting dividends. Benchmark returns displayed alongside some portfolios have therefore increased.

I hope you are as pleased as we are with our latest site enhancements!

Alex MacAndrew
Investment Director, Covestor