When we invested in Covestor it was in part because of the fit with our “Power to the People” thesis:
To us, this appears to be one of the great constants of the web. It is taking power away from existing large institutions and pushing it out to smaller entities and often all the way to individuals.
In the case of Covestor the institutions in question are large investment management firms and the individuals are people who are investing their own money. In its first phase, Covestor made it possible was for individuals to publish their verified track records to the world through the covestor.com site.
We are excited that Covestor is now launching its second phase with Covestor Investment Management (CVIM), which offers the world’s first Multi Managed Account (MMA).
Here is how it works in a nutshell: You take some money and put it in the MMA. CVIM then allows you to subscribe to models representing different individuals. As those individuals trade in their own accounts, the trades are replicated in your MMA (appropriately scaled). CVIM ensures that you can only subscribe to models that fit your risk profile and permits fine-grained control, such as excluding trades in the stock of the company you work for. Since the MMA is based on a regular brokerage account, you can see your actual positions at all times and CVIM lets you track your performance for each model.
Unlike traditional asset management firms, CVIM is an open and transparent platform that brings together model managers (individuals executing trades with their own money) and investors who want to follow those strategies. As an investor you know at all times what your positions are and which trades were executed as a result of which model. Your assets always stay in your own account. As CVIM adds more model managers to the platform, your choice increases and you can pick which models to subscribe to based on the performance of those models, knowing that they represent trades the model manager is making with his or her own money.
A big congrats to the Covestor team, which has worked incredibly hard and has overcome numerous technical and regulatory hurdles to bring the CVIM platform to market. Now to find out more and sign up for your own MMA, visit the new CVIM website.
