AlphaClone – Investment strategies that mirror the world’s top hedge funds

First Published Friday, 20th January 2012 02:30 pm from Xand : jneff

The opinions expressed by this blogger and those providing comments are theirs alone, this does not reflect the opinion of Automated Trader or any employee thereof. Automated Trader is not responsible for the accuracy of any of the information supplied by this article.


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Our Customer Spotlight series

showcases the innovative ways our clients are using Xignite's

Cloud APIs to power their

applications.

href="http://alphaclone.com/index.html"

target="_blank">AlphaClone is a San Francisco-based

investment management firm that enables investors to "follow the

smart money" with equity strategies that mirror the world's top

hedge funds. In addition to investment management services,

AlphaClone also offers a powerful online research platform that

investors can use to analyze stocks and to create and backtest

their own cloning strategies.

Xignite sat down

with Mazin Jadallah, Founder and Chief Executive Officer, to

learn more about AlphaClone.

Q:

Describe AlphaClone's service offering.

Mazin Jadallah -

AlphaClone is a SEC registered investment adviser and research

firm. Our objective is to give investors actionable, cheaper,

more liquid access to the investment ideas of the

world's top institutional investors. Our investment

research approach, a process called "cloning", utilizes top hedge

fund public disclosures to construct and backtest equity

investment strategies.

Q: Very

interesting concept. . . does cloning actually

work?

Mazin Jadallah

- Yes, cloning the investment strategies of top money

managers has been independently shown by academic and industry

research to generate alpha returns.

AlphaClone offers investors several core

investment strategies inside managed accounts as well as a

web-delivered subscription research service.

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AlphaClone enables

investors to backtest cloning strategies before investing real

money.

Q: How are the managers/funds in the

AlphaClone database chosen?

Mazin Jadallah - The funds in the AlphaClone

database represent roughly 70% of the total market value

disclosed by all funds that file 13F-HR forms. Our fund database

generally contains the largest institutional funds and hedge

funds as measured by the total market value disclosed on their

filings. Most of the managers AlphaClone tracks are fundamentals

driven, value-oriented investors. We tend to avoid funds that are

owned or operated by prime brokers, those with large ETF

businesses, and those with very high turnover.

Q: Describe the technology behind

AlphaClone and the advantages of Xignite Cloud

APIs?

Mazin Jadallah

- AlphaClone uses Xignite to pull in real-time price

quotes. Simply put, when we compared Xignite's

cloud-based model with others we found it to be more reliable,

cheaper, and perhaps most importantly, simple to implement. It's

hard to imagine making it any easier to incorporate market data

in an application. By relying on Xignite for standard market

data, it allows us to focus our development resources on areas of

our service that provide us with a differentiated

advantage.

Q: What are

AlphaClone's plans for the

future?

Mazin Jadallah

- Besides enhancing the AlphaClone research service

with new features and applications, we're planning to

offer investors new ways to access our disclosure-based hedge

fund replication strategies. That includes things like ETFs and

mutual funds which allow both individual investors and

professional money managers easy, convenient, and cost-effective

access to our investment strategies. As a technology-driven asset

manager, our focus will always be on leveraging technology in new

and useful ways to empower investors.

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