AlphaClone – Investment strategies that mirror the world’s top hedge funds
First Published Friday, 20th January 2012 02:30 pm from Xand : jneff
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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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