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eToro Smart Portfolios Review

Do you want to diversify your crypto-portfolio but have no knowledge of how to allocate your assets strategically? Read ahead to discover about eToro Smart Portfolios, which automatically copies a portfolio allocation of leading crypto assets on the basis of predefined strategy.
etoro smart portfolio review
etoro smart portfolio review

Having a well-researched portfolio is the first step towards wise investing. The advantages of having good portfolio with could reap results for decades.

Building an investment portfolio has always been a challenge for beginners. They often face difficulty in deciding how much percentage of the entire investment should be allocated to Bitcoin, Ethereum, meme-coins like Dogecoin, and other leading crypto assets.

To address their struggle, eToro has come up with its smart portfolios, which are designed to reduce long-term risk while taking advantage of Bitcoin, Ethereum, and other top cryptocurrencies’ accumulated growth.

Read ahead as we talk about the eToro smart portfolio feature, which will minimize your long-term risk, increase your earning potential, and allow you to take advantage of present market opportunities.

What are eToro Smart Portfolios?

As the name suggests, the eToro smart portfolio, a premium feature of the eToro trading platform, allows the traders to diversify their investment portfolio on the basis of a predetermined theme or strategy.

By using the smart portfolio feature at the eToro platform, you invest in an entire group of assets, rather than in a particular asset. This selection of assets is driven by a resource allocation plan controlled by numerous algorithms and overseen by the eToro Investment Committee.

 

etoro smart portfolio review USA

Different asset class investment options in CopyPortfolio

The reason why this feature is getting increasingly popular among traders is because it provides users access to cutting-edge investment ideas by machine learning and data science with tailor-made methodologies.

If you are looking to have a portfolio that minimizes your long-term risk, maximizes your earning prospects, and allows you to capitalize on current market opportunities, then you should use this feature to design your portfolio.

To ensure that traders get the maximum out of the theme-based investment strategy, every portfolio on this function is rebalanced on a regular basis. Further, it must be remembered that every individual or market in a portfolio is considered as a separate transaction in the Smart Portfolio function, and this transaction will get opened with the same proportional amount of your allotted funds.

Types of Smart Portfolios

eToro gives you the choice of picking your favorite Smart Portfolio from three different types: Top Trader Portfolios, Market Portfolios, and Partner Portfolios. Given below we have discussed these portfolios in detail so that you can make an informed decision regarding which portfolio to pick:

Top Trader Portfolios

These portfolios are designed according to the set strategy of the best performing traders on eToro. These traders are carefully chosen through advanced methodologies that observe, insert, manage, and automatically remove the required traders within the portfolio. Further, these portfolios are the supervision of eToro’s Investment Committee.

Some of the Top Trader portfolios include GainersQtr CopyPortfolio, TrendingR7 CopyPortfolio, ActiveTraders CopyPortfolio, and CopiersPlusR4 CopyPortfolio. These portfolios are specifically designed as per the predetermined criteria.

For instance, ActiveTraders CopyPortfolio is based on an algorithm that chooses traders, who are most likely to have the best Risk/Reward ratio in the next quarter. Similarly, in CopiersPlusR4 CopyPortfolio, you will traders, who have a risk score of 4 or below and have seen an increase in copiers in the last month. Therefore, Top Trader portfolios enhance your probability of making huge profits by bringing together a significant number of active traders with a track record of success.

Market Portfolios

Next, we have market portfolios, which are a collection of CFD equities, commodities, or ETFs, that are grouped according to a predetermined theme. Every market portfolio is built and managed by using sophisticated algorithms.

These algorithms, in return, determine the assets and capital allocation strategy with regular modifications and rebalancing. Just like Top Trader portfolios, these portfolios are also supervised by eToro’s Investment Committee.

Some of the examples of market portfolios include BigBanks CopyPortfolio, InTheGame CopyPortfolio, AllStocks CopyPortfolio, and BigTech CopyPortfolio, etc. All these portfolios are based on a specific theme.

For instance, BigBanks CopyPortfolio combines banks, global financial services providers, and other financial institutions in a single portfolio to diversify your investment across financial sectors.

Similarly, BigTech CopyPortfolio contains prominent firms from a variety of industries, including technology, e-commerce, telecommunications, entertainment, and a lot more. On the same lines, InTheGame CopyPortfolio will make you invest in industry-leading gaming companies.

If you want a comprehensive exposure to the whole US economy, then choose USA-ETF CopyPortfolio that comprises high-yield American bonds and CFD stocks of various US firms.

Partner Portfolios

Lastly, partner portfolios are built with the help of other external partners rather than by eToro and its investment department. These portfolios are created by eToro’s partners, including WeSave, a French Robo-advisor; Tipranks, a stock analyst software company; and Meitav Dash, a multi-billion dollar investment company.

AlphaCore is a partner portfolio that has been developed by WeSafe. It’s an ETF-based portfolio that invests in all markets intending to achieve long-term gains. Further, we have WannenBuffet-CF, a partner portfolio developed by TipRanks. This smart portfolio is developed on the basis of public information available from the Securities and Exchange Commission (SEC) about Berkshire Hathaway’s market positions.

On the same lines, CarlIcahn-CF is another partner portfolio developed by TipRanks, which is created on the basis of public information available from the Securities and Exchange Commission (SEC) about Carl Icahn Enterprises’ market positions.

Similarly, TipRanks has one more partner portfolio, EWachenheim-CF that is developed on the basis of public information available from the Securities and Exchange Commission (SEC) about Greenhaven Associates’ market positions.

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Smart Portfolios based on crypto-investment

With the increase in popularity of cryptocurrencies, individuals and institutions are becoming interested in crypto assets. These digital coins are a type of asset that can assist in portfolio diversification by offering returns that are unrelated to those of other securities.

If you are a crypto enthusiast and want to ensure your long-term growth, then you need to learn the art of diversifying your investment portfolio. To do this, you can make use of the eToro Smart Portfolio that builds a diversified portfolio with exposure to chosen crypto assets available on the eToro platform, based on a predetermined strategy. The crypto assets are equally weighted in the portfolio allocation.

etoro smart portfolio review

CopyPortfolio screenshots

For having a better understanding of how these smart portfolios work in crypto trading, we have explained some leading portfolios related to crypto.

Crypto-Currency CopyPortfolio

Crypto-CopyPortfolio gives you exposure to two leading cryptocurrencies of the industry in terms of their market capitalization, Bitcoin and Ethereum. Both of these cryptos are allocated in this smart portfolio based on their market capitalization.

For instance, Bitcoin is having a share of about 72%, while Ethereum is having a share of about 27% in the portfolio. This portfolio allows users to invest in the world of cryptocurrency with a single click using a clear allocation weighted according to a standard market strategy.

The portfolio is assessed periodically by the market experts and rebalanced annually depending upon the market situation. It is created and managed by eToro’s Investment Team. If you are aiming to use this portfolio for the purpose of making an investment, then you would have to make a minimum investment of $2,000.

CryptoEqual

CryptoEqual smart portfolio builds for you a diversified portfolio by choosing the selected cryptocurrencies available on the eToro platform. This selection is done on the basis of their market relevance. When portfolio allocation is done by the algorithm or experts, then all crypto assets are equally weighed.

Napoleon-X Smart Portfolio

Napoleon Crypto is a registered asset manager based in France, which designs low-frequency systematic trading algorithms. The leading asset manager has developed a long-term quantitative machine-learning on the basis of an investment strategy by using various cryptocurrencies, including Bitcoin, Ethereum, Litecoin, Ripple, and EOS. Every crypto allocation is provided with the same amount of exposure and is rebalanced daily.

DeFiPortfolio

The rise of cryptocurrencies has led to their increased usage across various technology-oriented sectors. For instance, these digital coins are used as a form of payment, store value for the traders and investors, develop applications on a variety of open-source blockchain systems, and a lot more.

Another big revolution brought about by crypto in the financial sector is the development of Decentralized Finance platforms (DeFi). These platforms are decreasing the utility of traditional financial institutions by providing permission-less, global, and transparent means of using money.

In other words, these platforms allow their users the exchange and transfer of money without the use of any intermediaries, thereby managing money with the help of their cutting-edge technology.

As the name suggests, eToro’s DeFiPortfolio brings together a selected group of cryptocurrencies in its portfolio on the basis of their representation in the DeFi domain. For instance, Ethereum, which is the leading crypto used in the development of DeFi applications, is allocated a high weight in the portfolio.

Considering that this portfolio provides its users the exposure to the innovative world of DeFi, this portfolio suits all those investors who are aiming to invest in the technology sector.

CryptoPortfolio

This copy portfolio is available for U.S. clients, where investors would get a diversified index of the best cryptocurrencies. Every crypto on this portfolio is having a market capitalization of over $1 billion along with a daily trading volume of above $20 million. The portfolio divides the weights proportionately on the basis of the market cap of every crypto, with a minimum of 5%.

TheTIE-LongOnly

Just like CryptoPortfolio, this copy portfolio is also available for U.S. clients. eToro trading platform, in partnership with the TIE, Social Media Analytics (SMA), has developed a portfolio that is weighted according to the crypto sentiment of the general public by analyzing more than 850 million daily tweets.

Another advantage of this smart portfolio is its use of advanced machine learning techniques to rebalance its allocation regularly as per the market conditions and sentiments.

Why should you make your investment by using smart portfolios?

If you are an amateur in crypto-trading, then you must start trading with ready-made portfolios designed by experts based on a predetermined strategy.

etoro copyportfolio features

Several features on eToro CopyPortfolio

Let’s find out the benefits you will be getting in case you try this technique of using smart portfolios:

Well-researched portfolio

Research is the backbone of every investment decision. If you have made your investment decision after doing proper market research, then you will most likely make huge profits. eToro understands this very well, and that is why, its every smart portfolio is backed by professional research, which increases your probability of making good profits significantly.

Developers have in-depth trading experience

The architects of these portfolios have in-depth trading experience and carry a vast understanding of market conditions. Therefore, their asset allocation strategies are taken with high credibility and confidence by many investors.

Use of technological innovation

The creation and management of smart portfolios are done with the usage of the latest technologies and methodologies. Machine learning and various algorithms play an important role in building profitable crypto-assets allocation strategies.

Risk management

Risk is an inevitable part of the market investment. For beginners, it is challenging to assess important risks affecting investment decisions. This lack of knowledge infects their decision-making, and consequently, risk management activity goes down in this entire process.

Having said that, smart portfolios plugin this limitation by carefully assessing every risk, and effectively dealing with it through their risk management tools.

Easily affordable

Smart portfolios are accessible for all beginners and investors with their affordable pricing. Usually, you can start using these portfolios with a minimum investment of $500. Additionally, there are no management fees charged by the platform, thereby making it affordable for many of the users.

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Conclusion

eToro smart portfolio allocates your investment funds adequately in leading crypto assets on the basis of predetermined investment strategy, and assess your portfolio regularly to rebalance it for maximum gains.

The ready-made portfolios diversify your investment and allow you to reap the benefits out of the combined performance of top crypto assets. Further, eToro allows you to avail these portfolios with a minimum investment of about $500.

These portfolios are an excellent solution for beginners who want to ensure long-term growth with fully managed portfolios supported by significant research and market specialists’ vast experience.

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FAQs

How much should be the investment in eToro smart portfolios?

eToro Portfolios work in the same way that numerous traders do: they all work for you at the same time. Consequently, numerous underlying positions are created on your behalf. As a result, the minimum investment amount in a Portfolio comes out to be $500.

For how much time should I hold my funds in a CopyPortfolio?

Though you are free to cash your investment at any moment, however, it is recommended to hold your investment for longer periods as investment strategies in smart portfolios are designed on the basis of medium to long-term trading.

How much fee is charged by eToro for smart portfolios?

Although there are no annual fees charged by eToro for using CopyPortfolios, however, other transactions, such as fund withdrawals, will be subject to the standard charges.

How can I close my investment?

You are not allowed to remove your investment partly. You'd have to entirely close your investment by clocking the settings wheel to the right of the portfolio and then choosing the option named 'Close Investment'.

How are profits realized in smart portfolios?

By closing your investment, you can realize your profits. The calculation of profit/loss on your investment is done on a real-time basis, and you will be able to see the appropriate figures in your equity. Once you have closed your investment, funds will be transferred to your available balance.

When does the rebalancing of portfolios take place?

The re-balancing period varies from one portfolio to another. That is why it is better to know the frequency of this period from your portfolio page.

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