The Darwinex AuM millionaires demo portfolio

[IlIlIlIlI]

Coming in January 2023:
The Darwinex AuM millionaires demo portfolio

Rules:

Eligibility rules:
Rule A) The Darwin has more than 1 mln AuM
Rule B) The Darwin must have closed the last calendar month with profit
Rule C) There must be more than 60 investors on the Darwin
Rule D) The Darwin must have made more than 50% profit
Rule E) A new Darwin must be available for buying

Processing rules:
Rule F) The portfolio has a monthly review at the beginning of each month, where Rule A) to E) must be met
Rule G) - currently not relevant - my own Darwin(s) will be included if they meet Rule B) and E)
Rule H) The portfolio share will be the same for each position
Rule I) The portfolio will be run with x3 leverage which gives 30k for investment for a 10k demo portfolio (standard size)
Rule J) - currently not relevant - a black list could exclude certain Darwins by certain and named reasons. The black list is currently empty.

Explanations:
The list of candidates meeting rule A) is published here in a public list or frequently here at T2W.

Rule B) excludes the candidates GFA, WGP, ERQ, UYZ, PVE, TRO, LUA and JTL as there was no profit in December 2022.

Rule C) excludes GFA, PVE and LUA to avoid potential wealth manager selections mainly not selected by the investor but by the manager.

Rule D) excludes LUA, PVE and GFA:

Rule E) currently does not exclude any Darwin.

So the portfolio will start with the following Darwins with a share of $ 5,000 for each Darwin:
BAX, WNJ, PKG, SYO, ZVQ and THA.

Here are the hypothetical calculations for 2022 for these Darwins. The calculations are not exact as they shows the hypothtical gross results.

BAX:

BAX would have shared the portfolio in the periods 01 - 05/2022, 07/2022, 09-10/2022 and 12/2022.
The gross profit would have been 11.32 % for 2022, The 1-year-backtest gives a difference of 2.43 % for fees and slippage for a full year, which makes 1.82 % for the 9 months in the portfolio from the monthly avarage. So the expected result would be 9.29 % profit for 2022.


WNJ:

WNJ would have shared the portfolio in the periods 01 - 05/2022, 07/2022 - 12/2022.
The gross profit would have been 33.86 % for 2022, The 1-year-backtest gives a difference of 8.65 % for fees and slippage for a full year, which makes 7.93 % for the 11 months in the portfolio from the monthly avarage. So the expected result would be 23.24 % profit for 2022.

PKG:

PKG would have shared the portfolio in the periods 01 - 03/2022, 06/2022 - 08/2022 and 10 - 12/2022.
The gross profit would have been 14.69 % for 2022, The 1-year-backtest gives a difference of 4.93% for fees and slippage for a full year, which makes 3.70 % for the 9 months in the portfolio from the monthly avarage. So the expected result would be 10.45 % profit for 2022.

SYO:

SYO would have shared the portfolio in the periods 01 - 04/2022, 07/2022 - 08/2022 and in 12/2022.
The gross profit would have been 14.94 % for 2022, The 1-year-backtest gives a difference of 4.21% for fees and slippage for a full year, which makes 2.46 % for the 7 months in the portfolio from the monthly avarage. So the expected result would be 12.12 % profit for 2022.
This result for SYO is significantly (more than 100%) better in 2022 than the Darwinex backtest result of 5.26 % for the whole year, by avoiding slippage and fees for 5 months and more than 5 % of its DD.

ZVQ:

ZVQ would have shared the portfolio in the periods 02 - 08/2022 and 10 - 11/2022. January 2022 is excluded as December 2021 was a losing month.
The gross profit would have been 9.79 % for 2022, The 1-year-backtest gives a difference of 2.45% for fees and slippage for a full year, which makes 1.63 % for the 8 months in the portfolio from the monthly avarage. So the expected result would be 8.00 % profit for 2022.

THA:

THA would have shared the portfolio in the periods 01 - 12/2022, the whole year as there was no losing month in 2022.
The gross profit would have been 43.77 % for 2022, The 1-year-backtest gives a difference of 10.39% for fees and slippage for a full year, which makes also 10.39 % for the 12 months in the portfolio from the monthly avarage. So the expected result would be 28.83 % profit for 2022.

 

[CavaliereVerde]

6 darwins like mine
Less is more.

 

[IlIlIlIlI]

There is a change to Rule I) forced by Darwinex:

Rule I) The portfolio will be run with x4 leverage which gives 40k for investment for a 10k demo portfolio (standard size)

So the portfolio will start with the following Darwins with a share of $ 6,666 for each Darwin.

Transactions are not possible at this moment - reason unknown:

 

[IlIlIlIlI]

I asked Darwinex for this issue and got the following answer:

"Hi ... good afternoon,

Thanks for your message.
The reason you cannot buy Darwins is because today the option to buy Darwins is closed until tomorrow.
If you need help with anything else, please feel free to contact us, we would be pleased to help you.
Best regards,
... "

So I will do my initial buy trades tonight or tomorrow.

 

[IlIlIlIlI]

Starting the portfolio with these trades:

 

[IlIlIlIlI]

To avoid several sell transactions of the existing positions if a new Darwin appears, I will add a new processing rule:
Rule K) If a new Darwin will join the portfolio, all existing positions will be sold and all eligible Darwins will be bought on the review date

Reasons:
A Darwin which lost money in the portfolio should also show a negative result for the past month.
The sell an rebuy of continuous positions should increase the amount available to invest and the profit, at least over time.

So the rules used will be:
Rules:

Eligibility rules:
Rule A) The Darwin has more than 1 mln AuM
Rule B) The Darwin must have closed the last calendar month with profit
Rule C) There must be more than 60 investors on the Darwin
Rule D) The Darwin must have made more than 50% profit
Rule E) A new Darwin must be available for buying

Processing rules:
Rule F) The portfolio has a monthly review at the beginning of each month, where Rule A) to E) must be met
Rule G) my own Darwin(s) will be included if they meet Rule B) and E)
Rule H) The portfolio share will be the same for each position
Rule I) The portfolio will be run with x4 leverage which gives 40k for investment for a 10k demo portfolio (standard size)
Rule J) a black list could exclude certain Darwins by certain and named reasons
Rule K) If a new Darwin will join the portfolio, all existing positions will be sold and all eligible Darwins will be bought on the review date

Current performance after a few days:

 

[IlIlIlIlI]

The portfolio started with a bad month showing 5.73% losses in only one month, increasing that to 6.12 % losses in the first hours of February until the old positions were sold.

Only one Darwin made profit in January:

There are 6 AuM millionaires with a profit shown for January:

Rule G) adds my Darwin MOT, so there are 7 Darwins to buy.

With $ 37,774.08 (-$ 2,225.92) left to invest, every Darwin gets a share of $ 5,396 (- $ 1.270).

Performance fees could only be taken for one Darwin:

Management fees:

 

[IlIlIlIlI]

The portfolio showed small losses ( - $ 44.53) after selling the February positions:

4 Darwins made profit in February:

There are 5 eligible AuM millionaires with a profit shown for February:

PVE and LUA are excluded by rule C) (minimum 60 investors).

With $ 37,595.96 (-$ 178.12) left to invest, every Darwin gets a share of $ 7,519 (+ $ 2,123).

Performance fees was to pay for 4 Darwins:

Management fees:

The fees have wiped out the small profit of February.

 

[IlIlIlIlI]

The portfolio showed small profit (0.41%) in March before selling March positions:

Only 2 Darwins made gross profit in March:

The candidates for April are SYO, JTL, THA, ZVQ, TRO and WNJ.
As rule B) demands profit, UYZ is not taken as I don't read a green 0.00% as profit.

Transactions to create the April portfolio will be made on Monday.

 

[wezzley]

Hi, thanks for sharing your journey. I find it interesting as someone who may allocate some funds across some darwins. Please may I ask your reasoning for rule B. I noticed a number of Darwins across the board performed badly the first three months of this year, any thoughts why? Also, wondering if you would do anything differently if you began this project again? Thanks again for sharing, I really like your approach to this and the way you have layed it all out for us, thanks again

 

[IlIlIlIlI]

Hi, thanks for sharing your journey. I find it interesting as someone who may allocate some funds across some darwins. Please may I ask your reasoning for rule B. I noticed a number of Darwins across the board performed badly the first three months of this year, any thoughts why? Also, wondering if you would do anything differently if you began this project again? Thanks again for sharing, I really like your approach to this and the way you have layed it all out for us, thanks again

Rule B) excludes a Darwin from the portfolio after a losing month.
Before defining the rules I made an undocumented Excel over all eligible Darwins with the monthly gross results shown on the Darwin's page.
I know that a calendar month is a random period of time.
I also know that the equity to invest is limited, in this leverage x4 demo portfolio limited to 40k.

My assumption is that the market behaviour changes every about 10 to 14 weeks and the analysis of algos (or manual traders) can be trapped by the changes and result in more losses than profit in the next weeks.
IMO there is no need for investors to share losing months, and there is a need for an exit rule for every portfolio.

In this portfolio there are 3 criteria for exit:
- a losing month
- AuM decreases below 1 million
- number of investors decreases to 60 or less.

Let's take as an example the Darwin TRO for the usage of rule B) in 2022 (hypothetical) - I hope the explanation is not to complicated.

The first line shows the monthly and yearly result of this Darwin as shown on the Darwin data page.
The second line in the 2022 column shows the result of a backtest holding this Darwin for the whole year. This cuts the profit and increases the loss by the fees.
So a longterm investor would have lost about 8.64 % holding the Darwin for the whole year according to the backtest data.
There are two 3-month periods of losses shown (May to July and October to December 2022 shown with red color background).

In the 3rd line you see the results of an investment in line with rule B) for the months 2022-01 to 2022-11 and the final result for 2022 under 2022-12 (where there would be no investment in TRO).
As TRO closed December 2021 also with losses, there would not be an investment in January 2022 according to rule B).

The 3rd line shows the monthly results of using rule B) and the final gross profit of using this rule in the December column.
The expected net profit is shown under "unleveraged result", deducting the gross profit by a Darwin specific average for fees for TRO.

For TRO this would mean that the year 2022 could be closed with 3.11 % profit instead of 8.64 % losses by holding it for the whole year.
With SYO the expected profit would also increase to more than 12% in 2022 by using rule B), with some other Darwins the profit could be cut.

This confirmed my idea of rule B) and I implemented it for this portfolio, since otherwise I would need other exit and entry rules to allocate the limited equity.

 

[IlIlIlIlI]

After selling the Darwins the portfolio showed losses for April 2023:

The fees had wiped out the small profit of the last month (March 2023) again.

Two Darwins made profit in March:

With $ 37,526.60 (-$ 69.36.) left to invest, every Darwin gets a share of $ 6,254 (- $ 1,265).

SYO, JTL, THA, ZVQ, TRO and WNJ were bought:

Performance fees was to pay for only 2 Darwins (-2):

Management fees paid:

 

[wezzley]

Rule B) excludes a Darwin from the portfolio after a losing month.
Before defining the rules I made an undocumented Excel over all eligible Darwins with the monthly gross results shown on the Darwin's page.
I know that a calendar month is a random period of time.
I also know that the equity to invest is limited, in this leverage x4 demo portfolio limited to 40k.

My assumption is that the market behaviour changes every about 10 to 14 weeks and the analysis of algos (or manual traders) can be trapped by the changes and result in more losses than profit in the next weeks.
IMO there is no need for investors to share losing months, and there is a need for an exit rule for every portfolio.

In this portfolio there are 3 criteria for exit:
- a losing month
- AuM decreases below 1 million
- number of investors decreases to 60 or less.

Let's take as an example the Darwin TRO for the usage of rule B) in 2022 (hypothetical) - I hope the explanation is not to complicated.
View attachment 327181
View attachment 327180

The first line shows the monthly and yearly result of this Darwin as shown on the Darwin data page.
The second line in the 2022 column shows the result of a backtest holding this Darwin for the whole year. This cuts the profit and increases the loss by the fees.
So a longterm investor would have lost about 8.64 % holding the Darwin for the whole year according to the backtest data.
There are two 3-month periods of losses shown (May to July and October to December 2022 shown with red color background).

In the 3rd line you see the results of an investment in line with rule B) for the months 2022-01 to 2022-11 and the final result for 2022 under 2022-12 (where there would be no investment in TRO).
As TRO closed December 2021 also with losses, there would not be an investment in January 2022 according to rule B).

The 3rd line shows the monthly results of using rule B) and the final gross profit of using this rule in the December column.
The expected net profit is shown under "unleveraged result", deducting the gross profit by a Darwin specific average for fees for TRO.

For TRO this would mean that the year 2022 could be closed with 3.11 % profit instead of 8.64 % losses by holding it for the whole year.
With SYO the expected profit would also increase to more than 12% in 2022 by using rule B), with some other Darwins the profit could be cut.

This confirmed my idea of rule B) and I implemented it for this portfolio, since otherwise I would need other exit and entry rules to allocate the limited equity.

Rule B) excludes a Darwin from the portfolio after a losing month.
Before defining the rules I made an undocumented Excel over all eligible Darwins with the monthly gross results shown on the Darwin's page.
I know that a calendar month is a random period of time.
I also know that the equity to invest is limited, in this leverage x4 demo portfolio limited to 40k.

My assumption is that the market behaviour changes every about 10 to 14 weeks and the analysis of algos (or manual traders) can be trapped by the changes and result in more losses than profit in the next weeks.
IMO there is no need for investors to share losing months, and there is a need for an exit rule for every portfolio.

In this portfolio there are 3 criteria for exit:
- a losing month
- AuM decreases below 1 million
- number of investors decreases to 60 or less.

Let's take as an example the Darwin TRO for the usage of rule B) in 2022 (hypothetical) - I hope the explanation is not to complicated.
View attachment 327181
View attachment 327180

The first line shows the monthly and yearly result of this Darwin as shown on the Darwin data page.
The second line in the 2022 column shows the result of a backtest holding this Darwin for the whole year. This cuts the profit and increases the loss by the fees.
So a longterm investor would have lost about 8.64 % holding the Darwin for the whole year according to the backtest data.
There are two 3-month periods of losses shown (May to July and October to December 2022 shown with red color background).

In the 3rd line you see the results of an investment in line with rule B) for the months 2022-01 to 2022-11 and the final result for 2022 under 2022-12 (where there would be no investment in TRO).
As TRO closed December 2021 also with losses, there would not be an investment in January 2022 according to rule B).

The 3rd line shows the monthly results of using rule B) and the final gross profit of using this rule in the December column.
The expected net profit is shown under "unleveraged result", deducting the gross profit by a Darwin specific average for fees for TRO.

For TRO this would mean that the year 2022 could be closed with 3.11 % profit instead of 8.64 % losses by holding it for the whole year.
With SYO the expected profit would also increase to more than 12% in 2022 by using rule B), with some other Darwins the profit could be cut.

This confirmed my idea of rule B) and I implemented it for this portfolio, since otherwise I would need other exit and entry rules to allocate the limited equity.

thanks very much for the detailed reply. May I ask - your 3 criteria for exit - do all three need to be met or just one? Also - what do you think of the idea some people have - that the best time to buy a darwin is when it is in a drawdown (buy the dip type approach) - and that this is why the darwinna allocation of darwinex finds concept is not very profitable - because by its nature, they put their money in at a 'top'? Thanks again for your reply and for your continued detailed updates here - I really find it interesting, thanks.

 

[IlIlIlIlI]

thanks very much for the detailed reply. May I ask - your 3 criteria for exit - do all three need to be met or just one? Also - what do you think of the idea some people have - that the best time to buy a darwin is when it is in a drawdown (buy the dip type approach) - and that this is why the darwinna allocation of darwinex finds concept is not very profitable - because by its nature, they put their money in at a 'top'? Thanks again for your reply and for your continued detailed updates here - I really find it interesting, thanks.

If one criterion is met after the end of the month on the review date, the Darwin will be excluded for the next month.

I think your thoughts about DarwinIA is one of their ideas to keep the trader's profit of DarwinIA low.
An other idea can be that they expect a change in trading behaviour if an unknown Darwin suddenly get's an allocation and usually such untested changes will cause losses. So some newcomers only will get a lesson, but no money.
There might be other ideas also - I'm just discussing the D-Score calculation with them as I assume there are changes made in the last months where I missed a publication - if there was any.

 

[IlIlIlIlI]

The portfolio shows significant losses after April before selling April positions:

The same as in March: only 2 Darwins made profit in April:

According to rule G), my Darwin MOT is back in the portfolio as it made nice profit in April (4.15 %).

The 6 candidates for May are MOT,BAX, WNJ, THA, ZQF and YOX.
ZQF shows 0.47% in the green for April, YOX shows 0.30%, but both show no profit in this last month list today. The list should be revised tomorrow.

As rule C) demands 60 investors, LUA and PVE are excluded.

Transactions to create the April portfolio will be made on Tuesday.

As the 1st of May is a holiday in Germany and in Spain (don't know that for sure about GB), the update will be done on the 2nd of May.

The Darwinex holiday calendar can be read here.

 

[IlIlIlIlI]

After selling the Darwins, the equity was shown as $ 9,209.69 and available to invest $ 36,838.76.

3 Darwins could be sold with profit:

May starts with some profit on the old investment before buying the new positions in MOT,BAX, WNJ, THA, ZQF and YOX.

The position size is $ 6,139 for each new Darwin in May.

Performance fee was to pay for 3 Darwins now:

Management fees paid:

 

[IlIlIlIlI]

May currently looks better than April, but I plan changes starting from June 2023.

As I wanted to exclude wealth managers without attraction to retail investors because of low profit, I increased the number of investors needed to 100.

So I built a filter with the following criteria.

• Drawdown Last 3 months: -5 to Max.
• Investor Capital Current: 1000000 to Max.
• Investors Last 3 months: 0 to Max.
• Investors Currently: 100 to Max.
• Return Last 3 months: 1 to Max.

For the portfolio the 50% minimum return is to take into account and my own Darwin(s) are to add if they meet rule G).

The resulting list is made public here.

Even if I don't believe in backtests as they only celebrate survivors, the result of the last 3 months from today or another longer period are encouraging for a change.

So the new rules from June 2023 used will be:

Eligibility rules:
Rule A) The Darwin has more than 1 mln AuM
Rule B) The Darwin must have closed the last 3 calendar months with at least 1% profit
Rule C) There must be more than 100 investors on the Darwin and investors are not leaving in the last 3 months
Rule D) The Darwin must have made more than 50% overall profit and a drawdown of less than 5% in the last 3 months
Rule E) A new Darwin must be available for buying

Processing rules:
Rule F) The portfolio has a monthly review at the beginning of each month, where Rule A) to E) must be met
Rule G) my own Darwin(s) will be included if they meet Rule B) and E)
Rule H) The portfolio share will be the same for each position
Rule I) The portfolio will be run with x4 leverage which gives 40k for investment for a 10k demo portfolio (standard size)
Rule J) a black list could exclude certain Darwins by certain and named reasons
Rule K) If a new Darwin will join the portfolio, all existing positions will be sold and all eligible Darwins will be bought on the review date

 

[IlIlIlIlI]

May was the most successful month in the history of this portfolio.

5 out of 6 Darwins left profit in the portfolio.

The following Darwins will build the portfolio in June after selling the current selection during the European or American market session:

It is the first time when the new rule set will be used:

Eligibility rules:
Rule A) The Darwin has more than 1 mln AuM
Rule B) The Darwin must have closed the last 3 calendar months with at least 1% profit
Rule C) There must be more than 100 investors on the Darwin and investors are not leaving in the last 3 months
Rule D) The Darwin must have made more than 50% overall profit and a drawdown of less than 5% in the last 3 months
Rule E) A new Darwin must be available for buying
Processing rules:
Rule F) The portfolio has a monthly review at the beginning of each month, where Rule A) to E) must be met
Rule G) my own Darwin(s) will be included if they meet Rule B) and E)
Rule H) The portfolio share will be the same for each position
Rule I) The portfolio will be run with x4 leverage which gives 40k for investment for a 10k demo portfolio (standard size)
Rule J) a black list could exclude certain Darwins by certain and named reasons
Rule K) If a new Darwin will join the portfolio, all existing positions will be sold and all eligible Darwins will be bought on the review date

 

[IlIlIlIlI]

After selling the May Darwin, there were $ 9,613.27 on the account which made $ 38,453.08 to invest with leverage x4.

5 Darwins were sold with profit:

The position size is $ 5,493.00 for each of the seven new Darwins for June.

Note: as you see, the total of all sales generated some small profit with was eaten up several times by the fees.


Performance fee was paid for 5 Darwins now since the portfolio exists:

Note: if a Darwin was sold with losses before, no performance fee is to pay until the loss is covered.

Management fee was also to pay:

 

[IlIlIlIlI]

June closed with a small profit of $ 40.94, the loss shown in tha monthly statistics is the result of the fees taken for May:

The results before selling the Darwins were:

After selling the June Darwins, there were $ 9,597.53 in the portfolio and $ 38,390.12 to buy the new ones.

ZVQ and ZQF left the portfolio because they were not profitable in the last 3 months.
MOT stays in the portfolio because last month was profitable for the last 3 months.
WGP enters the portfolio again.

For July the following Darwins will be bought, each with a share of 6,398.

Performance fee was paid to 5 out of 14 Darwins:

Note: if a Darwin was sold with losses before, no performance fee is to pay until the loss is covered.

Management fee was also to pay:

This was another month were the fees have eaten up more than the small profit of last month.