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Portfolio Index Value on dub

Justin Ramirez CCO and Senior Counsel
  • Updated
 

What Is Portfolio Index Value?

Portfolio index value is a standardized performance metric used on dub to help you compare different portfolios over time. It represents the hypothetical performance of a portfolio based on the trading activity conducted by the portfolio creator.

How Portfolio Index Value Works

Starting Point: 100

All portfolios on dub start with an index value of 100, regardless of their actual dollar value. This standardization makes it easier to compare performance across different portfolios.

Tracking Performance

As the portfolio's value changes over time due to market movements and trading activity:

  • The index value increases when the portfolio performs positively
  • The index value decreases when the portfolio performs negatively

Reading Index Values

The index value directly translates to percentage returns since inception:

  • Index value of 110 = 10% return since inception
  • Index value of 130 = 30% return since inception
  • Index value of 90 = -10% return since inception (10% loss)

How Portfolio Index Value Is Calculated

The calculation process involves:

  1. Generating a return series based on the portfolio's trading activity
  2. Normalizing the data to an initial value of 100
  3. Preserving percentage changes from the original non-indexed return series
  4. Expressing performance in US dollars as the standard currency

This ensures that the indexed values maintain the same percentage changes as the actual portfolio performance, just scaled to start at 100.

Important Considerations

When reviewing portfolio index values, keep in mind:

  • Hypothetical performance: The index value reflects hypothetical past performance based on the portfolio creator's trading activity
  • Not predictive: Past performance is not indicative of future results
  • Your results may differ: Your actual returns will differ from the displayed index value due to factors such as:
    • Timing of your investments
    • Transaction costs
    • Cash flows into and out of your account
    • Minor differences in execution prices

Remember that portfolio index values are just one tool to help you evaluate potential investments on dub. They should be considered alongside other factors in your investment decision-making process.

 

Need Help?

If you have any questions or need assistance during the account opening process, please contact us at support@dubapp.com

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