What is ZeccoShare performance?
Zecco has partnered with GainsKeeper, an
industry-leading product for performance calculations and tax preparation, in
order to bring performance metrics into ZeccoShare. Since the underlying
math is quite complicated, we wanted to provide a little bit more visibility
into how it works.
What is the purpose of performance?
Performance metrics are estimated statistics summarizing rates of return. The
metrics are intended to aid in the analysis and on-going monitoring of
historical security selection decisions, as well as providing inputs for future
investment decisions. The metrics provide insight into what returns are, why they
were achieved, and how performance might be improved.
The metrics are NOT intended as financial
advice and should not be used for these purposes. Performance metrics in
ZeccoShare are meant to be used as an informational and educational guide to
help users assess and interpret the investments made by fellow ZeccoShare
members. All ZeccoShare members sharing their investment data are ranked in
order of their overall performance, calculated as described below. Users
in the top 5%, top 20%, and top 50% of the community rankings are indicated
with medals on their profiles.
How is performance calculated?
GainsKeeper performance calculations are based on the so-called “time weighted
rate of return method”. This method seeks a high level of accuracy by weighing
the investment portfolio’s cash flows by the amount of time that they are
invested. Cash flows are investor initiated external capital additions or
withdrawals of cash/securities i.e. buying and selling of securities. Dividend
and interest income are not considered cash flows but are a component of the
return. Performance is calculated daily, after market close.
Note: GainsKeeper has
incorporated calculation and presentation methodologies based on guidelines
established by the CFA Institute (formerly the Association for Investment Management and Research) in their "Global Investment Performance Standards" (GIPS) handbook.
GainsKeeper does not claim compliance with these guidelines – only a firm
managing asset may claim compliance. The CFA Institute has not been involved in the
preparation or review of this software application.
What
performance metrics are used in ZeccoShare?
Several different performance metrics are used
for display and comparison throughout the ZeccoShare community. Each member
that is sharing their Zecco Trading account has an overall performance figure
associated with it. This overall performance is the account’s return since
inception. If the inception date is older than 12 months, it is annualized to
reflect average yearly performance. This figure is also time-weighted by
GainsKeeper, as described above.
Each ZeccoShare member’s profile also presents the performance of their
individual holdings that are currently in their portfolio. Like overall
performance, this figure is the return since inception, annualized after 12
months. If the user has closed and re-opened a position for a given
symbol, previous performance for that security will be maintained. If a user
transfers holdings from another brokerage firm into their Zecco Trading
account, return is calculated based on the value of the holding at the transfer
date.