Interactive Brokers’ Portfolio Builder tool offers a set of predefined strategies


Online trading services provider Interactive Brokers Group, Inc. (NASDAQ:IBKR) is introducing novelties to its Portfolio Builder, a tool that lets traders create research data-driven portfolio strategies, assess their simulated historical performance up to three years back, and then invest funds and submit orders to create the portfolio.

To help traders get started, the broker has added a number of predesigned strategy templates that one can customize as desired. When traders open Portfolio Builder from the New Window dropdown, they will see the Predefined Strategies in the sidecar Library. To get started, they have to click on a strategy, and then click the “Customize” button to make changes.

Current strategy templates include:

  • configure_strategyClosely Held – The pool of equities for this strategy includes stocks that have strong balance sheets (where Total Long Term Debt/Total Shareholder equity for most recent period is under 50) and high insider ownership (over 20%). The universe is sorted according to equally-weighted ratings from all analysts. After sorting, the 10 highest-ranked of these stocks comprise the long portion of the portfolio, and the 10 lowest-ranked comprise the short portion. The investment amount a trader allots to the strategy is allocated using a long/short ratio of 130%/50%, and is set to rebalance monthly.
  • Growth – The universe of equities for this strategy includes stocks that are regarded as “Growth” stocks (this means that their Earnings Per Share change over the last 12 months is greater than 5%) at attractive valuations (price-to-earnings ratio under 12). The universe is sorted based on equally-weighted ratings from all analysts. After sorting, the 10 highest-ranked of these stocks comprise the long portion of the portfolio, and the 10 lowest-ranked comprise the short portion. The investment amount a trader allots to the strategy is allocated using a long/short ratio of 130%/50%, and is set to rebalance monthly.
  • interactivebrokersHigh Yield – The universe of equities for this strategy includes stocks that are regarded as “High Yield” (with a dividend yield over the last 12 months greater than 3%) at attractive valuations (price-to-earnings ratio under 15), and is sorted based on equally-weighted ratings from all analysts. After sorting, the 10 highest-ranked of these stocks comprise the long portion of the portfolio, and the 10 lowest-ranked comprise the short portion. The investment amount traders allot to the strategy is allocated using a long/short ratio of 130%/50%, and is set to rebalance monthly.
  • Overvalued – The universe of equities for this strategy includes stocks that are regarded as “Highly Valued” (with a price-to-earnings ratio greater than 10) with strong performance (a year-to-date change greater than 10%), and is sorted based on equally-weighted ratings from all analysts. After sorting, the 10 highest-ranked of these stocks comprise the long portion of the portfolio, and the 10 lowest-ranked comprise the short portion. The investment amount one allots to the strategy is allocated using a long/short ratio of 130%/50%, and is set to rebalance monthly.

You can find out more about Interactive Brokers’ Portfolio Builder by clicking here.

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Interactive Brokers' Portfolio Builder tool offers a set of predefined strategies

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