Here at Vested, we evaluate and write about a lot of companies. We also create thematic portfolios (Vests). To expedite this process, we built an internal tool that helps us carry out our research faster and with more rigor. Now, we are excited to release this tool for everyone!
AlphaScreener is designed to help you:
Let’s say you want to screen for companies that have the top FCF margin that are growing rapidly, but you don’t want to look at small microcaps. You can do the following:
Once you’ve set up the filters, a list of companies are shown:
AlphaScreener provides a powerful backtest function that we call ‘Evaluate’. The Evaluate function is powerful because:
The Evaluate function also gives you a snapshot of how your strategy would have fared under past stress events.
To provide statistical robustness to the backtesting process and remove the element of luck (based on investment starting times), we simulate multiple portfolios at different start dates and holding periods. We aggregate the returns of these hypothetical portfolios, compare them with the performance of the S&P 500 benchmark over the same time period, and compare the two performances. We then count the rate at which the different hypothetical portfolios beat the benchmark. This is called the Base Rates.
In the chart above, the Single Year Return Base Rate is 46%. This implies that the simulated odds of you beating the S&P 500 benchmark, had you invested in the strategy defined in the screener (starting on some random date in the past 20 years and holding for one year), over the same time period is about 46%.
Note: while Base Rates might be useful to construct your investment strategy, please keep in mind that past performance is not an indication of future results. The hypothetical portfolio performance is subject to fluctuation depending on shifting market conditions.
You can also create multiple watchlists if you have multiple strategies that you want to monitor.
AlphaScreener offers two pricing tiers right now:
How to activate your AlphaScreener Plus (if you’re a Vested Premium subscriber):
As always, our aim is to help you make better investing decisions. Over time, we will add more functionalities. Please write to us at firstname.lastname@example.org if you have any feedback and suggestions.