STRATxAI already offers you the simplest way to take control of your personal investments.

 full of pre-built strategies you can select one and create an investment portfolio in a few clicks. Watch the performance in a simulated environment or connect to your broker and invest straight away. The choice is yours.

 you have the pro-tools and framework at your fingertips to go a step further. You can design and build bespoke investment strategies of your choosing.

 This means we are following a rules based approach, grouping ETF's based on one or more criteria from company financial data.

Leaving emotion and subjectivity at the door, your investing strategies are based on facts and backed by data.

Your Xplore ETF's portfolio will include a diverse collection of the top ranked ETF's selected by the investment strategy you create.

Creating an Xplore investing strategy is quick and easy, however we recommend getting familiar with the terms that are used and the factors and rankings that are available to use.

If you take a moment to read through the 

 you will be sure to get the most out of the feature. The guides will hopefully spark your creativity too.

This is where you get to tap into the extraordinary engine of STRATxAI, built with all the functionality of a quantitative hedge fund. STRATxAI uses powerful computing to run your strategy through proprietary statistical and mathematical models using the world's largest dataset of companies' financial data.

Run your Backtest and wait for a moment while STRATxAI uses these algorithms to assess how your strategy would have performed at any period of time within the past 17 years.

Each strategy you create and backtest will produce a tearsheet pdf which summarises your strategy and analysis. It is personalized with your chosen strategy name and chosen user name (or annonymous) so you can distribute or share the strategy and analysis.

Time to enjoy Xploring, the permutations are endless and your creativity will be unleashed.

We recommend that to get the most out of Xplore, you refer to the Glossary and check out the additional Tutorials on Universe, Factors, Ranking and Backtests.  

Factor investing is for the patient investor who is committed to ride the highs and lows for the long term gain. 

At STRATxAI we are committed to empowering investors with the strategies and skills to have that confidence and commitment.

 Markets are variable and portfolio performances can go up or down. That's why at STRATxAI our goal is to enrich an investors self-belief and enhance their ability to stand firm and achieve their long term investing ambitions.

Announcing the release of Xplore ETFs.  Now you can create, design, test and invest in your own ETF strategies. Easy access to pro-level investing. 

0. Announcing the release of Xplore ETFs

An exchange-traded fund (ETF) is a type of investment fund traded on stock exchanges. STRATxAI's Xplore ETF tool offers users a way to research, create and test a strategy that is tailored to their investing objectives.

 is the term used to define the set of assets to research and trade. In this post, we'll dig into the ETF investment universe that is available to users in our new Xplore ETF tool.

There are thousands of publicly listed ETFs in the USA. We selected a subset of these across a broad range of asset classes and ETF providers so that our users can build their own data-driven investing strategies. Users can select ETFs from the following asset classes - Market Indices (S+P 500, Dow Jones, Nasdaq, Russell etc ...), Bonds, Inflation, Commodities. There are also ETFs from commonly known 

 such as Value, Momentum, Quality, Low Volatility and Dividend Yield which are all 

Each of these asset classes have different risk-return characteristics (for example bonds will typically be lower risk than equities but also offer lower returns than equities). Allowing users to access our full universe, enables users to research and create a personalised and unique strategy that suits their investment goals.

Let's take a look at how we construct our top-level universe of ETFs at STRATxAI. In our research process, we applied the following logic in order to get a more manageable universe of ETFs for our users to choose from:

Starting with our entire database of ETFs, we found that there are over 4,000 ETFs traded in the USA.

We then grouped these ETFs by their asset class and examined the following properties of each:

We selected a maximum of 10 ETFs in each asset class that had the best results based on the above metrics. Let's take a look at the exact breakdown.

STRATxAI provides over 60 ETFs across 5 main asset classes, which are Equity indices, bonds, commodities, inflation, and style factor ETFs. Users can select or deselect a subset of these based on their own preferences.

Let's assume we want to create a strategy to trade in and out of various market indices. We can simply open the ETF universe selector, deselect all, and then select the market indices asset class, as shown in the image below.

Think about how you choose your investment universe and use the above data to guide your decision. A more reserved investor might choose a balance between bonds and stocks whereas a more aggressive investor might only include equity-based ETFs.

Start exploring and testing your investment ideas in our safe, enjoyable environment. Have fun constructing your own personalized investment strategies using our tool and please let us know any feedback. 

Choosing an investment universe is the first step in building an investment strategy. In this post, we'll break down the  STRATxAI ETF Universe.

1. Understanding the ETF Universe

In building an ETF strategy, we can refine our selection by adding filters. As part of our 

 offering, we give our users access to a number of metrics that are derived from the underlying ETF market data. These metrics enable users to filter their ETFs by a strict set of rules and to automate their own investment strategy. The inputs are grouped by Volatility, Momentum, and Technical metrics.

Users can apply up to 3 filters (factors) as standard with the core plans Beginner, Established and Xplorer. If you would like to unlock more filters you will need to augment your core plan with Xpert. 

Filters operate very much like a set of criteria that must be obeyed and adhered to and they are an integral part of any investment strategy design. The more filters that are used in the design of your investment strategy, the more complex and constrained the strategy becomes. Apply filters wisely, as too many or overly strict filters could mean the bar is set too high for any ETFs to pass.

All filters chosen by a user must be satisfied - for example, if an ETF satisfies 2 out of 3 filters then it still will not be included in your strategy as it still failed to pass the test on 1 filter.

We split our filter metrics into 3 groups - 

There are multiple metrics within each group.

is a key consideration for investors. Assuming all else is equal, most investors quite naturally would prefer lower volatility for their strategies or portfolios than higher volatility. Volatility metrics are based on the dispersion of returns for a given ETF. Volatility is a measure of how variable the returns are and how far from the average value they are over a historical period. It is technically  measured by calculating the standard deviation of the returns for the given historical period. This result is then annualised into a yearly number by multiplying it by the square root of 252, the number of trading days in a year.

 is calculated by measuring the standard deviation of returns for the previous 3 months of trading.

 is calculated by measuring the standard deviation of returns for the previous 6 months of trading.

 metrics are popular among investors who want a structured and longer term approach to investing. Stocks and ETFs with strong upward trends will have good momentum and its easier to go with the crowd than against. Momentum is calculated by measuring the price change in an ETF across a specifed historical period. Stocks with the highest momentum are trending the most.

 is calculated by measuring the change in today's ETF price versus the price from 3 months ago. For example, if the SPY today is priced at 440 and the SPY 3 months ago was 400, then the momentum 3-month would be 10% based on the calculation (440-400)/400. You can then calculate the momentum score across all ETFs and choose the ones with the highest return, indicating the highest momentum.

Investors use technical metrics or indicators which examine the available market data and provide them with buy or sell signals. There are numerous technical metrics that are available to users of the Xplore ETF tool, these indicators can be used in filters and sorts to refine the universe down to a smaller subset of ETFs that may outperform and do better.

Moving Average Convergence / Divergence (MACD)

 is a technical metric provided in STRATxAI Xplore ETF tool. MACD helps investors to determine the trend direction and the momentum within a trend. 

Other technical metrics include Relative Strength Index (RSI), Exponential Moving Average (EMA), and Simple Moving Average (SMA).

STRATxAI offers a simple way to leverage these filters in your investment strategy, Let's take a look at how we might employ some filters to create a reversion entry point (for example, waiting for a small reversal or pullback in an overall trend for your entry) into our strategy.

The above represents a simple strategy utilising 3 filters. The filters are as follows:

RSI is in the best 50% (less than the 50% percentile)

Finally, we rank the remaining ETFs by their lowest RSI. We use the default strategy parameters with a portfolio size of 3. The results are impressive and this incredibly simple strategy outperforms the S&P 500 on a risk-adjusted basis (Sharpe ratio). It also has a nice diversification benefit as the correlation (beta) to the S+P is only 35%. 

We can see in the cumulative return chart above, that there were periods where the equity went horizontally across, which might suggest that there were no ETFs passing the strategy filters at this time. We can confirm this in the backtest tearsheet.

It is visible from this chart that there were three times when the size of the universe fell to 0, which indicates that no ETFs passed the filters during these 3 periods.

 tool is designed to be very dynamic and robust enough to investigate all sorts of investment strategy design decisions. Please let us know any feedback and enjoy building your own strategies!

Filters allow you to customise your investment strategy to your own specific objectives. We will explain what filters we provide and how to use them.

2. What are the Xplore ETF filters

In the previous post, we discussed the Xplore ETF filters and how they can be leveraged to customise a strategy. 

In this post, we'll dig into the sorting methods provided by the Xplore tool.

A sort provides a way to order the ETFs by a particular metric.

Users can sort by up to 3 metrics at once. 

Sorting is applied across each asset class that is selected in the universe parameter:

Stock Indices, Bonds, Inflation, Commodities, Value, Quality, Momentum, Dividend Yield, and Low Volatility

The top 1 ETF from each selected asset class is selected.

The portfolio size parameter indicates how many ETFs to use.

Note: A sort is only applied after the filtering has occurred. 

Filtering based on metrics reduces the universe of ETFs down to only those that pass every filter. This means that on a given day your investment strategy will have a list of the ETFs that have passed all the filter criteria.

 so you can choose what ETFs go into your strategy. For example, choosing portfolio size of 3 means your strategy contains the top 3 ETFs, after the 

sort has been completed on your filtered ETFs 

When using more than one sort, we do not incorporate any 

Each factor generates its own individual ranking score for each ETF. We then calculate the final ranking-score for an ETF by summing up all of the individual rankings for that ETF. The sort is then applied to this final ETF ranking-score. These sort-scores are compared against all other ETFs in the asset class and the lowest score (i.e the top ranked, 1st position) from each selected asset class is taken.

In the below example, each ETF is sorted against all other ETFs in its asset class. In this case, we've chosen to build a portfolio based on 4 ETFs from the asset classes 

. Next, we calculate the momentum 3-month and volatility 3-month of each ETF in each asset class. We then rank these ETFs and give each one a score for each metric. Finally, we sum these scores and select the ETF from each asset class with the smallest final sort, which represents the top/best ranked. In the example, our portfolio will contain the ETFs, 

Momentum and volatility are popular sort metrics since they represent some of the most natural and important concepts in terms of investing. Sorting your final list would be a prudent thing to do, in order to ensure for example that the least volatile or the highest momentum ETFs are in your strategy, if that is what you want to focus on. 

With our Xplore ETF tool, you can start to build your knowledge and experience and start to experiment. Let's run through an example of using multiple sorts to create a strategy.

In the above example, we add 1 filter to ensure the RSI is in the bottom or best 40% (so as not to focus on over-bought ETFs)  and we add 3 sort metrics:

The triple momentum strategy performs well, beating the benchmark on both the cumulative return and on a risk-adjusted basis.

 tool is designed to be very dynamic and robust enough to investigate all sorts of investment strategy design decisions. Please let us know any feedback and enjoy building your own strategies! 

We explain how to use sorts when designing your ETF investment strategy with Xplore

3. How to use sorts in Xplore ETF

Choosing a portfolio size is an important part of building a strategy. Within the Xplore ETF tool,  users can create a portfolio with between 1-5 ETFs. ETFs are themselves diversified and so it is not necessary to choose a large number of assets to create a performant and diversified portfolio with this tool.

Let's investigate this idea with an example. We'll build a concentrated ETF strategy using the Xplore ETF tool:

Filter to just the best 10% of ETFs by RSI.

Sort by a combined 3, 6, and 12-month momentum.

The result of this strategy is outstanding, returning almost 16% per year since 2010 with a Sharpe ratio of 0.85.

Let's test the same strategy with a larger portfolio size of 5, leaving all else equal.

As expected, setting the portfolio size to 5 reduced the volatility, however, the risk-return performance of both is quite similar.

We explain how to choose a portfolio size in the Xplore ETF tool.

4. Choosing a portfolio size in Xplore ETF

European and United Kingdom-based retail investors can only invest in ETFs that conform to specific EU UCITS regulations. This means that US-domiciled ETFs are not available for EU and UK investors to trade via European brokers, as they do not meet the regulatory requirements. To address the difference in regulatory environments, many ETF providers offer EU-domiciled versions of their US-based ETFs.

The EU passed specific MiFiD II regulations in 2014 in order to raise standards and increase transparency in the financial markets. Some of the requirements of this bill, to protect retail investors, ensure that all ETFs much have the following documentation:

Frequent reporting for additional transparency

The Key Investor Information Document (KIID) for better disclosure, and to allow investors to more easily compare products.

These came into strict force from 2018 onwards in various forms. Since many US-ETFs cannot fulfil these requirements, US ETFs are not eligible for EU+UK investors to trade through European brokers. The additional regulatory overhead means that some of the providers of the EU-based versions of the US ETFs generally have higher fees than their US equivalent.

You can fully Xplore ETFs using the tool, and if you are on the 

 plan you can link your saved ETF strategy to a 

 augmentation who is domiciled in the EU or UK you will not be able to link a live portfolio and automated the trading of US-ETFs through your broker. Please note that this is EU law and your broker is obligated to prevent these trades.

It 

 possible to source equivalent EU-ETFs which have been created with the purpose of copying the US-ETF to get around this issue. In this scenario an STRATxAI user can 

 for guided trading, replacing the US ETFs in your strategy with the EU ETFs equivalent in your broker.


If you do this bear in mind the following:

The backtests and analysis will be based on the US-ETFs and results may differ with EU equivalents.

Your STRATxAI portfolio manager will always retain the US-ETFs, but you can keep track of the buys and sells you have executed in order to benefit from rebalancing advice.

Explain why trading US-domiciles ETFs is not available to European and UK broker users.

My European broker can't trade US-ETFs

Why is this?

Sign up to unlock

Announcing the release of Xplore ETFs

Understanding the ETF Universe

What are the Xplore ETF filters

How to use sorts in Xplore ETF

Choosing a portfolio size in Xplore ETF

My European broker can't trade US-ETFs