Financial Market Data Web Services – Xignite Blog

Our Customer Spotlight series showcases the innovative ways our clients are using Xignite’s Cloud APIs to power their applications.

AlphaClone is a San Francisco-based investment management firm that enables investors to “follow the smart money” with equity strategies that mirror the world’s top hedge funds. In addition to investment management services, AlphaClone also offers a powerful online research platform that investors can use to analyze stocks and to create and backtest their own cloning strategies.

Xignite sat down with Mazin Jadallah, Founder and Chief Executive Officer, to learn more about AlphaClone.

Q: Describe AlphaClone’s service offering.

Mazin Jadallah – AlphaClone is a SEC registered investment adviser and research firm. Our objective is to give investors actionable, cheaper, more liquid access to the investment ideas of the world’s top institutional investors. Our investment research approach, a process called “cloning”, utilizes top hedge fund public disclosures to construct and backtest equity investment strategies.

Q: Very interesting concept. . . does cloning actually work?

Mazin Jadallah – Yes, cloning the investment strategies of top money managers has been independently shown by academic and industry research to generate alpha returns. AlphaClone offers investors several core investment strategies inside managed accounts as well as a web-delivered subscription research service.

AlphaClone enables investors to backtest cloning strategies before investing real money.

Q: How are the managers/funds in the AlphaClone database chosen?

Mazin Jadallah – The funds in the AlphaClone database represent roughly 70% of the total market value disclosed by all funds that file 13F-HR forms. Our fund database generally contains the largest institutional funds and hedge funds as measured by the total market value disclosed on their filings. Most of the managers AlphaClone tracks are fundamentals driven, value-oriented investors. We tend to avoid funds that are owned or operated by prime brokers, those with large ETF businesses, and those with very high turnover.

Q: Describe the technology behind AlphaClone and the advantages of Xignite Cloud APIs?

Mazin Jadallah – AlphaClone uses Xignite to pull in real-time price quotes. Simply put, when we compared Xignite’s cloud-based model with others we found it to be more reliable, cheaper, and perhaps most importantly, simple to implement. It’s hard to imagine making it any easier to incorporate market data in an application. By relying on Xignite for standard market data, it allows us to focus our development resources on areas of our service that provide us with a differentiated advantage.

Q: What are AlphaClone’s plans for the future?

Mazin Jadallah – Besides enhancing the AlphaClone research service with new features and applications, we’re planning to offer investors new ways to access our disclosure-based hedge fund replication strategies.  That includes things like ETFs and mutual funds which allow both individual investors and professional money managers easy, convenient, and cost-effective access to our investment strategies. As a technology-driven asset manager, our focus will always be on leveraging technology in new and useful ways to empower investors.