[HN Gopher] Launch HN: Enombic (YC S20) - Create your own stock ...
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Launch HN: Enombic (YC S20) - Create your own stock indexes
Hey HN! We're Keri & Chris, the co-founders of Enombic
(https://enombic.com/), a tool for designing your own custom stock
indexes, investing in them, and sharing them with your friends. By
index we mean a weighted collection of publicly tradable
securities. With our product, you could, for example, remix the
ARK ETFs (https://enombic.com/13F/ARKK). Or, you could apply
portfolio theory to the most popular WSB symbols
(https://enombic.com/mandelbrot/wsb-MPT). Also, everything is
nestable, so you can put all of the above together
(https://enombic.com/aml/diversified). Then, it's one click to
invest. The investments can be one-off, or on a recurring schedule.
We started Enombic because we're personally really fascinated by
financial markets. Driven by curiosity, we wanted to hack on
different investment ideas. We couldn't find good tools for
portfolio and risk management, so we decided to make some. We
started doing this work with Python scripts, and sharing it with
our friends in group chats. Then we'd wrestle with existing
products to implement the strategies we had developed. Eventually,
we built a proper web app to make this easy. A lot of our UI / UX
is inspired by Github. For example, we built version control and
advanced permissioning into the indexes. The ubiquity of zero-
commission and fractional-share trading means that diversification
and customization is easier than ever. This allows you to think
about investing into a curated portfolio, rather than picking
stocks for individual companies or subscribing to popular ETFs.
We've had users do things like build their own robo-advisor,
reweight SPY to fit their existing portfolio, and construct sector-
specific indexes in their area of expertise (e.g. gaming,
enterprise SaaS, and e-commerce, to name a few). Enombic is free,
but we're rolling out a series of subscription-based premium
features. We would love your feedback on what we've built so far.
Happy to answer any questions you may have. Thank you for your
time!
Author : kmckiern
Score : 121 points
Date : 2021-02-25 18:01 UTC (4 hours ago)
| cargo8 wrote:
| This is a really really powerful concept - are you hiring?
| aliquotchris wrote:
| Thanks cargo8! We are. :) Looking in particular for a strong
| backend engineer. Tech stack is python, aiohttp, redis,
| postgres (& timescaledb), k8s, terraform, aws (react, nextjs,
| swr on the frontend).
|
| Know anyone?
| wheybags wrote:
| Oh man, this is actually exactly something I want. I want to
| invest in the s&p 500, like an index etf, but I want to filter
| out companies which I don't agree with ethically. I also want to
| look at my custom index's performance historically so I can see
| how well it tracks the overall market.
|
| It is extremely hard to actually do this. There's a plethora of
| hurdles in the way - you need to get data (I bought some
| historical s&p 500 data, seemed to be the only way), and then you
| need to figure out what to do with it too. When you look at a
| graph on the index, what is that based on? Do they rebalance
| every day? Monthly? Who knows? I was never able to reconstruct an
| s&p 500 graph from source data myself as a baseline.
|
| I will definitely be giving this a try.
|
| EDIT: signed up for the waitlist!
|
| Also, a question: Can you use this without some sort of linked
| broker account? IE, you tell it what you've got, and it spits out
| instructions that you execute manually? I ask because I'm in
| Europe, and only the big American brokers ever seem to get proper
| integrations with anything.
| mrhichem wrote:
| Trading212 (uk based) has already this. They call this investing
| pies. It is already a hit in europe
| aliquotchris wrote:
| Thanks for mentioning them! Yes some folks have pointed us to
| Trading212.
| [deleted]
| hemloc_io wrote:
| I've actually been working on a small side project related to
| open source finance, so this is super cool to see and I'm very
| excited to use it! This seems like a great tool for use in
| trading communities etc.
|
| I think that using github-esque features feels like a good in-
| between from the crazy gamification of Robinhood vs old and sad
| UX you see at most old brokers.
|
| Are you guys planning on adding options at any point and time, or
| the ability make more advanced strategies than a basket of
| stocks?
|
| EDIT: You lose the share link as soon as you click away from the
| waitlist page, might wanna send an email with it after ppl sign
| up for the waitlist :)
| aliquotchris wrote:
| Thanks! Couldn't agree more. On the strategies front, we have
| some exciting ideas in the works. Github is one of our favorite
| products, tons to draw on for more advanced strategy
| development. Glad you appreciate the analogy.
|
| Great to hear you've been working on some things in open source
| finance. We love getting feedback from folks who are building
| in the space. Looking forward to getting you on the product.
| monkeydust wrote:
| Interesting. Reminded me of a piece in the FT I read recently
| around Direct Indexing. https://on.ft.com/3rDhUd5
|
| Would love to try it. Have signed up on waitlist.
| kmckiern wrote:
| Just opened this up in a tab. Looking forward to reading it
| later. Thanks!
| dsanchez97 wrote:
| I signed up for the waitlist as this looks like a promising
| platform. Just curious, does this connect directly to a brokerage
| site (my own or another 3rd party) to make the trades?
| w1 wrote:
| Have you considered allowing the creators of a popular index to
| receive a small fee, similar to current ETF commission
| structures?
|
| Y'all seem like you're in a great position to create a vibrant
| community for the next generation of investors, and giving
| financial influencers a return could help bring people to your
| platform.
| kmckiern wrote:
| Indeed! We've been thinking through this model, but there's
| still a bit more to figure out. Our primary goal is to empower
| the prosumer retail investor.
| cgb223 wrote:
| I can tell you the difference between me being a user and not
| being a user is this exact feature.
|
| I can buy stocks on my own in different quantities to make my
| own "ETF" (granted not at fractional share prices)
|
| But if I could bundle it and make a small commission for it,
| you'd have my business for the rest of my life
|
| Also, what an awesome incentive that would be for me to share
| your product around with others who would invest in it! I'd
| literally be getting paid to do it!
| mdorazio wrote:
| Same thought from me - along the lines of recreating the
| "Becky" index from WSB [1] as an actual ETF that people could
| invest in for ~0.1% fees.
|
| [1]
| https://www.reddit.com/r/wallstreetbets/comments/b6hvdf/i_in...
| endisneigh wrote:
| I was thinking the same thing, but couldn't you just look at a
| popular index and replicate it for free?
| kmckiern wrote:
| Some folks may be too lazy to do that, unless you could
| automatically update the copy.
|
| In addition to this, we actually have advanced permissioning.
| So folks can have private indexes. However, we still need to
| work through what it would mean to invest in an index where
| you could not see the composition. Not sure on that front
| yet.
| takeiteasyy wrote:
| This is a fun idea, it would let anyone be a hedge fund
| manager. List the managers own money invested, other's money
| invested, commision rate, associated social media accounts,
| "risk"/diversification metrics, proportional and absolute
| gains/losses since inception (for what it's worth). Personally
| I would still keep the majority of my investments in an index
| fund, but for a particular kind of person I can see the social
| aspect is very engaging.
| TuringNYC wrote:
| >>We would love your feedback on what we've built so far.
|
| Id love to provide feedback, but it seems i'm waitlisted when I
| sign up. Is there a HN-skip-the-queue?
| kmckiern wrote:
| Awesome! Definitely, didn't call this out explicitly in our
| post but anyone who joins the waitlist today will be expedited.
| sheep-a wrote:
| Cool just signed up and same issue, unauthorized when I try
| log in
| aliquotchris wrote:
| Hey sheep-a, thanks for checking us out! If you submit to
| join the waitlist, we'll prioritize you in the queue.
| Attempting to sign up or login in at this time will just
| route you back to the landing page. It's not a very clear
| UX at the moment, thanks for reporting it.
| carbotaniuman wrote:
| I love it! Is it possible for you to add other markets, like
| Forex or hedging foreign stocks? Putting stuff that you would
| usually have to write yourself is very welcome, but I think
| there's a lot more that could be done here.
| kmckiern wrote:
| Awesome, thank you! We love diversification and to do that
| well, it's great to include a range of different asset classes
| / markets. For the next couple months though, while we refine
| our UX, we'll be sticking to stocks and ETFs. That being said,
| we have an ambitious long term road map.
| mehulagrawal wrote:
| Smallcase in India has been doing something similar. You can
| create your own "smallcase" or use any of the pre defined ones.
| Ntrails wrote:
| Rebranding stock picking as "index construction" is really quite
| disingenuous.
|
| I guess you're encouraging somewhat _diversified_ stock picking,
| but honestly I 'm dubious this is a 'good' idea for expected
| outcomes.
| YuriNiyazov wrote:
| If you read Matt Levine's money stuff: a new favorite thing
| amongst financial products (currently only available to hedge
| funds, but on its way to becoming retail) is the following:
|
| The default investment should be "the diversified market
| portfolio", e.g. S&P500. Then, if you have opinions (especially
| negative ones) about companies (e.g. if you are a perennial
| Tesla bear), you want to invest against those companies. A
| regular way to do that is to short. Shorting is hard and
| expensive for retail. A _better_ way to do it is to buy
| everything in the S &P500 _except_ TSLA. The way to do this is
| to construct a custom index that is identical to S &P500,
| except that TSLA is removed and all other weights are adjusted
| accordingly.
| kmckiern wrote:
| A big fan of Matt Levine's thoughts on indexing and how vast
| amounts of passive investing are impacting the markets.
| kmckiern wrote:
| Thanks for your feedback!
|
| If you want to stick to more traditional indexing approaches,
| that's supported. For example, one user has stayed very close
| to VTI, but made some modifications to customize VTI to her
| goals and existing portfolio (https://enombic.com/abby/VTI-15).
|
| We also have some users who want an easier way to automate
| their investments into a classic Vanguard basket
| (https://enombic.com/aml/lazy).
|
| Everything on the app is DIY. So, alternatively, if you want to
| be more active, and test a thesis you may have, that's
| supported as well.
| bww wrote:
| I think OP's concern (which I don't necessarily share, but
| which I think is valid) is that indexes are generally
| considered to be relatively safe investments but if you're
| personally choosing the securities in the "index" you're
| essentially just choosing individual stocks, which is
| generally considered to be a bad idea for most people.
|
| So it could be argued that you're essentially presenting
| choosing individual stocks, a highly risky investment
| strategy, as index funds, a different, much more conservative
| kind of investment.
| doggosphere wrote:
| Who cares? We put warning labels on cigarettes, we even tax
| them to offset the social cost of the badness of them. But
| we still have the freedom to consume them if we so choose.
|
| Risky investments are the same. We don't need overbearing
| protectionist policies other than to ensure people aren't
| being outright cheated/scammed.
|
| If the kids want to YOLO GME, who are we to say otherwise.
| adv0r wrote:
| I want to be able to charge a fee on top of my indexes before
| making "subscribable" by others. That'd attract a shitload of
| users ;)
|
| EDIT1: Also: are you familiar with your competitors on the crypto
| side of things? Iconomi, to name one.
|
| EDIT2: Is this available to non-US users? That'd be huge, as we
| are not able to access ARK directly , to name one
| ZeroCool2u wrote:
| Really cool idea folks! Just signed up for the wait list.
|
| Knee jerk feedback:
|
| 1. Dark mode & mobile/desktop apps on the roadmap? :)
|
| 2. It would be really cool to see some _basic_ social features.
| Maybe these exist already when you 're logged in? I have a few
| Signal chats with friends that are just full of screenshots of
| our IBKR apps etc and it would be cool to be able to
| collaborate/communicate privately with a small group about the
| construction of one of these ETF's.
|
| 3. I had a lot of the same questions about taxes/rebalancing,
| etc. but I see a lot of people have already asked about that as
| well, so I'll look through your comments for more info.
|
| 4. Where are you based and what's your tech stack like?
|
| Congrats on the launch!
| aliquotchris wrote:
| Hey! Great questions/feedback:
|
| 1. Would love both, but no specific timeline yet.
|
| 2. Agreed, re: social. We have some preliminary social
| features, but keen on building out more. Most of our users have
| group chats with friends like you've described (as do we). We
| want to bring the right parts of that experience in-product.
|
| 3. Thanks, yeah it's an exciting part of the product we look
| forward to building more advanced features for.
|
| 4. We're based in the bay area, our tech stack is react,
| nextjs, swr, python, aiohttp, redis, postgres (& timescaledb),
| k8s, terraform, aws.
|
| Looking forward to getting you signed up!
| donnythecroc wrote:
| This is great idea. I've signed up to wait list. Interested
| to know period to launch/full access?
| aliquotchris wrote:
| Thanks! Appreciate you checking us out. Getting a lot of
| engagement, we'll be bringing folks in as quickly as we can
| handle.
| mcgin wrote:
| Nice idea, having worked in a similar problem space for a number
| of years, I have some questions.
|
| - How are you managing rebalancing, what might trigger a
| rebalance and how do you manage the tax implications of that?
|
| - With a rebalance/deposit/withdrawal are you always a taker in
| the market?
|
| - What's the custody side of this look like? i.e where do the
| stocks sit, are they in my brokerage account or are you
| custodian.
|
| - How are you accounting for dividends in the portfolios do they
| get reinvested/included in returns?
|
| - Can you manage all types of corporate action like splits,
| mergers, delisting, halts etc.?
| divyahansg wrote:
| Awesome, would love to use this. How are you thinking about
| rebalancing and its tax implications?
| kmckiern wrote:
| Great to hear! Thanks!
|
| We are exploring a few different models for rebalancing. One is
| to rebalance with new contributions only, another would be
| rebalancing with each investing (through both buying and
| selling), and the third would be a more tax-aware rebalancing
| where it only happens quarterly or annually (perhaps after
| you've locked in long term capital gains).
|
| Since we lean prosumer / DIY platform, we feel like perhaps we
| should support a few models. Curious which you'd prefer?
| endisneigh wrote:
| If and when you become huge one interesting thing you might
| consider (if legal) is to become very liquid and actually allow
| users to trade stocks directly without selling to minimize tax.
|
| For example, if AMC is $1 and GME is $1, instead of buying the
| stocks directly we pay you $1.001 for both and you basically hold
| the stock for us. If we sell you sell the stock on our behalf and
| give us the cash and handle the tax forms.
|
| However, if we wanted more GME and GME's price fell in half to
| $0.50 and AMC's price doubled, the new prices are GME: $0.50 and
| AMC: $2. It would be awesome if we could "trade" our AMC for 4
| more GME without having to pay the gains on the $1 we earned on
| AMC.
|
| Obviously you can only delay so much under this scheme, but I'd
| be willing to pay a slight commission if you could facilitate a
| scheme legally to minimize the tax burden of trading.
|
| Like Robinhood making commission-free trades mainstream, if you
| can popularize this that would be good - sometimes if you're
| holding a very popular bubble stock you don't necessary want to
| cash out for _cash_ and want to directly trade it for another
| stock without selling. Unfortunately what I 'm describing would
| require crazy volume to be worth the implementation effort, but
| it's worth thinking about!
| dmurray wrote:
| I think this is not illegal per se, but it's an equity
| derivative product which the SEC would not approve, since they
| don't approve CFDs which go a lot less far than this.
| kmckiern wrote:
| This is super interesting.
|
| Reminds me of how a lot of centralized crypto exchanges work
| off-chain. Buy / sell is still taxable though.
|
| That being said, tax implications are really important so we're
| thinking through what's best for our users with every feature
| we build.
| nrmitchi wrote:
| This sounds _sort of_ like an exchange fund, which are
| typically used to people who are extremely concentrated in a
| single stock /position and want some diversification without
| selling.
| odobo wrote:
| This is a great idea. A few months back I was telling a friend
| that I would love to make an index based on Senator's stock picks
| (since it's all public info), but I don't have the first clue on
| making an ETF/index. Are there any plans to reward people who
| create popular indexes? As I understand, currently index funds &
| ETFs can make a lot of money off fees
| aliquotchris wrote:
| Thanks odobo! We're excited to help folks work together to
| level up their diversification strategy for exactly the reasons
| you shared.
|
| Re: popular indexes and creator incentives, we have lots of
| ideas in the works. Glad you're interested in it!
| atlasunshrugged wrote:
| I love this idea and really dug Motif Investing back in the day
| (although charging for trades made it hard when weighing that vs.
| Robinhood)
| aliquotchris wrote:
| Thanks atlasunshrugged! Yeah we were recently pointed to Motif
| by some of our early users. Have loved seeing their enthusiasm
| for it, hoping we can provide a great experience as well.
| ublaze wrote:
| It was really sad to see Motif shut down. That service was
| awesome. It's made me wary of trying new services for this,
| since their shutdown led to a bunch of shuttling around of
| portfolios from different, much worse services (Folio,
| finally Interactive Brokers).
| andylash wrote:
| RIA's offer this kind of custom constructed direct indexing as a
| value add, so there's clearly a market amongst the broader non-
| active-trader types.
|
| I bet you could lean into the huge and growing ESG (
| Environmental, Social, and Governance) sector, because people
| have very different opinions about what "good" and "bad" are. For
| example most ESG funds are heavily weighted to social media, but
| maybe you think oil and social media are both bad? There isn't an
| easy to access product for that.
| kmckiern wrote:
| Absolutely. Direct indexing has some unique benefits. Of course
| it's a bit more complex to track everything, but that's where
| we come in.
|
| We've had users get quite excited about ESG indexes. Especially
| with "forking" more traditional indexes and removing companies
| they're not morally aligned with.
| corry wrote:
| Love this idea. For the folks in the comments so far who are
| uncomfortable with the combination of "index" and "picking
| stocks", I think that's unfair. This is obviously a service for
| relatively sophisticated folks who (1) want ETFs that don't
| exist, or (2) want to make minor changes to existing ETFs, or (3)
| don't want to deal with the ETF fees/overheads for whatever
| reason (although presumably Enombic will have fees too).
|
| Here's an example that came to mind:
|
| If you were convinced psychedelic medicine is going to be huge as
| a sector, but also feel it's too early to pick winners/losers
| (and you dislike the expense overhead of PSYK) - great, make your
| own ETF. You still have sector risk but not 'stock picking risk'.
|
| FYI - this is a great real example, but assumes Enomics can
| handle the Neo exchange (in Canada, since that's where most of
| the psych stocks are these days). Like, someone should post this
| over at /r/shroomstocks for real. :)
| gwd wrote:
| > (2) want to make minor changes to existing ETFs
|
| This is exactly the use case I've wanted for a long time -- I'd
| much rather just park most of my money in an S&P 500 index
| fund. But there are some companies there whose business
| practices I just find scummy; and if I own stocks in that fund,
| those companies will be doing those scummy things in my name
| and for my benefit. I realize there are "ethical" index funds,
| but somehow their senses of ethics and mine don't match 100%.
| I'd very much like to be able to say, "The S&P 500, but not X Y
| or Z."
|
| I'll definitely be looking into this.
| kmckiern wrote:
| Thanks corry!
|
| You nailed it. We are building for "prosumer" retail investors
| who have baseline proficiency around these ideas. Over time
| we'd want to make sure our platform is more generally
| accessible, wherein we would build out more in-app education.
|
| Indeed, higher-risk sector-based indexing is a use case we're
| seeing a lot on the app (e.g. https://enombic.com/jake/crypto).
| Then, we're seeing folks couple decorrelated sector-based
| indexes into aggregate indexes (e.g.
| https://enombic.com/chris/main, this one is actually 50%
| Vanguard ETFs).
|
| No Neo exchange yet, sorry. Do you know if it's possible to get
| exposure to psychedelic medicine in the US?
| dsr_ wrote:
| Your privacy policy is either borrowed from a previous iteration
| of the company (supply chain logistics?) or from a sample
| somewhere. You should fix that.
|
| I work for a not-quite-YC* company adjacent to yours; I see some
| plausible symbiosis. I have an email address in my profile here
| -- reach out?
|
| * The photo at www.paulgraham.com/yctable.html shows two founders
| of my company talking to YC Summer 2005.
| nirushiv wrote:
| This looks awesome! Congrats on the launch. For a financial
| product like this, what does your tech stack look like? Do you
| use off the shelf databases to store account balances for
| example, or is there specialized tech for that? or does the
| brokerage handle that?
|
| How do you approach security? I'm guessing a lot of work went
| into it, but some details would be great for a curious customer
| like me :)
| aliquotchris wrote:
| Hey nirushiv, thanks for taking a look! Great questions, we
| take security and data seriously. All communication is
| encrypted end to end (of course), but we also ensure data at
| rest is encrypted, using KMS & RDS.
|
| Brokerages handle your account based information, but we
| generate additional data around your investments to help give
| you a richer picture into your portfolio performance.
|
| One particularly fun part of our data structures is the indexes
| themselves, which are all nest-able and fully versioned,
| creating a rich graph of historical performance data. Looking
| forward to exposing more features around this in the future.
|
| Our tech stack is react, nextjs, swr, python, aiohttp, redis,
| postgres (& timescaledb), k8s, terraform, aws.
| kmckiern wrote:
| timescaledb <3
| impostervt wrote:
| What's the source of the name?
| kmckiern wrote:
| combine -> enombic
| endisneigh wrote:
| Oh god it'll be amazing once /r/wallstreetbets gets their hands
| on this. The $WLSTRBETS custom ticker will definitely go to the
| moon. I would suggest maybe putting more info on the landing
| page.
|
| Are you a brokerage or is this something that can hook into your
| existing brokerage? The latter would be awesome.
| aliquotchris wrote:
| Thanks endisneigh! Yes we're looking forward to getting more
| content on the landing page soon. For now, all the links above
| are public pages, so you can explore those to see some of our
| features.
|
| We are currently the latter; we're powered by existing
| brokerages, but are working to become our own.
| alex-wallish wrote:
| What brokerages do currently work with?
| alexeldeib wrote:
| Would you consider expanding into e.g. derivatives?
|
| I was thinking a lot about this idea lately. An
| API/programmatic-first brokerage/trading platform. Let people
| design automated trading strategies on top of solid APIs, and
| use your site for visualization/planning. OptionAlpha seems
| to get into this but not nearly far enough. Latency wouldn't
| be critical either for retail investing.
|
| I don't really understand why it doesn't exist. IB is
| probably the closest well known broker. There are some other
| smaller ones with better APIs.
| aliquotchris wrote:
| Hey alexeldeib, thanks for checking us out. We want to get
| the UX right first with our existing feature set, and then
| consider expanding to more advanced things such as
| derivatives or options. We'll keep your request in mind!
|
| Also agree, re: API tooling. We'd love to find folks who
| want to write code against our API. Is that something you'd
| use?
| alexeldeib wrote:
| > API tooling. We'd love to find folks who want to write
| code against our API. Is that something you'd use?
|
| That's definitely what I'm thinking. There are so many
| tools out there to visualize strategies, profit/loss,
| scanners for various properties like IV, open interest,
| volume, etc in the case of options. But very few
| platforms go to the next level and provide _good_ APIs to
| manipulate. It would be extremely impressive to offer
| both data and trade execution via modern APIs. I 've
| wondered if that's an untapped market, or else why
| someone hasn't jumped on it :)
| mkrishnan wrote:
| Cool idea, it it works. important thing is re-balancing should
| not be a taxable event.
| jagan120 wrote:
| Few questions from my side:
|
| - Is it possible to make indexes of other country equivalents on
| this platform? Even if those stocks arent listed on US Markets.
|
| - How are the taxes going to work in general if the indexes are
| actively managed?
|
| - Are the 8949s and 1099s autogenerated for individual users by
| enombic?
|
| Thanks!
| [deleted]
| forgotmysn wrote:
| is it possible for other investors to participate or subscribe to
| your ETF, the way Angellist does for angel investments?
| aliquotchris wrote:
| Thanks for checking us out! Any user can invest in any other
| user's index, as long as it's public.
| monkeydust wrote:
| Having recently put together a mostly ETF portfolio for someone I
| realized that unintentionally you could end building a large
| exposure to one stock, in my case... No surprise... it was TSLA.
| I found a tool on morning star which allowed me to do this
| analysis but would be good to have this in your app.
| kmckiern wrote:
| Definitely! We are really interested in portfolio analytics.
| This would surface naturally with our app.
| smalter wrote:
| great timing, doji just launched today too
| https://twitter.com/ianmendiola/status/1364974427419598851
|
| trydoji.com
| aliquotchris wrote:
| Thanks for the link smalter, we'll definitely check them out.
| vitovito wrote:
| Being able to the see the components is a great start, but one of
| the things we've been unable to easily do in our own trackers is
| dynamically remove particular stocks to see how much someone's
| portfolio growth is relying on e.g. TSLA. Any plans for that?
| kmckiern wrote:
| We're really interested in making the index editing dynamic.
| E.g. as you modify the weights, all metrics update in real
| time.
|
| Additionally, we're interested in side-by-side comparisons as
| well, similar to a code "diff" on Github. So you can see how
| your modifications changed performance relative to a past
| version.
|
| We'd love to get your feedback on this. If you have more
| thoughts, feel free to reach us at hello [at] enombic [dot] com
| riffraff wrote:
| love the idea, but will this be open to people outside the US?
| kmckiern wrote:
| Thank you! Not at the moment but we hope eventually.
| baron816 wrote:
| I've asked on HN before why this exact thing didn't exist. Now it
| does. Cool to see.
| kmckiern wrote:
| Very glad to hear that. We literally built this because we
| wanted it to exist!
| narrationbox wrote:
| Some ETFs also allow easy investment in stocks of foreign
| countries without requiring additional brokerages on behalf of
| the end user. I presume this does not offer that functionality?
| frenchie4111 wrote:
| Does it/are there plans to support options?
| kmckiern wrote:
| Thanks for asking. Not in the next few months. We really want
| to nail the UI/UX around stocks and ETFs before we expand our
| footprint.
| thegreatpeter wrote:
| I have had so much fun messing around with enombic the last
| couple of months. The founders are super responsive, friendly and
| obviously smart!
|
| I look forward to watching enombic grow! Good luck team!
| kmckiern wrote:
| Thanks thegreatpeter!
| aliquotchris wrote:
| Thanks Peter! It's been terrific having you on and getting your
| feedback.
| CapriciousCptl wrote:
| How is this for tax efficiency? Is rebalancing a taxable event?
| Or can you rebalance without selling by just redirecting new
| contributions to the underrepresented issues? Over time a buy-
| and-hold strategy with etfs gives a large compounding bonus since
| taxes are deferred.
| kmckiern wrote:
| We're exploring several rebalancing models at the moment
| (calendar rebalancing, constant proportion rebalancing, as well
| as only rebalancing with new contributions), and trying to
| understand which folks are more interested in. Which would you
| be most interested in?
|
| Definitely want to mitigate tax burden. Additionally, the
| direct indexing model does allow for more flexibility around
| loss-harvesting.
| mkrishnan wrote:
| so re-balancing IS a taxable event right?
| eximius wrote:
| It CAN be. It depends how you rebalance.
|
| If your target is 50/50 and one stock goes up, you can
| either sell that stock or buy more of the other one. Only
| one of those models is a taxable event.
| CapriciousCptl wrote:
| Only rebalancing by using new contributions would be
| preferred. My use case is re-creating the s and p 500
| exclusive of some issues and with regular contributions for
| retirement.
| aliquotchris wrote:
| Nice, glad to hear it. We lean new contributions as well.
| truted2 wrote:
| Looking at the dev tools, auth.enombic.com/authorize is being
| pinged about once a second. Seems like an Oauth request gone
| awry?
| aliquotchris wrote:
| good catch truted2, will fix shortly :)
| CrackpotGonzo wrote:
| Love this! Do updates to the ETF push out to anyone invested, or
| do individuals have to rebalance if weighting changes happen to
| the original?
| kmckiern wrote:
| Thank you!
|
| Right now each index will track the latest version by default
| but we're thinking through something similar to version pinning
| with software dependencies. E.g., something like jdoe-
| index-0==v2
| abalaji wrote:
| I tried signing up but have been hitting an unauthorized error
| and am being bounced out. Is this currently only a landing page
| or is it something we can try?
| sgpl wrote:
| Wow, this is really cool. Will definitely give this a spin. Good
| luck to you guys!
| aliquotchris wrote:
| Thanks sgpl! Looking forward to getting you on the product.
| SilasX wrote:
| Would it be able to reproduce strategies that involve options?
|
| I recently learned of the SWAN ETF, which captures (or attempts
| to) most of the S&P's return with significantly less volatility.
| It holds mostly Treasurys, plus options that are in the money if
| the S&P gains a certain percentage[1].
|
| https://www.amplifyetfs.com/swan-holdings.html
|
| They had to create the "S-Network BlackSwan Core Total Return
| Index" for it.
|
| [1] They look to buy a year out every six months, but I can't
| tell for sure; it currently has SPY210618C00265000 (call at S&P =
| 2650 in June) and SPY 211217C00324000 (call at S&P = 3240 in
| December)
| kmckiern wrote:
| No options at the moment. We'd be excited to support them down
| the road though.
|
| SWAN ETF is super interesting. Wonder if there is a "long"
| analog. E.g. comparable motivation and performance.
| SilasX wrote:
| What do you mean by a long analog? SWAN is long the S&P, it
| just softens the downside.
| crazygringo wrote:
| This is fascinating. Since you don't have any info at all on the
| site (at least not without signing up), a few questions:
|
| - Since it's not just for designing the indexes but actually
| investing them... how? Do you link to a Robin Hood API or
| something? What trading platforms do you integrate with?
|
| - Obviously a huge part of an index is maintaining desired
| weightings/criteria, which involves buying and selling shares in
| order to preserve them. How often do you perform this
| rebalancing? Daily? Monthly? The very moment a certain "max"
| threshold is crossed to restore it to a "desired" value? Over a
| max threshold for some amount of time?
|
| - If I have a particularly "active" index with lots of
| rebalancing, am I going to get hit with tons of short-term
| capital gains even though I'm holding the index long-term?
|
| And finally, what happens if automated rebalancing produces a
| serious money-losing bug? Are investors using your platform at
| their own risk?
| sweeneyrod wrote:
| "Obviously a huge part of an index is maintaining desired
| weightings" Actually it's not. Suppose I have an index that
| should contain AAPL and TSLA weighted by market cap, with total
| value $100,000. Say they both have 1000 shares in existence,
| and on Monday their prices are $100 and $300 respectively. Then
| my index will consist of $25,000 = 250 shares in AAPL and
| $75,000 = 250 shares in TSLA.
|
| Now suppose on Tuesday the price of TSLA has increased to $700,
| so my index should be 1/8 AAPL and 7/8 TSLA. It's tempting to
| think this means I have to rebalance by selling AAPL/buying
| TLSA. But that's not right! I have 250 AAPL shares which are
| still worth $25,000, and 250 TSLA shares which are now worth
| $175,000. So I'm already at the desired 1:8 ratio.
| julienchastang wrote:
| On the topic of creating your own index, we've all heard of the
| SP 500, or the Russell 2000 indices, but isn't it possible to
| mine the historical data to create an index that has a better
| rate of return based on one or more criteria such as market cap
| or P/E? E.g., stocks that fall within this range of P/E tend to
| outperform the market in a ten year time range. This would be an
| elaboration of the concept that small cap stock indices tend to
| do better over time because they have more room to grow, in
| contrast to the SP500 dominated by FAANG companies that have most
| of their growth behind them. I doubt this is a novel idea, but I
| just have not heard of it before.
| kmckiern wrote:
| Absolutely. Would you want to make this index?
| reagan83 wrote:
| Congrats on the launch Keri & Chris! This is a fantastic concept
| that I've done on my own throughout the years. I'm excited to see
| if this will bridge the gap between index funds and previous gen,
| higher fee, mutual funds.
| aliquotchris wrote:
| Thanks reagan83! We're especially excited to hear from folks
| who've DIY'd this kind of strategy before, would love your
| feedback.
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