7/3/2014 6:30 PM ET|
Got a great investing idea? Start your own ETF
A new online broker allows you to create theme-based baskets of stocks. If other users like your idea enough to buy into it, you'll receive royalties.
Think you can beat the market? Here's your chance. Motif Investing, an online broker, lets you build your own theme-based portfolios, or "motifs," as the company calls them. If others like your idea, they can also buy into it.
"Think mini ETFs. Customizable, crowdsourceable, no-fee ETFs," said Motif Investing co-founder and CEO Hardeep Walia.
Each motif is a basket of up to 30 stocks with companies from different sectors, industries, countries and with different market capitalizations. The minimum investment amount is $250. After that, each motif you create, or invest in, is $9.95.
The site hosts over 50,000 user-created motifs, which offer a window into the investing interests of Americans.
For example, the "Obamacare" motif comprises companies that the creator thinks will profit from the Affordable Care Act. It includes healthcare plan providers, hospitals, medical appliances and equipment makers, drug manufacturers and healthcare information services companies. The motif is relatively new -- it was created on Oct. 26, 2013 -- but the lifetime return is 17 percent. The S&P 500 ($INX) returned 10.5 percent over the same period.
While the "Obamacare" motif is profitable, it's not very popular, as measured by the social media tools on MotifInvesting.com, which allow members to rate motifs with a thumbs up or down.
On the other hand, the "Repeal Obamacare" motif, which includes companies in diagnostics, medical devices and assisted living, is popular with fellow members, despite significantly lower returns. Over a one-year period, it's up only 4.2 percent versus a gain of 17.8 percent for the S&P 500.
The site also shows which motifs are trending. Currently, a motif called "Shale Oil" (up 42.3 percent over the past year) is near the top of the trending list, a reflection of the worries over oil prices due to the ongoing crisis in Iraq, Hardeep said.
Motif Investing, which launched in 2010, is No. 4 on the CNBC Disruptor 50 list, which features private companies whose innovations are revolutionizing the business landscape. Hardeep said he hopes to shake up the status quo in the investing arena by making it more intuitive, transparent, low cost, and giving customers more control.
- Also on CNBC: Full list: 2014 CNBC Disruptor 50
If you don't like a stock in your motif, you can switch it out for $4.95. You can also make money, by earning a $1 royalty payment if another member invests in your creation.
However, statistics show that beating the market isn't easy even if you're a professional. According to market research firm HFR, in 2013, the average hedge fund returned 9.13 percent for the year, versus a return of 32.36 percent for the S&P 500, including dividends.
In the end, if your idea doesn't cut it, you will have no one to blame but yourself.
More from CNBC
VIDEO ON MSN MONEY
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
The final week of August represented one of the quietest stretches for the stock market so far this year. The first four sessions of the week produced the ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'