$1 Million fantasy portfolio
Starting in 2017, contestant portfolio returns will be calculated differently in order to better reflect the real-world investment experience lived by investors every day. Instead of picking 5 stocks and managing an evenly-weighted portfolio of those 5 positions, PwP participants will build a portfolio by investing one million dollars of fantasy capital, investing across multiple positions in any way they choose.
Long and short
Traders can select to initiate a position by either “selling short” or “buying long”. For short sellers, a decline in stock value will result in a positive portfolio return. For long buyers, an increase in stock value will also result in a positive portfolio return.
While PwP allows for both long and short trades, we do not allow managers to utilize leverage. For example, if a trader elects to sell short $200k in notional value of one stock, and buys long $200k in notional value of another stock, that manager has used up $400k of their available $1 million portfolio and will have $600k of remaining capital to invest. We do not recognize “net” directional exposures, instead using gross position exposures to calculate portfolio returns.
Trading fees — coming in 2018
New for 2018, players will be charged trading fees which will increase the charitable donation pool. Please note, this will only apply to contests beginning after January 1st, 2018. This will not apply to students.
Here’s how it works. Users will enjoy unlimited trading for the first month of the competition. There will be no additional donation required to execute a trade, and there are no limits on how often a user can trade during this initial trading window.
Following the close of the trading window, users can continue to trade, but at an added cost. These trading fees are treated similarly to entry donations in that 100% of the proceeds enter the general donation pot that is distributed to the charities represented by the winning portfolio managers at the end of the contest. After the close of the trading window, trades will cost:
$0 donation per trade for students (unlimited trading, no fees)
$10 donation per trade for Novice Class participants
$50 donation per trade for Professional Class participants
$500 donation per trade for Master Class participants
Each “buy” or “sell” order is considered its own trade. For example, a Novice Class participant selling to close 1,000 shares of MSFT and then buying to open 500 shares of NFLX would be executing two separate trades, at a total cost of $20 for the full-trip position change.
PWP EFT screener criteria
PwP ETF Screener Criteria
- Not actively managed (no mutual funds disguised as ETFs)
- No leveraged ETFs (-1x is fine if it’s a short ETF => inverse tracking)
- Must trade $2mm per day
- Must correlate >85% over the previous 12 months if tracking an underlying index or commodity
Position limits
In order to maintain sufficient diversification across all portfolios, users may not have any single position account greater than 20% of the starting value of the portfolio. Additionally, users will only be able to select stocks with a market cap of $1 billion or greater as of the date of the transaction. So long as the 20% position limit and $1 billion market cap requirements are met, users may create portfolios with an unlimited number of stock positions.
Pending trades
Users will now create their original portfolio and trade around their positions by submitting a series of “Pending Trades.” During the pre-contest registration period, contestants will build their initial portfolio by listing the trades they would like to have executed at the open of the first day of the competition. During the registration period, users will see hypothetical notional values for each trade using the stock’s most recent closing price. Users can adjust, cancel, or add to these pending trades as often as they like without penalty until midnight the night before the contest start date.
Users will continue to submit pending trades for any position trades they would like to make once the competition is live. The positions will be executed as follows:
Pending trades entered between trading sessions will be executed at following session’s opening price.
Pending trades entered during active trading session will be executed at current session’s closing price.
2017 eligible stock exchanges
North America: NYSE, NYSE MKT, NASDAQ, OTCBB, TSX, TSX Venture
South America: BOVESPA, Lima, Santiago
Europe: Athens, BME (Madrid, Barcelona, Bilbao, Valencia), Budapest, Deustche Borse (XETRA and Regionals), Stuttgart, Irish, LSE, NASDAQ OMX Nordic , NASDAQ OMX Baltic, NYSE Euronext, Oslo, Prague, SIX Swiss, Vienna, Warsaw
Asia-Pacific: ASX, Bombay, HKEx, KRX, Shanghai, Shenzhen, SGX, Tokyo
Mexican exchanges, and Johannesburg Stock Exchange are NOT available to Portfolios with Purpose at this time. We apologize but the licensing fee is cost-prohibitive for our organization.
Valid 2017 Exchange Traded Funds (ETFs)