How does "CopyPorfolios" function work?

eToro has introduced such a tool, for people who want to invest in a specific area of ​​the market, without spending time on independently selecting companies for their own portfolio. Such areas may be for example, renewable energy sources, autonomous cars or remote work. Some of such portfolios are based on artificial intelligence algorithms, and some are supported by the actions of eToro employees who, from time to time, rebalance the % of individual companies in the portfolio. Most of these wallets also have minimum entry thresholds for making a copy, e.g. $2,000-5,000. It can also be a barrier for some users. Fortunately, you can find individual Popular Investors with similar strategies and no such entry thresholds.

What does investing in "CopyPortfolio" involve?

First of all, it should be noted that some portfolio consists of a dozen or several dozen companies that may be listed on many different markets and in various currencies. This entails an additional risk of fees and differences in currency exchange when making a copy and its subsequent closing.

There are also CopyPortfolios including only Popular Investors selected from some key, eg "ActiveTraders". Copying such portfolios entails even greater risk because they usually contain several such Popular Investors, and they in turn have several dozen companies in their portfolios, also potentially in various world markets. Which makes it practically impossible to control such a portfolio and the costs of opening and closing are impossible to estimate in advance.

All this means that making a decision to copy with the use of such tools requires a lot of caution. In many cases, copying 1-3 Popular Ivestors will be safer and easier to control. You can also choose only those who have their wallets in only one currency.