Wikifolio Review: The Best Social Trading Platform

As an experienced Wikifolio trader with an investable Wikifolio named “Relative Rendite US500” boasting over 25% p.a. return, I know what I’m talking about. Wikifolio stands out in the crowded world of social trading platforms. It provides a unique opportunity for investors to build a verifiable track record outside the traditional financial world and make money from their skills.

While not without its flaws, it remains one of the best platforms for showcasing and honing your investing skills.

The Pros

1. Independent and Verifiable

Wikifolio offers an independent and verifiable platform. Your trading skills are out there for all to see. This transparency is a major plus. You can’t fake success here. Investors can follow your portfolio and see your decisions in real-time. This builds credibility. If you’re good, everyone knows it.

2. Over 10 Years of Experience

With a history starting in 2012, Wikifolio has grown and evolved. It’s seen the market’s ups and downs. This experience translates into a robust platform. One you can trust. Over these years, the platform has fine-tuned its features and offerings, making it more user-friendly and reliable.

3. Over €250 Million in AUM

Assets under management (AUM) exceed €250 million. That’s a lot of trust from investors. It shows that many believe in the platform. Managing such a large sum requires confidence from a significant user base, reflecting the platform’s reliability and trustworthiness.

4. Wide Range of Instruments

You have options. Stocks, bonds, funds, and certificates. Variety is key. It allows for diverse strategies. You can tailor your portfolio to your style. Whether you are a conservative investor focusing on bonds or a more aggressive trader looking at stocks and funds, Wikifolio accommodates various investment strategies.

5. Earn from Your Skills

You can make money with your investing skills. This is a big draw, in theory. If you’re good, you can make money. It’s that simple. Investors can attract followers who replicate their portfolios, earning performance fees and management fees. This makes it possible to turn your investing hobby into a profitable endeavor.

But you either have to have outstanding performance or a lot of assets to actually move the needle.

Let’s say you managed to get $1 million into your virtual portfolio and you earned 10% in a year with a 5% performance fee. So the wikifolio earned a performance fee of $5,000 (5% of the $100,000 profit), which you have to split 50/50 with the wikifolio. The remaining $2,500, your share, has to be taxed, which can be very wild, but let’s assume a tax rate of 30%. In the end you have earned $1.750 per year or about $150 per month, nice to have but nothing to write home about.

I think a wikifolio can make economic sense north of 5 million, but more like 10 million, or you have to set a higher performance fee, which makes it hard to make good returns and get those assets in the first place.

The Cons

1. Fees

Fees are mostly moderate. There is a high watermark performance fee of between 5% and 30% that determines whether or not the fees are extensible. Something odd and definitely not good for investors is that the high walter mark is reset every year.

In addition to the performance fee, there is a management fee of 0.95% per year. And the bid-ask spreads. These can eat into profits. Be aware. While these fees are justified by the platform’s services, they can still impact your overall returns.

But it is worth noting that all performance metrics are with all fees included.

2. Risk of Bad Investors

Not all investors are good. Some Wikifolios have blown up. They’ve imploded spectacularly. This is a risk you must consider. Do your research before following. Even though the platform tries to highlight successful traders, some portfolios can be volatile and high-risk, leading to significant losses.

3. Ranking Based on Soft Factors

Rankings aren’t just about performance. Soft factors also play a role. This can be misleading. Performance should be the main factor. But it’s not always the case here. Factors like risk management and trading behavior also influence rankings, which might not always reflect pure performance.

4. Liquidity Issues

Wikifolios can be hard to buy and sell. Not every broker offers them. This limits access. It can be frustrating. Liquidity issues can make it difficult to enter or exit positions at desired prices, potentially affecting your investment strategy and outcomes.

5. No Dividends from U.S. Stocks

U.S. stocks don’t pay dividends into Wikifolio certificates. You lose out on those dividends. This can affect your overall returns. It’s a downside worth noting. For dividend-focused investors, this could be a significant drawback, as missing out on these payments can lower expected income.

Final Thoughts about wikifolio

Wikifolio is a great social trading platform. It’s transparent and has a solid history. Fees and some risks are there. But for many, the benefits outweigh the downsides. If you’re serious about showcasing your trading skills, Wikifolio is worth considering.

Wikifolio opens doors. It connects skilled traders with eager investors. It creates a marketplace of ideas and strategies. Despite its imperfections, it remains a top choice for those outside the traditional finance world looking to make their mark.

So, if you’re confident in your trading abilities and want to build a verifiable track record, give Wikifolio a try. You might just find it’s the perfect platform for your investing journey.