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Insight Basic provides an overall comparison of equity managers using their skill-based Behavioral Alpha Scores, and Insight Pro shows each manager’s Behavioral Alpha Score with its quartile ranking over time and broken down by individual decision-making skills. These service tiers are designed for high-level evaluation and due diligence.
Insight Advantage provides deep clarity into each manager’s investment process and how their behavioral patterns are impacting your investment returns. Whether you’re making a critical manager selection decision or helping your existing managers continuously improve their own decision-making, Advantage unlocks far richer, evidence-based conversations with your managers.
Essentia Insight uses a minimum of three years of historical daily holdings data as its starting point for analysis, then a daily feed thereafter. Allocators with segregated or separately managed accounts typically source the data from their custodian or fund administrator — Essentia facilitates that.
Allocators invested in pooled vehicles will need permission to view managers at the Pro or Advantage levels. Where a manager does not yet appear on the Essentia Insight platform, the allocator can invite them to take part for free using a referral code.
Regardless of the source, Essentia’s data onboarding team has a tried-and-tested process for making the data upload process easy, and all data is handled with attention to privacy and under certified SOC 2 and ISO 27001 security standards.
If you don’t see a particular manager you’d like to assess, you can invite them to participate from Insight Basic, Pro or Advantage in a couple of clicks. And if you share the referral code we give you, the manager can take part for free.
Insight for Allocators is currently only applicable to public equity portfolios and portfolios of ETFs.
The Behavioral Alpha Score is the key output of Essentia’s Behavioral Alpha Benchmark methodology: a comprehensive measure of investor decision-making skill derived from daily holdings data. It reflects seven key types of decision-making: stock picking, entry timing, sizing, scaling in, size adjusting, scaling out and exit timing.
The Benchmark methodology, as detailed in a research paper published in the Journal of Investing, assesses whether an investor’s decisions have added value more than 50% of the time (their decision hit rate) and if their average right decision has been more right than their average wrong decision has been wrong (their decision payoff ratio).
The owner of the data (typically the manager, but where segregated accounts are in use, the allocator) stays in control of who can see the identity of the portfolio at any given time by granting or revoking permission.
By default, all portfolios with a Behavioral Alpha Score above 50 will be identifiable, and all of those with a score below 50 will not. The owner of the data can switch that setting at any time.
As soon as the score drops below 50, the portfolio’s identity becomes hidden. It is worth pointing out, however, that Behavioral Alpha Scores do not tend to swing dramatically from quarter to quarter unless the manager makes a deliberate change to their process. In fact, our latest research shows that Behavioral Alpha Scores tend to persist over time, which makes them especially valuable to anyone trying to assess whether a manager is likely to deliver on performance.