Asset Score

The Asset Score is a weighted average of three key metrics: Return (40%), Stability (40%) and Diversification (20%). Each metric is presented as a performance ratio, where a score of 1.0 is equal to the performance of the S&P 500, our chosen benchmark. If the performance of a specific Generated Asset matches the S&P 500 benchmark on a particular metric, that Generated Asset would score a 1.0 on that metric. We explain below how Return, Stability and Diversification are calculated.

The Asset Score is not an investment recommendation, but a way of presenting information about your Generated Asset and how it has performed historically relative to the S&P 500.

Return Score

The Return Score is the average of three performance ratios: Total Returns, Compound Annual Growth Rate (“CAGR”), and Average Annual Returns. We calculate each performance ratio using a 10-year time horizon and the S&P 500 as a benchmark.

Total Returns

Total Returns calculates the portfolio's return based on its initial and final value.

Compound Annual Growth Rate (“CAGR”)

Compound Annual Growth Rate, or CAGR, calculates the portfolio's average annual return rate over the 10-year time horizon, assuming compounding and full reinvestment of all proceeds each year.

Average Annual Return

Average Annual Return calculates the average of the portfolio's returns over the 10-year time horizon.

Stability Score

The Stability Score is the inverse of the average of three risk-related performance ratios: Maximum Drawdown, Average Drawdown, Average Drawdown Duration. We calculate each performance ratio using a 10-year time horizon and the S&P 500 as a benchmark.

Maximum Drawdown

Maximum Drawdown is the greatest observed peak-to-trough decline in the portfolio's value, expressed as a percentage.

Average Drawdown

Average Drawdown is the average of all drawdown magnitudes, or in other words, the average loss from peak to trough before full recovery.

Average Drawdown Duration

Average Drawdown Duration is the average number of calendar days between the start and end of drawdown events.

Diversification Score

The Diversification Score is the average of three performance ratios: Number of Assets, Number of Sectors, Maximum Allocation. We calculate each performance ratio using a 10-year time horizon and an S&P 500 proxy (specifically, the VOO ETF) as a benchmark.

Number of Assets

Number of Assets counts the distinct underlying securities currently held in the portfolio, after breaking down an ETF's holdings into its constituent assets.

Number of Sectors

Number of Sectors counts the unique economic sectors currently represented in the portfolio, after breaking down the ETF's holdings by sector classification.

Maximum Allocation

Maximum Allocation calculates the highest percentage allocation to a single underlying security currently in the portfolio, after breaking down an ETF's holdings into its constituent assets. (This ratio is inversed, so a higher percentage means lower diversification.)