That´s eToro Smart Portfolios in a nutshell. If you want to find out what our research team has to say after carefully analysing eToro Smart Portfolios, keep reading. Here's what we'll cover:

eToro is a social trading broker founded in 2006 in Israel, with the mission to make trading accessible to anyone, anywhere, and reduce dependency on traditional financial institutions. Its platform allows users to trade various financial assets online, such as stocks, ETFs, and thousands of CFD products on stocks, indices, currencies, and commodities. eToro also allows you to buy and sell cryptocurrencies.

eToro is known for its product innovations, introducing, throughout the years, several features, such as CopyTrader™ and Smart Portfolios, that we will be covering today.

eToro Smart Portfolios are a brand new long-term thematic investment product designed to manage portfolios of various asset classes or a group of traders, under a predetermined market strategy and constantly monitored by machine-learning algorithms, experts, and eToro partners.

The eToro Investment Team is in charge of making and looking after most Portfolios. They think carefully about each portfolio, considering things like balance, exposure, the expected return, and how risky it is. Additionally, there are Partner Portfolios, curated and managed by eToro’s partners, including sophisticated financial firms and innovative startups in the field of financial technology.

The main question is, are these Portfolios always moving around or just staying the same?

It's a bit of both. They don't change every day, but the eToro team frequently checks and adjusts them to make sure they're doing well. It's like keeping a garden – not every day, but when needed to keep things growing just right.

• Professional Management: Smart Portfolios are typically managed by financial experts, providing a level of professional oversight and strategic decision-making.
• Diversification: Smart Portfolios often offer diversification across various assets, reducing risk by spreading investments.
• Time-Efficient: The automation aspect of Smart Portfolios can save time for investors who prefer a more hands-off approach to managing their investments.
• Accessibility: Smart Portfolios make investing accessible to individuals with varying experience levels, from beginners to seasoned investors.
• ‍No Management Fees: eToro Smart Portfolios don't have management fees associated with the investment (spreads and other fees apply)

• Limited Customization: Some Smart Portfolios may offer limited customization options, which might be a drawback for investors seeking highly personalised strategies.
• Minimum Investment: The minimum investment on eToro Smart Portfolios is $500, which can be considered a bit higher compared to some robo-advisors portfolios.
• Less Control: Investors relinquish some control over their portfolio management, relying on the decisions made by the professionals or algorithms behind the Smart Portfolios.
• Human or Algorithmic Error: If managed by professionals, the potential for human error exists, and if algorithmically driven, errors in the underlying algorithms could impact performance.
• Fees: While there are no management fees, other fees apply, such as spreads, inactivity fee, withdrawal fee, and currency conversion fee.
• Only two account balances (USD and EUR): Deposits made in a currency different than the USD or the EUR will incur in conversion fees.

eToro has both a mobile and a web trading platform. Below, we’ll help you navigate through eToro’s web trading app. In this review, we will focus on trading platform related to Smart Portfolios!

As soon as you log in, you have access to a bar on the left side, where you can quickly navigate through the various tabs available:

On the “Discover” tab, you will notice a quick overview of all the asset classes available, including the Smart Portfolios:

On the top bar, you can find the Smart Portfolios feature, where all the available Smart Portfolios on the platform are listed and divided in categories, as “Most Popular”, “Tech Focused”, “Crypto Based” and “Created by Partners”.

If you scroll down, a pop-up will appear, where you can “View All” the Smart Portfolios available on the platform:

By clicking on "View All," you are directed to a page where you can use various filters to find the most suitable Smart Portfolio for your investment interests.

As mentioned earlier, eToro provides various Smart Portfolios, which can be created by different individuals or entities. You can narrow down your search among the Smart Portfolio offerings based on three essential aspects:

1. Market: Invest in a thematic Smart Portfolio, focused on a specific sector. Thematic investment is somewhat similar to sector investing, but these portfolios often span various sectors and include companies relevant to the chosen theme.

2. Top Trader: These portfolios consist of the best-performing investors on eToro, selected through advanced data algorithms. eToro offers three types of this kind of portfolios:

• ActiveTraders: Offers exposure to eToro’s most active top-performing investors, chosen for diversity between asset classes based on real market dynamics.
• SharpTraders: Brings together high-performing investors with a high Sharpe ratio.
• GainersQtr: Includes leading eToro investors statistically likely to generate profit over the next quarter, chosen for their diverse portfolios, high profitability, and low-risk scores.

3. Partners: These Smart Portfolios are developed in collaboration with some of the most innovative investment startups, money managers, and data research companies globally, ensuring trustworthiness and credibility.

eToro also allows you to filter and sort available smart portfolios by variance (investor change) and historical return, with an adjustable time period. This way, as an investor, you can find the smart portfolio that best aligns with your preferences for risk-adjusted return.

eToro makes it easy for investors to understand and manage risk by offering a Risk Score, ranging from 1 (low risk) to 10 (high risk), visible on their user page. This score is based on the volatility of the smart portfolio, showing the potential ups and downs in percentage terms. For instance, a score of "0" means the portfolio is 100% cash with no volatility. The risk level is influenced by factors like the individual assets' volatility, portfolio diversity, and the use of leverage. While this Risk Score reflects historical performance and doesn't predict the future, it helps investors grasp how much their smart portfolio might change over time.

You can find more about how the risk is calculated for each Smart Portfolio on eToro's website!

The eToro Smart Portfolios are composed of various asset classes, and this composition can vary from one portfolio to another. Some portfolios may consist of only one asset class, as seen in the "ChinaCar" portfolio, while others may include two or more asset classes, such as the "OilWorldWide" portfolio. To understand their makeup, you should refer to the Factsheet of each portfolio, which can be found in its details:

By clicking on the desired Smart Portfolio, which can be found on the top bar, select "Details." By clicking there, you will be able to open the fact sheet of the chosen Smart Portfolio.

On the Factsheet, you can review the investment strategy of the selected Smart Portfolio, providing information on the types of assets in which the portfolio is invested. If you wish to delve into the specific holdings of the portfolio, you can find that information in the top bar under "Portfolio”:

Smart Portfolios can be commonly mistaken for ETFs; however, one of the aspects that sets them apart is the non-passive management. eToro's Smart Portfolios combine both passive and active management. While they are not rebalanced every day, the periodic rebalancing ensures that each portfolio is regularly realigned to adhere to the original asset allocation plan and is optimized for optimal results. The frequency of rebalancing varies from one portfolio to another, with specific details provided on each portfolio's information page.

Unlike traditional investment firms, eToro's Smart Portfolios keep things straightforward regarding fees. Good news – there are no management fees for investing in or closing Smart Portfolios. This means you can focus on how your portfolio is doing without worrying about extra costs.

Just a heads up, though: for each transaction within your Smart Portfolio, there are some costs called spreads. These spreads are like tiny fees associated with buying and selling any asset. They're a part of the overall cost of trading. For all the details on eToro's pricing, you can check out the pricing page on the eToro platform. This way, you can see exactly what costs are involved in your Smart Portfolio transactions.

On the downside, be aware that, while there are no management fees, other fees from the eToro platform apply. Some of the fees you should take into consideration are the withdrawal fee, spreads, inactivity fee, and the currency conversion fee (if your deposits are not made in USD or EUR).

eToro is fully regulated and supervised by top-tier regulators such as the UK’s Financial Conduct Authority (FCA) and the Australian Securities and Investments Commission (ASIC) in Australia. The subsidiary in Europe, formerly known as “eToro (Europe) Ltd,” is authorised and regulated by the Cyprus Securities Exchange Commission (CySEC).

In addition to CySEC, FCA and ASIC regulations, eToro also maintains membership in the following Investor Compensation Schemes:

• eToro (Europe) Ltd: You are under the Central Bank of Ireland regulation meaning that you are protected up to €20,000 for 90% of the amount you have lost (cash + assets);
• eToro (UK) Ltd: You will be under the FCA jurisdiction which gives you a protection amount (cash + assets) up to £85,000.
• eToro AUS Capital Limited: ASIC does not provide a pre-defined protected investment amount. More info here.

Moreover, keep in mind that it is registered in several countries, meaning it must have authorisation from the local financial markets authorities. For instance, in the Netherlands and Germany, eToro is registered with the Netherlands Authority for the Financial Markets (AFM – Autoriteit Financiële Markten) and the Federal Financial Supervisory Authority (BaFin), respectively.

Finally, besides the mandatory regulatory protections, eToro offers an additional layer of protection: a free insurance program only for Platinum + and Diamond Club customers of eToro (Europe) Ltd. and eToro AUS Capital Limited. Investors can obtain up to €/AUD$ 1,000,000 of protection by being in the program.

If you have questions or need assistance with Smart Portfolios or any other topic, eToro provides multiple ways to get help:

1. Chatbot and Live Chat: Access the 24/7 automated chatbot and live chat for quick responses. Securely log in here to initiate a chat session and receive specific answers about your Smart Portfolios.

2. Ticket: Open a ticket in the Customer Service Center here and expect a response within 48 business hours sent to your registered email address.

3. WhatsApp: eToro Club members can use WhatsApp to communicate directly with their Account Manager. Find the verified WhatsApp business account number on the Club Dashboard.

For questions about recently submitted documents, wait for 4 business days before making an inquiry. The customer support team is committed to providing timely assistance for all Smart Portfolio-related queries.

eToro accepts clients from over 70 countries, including the United Kingdom, Germany, Netherlands, Canada, Spain, Australia, United Arab Emirates, among others. The complete list of available countries can be found here.

Due to regulation, eToro cannot legally offer its services in several countries. Some notable exceptions include India, Pakistan, and Japan. The full list of restricted countries can be found here.

For regulatory reasons, eToro cannot provide its service to US citizens outside the USA.

Minimum deposit: $10 (varies between countries.).

Base currency: USD or EUR (Currency conversion fees applies when you deposit in another currency).

Deposit methods: Bank Cards, Wire Transfer and Payment services (PayPal, Skrill, Neteller, iDEAL, Klarna).

In conclusion, eToro's Smart Portfolios offer a unique blend of professional management and automation, catering to investors looking for a hands-off approach. The platform excels in diversification, time efficiency, and adaptability to market changes, making it an accessible option for investors of varying experience levels.

In the end, we recommend that you perform your due diligence before making any investment decisions, as investments are subject to market risks.

We hope this review has been helpful in answering your questions about eToro Smart Portfolios. If you have any further questions or feedback, please feel free to leave a comment or reach out to us directly.