Since launching in mid-November 2018, Betmarkets portfolio achieved a return of +1.74% until the end of July. The last month saw a significant drop in volume due to the end of the season for most European sports and leagues. This factor alone increases the volatility, but the drop is also due to attaining a Market Edge below 2.00% (0.73%). We are far of the maximum that we have already achieved (+7.04% in March), but long-term indicators remain positive.
Betmarkets portfolio: lower volume equals higher volatility
July was almost entirely devoted to improving the overall performance of the Betmarkets platform. We are incredibly happy to have entirely tested and published a new layout for the professional bettors’ interface. The month came to an end with more than 5,500 active users in Betmarkets, still a double-digit growth even though we were not very focused on acquisition. Critical mass has been achieved during the Beta and we now want to further improve the user experience.
We still do not have a precise launch date on our hands, but tremendous breakthroughs happened very recently. The official launch should happen in a few weeks and we hope to share some details very soon! Last month, we were finalists at iGB Live’s Startup Launchpad in Amsterdam, where we got great connections in the industry and important leads for possible growth channels.
We did not add any professional bettor to our portfolio this month, but are lining up additions for the upcoming sports season! The 2 new professional bettors that we talked about last report will be added soon to the platform, in the buildup towards our live launch. More are bound to arrive after the launch.
If you haven’t done so already, make sure to check our previous monthly reports:
- November and December 2018: a profitable first couple of months [figures amended in January’s report: +2.86% and +1.13%]
- January 2019: slow and steady wins the race [+0.41%]
- February 2019: our experts had something to say [+1.68%]
- March 2019: all-time highs before closing below [-0.93%]
- April 2019: steady month with great finish [+1.64%]
- May 2019: a losing month [-1.92%]
- June 2019: some days of turmoil [-2.13%]
The portfolio that we’re going to report is built by dividing your balance equally amongst all professional bettors available and by following each new one as soon as he/she is available. In this sense, if you were to follow this portfolio, you would be reallocating your balance every time a new expert is added. The risk/return level of the presented portfolio is the lowest in our scale – low. Performance for a portfolio of medium risk/return is 1.5x the one of this portfolio. Lastly, performance for a portfolio of high risk/return is 2.0x the one of the presented portfolio. Remember that the volatily of these riskier portfolios increases along the same lines.
July 2019: -0.96% (+1.74% overall)
We closed June with a cumulative return of +2.70%. July had a negative tendency throughout and it ended at the lowest point during the month, at +1.74%. The monthly Market Edge was 0.73%, below the required level to assure a long-term positive performance. So, to no surprise, the month ended in a loss.
Just a few active professional bettors
Summer’s volume tends to be low, and July’s no exception. Only a few professional bettors placed bets last month. We should see volume pick up again in late August or already in September.
Diocletianus deserves this month’s highlight, as he achieved a great +7.8% return. On the other side, Mike Shaw contributed the most to the monthly loss, as his performance was -14.7%. His profile is one of high volume and high volatility, so this shouldn’t come as a surprise. Still, he maintains a very good +14.6% accumulated performance in the Beta.
The previous table only includes DutchDota2 (removed from the platform due to a behaviour change) in his overall impact of the portfolio performance.
This has been the daily evolution of the gross performance of our portfolio since its inception. The bolded figures represent the end of each month.
There are signs of an upward trend in our portfolio, especially given the Market Edge of our professional bettors. If they are able to keep behaving this way, this product will deliver a long-term positive performance. That is the most important, regardless of the short-term market fluctuations.
We ended July with an annualised standard deviation of 9.91% (yay, one-digit only!), from 10.66% at the end of June. This figure will continue to run down as the contribution of the initial days – where we only had a handful of professional bettors – diminishes.
Our portfolio has been achieving an interesting risk/return profile – not so much in the past three months, though. The inclusion of new professional bettors will further strengthen this profile – reducing volatility. In addition, we shall be more and more positive about our predictions as we pile up observations. This will increase the statistical confidence of the analyses.
We are also compiling information on the Market Edge, that is, the advantage of the professional bettors against the overall market (measured by the comparison between the odds they bet on and the closing odds – statistically speaking, the best predictors of the true probability of the event). We closed July with a Market Edge of 2.17%. 0.07% below June’s figure. During July, Market Edge stood below the 2.0% threshold. Professional bettors did not manage to beat the market only by grabbing higher odds.
With a Market Edge above 2.0%, given that the fees of the betting providers we work with are in the range of 1.7%-2.0%, even by picking randomly the bets (as to say, even without any “skill” at all), these professional bettors will tend to profit in the long-term. This is just due to grabbing higher odds than what the market settles as fair. And that is a big reason that supports Betmarkets as an investment.
Changes with the official launch
After we launch, the threshold for the Market Edge (ensuring long-term positive performance) will be lower. And this is massive! Until now, we’ve been working with regular accounts – with still significant fees – from the launch onwards we will have corporate accounts with the providers. Those will have bonified spreads, allowing us to have an improved performance. On the long-term, this factor alone can account for a few percentage points of annual return.
Professional bettors that do not achieve a Market Edge above the spread will need skill to profit in the long-run. Another thing to take into consideration is the betting style of each professional bettor. The Market Edge each one attains will deeply depend on it. For example, if you mostly rely on LIVE bets, your Market Edge will only be computed based on a small fraction of all your bets (only the Pre-match ones can have Market Edge).
The figures presented below are cumulative from January 23rd onwards. When we published the new layout, changing the operational structure of the platform, some data had to be reset. Their significance will, as well, increase with the growth in the number of observations for each professional bettor.
What we expect for the remainder of 2019
During 2019 we will continue adding more professional bettors to our platform. With the increased number of bets, the portfolio will start to exhibit a steadier behaviour. Its standard deviation will decrease due to the independence between the performances of each professional bettor. Winning runs by some compensate losing runs of others. On average, the impact of being able to beat the market should start arising. That is the power of diversification and the main reason for you to follow several professional bettors simultaneously.
We are aiming to beat the long-term risk and inflation-adjusted return of the S&P500 of 6% per year while keeping lower volatility levels.
Try this Beta version without any risk
If you would like to have a closer look into the portfolio of professional bettors we are offering, register at Betmarkets. In this beta version we are giving you €10 to invest until the end of it.
In addition, you can use the promo code BM252 to receive another €10 to invest! 🙂 No deposit required. We will withdraw this amount when this version ends. You get to keep all profits as credit towards future bettors’ profit-sharing commissions. In the case of a loss, it’s entirely on us.