Since launching in mid-November 2018, Betmarkets portfolio achieved a return of +2.70% until the end of June. This month was the worst for the portfolio, with it losing 2.13%. During June, our experts did not manage to achieve a Market Edge above 2.00% (only 1.61%), not being able to outperform the market on that factor alone. Statistics were also not on our side as the loss was larger than expected, considering the Market Edge attained. We are somewhat far of the maximum that we have already achieved (+7.04% in March), but long-term indicators continue to be positive. And those are the most important.
Betmarkets portfolio: some days of turmoil
June came to an end with more than 5,000 active users in Betmarkets, an amazing milestone for the company. Thanks to everyone of you who have contributed, direct and indirectly. We were in Startup Avalanche, a pitching competition in Romania that has a grand prize of €100,000 and that is organised by Risky Business Ventures, a leading VC in the region, where we were finalists – it would be almost impossible to win given that some of the business angels that invest in the grand prize have limitations in investing in the sector where we work at. We will share more with you as soon as we have the footage!
Feedback from Risky Business Ventures
Jennifer Austin, partner at Risky Business, commented about us: “When we interviewed Betmarkets we were very excited. Having collaborated on a corporate innovation program with one of the major international betting companies, we immediately saw the potential. Betmarkets pitch and business is amazing. The grand prize was decided by the angel investors who put in the money, two of which were very excited by Betmarkets. But betting isn’t for everyone. I’m very happy, though, that Betmarkets received a few investment offers from investors who are knowledgeable about the company’s sector. It’s such a high potential business with a powerful team.”
We did not add any experts to our portfolio this month, but are lining up additions for the upcoming sports season! 2 new experts will be added soon to the platform, one from soccer and another from MMA, in the buildup towards our live launch. More are bound to arrive in September.
The months to come are off-season for most European sports, so some competitions will stop. Still, you can expect a lot of volume from horse racing – peaks in the Summer – and from baseball. To bet on the latter, you need to follow Diocletianus.
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%]
The portfolio that we’re going to report is built by dividing your balance equally amongst all experts 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.
June 2019: -2.13% (+2.70% overall)
We closed May with a cumulative return of +4.83%. June was relatively steady, apart for a few days of significant loss. In fact, between the 7th and the 12th of June, one of our experts entered a very strong losing run. That fact made the portfolio drop from +5.12% (was gaining up to there!) to +2.84%. Another sharp drop was felt on the 17th and the portfolio closed at its lowest since late December (+1.97%). From there, there was a recovery to end the month at +2.70%. The monthly Market Edge was 1.61%, below the required level to assure a long-term positive performance. So, to no surprise, the month ended in a loss.
A strong losing run from a few experts
After having the best performance last month with a +20.8% gain, Diocletianus saw himself having a 17.1% loss in June. This month’s loss arised mostly from the performance of David and Mike Shaw with -32.8% and -28.5%, respectively. It just shows how volatility comes into play and how you should follow several experts to ensure you have a diversified portfolio. These two have been listed as the top performers in several months already! And they will continue to deliver in the long-term. Before this sharp drop, they were winning +27.2% and +57.8%, respectively. Additionally, Mike Shaw peaked at a +84.4% return in the end of April. Indicators support that he will bounce back to surpass that threshold.
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 experts. If our experts 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. The last two months were a perfect example of how these short-term fluctuations affect the portfolio’s performance. They saw the portfolio having a loss larger than 4.0%.
We ended June with an annualised standard deviation of 10.66%, from 11.01% at the end of May. This figure will continue to run down as the contribution of the initial days – where we only had a handful of experts – diminishes.
Our portfolio has been achieving an interesting risk/return profile – not so much in the past two months, though. The inclusion of new experts 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 experts 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 June with a Market Edge of 2.24%. 0.16% below May’s figure. During May, Market Edge stood below the 2.0% threshold. Experts 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 experts 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.
Experts 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 expert. 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 expert.
Some competitions are near its end but Betmarkets won’t stop
Indeed, most European sports and leagues tend to stop during the Summer. Nevertheless, Betmarkets will have plenty of volume during this season break. Horse Racing runs full-throttle during the Summer, Baseball has already begun and some football leagues have just started. Nordic football is in full fledge at the moment and we have been observing some interesting match-ups!
What we expect for the remainder of 2019
During 2019 we will continue adding more experts 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 expert. 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 experts 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 sports betting experts 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 experts’ profit-sharing commissions. In the case of a loss, it’s entirely on us.