Addepar Introduces Investor Sentiment Index

MOUNTAIN VIEW, Calif., Sept. 24, 2020 /PRNewswire/ -- Addepar, a technology platform for wealth management, today introduced the Addepar Investor Sentiment Index^SM. An index of high- and ultra-high-net-worth (U/HNW) investor sentiment derived from U.S. equity transactions captured on the Addepar platform, it analyzes activity across more than 10,000 portfolios from investors each with more than $10 million in total assets.

While traditional investor sentiment readings are derived from survey results, which don't always accurately represent real investment choices, the Addepar Investor Sentiment Index is based on the true aggregated data of actual transactions. Moreover, existing market movement indices are dollar-weighted, meaning small movements by large players can skew results. Conversely, the Addepar Investor Sentiment Index is equal-weighted, giving a more accurate read of overall investment activity. As a result, for the first time, Addepar clients can leverage timely insights to compare their equity investing decisions with those of their peers on a weekly and monthly basis.

"Earlier this year, Addepar surpassed $2 trillion in client assets aggregated on the platform. Using the critical mass of data we have curated, we are meaningfully compounding the value we can bring to Addepar's clients by complementing our category-defining software with relevant and timely analytic insights," said CEO, Eric Poirier. "Building on our introduction of Marketplace, which unifies access to desirable financial products that have historically been hard to access and manage efficiently, the Addepar Investor Sentiment Index punctuates Addepar's ability to provide our clients with a truly unique and differentiated set of offerings to serve their clients and expand their trusted relationships. This new offering is our first of many as we expand our scope to engage with a wider audience. Our broad goal is to empower people everywhere to make more informed, data-driven decisions about their investments, irrespective of market or economic conditions."

"Addepar has taken a novel approach to measure sentiment. Their preliminary results showing the contrarian investment behavior of sophisticated investors is striking and worthy of continued attention," said Professor Chris Geczy, Academic Director of the Jacobs Levy Equity Management Center for Quantitative Financial Research, and Academic Director of the Wharton Wealth Management Initiative, The Wharton School, University of Pennsylvania.

The Index provides a uniquely transparent view of how highly sophisticated investors are adjusting their equity portfolios over specific periods of time. Figure 1 (below) demonstrates a high-level example, showing a history of the Addepar Investor Sentiment Index^SM compared to the S&P 500 index (April 2016 - July 2020).

1. The Addepar Investor Sentiment Index demonstrates that this cohort is contrarian.
2. Over the past five years (pre-pandemic) this group of investors has tended to invest ahead of the market. However, since April, this relationship has reversed and U/HNW investors have been consistent net sellers of U.S. equities, while markets have continued to rally.
3. The Addepar Investor Sentiment Index allows clients to learn from their peers as they're navigating an unprecedented market environment.

The Addepar Investor Sentiment Index and additional analytics are now available to clients. The Addepar Investor Sentiment Index will be made available publicly on a monthly basis. To learn more, visit: addepar.com/blog/introducing-the-addepar-investor-sentiment-index.

About Addepar
Addepar is a wealth management platform that specializes in data aggregation, analytics and reporting for even the most complex investment portfolios. The company's platform aggregates portfolio, market and client data all in one place. It provides asset owners and advisors a clearer financial picture at every level, allowing them to make more informed and timely investment decisions. Addepar works with hundreds of leading financial advisors, family offices and large financial institutions that manage data for nearly $2 trillion of assets on the company's platform. In 2020, Addepar was named as a Forbes Fintech 50 and in 2018 received Morgan Stanley's Fintech Award for making a significant impact on the firm's mission of continuous innovation. Addepar is headquartered in Silicon Valley and has offices in New York City and Salt Lake City. All brokerage services offered through Acervus Securities Inc., member FINRA / SIPC.

Index Methodology
Addepar Investor Sentiment Index^SM is a transaction-based index of high-net-worth (HNW) investor sentiment derived from U.S. equity transactions captured on the Addepar platform. Every U.S. equity market transaction tracked on Addepar is distilled into a single number: the percentage of portfolios buying U.S. equities minus the percentage of portfolios selling U.S. equities. A more detailed description of the index methodology can be found in the white paper.

Use of Data
As a company that provides technology for the aggregation and management of financial data, we take the confidentiality of client information very seriously. When creating and publishing analytic content derived from data on the Addepar platform, protecting the information entrusted to us is our topmost priority. We approach all data policy decisions from the perspective of building meaningful analytics that result in industry-relevant insights. Notices and disclaimers regarding the Addepar Investor Sentiment Index^SM can be found here.

SOURCE Addepar