Successful backtesting of the InsiderPie Expert Score

We regularly conduct backtests to ensure that our InsiderPie Expert Score truly helps you make sound investment decisions. Today we're publishing our latest backtest, which includes data from the beginning of 2017 to the end of November 2023.

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In this test, we simulate three different investors. All start on January 1, 2017, with €100,000. One investor opens the InsiderPie app every Monday and buys the top 10 stocks according to the InsiderPie Expert Score. The other invests their money in an index fund—the S&P 500 or the DAX. We originally also considered the MSCI World for comparison—but its performance is similar to that of the S&P 500, so we omitted it. As you can see from the chart, the InsiderPie strategy generates significantly more profit in the long run—with minimal additional effort.

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What data is the backtest based on?

To create this backtest, we collected historical data on the portfolios of star investors, insider transactions, and analyst ratings. Using this data, we back-calculated the InsiderPie Expert Score. For each of the nearly 5,000 companies in our database and for each weekday since January 1, 2017, we calculated what score the company would have had at that time—a total of more than 10 million individual scores. Using these scores, we simulated a portfolio that buys the top 10 stocks according to the InsiderPie Expert Score every Monday (and sells stocks that have fallen out of the top 10). The performance of this portfolio significantly outperforms indices like the S&P 500.

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Does your backtest also take transaction fees into account?

Yes, we used a transaction fee of 0.19% for each purchase and sale in our simulated portfolio. This value comes from a broker at an established German branch bank. Before you start investing yourself, it's worth checking your broker's fees and comparing them with other brokers.

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Why did you change your simulated portfolio only once a week and not every day?

We also created a backtest in which the simulated portfolio was changed every day. This portfolio generated slightly more profit. However, this strategy has two disadvantages:

The more often you buy or sell shares, the more transaction fees you have to pay

Checking your portfolio every day is a lot of work. InsiderPie is ideal for you if you want to outperform index funds without investing a lot of time in researching and managing your portfolio.