Flow Traders Investment Competition

About the Competition

The Flow Traders Investment Competition is one of three core activity of B&R Beurs Eindhoven. In this competition, we challenge groups of our members to put money together and actually invest. It allows our members to quickly gain practical experience, to teach them in a fun way, and to share knowledge more effectively.

The groups that compete are called investment groups; these groups, registered at the chamber of commerce, compete over a period of 8 months, to find out who can manage their portfolio most effectively. The Investment Groups usually consist of 7 to 20 members, and each group is independent, with its own rules and preferences. At the start of each year, existing and new members have the chance to join one of these groups. During our social- and matchmaking events, members find out with which group they fit the best, or whether they want to start an entirely new group from scratch.

In these groups, members participate in discussion and vote on portfolio decisions. Each member chips in a predetermined sum; usually between €250 and €400, adding to a shared sum that the group invests. What remains of this amount is given back to the individual members at the end of the competition.

Flow Traders Investment Competition Rules

Rules of the Flow Traders Investment Competition B&R Beurs Eindhoven 2023/2024

  1. The Flow Traders Investment Competition is about financial securities available in financial markets.
  2. The Flow Traders Investment Competition for the academic year 2023/2024 starts on November 13th 2023.
  3. The Flow Traders Investment Competition is held only between investment groups registered with B&R Beurs Eindhoven and at the Chamber of Commerce.
    1. New investment groups can only be created before the start of the competition.
    2. New investment groups need approval from the board to participate in the competition.
  4. The Flow Traders Investment Competition is exclusively accessible to B&R Beurs Eindhoven members which are members of an investment group.
  5. Each investment group has to define an initial deposit per person before the official start of the Investment Competition. This amount can be different for each group (e.g. €200, €250, €300, €400).
  6. Investment Groups have to make their first investment before January 9th, 2024 to be included in the ranking.
    1. The board can authorize an exception to this rule if well-argued. 
  7. The weekly ranking is based on risk adjusted returns (Modigliani Risk-Adjusted Performance). The weekly ranking is computed during the weekend, once the North American markets are closed.
  8. Investment groups are responsible to give the board access to their trade account to calculate weekly rankings and monitor integrity. Access can be given by:
    1. (non-eToro) By supplying regular login credentials or by supplying a special “viewing password”.
    2. (eToro) The account that is being copied also needs to be on the watchlist of the board.
      If the board does not have access to (a)the login credentials or (b) the copied account can’t be added to the board watchlist for at least 2 consecutive weeks, the investment group is disqualified from the competition.
  9. The following benchmark will be included in the ranking: iShares MSCI ACWI UCITS ETF (SSAC) denominated in Euros.
    1. The board may also decide to include partner investment societies or other parties into the ranking as a benchmark.
  10. The weekly ranking consists of risk-adjusted return, total return, change in total return and volatility.
    1. The risk adjusted return will be the Capped M2 measure, defined as:
    2. The risk-free rate will be based on the yield of German government bonds matching the maturity of the investment competition, 9 months. 
  11. Returns are calculated by the following formula: (Current value of the portfolio)/(Initial deposit of a member * number of members) – 1. E.g. a group of 15 students put 300€ each and the current value of the portfolio is 4600€. 4600/4500 – 1=+2.22%. If positions are taken in other currencies, the total wealth in Euros given by the broker will be considered.
    1. If there is extra money on the bank account, the quantity of money will be noted and subtracted from the current value of the portfolio. It will not count as extra profit. E.g. a group of 15 students at 300€ each could have 4600€ instead of 4500€ on the bank account because of leftovers. The return will be calculated on 4500€ and not 4600€, the difference will be constantly subtracted from the current value of the portfolio to calculate the group’s return. Thus, extra deposits will not count. 
  12. Members joining later than the official start of the Investment Competition will have to pay the initial amount agreed upon by the group, minus the loss, or plus the profit, at the time of the joining. The initial capital will then increase by the initial amount, and by paying the profit or loss, the group’s return stays the same. E.g. if the initial amount is 300€, a member wants to join in January, the group is at +10%, the new member will pay 330€. The initial group’s endowment will increase by 300€, maintaining thus the group’s return of +10%. This logic applies also to losses, and if a member leaves a group during the Investment Competition.
    1. If a member gets kicked from an investment group, he/she will receive his/her initial investment plus the profit or minus the loss at the time of the kick, as shown in article 12. The initial investment of the member will be removed from the group’s initial capital, and the group’s return recalculated.
    2. Each investment group is free to add a clause to the situation, such as a fine for joining later or leaving earlier. A fine will not influence the returns. 
    3. Within the timespan of the Flow Traders Investment Competition it is allowed to leave the IG when a member doesn’t agree with a trade. Within eToro specifically, it is allowed to un-follow the treasurer’s account, but the member will be removed from the IG. However, it is not allowed to re-follow the treasurer. Once the IG member has unfollowed the treasurer’s account rule 12a will take place.
  13. Trading bank accounts of investment groups have the sole purpose of trading. All money removed from the account during the year for other purposes will be accounted for as a loss (e.g. dinners), except if a member gets kicked.
  14. Any potential trading cost credit received from the broker is not counted in the group’s return. Such free costs will thus be compensated for in the calculation of returns by subtracting them from the portfolio value.
  15. An investment group needs at least 7 unique members. The legal maximum is 25 members. Members are allowed to join a maximum of 1 investment group.
    1. The board can authorize an exception to this rule if it is well-argued. 
  16. An investment group’s minimum initial total deposit is €600.
  17. Investment groups must respect the Dutch law. Restrictions include:
    1. Maximum 25 members per investment group,
    2. Maximum deposit of €9075.60 per member,
    3. Professional investing is not allowed,
    4. Not allowed to use extra deposits to cover losses, don’t invest more than 100% of the capital (e.g. leverage restriction, no naked short-selling, no credit line),
    5. The initiative to found an investment group didn’t come from the financial institution where the group has its trading account. 
  18. Investment groups need to be registered with their current chairman and treasurer at the chamber of commerce by the end of the Investment Competition.
  19. If an investment group does not comply with the rules above, its participation will not be considered in the Flow Traders Investment Competition and its return not calculated. It will have the status N/A until the compliance is effective.

Any comment? Please contact us via secretary@bnreindhoven.nl