The D-Score is a proprietary metric used at Darwinex that measures the quality of the DARWIN's return curve over the last 5 years.

1. What is the D-Score

The D-Score is a proprietary metric used at Darwinex that measures the quality of the DARWIN's return curve over the last 5 years.

Therefore, the D-Score is relevant for those providers who pursue Darwinex AuM.

2. The origins of the D-Score

The D-Score was born in 2013, much earlier than the DARWIN itself.

In the early years, it was based on a combination of our Investable Attribute grades and weights.

However, such a variety of factors that influenced it had brought it to a point of no evolution.

After going through numerous analyses with the data of thousands of DARWINs, we reached the conclusion that using the data from the DARWIN's quote we could derive a more predictive D-Score than the previous one.

In 2020, the D-Score calculation became much simpler, using only the data of the DARWIN's quote.

3. Our approach to the D-Score

Our in-depth research with the D-Score has led us to the following conclusions.

  1. A DARWIN’s Quote can be used to determine its ability to generate future returns.
  2. Investment Attributes provide information on how strategies achieve their returns. This is useful, e.g. for describing the behavior of a strategy without the need for traders to describe it themselves.
  3. The best strategy to invest in DARWINS is to invest in those that, in the medium term (2-3 years onwards), have been able to generate returns and currently have positive momentum.
  4. DARWINs that have stopped to perform change the ''shape'' of their upward return curve. In trading jargon, the breaking of a trendline is usually an indicator of strategy exhaustion.

Points 3 and 4 are what we have attempted to summarize in a single metric, the D-Score, and the results are promising.

4. Presence of the D-Score in other platform features

  • Accounts without DARWINs

As the DARWIN quote is not available for accounts without associated DARWINs, D-Score calculation will be simpler.

However, there may be discrepancies between the D-Score value of an account with or without a DARWIN and how often it is calculated.

The D-Score in DARWINs is calculated at least once an hour but it could take longer for those strategies which have not created a DARWIN yet. 

  • Predefined filters

Some predefined filters use the D-Score in their filter criteria.

  • D-Score rebates

Commission rebates for traders are linked to the D-Score.

  • A D-Score of 55 is required to get a 20% discount.
  • A D-Score of 60 is required to get a 40% discount.

5. Warning

The D-Score is not a recommendation to invest in DARWINs nor a guarantee of future profitability.

6. “D-Score” podcast mini-series w/ Javier Colón & Ali Saif

1) History of the D-Score up to 2020

In this first episode, Javier Colón talks about the history of Darwinex and all its Diagnostic Algorithms.

Javier takes listeners back in time to the origins of the D-Score and Darwinex itself, highlighting everything that has contributed to its evolution.

He sheds light on the need for Darwinex's Investment Attributes, what purposes they were intended to serve, and how the D-Score came about in its first form.


2) What has Darwinex learned as the D-Score has evolved

In episode 2, Javier Colón shares what Darwinex has learned through time and over various iterations of the D-Score which have lead to its current state as deployed on the Investor Platform.

He sheds light on the problems with the current D-Score, and how it became increasingly difficult to iteratively improve upon it due to its dependencies on Darwinex Investable Attributes.


3) How is the D-Score calculated?

In episode 3, Javier Colón shares considerations, logic and specific details around the calculation of the new D-Score.


4) Is there a best way to invest in DARWINs?

In episode 4, Javier Colón shares his experiences with DARWIN portfolio creation, his considerations, investment criteria, etc.

He states that these findings are in no way the ONLY ways to construct DARWIN portfolios and encourages the audience and the wider community to leverage the DARWIN API to improve upon the New D-Score or even create their own if they wish to!


5) Impact of the D-Score on Investable Attributes

In episode 5, Javier Colón sheds light on where the new D-Score leaves existing Investment Attributes at Darwinex.

Specifically, he sheds light on the Performance (Pf) attribute's future, given the correlation to the new D-Score as a result of the latter's formulation via a DARWIN's Quote.


6) Impact of the D-Score on Darwinia & Rebates

In this final episode, Javier Colón explains the impact of the new D-Score on key Darwinex assets such as the Darwinia competition and Rebates.

He also explains how Darwinex makes proprietary capital allocation decisions, what factors influence the same, and the challenges Darwinex faces in deploying company capital vs those faced by individual investors.