Methodology · The Institute's Framework
How every system in coverage is scored.
Six structural dimensions · Three analytical tiers · One composite score. The full framework is published; the proprietary weights are protected.
Dimensions
6
Tiers
3
Score
0–10
Six evaluation dimensions
Every system in the Institute's coverage universe is evaluated across these six structural categories. Each dimension captures a distinct aspect of system quality that institutional allocators assess before deploying capital.
Performance Validation
Are the returns real? Verified by independent audit, or self-reported and unauditable? The foundation of any evaluation.
Risk Architecture
How does the system manage risk? Is risk management built into the design, or bolted on as a marketing feature?
Stress Tolerance
What happens when markets move against the system? Does the architecture survive adversity, or does it accumulate hidden exposure?
Operational Integrity
Regulatory status, corporate structure, fee transparency, and the operational foundations that separate serious platforms from marketing operations.
Vendor Credibility
Track record of the team behind the system. Professional background, complaint history, and alignment between claims and evidence.
Structural Soundness
The composite assessment. Does the system's architecture, as observable from published data, exhibit the characteristics of a structurally sound investment vehicle?
Three analytical tiers
Tier 1
Quantitative Scoring
The foundation of every evaluation. Based on data measured directly from published, observable sources — verified return figures, drawdown metrics, time in market, track record length, regulatory status, fee structures, and other objective data points. These assessments are mechanical and reproducible. They require no expert judgment — only consistent application of defined criteria to available data.
Tier 2
Structural Inference
Beyond what the raw numbers show, experienced analysts can identify patterns in system behavior that indicate structural characteristics not captured by surface-level metrics. This is the analytical layer that separates institutional evaluation from retail-level comparison.
When a system's equity curve exhibits characteristics consistent with warehoused risk — and when this pattern is observable across the majority of a vendor's algorithms — the Institute's analysts assess the likelihood of structural risk accumulation even without access to underlying trade logs.
Tier 3
Editorial Judgment
The Institute publishes editorial perspectives alongside its quantitative and structural analysis. Editorial content reflects the informed professional judgment of the Institute's analysts — opinions grounded in the data and structural findings from Tiers 1 and 2, expressed in the context of broader industry knowledge and experience.
The Institute's editorial positions are held with conviction and grounded in evidence. They are also held with intellectual honesty. When new data emerges, when market conditions evolve, or when additional information changes the analytical picture, the Institute revises its assessments accordingly.
The tag system
Every vendor in the Institute's coverage universe receives a numerical score and one to three tags identifying key structural characteristics.
Red Tags — Structural Risk Detected
Yellow Tags — Caution / Insufficient
Green Tags — Positive Structural Findings
The Institute for Algorithmic Investing publishes research, analysis, and analytical tools for informational and educational purposes. We do not provide personalized investment advice. Our ratings are general assessments — not recommendations tailored to any individual investor. The Institute is not a registered investment advisor, broker-dealer, or financial planner.