In today’s increasingly competitive investment landscape, the ability to consistently outperform market benchmarks is becoming more difficult, not easier. The irony is striking: while technology, data access, and analytics tools have advanced tremendously, the actual performance of actively managed funds remains underwhelming, and in many cases, disappointing.
This underperformance is not due to a lack of intelligence or effort. Most active managers are highly skilled, experienced professionals. Rather, the problem lies in a fundamental disconnect between traditional methods and what the market actually rewards. The solution? A smarter, evidence-based approach that leverages modern analytics to uncover what truly works, and Trendrating is leading that evolution.
The Harsh Reality Facing Active Managers
Despite the widespread belief that active management should offer higher returns through skilled stock selection and tactical decision-making, the data paints a very different picture. Consider the following statistics:
- 93% of all actively managed U.S. mutual funds underperformed the S&P Composite 1500 over a 20-year period.
- 94% of large-cap funds failed to beat the S&P 500.
- 95% of mid-cap funds lagged behind the S&P Midcap 400.
- 94% of multi-cap funds fell short of the S&P Composite 1500.
- Similar results were found for value and growth funds across every market cap segment.
Sources: SPIVA Scorecard, Alpha Architect
These numbers aren’t just disappointing, they are alarming. They raise important questions about the methodologies and tools still used by many in the active management industry. If alpha generation is the goal, why are so few actually achieving it?
The Alpha Opportunity: Performance Dispersion Is Real
One of the core principles behind active investing is the concept of performance dispersion, the wide difference in returns between the best- and worst-performing stocks within any given universe.
Over a recent 6-month period in the US Large Cap stocks investment universe:
- The top 25% of stocks gained an average of +35%
- The bottom 25% lost an average of -15%
- That’s a staggering 50% performance gap
Source: Trendrating.
This dispersion represents a powerful opportunity, the chance to capture outsized gains by selecting the right stocks and avoiding the wrong ones. The challenge is how to consistently identify and act on these opportunities. Unfortunately, the tools and data traditionally used by active managers often lack the predictive strength and analytical depth to do so reliably.
What’s Holding Active Managers Back?
In today’s market, many investment solutions may sound logical, but the key question remains: do they consistently generate real profits? Despite the clear existence of performance dispersion and ample opportunities to outperform benchmarks, many active managers still struggle to seize them.
This often stems from the limitations of traditional investment frameworks. At Trendrating, we offer a different approach, one built on data-driven insights, proven results, and a systematic framework specifically designed to capture authentic, repeatable performance. Rather than relying on assumptions and guesswork, we prioritize validation, rigor, and adaptability to empower investors in unlocking genuine alpha.
Trendrating: A New Standard for Strategy Validation and Alpha Discovery
Trendrating was founded to address exactly this gap. Our mission is to empower professional investors with data-driven intelligence, systematic strategy validation, and advanced tools that make it easier to capture alpha.
Our platform is designed for both discretionary and systematic managers and provides a powerful framework for:
- Identifying the most effective stock selection criteria.
- Building rules-based investment models.
- Testing strategies across multiple market cycles.
- Optimizing decision frameworks using real-world data.
- Measuring and validating the actual contribution to alpha.
We move beyond the theory and focus on what works in practice, backed by over 15 years of historical data, rigorous performance attribution tools, and a highly customizable interface.
What Can You Do with Trendrating?
Whether you’re building a new strategy from scratch or refining an existing model, Trendrating offers a rich set of capabilities:
✅ Select from a comprehensive database of metrics, including Fundamental, Quantitative, Volatility, Market Cap, and Trend indicators.
✅ Define allocation and rebalancing rules tailored to your investment style and objectives.
✅ Backtest any combination of selection rules across multiple geographies, sectors, and timeframes, spanning over 15 years of market cycles.
✅ Evaluate the real alpha contribution of individual parameters and their combinations, with full transparency.
✅ Explore smarter combinations of filters to uncover optimal strategies that outperform consistently.
✅ Validate your strategy design with robust historical data and avoid overfitting or hindsight bias.
✅ Build, document, and execute high-conviction, evidence-based investment strategies.
Insightful Findings That Drive Better Decisions
Our clients often discover eye-opening truths about their current strategies and assumptions. Here are just a few examples of insights that Trendrating has made possible:
- Different sectors and regions tend to reward different types of fundamental metrics.
- Relying on a single fundamental factor often leads to underperformance; incorporating multiple factors, ticking more quality boxes, provides a more robust and reliable selection process.
- Adding a trend overlay to fundamental analysis significantly enhances the ability to identify sustainable alpha opportunities.
- Adaptive strategy design lets investors retain full control over selection and ranking rules, using rigorous backtesting to fine-tune their strategies based on market conditions. This approach enhances resilience and adaptability.
- Thanks to the platform’s smooth and user-friendly interface, investors can streamline the decision-making process, saving valuable time.
True discovery requires a platform that enables you to explore, test, compare, and validate your ideas, rather than simply hypothesizing.
Serving Both Discretionary and Systematic Investors
Trendrating is built to support a wide range of investment styles:
- Discretionary investors can enrich their decision-making with hard data, customized filters, and insights they can use to fine-tune portfolio allocations.
- Systematic investors can design fully automated, rules-based strategies with transparent logic and historical performance documentation.
In both cases, Trendrating acts as an enabler of fact-based decision-making, freeing investors from over-reliance on subjective judgments or outdated assumptions.
A Transparent Contribution to Alpha
What sets Trendrating apart from other platforms and data providers is our measurable, transparent value. Every strategy built or refined using our system can be tracked, documented, and attributed in terms of alpha generation.
We believe that smart data, properly tested and applied, is the most powerful edge any investor can have. In a world flooded with noise, clarity and evidence are the ultimate competitive advantage.
Conclusion: A Smarter Path to Outperformance
The underperformance of active strategies is not inevitable. It’s the result of outdated tools, limited data frameworks, and untested assumptions. Trendrating offers a better path — one based on data integrity, strategic flexibility, and proven analytics.
With the ability to validate, optimize, and implement smarter strategies, Trendrating empowers professional investors to make better decisions, and achieve the performance they’ve always aimed for.
It’s time to move beyond tradition. It’s time to manage smarter. Trendrating – Turning Data into Alpha.
About Trendrating
For over 10 years, Trendrating has been helping hundreds of global money managers maximize their performance and enhance risk control. In today’s complex market environment, where challenges continue to intensify, our clients require superior data and innovative solutions that deliver timely and actionable market intelligence. This is essential to effectively exploit the wide performance dispersion across stocks.
Traditional data sources and conventional research approaches tend to explain market trends only after they have occurred, which puts investors at a disadvantage. To stay ahead in fast-moving markets, advanced technology and cutting-edge analytics are indispensable, and this is exactly where Trendrating’s mission lies.
We offer a disruptive, AI-driven analytics platform that measures performance dispersion and accurately rates price trends, filtering out market noise, subjective opinions, and often questionable research. Our approach empowers investors with objective, data-backed insights that enable smarter, forward-looking investment decisions.
Our innovative technology and market impact have been recognized by leading industry platforms:
- In 2021, Trendrating was named one of the Best Data Analytics Companies of the Year by CIO Bulletin.
- In 2022, we were honoured as one of the Best Strategy Management Solution Providers by the same distinguished platform.
- In 2023, Trendrating featured on the cover of Enterprise World Magazine as one of the Most Trusted Advanced Market Analytics Solution Providers and a Top Performance Management Platform to Watch.
- In 2024, we were recognized by CEO Views Magazine as one of the Most Innovative Companies to Watch.
- Most recently, in 2025, Trendrating was awarded Best Risk Control Platform of the Year by Visionary CIO Magazine.
About the Founder
From starting out as a portfolio manager to founding two successful fintech companies, Rocco Pellegrinelli, Founder and CEO of Trendrating, has built a career at the intersection of finance and technology innovation.
In 1996, he launched Brainpower, a cutting-edge portfolio management platform that quickly gained global traction. Just four years later, the company went public on the Frankfurt Stock Exchange, and in 2006, it was acquired by Bloomberg — a strong validation of its value and impact in the industry.
Not one to settle, Rocco began a new research and development initiative to solve a key challenge in equity investing: how to reliably detect and capitalize on price trends. After several years of intensive testing — analyzing over 350 indicators, thousands of model combinations, and 25 years of historical data across 20,000 securities, the foundation of what would become Trendrating was built.
With the support of a world-class team of financial and data science experts, now integral to Trendrating, Rocco created a platform that delivers advanced analytics and intelligent technology to over 300 institutional investors worldwide.
His leadership and vision have been widely recognized. In 2020, he was named one of the “10 Most Inspiring CEOs to Watch” by Industry Tech Outlook, and one of the “10 Best Innovative Leaders” by DigiTech Insight. In 2025, he received the European CEO of the Year Award (Most Innovative Global FinTech CEO) from EU Business News, further highlighting his impact on the investment technology landscape. Rocco is also a contributor to Nasdaq’s Advisor Portal, where he shares insights on market trends, portfolio strategy, and the future of active management.