It’s been a busy few weeks here at Theta Research since the NAAIM Uncommon Knowledge Conference. We have added seven new strategies to the list of tracked models, one with a track record going back to 1992. These strategies have come from new Investment Managers as well as new strategies from existing Managers. Included in that number are the following:
Models Added by Existing Theta Investment Managers
Dr. Gary Harloff, current Investment Manager and founder of Harloff Capital Management, announces the expansion of his University Beta Strategies, adding the Equity, High-Yield Bond and Government Bond models. This brings Harloff’s total number of tracked accounts to seven. All of these latest strategies are new and do not yet have three months of track record.
Another current Theta Investment Manager, Ryan Redfern, ChFC, owner and CIO of Shadowridge Asset Management, LLC has added a model named SDW Core 403(b) (mod-aggr) Strategy. Theta has established tracking of this model as of its inception date of October 1, 2013.
One of our newest Investment Managers, Carbon Beach Asset Management has added its Carbon Beach Concentrated Deep Value Strategy. This model will not appear on the public website due to its being limited to Accredited Investors. However, qualified investors and investment professionals may access this strategy via Theta’s Guest Pass by contacting Colin Macintosh or Toby Carlisle.
New Investment Managers Added to the Theta Database:
New Investment Manager, Steve Rumsey, founder and CIO of Optimus Advisory Group, has submitted his Tactical High-Yield Bond strategy for tracking. Theta Research has independently documented the track record of this model back to its original inception date of November 1, 2013.
Bruce P. DeLaurentis, founder of Kensington Analytics, LLC has submitted his High-Yield Bond strategy for tracking. This strategy’s track record has been independently verified by Theta Research back to its original inception date of January 1, 1992, making it the longest track record currently found on Theta’s database.
…But First, a New Investment Manager Joins Theta Research
Michael Kieffer, Founder and Portfolio Manager of Kieffer Capital, LLC introduces the Covered Options Investment Strategy. Theta Research has verified the actual performance of this model back to its inception date of 01/31/2013.
Theta Research Radio Interview
Theta’s Marketing Director, Mike Posey, was featured in an interview on Strategic Investor Radio. Conducting the Interview was Charley Wright, a 30-year veteran in the investment industry and is the Host of Strategic Investor Radio.
Charley is a Fee-Only Investment Advisor with Partnervest Advisor Services, LLC and focuses on strategies designed to protect asset values in declining markets while capturing gains in rising markets. In other words, Charley’s professional focus is on the kind of active investment managers you’ll find on the Theta Research database.
The podcast was carried on OC Talk Radio, located in the heart of Orange County, California and was originally aired in 2015. However, you can now find a recorded version of Mike’s interview on the Theta Research home page.
Education Webinar Featuring Theta Research
Theta Research was also featured in an educational webinar sponsored by the Market Technicians Association (MTA). The MTA Educational Web Series consists of hour-long webcast seminars featuring recognized industry professionals and are hosted several times each month.
In his presentation entitled, “The Importance of Actual Returns in the Due Diligence Process” Mike Posey discussed some of the perils and pitfalls of using hypothetical returns when marketing model portfolios, and how they can be of only limited use in the due diligence process. He also shared lessons learned from his more than 16 years in evaluating and marketing third-party investment managers
Theta News – More New Active Models on Theta
In This Edition of Theta News:
* Theta Research is featured at Houston, Texas MTA Chapter meeting.
* The Growth Continues – Theta Research Announces Recent Addition of New Managers and Models
Theta is Featured at the Houston, Texas Chapter of the Market Technicians Association (MTA):
On Tuesday, March, 1, 2016, Mike Posey, Theta Research’s Marketing Director was the featured speaker at the Houston MTA Chapter meeting. Like his previous presentation to the Austin MTA Chapter, Mike shared his experienced-based insight on the due diligence process. Mike’s goal is to highlight business concerns once the heavy lifting of creating a trading model is done.
The presentation was primarily educational in nature with a focus on why it is important for Investment Managers to have a track record made up of actual, verified returns. Mike also discussed the inherent limitations of backtesting from a due diligence standpoint and why it’s especially important for early-stage Managers to document their performance in real-time trading.
Mike’s comments about his experience in the due diligence field closely follow those expressed in his recent white paper – The Importance of Actual Returns in the Due Diligence Process, a copy of which is available free of charge from Theta Research.
Theta’s Growth Continues – Announcing the Addition of New Models by Existing Managers:
Marty Kerns and Parker Binion of Kerns Capital Management announce the replacement of two prior strategies with their Sector Strength model. Sector Strength is part of Kerns’ Valarian Strategies and began tracking as of its inception date of December 1, 2015.
Another existing Investment Manager, Dr. Gary Harloff of Harloff Capital Management, has added three additional strategies under his University Beta Strategies series. The new strategies are Equity, High-Yield Bond and Government Bond. Theta Research began tracking these strategies as of their original inception dates in February and March of this year.
(Note that, as discussed the last edition of Theta News, the performance of these new strategies will not yet show up on the Theta subscription site since they do not have at least three months of actual performance data. In addition, two new Investment Managers and their models were added to Theta Research’s database but have chosen to remain anonymous.)
More New Managers and Answers to Your Questions
In this issue of Theta News, we want to welcome two new Investment Managers to Theta’s tracking service as well as answer a common question we hear from both Managers and Subscribers.
Three New Investment Managers Sign On with Theta Research
Armando Alizo, founder of Mount Dora Capital Management is now having his new model named the ProFunds Strategy tracked on a daily basis using the ProFunds platform. Tracking for this strategy began on January 1, 2016.
Greg Brooks announces the renewal of his Brooks Active Long/Short Strategy. This strategy is tracked on a daily basis using the ProFunds mutual fund platform. Theta Research has verified this model’s actual performance back to its inception on January 1, 2004.
Tracking services have also been established for Kevin W. Murphy’s Vitruvian Geometry strategy. This strategy began trading on January 27, 2016 and is tracked on a daily basis using the Guggenheim/Rydex mutual fund platform.
Theta Answers Your Questions:
Q: Why can’t I see performance data on the subscriber site for some of the new strategies announced by Theta News?
A: There are two reasons why a strategy may not show on the Theta database. First, Theta’s shortest time window for ranking reports and analysis is three months. Strategies with less than that much historical data will not show up on the site. The name of the Investment Management firm will also not show up on the Manager list unless it has other strategies on Theta with longer track records.
As a result, brand-new model strategies could take as long as three months before tracking numbers will appear on the subscriber site. However, this is where the Theta advantage comes in. Fortunately, Theta has the ability to document and verify historical data where it exists for a model strategy. Since most Managers come to us with some historical track record, subscribers usually have immediate access to new Managers’ performance information.
The new Investment Managers being announced in this issue of Theta News are all good examples of the above. Mount Dora’s ProFunds Strategy and Kevin Murphy’s Vitruvian Geometry model both started trading in January of 2016, so you won’t see performance on those programs until after the end of the first quarter of 2016. On the other hand, Royal Oaks’ Brook Active Long/Short Strategy is a new addition to Theta’s database but actual performance has been verified back to its original inception date in 2004.
A second reason why a Manager may not show up on the Theta database is that some Managers elect to remain hidden. They value Theta’s ability to document and verify their track records, but prefer to handle marketing their programs via Theta’s Guest Pass feature. I’ll be writing more in the coming weeks about how to maximize use of Guest Passes.
Q: Why are some strategies tracked on a daily basis and others monthly?
A: When Theta Research was originally developed, it tracked only accounts trading Rydex and ProFunds index mutual funds. As a result, a download system was developed to obtain daily valuation and trade information from these two sources. There were only a few monthly tracked models and they were very hard to access using the old system.
However, as time went by, active managers branched out from Rydex and ProFunds offerings and started using other funds such as ETFs that were held in a brokerage accounts. Accordingly, Theta enhanced its monthly performance tracking system so that now it is easy to access both daily and monthly tracked models. As a practical matter, we have seen that most investment professionals want to see time-window analysis based on month-end values anyway.
Because some strategies are tracked daily and others monthly, it’s important that you pay attention to the as-of date on Theta’s reports. On monthly tracked accounts, the as-of date will always be the end of the prior month, while daily tracked as-of dates will be a rolling period based on the close of the most recent trading day.
The bottom line is that including monthly tracked account broadens the population of Investment Managers available who can take advantage of Theta’s performance tracking and verification service.