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.

Posted by MPosey on 02-17-2016 in Company NewsPermalink

This Week in Theta News:

* Theta Research is featured at Austin MTA Chapter meeting.

* The Growth Continues – Theta Research Announces Recent New Managers and Models

Theta is Featured at Austin Chapter of the Market Technicians Association (MTA):

On January 20th, Mike Posey, Theta Research’s Marketing Director was the featured speaker at the Austin, Texas MTA Chapter meeting. In this presentation, Mike shared his insight on the due diligence process drawn from his more than 16 years of finding, evaluating and marketing managed accounts.

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 Managers and Models:

Tobias (“Toby”) Carlisle, Managing Member of Carbon Beach Asset Management, LLC, initiated the tracking of four new strategies: Classic Value, Enhanced Return Value, Risk Managed Value and Small & Micro Classic Value. All four are new strategies that began trading on January 1, 2016.

Joe Christian of Far Better Coaching began tracking his Far Better Absolute Return strategy as of January 1, 2016.

DeWayne Hall of Good Life Asset Strategies replaced a prior strategy with his Aggressive Growth Strategy. Theta Research has verified performance of this model back to its inception of February of 2015.

Jonathan Wallentine, FSA, CERA, MAAA of Actuarial Management Company also rolled out an additional model named Tactical Asset Allocation. Theta Research has verified performance of this model back to its inception of September 1, 2015.

Len Fox, Founder and CEO of Scarecrow Trading also added his new Phoenix strategy to those being tracked. Theta Research has verified performance of this new model back to its inception on 10/26/2015

Posted by MPosey on 01-28-2016 in Company NewsPermalink

Theta News – SEC Actions Highlight the Importance of Actual Performance

At Theta Research, we stress the need for actual performance data rather than backtested or other hypothetical returns. A recent article by the law firm of K&L Gates, LLP, discusses some of the recent SEC enforcement actions brought as a result of improper performance advertising by advisers.

Entitled, “Recent SEC Actions Highlight Adviser Responsibilities With Respect to Performance Advertising,” the article stresses the SEC’s views that:

1. Hypothetical or back-tested performance data should not be based on assumptions when actual historical data is available (emphasis added);

2. Investment advisers should maintain adequate backup for performance claims made in their advertisements, including claims based on information provided by third parties;

3. Disclosure that performance data is hypothetical or back-tested should be complete and prominently displayed with the performance data; and

4. The prohibition on past specific recommendations in advertising material contained in Section 206(4)-1(a)(5) of the Advisers Act, as modified by SEC guidance, continues to be an important investor protection tool the violation of which is subject to SEC enforcement.

Learn more about Theta Research’s performance documentation and verification methodology.

Posted by MPosey on 01-19-2016 in Industry NewsPermalink

Denny L. Holmes, President and Portfolio Manager of Mission Control Investment Strategies, LLC, has established model portfolios named the MCIS Falcon, Eagle and Owl Strategies. Falcon is a combination equity long/short and bond model, Eagle is a sector rotation strategy and Owl is based on traditional asset allocation. A fourth model, the MCIS Moderate Portfolio is also being tracked and consists of a combination of the Eagle, Owl and Falcon models. These are relatively new models and Theta has established tracking as of their common inception date of 6/30/2015.

Current Theta Manager, Brian Boughner, CFA, CMT and co-founder of Parallel Financial Partners has announced the tracking of an additional model named the Parallel Long/Short Portfolio. This strategy takes long and short positions in individual securities and ETFs, and may simultaneously be long some securities while short others. Theta research began tracking the actual performance of this model as of its inception date of 6/30/2015.

Another current Theta Investment Manager, Ryan Redfern, ChFC, owner and CIO of Shadowridge Asset Management, LLC has added a model named SDW Enhanced Index Strategy that uses a rotational strategy based on a combination of long-term and short-term trends in the S&P 500 Index. This is a new model and Theta has established tracking as of its inception date of 7/23/2015.

Existing Investment Manager Troy Schield, CFS, BCS of Disciplined Wealth Management has submitted two additional models for tracking. The Concentrated Sector Model seeks to own the leading sectors in uptrends based on a quantitative model that combines relative strength analysis and individual sector signals. The Intense Sector Model employs a similar methodology but uses leveraged to provide a more aggressive exposure. Theta Research has verified the actual performance of the Concentrated Sector and Intense Sector models to their inception dates of 12/18/2013 and 6/30/2015, respectively.

Posted by MPosey on 08-24-2015 in Company NewsPermalink
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