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
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.