The New OmniFunds

by Ed Downs

Automated Trading for the World

An Uncertain Market

Following the market decline of 2008, investors began looking for better ways to invest.

2000 Tech Bubble

2008 Sub-Prime Mortgage Meltdown

The Robo Advisors Arrive...

For the first time in history, automated investing is embraced by institutions and the financial world.

Betterment

Personal Capital

Wealthfront

Motif Investing

Learnvest

SigFig

Future Advisor

Investment & AUM

Capital Investment and Assets Under Management almost doubled in these firms in 2016 alone.

Company Raised (M) AUM (B)

Betterment $205.0 $8.0

Personal Capital $175.5 $3.5

Wealthfront $129.5 $5.0

Motif Investing $126.5 n/a

Learnvest $72.1 n/a

SigFig $60.0 $0.1

Future Advisor $21.5 $0.97

$790.1 M $17.57 B

Source: www.investorjunkie.com March 2017

Projected Growth

Strong growth is forecast in this market.

Robo Advisor Performance

Performance

Of the Top 6 Robo Advisors listed in this 2017 report, FutureAdvisor was the only one that published client account performance.

Performance

FutureAdvisor shows client accounts up 23.3% since June 2013.

Performance

January 15, 2017

Why do the “Robos” Underperform?

Modern Portfolio Theory

Harry Markowitz published his “Modern Portfolio Theory” in 1952.

MPT uses historical returns to predict future returns and risk.

The MPT Model

After analyzing the movement of stocks, bonds, etc. over a long history, MPT determines a fixed allocation for each Asset that is then maintained through “Re-Balancing.”

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

The Percentage Mix does not change over time.

The Problem with Fixed Asset Allocation

When the Market goes down, these

ETFs go down with it. Jan-Oct

2015

ANY fixed allocation of assets does not work across all markets.

Simulated Account Performance

The OmniFunds Solution

Higher Returns. Less Risk.

... achieved this by:

Applying Market Personality to determine asset mix.

Switching assets based on Artificial Intelligence.

Adjusting Allocation to the User’s Risk Tolerance.

A.I.

Market Personality

Market Personality is always changing (Volatile, Trending, ...)

It makes no sense to stay invested in the same assets in all market conditions.

We adjust our asset mix depending on what the market is doing.

Artificial Intelligence

Our Artificial Intelligence Engine enables us to identify securities with higher appreciation potential at each switching interval.

Signals generated by our A.I. Engine identify points with

high appreciation potential in the next interval.

Risk Adjustment

The investor can easily adjust between “Conservative” and “Aggressive” allocation models.

Robo Advisor +60%

½ the Risk

The Result.

4 TIMES the Return

OmniFunds +280%

Higher Returns with Less Risk

The New OmniFunds

MyOmniFunds.com

Our OmniFunds web site, launched in October 2016, has undergone some significant improvements.

MyOmniFunds.com

OmniFunds are a combination of Aggressive and Conservative Portfolios.

Conservative Aggressive

Building OmniFunds

Each OmniFunds is based on:

• A Symbol Universe

• Market States

• Filters

• Ranking Functions

• Allocation

Now we can easily create new Funds in the OmniFunds Lab!

Demo to follow...

Austin, Texas June 4-5, 2017