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TRANSCRIPT
Intelligent Fund Management Ed Downs, Manager for IFM
• Hello. Ed Downs here, CEO of Nirvana Systems and manager of IFM. We’re here to talk about Intelligent Fund Management, but I’d like to say a little about our team first.
30 Years of Experience
Nirvana Systems was established in June, 1987 to provide Automated Trading Solutions for Active Traders & Individual Investors.
30 Years of Experience
Client Focused
We KNOW the Individual Investor marketplace.
Live Customer Event
Thousands of satisfied customers have stayed with us and used our software for decades.
Advanced Technology
Our proprietary Artificial Intelligence engine has produced stellar performance within our premium Trading Strategies.
A.I. Trading Strategy 2005-2016
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Millions Invested over 20 Years of Software Development
Average 30% Return per Year
for 10 Years
• Today, we have many customers who are using our TRADING products and doing well.
• But the demand for solutions for PASSIVE INVESTORS is enormous.
• Nowhere is this more apparent than in the recent growth of the Robo Advisor space.
The Robo Advisors Arrive.
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
Robo Advisors Arrive!
In 2010-2013, the first “Robo Advisors” appeared on the scene.
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 $5.1
Personal Capital $175.5 $3.1
Wealthfront $129.5 $4.0
Motif Investing $126.5 n/a
Learnvest $72.1 n/a
SigFig $60.0 $0.1
Future Advisor $21.5 $0.8
$790.1 M $13.1 B
Source: www.crunchbase.com October 2016
Projected Growth
Strong growth is forecast in this market.
• To understand the problem we are solving, I think it’s worth spending a minute or so looking at well the Robo Advisors have performed for their clients.
How have Robo Advisors performed for their clients so far?
Robo Performance?
Searching for Robo Advisor Performance turns up few articles.
https://www.nerdwallet.com/blog/investing/best-robo-advisors/
They discusses Features and Fees. There is typically no mention of performance.
Robo Performance?
Article on 2014 Performance ‘Betterment’s 12-month return of 3.43% was significantly below the S&P 500 index at 13.46%. And Wealthfront’s most aggressive fund returned just 4.83%.’
Source: http://www.pragcap.com/assessing-the-2014-robo-advisor-performance/
Performance
https://senzu.io/investing/robo-advisors
Senzu performed an audit of the Robo Advisors’ performance in Real Time.
Performance
S&P 500 Stocks
Performance
Of the Top 6 Robo Advisors FutureAdvisor is the only one that publishes client account performance.
Performance
FutureAdvisor shows client accounts up 23.3% since June 2013.
Performance
Why do Robo Advisors Under-Perform the Market?
• If you look at the history and development of the Robo Advisors, it’s clear why their returns are so low.
• It’s essentially because they are automating an out-dated theory that was published over 60 years ago.
Modern Portfolio Theory
Harry Marcowitz 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 MPT Model
S&P 500
An investment in SPY would have made 10% more than the Aggressive Growth portfolio.
Ibbotson Portfolios published on: www.tradekingadvisors.com
Ibbotson Funds
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
• As we witnessed the poor performance records of the Robo Advisors in 2015, we saw an incredible opportunity forming. The Robo Advisors sell their services at a very low cost. In fact, you can manage $100,000 at Betterment for $150 a year! That SOUNDS good, except that everyone knows you can’t save your way to prosperity.
• Returns matter – a lot. Our belief is that if we can provide an investment platform that delivers superior returns with equal or less risk, we can create enormous value for an ultimate acquisition.
Our Goals are Simple:
Higher Returns. Less Risk.
We achieve 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
We have developed proprietary Artificial Intelligence techniques to determine Probability of Movement.
This enables us to periodically switch into Securities with the greatest potential to appreciate.
Points of Highest Probability of Upward Movement generated by our Artificial Intelligence engine.
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
Disrupting the Disruptors
• OmniFunds is the product of Intelligent Fund Management, LLC – a company I started in March of 2016 to pursue this incredible opportunity.
• IFM is in a perfect position to leverage everything we’ve learned over 30 years to add value in this space.
Robo Advisor Industry Trends
“The experts expect that, in the future, you’ll find a variety of investing styles available from the Robo Advisor, not just a passive, index-fund investment approach.
Greater sophistication in the technology for trade analysis, plus back-testing of strategies, will drive these styles forward.”
RoboAdvisorPros.com September 2016
Investment (Millions)
Capital Investment
IFM
Seed Capital of $2m was raised from customers to launch IFM.
Future Advisor was acquired by
BlackRock in 2015 for $152 Million.
As of October 2016
• August 2015 ○ OmniFunds software prototype built to test ETF Switching principles - a success.
• March 2016 ○ The Intelligent Fund Management, LLC launched and web site development started.
• October 2016 ○ Minimum Viable Product completed, integrating directly to Interactive Brokers.
• November 2016 ○ First Investors began Adopting OmniFunds for their accounts.
IFM Traction
OmniFund Investment Dashboard
Year to Date
Jan 18, 2017
Our US Stocks OmniFund is up 2.02%.
The S&P 500 is up 0.67%
This is just one of our OmniFunds. Others are under development.
Moving Forward...
• We’re seeking a financial partner to help us move to the next level and become a dominant player in this industry.
Contact...
To receive more information on IFM, email or call... Ed Downs [email protected] 512-298-3606 Intelligent Fund Management, LLC 9111 Jollyville Rd., Suite 275 Austin, TX 78759
www.myomnifunds.com
