Agile Capital, Inc. (“Agile”) is an online financial advisor. Our website can be found at www.agilecapital.us (the “Site”) and is registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940, as amended. Agile does not provide personalized financial planning to investors, including estate, tax, or retirement planning. Nothing on the Agile Site should be construed as a solicitation or offer, or recommendation, to buy or sell any security. Financial advisory services are only provided to investors who become Agile Clients (“Clients”) pursuant to account opening and acceptance of the written Client Account Agreement. Investors are urged to read and carefully consider in determining whether such agreement is suitable for their individual circumstances. An electronic copy of Agile’s Form ADV Part 2 is available at on www.agilecaptial.us
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS, AND ANY EXPECTED RETURNS OR HYPOTHETICAL PROJECTIONS MAY NOT REFLECT ACTUAL FUTURE PERFORMANCE. FURTHERMORE, PAST RETURNS MAY REFLECT THE PERFORMANCE OF ASSETS FOR A FINITE TIME, OR DURING A PERIOD OF EXTREME MARKET ACTIVITY. ALL INVESTMENTS INVOLVE RISK AND MAY LOSE MONEY.
Diversification does not ensure a profit or protect against a loss in a declining market. Bond funds are subject to the risk that an issuer will fail to make payments on time and that bond prices will decline because of rising interest rates or negative perceptions of an issuer's ability to make payments. Investments in stocks issued by non-U.S. companies are subject to risks including country/regional risk, which is the chance that political upheaval, financial troubles, or natural disasters will adversely affect the value of securities issued by companies in foreign countries or regions; and currency risk, which is the chance that the value of a foreign investment, measured in U.S. dollars, will decrease because of unfavorable changes in currency exchange rates. ETFs or funds that concentrate on a relatively narrow market sector face the risk of higher share-price volatility. There can be no assurance that an investment mix or any projected or actual performance shown on the Site will lead to the expected results shown or perform in any predictable manner. It should not be assumed that investors will experience returns in the future, if any, comparable to those shown or that any or all of Agile’s Clients experienced such returns.
Agile Indices / Index Disclosure
ONE CANNOT DIRECTLY INVEST IN AN INDEX.
An index is a measurement of the value of a section of securities based on a mathematical construct or mathematical formula. As such it cannot be directly invested in. The index value is computed from the prices of selected securities based on their respective weighting within the index.
Agile perpetually licenses and operates a number of Dynamic Indices, which the underlying holdings of the indices are typically ETFs (exchange-traded funds). Agile Dynamic Indices uses the quantitative mathematical formula adjust the pre-defined allocation of the index automatically between a “long”, “cash” or in some cases an “inverse” state based upon current market conditions. This differs to traditional index methodology where the state of the index is always invested in a long position.
ETFs are commonly registered investment companies registered under the Investment Company Act of 1940. The proliferation of ETFs in finance and the benefits over mutual funds allows Agile’s indices exposure to specific geographies, sectors, and asset classes or markets that otherwise would be time and cost prohibited.
AGILE PROVIDES DATA RELATED TO ITS INDICES ON A BEST EFFORTS AND INFORMATIONAL BASIS ONLY. AGILE DOES NOT GUARANTEE THE ADEQUACY, ACCURACY TIMELINESS OR THE COMPLETENESS OF THE INDICES OR ANY DATA INCLUDED THEREIN OR ANY COMMUNICATIONS, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATIONS (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. AGILE SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, DELAYS OR INTERRUPTIONS THEREIN. AGILE MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEES OF AGILE INDEXES OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDICES OR ANY DATA INCLUDED THEREIN. AGILE MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO AGILE'S TRADEMARKS, THE INDICES, OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL AGILE HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING BUT NOT LIMITED TO LOST PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE.
ETF Selection in Agile Indices
Agile indices use ETFs as the underlying holdings of the respective index. Agile Indices utilize a mathematical approach for index security selection. Security selection is on a bi-monthly, monthly, quarterly schedule depending on the index. Agile Indices typically include one or more ETFs that are inverse (opposite) to the long positions. The inverse ETFs must meet the same criteria as the long ETFs to be included in the active index. Agile reserves the right to change at any time the selection of ETFs used in its Indices at any time, in Agile’s sole discretion.
Should the ETFs, broad-based, sector specific or inverse ETFs, not meet the inclusion criteria then the Index will rotate into a cash position which may be represented with the use of a short-duration U.S. Treasury ETF. As the index selects a number of securirties based upon the quantitative criteria, it is possible that the index may be simultaneously in a long position and an inverse position in the same or different asset class.
Agile’s ETF selection process does not guarantee the quality of a particular ETF or that it will 1) be profitable, 2) properly track any comparable index, 3) trade in a liquid fashion, or 4) trade at or above its publicly-posted net asset value.
Index Tracking / Trade Equivalent Account(s)
Investors and clients who which to invest according to Agile’s Index Methodology can open accounts which will attempt to “track” the underlying holdings and performance of Agile’s Indices which may be considered a “tradable equivalent” to an index. Accounts seeking to track to any index, Agile’s or any other, will experience a difference in performance than what is reported by the respective index or index provider. Accounts seeking to track or are a tradable equivalent incur expense and transactions cost not applicable to an index. ETFs or securities comprising an Agile Index may, from time to time, temporally become unavailable adversely affecting the client account. As client accounts require the buying and selling of securities in a market, the supply and demand in the market for either the ETF and/or for the security held by the ETF may cause the ETF shares to trade at a premium or discount to the net asset value of the ETF or the securities which comprise the ETF. Agile indices may only report price performance and do not include dividends or bond coupons all of which will affect the net reported performance in a client account.
Agile, at its own discretion, reserves the right to substitute or omit ETFs in a Client Account as compared to the respective index that the account is attempting to track. Clients should be aware that changes in the selection of ETFs employed by Agile's investment management service may result in the sale of their existing holdings and may subject them to additional tax liability.
ETFs are only one type of securities product, and Agile generally does not make available to Clients other types of securities products that an investor may wish to consider as part of his or her overall financial plan. Other ETFs or investment products may provide different performance. In the event an Agile Index allocates a proportion to cash. A cash equivalent security may be a short duration bond based ETF. Bond ETFs do not offer the investor any guarantees against loss. Investors wishing to a pure cash alternative must explicitly contact Agile through email at email@example.com with a request not to use cash equivalent bond ETFs.
ETF Fee and Performance Disclosure
An ETF typically includes embedded expenses that may reduce its net asset value, and therefore directly affect its performance and indirectly affect a Client’s portfolio performance or an index benchmark comparison. These expenses may include management fees, custodian fees, and legal and accounting fees. ETF expenses may change from time to time at the sole discretion of the ETF issuer. ETF tracking error and expenses may vary between ETFs. Furthermore, ETF performance may not exactly match the performance of the index or market benchmark that the ETF is designed to track because 1) the ETF incurs expenses and transaction costs not incurred by any applicable index or market benchmark; 2) certain securities comprising the index or market benchmark tracked by the ETF may, from time to time, temporarily be unavailable; and 3) supply and demand in the market for either the ETF and/or for the securities held by the ETF may cause the ETF shares to trade at a premium or discount to the actual net asset value of the securities owned by the ETF.
Certain ETF strategies may from time to time include fixed income, commodities, foreign securities, American Depositary Receipts, or other securities for which expenses could be higher than otherwise charged for exchange-traded equity securities, and for which market quotations or valuation may be limited or inaccurate.
Clients should be aware that in some limited instances it may be difficult or impossible to trade the Clients’ securities. This liquidity risk may be caused by numerous factors, including but not limited to: 1) extreme market volatility, 2) a decision by exchange participants to withhold some or all of their quoted market bids, 3) exchange technical issues or exchange closure, 4) delisted or halted securities, and/or 5) a position across Client accounts that is large relative to the average daily trading volume of the security.
General Performance Disclosures
Client performance information is presented net of all management fees, custodial fees and charges and expenses unless marked otherwise. For all periods the performance information includes the reinvestment of dividends and interest unless otherwise noted.
Any comparison to traditional financial advisors is based on an evaluation of average fees and returns. Actual results may be different for each investor and there can be no guarantee of enhanced returns due to additional diversification, ETF selection, or the use of Agile’s investment management service.
Projected and/or hypothetical performance provided by Agile, it officers, directors, employees or its affiliates is intended to show only an expected range of possible investment outcomes based on historical average returns and standard deviation of each investment type contained in the investment mix recommended by Agile, but does not take into consideration the effect of taxes, changing risk profiles, or future investment decisions. Projected and/or hypothetical performance does not represent actual Client accounts or actual trades and may not reflect the effect of material economic and market factors. The actual transaction costs in Client accounts may be different.
Actual investment accounts with Agile are likely to experience different results from any hypothetical results shown. There is a potential for loss, as well as gain, that is not reflected in the hypothetical information portrayed. The hypothetical performance results shown do not represent the results of actual trading using client assets but were achieved by means of the retroactive application of a model designed with the benefit of hindsight.
Model returns by Foliofn Investments, Inc. (Foliofn) are calculated using the same methodology used to calculate performance for funded accounts where Foliofn is the custodian known as the Mid-Weighted Dietz Method. For details on this calculation method please see the Formulas section. At launch, each model Folio has a hypothetical market value, which then changes over time based on the changing value of the underlying holdings. Corporate actions such as dividends, splits, spin-offs, etc., are processed in the same fashion as for funded Folios, with hypothetical money and shares exchanged rather than real dollars or shares. Model corporate actions are not validated or audited, which may result in errors in the performance results presented. Cash distributions (i.e., dividends, capital gains, returns of capital) earned in a model Folio are automatically reinvested into the securities that paid them.
When models are rebalanced, buys and sells are calculated to return the model to its target weights. These hypothetical transactions assume a full execution of the shares needed at the closing prices on the day of rebalance. When the buys and sells cannot be offset exactly the resulting cash difference is hypothetically invested into FDIC.CASH, the symbol Foliofn uses for cash. In most cases, this cash investment is a negligible portion of the model and will be hypothetically invested in the model holdings (if possible) in the next rebalance. Performance is based on the model’s tracking to actual accounts, which does not constitute a composite for purposes of GIPS reporting.
Investors should carefully review the additional information presented by Agile as part of any hypothetical comparison.
ANY COMPARISONS TO INDICES ARE PROVIDED FOR ILLUSTRATIVE PURPOSES ONLY. AN INDEX IS A BROADLY DIVERSIFIED, UNMANAGED GROUP OF SECURITIES, WHICH MAY INCLUDE ONLY LARGE CAPITALIZATION COMPANIES OR COMPANIES OF A CERTAIN SIZE. BROADLY BASED INDICES MAY BE SHOWN ONLY AS AN INDICATION OF THE GENERAL PERFORMANCE OF THE FINANCIAL MARKETS DURING THE PERIODS INDICATED. BECAUSE OF THE DIFFERENCES BETWEEN THE CLIENT ALLOCATIONS AND ANY INDICES SHOWN, AGILE CAUTIONS INVESTORS THAT NO INDEX IS DIRECTLY COMPARABLE TO THE PERFORMANCE SHOWN SINCE EACH INDEX HAS ITS OWN UNIQUE RESULTS AND VOLATILITY, AND SUCH INDICES, IF SHOWN, SHOULD NOT BE RELIED UPON AS AN ACCURATE COMPARISON.
The return, composite and performance information shown on the Site uses or includes information compiled from third-party sources, including independent market quotations and index information. Agile believes the third-party information comes from reliable sources, but Agile does not guarantee the accuracy of the Site information and may receive incorrect information from third-party providers. Unless otherwise indicated, the information on the Site has been prepared by Agile and has not been reviewed, compiled or audited by any independent third-party or public accountant.
Model returns by Motif Investing, Inc. (Motif)
We calculate returns using a Modified Dietz Method, calculated intraday. Returns derived from the Modified Dietz method provide a reasonable idea of how the securities in your motif have performed adjusting for the amount invested which may vary over time.
We use a Value Weighted method to calculate motif returns since value-weighted returns are considered more accurate measures of the actual profit or loss of your particular investment, versus other methods such as Time Weighted returns.
Motifs are collections of stocks but are represented for purposes of performance as models, and as such, no actual money is invested in the underlying components of these models, no commissions or fees or other charges are reflected in Motif's performance calculations and no actual trades have been executed in the marketplace that could be expected to represent actual results. In calculating motif performance, we first assign each motif an index value of 1,000 at its origin date.
We then calculate the split-adjusted total returns (inclusive of cash and stock dividends) of each individual component (symbol) in the motif from the motif origin date. For example, if IBM were part of a particular motif, had a share price of $100 at the origin date, a current price of $110, had no stock splits, and had paid dividends of $10 during the intervening time, we would calculate its return as 20% (($110+$10)/$100-1). We repeat this calculation for each stock in the motif.
[The number of data points used in each return calculation depends on the length of the time period under consideration. For example, when calculating returns for a 5-year performance chart, we may use end-of-month trading data, or 60 data points for a 5-year period, while we may use end of day data for a 1-year performance chart or approximately 220 data points (trading days) for a 1-year period.]
Next, we multiply the return of each component in the motif by its respective weight within the motif. For example, if IBM represented 10% of the motif, we would calculate its weight-adjusted return as 2% (20% x 10%). We then sum the weight-adjusted returns of all of the components in the motif to generate the composite return for the motif.
The composite return for the components of the motif is then applied to the base index value of 1,000 to generate the current index value. Composite returns for each motif are calculated at the end of each trading day. During the trading day, an intraday change or delta factor using 20-minute delayed quotes is applied to the previous closing index value in order to calculate the current index's value.
The weights of each component in a motif are established at the motif's origin date, but those weights fluctuate as the price of each component's stock rises and falls. On a periodic basis following the establishment of a motif (usually quarterly, following the origin date), we review the motif and may elect to update it to reflect changes in the companies, industries and trends relevant to the motif. In particular, we may remove or add companies based on any changes in their relevance to the idea on which the motif is based, as a result of our review process.
For monthly, quarterly, yearly, and year-to-date returns, the performance is shown as the difference between the ending index value and beginning index value of that period over the beginning index value.
Motif returns are based on stock prices from the end of the normal trading day and include any distribution and cash dividends. The stocks that make up a motif may change from time to time - certain stocks may be removed and replaced with new stocks added to a motif, or the weighting of the stock represented within the motif may change. These returns track those changes. However, commissions and fees that are incurred for actual transactions are not deducted from these hypothetical returns.
Actual customer returns will likely vary from the motif returns shown due conditions such as corporate actions, transaction fees and customization. The calculation of split-adjusted total returns involves the adjustment of historical prices for corporate actions such as cash dividends, splits, spin-offs etc. Since we do not adjust the original cost basis for cash dividends, the returns on owned motifs do not include cash dividends and will therefore underperform the stated motif returns. While the original cost basis is not adjusted for cash dividends, the end of day security prices are adjusted for cash dividends and therefore the chart of portfolio performance excluding the date of purchase represents split-adjusted total returns. In addition, actual transactions would include the expense of commissions and customers may change the stocks in their motif on their own. Customers may choose not to change their motif when the stocks in a motif are changed in the motif's periodic rebalancing. There could be other corporate action events that may not be replicated in a motif until the rebalancing period.
Fee and Account Disclosures
Recommendations and fees may vary for each Client. Advisory fees are calculated based on the dollar amount of assets being managed per account as detailed in Agile’s Form ADV Part 2.
Agile does not make any representations regarding the execution quality of orders placed with our Custodian(s). Agile does monitor the execution quality of transactions to ensure that Clients receive the best overall trade execution pursuant to regulatory requirements.
Tax and Tax-loss Harvesting Disclosure
Agile does not represent in any manner that the tax consequences described as part of its tax-loss harvesting service will be achieved or that Agile's tax-loss harvesting service which is provided to Agile’s Clients by Foliofn, any of its products and/or services, will result in any particular tax consequence. The tax consequences of the tax-loss harvesting service and other strategies that Agile may pursue are complex and uncertain and may be challenged by the IRS. The information with regard to this service was not prepared to be used, and it cannot be used, by any investor to avoid penalties or interest.
Clients should confer with their personal tax professional regarding the tax consequences of investing with Agile and engaging in the tax-loss harvesting options, based on their particular circumstances. Clients and their personal tax professionals are responsible for how the transactions conducted in an account are reported to the IRS or any other taxing authority on the Client’s personal tax returns. Agile assumes no responsibility for the tax consequences to any Client of any transaction.