ABOUT US
Founded in 2015, BBAE Advisors LLC ("BBAE") is a digital investment advisory firm offering
fee-based asset management services through its online platforms, including its mobile apps
BBAE and BBAE Pro.
BBAE is an investment advisor registered with the SEC, and is 100% owned by BBAE
Holdings LLC, a Delaware domiciled limited liability company. BBAE Holdings LLC is majority
owned by BBAE Holdings Ltd., a British Virgin Islands domiciled limited company. BBAE
Holdings Ltd. is jointly controlled by Mr. Barry Freeman and Mr. Xibo Zhe. Mr. Barry Freeman
has served as the CEO of BBAE since its inception in 2015. In October of 2020, Mr. Tyler
Kushera was appointed the Firm’s Chief Compliance Officer.
BBAE is registered with the SEC as an investment adviser and operates as a digital investment
adviser. The company offers the BBAE MyAdvisor Program ("MyAdvisor" or "MyAdvisor
Program"), a specialized investment program that provides discretionary portfolio
management services through a wrap fee program. MyAdvisor offers clients personalized
asset allocation, with choices among different portfolios of smart beta portfolios of individual
stocks. The MyAdvisor Program is accessible via BBAE's proprietary mobile application,
available on the company's website at
www.bbae.com (the "Website"). For more detailed
information about BBAE's products and services, you can refer to the Firm's Form ADV Part 1,
available at
www.adviserinfo.sec.gov. The Firm also encourages interested individuals to visit
the Website to learn more.
SERVICES WE OFFER
At BBAE, we bring modern, convenient investing experiences to our Clients through the
BBAE MyAdvisor Program. This program offers access to a wide range of investing strategies,
including actively managed equity portfolios leveraging smart beta principles, all accessible via
an intuitive mobile app interface.
Smart Beta and Customized Portfolio Management
Through the MyAdvisor Program, BBAE offers discretionary services to clients, providing
access to professional portfolio management that leverages the principles of smart beta at an
affordable rate. Our aim is to create customized portfolios that align with each client's specific
risk tolerance and financial objectives. By incorporating actively managed stocks selected
based on growth and value factors, combined with fixed income ETF portfolios, we strive to
optimize investment returns for our clients.
Equity Components:
BBAE utilizes smart beta strategies to develop a tailored investment program. The equity
portfolios are built upon the foundation of the MarketGrader indices, which are designed to
identify high-quality companies with strong growth potential. These indices employ a rigorous
and transparent methodology that evaluates stocks based on fundamental factors such as
revenue growth, profitability, and earnings quality. By utilizing the MarketGrader indices, we
leverage their expertise and research to guide the stock selection process.
MarketGrader is a leading provider of Smart Beta Model Portfolios that offer BBAE's clients a
systematic approach to achieve superior risk-adjusted returns by identifying and investing in
the highest quality companies. MarketGrader rates every investable company in the U.S.
public markets using a proprietary methodology that emphasizes sustainable growth at
reasonable prices (GARP) and places a strong emphasis on quality, irrespective of company
size, sector, or business model. Their belief is that consistent creators of economic value
generate the best long-term shareholder returns. MarketGrader's objective is to provide
investors with a straightforward and transparent way to capture those returns and build
lasting wealth. As pioneers in the Smart Beta Indexes category, MarketGrader selects stocks
based on factors beyond just size, focusing on company fundamentals. Backed by a 20-year
track record of delivering superior risk-adjusted returns across global markets, MarketGrader's
quantitative analysis engine assists investors in finding the best long-term value creators.
The MyAdvisor Program portfolios seek to provide personalized, long-term oriented
investment portfolios that are investing based on clients' personal information, including
investment risk and financial parameters:
1. The BBAE MarketGrader Core Portfolio: this portfolio is designed to serve as the
foundation of a long-term capital appreciation strategy. This portfolio combines large,
mid, and small-cap stocks in an optimal manner to achieve a balance between
maximizing total returns and mitigating unnecessary risks at both the company and
portfolio levels, as identified through the MarketGrader indices.
2. The MarketGrader Growth Compounding Portfolio: this portfolio is tailored for
investors who are open to assuming slightly higher levels of risk compared to the Core
portfolio. This portfolio allocates a greater proportion of its holdings to mid and small-
cap companies, while also incorporating a large-cap portfolio that emphasizes growth-
oriented companies. By doing so, the Growth Compounding Portfolio aims to
capitalize on growth opportunities and potential compounding returns, as identified
through the MarketGrader indices.
3. The BBAE MarketGrader Growth & Income Portfolio: The Growth & Income Portfolio
is specifically designed for investors seeking consistent dividend payments from their
equity portfolio while still aiming for long-term capital appreciation. In addition to the
dividend return, the portfolio also seeks to match, at a minimum, the market's beta
return in terms of price appreciation. This strategy allows investors to benefit from
both steady income generation and potential growth in their investment, as identified
through the MarketGrader indices.
Each strategy is constructed based on the insights provided by the MarketGrader indices,
ensuring a diversified equity portfolio that aligns with clients' investment objectives and risk
profiles.
Fixed Income Components:
In addition to the equity component, the MyAdvisor Program offers a fixed income
component to provide diversification and income generation. For the fixed income portion of
the portfolios, the BBAE Fixed Income portfolio is utilized and includes exchange-traded
funds (ETFs) managed by Vanguard. The BBAE Fixed Income portfolio consists of a carefully
curated selection of Vanguard low-fee fixed income ETFs, which provide a strong foundation
for our clients' fixed income strategies.
The combination of the equity component, guided by the MarketGrader indices, and the fixed
income component utilizing the BBAE Fixed Income portfolio, allows the MyAdvisor Program
to create well-rounded investment portfolios that seek to deliver long-term capital
appreciation and income generation while managing risks.
It is important to note that the recommendations made through the MyAdvisor Program do
not include the use of margin (leverage) or options.
Overall, our Smart Beta and Customized Portfolio Management services offered through the
MyAdvisor Program aim to provide clients with professionally managed portfolios that align
with their individual risk tolerance and financial goals. By combining the principles of smart
beta with personalized strategies for both equity and fixed income components, we strive to
deliver superior investment outcomes for our valued clients.
COMPREHENSIVE INVESTMENT OFFERINGS
BBAE provides discretionary investment advisory services to individually managed accounts
(each a “Client,” and collectively, “Clients”) within a program that bundles services and charges
a single fee based on asset value (the “Wrap Program”). The MyAdvisor Program seeks to
provide personalized, long-term oriented investment portfolios, primarily comprising high-
quality, actively managed stocks. Services in the Program include advisory, trade execution,
clearance, settlement, custody, and reporting.
BBAE offers these services to individual taxable accounts and corporate taxable accounts.
From time to time, BBAE intends to introduce additional products or services under the
Program, continually enhancing our long-term oriented investment portfolio offerings. Future
offerings will contain specific terms and additional risk disclosures.
INVESTMENT ADVISORY FIDUCIARY STANDARD
As investment advisors, BBAE acts as a fiduciary for all of our investment management
clients, including those participating in the MyAdvisor Program. This means that we have an
obligation to act in the best interests of our clients and to provide investment advice that
serves their best interests. While BBAE strives not to engage in activities that create a
conflict of interest with our clients, if a conflict of interest does arise, we will disclose that
conflict to the client. Reasonable care is employed by BBAE to avoid misleading clients, and
full and fair disclosure of all material facts (including fees) are made to our clients and
prospective clients. We fulfill our fiduciary obligations by collecting information about you
and your investment goals, including your risk tolerance and objectives for smart beta
investing, so that our recommendations are customized to be in your best interests. We
disclose our services, advisory fees, compensation arrangements, and material conflicts of
interest within this brochure and in the client agreement, which are acknowledged by your
signature. Our commitment to the principles of smart beta and to providing accessible,
transparent, and expertly guided investment opportunities underscores our dedication to
acting in our clients' best interests.
LEGAL AND TAX CONSIDERATIONS
The MyAdvisor Program does not offer comprehensive financial or tax planning or legal
advice. Clients are encouraged to seek counsel from their own tax, financial, and legal
advisers. Neither BBAE nor its affiliates are responsible for maintaining compliance with tax
requirements or determining individual tax treatment. Neither BBAE nor its affiliates are
responsible for withholding tax penalties or income tax, except as required by law.
INDIVIDUALIZED SERVICES AND INVESTMENT RESTRICTIONS
BBAE’s MyAdvisor Program interacts with its Clients through a software application that is
available on mobile platforms and through BBAE's website,
www.bbae.com (collectively
known as the “BBAE Platform”). The advisory services are delivered through the BBAE
Platform.
Each Client provides personal information about themselves, including financial resources,
investment goals, and objectives by answering a questionnaire (the “Client Questionnaire”).
BBAE utilizes the information from the Client Questionnaire to create an investment portfolio
that is customized to each Client’s risk tolerance, financial parameters, and investment
objectives. For each Client's portfolio plan, BBAE considers the Client’s employment status,
income, investment goals, reasons to invest, investment time horizon, and investable assets.
BBAE evaluates each Client's responses and proposes a portfolio plan from among five
different risk categories, from a range of conservative to more aggressive portfolios. BBAE's
investment model leverages smart beta principles, which is expected to result in
recommendations that seek to provide optimal risk-adjusted return for a given Client, within
the necessary constraints and bounds, regardless of the deposit size.
The portfolio recommendation created by BBAE for each Client is based largely upon the
information provided by the Client. As such, the suitability of the investment plan
recommendations is limited by and relies on the accuracy and completeness of the Client
Questionnaire provided by the Client. BBAE does not capture any additional information not
covered in the Client Questionnaire in making its portfolio recommendation and providing its
investment advice.
A Client may specify the degree of risk level associated with their Client account, and the
amount of assets in the Client account. A Client is not able to select specific securities.
Each Client is able to update their risk profile or select (switch to) a recommended portfolio
with a different risk profile. Clients are obligated to update their information promptly if there
are changes to their financial situation, goals, objectives, personal circumstances, time
horizon, or if other relevant information changes or becomes available.
WRAP PROGRAM
As described above, BBAE offers its investment advisory services for wrap accounts through
the BBAE MyAdvisor Program. For more information about the BBAE MyAdvisor Program,
please see the Wrap Fee Program Brochure Appendix attached below.
ASSETS UNDER MANAGEMENT
As of December 31, 2023, BBAE has $315,380 in discretionary client regulatory assets under
management and no non-discretionary client regulatory assets under management.