Who we are
Delta Investment Management, LLC (referred to as “we,” “our,” “us,” or “Delta”), has been registered as
an investment advisor since April 2009. Our principals and owners are Nicholas Atkeson and Andrew
Houghton.
Services we offer
Delta provides investment consulting and investment management services to its clients. Delta charges
fees based on assets under management (asset based fees) and does not charge fees separately for
investment consulting services. For those clients who request a comprehensive investment plan, Delta
will design a plan that meets industry standard practice and may include the use of third party mutual
funds as a way to achieve the financial objectives identified in the plan. With the client’s approval, Delta
will implement the financial plan. Within the plan, some portion of the client's funds could be allocated to
one of the following strategies: Delta Capital Appreciation, Delta Kress Tactical, Delta Tactical Core, Delta
Opportunity, Delta Blue Chip Growth or could be managed by Delta in a custom account. Some portion
of our clients maintain only a portion of their total investable assets with Delta Investment Management.
Many of these clients with only a portion of their liquid net worth managed by Delta have their funds in the
Delta Kress Tactical, Delta Capital Appreciation, Delta Opportunity, Delta Blue Chip Growth, and/or Core
strategies.
Delta assists its clients in analyzing needs, setting objectives, developing asset allocation models and
selecting Managers to implement the asset allocation plan and to make specific investments. In
preparing a financial plan using a comprehensive disciplined approach intended to be consistent with
each client's particular needs and circumstances, we consider the following issues: total net worth, liquid
net worth, age, income, income visibility, risk tolerance, tax considerations, investment income needs,
savings requirements, overall investment objectives, investment experience, understanding of investment
risk considerations, expected investment return rates, volatility of various investment choices, correlation
of portfolio assets, diversification, and asset allocation. Once we implement an investment plan for you,
we will monitor your investment performance on an ongoing basis. It is your responsibility to inform us of
any changes to your financial situation that may impact the suitability of your investment.
Delta also acts as a subadvisor to other investment advisors. In these cases, the investment advisor
hiring Delta has responsibility for client communication, gathering suitability information and choosing the
appropriate investment strategy for each client.
We do not sponsor or manage wrap fee program assets.
Delta Capital Appreciation
Delta Capital Appreciation strategy seeks to appreciate client assets during bullish U.S. equity market
periods and mitigate potential loss during U.S. equity bearish market periods by means of making
opportunistic investments in equity and bond ETFs and cash. The strategy seeks to achieve positive
absolute performance through major market cycles. The strategy is focused on managing equity risk by
measuring stock market momentum of U.S. equity markets and positioning the strategy either in high
relative strength stock ETFs, defined outcome/hedged ETFs, U.S. treasury ETFs or cash based on equity
risk levels. During times when the strategy is invested in equities, it achieves its equity exposure through
an ETF(s). During times the strategy is allocated in U.S. treasury bonds, it achieves its exposure through
an ETF(s). While the strategy incorporates stringent risk control metrics, it makes no guarantee that your
investment may not suffer from severe drawdowns.
Delta Capital Appreciation is managed by Delta. Asset allocation decisions are made weekly. Accounts
that follow the Delta Capital Appreciation strategy are expected to experience significant turnover and
short-term capital gains and losses. The Delta Capital Appreciation strategy is not suitable for all
investors and involves risks associated with ETF investments including the risk of loss of the principal
invested.
Delta Opportunity
Delta Opportunity is an all opportunity, relative strength ETF rotation strategy that seeks to outperform the
S&P 500 through the full investment cycle. The strategy may invest in ETFs representing various industry
sectors, geographies, market capitalizations, styles (including value, blend and growth) and asset types
including equities, bonds, treasuries and cash. On a weekly basis, price performance of the available
investment opportunity set is measured and portfolio positions may be replaced with new positions with
higher relative strength measurements. The investment opportunity set is analyzed quantitatively with
multiple investment models using a variety of investment analysis metrics. The strategy seeks to
transition client assets to the best performing areas of a broad investment set that includes global
equities, bonds and cash. The strategy incorporates several layers of risk management including the
capability of transitioning to defensive asset types during bearish equity cycles. Tactical position changes
are designed to capture growth opportunities in up markets and mitigate risk in declining markets.
Delta Core
Delta Core is a diversified strategy which owns both fixed income and equity investments using both
exchange traded funds (ETFs) and mutual funds. The strategy is benchmarked against a globally
diversified 60% equity/40% bond portfolio. The strategy is designed to be tax efficient with a low turnover
ratio. The primary method of risk management in the Delta Core strategy is through asset diversification.
When recession risk is elevated based on macro-economic indicators, the strategy may further mange
risk by reducing its equity exposure materially below the 60% range.
Delta Kress Tactical
The objective of the Delta Kress Tactical strategy is to be profitable and avoid losses in both positive and
negative equity market environments and to outperform the S&P 500 Index each calendar year. The
strategy primarily involves purchasing and selling U.S. equities coupled with holding the account in cash
when the equity market is expected to depreciate. Purchase and sales of securities is partly based on a
systematic analysis on certain technical indicators. The strategy may at times cause portfolios to hold
significant amounts of cash. Investors should bear in mind that even when accounts hold significant
amounts of cash, earning potentially lower rates of return,
they will nevertheless be charged significant
management fees. Delta Kress Tactical strategy may not be suitable for risk-averse clients or permissible
for certain retirement accounts. Risks include the possibility that investors could lose their entire
investment. In addition, because the strategy involves buying and selling securities on a short-term basis,
generally at least every few months, the client accounts may incur short-term capital gains and losses,
which are taxed less favorably than investments held for more than one year.
Delta Blue Chip Growth
Blue Chip Growth is a concentrated, bottom-up stock picking strategy that seeks to outperform the S&P
500 through the full investment cycle. The strategy uses fundamental analysis to invest in individual
stocks and focuses on intrinsic value growth of those stocks over time. The mandate of the strategy is to
be fully invested in stocks at all times. Blue Chip Growth is unconstrained with regards to value or growth
weightings, size weightings, sector concentration, or stock concentration. The manager allocates capital
to where he sees the best relative value among equities at any given time even if that leads to significant
concentration in sectors and/or individual stocks.
Delta Custom
Delta works with clients to understand their financial conditions and goals. Delta performs in-depth
analysis to provide clients with information necessary to making informed investment decisions and
understand likely investment scenarios and trade-offs. With the client, Delta designs and implements
investment plans that will help clients achieve their financial goals. These investment plans and portfolio
holdings may be specific to each client and are designed to meet the needs of an individual client. These
custom designed client accounts may hold a variety of assets including ETFs, stocks, bonds and mutual
funds. Positions are not style or market capitalization constrained and may be actively managed. Delta
may seek diversification in client accounts through use of various investment management techniques
and a broad array of asset types including global equities, bonds, commodities and currencies. Delta
monitors and reviews the investments and managers selected to ensure custom investment plans are
serving the particular needs of each client.
Alternative Investments
Based on client investment objectives and financial condition, Delta may recommend investing in
alternative assets. Generally, Delta considers alternative investments to be investments that do not offer
daily liquidity, are in pooled investment vehicles such as limited partnerships and may place restrictions
on capital withdrawals. Alternative investments do not fall into one of the conventional categories
including stocks, bonds, exchange traded funds (ETFs), mutual funds and cash.
Alternative investments often require that an investor be an accredited investor. The Securities and
Exchange Commission (SEC) defines who is an accredited investor under Regulation D. Accredited
investors are legally authorized to purchase securities that are not registered with regulatory authorities
like the SEC. An individual accredited investor is defined by an income or net worth threshold.
Accredited investors are presumed to be financially sophisticated so they are able to understand the risks
associated with investing in non-standard assets.
The custodians and broker/dealers that work with Delta and also custody alternative assets often apply
additional fees and commissions to alternative assets that they do not on conventional, listed securities.
Commissions to buy and sell alternative assets may be substantially higher than standard commission
rates and some custodians charge annual holding fees for alternative assets. High fees diminish the
investment returns of alternative assets. To make the fees a small percentage of the overall investment
return, alternative investments often involve significant position sizes that are often materially larger than
what is suitable in a typical Delta account.
Delta Vista ETF Rotation Strategy
Delta Vista is a quantitative equity trading strategy that uses machine learning models to establish
portfolio market exposure through index exchange traded funds (ETFs). The analysis uses mathematical
models that evaluate equity options to make decisions about the short-term direction and volatility of
equities. The system analyzes all equity option activities in the U.S. options market to create about forty
machine learning models. These models are used to predict the behavior of the underlying assets under
different market conditions. The machine learning system uses the models to provide recommendations
to maximize the Sharpe/Sortino ratios of a proposed portfolio of equity index ETFs. The machine learning
system provides daily position recommendations as well as stop-loss and profit-taking criteria. Through
the purchase of both standard and inverse ETFs, the strategy may achieve positive absolute performance
in both up and down equity markets.
401k Held-Away Account Management
We use a third party platform, Pontera Solutions, Inc., to facilitate management of held away assets such
as defined contribution plan participant accounts, with discretion. The platform allows us to avoid being
considered to have custody of client funds since we do not have direct access to client log-in credentials
to affect trades. We are not affiliated with the platform in any way and receive no compensation from
them for using their platform. A link will be provided to the client allowing them to connect an account(s) to
the platform. Pontera is not registered with the Securities and Exchange Commission or the Department
of Labor. Pontera is SOC 2 certified and employs bank-level encryption, security architecture, and
regular pen testing to ensure that client data is protected. Once client account(s) is connected to the
platform, Delta will review the current account allocations. When deemed necessary, Delta will rebalance
the account considering client investment goals and risk tolerance, and any change in allocations will
consider current economic and market trends. The goal is to improve account performance over time,
minimize loss during difficult markets, and manage internal fees that harm account performance. Client
account(s) will be reviewed at least quarterly and allocation changes will be made as deemed necessary.
Assets under management
As of December 31, 2023, we manage assets of $628.9 million on a discretionary basis and no assets on
a non-discretionary basis.