Services
USA Financial Formulas Corporation (“USA Financial Formulas”) is a registered investment adviser with the Securities and Exchange
Commission (“SEC”). USA Financial Formulas provides investment portfolio advice and supervisory services. USA Financial Formulas
was formed in 2007, with the primary objective of eliminating human emotion from the investing process. USA Financial Formulas is a
wholly owned subsidiary of USA Financial Corporation (“USA Financial”). USA Financial is owned by Michael Walters and Brent Enders.
USA Financial Formulas only manages investment strategies on a discretionary basis. As of December 31, 2023, USA Financial
Formulas had assets under management of approximately $585,852,896. USA Financial Formulas offers investment strategies
through third-party platforms. USA Financial Formulas serves as a sub-adviser for USA Financial Exchange’s TAMP platform. More
on this arrangement can be found in the Other Industry Activities and Affiliations section.
USA Financial Formulas strategies are called “Portformulas.” Each Portformula is different, and investors should choose the
Portformula that best suits their investment goals and objectives. It is important for investors to understand that USA Financial
Formulas does not tailor investment advice to the needs of each particular investor and investment advice is limited to the investment
strategies we offer. USA Financial Formulas will not give investment advice on other products or other accounts investors may own.
As previously mentioned, USA Financial Formulas’ primary objective is to eliminate human emotion from the investing process. This
is accomplished by using a step-by-step, objective stock-selection process. USA Financial Formulas does not use money managers.
USA Financial Formulas develops the stock selection criteria based on a particular portfolio’s objective, and then a formula selects
only those equities that meet the qualification criteria, e.g., the stocks must have a specific price-per-earnings ratio or the stocks
must be issued by a large cap company. Therefore, because of the nature of USA Financial Formulas, investors cannot place certain
restrictions on their investment within the strategy. For example, each Portformula model will hold only those equities that meet the
qualification criteria. This also means that USA Financial Formulas will not intervene in the event of market fluctuations. However,
clients may place other reasonable restrictions on their account.
USA Financial Formulas Accounts
USA Financial Formulas offers several different portfolio options – each one designed with a specific investment goal. For example,
a strategy aims to capture the best performers listed on the S&P 500. The strategy’s investment selection pool is any stock that is
listed on the S&P 500. From there, the Portformula narrows down the stocks based on several specific criteria, eventually buying
only those stocks that meet the criteria.
As referenced above, each Portformula’s criteria will dictate not only which investments to purchase, but how long each investment
should be held, and when the investments will be sold because they no longer meet the investment criteria. Based upon each
specific Portformula’s investment criteria, it may be possible that no holdings will qualify for the Portformula during a given period
of time. This may result in an account maintaining a full money-market or institutional-bond position, but generally only for a
limited period
of time.
Strategies are designed to maintain a minimum 1 percent cash position that may exceed 1 percent based on trading activity
within each investor’s account. The remaining percentage is fully invested in the Portformula’s holdings. Investors will always be
able to identify the strategy’s holdings. The holdings within each strategy are updated, as necessary, by reapplying the formula
and rebalancing the assets allocated to the strategy to achieve original asset allocations. Detailed information regarding the
Portformula’s selection criteria and rebalancing schedule can be found in the Portformula’s hypothetical.
It is possible that, in the future, USA Financial Formulas may decide to change a Portformula’s investment selection criteria based
on economic research or other compelling considerations. Depending upon the materiality of these changes, a new strategy may
be established, or, if not material, future enhanced metrics will be applied the existing strategy.
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Investment Discretion
As referenced in the section Advisory Business, above, USA Financial Formulas exercises investment discretion on all assets
invested in USA Financial Formulas strategies. Investment discretion occurs when an investment adviser can determine which
securities should be purchased or sold.
Because portfolio holdings are selected based on a formulaic process and trading is done on an omnibus or block level, investors
will not be able to instruct USA Financial Formulas to buy or sell specific securities within their account.
Portfolio Manager Information
Client Information Provided to Portfolio Managers
USA Financial Formulas does not utilize traditional money managers, i.e., a single person who makes decisions as to a model’s
holdings. Each Portformula chooses holdings based on the objective, investment selection criteria. USA Financial Formulas’
advice is impersonal – we keep human emotion out of the investing process.
Client Contact With Portfolio Managers
USA Financial Formulas does not utilize portfolio managers. However, investors may contact USA Financial Formulas at any time
for questions regarding USA Financial Formulas’ investment strategies.
Portfolio Manager Selection and Evaluation
As mentioned above, USA Financial Formulas does not use money managers. USA Financial Formulas creates and defines
each Portformula’s overall investment objectives and the investment selection criteria. Once the investment-selection criteria
are defined, however, USA Financial Formulas uses that criteria to determine investment recommendations – each proprietary,
formulaic process applies the investment selection criteria to a universe of stocks or investment.
Amplify Platform
USA Financial Formulas utilizes the Amplify Platform through which investment adviser firms and investment professionals
engage Ashton Thomas, The Amplify program Sponsor, to provide back-office operational support services and/or gain
access to and select from independent third-party managers available through the Amplify Platform.
USA Financial Formulas is considered a Platform Member on the Amplify Platform. Platform Members may choose to receive
certain back-office services, such as administrative, trading, and reporting services, and/or to select independent third-party
managers to manage underlying client assets on a sub-advisory basis.
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