Quant Alpha LLC – Disclosures

Regulatory Status & Internet Adviser Exemption

Quant Alpha LLC (“Quant Alpha” or “the Firm”) is an investment advisory firm focused on providing services exclusively through an online platform, qualifying for the SEC’s “Internet Investment Adviser” exemption under Rule 203A-2(e). This exemption allows Quant Alpha to register with the U.S. Securities and Exchange Commission (SEC) even if it does not meet the typical assets under management threshold, provided all advisory services are delivered via an interactive website. Quant Alpha maintains an operational interactive website at all times in compliance with this rule, through which all client-specific investment advice is generated by software-based models and algorithms. We do not provide in-person, phone, or other offline investment advice – any personal communications outside the website are limited to technical support or general inquiries and do not include tailored investment recommendations (in accordance with SEC requirements).

SEC Registration: Quant Alpha is registered as an Investment Adviser with the SEC (registration pending approval as of this writing). Please note that SEC registration does not imply any specific level of skill or training, nor an endorsement by the SEC or any state securities authority. We have filed for SEC registration under the Internet Adviser Exemption and will be in full compliance with the amended conditions by the March 31, 2025 compliance date.

Quant Alpha is an independent advisory firm and is not controlled by, or affiliated with, any other investment adviser. This ensures our qualification under Rule 203A-2(e) is legitimate and not used to circumvent registration rules through an affiliate. Our Form ADV (Parts 1 and 2) containing detailed information about our firm, services, and fees is available on the SEC’s Investment Adviser Public Disclosure website or upon request. Any direct communication with prospective clients will be conducted by a properly licensed representative or pursuant to an applicable exemption in the client’s state of residence.

Advisory Services Overview

Quant Alpha LLC offers risk-managed, growth-oriented investment strategies focused on the Nasdaq-100 Index. Our investment approach revolves around model-driven portfolios that track or replicate the Nasdaq-100, with leveraged variations for different risk profiles. Clients can choose a strategy (e.g., conservative vs. aggressive) that suits their risk tolerance; this selection, along with any information you provide through our website, forms the basis of the personalized advice our platform delivers.

All client portfolios are managed using our proprietary algorithm and quantitative models. This means an algorithm is used to manage and rebalance individual client accounts (not a human stock-picker). The algorithm’s design is based on our firm’s quantitative research and risk management principles, including assumptions about market behavior and volatility. Key assumptions and limitations of our algorithm are disclosed to clients: for example, our models assume that historical market patterns and volatility trends can inform future risk management, which may not hold true in all cases. Limitations of the algorithm include potential underperformance during unusual or prolonged market regimes that were not anticipated by the model. Clients should understand that the algorithm may execute trades or rebalancing automatically according to its predetermined rules — for instance, it might reduce exposure during high volatility or increase leverage in low-volatility conditions — and it may not factor in unforeseen events or nuances that a human advisor might consider.

We continuously monitor and refine our algorithms. While the day-to-day investment decisions are automated, Quant Alpha’s investment team oversees the process and the model’s outcomes. Human involvement in managing individual accounts is limited; our team generally does not intervene in individual client portfolios except to maintain the algorithm’s proper function or in extraordinary circumstances. In rare cases (such as extreme market disruptions or technical issues), we reserve the right to pause trading or override the algorithm to protect our clients’ interests. Any such action would be disclosed to clients as needed.

Quant Alpha’s services are discretionary in nature: by becoming a client, you grant us the authority to execute trades in your account according to the strategy selected and the algorithm’s signals. We do not provide comprehensive financial planning, tax advice, or consider assets held outside of your Quant Alpha-managed account in our recommendations. Our advice is limited in scope to the assets and strategy you have with us, and we will not manage or advise on assets outside of those parameters. We encourage clients to view our services as a component of their overall financial plan and to seek additional professional advice for matters outside the scope of our investment strategies (e.g. tax or estate planning).

Client Eligibility & Jurisdictional Limitations

Quant Alpha’s services are available to clients through our website and email communications. To open an account and use our advisory services, clients must be at least 18 years of age (or the age of majority in their jurisdiction) and legally able to enter into an investment advisory agreement. Our services are currently offered to residents of the United States and other jurisdictions supported by our third-party custodian, Interactive Brokers LLC (“IB”). We do not solicit or accept clients in locations where we are not legally permitted to operate or where IB cannot provide brokerage/custody services. This may exclude certain countries or regions in compliance with international regulations and IB’s policies. Nothing on this website is intended as an offer or solicitation of our services in any jurisdiction where such offer is not authorized or where we are not in compliance with local laws. If you are accessing this site from outside the supported areas, you do so on your own initiative and are responsible for compliance with any local laws and regulations.

Clients are responsible for ensuring that the information they provide to us is truthful and up-to-date. Because our advice is generated based on the data you supply (such as your risk profile or strategy selection), it is crucial that you promptly inform us (through the website interface or by contacting us) if your financial situation, investment objectives, or restrictions change. Our platform may rely solely on your questionnaire responses or selections to generate advice; if those inputs are incomplete or inaccurate, the recommendations may not be suitable for your actual needs. You will have the ability to update your profile or strategy selection, and it is the client’s responsibility to do so whenever your circumstances or preferences change.

Custody, Brokerage & Custodian Information

Quant Alpha LLC does not take physical custody of client assets. Instead, all client accounts and assets are held with Interactive Brokers LLC (“IB”), a third-party qualified custodian and broker-dealer. IB is a member of FINRA and SIPC (Securities Investor Protection Corporation), which provides SIPC protection for securities and cash in customer accounts (up to certain limits) in the case of broker-dealer insolvency. (Note: SIPC protection does not cover investment losses due to market fluctuations.) Clients will open a brokerage account in their own name with IB, and will grant Quant Alpha limited trading authority on that account to implement the chosen strategy. This arrangement means:

Account Statements: Clients will receive trade confirmations and account statements directly from IB (electronically or by mail, according to your preferences). We encourage you to review all statements from the custodian. Quant Alpha may also provide periodic reports or performance summaries through our website, but the official records of your account are maintained by IB. We urge clients to compare any report from Quant Alpha with the statements from IB and to promptly notify us and IB of any discrepancy.
Third-Party Custodian Agreement: When you become a client, you will also agree to IB’s account terms and disclosures. Those govern your relationship with the broker (for example, margin account agreements if using leverage). Quant Alpha is independent from IB; we have chosen IB for its robust electronic trading platform and global reach, but we are not affiliated with IB and do not control its operations. IB will charge you brokerage commissions and/or fees for transactions, custodial services, margin interest (if you use margin loans), and other standard account fees according to their fee schedule. These costs are separate from and in addition to Quant Alpha’s advisory fees. We strive to minimize trading costs as part of our strategy execution, but clients are responsible for any fees charged by IB or product providers (e.g., ETF expense ratios).
No Custody of Client Funds: Quant Alpha’s access to your IB account is limited to trading authorization and fee deduction (with your prior consent). We cannot withdraw or transfer assets to third parties (except for payment of our advisory fee as outlined in your client agreement or as you direct to your own bank). You retain full ownership of your account and can monitor activity in real-time via IB’s online portal.

Fees and Compensation

Quant Alpha LLC is a fee-only adviser. We are compensated solely by the advisory fees paid by our clients, and do not receive commissions or compensation from any fund, broker, or third party for recommending particular investments. Our advisory fee is typically structured as an annual percentage of assets under management (AUM) in your account (billed monthly). Performance fees apply only to Qualified Clients and are billed quarterly, subject to a fixed hurdle rate and a perpetual look-back high-water mark. Specific fee rates and billing details are provided in our Form ADV Part 2A (Firm Brochure) and your Investment Advisory Agreement.

In addition to our advisory fee, you may incur other costs associated with investing through Quant Alpha’s program, including: brokerage commissions, transaction fees, and custodial fees charged by Interactive Brokers; internal expenses of any investment products used (for example, if we invest in an exchange-traded fund (ETF), the ETF has its own expense ratio); and, if applicable, margin interest on any leveraged positions (if your strategy and account type involve borrowing). All such costs are borne by the client. We strive to be transparent about all fees – please refer to your client agreement and IB’s fee schedule for details. We will not increase our advisory fee without providing you advance written notice and obtaining any required client consent. Any questions about fees are welcome – we want you to clearly understand what you’re paying for our services.

Investment Strategy and Risks

Investment Focus: Quant Alpha specializes in strategies tied to the Nasdaq-100 Index, which is composed primarily of technology and growth-oriented companies. Our strategies are designed for growth and involve active risk management techniques (such as adjusting exposure based on market volatility or trends). Depending on your chosen strategy, we may employ leverage (through margin borrowing or leveraged ETFs) to amplify exposure as part of seeking higher returns. Each strategy varies in risk level: for example, a more conservative version might limit or avoid leverage and reduce exposure in high-risk periods, whereas an aggressive version could use higher leverage and tolerate larger swings. All strategies, however, share a common philosophy of attempting to participate in the Nasdaq-100’s growth potential while managing downside risk through quantitative signals.

No Guarantee of Results: Investing in securities involves risk of loss. All investments carry risk, and you may lose money including the principal invested. While our strategies are “risk-managed,” this does not imply risk elimination or guaranteed outcomes. Past performance is not indicative of future results. There is no assurance that our strategies will achieve their objectives or that any performance targets will be met. Market conditions can (and will) change over time, and future market behavior may differ from historical patterns our model is based on. Clients should be prepared for periods of volatility and potential drawdowns.

Specific Risk Factors: By using a Quant Alpha strategy, you acknowledge and accept the following risks, among others:

Market Risk: The value of your portfolio will fluctuate with the markets. Because we focus on Nasdaq-100 related investments, poor performance or volatility in the technology/growth sector will directly impact your account. Broad market downturns (or recessions) can cause significant declines in portfolio value, even with risk management measures in place.
Concentration Risk: The Nasdaq-100 is a concentrated index, heavily weighted in the technology sector and in a relatively small number of mega-cap companies. Our focus on this index means your portfolio may lack diversification into other sectors (e.g., energy, financials) or asset classes (such as bonds). This concentration can lead to higher volatility and risk compared to a fully diversified portfolio. There may be times when the Nasdaq-100 underperforms other segments of the market.
Leverage Risk: Strategies employing leverage entail magnified risk. Leverage can increase gains and losses proportionally. For instance, a 2x leveraged exposure to the index means that a 10% market decline could result in approximately a 20% loss in your portfolio (before accounting for any risk management actions). Additionally, using margin or leveraged ETFs introduces costs (interest or fund fees) and the potential for margin calls. In extreme scenarios, a highly leveraged portfolio could lose most or all of its value if not properly managed. Quant Alpha’s risk controls aim to prevent excessive losses, but they cannot guarantee avoidance of all large losses, especially if market moves are abrupt.
Algorithm/Model Risk: Our investment decisions are driven by our algorithm and quantitative models. There is a risk that the model could be flawed or that it may not perform as expected in all market conditions. For example, the algorithm might rebalance or adjust positions based on its rules without regard to sudden fundamental news or extreme market events. Unusual market conditions (such as prolonged low-liquidity periods, structural market changes, or events outside historical data) could result in the strategy not protecting as intended or missing opportunities. We mitigate this risk by continuously researching improvements and by monitoring real-world performance, but some model risk is unavoidable.
Operational and Technology Risk: Since our services are provided online and trades are executed electronically, technical issues could occur. These include outages of our website or IB’s systems, errors in software, cyber-security breaches, or other system failures. We have contingency plans and security measures to minimize these risks (see Privacy & Security sections for more details), and the SEC allows only de minimis downtime for an “operational website” under our exemption. However, a technology problem could potentially delay execution of trades or temporarily limit your ability to access our services. In such events, we will work to resolve issues as quickly as possible and may take appropriate action (including manual intervention or contacting clients) if needed to safeguard client accounts.
Regulatory Risk: Changes in laws, regulations, or regulatory interpretation could impact our ability to operate as currently envisioned. For example, the SEC’s amendments to the internet adviser rule require strict adherence to the online-only model; if for some reason our business model were to deviate or the rule was further changed, we might need to adjust our services or potentially transition clients to a different arrangement (such as state registration if we can no longer rely on the exemption). We will notify clients of any material regulatory changes that affect our services or requirements on you as a client.

We provide these disclosures so that you, as a client or prospective client, can fully understand the scope and limitations of our services. We encourage you to consider your own financial situation and risk tolerance carefully. If you have any questions about how our strategies work or their risks, please contact us. We are happy to explain more about our methodology in straightforward terms. Additionally, while we believe our service can be a valuable component of your investment plan, you should determine whether a technology-driven strategy matches your personal needs. Our offerings are not appropriate for everyone – for instance, if you require frequent human interaction or holistic financial planning, a traditional advisor may be more suitable.

Index Trademark Disclaimer

Nasdaq-100® is a registered trademark of Nasdaq, Inc. Quant Alpha LLC is not affiliated with Nasdaq, Inc., and the strategy is not sponsored, endorsed, sold, or promoted by Nasdaq. Nasdaq makes no representation regarding the advisability of investing in this product.

Conflicts of Interest & Other Disclosures

Quant Alpha LLC is a fiduciary to our clients. We place our clients’ interests above our own and strive to minimize conflicts of interest. Because we do not receive third-party compensation (no commissions, referral fees, or kickbacks), our advice is purely driven by our strategy’s objective criteria and your stated goals. However, like any investment adviser, conflicts can arise, and we disclose material conflicts here and in our Form ADV:

Quant Alpha may aggregate client orders when trading (to ensure fair execution for all clients following the same model). In rare cases, different strategies or updates to the model could create situations where not all client accounts are traded identically (for example, if a new strategy feature is rolled out gradually). We manage such situations with policies to ensure no client or group is systematically disadvantaged.
Our principals and employees may also invest personal funds in the same or similar securities as clients. This is intended to align our interests (we “eat our own cooking”), but it could be viewed as a conflict if, for example, we executed trades for personal accounts at slightly different times than client accounts. Our policy is that client trades take priority and any personal trading by insiders is done either alongside client trades or after, never in advance of client trades (no front-running).
We may have incentive to grow our business and AUM, which could indirectly incentivize taking more risk or being more aggressive in strategies to improve short-term performance. We mitigate this by sticking to our stated strategy rules and risk parameters, and by regulatory compliance that mandates acting in clients’ best interests.
Quant Alpha does not receive compensation from Interactive Brokers aside from occasional technology or research credits common to advisors using their platform (if any). We choose IB for its capabilities, but clients should be aware we have an institutional relationship with IB as our custodian. We periodically review this arrangement to ensure IB’s services (execution quality, fees, security) remain competitive for our clients. We are not locked in and would change custodians if it clearly benefited clients.

There are no hidden fees or soft-dollar arrangements in our firm. We will always inform you of any material conflict if one arises.

We also want to clarify that Quant Alpha does not provide tax, accounting, or legal advice. Any tax-related information we provide (such as describing general tax treatment of ETFs or capital gains) is for informational purposes and not tailored to your situation. Clients should consult with a qualified tax advisor or attorney for advice in those areas.

Finally, performance figures or testimonials (if any are shown on our website) have important limitations. Any performance data is likely back-tested or hypothetical prior to our launch since we are a new firm. We will label such data clearly and provide context. Hypothetical or back-tested results have inherent biases and do not reflect actual trading, and real performance may differ significantly. Past or projected performance is not a guarantee of future results. Similarly, any testimonials or client experiences are individual and not a guarantee that new clients will experience the same. We follow all SEC regulations regarding marketing communications (Rule 206(4)-1) to ensure information is presented fairly and with appropriate disclaimers.

Client Responsibilities

While we commit to managing your investments diligently, clients also have responsibilities in this advisory relationship to help ensure success and compliance:

Provide Accurate Information: As noted, you must provide true and complete information about your financial situation and update it when changes occur. Our algorithm’s suitability for you depends on the quality of information you provide. We cannot be responsible for inappropriate recommendations if you have provided misleading or incomplete data.
Use the Platform as Intended: Our interactive website is the medium for advice. Clients should engage with our platform for all advisory interactions – including reviewing recommendations, strategy changes, and account monitoring. Avoid seeking individualized investment advice from Quant Alpha staff outside the platform; they are not permitted to give advice outside of the digital program. For example, if you email a question that is essentially asking “what should I do with my portfolio now?”, we will likely direct you to log in to see the guidance provided by the model or update your inputs. This ensures we remain compliant with internet-only advice rules and treat all clients equally.
Confidentiality of Access: You are responsible for maintaining the confidentiality of your login credentials to our website. Please do not share your account access with anyone. If you suspect your account has been compromised, notify us immediately. (Refer to our Terms of Use for more on account security.)
Review Communications: We deliver important information electronically (website notifications or email). Clients should promptly review any alerts, updates, or disclosures we send. If we announce a change in strategy or an important disclosure update, it is in your interest to be aware of it.
Understand the Strategy: We strive to explain our strategies in clear language. Clients should make an effort to understand, at least at a high level, the nature of the strategy they are following. If anything is unclear, ask us. We believe an informed client is better able to stick with a strategy and benefit long-term.
Compliance and Legal Use: You agree to use our services in compliance with all applicable laws and regulations. You must not use our platform for any illicit purposes, attempt to reverse-engineer our algorithms, or engage in abusive behavior on the site. (See Terms of Use for more details on prohibited activities.)

Important Notices

No Offer in Unauthorised Jurisdictions: Information on this site is for U.S. investors and those in jurisdictions where we are permitted to offer services. It is not intended for any person in a country or state where such offer or solicitation would be contrary to law or regulation. Specifically, Quant Alpha’s website is limited to the dissemination of general information regarding our advisory services and provides a method for prospective clients to learn about our approach. The publication of our website should not be construed as a solicitation or advertisement for any investment advisory services to any person who is not qualified or legally permitted to become a client.

Retention of Records: Quant Alpha maintains records of all client communications, transactions, and advice provided through our platform as required under the Investment Advisers Act and related regulations. This includes archival of the advice generated by our software for each client. These records are kept in compliance with SEC rules, typically for no less than five years. While this is an internal compliance matter, we mention it to reassure clients that all interactions and advice are documented and available for regulatory review, which helps protect client interestsg.

Recognition of Risks: By using our advisory services, you acknowledge that you have received and reviewed these Disclosures, including the description of our services, strategies, and risk factors. You understand that investing involves risk and that Quant Alpha LLC has not guaranteed any outcome. Any decision to invest with Quant Alpha is made by you voluntarily with awareness of the relevant risks.

Regulatory Oversight: As an SEC-registered adviser (upon effectiveness of our registration), Quant Alpha is subject to the Investment Advisers Act of 1940 and related SEC rules. We have implemented policies and procedures to comply with all required regulations, including but not limited to the internet adviser conditions, fiduciary duties, advertising rules, custody rule (we obtain surprise examinations or custody audits if ever deemed to have custody), and privacy regulations (see Privacy Policy below). We undergo routine examinations by the SEC and maintain a compliance program consistent with our digital business model. Our Chief Compliance Officer is responsible for overseeing and updating our compliance program. If you ever have a compliance-related question or concern (for example, to report a potential error or issue), please contact us directly at support@quantalpha.com.

Contact Information

If you have any questions about these disclosures or need additional information, you can contact us at:

Quant Alpha LLC
Email: support@quantalpha.com

We appreciate your trust in Quant Alpha LLC. Our goal is to be transparent, client-focused, and diligent in helping you pursue your investment goals through our innovative online platform. Please continue to the Privacy Policy and Terms of Use for more important information regarding our relationship and your use of our services.