Form ADV Part 3
Upturn Corporation (“Upturn,” “we,” or “us”) is an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Brokerage and investment advisory services and fees differ and that it is important for you to understand the differences. Free and simple tools are available to research firms and financial professionals at Investor.gov/CRS, which also provides educational materials about broker-dealers, investment advisers, and investing.
What Investment Services and Advice Can You Provide Me?
We offer investment advisory services to retail investors through our proprietary mobile and desktop applications, and we may from time to time provide these services through website access or via integration with third-party applications (collectively, the “App”). The App provides users with information to make decisions about buying and selling publicly traded stocks, mutual funds, and exchange-traded funds. The App uses a proprietary algorithm to provide users with a quantitative analysis of how certain selected stocks are performing and alerts users when there may be an upturn in a stock’s value.
We have no assets under management and provide no discretionary investment advisory services. That means that you, rather than us, will make all investment decisions. We do not monitor your investments, including trade frequency, and we do not impose material trade limitations.
Currently, we only offer the App’s recommendations with respect to large-capitalization (large cap) stocks and instruments like exchange-traded funds and mutual funds. We plan to include all stocks and ETFs traded at Nasdaq and NYSE. There is no minimum balance required to open an account with us.
For more detailed information about our services please see our Brochure, at Items 4 and 7.
What Fees Will I Pay?
App Subscription Fees: We charge a periodic subscription fee for stock and ETF trade recommendations. Currently, we receive the amount you pay for the App when it is sold as a subscription either on Apple iOS Appstore or Google Android Playstore. When the App is sold in a store maintained by a third party, we receive a portion of the price you pay the store.
We may from time to time manage subscription fees through the website instead of the App.
Some investments (e.g., mutual funds and ETFs) bear additional fees (e.g., transactional fees and product-level fees) that reduce the value of your investment over time. The same goes for any additional fees you pay to a custodian. You will pay fees and costs whether you make or lose money on your investments. Fees and costs will reduce any amount of money you make on your investments over time. Please make sure you understand what fees and costs you are paying.
For more detailed information about our fees and costs please see our Brochure, at Items 5, 6 and 7.
What are your legal obligations to me when acting as my investment adviser?
How else does your firm make money and what conflicts of interest do you have?
When we act as your investment adviser, we have to act in your best interest and not put our interest ahead of yours. At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts because they can affect the investment advice, we provide you. Here are some examples to help you understand what this means.
Our personnel and their families may use the App’s recommendations to invest. Our Code of Ethics prohibits trading ahead of clients or trading on nonpublic information. In the event that a conflict of interest is perceived to exist, we will seek to eliminate or mitigate that conflict of interest, such as by prohibiting or monitoring trading that is identified as potentially representing a conflict of interest.
For more detailed information about our conflicts of interest: please see our Form ADV, Part 2A brochure, at Item 11.
How Do Your Financial Professionals Make Money?
Our financial professionals receive compensation in the form of an annual salary paid by Upturn. Upturn uses no additional factors to determine compensation. This does not create a conflict of interest.
Do You or Your financial Professionals Have Legal or Disciplinary History?
No. You can visit Investor.gov/CRS for a free and simple search tool to research us and our financial professionals.
For additional information, please contact us at firstname.lastname@example.org to request up-to-date information and/or a copy of this Relationship Summary free of charge.
Considerations before using Upturn
Given my financial situation should I choose an investment advisory service? Why or why not?
You should only choose an investment advisory service if you're ready to start investing in the first place. For most people, this will be once you’ve covered day-to-day and anticipated expenses, paid insurance costs, and built a reasonable emergency fund. Upturn is an investment advisory service for people who prefer to manage their investments via apps and technology. Upturn is not an appropriate service for someone who wants frequent feedback from a human advisor. Upturn does not implement any trades for you or help you find a broker, so you should expect to have to choose a brokerage service as well.
How will you choose investments to recommend to me?
Upturn’s website and app use proprietary algorithms to alert you when a security’s value might potentially be on an upturn. These alerts are based on a technical analysis of historical data using machine learning and quantitative statistical analysis. You will receive daily alerts after markets close either recommending you “buy” or “sell” the security-based upon your selected investment strategy. We provide four investment strategies: long, quarterly, and monthly, and rush, each corresponding to how frequently you want to trade certain security. We can change the algorithms and other aspects of our advice from time to time.
What is your relevant experience including your licenses education and other qualifications? What do these qualifications mean?
Our financial advice is automated. The website and app were developed and are overseen by Upturn’s founder, Karthik Krishna. Mr. Krishna’s background is in software technology rather than in recommending investments for others. Mr. Krishna has a Bachelor of Engineering degree in Computer Science and Engineering from Visvesvaraya Technological University in India, and a Master of Science degree in Computer & Information Science from the University of Delaware.
Help me understand how these fees and costs might affect my investments. If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?
We do not hold custody of your assets or perform any trading on your behalf. Instead, you will receive recommendations, decide whether to trade, and give instructions to whatever broker you have engaged. If you decide to invest $10,000, it will be subject to the fees and other charges of your brokerage arrangement. The subscription fee or other price you pay for use of our website or app will reduce your personal assets by the amount of that fee or price, but will not be directly applied to the $10,000 investment that you make. Applied to a $10,000 investment, every $10 you pay annually for the subscription fee would be equivalent to a 0.10% annual investment advisory fee.
How might your conflicts of interest affect me and how will you address them?
We are a fiduciary, which means we are legally required to act in your best interest at all times in our client relationship with you. The investment advice that Upturn provides offers little or no opportunity for a conflict of interest to arise, given that the advice is expected to relate to publicly traded stocks that are generally liquid. Our Code of Ethics prohibits trading ahead of clients or trading on nonpublic information. If a conflict of interest does arise, we will mitigate the conflict through prohibiting or monitoring trading by us or our personnel identified as potentially conflicted.
As a financial professional do you have any disciplinary history? For what type of conduct?
No. Upturn does not have a disciplinary history, nor is Upturn involved in any other legal matters that would have a significant impact on its advisory business. Visit Investor.gov/CRS for a free and simple search tool to research us and our financial consultants, or you can visit or adviserinfo.sec.gov/.
Who is my primary contact person? Is he or she a representative of an investment adviser or a broker-dealer? Who can I talk to if I have concerns about how this person is treating me?
Because Upturn provides investment advice primarily through our mobile and desktop app as well as our website, your primary way of interacting with us as your investment adviser is through our website or app.
Disclosures for Performance Metrics and Simulations Performance Metrics
This section discusses the assumptions and details on how Performance Metrics are calculated
Broad Assumptions of all Performance Metrics and simulations for all stocks and portfolios
All performance metrics are not specific to an individual user but are simulations (hypothetical returns) of the historic recommendations with the following facts and general assumptions for both stocks and portfolios:
All historic data for stocks and ETFs is obtained from Marketstack.com.
All performance evaluation, which includes key metrics defined above (cumulative returns, Annualized returns, annual volatility, Sharpe ratio, etc) considers the "BUY" price to be the price at the "Close" of the market on the previous day or the last close price of the stock. However, the “BUY” price for the stock may not be available the next day if the “open price” of the stock has gone up or down. Further, even if the market opens for the stock at the mentioned “BUY” price, such a price may not be available for a large volume of “BUY” for a user for the next day.
A recommendation of "BUY" doesn't guarantee that the stock will go up or the corresponding "SELL" will lead to profits. "BUY" is an indication of the trend based on Upturn's technical and quantitation analysis of historical data to indicate a "potential" price increase and not a "guaranteed" price increase.
Similarly, all performance evaluation that includes key metrics defined above (cumulative returns, Annualized returns, annual volatility, Sharpe ratio, etc) considers the "SELL" price to be the price of "Close" on the previous day or the last close price of the stock. However, that price might not be available for Selling the stock the next day as on the next day the “open price” of the stock might have gone up or down. Further, even if the market opens at the mentioned price for “SELL”, that price might not be available for a large volume of “SELL” for a user for the next day.
The term “returns” used in describing metrics may be either a profit or loss
The price used for the stock for metric calculation in the simulation assumes that price is available for either “BUYing” or “SELLing” of stock and doesn’t take into consideration the large volume of transactions for such stock
The simulated performance metric uses January 1, 2020, as the starting date to capture all metrics including recommendation starts both for the stock (the stock chart and returns calculation and for star rating considerations for the stock) and the portfolio evaluation using the above-mentioned metrics for the simulated portfolio ratio and returns consideration
This date January 1, 2020, which is considered for all metrics and returns is a date chosen to show at least a few years of historic consideration for the simulation. This date would progress to a newer date as time progresses to only capture the last 2-3 years of history and not more.
All ratios and performance metrics for stocks (such as compounded return, average profit, avg-invested-days, unrealized profits, etc) and portfolios (such as cumulative returns, annualized returns, annual volatility, Sharpe ratio, etc) do not take into account taxes for short term or long term gains, cost of buying and selling stocks (the deduction of brokerage or other commissions, and any other expenses that a client would have paid or actually paid) or dividends paid (or reinvestment of the dividends and other earnings) in between which would mean the actual returns would be much lesser or more (in consideration of dividends) than shown in the simulation.
The performance metrics of the simulation are to be taken as only directionally representative of past performance and not represent actual trading returns or future performance
Specific to portfolios, if a portfolio is built with 10 stocks chosen, either through a custom user selection of stocks or a stock screener (a stock search tool in the Upturn app to search and filter stocks based on Upturn Star rating, cumulative returns, stock price, etc), for all its calculations, for the simulation, it is considered the portfolio is equally weighted. That is, all stocks are invested with equal capital. For simplicity of explanation, consider two stocks A and B in the portfolio, if the price of stock A is 100 and the price of stock B is 10 to start with, equal-weighted would mean for every 1 stock of A, 10 stocks of B are bought to start with, and for simplicity, this is implemented by taking a percentage of daily returns (changes in the percentage of every stock movement on a daily basis) divided by the number of stocks in the portfolio
Specific to portfolios, similarly to above, SPY (SPDR S&P 500 ETF Trust) is taken as the benchmark to compare and the percentage of daily returns (changes in the percentage of stock price movement on a daily basis) of SPY is taken into consideration. Over time, additional benchmarks might be added for the customer to compare.
As noted above, users might not build a portfolio that is equally weighted and for a given principal it might not be possible to create an equally weighted portfolio (stock prices could be different with few stocks in hundreds of dollars and few in tens and others in thousands) and all the metrics of the simulation considers an equally weighted portfolio for the sake of simplicity.
The portfolio simulations consider executing the “BUY” and “SELL” recommendations by Upturn on the stocks in the portfolio for their respective personas. The “BUY” price and “SELL” price considered for the simulations follow the above assumptions mentioned. These prices for “BUY” and “SELL” might not be available the next day for a user to actually “BUY” or “SELL” the stock.
Upturn Star Rating for stocks and Upturn Star Rating for Robo-portfolios doesn’t include fundamental ratings of the company. A higher rating doesn’t imply better returns in the future but is an indicator of how the stock performed historically with upturn’s recommendations for them
Upturn Star Rating for Stocks: The simulated historic cumulative returns of the stock for its persona is typically considered for over two years (beginning of the chart) for Upturn Star rating for stocks and is a measure of historic cumulative returns of the stock based on the Upturn’s "Buy" and "Sell" recommendation along with how the stock is doing more recently. This is calculated as a combination of Upturn Advisory Performance and Stock Returns Performance along with additional proprietary logic which also takes the recent performance of the stock
Upturn Advisory Performance is a measure of how well Upturn Advisory worked for the stock in the past since the beginning of the chart (typically over 2 years) based on simulation and its considerations as mentioned above. This is not an indication of how well the advisory will work in the future. Lots of parameters go into how a stock performs and the advisory in the future might be better or worse in performance.
Stock Returns Performance is a measure of the returns of the stock since the beginning of the chart (typically over 2 years) with respect to Upturn Advisory. This is based on simulation and its considerations as mentioned above. This is not an indication of how well the stock will perform with respect to Upturn Advisory in the future. Lots of parameters go into how a stock performs and the advisory in the future might be better or worse in performance.
Upturn Star Rating for Stocks: A higher Upturn star rating does not guarantee that the stock will perform well in the future, nor does a lower rating indicate poor performance in the future.
Upturn Star Rating for Stocks: Further, since the recommendations are more of technical and quantitative analysis of historic patterns, historic performance is no guarantee of how a stock could perform in the future.
Upturn Star Rating for Robo-portfolio: The Robo-portfolio star rating is a measure of how the recommendations of historic cumulative returns of the stock based on Upturn’s "Buy" and "Sell" recommendations performed along with the Sharpe ratio (the risk-adjusted returns for the portfolio) and Upturn star rating for Robo-portfolio of 3 has higher than or equal to a Sharpe ratio of 1 and Upturn star rating for Robo-portfolio of 4 and 5 have higher than or equal to a Sharpe ratio of 1.5 along with higher cumulative returns.
Upturn Star Rating for Robo-portfolios: A higher Upturn star rating does not guarantee that the Robo-portfolio will perform well in the future, nor does a lower rating indicate poor performance in the future.
Upturn Star Rating for Robo-portfolios: The current recommendation is a minimum of 12 stocks in a Robo-Portfolio so the user considers diversifying their capital across multiple stocks. Upturn doesn't force in their Robo-portfolio distribution of stocks across different industry types and different markets. The number of stocks picked is based on the user's input and randomly picks stocks from the pool of all stocks or ETFs which satisfies the other filter conditions (Upturn Star Rating for Stocks, Top performer, or Recent mover).
Buy Strength indicates how many of the technical and algorithmic indicators used for the "Buy" recommendation for the persona under consideration are holding True. However, a Buy strength of 100% only means a higher chance of the stock doing better but is no guarantee the stock will actually perform better in the future as most technical analysis is based on historic patterns. This value is shown to the user to get higher visibility of Upturn's indicators strength for the stock during that period of time and provides no guarantee for stock future performance.
The recommendation of "WAIT" for a Stock or an ETF is shown when the Buy strength is less than 70% which indicates that there could be a reversal of trends and the user can "wait" until the trends get stronger. "WAIT" only indicates that the trend to "BUY" is not strong enough.