Form ADV Part 2A Brochure

 DASTA Investments LLC ("dub Advisors")

March 31, 2025

 

 

This brochure provides information about the qualifications and business practices of DASTA Investments LLC (“dub Advisors”).  If you have any questions about the contents of this brochure (“Brochure”), please contact our chief compliance officer at Justin@dubapp.com.  This information has not been approved or verified by the United States Securities and Exchange Commission (the “SEC”) or by any state securities authority.

 

Additional information about dub Advisors also is available on the SEC’s website at www.adviserinfo.sec.gov.

 

Registration with the SEC does not imply a certain level of skill or training.

 

DASTA Investments LLC ("dub Advisors")
101 Greenwich Street, Floor 2, Suite 402

New York, NY 10006
Tel: 917-261-2036

 

Item 2. Material Changes

This brochure amendment is made in connection with dub Advisors' other than annual update to provide additional and clarifying changes to dub Advisors' brochure dated March 15^th, 2025, and include:

• Item 4 - Now includes additional details regarding dub Advisors' advisory services, specifically introducing the Creator Program and Sponsored Portfolio overview.
• Item 5 - Fee structure has been revised to clarify that dub Advisors will use a new tiered subscription model covering access to Premium Portfolios, Creator Portfolios, and Sponsored Portfolios.
• Item 8 -Risk Disclosures now provide greater detail on the methods of analysis used for AI-driven portfolios, including how Large Language Models (LLMs) contribute to investment decision-making. Additionally, the section outlines material risks related to AI-generated portfolios and creator-driven strategies.
• Item 10- Additional disclosures of potential conflicts relating to dub Advisors' affiliate DASTA Financial, LLC, APEX Clearing Corporation, and other dub Advisors Users.

 Item 3. Table of Contents

Item 2.        Material Changes. 

Item 3         Table of Contents. 

Item 4         Advisory Business. 

Item 5         Fees and Compensation. 

Item 6         Performance-Based Fees and Side-by-Side Management 

Item 7         Types of Clients. 

Item 8         Methods of Analysis, Investment Strategies and Risk of Loss. 

Item 9         Disciplinary Information. 

Item 10       Other Financial Industry Activities and Affiliations. 

Item 11       Code of Ethics, Participation or Interest in Client Transactions and Personal Trading. 

Item 12       Brokerage Practices. 

Item 13       Review of Accounts. 

Item 14       Client Referrals and Other Compensation. 

Item 15       Custody. 

Item 16       Investment Discretion. 

Item 17       Voting Client Securities. 

Item 18       Financial Information. 

 

Item 4. Advisory Business

DASTA Investments LLC (“dub Advisors”) is an investment adviser with its principal place of business in New York, New York.  dub Advisors is a wholly owned subsidiary of DASTA Incorporated, a Delaware corporation.  Steven Wang is the principal control person of DASTA Incorporated.  

dub Advisors is eligible to register as an investment adviser with the SEC as an internet adviser pursuant to Rule 203A-2(e) of the Investment Advisers Act of 1940, as amended, due to its advisory business being conducted exclusively through a mobile application owned and operated by DASTA Incorporated ( the “dub App”). 

Advisory Services

dub Advisors exclusively provides model portfolio management services through the dub App to individual users (“dub Advisors Users”), who are natural persons. Within the dub App, dub Advisors Users can employ filtering and search tools to discover and invest according to proprietary model strategies managed by dub Advisors (“Premium Portfolios”), or portfolios created by other DASTA Users (“User Portfolios”).

Premium Portfolios, includes those offered through the Creator Program or that are Sponsored, both of which are managed by dub Advisors, which retains full discretionary authority over all investment decisions, rebalancing activities, and compliance oversight.

However, User Portfolios—portfolios created by individual DASTA Users—are not managed, monitored, or supervised by dub Advisors. These portfolios are a feature offered through the dub App, where DASTA Users may construct and share their own investment strategies with others. dub Advisors has no involvement in the management, oversight, or execution of these portfolios.

In instances where a DASTA User chooses to engage with a User Portfolio, they are doing so on a self-directed basis. Any transactions related to User Portfolios are executed through DASTA Financial, LLC, which serves as the introducing broker-dealer. dub Advisors does not act as an adviser, nor does it assume any responsibility for, or obligation to supervise, the trading activity of DASTA Users in connection with these portfolios.

Users engaging with User Portfolios acknowledge that:

1. dub Advisors does not manage or provide investment advice related to User Portfolios.
2. Trades executed in connection with User Portfolios are entirely self-directed and facilitated through DASTA Financial, LLC.
3. dub Advisors assumes no fiduciary responsibility, supervisory obligations, or discretionary authority over User Portfolios.
4. Users should conduct their own due diligence and understand the risks associated with copying or following User Portfolios.

It’s also important to emphasize that when a DASTA User allocates assets to copy the trading activity of a either a Premium Portfolio or User Portfolio, DASTA Incorporated employs its proprietary copy trading technology. This technology enables any User to effectively replicate (or “Copy” / “Copying”) the DASTA User's chosen portfolio in their own account. DASTA Users maintain complete control and discretion when it comes to deciding whether to copy one or more Premium or User created Portfolio within the dub App. dub Advisors does not provide financial planning services or give tax or legal advice. DASTA Users are urged to consult with his or her own advisors with respect to the legal, tax, regulatory, financial, and accounting consequences of an investment copying any Premium Portfolio.

Creator Program Overview

dub Advisors offers access to model portfolios developed by individual creators (“Creators”) through the Creator Program. In this program, Creators design model index portfolios, which are licensed to dub Advisors and made available on the dub App for users to copy for a subscription-based fee (“Model Subscription Fee”), as detailed in Item 5 of this ADV.

The Creator Program expands dub Advisors' investment offerings, allowing individuals to share their insights while providing new investment opportunities to the dub community. While Creators contribute to portfolio design, composition and rebalancing, dub Advisors retains full discretionary authority over all investment decisions, rebalancing activities, and portfolio management to ensure regulatory compliance and fiduciary oversight.

It is important to clarify that Creators are not investment advisers to DASTA Users and do not provide personalized investment advice. Rather, dub Advisors acts as the sole fiduciary and investment manager for all Creator Portfolios.

DASTA Users copying Creator Portfolios acknowledge that:

1. dub Advisors exercises full discretion over execution and rebalancing of Creator Portfolios.
2. Creators cannot provide individualized advice to DASTA Users and have no authority over user accounts.
3. The Model Subscription Fee does not represent an advisory fee paid to the Creator.
4. DASTA has the right to discontinue or modify Creator Portfolios at its discretion. 

The Creator Program enhances the diversity of available strategies on the dub App by leveraging insights from individuals while maintaining a robust compliance framework. Through this approach, dub Advisors ensures that users benefit from structured, high-quality investment opportunities while maintaining transparency and oversight. Users should evaluate their financial objectives before copying any portfolio, as all investments involve inherent risks.

Sponsored Portfolios

dub Advisors also offers access to Sponsored Portfolios, a category of Premium Portfolios where an individual or entity collaborates with dub Advisors to endorse or sponsor the investment strategy for a subscription fee (“Sponsored Subscription Fee”), as detailed in Item 5 of this ADV. While the individual or entity may contribute to the conceptualization or thematic focus of the portfolio, all investment management, portfolio construction, and trading decisions are made solely by dub Advisors.

Sponsored Portfolios are branded under the name and likeness of the endorsing individual or entity on the dub App, and the strategy’s theme may reflect the sponsor’s insights, values, or industry expertise. However, the sponsor does not have any investment authority, discretion, or direct involvement in security selection, trade execution, or portfolio management.

Users investing in a Sponsored Portfolio acknowledge that:

1. The portfolio is endorsed or sponsored by an individual or entity but is fully constructed and managed by dub Advisors.
2. The sponsor’s involvement is limited to the thematic inspiration or initial concept; they do not make investment decisions or provide financial advice. 6
3. dub Advisors retains sole discretion over all trading activity, rebalancing, and investment strategy implementation.
4. Sponsored Portfolios are subject to the same oversight, diligence, and regulatory compliance standards as all other Premium Portfolios.

Sponsored Portfolios provide an opportunity for DASTA Users to invest in strategies inspired by recognized individuals or entities while maintaining professional investment management oversight by dub Advisors. These portfolios are designed to align with the thematic interests of the sponsor while ensuring that investment decisions remain independent and objectively managed.

AI-Driven Portfolios

dub Advisors provides DASTA Users with access to AI-driven portfolios through the dub App. These portfolios are constructed using insights generated by Large Language Models (LLMs), including Claude by Anthropic, ChatGPT by OpenAI, and Gemini by Google. Each portfolio represents the output of a specific LLM's analysis, allowing clients to Copy Portfolios based on different AI-generated investment strategies.

AI Portfolio Methodology

dub Advisors constructs and maintains separate AI-driven portfolios using proprietary models that integrate macro trends, market developments, and company-specific data. Each portfolio is generated through a systematic approach that incorporates financial, qualitative, and sentiment-based inputs to assess investment opportunities.

The AI models analyze relevant market news, economic indicators, and corporate financial data to generate stock ratings based on perceived investment potential. These ratings are then reviewed and validated by dub Advisors' investment team, ensuring alignment with sound investment principles and risk management considerations.

Investment Oversight and Management

While AI models contribute to portfolio construction, dub Advisors retains full discretion over all portfolio management decisions, rebalancing, and execution of trades. AI-generated insights serve as an input, but final investment decisions are reviewed and approved by dub Advisors' investment professionals to ensure consistency, compliance, and suitability.

AI-driven portfolios provide an innovative approach to investing, leveraging advanced technology alongside human oversight to deliver structured investment strategies to DASTA Users. These portfolios are subject to ongoing review and optimization to adapt to market conditions and improve portfolio outcomes.

User Profiles and Risk Scoring

The dub App also gathers and evaluates information provided by each DASTA User, encompassing details such as age, income, investment objectives, investment horizon, risk tolerance, and other pertinent information utilized by dub Advisors to construct a comprehensive user profile, referred to as the "User Profile." This User Profile may incorporate a risk tolerance score, which is exclusively determined based on responses provided by DASTA Users during the creation of their profile.

It's important to note that DASTA Users are initially restricted from Copying Premium Portfolios that dub Advisors deems to have a higher risk rating than the DASTA User's risk tolerance score, creating what we term a "risk mismatch." Whenever a risk mismatch occurs, DASTA Users are promptly notified, preventing them from Copying the corresponding Premium Portfolio, unless such DASTA User acknowledges such risk mismatch and affirmatively agrees to continue with Copying that Premium Portfolio.

In addition, DASTA Users hold the flexibility to update their User Profile at their discretion. Such updates may or may not result in a modification to the DASTA User's risk tolerance score. In all instances, DASTA Users bear sole responsibility for notifying dub Advisors of any alterations to their financial situation, investment objectives, risk tolerance, or investment constraints.

General Considerations

The dub App is a mobile and online investment and trading platform, designed to be a marketplace of investment ideas and provide access to DASTA Users to a wide variety of investment strategies. dub Advisors provides its advisory services primarily online, however dub Advisors customer support is available for telephone consultation as needed to provide a complete advisory experience to DASTA Users.

DASTA Users should be familiar with investing online and comfortable communicating with DASTA through electronic means. When DASTA Users agree to the terms of the dub App, they agree to receive all communications and documents electronically (via email or directly through the dub App). The dub App is not suitable for DASTA Users if they have limited access to internet or don’t have the physical technology required to run the dub App.

It's important for DASTA Users to keep in mind that the dub App and any Premium Portfolios a DASTA User may invest in is only one component of their investment strategy. The dub App is not designed to provide financial planning services and is limited by the information a DASTA User provides during onboarding. Investing is inherently risky and may result in a total loss of your investment.

DASTA Users must rely on their own examination of the Premium Portfolio, including the merits and risks involved, before Copying any Premium Portfolio. DASTA does not endorse or recommend any Premium Portfolio for investment by a DASTA User. There is no guarantee that the objective of any or all Premium Portfolios will be achieved.

Copy Mechanics

When a DASTA User Copies a Premium Portfolio, the DASTA User sends corresponding automated trades reflecting the Premium Portfolio holdings directly to the Introducing Firm, who clears through third-party broker-dealer, Apex Clearing Corporation (“Third Party Broker”). If a Premium Portfolio that a DASTA User Copies changes, dub Advisors sends corresponding automated trade instructions to the Introducing Firm reflecting the Premium Portfolio changes. dub Advisors does not always reflect the trading activity in a Premium Portfolio. For instance, a DASTA User’s may impose reasonable restrictions on investing in certain securities or types of securities. In those instances, dub Advisors will allocate the remaining weight to cash in the portfolio.

When multiple DASTA Users Copy a Premium Portfolio, the Introducing Firm may, but is not required to, aggregate orders for the purchase and sale of securities to reflect the Premium Portfolio. In such instances, each DASTA User will receive their pro-rata allocation with the average price per unit.

Each DASTA User opens a brokerage account (“Brokerage Account”) with the Introducing Firm who utilizes the Third-Party Broker for execution, custodial and clearing services.

Premium Portfolio Availability

There are multiple instances where dub Advisors may cease the availability of a particular Premium Portfolio. For instance, dub Advisors seeks to make available only those Premium Portfolios that meet the diligence and performance requirements of dub Advisors. To the extent these requirements are not met, as determined by dub Advisors in its sole discretion, dub Advisors may decide to remove the Premium Portfolio from the dub App. Where this is the case, dub Advisors will seek to provide DASTA Users with as much notice as reasonably practical prior to removing the Premium Portfolio from the dub App. Other reasons for removal of a Premium Portfolio from the dub App include death or incapacity or retirement of a supervised person or the inability to 8 effectively manage the strategy of a specific Premium Portfolio. dub Advisors cannot guarantee the availability of any Premium Portfolio on the dub App.

The availability of a Premium Portfolio should not be considered by a DASTA User to be an endorsement or recommendation of any Premium Portfolio. Investing in securities involves inherent risks, and you should be prepared for the potential of losing money when you invest in securities.

Item 5. Fees and Compensation

dub Advisors implements a three-tiered subscription model for accessing Premium Portfolios, Creator Portfolios, and Sponsored Portfolios, allowing users to choose between quarterly or annual payment options.

The Premium Portfolio Subscription Fee applies to Premium Portfolios created and managed by dub Advisors. Users must pay a flat Subscription Fee, which grants access to all Premium Portfolios managed by dub Advisors. The Subscription Fee ranges from $25 to $250 per subscription period and can be paid on a quarterly or annual basis, with payment due in advance for the selected period. This fee compensates for advisory services related to portfolio management, including discretionary investment decision-making, rebalancing, and risk management.

For Creator Portfolios, which are model portfolios developed by individual Creators and licensed to dub Advisors, users must pay a Model Subscription Fee. This fee grants access to all portfolios offered by a single Creator. The Model Subscription Fee ranges from $25 to $250 per Creator per subscription period and can be paid on a quarterly or annual basis, with payment due in advance for the selected period. This fee compensates for access to the Creator’s model strategies, with dub Advisors retaining full discretionary authority over portfolio implementation and management.

The Sponsored Portfolio Subscription Fee applies to Sponsored Portfolios, which are endorsed by a specific individual or entity but fully managed by dub Advisors. Users must pay a subscription fee per Sponsor, granting access to all portfolios associated with that Sponsor. The Sponsored Portfolio Subscription Fee ranges from $25 to $250 per Sponsor per subscription period and can be paid on a quarterly or annual basis, with payment due in advance for the selected period. This fee compensates for access to investment strategies inspired by the Sponsor, while dub Advisors maintains full discretion over portfolio construction, management, and rebalancing.

dub Advisors reserves the right to adjust Subscription Fees within the specified range based on portfolio characteristics, demand, and promotional incentives. Subscription Fees are deducted directly from the user’s brokerage account or other method available through the dub App. If sufficient cash is unavailable, dub Advisors may instruct the Introducing Broker to sell portions of copied portfolios in amounts necessary to cover applicable fees, with users notified in advance whenever possible. From time to time, dub Advisors may offer discounts, waive fees, or modify pricing structures at its discretion. Any changes will be communicated to users with at least 30 days’ advance notice.

Users should be aware that in addition to any subscription fee and any applicable AUM-based fees, they may be subject to third-party costs, including but not limited to: (i) brokerage and clearing fees charged by the Introducing Broker and Third-Party Broker, (ii) exchange-traded fund (ETF) fees and expenses as outlined in each fund’s prospectus, and (iii) other transactional fees imposed by regulatory bodies, exchanges, or counterparties.

dub Advisors believes that its fees are competitive within the industry, but users should evaluate whether similar services are available at lower costs elsewhere. Users are encouraged to review all applicable fees before investing.

All Subscription Fees and AUM-based fees, if applicable, will be clearly disclosed in advance of a user selecting a portfolio. Users can access detailed fee breakdowns through the dub App under their account settings. If users have questions about applicable fees, they may contact support@dubadvisors.com for further clarification.

 

Item 6. Performance-Based Fees and Side-by-Side Management

This Item is not applicable as dub Advisors does not charge performance-based fees.

 

Item 7. Types of Clients

dub Advisors' clients consist of individuals, including High Net worth individuals.  dub Advisors does not require a minimum account size for opening or maintaining a DASTA User account, however DASTA Incorporated does impose a $100 minimum deposit size and may impose portfolio specific minimums. Individuals may become dub Advisors clients by applying to open an account through the dub App. All required documents and disclosure are executed and presented in the dub App.

 

Item 8. Methods of Analysis, Investment Strategies and Risk of Loss

Methods of Analysis and Investment Strategies. 

Prior to a Premium Portfolio being made available on the dub App, dub Advisors conducts a thorough evaluation process and analysis to ensure alignment with investment objectives, risk management standards, and platform suitability. This evaluation applies to both internally managed portfolios and model portfolios offered through the Creator Program.

General Evaluation Criteria

dub Advisors evaluates Premium Portfolios through both qualitative and quantitative assessments, including: 

• Strategy Evaluation: A review of portfolio structure, asset allocation, exposure constraints, and risk return profile. 
• Quantitative Metrics: Performance history (vs. relevant benchmarks), risk-adjusted returns, volatility, drawdown analysis, and other key indicators. 
• Portfolio Oversight: Ongoing monitoring to ensure adherence to the portfolio’s stated objectives and alignment with investor expectations.

Evaluation of Creator Program Model Portfolios

For Creator Program Model Portfolios, additional diligence is conducted to assess the creator’s strategy, methodology, and risk parameters. dub Advisors evaluates a minimum of six months' worth of trading history, where possible, with a preference for structured trade signals that allow for backtesting. For models that rely on discretionary updates by the portfolio creator, a longer evaluation period is typically required to assess consistency and effectiveness.

Specific evaluation criteria for Creator Program Model Portfolios include: 

• Track Record Analysis: Minimum of six months of historical trading data, with longer evaluation periods for discretionary strategies. 
• Risk and Volatility Assessment: Examination of drawdowns, position concentration, trading frequency, and overall risk exposure. 
• Due Diligence Questionnaire: Creators must complete a comprehensive review process to assess their investment approach, experience, and risk management practices. 
• Investment Committee Review: Portfolios admitted into the Creator Program undergo final approval by dub Advisors' investment committee before being offered on the dub App.

Ongoing Supervision and Review

Once a portfolio is approved and available for copying, dub Advisors conducts periodic reviews to ensure continued adherence to investment guidelines. This includes:

• Regular performance monitoring to ensure portfolios maintain expected risk-return characteristics.
• Ongoing due diligence on Creator Program Model Portfolios, with a structured review process to validate continued alignment with dub Advisors' standards.
• Compliance and risk management oversight to address deviations from approved strategies or excessive volatility.

Methods of Analysis specific to AI-generated Portfolios

Our AI-generated Portfolios operate based on a rigorous multi-step process to ensure quality and relevance. Below is an overview of the methodology:

Data Collection:

• News and Events: dub Advisors collect significant events relevant to stock analysis using public sources, such as Wikipedia’s current events summaries, and use the LLM to filter events with a perceived impact for US stock investors.
• Macro Expectations: Expectations for GDP growth, inflation, and interest rates are derived using web tools such as LangChain and web search.
• Company Data: dub Advisors sources financial data from Nasdaq, including revenue, net income, free cash flow, EBITDA, and other key metrics. EDGAR filings, such as 10-Ks and 10-Qs, are also used to understand company operations, risks, opportunities, and competitive positioning.
• Filtering: Companies without a sufficient reporting history, market cap under $10 billion, or not included on the Third-Party Broker’s tradable list are excluded from consideration.

AI Analysis: Each LLM uses the compiled data to analyze stocks and assign ratings from 0 to 100, accompanied by an explanation. The AI's analysis identifies potential opportunities, risks, and competitive positioning for each stock, generating a holistic evaluation.

Portfolio Construction: After dub Advisors reviews the AI-generated ratings, the investment management team conducts oversight to verify the logic and eliminate any inconsistencies or hallucinations from the AI analysis. Once validated, the AI assembles the final portfolio from the top-rated stocks.

Human Oversight and Rebalancing: The Portfolios are actively managed with human oversight to ensure alignment with the intended strategy. If any critical factor or data gap is identified, adjustments are made to maintain portfolio integrity. Rebalancing decisions are initiated based on AI insights but reviewed before execution to confirm accuracy and alignment with investment objectives.

Material Risks

The following summary identifies certain material risks that apply with respect to dub Advisors' advisory services, the use of the dub App and certain common risks associated with Copying one or more Premium Portfolio.  The below should be carefully evaluated before investing through the dub App; however, the following does not intend to identify all possible risks of an investment through the dub App or of Copying a Premium Portfolio or provide a full description of the identified risks.  

While dub Advisors will conduct initial and ongoing due diligence reviews on Premium Portfolios, DASTA Users are encouraged to research and understand the investment strategies and related risks of Premium Portfolios, prior to Copying them. 

Certain Limitations on dub Advisors' Advisory Services.  The dub App will provide DASTA Users with information and tools to allow users to research opportunities and better understand an investment’s risks, time horizon, and expected returns, among other things. dub Advisors does not purport to provide DASTA Users with comprehensive investment advice, and dub Advisors’ services to DASTA Users are subject to a number of limitations.  The User Profile and resulting risk score is developed solely on information provided by DASTA Users.  Accordingly, the dub App’s ability to provide suitability analysis will depend upon DASTA Users providing accurate and complete information, and to update such information on an ongoing basis to the extent it becomes inaccurate.  Inaccuracies or omissions in the algorithm will have a materially adverse effect on the dub App’s ability to analyze whether a DASTA User’s risk tolerance is in line with any given Premium Portfolio.

Activities of Premium Portfolios. dub Advisors will seek to make available only Premium Portfolio with the highest level of confidence.  While the dub App may place limits on the types of strategies and investments offered by certain Premium Portfolios, dub Advisors is unable to predict market behavior and other factors outside of its control.

Creator Generated Premium Portfolios. Although creators are not required to register as investment advisors, dub Advisors manages all final investment decisions. This structure mitigates the risk that creators provide unauthorized personalized advice. DASTA Users should understand that creator compensation is tied a structured licensing model that at times may incentivize the creator to promote the strategy. dub Advisors monitors communications to prevent the creator from touting or otherwise engaging in activities contrary to the Advisor’s Act.  

AI generated Portfolio Limitations: AI models are not predictive tools and cannot guarantee accuracy in anticipating market conditions or company performance. Portfolio decisions rely on data sourced from external providers. Disruptions or inaccuracies in data sources could affect the model’s recommendations. While AI provides initial recommendations, portfolio composition depends on human review, which introduces an element of discretion that could affect performance. The Portfolios may undergo frequent rebalancing based on evolving market data and AI recommendations, potentially resulting in increased transaction costs. Although efforts are made to ensure unbiased analysis, the AI models may inadvertently reflect biases based on their training data or inputs.

Nature of Investments.  Data providers and portfolio managers of Premium Portfolio strategies have discretion in making investments on behalf of their respective Premium Portfolio(s), and investments could include a wide spectrum of publicly available financial instruments.  Many of these instruments and other assets will be subject to significant business, financial market or legal uncertainties. Prices of the financial instruments acquired for a Premium Portfolio may be volatile, and a variety of factors that are inherently difficult to predict, such as domestic or international economic and political developments, may significantly affect the results of the portfolio and the value of investments.  No guarantee or representation is made that the investment objective of any or all Premium Portfolios will be achieved.  Although certain Premium Portfolio strategies may attempt to mitigate market risk, there will be a significant degree of market risk relating to these investments.  

Multiple Premium Portfolio.  To the extent that a DASTA User were to allocate capital by Copying  multiple Premium Portfolios, each of which makes their rebalance decisions independently, it is theoretically possible that one or more of such Premium Portfolio may, at any time, take positions that may be opposite of positions taken by other Premium Portfolios. It is also possible that the Premium Portfolio may on occasion be competing with other Premium Portfolios for similar positions at the same time. 

Equity Securities.  Premium Portfolios primarily invest in equity securities.  The value of equity securities fluctuates in response to issuer, political, market, and economic developments. Fluctuations can be dramatic over the short term as well as long term, and different parts of the market and different types of equity securities can react differently to these developments. For example, large cap stocks can react differently from small cap stocks, and "growth" stocks can react differently from "value" stocks. Issuer, political, or economic developments can affect a single issuer, issuers within an industry or economic sector or geographic region, or the market as a whole. Changes in the financial condition of a single issuer can impact the market as a whole. Terrorism and related geo-political risks have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally.

Lack of Diversification.  Premium Portfolios will at times not be diversified among a wide range of types of securities, countries or industry sectors.  Accordingly, client portfolios are subject to more rapid change in value than would be the case if the relevant DASTA User accounts maintained a wider diversification among types of securities and other instruments, geographic areas or sectors.

Illiquid Instruments.  A Premium Portfolio may invest in relatively illiquid equity assets for as part of its strategy.  Certain instruments may have no readily available market or third-party pricing.  Reduced liquidity may have an adverse impact on market price and dub Advisors' ability to sell particular securities when necessary to meet liquidity needs or in response to a specific economic event, such as the deterioration of creditworthiness of an issuer. Reduced liquidity in the secondary market for certain securities may also make it more difficult for a DASTA User to obtain market quotations based on actual trades for the purpose of valuing a fund’s portfolio.  

Non-U.S. Securities.  Foreign securities, foreign currencies, and securities issued by U.S. entities with substantial foreign operations can involve additional risks relating to political, economic, or regulatory conditions in foreign countries.  These risks include fluctuations in foreign currencies; withholding or other taxes; trading, settlement, custodial, and other operational risks; and the less stringent investor protection and disclosure standards of some foreign markets. One or more of these factors can make foreign investments, especially those in emerging markets, more volatile and potentially less liquid than U.S. investments. In addition, foreign markets can perform differently from the U.S. market.

REITs.  REITs in which a Premium Portfolio may invest are affected by underlying real estate values, which may have an exaggerated effect to the extent that REITs in which a Premium Portfolio invests concentrate investments in particular geographic regions or property types.  Investments in REITs are also subject to the risk of interest rate volatility.  Further, rising interest rates will cause investors in REITs to demand a higher annual yield from future distributions, which will in turn decrease market prices for equity securities issued by REITs.  REITs are subject to risks inherent in operating and financing a limited number of projects because they are dependent upon specialized management skills, and have limited diversification.  REITS depend generally on their ability to generate cash flow to make distributions to investors.

Arbitrage Transaction Risks.  If the requisite elements of an arbitrage strategy are not properly analyzed, or unexpected events or price movements intervene, losses can occur.  Moreover, arbitrage strategies often depend upon identifying favorable “spreads”, which can also be identified, reduced or eliminated by other market participants.

Hedging.  There can be no assurances that a particular hedge is appropriate, or that certain risk is measured properly.  Further, while a DASTA User account may enter into hedging transactions to seek to reduce risk, such transactions may result in poorer overall performance and increased (rather than reduced) risk for the investment portfolio(s) than if the DASTA User did not engage in any such hedging transactions.

Issuer-Specific Changes. Changes in the financial condition of an issuer or counterparty, changes in specific economic or political conditions that affect a particular type of security or issuer, and changes in general economic or political conditions can increase the risk of default by an issuer or counterparty, which can affect a security's or instrument's value. The value of securities of smaller, less well-known issuers can be more volatile than that of larger issuers. Smaller issuers can have more limited product lines, markets, or financial resources.

Relative Value Risk.  In the event that the perceived mispricing underlying an investor’s relative value trading positions were to fail to converge toward, or were to diverge further from, relationships expected by the investor, DASTA User accounts may incur a loss.

Quantitative Strategies Risk.  Certain Premium Portfolios’ investment programs may make considerable use of computer programs and involves highly complex mathematical calculations, such that the purchases or sales of investments for the model portfolio will be in accordance with computer-generated trades.  Even if a Premium Portfolio strategy seeks to carry out such computer-generated calculations correctly, there can be no assurance that it will successfully be able to do so, nor does the use of a computer in collating information and operating a trading method assure the success of any such method.  Errors, including but not limited to, inaccuracies in or corruption of data underlying trading algorithms, may occur with such complex calculations and computer programs which may be difficult to detect, and could have a material adverse effect on client profits.  The magnitude of the effect of such errors may be exacerbated when the program results in a significant number of trades being executed over a short period of time.  Furthermore, highly successful strategies and programs may become outdated over time, even before dub Advisors is able to recognize the shift and prevent substantial loss.

There may be times when human beings must alter, correct or update the data, models, or calculations used. The complexity of the programs used may make it more difficult for dub Advisors to detect any source of failure or error in such programs before material losses occur.

Cyber Security Breaches, Identity Theft and Fraud. DASTA’s information and technology systems may be vulnerable to damage or interruption from computer viruses, network failures, computer and telecommunications failures, security breaches, power outages and catastrophic events such as fire, tornadoes, flood, hurricanes and earthquakes. The failure of these systems could cause significant interruptions in dub Advisors' operations and result in a failure to maintain the security or privacy of certain client information. In addition, dub Advisors is subject to the risk of fraud. While dub Advisors may deploy systems and procedures to detect such fraud, it may not be effective in preventing the risk of fraud in all circumstances.

 

Item 9. Disciplinary Information

This Item is not applicable.

 

Item 10. Other Financial Industry Activities and Affiliations

DASTA Financial LLC

An affiliate of dub Advisors, DASTA Financial LLC, maintains membership with the Financial Industry Regulatory Authority (“FINRA”) as a registered broker dealer. dub Advisors directs brokerage to DASTA Financial, LLC, its introducing broker dealer. It’s important to note that DASTA Financial’s Clearing Agreement results in APEX being the sole available custodian for client assets. This relationship does not benefit dub Advisors.

Additionally, dub Advisors has entered into an Intracompany AML Reliance Agreement with DASTA Financial, LLC.

Under this agreement, dub Advisors relies on DASTA Financial’s anti-money laundering (AML) program for specific regulatory compliance obligations under the Bank Secrecy Act (BSA) and Financial Crimes Enforcement Network (FinCEN) regulations. This reliance includes:

• Suspicious Activity Reports (SARs): dub Advisors may rely on DASTA Financial for SAR filings related to transactions executed through brokerage accounts maintained at DASTA Financial.
• Customer Identification Program (CIP): dub Advisors relies on DASTA Financial’s customer identification and verification procedures for clients who maintain brokerage accounts at DASTA Financial.
• Recordkeeping and Travel Rule Compliance: dub Advisors Financial maintains records of covered transactions in accordance with FinCEN’s Travel Rule, which dub Advisors may access to satisfy its compliance obligations.

While dub Advisors relies on DASTA Financial for certain AML obligations, it remains independently responsible for ensuring compliance with applicable FinCEN, SEC, and BSA requirements. If suspicious activity arises in an advisory capacity unrelated to transactions at DASTA Financial, dub Advisors will file its own SARs as necessary. This arrangement helps dub Advisors avoid duplicative compliance efforts and aligns with regulatory best practices for affiliated investment advisers and broker-dealers.

Finally, it’s important for Users to understand that DASTA Financial, LLC does take a share of credit interest on customer cash balances held at APEX as disclosed and agreed to in the APEX FDIC-Insured Sweep Program Agreement. Clients may opt out of this Program and are encouraged to reach out to support@dubadvisors.com should they wish to terminate their participation in the Program.

Apex Clearing Corporation (“APEX”)

APEX provides execution and clearing services to dub Advisors through its relationship with DASTA Financial, LLC. All trades made by dub Advisors are routed to DASTA Financial that introduces orders to APEX on a fully disclosed basis for execution. APEX, as the executing firm, determines trade execution quality, which is periodically reviewed by dub Advisors.

Additionally, certain Principals of APEX have entered into SAFE agreements with DASTA Incorporated., the parent company of DASTA Financial, LLC. This relationship may create an incentive for DASTA Financial, LLC, the affiliate of dub Advisors, to select APEX for brokerage services in respect of the execution and clearing services APEX provides. The APEX relationship is managed by several dub Advisors executives to ensure that dub Advisors is not impacted by any conflicts that may exist, including that DASTA Financial meets its obligation of best execution.

dub Advisors Investors

A limited number of Users have invested in DASTA Incorporated, the parent company of dub Advisors, and have created User portfolios within the dub App. DASTA Incorporated may provide the option to have these portfolios available to be copied, alongside Premium Portfolios.

In general, these relationships may create an incentive to highlight specific User portfolios or offer preferential terms to these Users. To address and mitigate this potential conflict of interest, dub Advisors manages this relationship through several executives. dub Advisors does not recommend any User portfolio within the dub App.

dub Advisors Creators

dub Advisors offers the Creator Program via the dub App, which is owned and operated by DASTA Inc.. Creators are considered third parties, not employees or supervised persons of dub Advisors, as they operate pursuant to a data licensing agreement with dub Advisors. 

In general, these relationships may create an incentive for dub Advisors to highlight these Creators or offer preferential terms to these Users. To address and mitigate this potential conflict, dub Advisors has developed policies and procedures that detail the relationship between the parties, the supervision over such relationships, the discovery of these model portfolios through the dub app, and the measures dub Advisors takes to mitigate risk to Clients.

 

Item 11. Code of Ethics, Participation or Interest in Client Transactions and Personal Trading

dub Advisors has adopted a Code of Ethics (the “Code”) that obligates dub Advisors and its access persons to put the interests of dub Advisors' clients before their own interests and to act honestly and fairly in all respects in their dealings with clients.  In addition to compliance with dub Advisors' policies and procedures, all of dub Advisors' personnel are required to comply with applicable federal securities laws.  Users or prospective Users may obtain a copy of the Code by contacting Justin Ramirez (DASTA’s Chief Compliance Officer) at Justin@dubapp.com. See below for further provisions of the Code as they relate to the preclearing and reporting of securities transactions by dub Advisors' access persons.

dub Advisors, or its related persons, in the course of their investment management and other activities (e.g., implementing, troubleshooting and monitoring the dub App and model portfolios), may come into possession of confidential or material nonpublic information about expected trading patterns of the Premium Portfolio Creators and about issuers, including issuers in which dub Advisors or its related persons have recommended to DASTA Users or invested.  dub Advisors maintains and enforces written policies and procedures that prohibit the communication of such information to persons who do not have a legitimate need to know such information and to assure that dub Advisors is meeting its obligations to its clients and remains in compliance with applicable law.  dub Advisors may possess certain confidential or material, nonpublic information that, if disclosed, might be material to a decision to buy, sell or hold a security, but dub Advisors will be prohibited from communicating such information to the client or using such information for the client’s benefit.  In such circumstances, dub Advisors will have no responsibility or liability to the client for not disclosing such information to the client (or the fact that dub Advisors possesses such information), or not using such information for the client’s benefit, as a result of following dub Advisors' policies and procedures designed to provide reasonable assurances that it is complying with applicable law.

dub Advisors requires its access persons to preclear only certain limited offerings and initial public offerings in their personal accounts with the Chief Compliance Officer, who may deny permission to execute the transaction if such transaction will have any adverse economic impact on one or more of the dub Advisors Users. All of dub Advisors' access persons are required to disclose their securities transactions on a quarterly basis.  In addition, the dub Advisors' access persons are required to disclose the holdings in their personal accounts upon commencement of employment with the dub Advisors and on an annual basis thereafter.  dub Advisors' access persons are required to provide broker confirmations of each transaction in which they engage and annual certification of such transactions. dub Advisors' access persons are also required to provide quarterly brokerage statements.  Trading in the personal accounts of the dub Advisors' access persons is reviewed by the Chief Compliance Officer and compared with transactions for client accounts and reviewed against the restricted securities list.

 

Item 12. Brokerage Practices

All DASTA Users open brokerage accounts through the Introducing Firm, with clearing and executing services provided by APEX Clearing Corporation.  Not all investment advisers require their clients to direct brokerage.  By directing brokerage to the Introducing Firm, dub Advisors may be unable to achieve most favorable execution of client transactions.  This practice may cost clients more money.  Such costs may include higher brokerage commissions (because dub Advisors may not be able to aggregate orders to reduce transaction costs) and less favorable execution of transactions.

dub Advisors will not receive research or other products or services other than execution from a broker-dealer or a third party in connection with client securities transactions (referred to as soft dollar benefits).   

In directing brokerage to the Introducing Firm, dub Advisors and its related persons will not receive client referrals from the Introducing Firm. 

 

Item 13. Review of Accounts

The dub App will review DASTA User allocations that Copy Premium Portfolios on an ongoing basis and notify DASTA Users when such allocations are inconsistent with DASTA User’s User Profile. Premium Portfolio risk scores are calculated initially and periodically thereafter, and dub Advisors reviews DASTA User’s User Profiles at least annually. Each DASTA User will receive account reports from the custodian of the account. 

dub Advisors will prompt clients to review their answers to the User Profile questionnaire and restrictions on a quarterly basis. Annually, dub Advisors will contact clients to determine whether there have been any changes in their financial situation or investment objectives which may result in changes to their prior responses to the User Profile questionnaire.

dub Advisors' customer service representatives are available to discuss and explain investment decisions made for Premium Portfolios and may be contacted by email at support@dubapp.com or telephone (917) 261-2036.

 

Item 14. Client Referrals and Other Compensation

dub Advisors' affiliate Introducing Broker, may offer financial incentives to DASTA Users who refer family and friends to open and fund a brokerage account. These incentives are provided through a referral program and are subject to specific terms and conditions. dub Advisors does not receive an economic benefit from DASTA Users who refer friends or family members pursuant to this program.

 

Item 15. Custody

This Item is not applicable as dub Advisors will not have custody of DASTA User’s funds or securities. 

 

Item 16. Investment Discretion

dub Advisors offers model portfolio management services on a limited discretionary basis, in which case the Introducing Broker places trades in a DASTA User’s account Copying a Premium Portfolio without contacting the client prior to each trade to obtain the client’s permission.

Through the execution of a Customer Agreement, dub Advisors' discretionary authority is solely limited to providing trading signals in accordance with a Premium Portfolio for which a DASTA User has sole discretion to Copy or not at any time on a self-directed basis.

Creator generated Premium Portfolio, although creators generate signals, all discretionary authority rests with dub Advisors and creators do not have the ability to initiate trades or manage DASTA User accounts. dub Advisors handles the execution of all trades through its brokerage account with APEX.

 

Item 17. Voting Client Securities

dub Advisors does not have the authority to vote securities on behalf of DASTA Users.  DASTA Users will receive their proxies or other solicitations directly from their custodian.  Accordingly, DASTA Users are not able to contact dub Advisors with questions about a particular solicitation.

 

Item 18. Financial Information

This Item is not applicable.