Hypothetical Performance Data Disclosures
Hypothetical Performance Data
The performance results represent the hypothetical back-tested model results a diversified portfolio with moderate risk, and do not reflect actual trading by Cassaday & Company, Inc. and do not represent the actual performance achieved by any Cassaday & Company, Inc. clients. Future investments may be made under materially different economic conditions, in different securities and using different investment strategies and these differences may have a significant effect on the results portrayed. Each of these material market or economic conditions may or may not be repeated. Therefore, there may be sharp differences between a benchmark, the particular securities provided as being representative of certain market segments, strategies and conditions and Cassaday & Company, Inc. performance shown and the actual performance results achieved by any particular client.
Following are limitations inherent in the presented hypothetical back-tested performance results:
- It is assumed that all of the securities used in the hypothetical back-tested results were available for purchase or sale during the time period presented and the markets were sufficiently liquid to permit the types of trading used. In addition, back-testing assumes purchase and sale prices believed to be attainable. Trades for the hypothetical returns were not actually executed. In actual trading, the prices attained may or may not be the same as the assumed order prices due to differences in the time the trades were executed and other factors.
- The actual performance achieved by a client account in the strategies may be affected by a variety of factors, including the initial balance of the account, the timing of additions and withdrawals from the account, modifications to the strategies to meet the specific investment needs or preferences of the client, the duration and timing of the investment, among other factors.
- Hypothetical back-tested performance also differs from actual performance because, as noted, it is achieved through the retroactive application of screening designed with the benefit of hindsight. As a result, the screening process theoretically can continue to be changed until desired or better performance results are achieved. Further, back-tested screening performance does not represent the impact of technical factors, such as: 1) changes in signals as a result of changes in market data that occur after the cutoff time for trading and 2) the inability to execute trades when desired. In addition, performance results for clients that invest in the strategies will vary from the back-tested screening performance due to, for example, investment cash flows, frequency and precision of rebalancing and tax-management strategies.
- The results do not represent the impact that material economic and market factors might have on an investment adviser's decision-making process if the adviser were actually managing client money. Accordingly, the results may have over or under compensated for the impact, if any, of certain market factors such as lack of liquidity, money flow and other factors.
- Back-tested hypothetical returns are dependent on the market and economic conditions that existed during the period. Future market or economic conditions can adversely affect the returns.
- The hypothetical back-tested characteristics related to positions, position sizes and sector weights might differ materially from actual client portfolios.
Disclosures Regarding Gross of Fees Data
The performance results do not reflect any transaction costs of buying and selling securities, investment management fees (including without limitation management fees and performance fees), custody and other costs, or taxes – all of which would be incurred by an investor in any account managed by Cassaday & Company, Inc.. If such costs and fees were reflected, the performance results would be lower. The following chart demonstrates the effect of fees upon account performance*:
|*Assumes 4% annual return
|With 1% Advisory Fee
Please refer to Cassaday & Company, Inc.’s Form ADV Part 2A for a description of Cassaday & Company, Inc.’s fees.
Benchmarks and Securities Representative of Various Market Segments, Strategies and Conditions
The benchmark and securities representative of various market segments, strategies and conditions are shown for comparison purposes only.
S&P 500 Index
The S&P 500 Index is a market-cap weighted index composed of the common stock of 500 leading companies in leading industries of the U.S. economy. The benchmark presented represent an unmanaged portfolio whose characteristics differ from the strategies; however, they tend to represent the investment environment existing during the time periods shown. The benchmark cannot be invested in directly. The returns of the benchmark do not include any transaction costs, management fees or other costs. The holdings of the client portfolios in the strategies may differ significantly from the securities that comprise the benchmark shown. The benchmark has been selected to represent what Cassaday & Company, Inc. believes is an appropriate benchmark with which to compare the performance of the strategies.