Improving the Consistency of Financial Outcomes with Catapult, a Wealthtech Startup to Watch

Catapult is a wealthtech startup that allows investors to create a repeatable set of rules to reallocate periodically and take the subjectivity and emotion out of choosing and sizing investments. Backed by founders with decades of experience in investing and technology, Catapult has proven its utility and value to investors since first being applied to live portfolios in 2020.

🧑‍💻 Wealthtender Wealthtech Spotlight Series: Get to Know Catapult

This page is organized into sections to help you quickly find the information you need and get answers to your questions:

1. Q&A with Catapult Co-Founder, Scott Frank
2. Quick Facts about Catapult
3. Browse Trending Articles

– Wealthtech Spotlight: Catapult –

Also, our investment decisions, like most investors, center around past returns. The rhythm of past and present can be two very different things, particularly when it comes to investment returns.

Ultimately, we wanted to build a repeatable, data-driven investment process void of subjectivity and emotion and have the leverage to assimilate an ever-expanding universe of investment products.

Q: Can you share one example of where and how Catapult is being employed today, and why it made sense in this case?

At DeWitt Capital Management, we are going on our third year running Catapult-powered portfolios. Currently, we have over 30 models operating across single stocks, ETFs, and mutual funds (401k accounts).

One example is our “P-Lock” or position lock feature, helping clients with large or concentrated positions. With this feature, we can quickly and efficiently build portfolios of complementary securities around those concentrated positions, providing a ballast to reduce overall portfolio volatility.

Q: Does Catapult integrate with custodians or require manual intervention for trading portfolios?

Manually today.  Full integrations will be made available in the future.

Q: Could Catapult offer smart beta ETF managers a solution for their advisor clients as an ETF alternative when clients with unique circumstances would benefit from customization in an SMA with advanced optimization techniques for taxes, risk, concentration, etc?

Yes, we think there is a significant opportunity to work on collaborative solutions with ETF managers or aspiring managers seeking to launch ETFs as the need for more innovative products and personalized portfolios expands.

Another developing opportunity is a concept we call “ETF 2.0”. Select an off-the-shelf ETF or multiple ETFs, combine the holdings, create a custom framework of risk constraints at the asset class, sector, and security level, and optimize to minimize volatility at a regular interval. Test and re-calibrate to find your desired solution that improves the risk/return consistency.

We have several portfolios running on this concept and see demand growing for such personalization.

Q: How is Catapult priced and who is it available to? Exclusively advisors and institutions?

Yes, currently, it’s available to institutions and advisors. Private clients can gain access through DeWitt Capital Management’s advisory services. There are two pricing models, 1) subscription/license and 2) advisory/sub-advisory asset-based pricing (RIA managed).

In the future, we envisage adding a pay-per-optimization service which would be a fee per portfolio optimization.

Q: What does the competitive landscape look like for Catapult?

Honestly, we haven’t focused on the competitive landscape, but that doesn’t mean there aren’t other tools or solutions available. We initially launched the project to become better investors for our clients, not necessarily as a B2B offering.

We believe the space is large enough to accommodate multiple data-driven portfolio management solutions as investor preferences and styles vary widely. Our core tools strive to minimize volatility and control risk. We wouldn’t be the ideal platform for investors seeking screens on a particular valuation metric; we continue to focus on and build risk-managed solutions.

Q: Would a good use case for Catapult include smart beta asset managers’ product development and management teams as a tool for both new product idea generation and existing product stress testing?

Yes, we believe so, given that our testing environment is “out-of-sample.”

Our goal at the onset was to create a more reliable testing environment than the widely used “in-sample” backtest. Since its inception, we have run over 50,000 tests on the platform. The output created during the testing process can help investors analyze historical behavior and dial in an allocation before deploying capital.

Our objective is to test assumptions, identify new opportunities, and find an ideal portfolio to achieve more consistent long-term investment success.

📗 Quick Facts About Catapult

Year Founded:	2020
Website:	www.fntech.io
Co-Founders:	Scott Frank, CAIA, CPWA | Patrick Newell

📰 Trending Articles in Advisor Practice Management & Marketing

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