With the upcoming Fidelity conversion in mind, I thought it would be appropriate to introduce the new portfolio offerings that are now available. We are offering discretionary Exchange Traded Fund (ETF) portfolios to satisfy client accounts that do not meet the minimum account levels required to implement a separately managed account in a cost-effective manner.
These new offerings can be implemented at lower thresholds, but still exhibit many of the same attributes of our separately managed account strategies. We can implement these strategies at an attractive cost that may make sense for many clients.
If you are not familiar with ETFs, they are similar to traditional mutual funds in many ways. ETFs and traditional mutual funds both have shares owned by the shareholders that together create a pool of money for a portfolio manager to invest. This allows an individual investor to diversify any amount of money, retain liquidity, and hire professional investment management.
One key difference between the two products is pricing: mutual funds are priced only once per day, at the closing of the market, while ETFs trade at different prices throughout the day, like an equity. Generally, ETF’s have a much lower internal management fee than traditional mutual funds, thus providing similar diversification at a lower cost.
While our separately managed accounts require a higher asset level, these discretionary ETF portfolios can accomplish the common goals of diversification, proper asset allocation, and active professional management. Our portfolio managers will be screening the universe of available ETF’s to uncover the best possible
portfolio for our investors.
These accounts also will be rebalanced annually to ensure the portfolio is still in line with the intended allocation. The portfolios will be offered in four different model options containing a mix of domestic equity ETFs, international ETFs, and fixed income ETFs.
If you have additional money here or elsewhere that does not meet our threshold for a separately managed account but could benefit from active management, please do not hesitate to give us a call. Karl Wagner or I would appreciate the opportunity to ascertain the suitability of investing in these strategies for you. As always, we stand ready and willing to assist you in all matters pertaining to your financial well-being.
Business Development Associate