Disclosures

Absolute Return Strategies: 50/50 Portfolio, Aggressive GrowthTactical Portfolio, Global Growth, Single Sector

Investable Benchmarks: eMAC, Income & Growth, Income

Verification Reports: Aggressive Growth, Global Growth, Long Short

Pledge: ETF PM’s Pledge to Give Back

The Spaulding Group, an independent third party that is not affiliated with ETF PM, has verified the performance of ETF PM’s representative accounts.

50/50 Portfolio Performance Disclosure

General Information

The 50/50 Portfolio (“50/50″) is a hypothetical portfolio that reflects 50% eMAC Portfolio, 25% Aggressive Growth and 25% Global Growth. The 50/50 performance estimates at ETF PM are backtested and have not been audited. The 50/50 performance estimates are net of all fees and assume reinvestment of dividends with annual rebalancing. Please see full disclosures for ETF PM’s eMAC, Aggressive Growth and Global Growth portfolios.

Benchmarks

The S&P 500 Index is an unmanaged index of common stocks that represents the U.S. stock market. The index is mainly comprised of large cap companies and reflects roughly two-thirds of the total domestic stock market value.

The Dow Jones Credit Suisse Hedge Fund Index (“HFI”) includes approximately 8,000 funds that each have a minimum of $50mm under management, a 12-month track record, and audited financials. The index is asset weighted and excludes separate accounts.

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Aggressive Growth Performance Disclosure

General Information

All of our Aggressive Growth (AG) performance results relate to the AG representative account, an account that David Kreinces first traded in January 2005 while he was a portfolio manager at Merrill Lynch. Mr. Kreinces left Merrill Lynch on November 27, 2007 and started ETF Portfolio  Management (ETF PM) on December 1, 2007.

Mr. Kreinces was solely responsible for the development of AG. While at Merrill Lynch, he had full discretionary authority over the selection of investments for, and was primarily responsible for the day-to-day management of, all accounts that employed the AG strategy. Although Mr. Kreinces implements AG at ETF PM in substantially the same manner as he did at Merrill Lynch, the performance results during the prior performance period are not indicative of the future performance of AG.

Most of the Merrill Lynch AG accounts terminated their respective investment advisory agreements with Merrill Lynch and became clients of ETF PM. As was the case at Merrill Lynch, Mr. Kreinces has full discretionary authority over the selection of investments for, and he is primarily responsible for managing, ETF PM accounts that allocate to the AG portfolio.

Performance

The performance results for AG reflect a single account performance achieved by the respective representative account. Accordingly, the performance results are similar to the respective composite results but the figures are not identical.

The AG representative account is the account of an individual related to Mr. Kreinces and it was chosen because it most closely conforms to the AG investment strategy. Individual account performance will vary based upon the inception date of the account, restrictions on the account, and other factors, and may not equal the performance presented herein.

The performance results for AG have been verified by The Spaulding Group and they are net of all fees. Please see Aggressive Growth Verification for the latest performance report from The Spaulding Group or request the report at info@etfpm.com.

Historical performance is not indicative of future performance. Additionally, the investment return and principal value of an ETF PM account will fluctuate and may be worth more or less than the original cost when liquidated. The investment environment and market conditions may be markedly different in the future and investment returns will fluctuate in value.

AG was implemented, and will continue to be implemented, with a view towards long-term capital growth and protection. The indices presented are for comparison purposes only. An ETF PM account employing AG may not be as diversified as any of these indices and no index is directly comparable to AG.

Fees

The representative Merrill Lynch AG account was charged an annual, all-inclusive fee of 1.5% of assets under management (AUM). Each AG advisory account at ETF PM was charged an annual management fee of 1.0% of AUM in 2008. The AG performance results during the prior performance period reflect the Merrill Lynch fee structure. Accordingly, if the ETF PM fee structure were in place at Merrill Lynch, the performance results during the prior performance period may be lower than those presented.

In 2009, the annual management fee for AG became 2.0%. ETF PM does not charge a performance fee on any of the firm’s accounts.

Advisory fees are disclosed in each client’s investment management agreement. The AG accounts are responsible for all commissions and other transaction charges as well as any charges relating to the custody of securities.

Benchmarks

The S&P 500 Index (SPX) is an unmanaged index of common stocks that represents the U.S. stock market. The index is mainly comprised of large cap companies and reflects roughly two-thirds of the total domestic stock market value.

The Dow Jones Credit Suisse Hedge Fund Index (HF Index) includes approximately 8,000 funds that each have a minimum of $50mm under management, a 12-month track record, and audited financial statements. The index is asset weighted and excludes separate accounts.

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Tactical Portfolio Performance Disclosure

General Information

All of our Tactical Portfolio (T) performance results relate to the T representative account which was first implemented in January 2013.

Performance

The performance results for T reflect the single account performance achieved by the respective representative account. Accordingly, the performance results are similar to the respective composite results but the figures are not identical. Individual account performance will vary based upon the inception date of the account, restrictions on the account, and other factors, and may not equal the performance presented herein. The performance results for T are net of all fees.

Historical performance is not indicative of future performance. Additionally, the investment return and principal value of an ETF PM account will fluctuate and may be worth more or less than the original cost when liquidated. The investment environment and market conditions may be markedly different in the future and investment returns will fluctuate in value.

T was implemented, and will continue to be implemented, with a view towards long-term capital growth and protection. The indices presented are for comparison purposes only. An ETF PM account employing T may not be as diversified as any of these indices and no index is directly comparable to T.

Fees

Each T advisory account was charged an annual management fee of 1.0% of AUM through September 2013. In October 2013, the annual management fee for T became 1.5%. ETF PM does not charge a performance fee on any of the firm’s accounts.

Advisory fees are disclosed in each client’s investment management agreement. The T accounts are responsible for all commissions and other transaction charges as well as any charges relating to the custody of securities.

Benchmarks

The S&P 500 Index (SPX) is an unmanaged index of common stocks that represents the U.S. stock market. The index is mainly comprised of large cap companies and reflects roughly two-thirds of the total domestic stock market value

The Dow Jones Credit Suisse Hedge Fund Index (HF Index) includes approximately 8,000 funds that each have a minimum of $50mm under management, a 12-month track record, and audited financial statements. The index is asset weighted and excludes separate accounts.

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Global Growth Performance Disclosure

General Information

All of our Global Growth (GG) performance results relate to the GG representative account which was first implemented in January 2008.    

Performance

The performance results for GG reflect the single account performance achieved by the respective representative account. Accordingly, the performance results are similar to the respective composite results but the figures are not identical. Individual account performance will vary based upon the inception date of the account, restrictions on the account, and other factors, and may not equal the performance presented herein.

The performance results for GG have been verified by The Spaulding Group and they are net of all fees. Please see the Global Growth Verification for the The Spaulding Group’s latest report or email a request for a copy of the report to info@etfpm.com.

Historical performance is not indicative of future performance. Additionally, the investment return and principal value of an ETF PM account will fluctuate and may be worth more or less than the original cost when liquidated. The investment environment and market conditions may be markedly different in the future and investment returns will fluctuate in value.

GG was implemented, and will continue to be implemented, with a view towards long-term capital growth and protection. The indices presented are for comparison purposes only. An ETF PM account employing GG may not be as diversified as any of these indices and no index is directly comparable to GG.

Fees

Each GG advisory account was charged an annual management fee of 0.5% of AUM in 2008.  In 2009, the annual management fee for GG became 2.0%. ETF PM does not charge a performance fee on any of the firm’s accounts.

Advisory fees are disclosed in each client’s investment management agreement. The GG accounts are responsible for all commissions and other transaction charges as well as any charges relating to the custody of securities.

Benchmarks

The S&P 500 Index (SPX) is an unmanaged index of common stocks that represents the U.S. stock market. The index is mainly comprised of large cap companies and reflects roughly two-thirds of the total domestic stock market value.

The Dow Jones Credit Suisse Hedge Fund Index (HF Index) includes approximately 8,000 funds that each have a minimum of $50mm under management, a 12-month track record, and audited financial statements. The index is asset weighted and excludes separate accounts.

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Single Sector Performance Disclosure

General Information

All of our Single Sector (SS) performance results relate to the SS representative account which was first implemented in January 2008.

Performance

The performance results for SS reflect the single account performance achieved by the respective representative account. Accordingly, the performance results are similar to the respective composite results but the figures are not identical. Individual account performance will vary based upon the inception date of the account, restrictions on the account, and other factors, and may not equal the performance presented herein. The performance results for SS are net of all fees.

Historical performance is not indicative of future performance. Additionally, the investment return and principal value of an ETF PM account will fluctuate and may be worth more or less than the original cost when liquidated. The investment environment and market conditions may be markedly different in the future and investment returns will fluctuate in value.

SS was implemented, and will continue to be implemented, with a view towards long-term capital growth and protection. The indices presented are for comparison purposes only. An ETF PM account employing SS may not be as diversified as any of these indices and no index is directly comparable to SS.

Fees

Each SS advisory account was charged an annual management fee of 1.0% of AUM in 2008.  In 2009, the annual management fee for SS became 2.0%. ETF PM does not charge a performance fee on any of the firm’s accounts.

Advisory fees are disclosed in each client’s investment management agreement. The SS accounts are responsible for all commissions and other transaction charges as well as any charges relating to the custody of securities.

Benchmarks

The S&P 500 Index (SPX) is an unmanaged index of common stocks that represents the U.S. stock market. The index is mainly comprised of large cap companies and reflects roughly two-thirds of the total domestic stock market value

The Dow Jones Credit Suisse Hedge Fund Index (HF Index) includes approximately 8,000 funds that each have a minimum of $50mm under management, a 12-month track record, and audited financial statements. The index is asset weighted and excludes separate accounts.

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eMAC Portfolio Performance Disclosure

General Information

     The growth benchmark portfolio is comprised of leading ETFs from Vanguard and iShares. Mr. Kreinces based the growth benchmark on the efficient multi-asset class (eMAC) portfolio recommended by David Swensen in “Unconventional Success” and his revisions. Swensen is CIO of Yale University and his views have significantly broadened the industry’s perception of proper diversificaition. Swensen is not affiliated with ETF PM and has not endorsed ETF PM. The eMAC is 30% US Equity (VTI), 15% Foreign Equity (VEA), 10% Emerging Markets (VWO), 15% REITs (VNQ), 15% Medium-Term Treasuries (IEF), and 15% Treasury Inflation Protected Securities (TIP).

All of the performance estimates relate to a hypothetical core model, a strategy that David Kreinces first backtested in 2008. The portfolio does not take into account an individual’s investment objectives and financial circumstances. Consult your investment adviser before investing.

Mr. Kreinces left Merrill Lynch on November 27, 2007 and started ETF Portfolio Management, LLC (“ETF PM”) on December 1, 2007.  It is expected that high net worth individuals and institutional clients will allocate to the eMAC at ETF PM.

Performance Estimates: The performance estimates reflect performance that would have been achieved by a hypothetical eMAC account with annual rebalancing. The performance estimates are backtested and have not been audited. The performance estimates do not reflect trading fees associated with annual rebalancing, and assume reinvestment of dividends.

The performance estimates for the eMAC do not reflect an advisory fee and ETF PM does not charge an advisory fee for this account structure. Each ETF PM advisory account is solely responsible for all commissions and other transaction charges, as well as any charge relating to the custody of securities in such account.

Backtesting involves simulation of a quantitative investment model by applying all rules, thresholds and strategies to a hypothetical portfolio during a specific time period. The eMAC performance estimates do not reflect the returns of actual client accounts. Backtested performance does not represent actual trading and does not reflect the impact that material market factors might have had on ETF PM’s decision-making.

Historical performance estimates are not indicative of future performance. The investment return and principal value of an ETF PM account will fluctuate and may be worth more or less than the original cost when liquidated. The investment environment and market conditions may be markedly different in the future and investment returns will fluctuate in value.

The eMAC was implemented, and will continue to be implemented, with a view towards low-cost diversification across multiple asset classes. The performance estimates presented are for comparison purposes only. All of the information in this report was taken from sources which we believe to be reliable, but we cannot guarantee perfect accuracy.

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Income & Growth Performance Disclosure

General Information

     The Income & Growth (I&G) benchmark portfolio is comprised of leading ETFs from Vanguard and iShares. All of the performance estimates for I&G relate to a hypothetical core model, a strategy that David Kreinces first backtested in 2008. This portfolio does not take into account an individual’s investment objectives and financial circumstances. Consult your investment adviser before investing.

Mr. Kreinces was solely responsible for the development of the I&G portfolio and he had full discretionary authority over the selection of investments. The I&G portfolio is 42% Vanguard Total World Stock (VT), 8% REITs (VNQ), 35% Long-Term Treasuries (TLT), 7% Medium-Term Treasuries (IEF), and 8% Treasury Inflation Protected Securities (TIP).

It is expected that high net worth individuals and institutional clients will allocate to the investable benchmarks at ETF PM.

Performance Estimates

The performance estimates reflect performance that would have been achieved by a hypothetical I&G benchmark account with annual rebalancing. The performance estimates are backtested and have not been audited. The performance estimates do not reflect trading fees associated with annual rebalancing, and assume reinvestment of dividends.

The performance estimates for the I&G portfolio do not reflect an advisory fee and ETF PM does not charge an advisory fee for this account structure. Each ETF PM advisory account is solely responsible for all commissions and other transaction charges, as well as any charge relating to the custody of securities in such account.

Backtesting involves simulation of a quantitative investment model by applying all rules, thresholds and strategies to a hypothetical portfolio during a specific time period. The I&G benchmark performance estimates do not reflect the returns of actual client accounts. Backtested performance does not represent actual trading and does not reflect the impact that material market factors might have had on ETF PM’s decision-making.

Historical performance estimates are not indicative of future performance. The investment return and principal value of an ETF PM account will fluctuate and may be worth more or less than the original cost when liquidated. The investment environment and market conditions may be markedly different in the future and investment returns will fluctuate in value.

The I&G benchmark was implemented, and will continue to be implemented, with a view towards low-cost diversification across multiple asset classes. The performance estimates presented are for comparison purposes only. All of the information in this report was taken from sources which we believe to be reliable, but we cannot guarantee perfect accuracy.

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Income Portfolio Performance Disclosure

The Income (30/70i) benchmark portfolio is comprised of leading ETFs from Vanguard and iShares. All of the performance estimates for 30/70i relate to a hypothetical core model, a strategy that David Kreinces first backtested in 2008. This portfolio does not take into account an individual’s investment objectives and financial circumstances. Consult your investment adviser before investing.

Mr. Kreinces was solely responsible for the development of the I&G portfolio and he had full discretionary authority over the selection of investments. 30/70i is 30% Vanguard Total World Stock (VT) and 70% iShares 20+ Year Treasury Bond (TLT).

It is expected that high net worth individuals and institutional clients will allocate to the 30/70i Portfolio at ETF PM.

Performance Estimates

The performance estimates reflect performance that would have been achieved by a hypothetical 30/70i benchmark account with annual rebalancing. The performance estimates are backtested and have not been audited. The performance estimates do not reflect trading fees associated with annual rebalancing, and assume reinvestment of dividends.

The performance estimates for the 30/70i portfolio do not reflect an advisory fee and ETF PM does not charge an advisory fee for this account structure. Each ETF PM advisory account is solely responsible for all commissions and other transaction charges, as well as any charge relating to the custody of securities in such account.

Backtesting involves simulation of a quantitative investment model by applying all rules, thresholds and strategies to a hypothetical portfolio during a specific time period. The 30/70i benchmark performance estimates do not reflect the returns of actual client accounts. Backtested performance does not represent actual trading and does not reflect the impact that material market factors might have had on ETF PM’s decision-making.

Historical performance estimates are not indicative of future performance. The investment return and principal value of an ETF PM account will fluctuate and may be worth more or less than the original cost when liquidated. The investment environment and market conditions may be markedly different in the future and investment returns will fluctuate in value.

The 30/70i benchmark was implemented, and will continue to be implemented, with a view towards low-cost diversification across multiple asset classes. The performance estimates presented are for comparison purposes only. All of the information in this report was taken from sources which we believe to be reliable, but we cannot guarantee perfect accuracy.

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Pledge to Give Back

ETF PM pledges to give 8% of our annual advisory fees to the schools and charities selected by our clients. Initially, our pledge was to give 15% of our annual advisory fees but, in 2013, the percentage was lowered to 8%.

The Pledge to Give Back is intended to run for the life of the firm. However, ETF PM reserves the right to change or modify our pledge as needed.

Clients may each submit one 501(c)(3) organization annually for approval.

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ETF Portfolio Management, LLC
350 Via Las Brisas, Suite 270
Newbury Park, CA 91320
Phone: (866) 409-5844 Toll-Free
Fax: (805) 480-1111
Email: info@etfpm.com

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