Disclosures
Absolute Return Strategies: Global Growth, Aggressive Growth, Long/Short, Advanced Alpha
Passive Cores: Basic Core, eMAC Portfolio, Advanced Core, 70/30 Growth
Verification Reports: Global Growth, Aggressive 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.
Global Growth Performance Disclosure
General Information
All of our Global Growth performance results (the “Performance Results”) relate to the Global Growth representative account (the “GG Portfolio”), an account that David Kreinces first traded in January 2008. Mr. Kreinces left Merrill Lynch on November 27, 2007 and started ETF Portfolio Management, LLC (“ETF PM”) on December 1, 2007.
Performance Achieved at ETF PM
The Performance Results at ETF PM reflect the single account performance achieved by the representative ETF PM Global Growth account. Accordingly, the Performance Results are similar to the performance achieved by the composite of ETF PM’s Global Growth accounts, although the figures are not identical. The Performance Results are verified by The Spaulding Group, are net of all fees, and assume reinvestment of dividends. 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.
Each GG advisory account (each, an “ETF PM Account”) was charged an annual management fee of 0.5% of assets under management in 2008 and was solely responsible for all commissions and other transaction charges as well as any charge relating to the custody of securities in such account (the “ETF PM Fee Structure”). In 2009, the annual management fee is 2% on all of our active strategies, including Global Growth, and there will be no performance fee on any of our accounts. Advisory fees are disclosed in each client’s investment management agreement with ETF PM.
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. Investment environment and market conditions may be markedly different in the future, and investment returns will fluctuate in value. There can be no assurance that any ETF PM Account will achieve positive returns in future periods.
The GG Portfolio was implemented, and will continue to be implemented, with a view towards long-term capital protection and growth. The indices presented are for comparison purposes only and no index is directly comparable to the investment strategy of any ETF PM Account employing the GG Portfolio.
60/40 GG: The 60/40 GG portfolio is a hypothetical portfolio that is 60% allocated to our passive Advanced Core portfolio and 40% to our active Global Growth portfolio. The 60/40 GG performance estimates at ETF PM are backtested and have not been audited. The 60/40 GG performance estimates are net of all fees and assume reinvestment of dividends. The 60/40 GG portfolio is shown to reflect a strategic combination of both passive and active portfolio management.
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 Credit Suisse/Tremont Hedge Fund Index includes 496 funds across 10 style-based sectors that reflect the hedge fund industry. The index is asset weighted in order to avoid underweighting top performers and overweighting decliners. Member funds report monthly performance and have annually audited financial statements.
Aggressive Growth Performance Disclosure
General Information
All of our Aggressive Growth performance results (the “Performance Results”) relate to the Aggressive Growth representative account (the “Aggressive Growth Portfolio”), an account that David Kreinces first traded in January 2005 while he was a portfolio manager at Merrill Lynch & Co. (“Merrill Lynch”). Mr. Kreinces was solely responsible for the development of the Aggressive Growth Portfolio. 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 Aggressive Growth Portfolio (collectively, the “Merrill Lynch Aggressive Growth Accounts”).
Mr. Kreinces left Merrill Lynch on November 27, 2007 and started ETF Portfolio Management, LLC (“ETF PM”) on December 1, 2007. Most of the Merrill Lynch Aggressive Growth Accounts terminated their respective investment advisory agreements with Merrill Lynch and became investment advisory clients of ETF PM, allocating to the same Aggressive Growth Portfolio. The Aggressive Growth Portfolio managed by Mr. Kreinces at ETF PM is substantially similar to, if not the same as, the Aggressive Growth Portfolio employed by him while he was with Merrill Lynch. As was the case with Merrill Lynch, Mr. Kreinces has full discretionary authority over the selection of investments for, and is primarily responsible for the day-to-day management of, those ETF PM accounts that allocate to the Aggressive Growth Portfolio.
Performance Achieved at ETF PM: The Performance Results at ETF PM reflect the single account performance achieved by the representative ETF PM Aggressive Growth account, which is the account of an individual related to Mr. Kreinces. The representative account used to represent the Aggressive Growth Portfolio was chosen because it most closely conforms to the investment strategies utilized in the Aggressive Growth Portfolio. 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. Accordingly, the Performance Results at ETF PM are similar to the performance achieved by the composite of ETF PM’s Aggressive Growth accounts although the figures are not identical. The Performance Results are verified by The Spaulding Group, are net of all fees, and assume reinvestment of dividends. Please see http://etfpm.com/resources/all-disclosures/performance-verification-reports/ for the latest performance report from The Spaulding Group or request the report at info@etfpm.com.
Performance Achieved at Prior Adviser: David Kreinces’ Prior Record: The Performance Results, between the period of January 1, 2005 through November 25, 2007 (the “Prior Performance Period”), reflect the performance of the same account achieved under the management of Mr. Kreinces while he was a portfolio manager at Merrill Lynch. The Performance Results from the Prior Performance Period have been verified by The Spaulding Group, are net of all fees, and assume reinvestment of dividends. Please see the Aggressive Growth Verification for the The Spaulding Group’s latest report or email a request for a copy of the report to info@etfpm.com.
The representative Merrill Lynch Aggressive Growth account was charged by Merrill Lynch an annual, all-inclusive fee of 1.5% of assets under management (the “Merrill Lynch Fee Structure”). On the other hand, each ETF PM advisory account (each, an “ETF PM Account”) is charged an annual management fee of 1.0% of assets under management in 2008 and is solely responsible for all commissions and other transaction charges as well as any charge relating to the custody of securities in such account (the “ETF PM Fee Structure”). In 2009, the annual management fee is 2% on all of our active strategies including Aggressive Growth. Annual management fees are disclosed in each client’s investment management agreement with ETF PM. The Performance Results during the Prior Performance Period reflect the Merrill Lynch Fee Structure. Accordingly, if the ETF PM Fee Structure were taken into account instead of the Merrill Lynch Fee Structure, the Performance Results during the Prior Performance Period may be higher or lower than those presented.
Historical performance is not indicative of future performance. Although Mr. Kreinces will implement the Aggressive Growth Portfolio at ETF PM in substantially the same manner as that of when he was at Merrill Lynch, the Performance Results during the Prior Performance Period are not indicative of the future performance of the Aggressive Growth Portfolio at ETF PM. 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 during the Prior Performance Period may be markedly different in the future and investment returns will fluctuate in value. There can be no assurance that any ETF PM Account will achieve positive returns in future periods.
The Aggressive Growth Portfolio was implemented, and will continue to be implemented, with a view towards long-term capital protection and growth. The indices presented are for comparison purposes only and no index is directly comparable to the investment strategy of any ETF PM Account employing the Aggressive Growth Portfolio.
60/40 AG: The 60/40 AG portfolio is a hypothetical portfolio that is 60% allocated to our passive Advanced Core portfolio and 40% to our active Aggressive Growth portfolio. The 60/40 AG performance estimates at ETF PM are backtested and have not been audited. The 60/40 AG performance estimates are net of all fees and assume reinvestment of dividends. The 60/40 AG portfolio is shown to reflect a strategic combination of both passive and active portfolio management.
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 Credit Suisse/Tremont Hedge Fund Index includes 496 funds across 10 style-based sectors that reflect the hedge fund industry. The index is asset weighted in order not to underweight top performers and overweight decliners. Member funds submit to reporting monthly performance and annually audited financial statements.
Long/Short Performance Disclosure
General Information
All of our Long/Short performance results (the “Performance Results”) relate to the Long/Short representative account (the “LS Portfolio”), an account that David Kreinces first traded in January 2007 while he was a portfolio manager at Merrill Lynch & Co. (“Merrill Lynch”). Mr. Kreinces left Merrill Lynch on November 27, 2007 and started ETF Portfolio Management, LLC (“ETF PM”) on December 1, 2007.
Performance Achieved at ETF PM
The Performance Results at ETF PM reflect the single account performance achieved by the representative ETF PM Long/Short account. Accordingly, the Performance Results at ETF PM are similar to the performance achieved by the composite of ETF PM’s Long/Short accounts although the figures are not identical. The Performance Results are verified by The Spaulding Group, are net of all fees, and assume reinvestment of dividends. Please see the Long/Short Verification for the The Spaulding Group’s latest report or email a request for a copy of the report to info@etfpm.com.
Each LS advisory account (each, an “ETF PM Account”) was charged an annual management fee of 1% of assets under management in 2008 and are solely responsible for all commissions and other transaction charges as well as any charge relating to the custody of securities in such account (the “ETF PM Fee Structure”). In 2009, the annual management fee is 2% on all of our active strategies including Long/Short. Advisory fees are disclosed in each client’s investment management agreement with ETF PM.
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. Investment environment and market conditions may be markedly different in the future and investment returns will fluctuate in value. There can be no assurance that any ETF PM Account will achieve positive returns in future periods.
The LS Portfolio was implemented, and will continue to be implemented, with a view towards long-term capital protection and growth. The indices presented are for comparison purposes only and no index is directly comparable to the investment strategy of any ETF PM Account employing the LS Portfolio.
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 Credit Suisse/Tremont Hedge Fund Index includes 496 funds across 10 style-based sectors that reflect the hedge fund industry. The index is asset weighted in order to avoid underweighting top performers and overweighting decliners. Member funds report monthly performance and annually audited financial statements.
Advanced Alpha Performance Disclosure
General Information
All of our Core Alpha (formerly known as “Core Alpha”) performance results (the “Performance Results”) relate to the Advanced Alpha representative account (the “AA Portfolio”), an account that David Kreinces first traded in January 2008. Mr. Kreinces left Merrill Lynch on November 27, 2007 and started ETF Portfolio Management, LLC (“ETF PM”) on December 1, 2007.
Performance Achieved at ETF PM
In 2008, the Performance Results are pro-forma to reflect the average return of three different representative client accounts’ actual performance results achieved at ETF PM. Accordingly, the Performance Results are similar to the performance achieved by the composite of ETF PM’s actively managed client accounts, although the figures are not identical. The 2008 Performance Results of the three different representative client accounts have been verified by The Spaulding Group, are net of all fees, and assume reinvestment of dividends. Please see http://etfpm.com/resources/all-disclosures/performance-verification-reports/ for the latest performance report from The Spaulding Group or request the report at info@etfpm.com.
The Performance Results after December 31, 2008 reflect an actual representative client account with all three of the different strategies combined in one account. The Performance Results for the representative account have not been verified, are net of all fees, and assume reinvestment of dividends.
The pro-forma AA advisory accounts (each, an “ETF PM Account”) returns in 2008 are net of a 0.83% annual management fee on assets under management and the accounts are solely responsible for all commissions and other transaction charges as well as any charges relating to the custody of securities in such accounts (the “ETF PM Fee Structure”). In 2009, the annual management fee is 2% on all of our active strategies, including Advanced Alpha, and there will be no performance fee on any of our accounts. Advisory fees are disclosed in each client’s investment management agreement with ETF PM.
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. Investment environment and market conditions may be markedly different in the future and investment returns will fluctuate in value. There can be no assurance that any ETF PM Account will achieve positive returns in future periods.
The AA Portfolio was implemented, and will continue to be implemented, with a view towards long-term capital growth and protection. The indexes presented are for comparison purposes only and no index is directly comparable to the investment strategy of any ETF PM Account employing the AA Portfolio.
60/40 AA: The 60/40 AA portfolio is a hypothetical portfolio that is 60% allocated to our passive Advanced Core portfolio and 40% to our active Advanced Alpha portfolio. The 60/40 AA performance estimates at ETF PM are backtested and have not been audited. The 60/40 AA performance estimates are net of all fees and assume reinvestment of dividends. The 60/40 AA portfolio is shown to reflect a strategic combination of both passive and active portfolio management.
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 Credit Suisse/Tremont Hedge Fund Index includes 496 funds across 10 style-based sectors that reflect the hedge fund industry. The index is asset weighted in order not to underweight top performers and overweight decliners. Member funds submit to reporting monthly performance and annually audited financial statements.
Basic Core Performance Disclosure
General Information
All of our Basic Core performance estimates (the “Performance Estimates”) relate to the Basic Core model (the “Basic Core Portfolio”), a strategy that David Kreinces first employed in March 2008. Mr. Kreinces was solely responsible for the development of the passive Basic Core Portfolio and he had full discretionary authority over the selection of investments.
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 Basic Core Portfolio at ETF PM.
Performance Estimates at ETF PM
The Performance Estimates at ETF PM reflect an estimate of the performance that would have been achieved by a hypothetical Basic Core account. The Performance Estimates at ETF PM have not been audited. The Performance Estimates are net of all fees and assume reinvestment of dividends.
The Performance Estimates for the hypothetical model Basic Core account do not reflect an advisory fee and no advisory fee will be charged for this account structure at ETF PM. 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 (the “ETF PM Fee Structure”).
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. There can be no assurance that any ETF PM Account will achieve positive returns in future periods.
The Basic Core Portfolio was implemented, and will continue to be implemented, with a view towards low-cost global diversification. The indices presented are for comparison purposes only. In comparing the Performance Estimates to any market indices, clients and prospective clients of ETF PM should note that many indices represent only unmanaged results of long investments within an individual asset class. Additionally, these indices do not incur expenses and are not available for investment. Because of these differences, no index is directly comparable to the investment strategy of any ETF PM Account employing the Basic Core Portfolio.
eMAC Portfolio Performance Disclosure
General Information
All of our eMAC Portfolio performance estimates (the “Performance Estimates”) relate to the eMAC Portfolio model (the “eMAC Portfolio”), a strategy that David Kreinces first employed in September 2008. Mr. Kreinces tailored the eMAC Portfolio according to the efficient multi-asset class core ETF portfolio outlined by David Swensen in ”Unconventional Success.” Swensen’s performance managing Yale University’s endowment fund is leading Wall Street in many respects and his views have significantly broadened the industry’s perception of proper diversification.
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 Unconventional Core Portfolio at ETF PM.
Performance Estimates at ETF PM
The Performance Estimates at ETF PM reflect an estimate of the performance that would have been achieved by a hypothetical eMAC Portfolio account. The Performance Estimates at ETF PM have not been audited. The Performance Estimates are net of all fees and assume reinvestment of dividends.
The Performance Estimates for the hypothetical model eMAC Portfolio do not reflect an advisory fee and no advisory fee will be charged for this account structure at ETF PM. 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 (the “ETF PM Fee Structure”).
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. There can be no assurance that any ETF PM Account will achieve positive returns in future periods.
The eMAC Portfolio was implemented, and will continue to be implemented, with a view towards efficient multi-asset class diversification. The indices presented are for comparison purposes only and no index is directly comparable to the investment strategy of any ETF PM Account employing the eMAC Portfolio.
Advanced Core Performance Disclosure
General Information
All of our Advanced Core performance estimates (the “Performance Estimates”) relate to the Advanced Core model (the “Advanced Core Portfolio”), a strategy that David Kreinces first employed in March 2008. Mr. Kreinces was solely responsible for the development of the passive Advanced Core Portfolio and he had full discretionary authority over the selection of investments.
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 Advanced Core Portfolio at ETF PM.
Performance Estimates at ETF PM
The Performance Estimates at ETF PM reflect an estimate of the performance that would have been achieved by a hypothetical Advanced Core account. The Performance Estimates at ETF PM have not been audited. The Performance Estimates are net of all fees and assume reinvestment of dividends.
The Performance Estimates for the hypothetical model Advanced Core account do not reflect an advisory fee and no advisory fee will be charged for this account structure at ETF PM. 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 (the “ETF PM Fee Structure”).
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. There can be no assurance that any ETF PM Account will achieve positive returns in future periods.
The Advanced Core Portfolio was implemented, and will continue to be implemented, with a view towards strategic and low-cost diversification across multiple asset classes. The indices presented are for comparison purposes only and no index is directly comparable to the investment strategy of any ETF PM Account employing the Advanced Core Portfolio.
70/30 Growth Performance Disclosure
General Information
All of the 70/30 Growth performance estimates (the “Performance Estimates”) relate to the 70/30 Growth model benchmark (the “70/30 Growth Portfolio”).
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 70/30 Growth Portfolio at ETF PM.
Performance Estimates at ETF PM
The Performance Estimates at ETF PM reflect an estimate of the performance that would have been achieved by a hypothetical 70/30 Growth account. The Performance Estimates at ETF PM have not been audited. The Performance Estimates are net of all fees and assume reinvestment of dividends.
The Performance Estimates for the hypothetical model 70/30 Growth account do not reflect an advisory fee, and no advisory fee will be charged for this account structure at ETF PM. 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.
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. There can be no assurance that any ETF PM Account will achieve positive returns in future periods.
The 70/30 Growth Portfolio was implemented, and will continue to be implemented, with a view towards a simple investable benchmark for a core growth portfolio. The indices presented are for comparison purposes only and no index is directly comparable to the investment strategy of any ETF PM Account employing the 70/30 Growth Portfolio.
Our Pledge To Give Back
ETF PM’s pledge to give back 15% of our annual advisory fees, to the schools and charities selected by our clients, is intended to run annually for the life of the firm. However, ETF PM reserves the right to change or modify this pledge, if needed, with written notification to all clients. The pledge applies to new firm clients beginning December 2009 and extends to all pre-existing clients in 2011. Clients may each submit one 501(c)(3) organization annually for approval.
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