Disclosures

Absolute Return Strategies: 50/50 Portfolio, Tactical (T), and Tactical 2x (T2).

Investable Benchmarks: Growth. Income & Growth, and Income.

Former Strategy 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 and 50% Tactical (T). Prior to July ’14, the active portion was in our former Aggressive Growth (AG) and Global Growth (GG) portfolios.

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.

The 50/50 Portfolio account is charged an annual, all-inclusive fee of 1.0% of assets under management (AUM). Please see full disclosures for ETF PM’s eMAC, T, AG, and GG 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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Tactical (T) Performance Disclosure

General Information

All of our Tactical (T) performance results relate to the T representative account, an account that David Kreinces first traded in July 2014. Mr. Kreinces was solely responsible for the development of T and he has full discretionary authority over the selection of investments for, and he is primarily responsible for managing, ETF PM accounts that allocate to the T portfolio.

Performance

The performance results for T 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 T representative account was chosen because it most closely conforms to the T 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 T are net of all fees and expenses. Please see Tactical (T) for the latest performance report 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.

The T portfolio 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

The representative T account was charged an annual, all-inclusive fee of 2.0% of assets under management (AUM). 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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Tactical 2x (T2) Performance Disclosure

General Information

All of our Tactical 2x (T2) performance results relate to the T2 representative account which was first implemented in July 2014. The objective of T2 is to employ trend following rotation of leading exchange-traded funds (ETFs) with the use of up to 2x leverage at select times.

Performance

The performance results for T2 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 T2 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.

T2 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 T2 may not be as diversified as any of these indices and no index is directly comparable to T2.

Fees

Each T2 advisory account was charged an annual management fee of 2.0% of AUM. 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 T2 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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Growth Portfolios Performance Disclosures

General Information

The growth benchmark portfolios are comprised of leading ETFs from Vanguard and iShares. Mr. Kreinces based the first 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 diversification. 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.

The firm’s other Growth Portfolios (GQs) are three Internet and Technology focused growth portfolios comprised of leading ETFs from  Vanguard, iShares, PowerShares, ProShares, and Direxion. The performance estimates for the GQs relate to a range of hypothetical core models, strategies that David Kreinces first backtested in 2016. These portfolios do 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 all three GQs and he had full discretionary authority over the selection of investments. The Growth  (GQ) portfolio is 42% Nasdaq 100 (QQQ), 8% REITs (VNQ), and 50% Long-Term Treasuries (TLT).

Mr. Kreinces modified the Growth 1.5x (GQ 1.5x) to be 32% Nasdaq 100 2x (QLD), 6% REITs 2x (URE), 38% Long-Term Treasuries 2x (UBT), and 24% Short-Term Treasuries (SHY).

Mr. Kreinces further modified the Growth 3x (GQ 3x) to be 42% Nasdaq 100 3x (TQQQ), 8% REITs 3x (DRN), and 50% Long-Term Treasuries 3x (TMF).

Performance Estimates: The performance estimates reflect performance that would have been achieved by a hypothetical eMAC  or GQs 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 and GQs reflect a 0.25% annual advisory fee. 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 and GQs 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 and GQs were 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.

Leveraged ETFs: Leveraged ETFs do not deliver their exact multiple of the underlying index. On a regular basis, leveraged ETF returns may deviate materially from the underlying index multiple they target. Investors should not use leveraged ETFs without careful consideration, an appropriate asset allocation, and a disciplined risk control framework.

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Income & Growth Performance Disclosures

General Information

The three Income & Growth Portfolios (IGs) are comprised of leading ETFs from Vanguard, iShares, ProShares, and Direxion. The performance estimates for the IGs relate to a range of hypothetical core models, strategies that David Kreinces first backtested in 2016. These portfolios do 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 all three IGPs and he had full discretionary authority over the selection of investments. The Income & Growth (IG) portfolio is 42% Vanguard Total World Stock (VT), 8% REITs (VNQ), and 50% Long-Term Treasuries (TLT), 7% Medium-Term Treasuries (IEF), and 8% Treasury Inflation Protected Securities (TIP).

Mr. Kreinces modified the Income & Growth 1.5x (IG 1.5x) to be 32% S&P 500 2x (SSO), 6% REITs 2x (URE), 38% Long-Term Treasuries 2x (UBT), & 24% Short-Term Treasuries (SHY).

Mr. Kreinces further modified the Income & Growth 3x (IG 3x) to be 42% S&P 500 3x (UPRO), 8% REITs 3x (DRN), and 50% Long-Term Treasuries 3x (TMF).

Performance Estimates

The performance estimates reflect performance that would have been achieved by a hypothetical account with annual rebalancing. The performance estimates are backtested and have not been audited. Conservative estimates were used for underlying ETF performance prior to their inception. The performance estimates do not reflect trading fees associated with annual rebalancing, and assume reinvestment of dividends.

The performance estimates for all of the IGs are net of a 0.25% annual advisory fee. Each ETF PM advisory account is solely responsible for all advisory fees, 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 investable 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 IGs were 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.

Leveraged ETFs: Leveraged ETFs do not deliver their exact multiple of the underlying index. On a regular basis, leveraged ETF returns may deviate materially from the underlying index multiple they target. Investors should not use leveraged ETFs without careful consideration, an appropriate asset allocation, and a disciplined risk control framework.

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Income Portfolios Performance Disclosure

The Income Portfolios (INCs) are comprised of leading ETFs from Vanguard, iShares, ProShares, and Direxion. The performance estimates for the INCs relate to a range of hypothetical core models, strategies that David Kreinces first backtested in 2008. These portfolios do 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 INCs and he had full discretionary authority over the selection of investments. Income (INC) is 30% Vanguard Total World Stock (VT) and 70% iShares 20+ Year Treasury Bond (TLT).

Mr. Kreinces modified the Income 1.5x (INC 1.5x) to be 23% S&P 500 2x (SSO), 52% Long-Term Treasuries 2x (UBT), and 25% Short-Term Treasuries (SHY).

Mr. Kreinces further modified the Income 3x (INC 3x) to be 30% S&P 500 3x (UPRO) and 70% Long-Term Treasuries 3x (TMF).

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

Performance Estimates

The performance estimates reflect performance that would have been achieved by hypothetical INCs 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 INCs reflect a 0.25% annual advisory fee. 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 INCs 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 INCs were 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.

Leveraged ETFs: Leveraged ETFs do not deliver their exact multiple of the underlying index. On a regular basis, leveraged ETF returns may deviate materially from the underlying index multiple they target. Investors should not use leveraged ETFs without careful consideration, an appropriate asset allocation, and a disciplined risk control framework.

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Pledge to Give Back

ETF PM pledges to give 5% 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, and in 2015 it was lowered to 5%.

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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