Value Proposition

Many firms and investment services have established competence in one or two areas and can be impressive in that context.  We realize, however, that such a narrow focus fails to account for the most important end result: Are you better off?  

With your well-being as our primary goal, we have combined a wide range of features which we believe give you the best chance to get ahead with investing.

Distinctly mid cap
The aggregate characteristics of your mid cap portfolio will be anchored on those of the Russell Midcap Index.  Since we find the mid cap stock universe very attractive for finding new stock ideas, we have no need to “cheat” by looking outside that universe and thus compromising the mid cap nature of your portfolio.

Actively managed
Your portfolio will be actively managed giving you a real chance to outperform the benchmark.  Index funds seek to replicate benchmark performance, but fall short when management fees are included.  Some funds try to stay close to their benchmark or “closet index” in order to minimize the chance of significant underperformance.  You will get a portfolio that benefits from our experience and expertise in stock selection in the form of a diversified group of our best stock ideas.

Long-term perspective
Our research focuses on long-term insights, not on short-term noise and trends.  We believe that over longer periods of time, stocks migrate toward their intrinsic values.  We also believe this phenomenon can be exploited by those who are both skilled enough to make reasonably accurate estimates of intrinsic value and patient enough for it to be realized.  During shorter, interim periods, however, the numerous and diverse effects on trading activity make it excessively difficult to consistently determine the direction of stock prices.

Relatively low portfolio turnover
Our investment style is oriented to a longer-term time horizon of three to five years.  As a result, our portfolio turnover tends to fall in the 20-40% range compared to the industry average of over 100%.  Lower turnover means lower transaction costs for you and also tends to mean lower capital gains for taxable accounts.

Independent    
Our firm is independently owned and operated which we believe gives us the best chance to make the best possible decisions for our clients.  We have no outside owners which may have interests that could conflict with the interests of our clients.  Some industry experts consider independence to be a competitive advantage.

Separate Accounts
We manage separate accounts for clients rather than pooling contributions from various clients.  Assets are held in custody by a national recognized custodian and clients receive quarterly statements of exactly what is in their individual account and a list of transactions executed for that account.  There is no ambiguity.  We believe the separate accounts structure greatly improves the visibility of the investment process as well as the portfolio accounting.  We believe this high degree of visibility serves as a significant layer of protection for clients against neglect or malfeasance. 

Reasonable fee structure
We employ a very straightforward and reasonable fee structure of 1% of assets under management for assets up to $1 million with lower rates beyond that.  This compares to many mutual funds which have expense ratios in excess of 1.5%.  In addition, we don’t employ performance fees because we believe such fees often provide incentive to the manager to take inappropriate risks in order to realize those fees. 

Commitment to putting our clients first
We are completely committed to putting the interests of our clients first.  We do not employ any soft dollar arrangements because we believe these essentially end up being “hidden” fees for customers that are appropriately business expenses and should therefore be covered by the management fee.  We do not operate in any other businesses that may provide conflicts of interest.  All client accounts are treated exactly the same; no preferences are shown because the same trades are placed for every account at the same time.  We also provide performance reporting so you can judge for yourself how we are doing.

Excellence - across multiple dimensions

Arete recognizes that in today's complex, global economy, strength in one narrow capacity is rarely sufficient to ensure investment success.  As a result, we have combined a wide array of investor-friendly characteristics together into a single service in order to give you the best chance of getting ahead.

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