Global Macro ETF Strategy

ETF's (Exchange Traded Funds)

ETF's are index funds which are traded on a stock exchange like an individual security. They are hybrid investment vehicles that combine the trading flexibility of individual stocks, with the diversification benefits of a managed portfolio or mutual fund. These funds allow us to customize your portfolio, from 600 ETF's sponsored by a variety of institutions. ETF's also have extremely low expenses, generally around 0.3% annually.

ETF's are extremely tax-efficient due to their unique legal structure. Unlike actively managed funds, which annually accumulate taxable short-term gains and distributions to shareholders, ETF's ordinarily only generate taxable capital gain when they are sold. The average capital gains distributed as a percentage of assets for 2001 was .31% as apposed to 5.9% for corresponding index mutual fund. (Source Bloomberg May 2002 issue of Financial Planning Magazine.)

ETF INVESTING:

Our ETF Investing Strategy utilizes a more fundamental buy and hold focus, utilizing indexes like the Nasdaq or S&P500 for the long term. The benefit of investing in indexes is that they match as closely as possible the overall return of the market. This strategy is the more conservative route focusing approximately ten ETFs around what is successful overall rather than what is the big current trend promising success.

Overall, ETFs are cost efficient, tax efficient, flexible, and provide an average 3% annual greater historical return on average than active mutual funds.