Managed Account Program
Marketocracy mFOLIOs are available only to clients in our managed account program. Here's how it works.
When you become a managed account client, we will open a brokerage account in your name at FOLIOfn. You will have online access to view your holdings and transactions through FOLIOfn's website. Through this account, you can specify which of our mFOLIOs you would like your brokerage account to mirror. Upon receipt of your instructions, we will execute the trades necessary to match the current holdings of the mFOLIOs you selected. After that, whenever the mFOLIO Master changes the mFOLIO, we will mirror the trade in your account generally the next day.
The minimum amount to open a managed account is $50,000, and the minimum amount for each mFOLIO you select is $10,000.
There are two major reasons we use FOLIOfn.
First, FOLIOfn allows us to trade in fractional shares. This enables us to closely match the weighting of each stock in your account with the stock's weighting in the mFOLIO. If your account needs to hold 0.5 shares of Google to match the percentage of the mFOLIO you selected that is in Google, then that is what you will get. At other brokerage firms, where a 100 share "round lot" is the smallest economical order, it would be difficult to get close to the right position weights unless the minimum account size was much larger.
Second, FOLIOfn's "window trades" enable us to to trade client portfolios at no additional cost. FOLIOfn has designated over 10,000 stocks and ETFs as eligible for window trading. Whenever possible we execute trades for our clients at the two times each day (the windows) when the trades can be done at no additional cost.
These two features are especially important if you ever want to add or withdraw money from your managed account, here's why.
A typical mFOLIO holds 20 stocks. If you want to add $1,000 to your account, at FOLIOfn we can buy small amounts of each of 20 window tradable stocks without incurring additional costs. At brokerage firms that charge for each trade, executing 20 trades at $10/trade would cost $200. The commissions would eat up 20% of your $1,000!
Core and Explore
mFOLIOs are appropriate for the "explore" portion of your overall portfolio with the objective to generate excess returns. Of course, there is no guarantee of performance and higher returns often require taking higher risks. Therefore, mFOLIOs should generally represent less than 10% of your net worth unless warranted by a closer assessment of your particular situation.
Building Your Personal Team
No single person has the expertise to invest well in every sector across the whole the market. This is why I think that to make money in the market over the long-term you need a team.
Each of the mFOLIO Masters is an outstanding investor, but each achieves their results with a distinctive investment style. mFOLIOs can be mixed and matched to personalize your portfolio to give you exposure to sectors/areas of the market outside of those that you have the expertise to invest in on your own.
The Kam Family Team
If you would like to invest in the same mix of mFOLIOs that I am using for my family, I invite you to invest alongside me.
Currently the Kam Family Blend is invested in the following mFOLIOs:
Adam Thompson: (athompson:TPSNX)
Chris Rees: (crees:10STX)
Randolph McDuff: (rmcduff:RMG1)
Timothy Siegel: (timbo56:SSOF1)
and my Best Ideas Portfolio (kenkam:BIP)
Managed Account Fees
Fees for a Marketocracy mFOLIO Managed Account start at 1.90% per year (Marketocracy Capital Management (MCM)'s advisory fees start at 1.50% and FOLIOfn's account and brokerage fees start at 0.40%, with a $200 minimum) and is debited monthly from your account based on the average daily asset value.
FOLIOfn's 0.40% annual brokerage fee covers nearly all of the trading costs when the mFOLIOs trade securities or you make changes to your mFOLIO team or buy or sell an mFOLIO including commissions on window trades. There may be additional fees for special services, e.g., IRAs, wire transfers out, SRO fees, etc. and if we use market and limit orders. There are break points that lower the FOLIOfn fees as follows:
0.40% of the Daily Assets for the first $500,000
0.30% of the Daily Assets for the amount between $500,000 to $1,000,000
0.20% of the Daily Assets for the amount between $1,000,000 to $3,000,000
0.15% of the Daily Assets for any amount above $3,000,000
MCM's 1.50% annual advisory fee has break points that lowers the fee as follows:
1.50% of the Daily Assets if below $500,000
1.30% of the Daily Assets if between $500,000 to $1,000,000
1.10% of the Daily Assets if between $1,000,000 to $3,000,000
1.00% of the Daily Assets if above $3,000,000
For a $50,000 account, the total annual fees are 1.90%, which is comparable to the annual expense of an actively managed mutual fund especially when you consider that a mutual fund's expense ratio does not include commissions for the fund's trading.
These managed account fees will not be charged on assets invested in any Marketocracy mutual fund (currently only the Marketocracy Masters 100 Fund symbol: MOFQX).