When your virtual funds outperform their benchmarks, you are ready to invest your real money, and maybe even other people's, through Marketocracy Capital Management, LLC (MCM), our affiliated registered investment advisor.
For accounts less than $250,000, MCM's annual management fee is 1.50%. In addition, FOLIOfn -- the brokerage firm where your account will be domiciled -- charges a brokerage fee of 0.40% with an annual minimum of $100. Of course, if you would like to invest more than $250,000 in your model portfolio, the fees would come down.
The returns of your Marketocracy model portfolio are reported net of imputed management fees of 1.95% per year. In our experience, the actual returns to clients have a slight bias to outperforming the Marketocracy models because the fees on our separately managed accounts are lower than the imputed fees on our models.
|Account Value||MCM Advisor Fees||Brokerage Fee||Total|
|$20,000 - $50,000||1.50%||$100||1.50% + $100|
|$50,001 - $250,000||1.50%||0.40%||1.90%|
|$250,001 - $500,000||1.40%||0.30%||1.70%|
|$500,001 - $1,000,000||1.30%||0.25%||1.55%|
|$1,000,001 - $2,500,000||1.10%||0.20%||1.30%|
|$2,500,001 and up||1.00%||0.15%||1.15%|
We use FOLIOfn because their fee structure and the ability to hold fractional shares enables us to match your model's performance very closely. It also enables our clients to make deposits or withdrawals in small amounts.
Example: Say your portfolio has 20 positions in it. If you add $1000 to your account you would need to make 20 trades to keep the account in sync with your model. If you paid $10/trade, your commissions would be $200 or 20% of your transaction. Even if you paid $1/trade, your commissions would still be 2% of your transaction.
If you are currently paying retail commissions and fees to manage your own brokerage and/or IRA account, it is possible that this account will save you money and open up a new career option for you at the same time! If your Marketocracy model portfolio has outperformed your brokerage or IRA account, you may even get better returns.
FOLIOfn does charge for certain extra items like paper statements, wire transfers, paper checks, etc .. These fees are rare, and are usually the result of a client-initiated action. Here is a list of these service fees.
Investing in your model portfolio through MCM will give you a GIPS® composite, a real-money track record, that can open doors on Wall Street and make it possible for us to market your model to our clients and to our readership at Forbes.
If you are interested in being paid to manage money for others, click here to see how to become a manager in MCM's SMA program.