iSectors® is an outsourced investment manager that specializes in creating exchange traded fund (ETF)-based investment allocation models. iSectors allocations are used by investment advisors to create customized portfolio solutions for their clients. By outsourcing their asset allocation process to iSectors®, investment advisors can save time and resources, which affords them more time to work with clients and improve the efficiency of their advisory business.
iSectors® offers a suite of ETF-based asset allocation models, each of which has been created to meet the needs of a specific investment objective. Depending upon an investor’s specific needs, an advisor can build a portfolio using one or more iSectors models that is tailored to the client’s specific investment objective. Through the use of ETFs, whenever possible, iSectors allocations provide daily liquidity and transparency with respect to account holdings.
iSectors® asset allocation models are available in separate and unified managed accounts for use in both taxable and non-taxable accounts, including 401(k) and other retirement plans. For 401(k) plans, the allocations are unitized through Mid-Atlantic Capital Group’s ModelxChangeTM platform service and iSectors can partner with various TPAs, record keepers and other providers to develop open-source retirement plans customized to meet the specific needs of your plan.
The iSectors® series of asset allocation models are available exclusively through registered investment advisors. We invite you and your investment advisor to see how iSectors can help you reach your investment objectives, reduce your overall cost of investing, and improve the transparency of your investment holdings and your fees.
iSectors® has several asset allocations, including Post-MPT Growth, as well as our Liquid Alternatives Allocation that have historically exhibited hedge fund-like risk and return characteristics. However, iSectors models are more investor-friendly than hedge funds in the following ways:
- Available to all investors (no accredited investor standard)
- Low minimum investments (from $15,000 – $100,000, depending on the strategy)
- Daily liquidity (even intraday liquidity)
- Transparency with respect to securities holdings
- Separately Managed Accounts (held in client’s own name)
- 1099 tax reporting (no late K-1s or other tax issues!)
In addition to the Post-MPT and Liquid Alternatives allocations, iSectors offers additional strategy solutions, including: Domestic, Global, Endowment, as well as Tactical Global Balanced and Tactical International.
Exchange traded funds (ETFs) are a diversified portfolio, or basket of individual securities similar to mutual funds. There are ETFs that hold portfolios of nearly every major asset class, including major stock and bond sector indexes, industries, foreign countries, currencies, precious metals, real estate, and many others. Thus, with the purchase of one ETF, an investor obtains a diversified portfolio of securities in the particular asset class the ETF has been designed to track.
However, ETFs do have several advantages over mutual funds because of their unique structure. For example – they are bought and sold on stock exchanges (just like individual stocks) at any time throughout the day. In addition, the unique structure of ETFs may offer the following advantages over mutual funds:
- lower expense ratios
- lower tax liabilities
- increased transparency
iSectors offers investors complete, properly allocated and diversified, ETF-based portfolios. All iSectors investment portfolios use ETFs as the primary vehicle with which to execute the desired asset allocation strategy.
Why is it so important to keep expenses low by using exchange traded funds (ETFs)? Investing in low-cost index ETFs, versus higher cost mutual funds, is like a horse race in which you put a 100-pound jockey on your horse and the other competitors put 300-pound jockeys on their horses. This lighter jockey is going to give you a significant competitive advantage in this competitive world of horse racing. Low cost ETFs, as a part of your investment strategy, are going to give you a competitive advantage in the results of your portfolio.
For more information on the costs involved in mutual fund investing, go to www.personalfund.com.
All iSectors® allocation investments use separately managed (or unified managed) accounts. These accounts are opened in your name at independent brokerage custodians. These accounts offer online access to various reports, including: holdings, transactions, realized gain/loss, tax reports, and other information that is updated daily (or in some cases, real-time).
iSectors® uses ETFs whenever possible to invest your account. Just like individual securities, ETFs may be bought or sold at any time during the day while the securities markets are open. Because ETFs are like individual securities and they are held in your own individual account, you don’t have to wait until the end of the day to purchase or sell a portion of your account. Additionally, since the securities in your account are held in your name, they are owned by you. Thus, unlike a mutual fund, you won’t have to be responsible for taxes when someone else sells their shares. Finally, your account is transparent; there are no hidden fees. iSectors charges from 0.10% – 0.30% annually for our investment management services, which is our only source of compensation for our services. iSectors does not participate in any revenue sharing arrangements with other providers. Other providers will assess fees for their services, including platform services, custody and trading, advisor and/or broker dealer fees. These fees are normally asset-based or flat-fees, and there are no additional commissions or other hidden marketing charges assessed on your account. Before making any investment, you should review the investment proposal and other disclosure documents provided by your advisor for information about the specific fees that would apply to your particular account.
* Note – some custodians will assess an account closing fee. 401(k) plan accounts are subject to account administration costs that may be assessed by a record keeper or third party administrator.