“Risk is good. Not properly managing your risk is a dangerous leap”
– Evel Knievel, Motorcyclist
FAQs
Who is Main Management?
Main Management LLC is a California Limited Liability Company formed in August 2002. The firm is a Registered Investment Advisor (RIA) with the Securities and Exchange Commission (SEC) and is licensed to transact business throughout the United States. Our headquarters are located in San Francisco, California. As of March 31, 2010, Main Management has $315 million under management in Separately Managed Accounts for Family Offices, Foundations, Pension Plans, Trusts and Individuals. The employees of the company have a combined 150 years of senior Wall Street experience. > view biographies
Why should I choose Main Management as my investment manager?
Main is committed to delivering transparent, cost-effective investment solutions to high net worth individuals and institutional investors. Main’s seasoned team averages over 30 years industry experience across many market cycles. The investment approach is based on the active management of (largely) passive indexes. The primary focus is on sector, sub-sector and style analysis. Main seeks to identify sectors that look undervalued relative to (i) their historical mean and (ii) the relevant benchmark index. Given that certain market segments can remain disconnected from their mean value for extended periods, Main aims to uncover a catalyst that should lead to near term price appreciation. In terms of portfolio implementation, ETFs are the building blocks of all of the firm’s strategies. > view strategies
What are the benefits of ETFs
The benefits of utilizing ETFs versus mutual funds or individual securities include:
- Ease of Diversification
- Tax and Cost Efficiency
- Low Turnover
- Low Expense Ratios
- Transparency
- Trading Flexibility
- Small Capital Gains Distributions
- Liquidity and Pricing
Why is an active ETF approach to investing superior to stock-picking?
About 70% of active managers underperform the indexes against which their performance is measured over a five year time frame. As a result, the odds of picking the right stock-picking managers that outperform market averages are not in the client’s favor. Indexes outperform active managers by an average of about 1.5% per year. That 1.5% is essentially the costs of active trading (market timing strategies, commissions, trading spreads) and marketing expenses (sales loads and 12b-1 fees). Also, stock-picking in taxable accounts is usually not tax efficient because of the constant turnover of assets in the desire to achieve higher returns which creates capital gains taxes. All of the aforementioned costs are ultimately paid for by investors.
Active ETF investment strategies can not only produce superior risk adjusted returns relative to stock-picking, but are particularly advantageous in taxable accounts. Stock-picking managers must "turn over" their portfolios far more rapidly than active ETF managers as they try to boost performance by trading stocks or timing markets. Consequently, investors in stock-picking managed funds are usually subject to far higher capital gains taxes than active ETF investors.
What is your minimum account size and management fee?
Main Management’s minimum account size is $2,000,000. Management fees range from 0.45% to 0.75% of net assets per annum depending on the account size.
What other expenses are there?
Commissions on trades assessed at institutional rates through our relationship with the custodian of your assets.
How do I become a client of Main Management?
It is helpful to begin with a phone conversation or a face-to-face meeting. This initial contact allows us to begin to understand and analyze your unique financial situation. If we decide to move forward, we will forward you current client references, documents for establishing a business relationship, our ADVII, as well as documents for setting up and transferring brokerage accounts, where necessary.
We will oversee the account opening and transfer process, review your current holdings, discuss financial issues relevant to your investments, develop a plan, refine it if necessary, then implement it. We are also available for answering investment related questions, handling changes in accounts, and other investment matters on an ongoing basis.
What custodian (brokerage firms) do you use?
Currently, client assets are held at TD Ameritrade and Charles Schwab. The custodian provides account services including monthly statements, year-end tax statements, realized gains and losses reporting, institutional trade execution and commission rates, and account access through the internet.
Are the investments in my accounts safe?
We do not custody your assets. The individual brokerage firm designated by the client holds them. Accounts at these firms are insured by the SIPC and additional private insurance. All account assets are held in your name or in trusts and retirement plan entities. No one can access or distribute funds from the accounts without your permission and knowledge.
What type of reports or contact will I have with Main Management?
Main Management furnishes a Quarterly Performance Report which includes a detailed analysis of account performance, asset allocation, and portfolio positions. Clients also receive monthly account statements from the Custodian (a brokerage account statement) which includes trade information, cost basis and other information.
Does Main Management require trading discretion?
Yes, however all initial trades when setting up your account will be discussed with you.
Why is rebalancing important?
Rebalancing a portfolio maintains the original investment strategy and risk profile. Over time, certain asset classes will outperform other asset classes. Annual rebalancing shifts exposure from assets overvalued due to market performance to undervalued investments. This is consistent with a buy low, sell high strategy. We rebalance only when asset classes, and particularly, the equity/fixed income ratio, gets out of balance far enough to produce a significant expected difference in returns and volatility.
Gross returns versus net returns? Pre-tax versus after-tax?
We believe investors are always better served by minimizing the differential between gross returns and returns realized pre-tax and after-tax. Investors should be concerned with what they get to keep at the end of the day. Contact should be maintained to update your tax situation in order to take advantage of unrealized gains or losses to minimize taxes paid.
Do you offer tax and estate planning or advice on insurance in addition to financial planning and portfolio management?
Main Management's Investment Committee has a strong knowledge of these areas and incorporates these matters into investment strategies. However, it is recommended that our clients use specialists in each area estate planning with a Trust and Estates attorney, tax related matters with a C.P.A., and insurance with a qualified insurance agent.
Withdrawals? Termination?
Minimum notice is required.
Who audits Main Management’s financial statements?
BDO Sideman
Do you have a 401(K) Plan?
Yes. Main Management offers a unique professionally managed 401(k) plan. Our cutting edge plan, the Simplified 401(K) Plan or SkPlan, offers significant cost and performance advantages over traditional participant directed plans. For more information contact Jim McMichael, Director of Retirement Plan Consulting at (415) 217-5806.
Press Kit / Media
Our investment professionals are widely quoted by media sources. Main Management has been featured in investment and personal finance publications such as Fortune, Wall Street Journal, Business Week and The New York Times. We are available to provide media sources with information and quotes on subjects concerning ETFs, Investment Theory, and Money Management. > view "In The News"
An investment advisor disclosure document (ADV-II substitute) and current client references are available upon request.
Our contact information is as follows:
Direct: (415) 217-5800
Toll Free: (866) ETF-XPRT
Fax: (415) 217-5803
e-mail: docker@mainmgt.com