Domestic ETF and Index Funds, meaning those securities investing in broad U.S. stocks and bonds, generally vary in our portfolios between .07% – .5% of net asset value. International securities we invest in generally have an internal expense greater than .5% but less than 1.% . These expenses are deducted at the fund level, reducing the fund’s return.
*Transaction Fee
When an ETF is bought or sold a commission is charged by the brokerage firm handling the transaction. To keep costs low, we utilize TD Ameritrade, a low transaction fee brokerage firm. Most of the Exchange Traded Funds we invest in do not have a transaction fee.
As the number of ETFs has expanded to include a variety of unproven management techniques, so have their expenses. Our analysis and selection process generally eliminates them from the pool of potential investable securities. There are a number of reasons for not being early adopters, such as low transaction volume which tends to create a discount or premium an ETF is selling for relative to its net asset value, and the lack of a track record to prove the technique can be executed successfully.
*Our Management Fee
The management fee is the annual fee we charge to manage the portfolio. Our process includes a risk tolerance assessment of each investor, along with gathering knowledge of the client’s goals, taxes, time horizon, specific wishes, and special circumstances.
Portfolios of $0 up to $500,000 are assessed an annual fee of 0.7% of assets under management. The next $500,001 – $1 million are charged 0.5% and the $1 million – $5 million is charged 0.35%. Portfolios greater than $5 million are negotiated. The minimum fee is $500 per quarter. If the quarterly fee creates an annual fee that is greater than 1%, we may recommend our coaching services, whereby a client manages their own funds with our guidance. (see below: Investment Coach)
Families may combine their portfolios’ values if together they will receive a reduced fee.
Nonprofit organizations and corporate profit sharing plan fees will be determined on a case-by-case basis at the discretion of GHFG if their asset size is such that the minimum quarterly fees would be greater than 0.7%.
Fees are assessed at the end of each quarter, and paid the following month.