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Managed Accounts
Many investors may like the
approach of using sentiment to invest a portion of their assets, however
they cannot find the time to follow many of the moves in their personal
portfolios.
As a potential solution, we have
formed an exclusive consulting arrangement with Global Investment
Solutions, LLC (GIS), an experienced Registered Investment Advisor.
When clients open an
account, GIS executes trades in the account based in part on analysis from
Sundial Capital Research, parent of sentimenTrader.com.
Below are some frequently
asked questions regarding the programs.
What approach do you take to trading the programs?
I've read a
lot about hedge funds straying from their intended purpose. Where
is my money going to be invested?
Many funds take big losses in illiquid instruments.
How do I know that's not going to happen to me?
What's the difference between a managed account and a
hedge fund?
Can I see your performance history?
Do I have to be an "accredited investor" in order to use
your managed accounts?
What fees do you charge?
Do you use margin?
Do you use short sales?
Do you accept foreign accounts?
What is the minimum investment?
Do you "eat your own cooking"?
How much of my total portfolio should I place in the
programs?
How do I contact you for more information?
What approach do you take to trading the programs?
You can find more
information on the managed accounts by reading the
background brochure
(requires Adobe PDF viewer
)
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I've
read a lot about hedge funds straying from their intended purpose.
Where is my money going to be invested?
Global Investment
Solutions, LLC (GIS) is an investment advisor and does not have custody
of client funds. GIS only has management authority over client
accounts. When clients decide to hire GIS as their investment advisor,
they are instructed to open an account in their own name with a
brokerage firm for custody and trade execution services. GIS does
not receive any compensation from the brokerage firm for commissions
charged for trade execution.
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Many funds take big losses in illiquid instruments. How do I know
that's not going to happen to me?
One reason investors shy
away from hedge funds is that they don't know what the fund is doing
with their money. Managed accounts are different in that you have complete and total access to your account at all times,
24 hours a day, 7 days a week. You can always see what's in your
account. GIS cannot guarantee you will never suffer losses, of
course - that's a normal part of trading and investing - but they stick to
liquid ETFs and mutual funds, and not esoteric derivatives.
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What's the difference between a managed account and a hedge fund?
A hedge fund is an entity
that pools together the funds from limited partners (the investors) and
a general partner (the advisor). The limited partners have no
control over the account and generally only receive periodic performance
updates and access to their capital.
Managed accounts are
separate accounts for each investor - no money is pooled together.
Investors have complete access to their accounts at all times, so there
is 100% transparency as to what the advisor is doing. Investors
may deposit or withdraw funds from their accounts at any time - there is
no lockup period. When you appoint GIS as the advisor, you sign a
limited power of attorney for trading management of the account only.
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Can I see the performance history?
All available history can
be requested by contacting GIS.
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Do I have to be an "accredited investor" in order to use your
managed accounts?
Yes and no. For the
"Exclusive ETF" program, you must have a net worth of $1.5 million or be
willing to place at least $750,000 under the direction of GIS. For
the "Standard ETF" and "Standard Rydex" programs, you do not need to be
accredited.
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What
fees do you charge?
The "Exclusive ETF" program
charges a management fee and incentive fee, provided high-water mark
conditions are met. The other programs charge a management fee
only.
Contact GIS for details or see the
background brochure.
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Do
you use margin?
In rare cases when a
particularly high-probability situation presents itself, the Exclusive
ETF program
may make moderate use of margin. The margin is taken in
the form of leveraged ETF funds, so at no time - even in the very worst
possible situation - can you ever lose more money than you put into the
account.
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Do
you use short sales?
In some situations we may
use short sales in the programs. These are typically shorter-term
in nature and most often used when equities are in a defined downtrend
(such as a downward-sloping 200-day moving average). The short
sales are made in the form of inverse ETFs, so even in the worst
possible situation, you can never lose more money than you put into the
account.
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Do
you accept foreign accounts?
Foreign accounts may be
accepted if the custodian that we use is able to establish an account in
your name. Typically, foreign accounts will need additional paperwork
to establish an account, and in addition these accounts may incur
additional taxes when investing in the United States. Please contact
GIS and they will get the details for your specific country.
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What is the minimum investment?
For the "Exclusive ETF"
program, the minimum investment is $250,000. For the "Standard ETF"
program, the minimum is $100,000. For the "Standard Rydex"
program, the minimum is $25,000.
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Do
you "eat your own cooking"?
Yes, it's important to have our
interests lined up with investors. Both Roger Kliminski (principal
of GIS) and Jason Goepfert (President of Sundial Capital Research, Inc.)
have invested a large portion of their liquid net worth in the managed account programs.
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How much of my total portfolio should I place in the programs?
That is an individual
decision, but we stress that no one program should make up the bulk of
one's investment funds. We aim to provide an outlet for capital
appreciation outside of an investor's normal investments.
GIS has other managed
programs, including a High Yield Bond Strategy, that may help in your
diversification of assets. Please contact GIS with your particular
situation and they will assist in the area of diversification of your
portfolio.
While not exactly
comparable, the Chicago Board of Trade released a study in its 2004
edition of Portfolio Diversification Opportunities that showed an
account that was comprised of 41% stocks, 41% bonds and 18% managed
futures (similar to our managed accounts) showed the highest return with
the least volatility. It's helpful to think of separately managed
accounts in terms of one's total portfolio.
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How
do I contact you for more information?
Roger Kliminski, principal
of Global Investment Solutions, can be reached via email at
roger@globalinvestsolutions.com, or via
phone at 1-866-547-3123 (toll-free inside the U.S.) or 1-949-660-7960 (for
those outside the U.S.).
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