Consider Advisor Bob.
You've probably met him on the golf course.
He gathers client assets and places them in financial products that contains hundreds or even thousands of stocks.
Because his clients are hyper diversified, they will typically mimic market returns, before fees.
These financial products have a high turnover rate resulting in even higher tax expenses1.
Typically mimics market returns minus fees
Focuses on Quantity
Turnover with negative tax implications1
Averages >13% annual returns
Focuses on Quality
Tax efficiency through Low Turnover1
Based on a $100,000 investment
your investment at Selective would have been
whereas Advisor Bob's clients earned
Over 30 years
a High Conviction Approach could allow you to retire with over
more than Advisor Bob's clients
Select a year below to read our annual reports
Why it Matters
Selective takes a tax efficient, long-term approach to investing.
Our clients understand what they own and why they own it.
The focus is not on short term price movements, but on the performance of the business.
We believe Selective clients can act confidently in all market conditions
1Actively managed mutual funds with a low turnover ratio show a buy and hold strategy. For example, a mutual fund investing in 100 stocks and replacing 50 stocks during one year has a turnover ratio of 50%. However, because the average turnover rate of managed mutual funds is approximately 85%, nearly all of the funds’ holdings are being turned over annually. Some funds hold their stock for less than twelve months, meaning their turnover ratios exceed 100%.
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*Returns based on a composite of accounts primarily invested in Selective’s proprietary mutual fund (Composite A). This composite utilizes an investment approach focused on maximizing long-term returns while protecting client principle. The proprietary Fund is non-diversified and focuses its investments in a relatively small number of Selective Companies, typically seeking to hold between 15 and 25 companies (although the number may vary depending on market conditions). The Fund may also invest a substantial portion of its assets in cash and cash equivalents, including money market funds and other short-term fixed income investments, in seeking to protect principal. All returns are time-weighted, net of all fees and trading expenses. Performance varied by account. Performance 2013 to 2017 has been independently verified. Prior to 2017 this composite was made up of accounts managed by an identical investment mandate to the proprietary fund. Performance varied by account.
** S&P 500 returns are total returns - which include price changes and dividends. The S&P 500 is not a suitable benchmark and is used for general comparison. We do not believe there is a suitable benchmark given the concentrated nature of our investment style.
***Performance through December 31, 2018.
†Returns from inception (March 1st) to year-end. Returns for partial years are not annualized.
Past performance does not guarantee future results, and a loss of original capital may occur. There is always the inherent risk that Selective Wealth Management will not outperform the market or other investment advisors. The information herein should not be construed as a recommendation to purchase or sell any particular security or an assurance that any particular security held in a portfolio will remain in the portfolio or that a previously held security will not be repurchased. It should not be assumed that any of the security transactions or holdings have been or will equal or exceed the investment performance of the securities discussed.
"The Reality" Graph Data
Performance as of December 31, 2018.
Advisor Bob's returns were calculated using actual S&P 500 returns for each year represented, minus assumed advisor fees of 1.5%, assumed fund fees of 1.25%. For more detailed information, please email firstname.lastname@example.org
"Over 30 Years" Graph Data
High Conviction returns were calculated using an annual average return of 12%, minus the 33% short-term capital gains tax impact on an 27% annual portfolio turnover rate. High Conviction approach research can be found here.