Investment Process, Performance & Fees
How does my portfolio get customized?
How will I know what my account’s performance has been?
What has been the performance of Scholtz & Company’s accounts historically?
What are the fees and expenses that I will be charged?
Does Scholtz & Company use mutual funds and exchange-traded funds (‘ETFs’)?
How does Scholtz & Company research and select investment ideas?
Does Scholtz & Company short securities or trade in options/futures?
After an in-depth review of a new client’s circumstances, our Portfolio Managers build a customized portfolio for the client according to their return and risk goals. For example, with respect to particularly conservative clients, Portfolio Managers will focus on less risky securities while clients with higher risk tolerance are more apt to invest in securities with higher return potential. This also applies to asset allocation, where the mix of cash, stocks and bonds reflect risk tolerance. For a more in-depth discussion click here.
Due to account inflows/outflows (which changes the basis), management fees, and accrued dividends, it may be difficult to actually determine performance sometimes, especially relative to a benchmark. Scholtz & Company mails its clients quarterly letters which include a measure of return based on the equities in the account (and the bonds, if applicable) along with a total return measure. The letter also shows the return of the appropriate benchmark to demonstrate our relative performance. Our performance is calculated according to Global Investment Performance Standards (GIPS ®) using AXYS® software. Feel free to contact us with any questions. Further, if you would to read a more in-depth discussion about Investment Performance Calculations, click here.
Scholtz & Company accounts have performed very favorably relative to its benchmark indices. To review this performance by investment strategy, please click here.
Scholtz & Company charges a management fee based on the assets under management (AUM) on a quarterly basis. Besides a management fee, accounts will be charged commissions for all trades that Scholtz & Company puts through with broker-dealers. Scholtz & Company does not receive any of these commissions which typically amount to 0.15-0.25% of the account annually (depending on trading volume for any given year). Other fees such as custody fees are typically paid by Scholtz & Company. Most of Scholtz & Company’s accounts under management are custodied with U.S. Bank. Typically, U.S. Bank charges ~0.05% (subject to minimums) for this service, but Scholtz & Company pays this fee. Our clients do not pay custody fees.
Scholtz & Company does not use mutual funds. First, mutual funds are our competition. We pick securities and build a portfolio; mutual funds do the same, except they can’t customize for individuals. Second, mutual funds charge a management fee as well (which comes directly out of the fund). By investing in mutual funds, you would be paying double fees. In terms of ETFs, we generally do not invest in them except for a few unique situations such as to invest in a commodity (e.g., gold) or in a specific country (e.g., China) on a broad basis. Fees in ETFs are also usually much lower than fees in mutual funds.
Scholtz & Company Portfolio Managers and Analysts spend a majority of their time searching for and researching potential securities to add to client portfolios. This involves a variety of analyses, including a review of public financial statements, meetings or calls with a company’s management, and deep financial modeling. For a more detail discussion over our security selection process click here.
Scholtz & Company does not short securities or invest in options/futures in any strategy except for the Tactical Allocation strategy. Within the Tactical Allocation strategy, Scholtz & Company uses covered writes and long puts to reduce risk, however we do not invest in futures or short securities. Our only use of options is to reduce risk and account volatility.