We pioneered the use of low‐cost, U.S.‐traded exchange‐traded funds (ETFs) to access all the world’s most promising markets and sectors.i We also proactively strive to protect you on the downside – all within your own separately‐managed account(s) at Charles Schwab.
Why Invest in Markets and Sectors?
Markets and sectors are typically tracked by indices. Exchange traded funds – ETFs – are low‐cost investment products that track those indices.
Market and sector investing with ETFs offers many distinct advantages over traditional mutual funds, or individual stock and bond portfolios.
Be sure to see our full explanation of ETF benefits below.
Using low-cost, U.S.-traded ETFs we invest in the United States, in other developed markets, and in rapidly-growing emerging markets – all within your separately-managed account at Charles Schwab.
We employ the terms MARKTORS® to describe our innovative, world-wide, investment discipline. MARKTORS® simply combines two words: Markets and Sectors.
The MARKTORS® investment discipline applies old‐fashioned, hard‐nosed valuation methods to the new world of market and sector investing. Our expertise includes both growth and wealth preservation allocations using ETFs.
The MARKTORS® discipline alerts us to go to cash or to defensive positions when U.S. or world markets do not meet our strict valuation criteria.
While we invest primarily in ETFs, we may also occasionally invest in individual securities or funds in accordance with our rigorous screening process.
Why Use Exchange Traded Funds (ETFs)?
U.S.-traded exchange traded funds (ETFs) are increasingly popular with investors. They are typically passive investments. That means that ETFs passively and efficientlyii track the performance of markets and sectors in the U.S. and around the world.
We actively manage
these passive investments
to efficiently access
the world’s most promising
markets and sectors.
These include markets and sectors in the United States, in other developed countries, and in rapidly-growing emerging markets.
We use the rapidly-growing (and increasingly complex) universe of U.S.‐traded, index-tracking, exchange-traded funds (ETFs).
There are now more than 1300 market and sector indices world-wide that are faithfully tracked by U.S.-traded ETFs. Meanwhile, the number of new index-tracking, U.S.-traded ETFs is expanding rapidly. While this increases the need for professional guidance, it also provides a much higher level of opportunity to investors.
Advantages of Exchange Traded Funds (ETFs)
ETFs off many advantages, including:
- Lower Costs. ETFs are typically much less expensive than either traditional mutual funds, or comparably-diversified individual stock or bond portfolios.
- Faithful Tracking of Indices. ETFs typically provide faithful market and sector index-tracking performance.
- Performance vs. Actively‐Managed Mutual Funds. According to the world’s largest index provider, S&P, most actively-managed mutual funds fail to outperform the market or sector index against which they compete, despite their higher costs1.
- Diversification with a Single Transaction. Individual stock and bond portfolios do not realistically offer the opportunity to track the performance of entire markets or sectors. ETFs provide this ability with a single transaction. With a single ETF you may own 30 to 3,000 specified stocks or bonds, specified categories of each, or specified baskets of commodities or real estate.
- Liquidity. ETFs are highly liquid. They trade like stocks throughout the day. Actively-managed mutual funds may only be traded at the end of each trading day.
- Defensive Agility. ETFs facilitate going to cash or to defensive positions much more quickly and cost-effectively.
- Tax Efficiency. ETFs are typically more tax efficient than mutual funds.
How We Do It – MARKTORS’® Unique Approach
First and foremost, we do not use ineffective and dangerous buy and-hold, U.S.-centric, portfolio models.
We identify what we regard as the world’s most promising markets and sectors, we rotate into the most promising markets, and we proactively go to cash or to defensive positions when U.S. or world markets do not meet our strict criteria.iii
to the new world
of market and sector investing.
The data we use was simply not uniformly compiled just a few years ago.
We are the first to apply our strict discipline to this exciting, new and, we believe, preferred world of investing.
We use only what are, in our opinion, the most appropriate, low-cost, exchange-traded funds (ETFs) to efficiently access each market and sector. These passive, low cost ETFs are specifically designed by third parties to closely track the performance of the markets and sectors in which we invest.
Political issues aside, free enterprise is alive and well in the United States, and throughout the world. Now, for the first time, you may prudently participate in this remarkable explosion of growth through DeGreen Capital Management and MARKTORS®.
i The phrase “most promising markets and sectors” refers only to the markets and sectors our investment discipline identifies. Obviously, results can never be guaranteed. All investing includes risk, including the risk of losing your invested principal.
ii Because even low-cost ETFs charge annual fees, over time, the performance of a typical index-tracking ETF will be slightly less than the performance of the index itself.
iii All investing, even through us, involves the risk of loss, including the loss of your invested principal.
iv Additional information regarding our proprietary investment protocols is available upon request.
1 Source: Quarterly S&P SPIVA Report