SMART ETF Summary
What is the ‘SMART ETF’ Strategy?
• An actively managed US Dollar account via Interactive Brokers voted best brokers three years running
• IB has offices in Hong Kong, NYC, London, Tokyo, Sydney and Switzerland
• Secure, encrypted data protection
• Interactive Brokers are regulated by the Securities Exchange Commission (SEC), NYSE, FSA, FINRA and other regulatory bodies. It is US FATCA and GATCA compliant
• Assets are actively rebalanced monthly
• The strategy can make money in rising, falling and flat markets
• We can accept most nationalities including US expats
• No lock-ins, no entry fees, no exit fees and no hidden costs
• The strategy returned an average of 34% per year over ten years in backtests
The 'SMART ETF' Strategy Vs SPY ETF (S&P500)
If you had invested in the ‘SMART ETF Strategy’ after fees were deducted, the average return was 34% per year from Jan 1st, 2003 – Dec 31st, 2013. The strategy has been rigorously back tested for ten years .
The strategy shows the benefit of using Hudson James Investment Management’s actively managed
$100,000 invested at the beginning of 2007 would have grown to $151,124 in five years with an investment in the S&P500 tracker (SPY ETF).
$100,000 invested in the SMART ETF Strategy would have grown to $879,433 in five years.
“Please note than past performance does not necessarily guarantee future returns.”
The ‘SMART ETF’ Strategy Explained
• Monies are held in your name by Interactive Brokers in USD and the strategy buys & sells US Exchange Traded Funds (ETF’s). Interactive Brokers’ trading platform has $5 billion USD under management
• Invest cash in the strategy for as long as you want. There is no lock-in period, no up-front costs and no redemption fees. Positions can be liquidated immediately upon request
• The ‘SMART ETF’ strategy has seen a 34% annualized return over the last 10 years via back testing net of all fees. Past performance does not necessarily guarantee future returns; however the risks are lower than investing in the stock market and the macroeconomic theory behind the strategy is sound
• The ‘SMART ETF’ strategy is less risky than investing in “blue chip” US equities (the S&P 500) and has delivered higher returns
• The strategy has demonstrated it can make money even when stock markets are falling. The ‘SMART ETF’ strategy made over 50% when the stock market crashed in 2008
• Hudson James Investments are actively managed and the strategy is rebalanced monthly
• Electronic application form and clients can view live valuations online anytime
• Clients are required to complete our application forms and provide proof of ID for compliance, however initial sign up is available online and via scanned copies. Your unique ID and password allows access to valuations at anytime
• Low cost US Exchange Traded Funds (ETF’s are similar to index trackers) are used to keep fees low and returns high whilst reducing risk as ETF’s are very liquid assets. They can be bought and sold almost instantly. They are SEC- regulated which increases transparency and reduces the risks of investing
• During a stock market crash, the strategy switches quickly to US treasuries for safety. The strategy can also make money from swings in the markets. This means you can make money when the stock market is rising, falling or even in static markets
• The account is held in your name. The trades are placed by Interactive Brokers under instruction from Hudson James Investment Management. You can liquidate your positions at any time and exit the strategy. Simply email us and Hudson James can send money to your current account at any time you want
• There is no ATM card associated with this account, but cash can be easily transferred to the bank account you transferred money from at any time*
*We can also assist in arranging offshore bank accounts in the Isle of Man, Switzerland, or Mauritius if necessary and link it to your managed account*
• Fees include a 2% per year management fee (charged pro rata monthly) plus 20% of any capital gains above a previous high watermark taken quarterly. Discounts apply to institutional and family office investors. The fees for buying and selling ETF’s are charged at cost which is USD 0.005 per share (with a minimum of USD 1.00 and maximum of 0.5% of trade value). Usually, there are only one or two trades per month.
• ETF’s are ranked by an algorithm based on past performance, volatility, optimization and walk-forward statistical analysis. The top one or two ETF’s with the strongest momentum and best risk/reward ratio are then held for the following month which means there are only a handful of trades per year
• Interactive Brokers has no exposure to mortgage debt, credit default swaps or securitized mortgage debt which improves the security of the platform
What about deposit protection and security of the assets?
Any monies in the account are fully invested, so you are protected from “bail-ins” which has now been signed into EU law. The EU has signed a new law which is effective Jan 1st, 2016. If you have money in a European bank and that bank goes into liquidation in a bank run, your deposits might face an instant tax similar to the 40% “haircut” on depositors’ accounts in Cyprus in 2013. It was 0.6% in Italy (1992) and Spain has just introduced a 0.3% tax (2014).
This may be the tip of the iceberg.
Our managed account protects you from “bail-ins” exposure risk.
Deposit protection scheme: Any money invested is protected by the Securities Investor Protection
Corporation ("SIPC") in the USA for a maximum coverage of $500,000 (with a cash sublimit of $250,000).
This compares to banks in the UK which only protect 85,000 GBP and banks in the EU which only protect 80,000
EUR. So, you have much higher protection.
Furthermore, most of the time you will be 100% invested in SEC regulated US Exchange Traded Funds, so 100% of your assets will be segregated and ring-fenced. If Interactive Brokers goes into liquidation and you are fully invested, your assets can simply be reassigned to another brokerage or financial institution.
Interactive Brokers LLC has a credit rating of A-. This is the same credit rating as the governments of Andorra and Malaysia. It is higher than the government of Thailand.
Please scroll down to see our partners and for further information on deposit protection and on security of client assets.
Hudson James Investment Management are licenced in the BVI and regulated by the BVI Financial Services Commission. HJIM hold a “Category 3” investment management licence: SIBA/L/14/1069.
Interactive Brokers LLC has a Standard &Poor’s credit rating of A-/Stable/A-2
HJIM use Interactive Brokers to protect client monies. They have been the best online broker for the last 3 years in a row as rated by Barron’s. Over the last 37 years, they have grown internationally to become one of the premier securities firms with over $5 billion in equity capital.
Interactive Brokers' headquarters are in the USA and they have approximately 880 employees throughout their offices in the USA, Switzerland, Canada, Hong Kong, UK, Australia, Hungary, Russia, Japan, India, China and Estonia. IB are regulated by the SEC, FINRA, NYSE, FSA and other regulatory agencies around the world.
Customer securities accounts at Interactive Brokers LLC are protected by the Securities Investor Protection Corporation ("SIPC") for a maximum coverage of $500,000 (with a cash sublimit of $250,000) and under Interactive Brokers LLC excess SIPC policy with certain underwriters at Lloyd's of London for up to an additional $30 million (with a cash sublimit of $900,000) subject to an aggregate limit of $150 million.
http://www.interactivebrokers.com - in English
http://www.interactivebrokers.com/ch - in Swiss/German
HJIM are audited by KPMG LLP, the U.S. member firm of KPMG International Cooperative ("KPMG International"). KPMG International’s member firms have 145,000 professionals, including more than 8,000 partners, in 152 countries. http://www.kpmg.com