The models are managed by Mark Holder who has substantially all of his family's liquid net worth in these investments. Most mutual funds don't require portfolio managers to invest family wealth with the funds they manage and hence their interests aren't in line with investors.
The core portfolios are linked to separate managed accounts allowing for trades to be executed across all investor accounts at the same time and providing ultimate transparency and security. Also, the managers account benefits and loses the same as investors ensuring that every trade makes financial and logical sense. Trust us, Mark doesn't like paying extra fees either nor does he like losing money.
SFC offers two basic investment folios. Investors can chose 3 varieties of the more aggressive Opportunistic Folio or the conservative Net Payout Yields Folio. The Opportunistic Folio offers the option to either use a typical mutual fund concept of Long Only or the more aggressive Levered that utilizes margin and shorting. Also available is a hybrid fund that uses longs and shorts without leverage.
All of the models are available via Covestor.com except for Opportunistic Hedged. Covestor is an innovative social media investing concept. Working directly with Stone Fox Capital provides the opportunity to work directly with the portfolio manager unlike Covestor, but we're just as happy to see people invest with Stone Fox Capital via them as well. Covestor does provide the advantage of investing as little as $5K with our models though they do require $10K to open an account.
Net Payout Yields
More conservative portfolio focused on a diversified selection of financially strong large cap stocks. These stocks have high Net Payout Yields which is the combination of dividends and stock repurchases. Studies have shown these stocks tend to out perform the market because selection of these stocks takes the emotion out of stock picking and by default these stocks are typically undervalued compared to their financial picture. The portfolio will be concentrated in 20 stocks to remain focused on the highest net payout yielding stocks.
$20K via Stone Fox Capital - 1.0% p.a.
$5K via Covestor - 1.1%
Opportunistic Long only
The main approach is to be opportunistic and take advantage of what the market presents. Typically have a small/mid cap bias towards fundamentally strong stocks within attractive macro trends. Also look for underfollowed/underappreciated ideas to exploit the misinformation in the market. This can be from IPOs, value plays, spinoffs, or just beaten down sectors. The ultimate goal is to have a well diversified group of 20-25 stocks that provide long term outperformance of the market. Long term bullish on the emerging markets and global growth themes and typically holds 25%-50% of the portfolio in stocks that have major operations outside the US.
$20K via Stone Fox Capital - 1.25%
$5K via Covestor - 1.5%
Hedged portfolio that is composed of three stock groups: Net Payout Yield stocks, Opportunisitc stocks, and Short stocks. This will give clients exposure to the market with less volatility and less market risk. The goal being to provide a higher risk adjusted return while also providing returns that are independent of the market. The portfolio will generally be invested 1/3 in Net Payout Yield stocks, 1/3 in Opportunistic stocks, and 1/3 in Short stocks. When market conditions are unfavorable, the Opportunistic and Short stock exposure will be reduced which will significantly reduce market exposure. The Net Payout Yield portion will normally be fully invested due to the steady market performance that this group offers.
Minimum investment: $20K - 1.5%
Long/short concentrated version of the Opportunistic Long only portfolio usually investing in top 20-25 picks with leverage. This portfolio is very aggressive as it regularly will have short positions and sometimes will utilize margin of up to 2x. This is the ultimate opportunistic model since it has the ability to lever up in a weak market or go net short during weak markets.
$20K via Stone Fox Capital - 1.5%
$5K via Covestor - 1.5%
Custody of Assets
Custody of the assets under management resides with either Interactive Brokers or FOLIOfn. Stone Fox Capital Advisors recieves limited power of attorney to buy and sell securities for the client's account. Clients still receive trading confirmations and monthly/quarterly statements directly from the brokerage firm.
We are compensated on a fee-only basis, depending on the assets and portfolio under management. The fees are deducted monthly by the custodian. We do not receive brokerage commissions or any other compensation for selling financial securities or products. Thus, our interest in enhancing investment value is aligned with the interests of our clients.