Frequently Asked Questions

Yes, we do. US investors can invest either in a private fund or in their own individual Separately Managed Account at Fidelity. We can handle both taxable investments and tax advantaged accounts, such as IRAs. If you are not sure whether the fund or an SMA would be more appropriate for you, please click here for the relative benefits of each.

Non-US investors from certain jurisdictions can invest in our private off-shore fund. For all our products, we charge a 0.12% per annum management fee, which is inclusive of all operating expenses, and we charge no incentive or other fees.

For our US private fund, investors must be Qualified Purchasers, which generally means they need to have at least $5mm of investment assets (we can send you a copy of the full SEC definition). Our Separately Managed Accounts at Fidelity are open to all US investors. For our private offshore fund, non-US investors from only certain jurisdictions are eligible to invest. Please contact us to discuss further.

For our US private fund, the minimum investment is $2mm, for our Separately Managed Accounts at Fidelity the minimum is $300k, and for our offshore private fund, the minimum is $1mm.

We hold assets with the following institutions for each of our products.

For US investors:

• Our private fund – Vanguard, Morgan Stanley, Northern Trust and DFA
• Separately Managed Accounts: Fidelity

For non-US investors:

• Our private fund – Morgan Stanley, Interactive Brokers, Northern Trust and DFA

Each of our strategies follows our rules-based asset allocation methodology, an approach we call Active Index Investing®. Please click here for a note that describes in detail the three main components of this approach: the construction of the Baseline portfolio and the value and momentum overlays to that Baseline portfolio which make the portfolio responsive to changing market conditions.

No. We only charge the 12bp management fee. We do not charge an incentive fee, and our management fee is inclusive of operating costs, such as administration, audit and legal. There are no hidden fees.

The weighted average expense ratios change depending on the asset allocation. For our various products it has ranged from 0.12% to 0.19% so far. We carefully select the vehicles we use to build our portfolios, and cost is one of the factors that we think is important.

First of all, we don’t think we charge a low fee, but rather a fair fee. Others charge substantially higher fees, at least partially because they have to pay for expensive experts to manage their clients investments in a discretionary manner. The structure of our product, being primarily systematic and rules-based, allows us to charge the fee we do.

We can do more than survive with this fee structure; we can thrive. While we can be profitable with our current amount of assets under management, we have chosen to spend more than our revenue as an investment in a future in which we expect substantially more assets under management.

As of Jan 1st, 2017, more than 140 investors trusted us with approximately $400mm of their savings.

The vast majority of our investors are active or retired financial industry professionals, from 45 to 60 years of age, and who have accumulated substantial savings. Many of our investors have graduate degrees, and at least 7 of our investors have taught finance at the graduate level in such universities as UPenn, Stanford, NYU and Harvard.

Elm Partners manages a substantial fraction of the liquid, non-real estate assets of the manager, which represents over 15% of the AUM of Elm Partners. ‘Manager’ here refers to Victor Haghani and his immediate family.

Elm Partners was founded in Wilson, Wyoming (a suburb of Jackson Hole), where Victor and his family have a home. After a few years, it became clear that a second office was needed in London, where Victor now spends the majority of his time. The London office is also where Elm’s two other full time team members work. Elm Partners is regulated both by the SEC in the US and the FCA in the UK.

We expect our strategy to generate approximately 100% annual turnover, but with a large degree of variability year to year. Most of the turnover is generated by our momentum overlay.

For US taxable investors, we seek to deliver returns in a tax efficient manner, which means trying to reduce short-term capital gains, trying to defer long term capital gains and trying to earn income as much as possible in the tax preferred form of either Qualified Dividends or federally tax exempt municipal bond income. Despite our relatively high portfolio turnover, we have been able to deliver relatively tax efficient returns by making use of specific tax lot accounting to always sell the highest basis holdings, and we have benefited from the more tax efficient structure of a private fund as compared to a 40 Act mutual fund structure. Please contact us if you would like to discuss in more detail.

We feel that monthly rebalancing is consistent with thenature of our value and momentum metrics. Furthermore, rebalancing the portfolio monthly generates expected turnover of 100% per year, which we think is high but acceptable. As AUM grows, we intend to eventually implement more frequent, partial portfolio rebalancing that will smooth our exposure to momentum, while maintaining expected turnover roughly constant. For example, rebalancing one quarter of the portfolio four times a month would be one such option.