Start A GIPS Composite

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My mission is to run an investment firm where managers are selected for their skill not their pedigree. -Ken Kam

Marketing Your Track Record

Your model portfolio's track record is excellent. However, no matter how good a model portfolio's track record is, people will always question why no one was ever willing to invest real money in it. Step 1 is to enable those who believe in your investment skill (including yourself) to put some money in it.

In order to make this easy to do, Marketocracy Capital Management, LLC (MCM), our affiliated registered investment advisor, has reduced its minimum separately managed account (SMA) size to $20,000 for you and your friends and family.

Investing in your model portfolio through MCM will give you a GIPS® composite, a real-money track record, that can open doors on Wall Street and make it possible for us to market your model to our clients and to our readership at Forbes.

What Is A GIPS® Composite?

GIPS® stands for Global Investment Performance Standard. A GIPS® composite is the group of real-money accounts invested in your model. The standard exists to provide clients and prospects confidence in the integrity of performance claims and the ability to compare performance across different firms. In addition, results reported in accordance with the GIPS® standards generally comply with SEC rules for advertising performance.

Your Marketocracy model portfolio returns are not GIPS® compliant. However, your model's returns can be included in marketing presentations as supplemental information to a GIPS® composite.

What Does This Cost?

For accounts less than $250,000, MCM's annual management fee is 1.50%. In addition, FOLIOfn -- the brokerage firm where your account will be domiciled -- charges a brokerage fee of 0.40% with an annual minimum of $100. Of course, if you would like to invest more than $250,000 in your model portfolio, the fees would come down.

The returns of your Marketocracy model portfolio are reported net of imputed management fees of 1.95% per year. In our experience, the actual returns to clients have a slight bias to outperforming the Marketocracy models because the fees on our separately managed accounts are lower than the imputed fees on our models.

Who is FOLIOfn?

  • Independent brokerage firm that enables trading portfolios of stocks called folios
  • 24x7 access to view your holdings
  • FOLIOfn takes custody of your account and provides SIPC insurance
Account Value MCM Advisor Fees Brokerage Fee Total
$20,000 - $40,000 1.50% $100 1.50% + $100
$40,001 - $250,000 1.50% 0.25% 1.75%
$250,001 - $500,000 1.40% 0.25% 1.65%
$500,001 - $1,000,000 1.30% 0.20% 1.50%
$1,000,001 - $2,500,000 1.10% 0.15% 1.25%
$2,500,001 - $5,000,000 1.00% 0.15% 1.15%
$5,500,001 and up 0.90% 0.10% 1.00%

Why FOLIOfn?

We use FOLIOfn because their fee structure and the ability to hold fractional shares enables us to match your model's performance very closely. It also enables our clients to make deposits or withdrawals in small amounts.

Example: Say your portfolio has 20 positions in it. If you add $1000 to your account you would need to make 20 trades to keep the account in sync with your model. If you paid $10/trade, your commissions would be $200 or 20% of your transaction. Even if you paid $1/trade, your commissions would still be 2% of your transaction.

If you are currently paying retail commissions and fees to manage your own brokerage and/or IRA account, it is possible that this account will save you money and open up a new career option for you at the same time! If your Marketocracy model portfolio has outperformed your brokerage or IRA account, you may even get better returns.

FOLIOfn does charge for certain extra items like paper statements, wire transfers, paper checks, etc .. These fees are rare, and are usually the result of a client-initiated action. Here is a list of these service fees.

What's In This For You?

Our Masters Contract is designed to enable us to work with those who are not registered investment advisors. If you are a registered investment advisor, we can work with you under our Service Advisor Contract.

Our Masters Contract pays you to provide investment research for our clients. To deliver your research, you need do nothing more than continue to manage your model portfolio on Marketocracy's website. We use this information to run your model at FOLIOfn so that client's of MCM can choose it as an investment option in their separately managed accounts.

Your compensation for this research is 30 basis points annually on the assets invested in your model. This means that at $100 million in assets, your annual payment would be $300,000. At $10 million, it would be $30,000. At $1 million, $3,000. Download sample contract.