Why people paying fee for custody or wealth management , when you can buy low fee index fund etf by yourself ?
- Thread starter troubled soul
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Because the world works on the basis of extortion, the more people you have the more ineffective that approach which is used by many in the world, it's just that simple, I work with hedge funds, wealth maangers, crypto funds, I was seeding a new fund not long ago at 50% per quarter, until we found out the fund owner was trying to embezzle and commingle the investor funds so had to stop the launch process.
Even though today most investors barely cover inflation on 2&20 as the net is around 13%, they are happy with the returns because it guards their capital which they would struggle with if they managed the funds on their own, most of the people I know work on a pure Alpha basis, direct returns usually over S&P benchmark before fees kick in, but most of us target UHNW at 70-100%pa because we want real returns, not capital preservation returns.
An ETF does not protect your capital, a Hedge fund where you have a 1% share does, don't worry I worked with some of the wealthiest people who had their assets stripped due to the incompetence of professionals and there was literally nothing they could do, once the capital has changed hands it's almost impossible to recover it unless you generate new capital, which is actually what we do while skipping the part in the middle, generate high returns on less capital to make sure excess capital is not exposed, think 20/80 without the other 60% being exposed, helps you sleep at night.
Even though today most investors barely cover inflation on 2&20 as the net is around 13%, they are happy with the returns because it guards their capital which they would struggle with if they managed the funds on their own, most of the people I know work on a pure Alpha basis, direct returns usually over S&P benchmark before fees kick in, but most of us target UHNW at 70-100%pa because we want real returns, not capital preservation returns.
An ETF does not protect your capital, a Hedge fund where you have a 1% share does, don't worry I worked with some of the wealthiest people who had their assets stripped due to the incompetence of professionals and there was literally nothing they could do, once the capital has changed hands it's almost impossible to recover it unless you generate new capital, which is actually what we do while skipping the part in the middle, generate high returns on less capital to make sure excess capital is not exposed, think 20/80 without the other 60% being exposed, helps you sleep at night.
It's all about the numbers, 10yr Tbills are low hanging fruit at 3.8%pa on 60% which is 2.28%pa, you then generate 70-100%pa on 20% making 17%pa of gross capital, and the other 20% can be ETFs at 7-10% making 1.7%pa, totaling 20.98%pa but you have only exposed 20% to the markets, the other 60% and ETF 20% are inert as the capital pa returns plus capital amounts are too low of net worth to make it interesting.
Your pusher is very good thu&¤#
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@JohnnyDoe ”“ Your #1 Source for Guidance in Different Offshore Fields
You should give punctuation a try. Your comment is unreadable and unintelligible. Maybe it is just me but I don't understand what you are trying to tell us here. Are you trying to explain the 60/40 portfolio?
(By the way: T-bills are for short maturities; T- notes for 1y to 10y and T-Bonds are for maturities of more than 10 years. This is finance 101.)
Last edited: Jul 1, 2023
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