Friday Financial Five – December 13th, 2013
Dan Forbes, GoLocalProv MINDSETTER™
Friday Financial Five – December 13th, 2013
The budget deal won’t address many of the long term financial problems the country faces, but the fact that Congress was able to agree on anything should be seen as a positive. After the recent government shutdown, the inability to come to some budgetary accord might have made Congress less popular than the winter flu. As it stands, they’re tied. The deal didn’t address corporate tax breaks, entitlement spending or the debt ceiling, but it prevents automatic spending cuts important to both sides of the political aisle. There’s plenty of work to be done, but at least there’s finally a budget in place.
Facebook to join the S&P 500
Thanks to a market capitalization over $100 billion, Facebook shareholding friends will soon be part of the S&P 500. The company becomes part of the S&P on December 20th, replacing Teradyne. News of inclusion in the index has been good for those owning the stock, as shares have seen a nice bounce since the announcement. Lost in the sea of good news is that the company still has a minimal earnings per share.
Still time to get RMDs processed
For those needing to beat the December 31st deadline, there’s still time to get Required Minimum Distributions squared away. For active employees, remember that the RMD calculation includes SIMPLE IRAs, but does not include 401(k) participants. The penalty for missing the withdrawal can be punitive. The amount not withdrawn is taxed at 50%, unless the IRS grants an exception.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe Volcker Rule is finalized
Following the financial crisis, former Fed chairman Paul Volcker suggested banning proprietary trading and limiting the use of hedge funds by banks. This week, the Volcker Rule has finally been approved by the five federal agencies necessary to implement the rule effective April 1st, 2014. While there are numerous exclusions to the rule, there is also increased compliance, including a requirement that bank CEOs attest to compliance with the rule.
The rise of socially conscious “B” Corporations
A relatively new business structure is the “B” Corporation, available to companies that have a well defined social mission. While “C” and “S” corporations routinely answer to the companies’ shareholders, “B” corporations have a duty to the environment, community, and their employees. The company must also publish financial reports and reports of social accomplishments that coincide with the stated mission. The expectation here is that these companies will focus primarily on transparency and the greater public good as opposed to the bottom line. There are currently a handful of states that allow the formation of this type of company, while others are expected to get on board soon.
Dan Forbes is a regular contributor on financial issues. He is a CFP Board Ambassador. He leads the firm Forbes Financial Planning, Inc in Providence, RI and can be reached at [email protected].
See How Much Providence Pays in Pension Fund Fees
Manager: Halpern Denny III
Manager Effective Fee: 0.0%
Asset Class: Private Equity
Assignment: Private Equity
Market Value: $188,318
% of Total Fund: 0.1%
Note: Fund is in liquidation.
Manager: William Blair VII
Manager Effective Fee: 0.0%
Asset Class: Private Equity
Assignment: Private Equity
Market Value: $434,649
% of Total Fund: 0.2%
Note: No further management fee is charged in 2013 other than a $2000 charge anticipated from January 2013 to mid March 2013. Fund is in liquidation.
Manager: SSgA Russell 2000 Growth
Manager Effective Fee: 0.08%
Asset Class: Equity Managers
Assignment: Small Growth (Index)
Market Value: $10,415,062
% of Total Fund: 3.9%
Note: Subject to $10,000 min annual fee.
Manager: SSgA Russell 1000 Growth
Manager Effective Fee: 0.08%
Asset Class: Equity Managers
Assignment: Large Growth (Index)
Market Value: $6,811,160
% of Total Fund: 2.6%
Note: Subject to $10,000 min annual fee
Manager: Vanguard MG ETF
Manager Effective Fee: 0.10%
Asset Class: Equity Managers
Assignment: Mid Growth
Market Value: $7,635,410
% of Total Fund: 2.9%
Manager: Invesco Venture Fund III
Manager Effective Fee: 0.25%
Asset Class: Private Equity
Assignment: Venture Fund of Funds
Market Value: $1,627,627
% of Total Fund: 0.6%
Note: Fee reduced to 0.25% in Q4-2013.
Manager: Columbia (Fleet)
Manager Effective Fee: 0.30%
Asset Class: Cash
Assignment: Large Value
Market Value: $397,606
% of Total Fund: 0.1%
Note: Subject to $15,000 min annual fee.
Manager: Columbia (ValuePath)
Manager Effective Fee: 0.37%
Asset Class: Equity Managers
Assignment: Large Value
Market Value: $20,453,356
% of Total Fund: 7.7%
Note: Columbia (Value Path): 0.40% on first $10m/0.35% on next $15m/0.30% on next $75m/0.25% on remainder.
Manager: Mellon (Prov Group)
Manager Effective Fee: 0.50%
Asset Class: Equity Managers
Assignment: Large Growth
Market Value: $6,641,213
% of Total Fund: 2.5%
Manager: Renaissance Installation Equity Fund
Manager Effective Fee: 0.50%
Asset Class: Hedge Funds
Assignment: Long/Short Equity
Market Value: $34,779,679
% of Total Fund: 13.0%
Note: Additional performance fee of 10%.
Manager: Q-BLK (Quellos) Strategic
Manager Effective Fee: 0.50% Min
Asset Class: Hedge Funds
Assignment: Fund of Funds
Market Value: $11,120,033
% of Total Fund: 4.2%
Note: The quarterly advisory fee paid to the Investment Manager is 0.1250% (0.50% per annum) of the Fund’s net assets on a quarterly basis when the Fund’s quarterly return is equal to or less than the return on the 90-day US Treasury bills plus 1.25%. The advisory fee will ratably increase, depending on the Fund’s performance, up to a maximum of 0.6250% per quarter (2.50% per annum).
Manager: Rogge Global Partners
Manager Effective Fee: 0.65%
Asset Class: Fixed Income
Assignment: Foreign Bonds
Market Value: $14,033,078
% of Total Fund: 5.3%
Manager: Boston Partners MV
Manager Effective Fee: 0.70%
Asset Class: Equity Managers
Assignment: Mid Value
Market Value: $24,556,046
% of Total Fund: 9.2%
Note: Boston Partners-MV: 0.70% on first $25m/0.60% on remainder.
Manager: Brandes
Manager Effective Fee: 0.74%
Asset Class: Equity Managers
Assignment: Foreign Equity
Market Value: $39,824,387
% of Total Fund: 14.9%
Note: Brandes Partners: 0.95% on first $10m/0.80% on next $10m/0.60% on next $30m/0.50% on remainder.
Manager: Boston Partners SV
Manager Effective Fee: 0.99%
Asset Class: Equity Managers
Assignment: Small Value
Market Value: $25,886,408
% of Total Fund: 9.7%
Note: Boston Partners-SV: 1% on first $25m/0.80% on remainder.
Manager: Point Judith II
Manager Effective Fee: 1.50%
Asset Class: Private Equity
Assignment: Private Equity
Market Value: $1,174,791
% of Total Fund: 0.4%
Note: Management fee is charged on committed capital and is equal to 2.5% during the first six years of the fund; 1.5% for the next two years and 1.0% thereafter. Point Judith also charges a performance fee of 20%.
Manager: Graham Global II*
Manager Effective Fee: 3.0%
Asset Class: Hedge Funds
Assignment: Global Macro
Market Value: $5,426,857
% of Total Fund: 2.0%
Note: Additional performance fee of 25%
