We at Cáritas Investment Advisors are funding the philanthropic entities of your choice, through our revenue (annual fees we take in) sharing in the public sector. We direct a portion of our fees toward charities you choose, funding your philanthropies through direct contributions to non-profit 501(c)3 organizations, at your discretion (10% in year one; 15% in year two; 20% in year three; 25% in year four; 10% in year five into perpetuity). Helping us deliver on this promise, we utilize the administrative services of the largest foundation asset administrator in the county, Foundation Source Philanthropic Services, Inc., in Fairfield, Connecticut for the utmost in efficient administrative execution. (Your 0.20% annual all-in fee includes this feature).

As part of our “finanthropic” structure, the low fees we charge for passively indexing your assets to meet the market–rather than trying to beat the market–go toward funding non-profits of your choice. We are literally funding your philanthropies.

Cáritas is Latin for “Charity,” and the name of our firm informs and dictates our every decision and activity, respecting our clients’ objectives and putting their interests–and those of the greater community–first and foremost.

The ability for professional money managers to regularly outperform the S&P 500—or any appropriate Index to match the given portfolio—is fraught with one inalienable fact: Fees will inevitably prohibit any manager, no matter how smart, experience, or well educated, from being able to outperform the benchmark.

The cost to hire a manager, in other words, either to manage Separately Managed Accounts, or to manage an actively managed mutual fund, is prohibitively costly, and the true winner is not the client, but is rather the money managers themselves. It’s a bitter pill to swallow, but it is the truth.

Warren Buffet recently in the Wall Street Journal excoriated the hedge fund industry as virtual highway robbers charging “borderline obscenely high” fees on their under performing assets. Buffet’s 2017 letter to shareholders recommends an Index S&P 500 holding as core to any sound investment strategy.*

Study after study shows that over 90% of professional money managers under-perform their respective benchmark, and this number approaches 98% over a ten year or greater time period. Transaction costs and management fees aren’t the only reasons for this, but they are a large component of this fact, to be sure.**

Enter our Self-Driving Portfolio: Seven (7) Exchange-Traded Funds, and the cash money market fund: THAT’S IT.  A passive, all-Index, Exchange-Traded Fund (“ETF”) only index portfolio which utilizes low turnover and covered-call option writing to meet and/or beat the market. The low-cost, all Index ETF and covered-call option portfolio strategy designed by Cáritas Advisors, will diversify away company specific risk, mitigate downside through options strategies, and index your assets through Vanguard, Schwab, iShares, and SPDRS, to your unique risk parameters. The seven ETFs are tailored to your risk appetite and allocated to percentages appropriate to your taste, from 100% equity to 100% cash, and all varieties in between, employing all asset classes including real estate, precious metals, fixed income, etc.

It’s a broadly diversified portfolio of fixed income, equity, and other real assets (e.g., commodities, real estate, currencies, etc.) which is proven to outperform over the long term, freeing up time for the client to fret over money manager decisions and performance. You no longer need to assess how your assets are performing, in reality, because you won the market, and will always meet, beat, or be very close (at least) to the benchmark. You can finally enjoy life, focus on charitable endeavors if you wish, sleep soundly at night, and care for more meaningful aspects of your day-to-day regimen. Your “market worry” is relieved, and your stress over hiring and firing money managers is also removed from the investment equation.

Rather than trying to outperform the market, the Self-Driving Portfolio “meets” the market, and is only re-balanced every three to six months, with strategic hedging through covered-call option writing, which mitigates downside risk and provides added income and greater returns of up to 2 – 4% per year (versus a portfolio which does not apply these options strategies).

Call Cáritas at (415) 277-5992 for more information. 

**Source: 1) May 13, 2017: Mark Hilbert, Financial Columnist and Newsletter writer: MarketWatch operates a financial information website that provides business news, analysis, and stock market data. It is a subsidiary of Dow Jones & Company, a property of News Corp, which also owns The Wall Street Journal; 2) CNBC, “Bad Times For Active Managers: Almost None Beat The Market Over Any Five-Year Period.” June 28, 2017. *Source: Warren E. Buffet’s “Letter To Shareholders,” Feb 24, 2018.