2013 Lane Reports

The ETF - Managed Portfolio Solution

The Lane Report, May 2013
Wednesday, May 1, 2013 10:00 am
by J. Brad Strom, CFA

Marc J. Lane Investment Management, Inc. has been providing portfolio management solutions for high net-worth individuals since 2002. Historically, those services have only been made available to our clients with over $500,000 to invest. But now we are offering a competitive solution for clients with investable assets of $100,000 or more. These portfolios benefit from the same sector-allocation analysis that our higher-balance portfolios do. (The only exception is that exchange traded funds (ETFs) are used to gain exposure to economic sectors, rather than stocks and bonds.)

We don't offer a mutual fund, but an actively managed portfolio of exchange traded funds targeting an agreed mix of common stock and fixed-income exchange traded products. We strictly adhere to an agreed target allocation between stocks, bonds and cash equivalents to give the client confidence that the market risk to which his or her portfolio is exposed is intentional and deliberate.

These portfolios offer exposure to a broad range of market sectors, actively managing subsector exposure and risk through the use of a wide range of exchange traded funds. Our disciplined approach to managing portfolio risk provides diversified exposure to the domestic large cap, mid cap, and small cap sectors of the U.S. equity market as well as the developed and emerging sectors of the international marketplace. Both asset allocation and subsector exposure are closely monitored and held within targeted exposure ranges, efficiently managing equity-portfolio risk. Subsector exposure is tactically managed, assigning more emphasis to those sectors our Investment Committee deems advantageous, giving us the ability to re-position our portfolios within the ever-changing financial landscape. 

Exchange traded funds are also used to gain exposure to the fixed income market. Defined maturity—or fixed-term—ETFs are used to mitigate the risk to principal inherent in a rising interest-rate environment. The due dates of these targeted-maturity fixed-income ETFs are effectively laddered, with bond ETFs “maturing” each year, poised to capture ever increasing yields. These securities address what we consider to be the primary drawback to bond mutual funds, the investor's inability to hold bonds to their stated maturity date and receive back the full face value of their maturing bond holdings. Since bond mutual funds have no stated maturity date, as interest rates rise both the price and value of bond fund holdings will inevitably drop. Defined-maturity ETFs, on the other hand, return maturing bond proceeds to our client shareholders for reinvestment.

Marc J. Lane Investment Management, Inc.'s ETF - Managed Portfolio Solution opens the door to a professionally managed portfolio for investors with moderate-sized investment portfolios. To find out more about this innovative portfolio offering, please contact Marc Lane at 312- 372-5000 (or 800-372-1040) or at mlane@MarcJLane.com.

J. Brad Strom is a Senior Vice President and Portfolio Manager of Marc J. Lane Investment Management, Inc. Mr. Strom is a graduate of Illinois State University (B.S.) and DePaul University's Graduate School of Business (M.B.A.). Mr. Strom is a Chartered Financial Analyst (CFA).

The Law Offices of Marc J. Lane, A Professional Corporation
180 North La Salle Street
Chicago, Illinois 60601-2701
(312) 372-1040
Nationwide: (800) 372-1040
Facsimile (312) 346-1040

Websites: www.MarcJLane.com

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