Item 4 - Services, Fees and Compensation
Total Asset Market “TAM®” offers a disciplined, discretionary, and non-discretionary fee based mutual fund of funds program. It attempts to establish long-term Strategic Asset Allocation portfolios that are made out of a few select, best in class, on and off shore underlying mutual funds that are purchased at Net Asset Value (NAV). These funds are selected out of a total universe of approximately 200 mutual fund families that include unaffiliated load-waived and no-load funds (Although there are no upfront sales charges, other fees and expenses do apply).
(i)TAM® Program:
The program endorses a top-down value discipline that seeks to identify globally undervalued Markets, Economic Sectors, Industries, Fixed Income, and Specific Securities in “Super Cycles” that sell at deep discounts to both their respective and historical intrinsic values. “Super Cycles” are defined as undervalued Economic Sectors, and Industries in the Global Economy that our firm believes are best positioned for “Long-Term Growth”. The select list due diligence process that aims to identify some of the world’s best underlying mutual funds begins with a rigorous screening process of the entire global universe of about 200 mutual fund families.
Next, qualitative and quantitative assessments are applied for deciding on the best in class underlying mutual funds that will end up making the Total Asset Market (TAM®) portfolio. This extensive due diligence process of filtering out a global universe of approximately 200 mutual fund families includes but is not limited to the followings: (i) Researching organizational ownership, (ii) Finding out portfolio management tenure, (iii) Understanding the investment process and its implementation, and (iv) Studying long and short-term performance results.
This process also attempts to evaluate risk/reward parameters assumed by the mutual fund managers as measured by their quantitative and/or Mathematical Calculations of Risk. The followings are some of the criteria studied when quantitative risk parameters are evaluated: Beta, Alpha, Standard Deviation, Sharpe Ratio, and R-Squared. In addition, the followings are some of the risk parameters researched when qualitative data is included: Market Risk, Economic Sector Risk, Industry Risk, Significant Sector and Position Concentration Risk, Liquidity Risk, and Management Fee Risk of expense ratios, 12b-1 charges, and early withdrawals.
The TAM program includes different assets under management thresholds. In general, the minimum requirement to participate in the program is $75,000 in assets under management. However, in order to accommodate some of the firm’s legacy household clients and/or to be able, under certain circumstances, to provide additional investment ADV Part 2A – Firm Brochure Page 9 Tamar Securities, LLC options, the TAM program has created a diluted version of its main discipline with lower threshold minimums than $75,000 in assets under management.
The underlying number and type of mutual funds that make up the entire TAM portfolio will vary based on the assets’ threshold in the program. For example, the TAM program with assets under management of over $75,000 will likely carry higher number of different underlying mutual funds in order to better target specific sectors and industries in world economy. On the other hand, lower TAM thresholds than $75,000 in assets under management will likely carry fewer underlying of different family funds that are typically apart of the higher threshold TAM program.
Throughout the tenure of the Total Asset Market (TAM®) program, Global Asset Allocation models are either rebalanced quarterly, semi-annually or annually in order to achieve an optimal strategic asset allocation on the Efficient Frontier. This process of rebalancing a diversified global portfolio across a strategic combination of asset classes, in turn can potentially increase overall investment returns while decreasing volatility.
Additionally, the investment process is gradual, fundamental in nature, and occasionally technically driven. Implementing fundamental and technical analysis to uncover oversold market conditions can lead to excessive cash balances in the interim.
Lastly, the firm attempts to schedule periodic ongoing reviews with all clients. This process includes the followings:
• Review of the entire portfolio as well as its underlying mutual funds benchmarked each quarter against their respective Equity and Fixed Income indexes;
• Recalibrate each client’s asset allocation models as his or her life circumstances change, and;
• Present consolidated reporting that incorporates the Total Asset Market® (TAM®) portfolio with the entire holdings of the clients’ other investments disciplines.
(a)TAM®:
All Equity discretionary money managed programs which include Total Asset Market (TAM®) will adhere to the following pricing schedule:
| Assets Under Management | Annual Net Fee Assessed * |
| First $500,000 | 2.25% |
| Next $500,000 | 1.75% |
| Over $1,000,000 | 1.25% |
*Our firm’s fees are generally not negotiable. Further, our firm’s fees are billed on a pro-rata annualized basis quarterly in advance based on the value of your account on the last day of the previous quarter.