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Northcoast Assest Management ETF investment?

My adviser at Fidelity recommends that I let Northcoast Assest Management to manage about 12.5% of my retirement fund investing in ETF strategies. My time horizon is about 7 years. Any feedback on Northcoast Assest Management and ETF investments?

May 12, 2014 by Ali from Novi, MI in  |  Flag
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2 votes

Ali, Northcoast Asset Management is a money manager with a decent reputation, in my opinion. I looked at the returns on their CANSLIM program, but did not see anything remarkable. It does not appear to follow a pattern of minimal volatility, nor does it show any sort of outperformance.

I would go back to your Fidelity advisor and ask him why he chose Northcoast Asset Management for your specific account, especially with a 7 year time horizon, what the fees are, and how he justifies the fees. If you are not satisfied with the answers, I would seek other financial advice.

BTW, I see nothing wrong with allocating 12.5% to any one asset manager.

1 Comment   |  Flag   |  May 27, 2014 from Delray Beach, FL
Michael Steven Greenberg, CFP®

I missed your question about my thoughts on ETF's. ETF's in itself are fine. ETF's managed by a portfolio manager are as good as the portfolio manager. I regularly build primarily ETF portfolios using blends of different strategies from different managers that I believe deliver total portfolios with minimal relative volatility and what I believe are above average returns.

Flag |  May 27, 2014 near Delray Beach, FL

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David N. Smith Level 10

Why does your advisor think so little of Northcoast that they recommend 12.5% of your portfolio. ETFs are used to provide diversification at a low cost. Can't Northcoast allocate an entire diversified portfolio using ETFs? If the idea is to hire multiple managers to compare performance you are going to end up with a lot of duplication of holdings. Your ability to manage taxes is going to be impacted if you use multiple managers. Find someone that can help you figure out a good investment strategy and stick to it.

Comment   |  Flag   |  May 12, 2014 from Miami, FL

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I see two ETF based portfolios in my database that are managed by NorthCoast. One is based on the CAN SLIM process and the other is Tactical. Both use ETFs. The CAN Slim track record goes back to 6/1/2009 and has produced a 5.3% annual return over the last three years whereas the Tactical portfolo track record goes back to 12/29/2000 and has produced a 3.68% return over the last three years, 7.44% over the last five years and 8.66% over the last ten years.

Hope this helps. If you have further questions or would like to discuss any of these in further detail please feel free to reach out to us at 920-785-6010 and/or prateek@endowmentwm.com.

Best regards,

Prateek Mehrotra www.Endowmentwm.com

Comment   |  Flag   |  May 12, 2014 from Appleton, WI

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I use only ETF portfolios for managing my clients' investments. I like Blackrock for my ETF portfolios and they trade for free on Fidelity's platform. I'm unfamiliar with NorthCoast.

Comment   |  Flag   |  May 12, 2014 from Canton, GA

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I took a brief look at their ADV via the FINRA website. Here is some relevant information for your consideration. They manage about $2 billion. Over 75% of their clients are “high net worth.” They have 5900 clients. You may want to consider how much personal attention you will get from them and if that’s important to you. They also report that they custody some of their client assets which could be an issue. I have a bias toward using advisors who will provide personal advice based on individual need rather than just manage a portfolio; you can get a mutual fund for that. I hope this helps.

1 Comment   |  Flag   |  May 13, 2014 from Suffolk, VA
Arie J. Korving, CFP®

As a follow-up, please note that Fidelity receives a referral fee from Northcoast for sending clients to them for management. It's not a deal breaker, but something you should be aware of.

Flag |  May 13, 2014 near Suffolk, VA

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