Q:  I’ve been investing on my own for years; why should I use a professional money manager?
A:  Two main reasons – expertise and time. If you do your own research, keep current on business and the economy, and spend time studying and monitoring your investments, then maybe you do not need a professional money manager to help you. Many of our clients could invest on their own if they were able to commit the time and resources to do so. Arcataur provides specialized knowledge and experience that can help guide you in determining your investment objectives and pursuing them. We work full time on your investment portfolio, so you can pursue your other personal and professional interests.

 

Q:  What is an individually managed account and what are its advantages?
A:  American investors have been the beneficiaries of an extraordinary change in the investment management industry – the increased availability of separate account management for “retail” accounts. By individually managing their portfolios, investment managers can provide experienced, expert portfolio management complemented by a new level of service. Individual investors can now discover what institutional investors have known for a long time – individually managed accounts offer enhanced investment control and flexibility.  Essentially, a separately managed account can be tailored to meet your individual needs, in terms of such aspects as taxes, retirement planning, risk tolerance and social constraints. The primary benefits include:

Access to institutional money managers. You can now have access to institutional quality money managers for your separate account, rather than only in a mutual fund setting.
 

Customization and flexibility. A separately managed account begins with flexible funding – it can be with cash or securities, and the account can be transitioned based on your individual goals and needs.
 

Greater control. The investment strategies implemented using a separately managed account can be as individual as you are.
 

Tax efficiency. With a separately managed account, you have control over when you want to realize capital gains or take losses, allowing you to better manage your gains and losses. Furthermore, mutual funds usually turn over their portfolios frequently, creating trading expenses and tax liabilities.

Basically, individually managed accounts offer a step up from a typical mutual fund portfolio solution. They provide you with a customized solution specifically tailored to meet your goals and objectives. Unlike mutual funds, they do not commingle or pool assets. Rather, they provide you with direct ownership of the securities in your portfolio.

 

Q:  What does Arcataur do?
A:  We are direct investment managers that specialize in large capitalization equities, investment grade fixed income and balanced portfolios. When hired to provide a complete investment solution, our core large capitalization equities and investment grade fixed income will be augmented with broad index based exchange-traded funds (ETFs) to provide a truly diversified portfolio. Our business is solely focused on managing separate accounts.  We offer personalized service by partnering with our clients to meet their individual investment and service needs.

 

Q:  How does Arcataur add value for their clients?
A:  Arcataur views proper identification and monitoring of investment objectives and risk tolerance, asset allocation and superior stock and bond selection as the main sources of value we bring to our clients. In addition, we manage our client relationships proactively, and provide individual attention and monitoring of our clients’ investment portfolios and their investment needs. And we provide all of this at the lowest reasonable cost. We are keenly aware that every dollar of expenses, including trading costs and management fees, reduces the total return to our clients. Arcataur understands the idea of being a good steward of capital, and the importance of long-term staying power and compounding.

 

Q:  Do most of your portfolios look alike?
A:  Arcataur offers three main products – the Arcataur Large Capitalization Portfolio, the Arcataur Investment Grade Fixed Income Portfolio, and the Arcataur Managed Balance Portfolio. Within these products, the individual names held are likely to be similar, but the quantities and asset allocation percentages may differ depending upon your individual investment objectives and risk tolerance. Furthermore, portfolios may differ depending upon the asset transitioning needed and your tax-related investment preferences. Our portfolio managers use information provided to them by institutional research firms, together with information they obtain from various financial services and publications, to make decisions concerning which securities should be bought and sold for their clients. Securities are selected for each client portfolio based on the portfolio’s investment guidelines and needs.

Q:  What are the advantages of having my money managed by Arcataur?
A:  Focus. Dedication. Integrity. Smart Investing. That’s Arcataur Capital Management. Arcataur strives to ensure its clients succeed in all markets by:
 

• Delivering institutional class investment expertise

• Seeking investment returns that are consistently better than those of its competitors and with lower volatility

• Dispensing highly personalized investment advice

• Providing easy accessibility to clients

• Maintaining the lowest reasonable management fees

• Giving assistance, education, guidance and advice that enable its clients to meet their financial goals

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Q:  Who has custody of my assets?
A:  Whatever custodian you have chosen has custody of your assets. Your custodian typically may be a brokerage firm (such as Schwab) or a custodian bank (such as BMO Harris Bank). Arcataur does not have custody of your assets. This means that at all times, you retain ownership and control of your assets. The only authority Arcataur has over your assets is the ability to manage the investments, based on your stated investment objectives, and withdraw the agreed upon management fees.

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Q:  Under what market conditions can Arcataur’s investment style and strategies be expected to outperform or underperform?
A:  As our name suggests, Arcataur’s investment style and strategies are suited for both bull and bear markets. Our fundamental approach to investment selection and our active management style are suitable for both up and down markets. We believe our way is the way to manage serious money. Through discipline, dedication, diligence and integrity, we earn client trust in our ability to handle their money in a predictable and ultimately profitable way. We adhere to our philosophy and investment approach. We also recognize that our greatest asset is the trust and confidence of our clients. We are committed to utilizing our extensive experience of economic and financial markets and to perform fundamental in-depth company analysis to create balanced investment portfolios with solid performance for our clients.
 

Q:  What are Arcataur’s fees?
A:  Fees generally are calculated monthly, as a percentage of net asset value, and paid quarterly in arrears. The following schedule applies to Arcataur-managed accounts:

Arcataur Large Capitalization Equity Portfolios:
Asset Value Annual Rate

First $1 million 0.85%
$1 to $5 million 0.80%
$5 to $10 million 0.75%
Over $10 million 0.70%

Arcataur Investment Grade Fixed Income Portfolios:
Asset Value Annual Rate

First $1 million 0.60%
$1 to $5 million 0.55%
$5 to $10 million 0.50%

Over $10 million 0.45%

 

Arcataur Managed Balance Portfolios:

consisting Direct Equities, ETFs & Direct Investment Grade Fixed Income
Asset Value Annual Rate

First $1 million 0.80%
$1 to $5 million 0.75%
$5 to $10 million 0.70%

Over $10 million 0.65%

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Arcataur Managed Balance Portfolios:

consisting of ETFs & Direct Investment Grade Fixed Income
Asset Value Annual Rate

First $3 million 0.60%
$3 to $5 million 0.55%
$5 to $10 million 0.50%

Over $10 million 0.45%

 

For purposes of determining the applicable fee rate, Arcataur may aggregate the net asset values of certain related accounts. Arcataur’s fees also may vary from the applicable fee schedule set forth above as may be negotiated with particular clients.

A client’s account also will incur trading costs and may incur additional administrative-related fees.
 

Q:  Does Arcataur have a minimum account size?
A:  Arcataur generally prefers accounts with at least $500,000 in assets; however, based upon a client’s needs and the use of exchange traded funds to achieve appropriate diversification, Arcataur is comfortable assisting clients with less assets.  The important consideration is achieving proper portfolio construction that meets the investment goals of the client.
 

Q:  What if I already own securities in my portfolio at the time I retain Arcataur to manage my assets? Will these securities be sold?
A:  In some cases, your existing securities positions may be sold, and in other cases, some of these securities positions will be kept. This will depend upon several factors, including the following:

(i) whether the security in question fits an appropriate asset allocation for the account;
(ii) whether we judge the security to be of appropriate quality and/or appropriate fit for the portfolio;
(iii) what the tax consequences would be to sell the security; and

(iv) what the client’s wishes are with respect to the security. For example, some of our clients may be overweighted in employer stock, and may desire to keep the overweight. In these cases, if a client wishes to continue owning a security we would not normally have in the account, it is possible to retain it in the portfolio and exempt it from portfolio management fees.
 

Q:  How often will I receive reports from Arcataur about my account?
Can I meet with the investment professionals managing my money?
A:  Arcataur usually sends out account-related reports on a quarterly basis. At the outset of our relationship with you, we will discuss the timing and nature of the reports you would like to see from us relating to your account. In addition, you will also receive reports from your custodian on a monthly or quarterly basis.

We meet with our clients as often as they desire. At these meetings, we typically review goals and objectives, performance, recent purchases and sales, our outlook on the economy and the stock market, and answer any questions you may have. One of the primary benefits of Arcataur is that our investment professionals are available to all of our clients, and do talk to our clients on a regular basis. Direct access to the investment professionals managing your money is very important to us, and we think is a great benefit to our clients.
 

Q:  If I need money from my account, what do I do?
A:  All funds in your account belong to you, and you can make additions or withdrawals from your account at any time. If you do plan on making additions or withdrawals to your account, it is a good idea to let us know in advance, so we can make arrangements to invest the contributions in the case of account additions or liquidate investments in the case of withdrawals. If securities need to be sold to raise funds, keep in mind that it may take you a few days to obtain the cash.
 

Q:  How do I hire Arcataur to manage my assets?
A:  Before we have you sign any paperwork, we will sit down with you and review your investment goals and objectives, your risk tolerance, and any investment-related guidelines or concerns you may have. We then will discuss with you our proposed investment approach for your account, and if you are comfortable with it, we can then proceed to complete the paperwork which will enable us to manage your account. We will have you sign an investment management agreement with us, which permits us to effect transactions for your account. You also will need to sign custodial agreements and fill out paperwork to open an account with a custodian of your choosing. Additional documentation may be necessary in the case of asset transfers, which we can help you with.
 

Q:  How can I find out more about Arcataur?
A:  You may call us 414.225.8200, or write us at:
Arcataur Capital Management LLC,
826 N. Plankinton Avenue, Suite 300
Milwaukee, Wisconsin 53203.

You also may contact any of us.

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