QUESTIONS THAT ARE FREQUENTLY ASKED. . .
Q: What makes Newport different from other Money Managers?
A: Newport's highest priority is preservation of capital. Therefore, when market conditions are unfavorable, assets are moved into a money market fund to preserve capital and lock in gains.
Q: Who places the trades?
A: Newport places the trades on the client's behalf. Confirmations are sent by the custodian notifying the client of any trades.
Q: May I terminate my involvement at any time?
A: Yes.
Q: Will my investment be held in a safe place?
A: Yes. All brokerage accounts are insured subject to limits by the Securities Investor Protection Corporation (SIPC).
Q: What is the extent of control Newport has over a client’s account?
A: Newport only has discretionary authority to place trades.
Q: Is Newport registered?
A: Yes, Newport is registered with all required governing authorities.
Q: Can I withdraw funds if I need it?
A: Yes, you may withdraw funds in any amount at any time.
Q: Can I arrange withdrawals on a regular basis?
A: Yes, systematic withdrawal plans are available weekly, monthly, quarterly, or annually. You may change the timing or amount at any time.
Q: What is the minimum amount I may have managed?
A: The minimum managed account is $100,000, but this may be waived under special circumstances.
Q: May I add to my account?
A: Yes.
Q: Is Newport's investment performance guaranteed?
A: No. Remember, most of our program’s primary objective is preservation of principal. The secondary objective is to generate above-average investment returns via capital appreciation and income.
Q: How active can I expect Newport to trade my account?
A: A typical year may involve 3-4 trades.
Q: What mutual fund families will Newport use?
A: We have access to more than 13,000 funds, ETFs, and ETNs.
Q: Why is this money management approach sometimes considered to be a "safety net" strategy?
A: The objective of the investment style is to provide discipline by seeking the safety of a money market fund during falling price trends. Past performance in no guarantee of future results, but investors may review how the strategy has performed during many uncertain times in the past to gain confidence in how it may perform in the future. Our goal is to learn from the past and benefit in the future. We may not meet our goal.
Q: How did Newport Flexible Equity clients do during the 1987 crash? 1990 sell off? Internet bubble of 2000? Sub-prime meltdown of 2008?
A: All clients in equity funds were 100% in cash prior to October 19, 1987. This result was achieved by Newport's founder while acting as the Chief Investment Officer at his predecessor firm. Newport was founded in June 1988.
In 1990 we reduced equity exposure dramatically before the sell off.
During the Internet Bubble, equity accounts had a positive return while many mutual funds lost 50-70% and high yield bond funds lost upward of 25%.
While Newport's Flexible Equity clients couldn't shelter 100% of the sub-prime meltdown of 2008, Newport's Flexible Equity accounts only experienced 1/3 of the losses sustained by the average stock mutual fund.
Q: How did Newport Flexible Bond clients do during the 1990 bond market sell off? 1994 debacle? Sub-prime meltdown of 2008?
A: Our average Flexible Bond client produced positive results of over 9% net of fees in 1990.
In 1994 our average Flexible Bond account grew 1.7%, while the average bond fund lost money*.
According to Morningstar, during the Sub-prime Meltdown of 2008, Newport's Flexible Bond accounts earned almost 2%, while the average high yield bond fund lost more than 26%, the average Corporate Bond Fund lost nearly 8%, and the average Intermediate-Term Bond Fund lost more than 4.5%.
Q: May I place my existing mutual accounts under your management?
A: Yes.
Q; How will I know how my account is doing?
A:
1) A confirmation will be sent directly from the custodian after each transaction.
2) You will receive a monthly or quarterly statement from the custodian.
3) Online access and paperless confirmations and statements are available on the custodian's website
4) Newport will send you a quarterly report summarizing performance.
Q: What are your fees?
A: Typical management fees are calculated using the market value of your account at the end of each quarter. Performance based management fees can be negotiated if you qualify. Please request a copy of Newport's Form ADV Part II
Q: What about tax information regarding my investment?
A: You will receive year-end 1099s from your custodian.
Q: May I allocate my money between bond funds and stock funds?
A: Yes. After completing an Investor Profile Questionnaire, your asset allocation will be constructed to meet your specific risk profiles and objectives.
Q: May I change my investment objective?
A: Yes, you may change your investment objective at any time.
Q: Does Newport manage variable annuities?
A: Yes. Newport can manage variable annuities and variable life insurance policies.
Q: What if I have a special request or problem or need further information?
A: You may call our offices and we will be happy assist you.
*Data provided by a Raymond James marketing report produced in 2011.
Past performance is no guarantee of future results. Actual results will differ from those indicated.