We Make Investment Managers and their Shareholders More Money by Providing the Technology Needed to Facilitate “Clean” Security Pricing
FairShares offers a value-added best practice service that investment fund managers can provide to their shareholders for a fee. Our patent-pending product increases the investment returns and buying power of any security that pays a dividend or capital gain. By providing this service, investment fund managers can generate a significant amount of high margin revenue, in addition to their current asset management fees, and deliver higher investment returns to their shareholders.
Securities Trade “Clean”
Best performing index funds in the world
Investment managers make more money
Shareholders achieve higher compound annual returns
Managers can leverage a tangible competitive advantage
Investment funds realize improved risk-adjusted returns
Tracking error is reduced
Painless to administer
Why Every Investment Fund Needs FairShares – Equities Trade “Dirty”
FairShares provides the systems and methods needed to address and solve the two most critical issues facing every investment manager
- Fee compression
FairShares creates what we call “structural alpha.” We deliver enhanced returns in any market environment by improving the structure and tax-efficiency of income-producing securities. When an investment manager can provide consistent incremental value, shareholders are willing to pay for that value-added. Behavioral economics suggests this remains true so long as the cost of the service does not exceed the value created. For example, are you willing to pay someone $1.00 if they can make you an extra $10.00? Of course, you would. This concept forms the fundamental basis for the FairShares business model – creating a situation where every participant is better off with FairShares than without FairShares.
FairShares products are available for a nominal licensing fee.
How Does FairShares Deliver This Added Value?
What Happens When Equities Trade “Dirty”?
Traditional securities include dividends and capital gains in the price an investor pays for a security. A security that includes dividends and capital gains in its price is said to “Trade Dirty.” When an investor buys a security that trades Dirty, they will
- Pay more for the security than it is worth, and
- Pay taxes they should not owe
Buying securities when a dividend or capital gain is a component of the price is known as “buying a dividend” in the investment management industry. When investors buy dividends and capital gains, they achieve a lower total return, lower yields, and purchase fewer shares.
Our patent-pending dividend and capital gain payment system allow securities to “Trade Clean,” which means that dividends and capital gains can be removed from the net asset value of the fund.
What Happens When Equities Trade “Clean”?
When a security trades Clean shareholders can
- Purchase more shares with the same amount of capital
- Achieve higher yields
- Avoid paying taxes they should not owe
The fund’s dividends and capital gains are then equitably distributed to ALL investors. Our patent-pending payment methods differ substantially from our current dividend distribution system. The current payment system only pays dividends/capital gains to the last holders of record – an antiquated and unfair system.
It is not possible to improve an investment fund’s accounting, without leveraging FairShares intellectual property.
Benefits of Adopting FairShares For All of Your Investment Funds
FairShares Delivers Higher Returns
Investors achieve higher compound annual growth rates by avoiding unnecessary taxation, buying more shares and achieving a higher yield on invested capital.
World's Best Performing Index Funds
All things being equal, an index fund using FairShares technology will trade at a marked discount and greatly outperform any of its peers. Fiduciaries will be compelled to allocate to FairShare funds.
Managers Earn Additional Income
Investment fund managers can create an additional revenue stream by providing a value-added service to their shareholders.
Investment funds that use FairShares technology will have a lower tracking error and reduced volatility which helps improve a manager’s risk-adjusted return metrics.
FairShares Difference Realized in 95 Days – Using Real Data*
More Money Made
Less Paid in Taxes
Higher Annual Yield
More Shares Purchased
* The analysis above was performed using real data ending 9-20-2019. The results demonstrate the performance and buying power difference realized when comparing a $15 Million purchase of SPY on 6-18-2019, a liquid S&P 500 index fund, with a $15 Million purchase of an identical FairShares S&P 500 fund, that has no dividend included in its price. After-tax dividends received on 7-31-2019 are reinvested in each security on that day and after-tax mark-to-market values of each investment are calculated based on the closing prices on 9-20-2019. The detailed math is available upon request.