High Net Worth / Trusts-Estates
Midwest can help to manage your financial assets.
Midwest can help you over the next ten years.
Global stock and bond annual forecasts from 2020 to 2029 are 6.0% and 2.3% before inflation, fees, and taxes. ¹
Both estimates are lower than their 10.1% and 5.4% averages from 1926 to 2019, and these levels are prudent under current circumstances. Accordingly, investors are encouraged to allocate at least 50% of their publicly held assets to highly diversified portfolios (see High Net Worth Brochure).
In addition, many accounts should be managed in a passive, low-cost manner. Most actively managed portfolios underperform investable indices due to high/unnecessary fees and subjectivity. There is also a higher uncertainty of investment returns, and administrative duties are increased.
- Over the past ten years most of Vanguard’s funds have outperformed the peer-group averages. ² That relative performance should continue.
- Research shows that properly balanced portfolios earned similar inflation-adjusted returns during both expansions and contractions from 1926 to 2009. ³
- Vanguard’s fee control structure is impressive and transparent.
- Most portfolios are highly diversified and can be tailored to owner-beneficiary circumstances, including tax-efficient strategies.
- Their custodial services are considered among the best and safest with respect to their fiduciary, compliance, and other responsibilities.
Midwest builds and manages High Net Worth portfolios using mostly Vanguard funds based on specific client goals.
Midwest oversees all portfolios in an unbiased, cost efficient, and easy-to-understand manner.
Expenses do matter.
As the chart below shows, the return difference on an efficiently managed $1 million low-cost vs. high cost portfolio over ten to forty years can be $130,000 to $1,180,000 or more.
To create the 3.8% expected annual balanced return below, ten-year 6.4% stock and 1.2% bond estimates were used.¹ For lack of available forecasts, the same assumptions were used for the eleven to forty-year periods.
Midwest passive fees range from 0.1% to 0.5%, and 0.3% on a $1 million portfolio. External fees are generally less than 0.2%. Accordingly, Midwest’s total passive expense estimates are less than 0.5%. Peer passive or active expense estimates are 1.5%.
¹ Benz, C. Experts Forecast Long-Term Stock and Bond Returns: 2021 Edition, Morningstar.com, January 20, 2021 and others. Please contact us for details.
² Vanguard 2017 economic and market outlook: Stabilization not stagnation, December 2016, pp. 20-25, for 1926 to 2016 period. From 2017 to 2020 various indices compiled by Midwest Asset Management, Inc.
³ Vanguard performance report: Vanguard funds outperformed peers over long haul, 10 years to September 30, 2020, p. 1., and others.
4 Vanguard performance report: Recessions and balanced portfolio returns, October 2011, p. 2.
Midwest Asset Management, Inc.
8383 Greenway Blvd., Suite 600
Middleton, WI 53562 USA
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