MWR Featured in Barron's
Focus Lists Were Out of Focus in 2011's Turmoil
By VITO J. RACANELLI
Important Disclosure
The foregoing article was written and published by Barron’s. MWR did not participate in writing this article. The performance figures shown were compiled by a third-party vendor, Zacks Investment Research, to whom MWR pays a fee for compiling performance information. The “stock picks” referred to represent the performance of the securities covered by MWR research analysts and included in MWR’s Focus List for the six months, one-year , three-year, and five-year periods ended 12/31/2011. Past performance is not indicative of nor is it a guarantee of future performance.
The performance referred to is calculated with a time-weighted performance methodology by Zack’s Investment Research, using data supplied by MWR. The calculation involves equally weighted positions, monthly rebalancing, and includes dividend reinvestment. MWR’s own internal calculations differ in some respects from the calculation method used by Zack’s. The numbers presented are not audited or otherwise verified by any third party.
Performance shown does not represent actual performance of any MWR account and does not represent any actual investment portfolio. Zack’s applies a 1% commission charge on any stock added by the firm or removed by the firm. MWR’s own internal calculations do not include these charges. A 1% commission charge may bear little resemblance to actual charges incurred in client accounts. Had actual costs been included, there may be a material reduction in the performance shown. Performance of actual client portfolios will be reduced by the advisory fees, commissions, and other charges incurred by clients. Clients must also be aware that performance of many actual MWR client accounts during the above periods differed materially from the performance shown. Future stock selections will be made under different economic conditions and in different securities. The investments described are subject to market risk and an investor may experience loss of principal.
There are significant limitations inherent in tracking performance based on recommendations rather than on actual portfolios. Use of this performance data with advisory clients and prospects is permissible only in one-on-one presentations and clients must understand the effect of compounded advisory fees, over a period of years, on the value of a client’s portfolio. The net compounded impact of the deduction of such fees will be affected by the amount of the fees, the time period, and the actual investment performance. For example, an account with annual fees of 1.6%, deducted quarterly, whose annualized performance was 10%, or 2.411% per quarter, before fees, would have net annualized performance of approximately 8.258% after deduction of fees. It is important that investors understand the impact of compounding over a period of time. For example, in the above illustration, the total return over 5 years would be 61.051% without advisory fees but would be reduced to 48.696% after the deduction of advisory fees. If a client invested $1 million dollars for five years at the rates stated above—without advisory fees—the client would have holdings worth $1,610,510 at the end of five years. The client charged 1.6% per year would have holdings worth $1,486,960 at the end of five years. For complete description of all fees, costs, and expenses, please refer to MWR’s Advisory Brochure.
Please contact research@mwrinc.com to obtain a list of all recommendations made during the past year, as well as during the six-month period referred to in the article. We will also furnish upon request additional investment information supporting the specific recommendations, as well as additional disclosures.