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Corporate Summary (OTCBB:FNDM.OB)
Fund.com Corporate Mission Statement
To create equal access for all investors to the portfolio management skills of leading investment managers by launching an extended series of actively managed Exchange Traded Funds (ETFs) through it’s subsidiary AdvisorShares, which are listed on the New York Stock Exchange that can be freely bought and sold by retail investors; and to use the Internet to serve as a consumer advocate to the non-expert retail investor by providing our Fund.com “EDGE” - Education, Direction, Guidance and Evaluation - to help investors find the right pooled investment products, or “funds” in an engaging, unbiased online experience.
Revenue Model
Fund.com and its 60% owned subsidiary AdvisorShares make money by earning management fees on assets under management (AUM). AdvisorShares earns varying levels of basis points on all monies invested in its actively managed ETFs, such as NYSE: DENT (Dent Tactical) paid monthly on an annualized basis. Fund.com receives 60% of the net fees retained by AdvisorShares. Fund.com also receives advertising revenue from its website(s).
An Open Architecture Financial Platform
Despite ETFs unequivocally being the fastest growing financial product of the new century and perhaps of all time, Fund.com and its AdvisorShares subsidiary approaches ETFs differently than mainstream ETF providers by observing and copying a new and wildly successful business model – Apple’s iPhone. Apple made the iPhone software open to software developers that unleashed a torrent of creativity and resulted in 85,000 applications for the iPhone being developed by independent programmers. Apple itself invests in the platform, branding, marketing and the distribution these “apps”, however, the apps have made the iPhone infinitely more desirable to the general public, dramatically increasing Apple’s sales, with Apple’s stock recently breaking the $200.00 mark, even in the still shaky economy. AdvisorShares applies this same model to ETFs.
The AdvisorShares’ ETF platform allows existing investment advisors to “plug-in” their own investment management strategy into an ETF. Like an iPhone “app,” independent managers develop their own products that “run on” AdvisorShares ETF platform. AdvisorShares shares in the management fee revenue, just like Apple. And also just like Apple, AdvisorShares’ target market is massive – in the US there are currently 10,466 registered investment advisors (RIAs) in the United States that oversee $37.5 trillion in professionally managed assets, according to Tiburon Strategic Advisors. In the company’s view, all advisors want to grow their business and a custom NYSE-listed ETF will help them achieve their goals.
The AdvisorShares Target Market
The target clients of AdvisorShares are third party advisors who already manage clients' assets, have a favorable track record and desire to package their investment strategy using exchange-traded funds. AdvisorShares believes that by accessing the AdvisorShares ETF platform, third party investment managers will be able to equal accessibility as firms such as Fidelity Investments or American Funds. For an advisor, offering a packaged solution can ease client administration and streamline compliance. Even more significant, by being listed on a major stock exchange, such as the NYSE, investment managers significantly improve their client distribution opportunities, are able to showcase their track record, and can increase assets under management.
Exchange Traded Fund Facts
In 1963 President Kennedy said “a rising tide lifts all boats.” ETFs are a rapidly rising tide.
- Exchange traded funds are the most significant product development since money market funds in the 1970s with ETF asset growth approaching $800 billion.
- According to Barclays Global Investors, “Just about the only product to see net inflows in 2008 were Exchange Traded Funds “ETFs”.
- On a global basis: ETF net sales were US$ 187.5 billion; while net sales of mutual funds were minus US$256.7 billion
- In contrast, Hedge Funds for the first time in their 18-year history had significant outflows according to Hedge Fund Research (HFR). TrimTabs expects the outflows to be more than US$ 100 billion for all of 2008.
- According to the National Stock Exchange, ETFs represent $1.3 TRILLION in trading volume per month
- Exchange-traded funds now represent 31 percent of all trading volume in the U.S. equities market, an indication of just how widespread the adoption of ETFs has become in the U.S.
A Growth Story
An example of Fund.com’s growth and business model is the Dent Tactical ETF which commenced trading on the New York Stock Exchange on September 15, 2009 under the NYSE Ticker: DENT. This is the first product of AdvisorShares Investments, LLC, an investment management company that was formed for the purpose of offering a series of actively managed ETFs. DENT is actively managed by HS Dent Investment Management, LLC, an independent economic research and forecasting company and publisher of The Dent Method. HS Dent Investment Management is managed by New York Times best selling financial author, Harry S. Dent Jr. Previously, HS Dent has previously raised and managed a $1.7 billion dollar mutual fund.
AdvisorShares is the investment advisor to DENT and is paid fees by the ETF as a percentage of assets in the fund, with 60% of the net fees retained going to Fund.com.
Senior Management
Fund.com is lead by Greg Webster, its CEO. Prior to Fund.com, Greg was CEO of HSBC Securities and a board member of HSBC Wealth Management. As CEO, he was responsible for over 400,000 client accounts, $32 billion in client assets and 4,000 FINRA registered representatives.
Corporate Governance
Gregory Webster, CEO & Director
Philip Gentile, COO & EVP
Michael Hlavsa, CFO
Joe Bianco, Executive Chairman
Fund.com Inc. (OTCBB: FNDM)
14 Wall Street
New York, NY 10005
www.fund.com
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Disclaimer: Equities Magazine has been paid $130,000 to conduct a market awareness campaign for Fund.com (FNDM.OB). Officers, directors, affiliates, employees, and/or shareholders of Equities Magazine own shares of Fund.com and may buy or sell shares of Fund.com while Fund.com is engaged in conducting this market awareness campaign. Equities Magazine will periodically update this disclosure during the course of this campaign to disclose any purchases and/or sales of Fund.com's shares made by its officers, directors, employees and affiliates if any transactions occur.
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