Horizon Kinetics Wealth Strategy...
Transcript of Horizon Kinetics Wealth Strategy...
HORIZON KINETICS ISE WEALTH STRATEGY
© 2012 Horizon Kinetics LLC.™ All rights reserved.
Table of Content
I. Firm Overview
II. Horizon Kinetics ISE Wealth Strategy
III. Appendix– Holdings
Bi– Bios– Disclosures
© 2012 Horizon Kinetics LLC.™ All rights reserved. 2
Firm OverviewFirm Overview
© 2012 Horizon Kinetics LLC.™ All rights reserved. 3
Firm Overview
At a Glance
Horizon Kinetics LLC Investment Approach
Independent, employee owned, serving clients since 1994.
$7.3 billion in firm-wide assets under management.1
80+ employees.
Offices in New York City and Elmsford, NY.
Independent Thinking
− Primary source data driven process.
− Research analysts culturally guided to overcome confirmation biases and data availability errors.
OpportunityStable, tenured investment team
Co-Founders investing together for over 25 years.
− Murray Stahl – Chief Investment Officer
− Steven Bregman – Director of Research
Opportunity
− Seek higher returns and margin of safety by capturing high discount rates associated with the “Equity Yield Curve.”
− Earn returns of underlying fundamental business and potential narrowing of discount rate.
− Peter Doyle – President of Kinetics Mutual Funds, Inc.
19 Investment Professionals with an average tenure of 8 years with the firm and 19 years in the industry.
Dedicated Culture
potential narrowing of discount rate.
Focus
− Research team and process organized around attributes associated with long-term excess returns.
− Seek to avoid the permanent loss of capital.
Committed exclusively to investment research and portfolio management across the capital structure.
Independent publisher of research for institutional investment community since 1995.
Adhering to a research-intensive, time-tested fundamental investment philosophy
Differentiated
− Philosophy and process lead us to explore lesser researched and less frequently trafficked investments.
Discipline
− Portfolio Managers and Research Analysts must write investment philosophy.
Institutional quality client service and operations infrastructure.logical, clear and understandable investment theses that withstand internal and external scrutiny.
Patience
− Capturing long-term excess returns requires commitment.
© 2012 Horizon Kinetics LLC.™ All rights reserved.
1 As of March 31st, 2012
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Firm Overview
HistoryTeam Formation at Bankers Trust
Murray Stahl (1978)Steven Bregman (1985)Steven Bregman (1985)Peter Doyle (1985)
− Portfolio Management: − Special Opportunities− Utilities− Tangible Assets
− Portfolio management responsibilities for
1978-1994 1995 1996 1998 2000 2008 2010 2011
Portfolio management responsibilities for separately managed accounts within the Bank’s Private Client Group and Trust Company.
− Identified need for independent research.
2003
Contrarian Research
Report
Spin-off Report
Intangible Asset
Report
Capital Structure Arbitrage
Global Contrarian
Report
ETF Report
Horizon Kinetics LLC (2011)
Merger of underlying companies
Horizon Research Milestones
Horizon Asset Management LLC (1994)
Kinetics Asset
Investment Management Milestones
companies.
− Senior portfolio managers focused on investing and research.
− Formalized Professional Management.
Created to advise and manage mutual funds
Equity and Fixed
Income Strategies
Alternative Strategies
Options Strategies
Kinetics Asset Management LLC(1996)
− Single comprehensive platform with institutional quality client service, business development, legal/compliance and operations.
Created to advise and manage mutual funds under Kinetics Mutual Funds, Inc. leveraging Horizon’s investment research.
Internet Fund
Paradigm Fund
© 2012 Horizon Kinetics LLC.™ All rights reserved. 5
Alternative Strategies
Firm Overview
Fi id A t U d M t $7 3 B Cli t A t b T
Strategy and Client Type Overview
Firmwide Assets Under Management $7.3 B
Separately Managed Accounts1 $5.7 B
Focused Strategies Unconstrained Strategies2
Large Cap Strategic Value Investing
Client Assets by Type
Global Large Cap Value Research Select
Small Cap
Asia
Spin-Off
Kinetics Funds, 16%
Intermediary4, 25%
High Yield Opportunity
Core Value
Kinetics Mutual Funds, Inc3 $1.2 B
Broad Markets Specialty Markets
High Net Worth, 20%
Alt ti *
Subadvisory, 13%
Broad Markets Specialty Markets
Paradigm Fund Internet Fund
Small Cap Fund Medical Fund
Global Fund Market Opportunities Fund
Multi Disciplinary Fund Water Infrastructure Fund
Alternatives*, 6%
Institutions, 21%
Multi Disciplinary Fund Water Infrastructure Fund
Alternative Investments* $0.4 B
AUM as of March 31, 2012. Client Type as of December 31, 2011.* Additional information available upon request for qualified investors.1 Includes assets in customized portfolios and other strategies developed for intermediaries.2 S bj t t li t id li
© 2012 Horizon Kinetics LLC.™ All rights reserved.
2 Subject to client guidelines.3 Kinetics Mutual Funds, Inc. (“Kinetics Funds”) are distributed by Kinetics Funds Distributors, Inc. (“KFD”), an affiliate of Horizon Kinetics LLC. KFD is not affiliated with the Kinetics Funds.4 Includes individual client accounts through intermediaries.You should consider the investment objectives, risks, charges and expenses of the mutual funds carefully before investing. For a free copy of the mutual funds’ prospectus, which contains this and other information, visit our website at www.kineticsfunds.com or call 1-800-930-3828. You should read the prospectus carefully before you invest.
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Horizon Kinetics ISE Wealth StrategyHorizon Kinetics ISE Wealth Strategy
© 2012 Horizon Kinetics LLC.™ All rights reserved. 7
Horizon Kinetics ISE Wealth Index
Investing Alongside Successful Business Leaders
The Horizon Kinetics ISE Wealth Index provides abenchmark for investors interested in tracking theperformance of U.S.-listed companies managedby executives whose track records of skill andspecific industry knowledge have made them
The Wealth Index Qualitative Attributes
Vested Interestsspecific industry knowledge have made themsome of the wealthiest individuals in the UnitedStates.
Horizon Kinetics partnered with the InternationalSecurities Exchange (ISE) to launch the Horizon
In many cases, wealthy people have used their companies as their primary means of accumulating personal wealth.
Astute Asset AllocatorsWealthy people tend to have the option of either remaining in a Securities Exchange (ISE) to launch the Horizon
Kinetics ISE Wealth Index in August of 2011 (tickerRCH).
In most cases, a very wealthy individual hasplaced a substantial portion of his or her net
given business or to allocating capital elsewhere in a timely manner.
Access to CapitalBecause of their history of sound decision-making, they benefit placed a substantial portion of his or her net
worth in the stock of the constituent companies.Given the historical success records of theseindividuals, we believe that an index comprisedof the companies they choose to own and
h th t ti l t t f th
y g yfrom access to capital not available to employee managers.
Long Track RecordTheir record of success makes them desirable partners.
manage has the potential to outperform thebroader market. Information
They have developed a reputation and a network over their careers that provides them with an information advantage.
© 2012 Horizon Kinetics LLC.™ All rights reserved. 8
Horizon Kinetics ISE Wealth Index
Methodology
The Horizon Kinetics ISE Wealth IndexA Wealthy Individual in Control
•Wealthy: Personal Assets Exceeding $1 billion
•Control: Senior management position that allows for substantial decision
Listed on a U.S. Exchange
The Horizon Kinetics ISE Wealth Indexuses an equal weighted allocationmethodology for all components inthe index. This allows the Index to gainequal exposure to the mindset ofthese successful business people, and that allows for substantial decision
making authority
The
these successful business people, andavoids biasing the Index towardcompanies with relatively higher priceto earnings ratios.
Index components are reviewed The Wealth Index
Index components are reviewedquarterly for eligibility, and weightsare reset accordingly.
While not all of the companiesincluded in the Wealth Index are
An Operating Company
•Not a closed-end fund or an exchange traded fund (ETF)
Meeting the Following Market Capitalization and Concentration Requirements:
•Min $100M market capitalization•Max 24% individual weighting,
included in the Wealth Index areowner-operator companies, the Indexprovides substantial exposure to theowner-operator theme. All of thefollowing requirements must be met inorder for a company to be eligible for •Max 50% total of individual weights >5%
•Trailing 3-month average daily value > $1M
order for a company to be eligible forinclusion:
© 2012 Horizon Kinetics LLC.™ All rights reserved. 9
Source: ISE. For a complete index methodology guide, please refer to http://www.ise.com/assets/documents/OptionsExchange/index_reports/RCH_IMG.PDF
Horizon Kinetics ISE Wealth Index
Performance History and Statistics (as of March 31, 2012)
St ti tiPerformance Statistics 1 Year 3 Years 5 Years 7 Years 10 Years 15 Years 20 Years
Horizon Kinetics Wealth Index Total Return (gross)* 11.1% 40.6% 8.4% 10.9% 10.9% 10.9% 11.7%
S&P 500 Index* 8.5% 23.4% 2.0% 4.7% 4.1% 6.1% 8.6%Excess Return (gross)* 2.5% 17.2% 6.4% 6.2% 6.8% 4.8% 3.1%
Statistics
Number of Components 103
Avg. Market Cap. (B) $22.97 B
Dividend Yield 1.66Standard Deviation (%)* 20.7% 23.7% 26.0% 22.8% 21.8% 24.3% 21.8%
Tracking Error* 6.2% 11.3% 10.7% 9.9% 9.4% 11.7% 10.7%Risk Adjusted Return (gross)* 0.54 1.72 0.32 0.48 0.50 0.45 0.54
Information Ratio (gross)* 0.41 1.53 0.60 0.63 0.72 0.41 0.29 Beta 1.20 1.32 1.27 1.28 1.26 1.33 1.29Batting Average (1) (gross)* 62.70% 65.91% 66.84%
Estimated P/E 26.36
Price/Sales 3.61
Cashflow/Share 4.85
Historical Index Levels Sector Allocation, %
6.8% 5.8%
Consumer DiscretionaryConsumer Staples1,000
1,200
32.0%14.6%
1.0% Energy
Financials
Health Care
Industrials
400
600
800
3.9%4.9%
23.3%
2.9%
4.9%Industrials
Information TechnologyMaterials
Telecom. Services
0
200
© 2012 Horizon Kinetics LLC.™ All rights reserved. 10
*Note: Calculated Using Total Returns. The Horizon Kinetics ISE Wealth Index began in January 2012, therefore, a portion of the returns stated above contain back-tested performance. Seethe Disclosure slide for important considerations when evaluating back-tested performance data. Source: Horizon Kinetics LLC, International Securities Exchange, Bloomberg, Factset.
UtilitiesHorizon Kinetics ISE Wealth Index TOTAL RETURN PRICE LEVEL S&P 500 Index TOTAL RETURN PRICE LEVEL
AppendixAppendix
© 2012 Horizon Kinetics LLC.™ All rights reserved. 11
Horizon Kinetics Wealth Index
Holdings as of 3/31/2012No. Ticker Security Name Individual Name Position
1AHGP Alliance Holdings GP LP Joseph W. Craft III Chairman/President/Chief Executive Officer 2AL Ai L C St F Ud H Ch i /Chi f E ti Offi /C F d
No. Ticker Security Name Individual Name Position
53KKR KKR & Co LP Henry R. Kravis Co-Chairman/Co-Chief Executive Officer 54KMI Ki d M I /D l Ri h d D Ki d Ch i /Chi f E ti Offi 2AL Air Lease Corp Steven F. Udvar-Hazy Chairman/Chief Executive Officer/Co-Founder
3ALX Alexander's Inc Steven Roth Chairman 4AMCX AMC Networks Inc Charles Francis Dolan Chairman 5AMKR Amkor Technology Inc James J. Kim Chairman 6AMZN Amazon.com Inc Jeffrey P. Bezos Chairman/President/Chief Executive Officer 7APO Apollo Global Management LLC Leon D. Black Chairman/Chief Executive Officer 8APOL Apollo Group Inc John G. Sperling Executive Chairman 9ARII American Railcar Industries Inc Carl C. Icahn Chairman
10ARLP Alliance Resource Partners LP Joseph W Craft III President/Chief Executive Officer 11AXE Anixter International Inc Samuel Zell Chairman
54KMI Kinder Morgan Inc/Delaware Richard D. Kinder Chairman/Chief Executive Officer 55KMP Kinder Morgan Energy Partners LP Richard D. Kinder Chairman/Chief Executive Officer 56KMR Kinder Morgan Management LLC Richard D. Kinder Chairman/Chief Executive Officer 57KRO Kronos Worldwide Inc Harold C. Simmons Chairman 58L Loews Corp Andrew H. Tisch Co-Chairman 59LBTYA Liberty Global Inc John C. Malone Chairman 60LINTA Liberty Media Corp - Interactive John C. Malone Chairman 61LMCA Liberty Media Corp - Capital John C. Malone Chairman 62LNKD LinkedIn Corporation Reid G. Hoffman Chairman/Co-Founder 63LTD Ltd Brands Inc Leslie Herbert Wexner Chairman/Chief Executive Officer
12BBY Best Buy Co Inc Richard M. Schulze Chairman 13BEN Franklin Resources Inc. Charles B. Johnson Chairman 14BFS Saul Centers Inc B. Francis Saul II Chairman/Chief Executive Officer 15BOKF BOK Financial Corp George B. Kaiser Chairman 16BRK/B Berkshire Hathaway Inc Warren E. Buffett Chairman/Chief Executive Officer 17BX Blackstone Group LP Stephen A. Schwarzman Chairman/Chief Executive Officer/Founder 18BXP Boston Properties Inc Mortimer B. Zuckerman Chairman/Chief Executive Officer 19CBS CBS Corp Sumner M. Redstone Chairman 20CCL Carnival Corp Micky Meir Arison Chairman/Chief Executive Officer 21CFX C lf C Mit h ll P R l Ch i /C F d
/64LVLT Level 3 Communications Inc Walter Scott Jr. Chairman 65LVS Las Vegas Sands Corp Sheldon Gary Adelson Chairman/Chief Executive Officer/Treasurer 66MAR Marriott International Inc/DE John W. Marriott Jr. Chairman/Chief Executive Officer 67MCY Mercury General Corp George Joseph Chairman/Founder 68MNKD MannKind Corp Alfred E. Mann Chairman/Chief Executive Officer 69MORN Morningstar Inc Joseph D. Mansueto Chairman/Chief Executive Officer/Founder 70MSFT Microsoft Corp William Henry Gates III Chairman 71MSG Madison Square Garden Co/The James L. Dolan Chairman 72NG NovaGold Resources Inc. Thomas S. Kaplan Chairman 73NKE NIKE I Phili H K i ht Ch i 21CFX Colfax Corp Mitchell P. Rales Chairman/Co-Founder
22CHK Chesapeake Energy Corp Aubrey K. McClendon Chairman/Chief Executive Officer/Co-Founder 23CLNY Colony Financial Inc Thomas J. Barrack Chairman 24CLR Continental Resources Inc/OK Harold G. Hamm Chairman/Chief Executive Officer 25CRM Salesforce.com Inc Marc R. Benioff Chairman/Chief Executive Officer 26CVA Covanta Holding Corp Samuel Zell Chairman 27CVC Cablevision Systems Corp Charles Francis Dolan Chairman 28DELL Dell Inc Michael S. Dell Chairman/Chief Executive Officer 29DHR Danaher Corp Steven M. Rales Chairman 30DISH DISH Network Corp Charles William Ergen Chairman
73NKE NIKE Inc Philip H. Knight Chairman 74NWSA News Corp Keith Rupert Murdoch Chairman/Chief Executive Officer 75OPK Opko Health Inc Phillip Frost Chairman/Chief Executive Officer 76ORCL Oracle Corp Lawrence J.Ellison Chief Executive Officer 77OZM Och-Ziff Capital Management Group LLC Daniel S. Och Chairman/Chief Executive Officer/Founder 78PAG Penske Automotive Group Inc Roger S. Penske Chairman/Chief Executive Officer 79PAYX Paychex Inc Blasé Thomas Golisano Chairman/Founder 80PCBC Pacific Capital Bancorp NA Gerald J. Ford Chairman 81PGR Progressive Corp/The Peter Benjamin Lewis Chairman 82QCOM QUALCOMM Inc. Paul Eric Jacobs Chairman/Chief Executive Officer p g
31DOLE Dole Food Co Inc David H. Murdock Chairman 32DRC Dresser-Rand Group, Inc. William E. Macaulay Chairman 33EBAY eBay Inc Pierre M. Omidyar Chairman/Founder 34ELS Equity Lifestyle Properties Inc Samuel Zell Chairman 35EQR Equity Residential Samuel Zell Chairman 36ETE Energy Transfer Equity LP Kelcy L. Warren Chairman/Chief Executive Officer 37ETP Energy Transfer Partners LP Kelcy L. Warren Chairman/Chief Executive Officer 38EXPE Expedia Inc Barry Diller Chairman 39FDML Federal-Mogul Corp Carl C. Icahn Chairman 40FDX F dE C F d i k W ll S ith Ch i /P id t/Chi f E ti Offi
82QCOM QUALCOMM Inc. Paul Eric Jacobs Chairman/Chief Executive Officer 83REV Revlon Inc Ronald O. Perelman Chairman 84RL Ralph Lauren Corp Ralph Lauren Chairman/Chief Executive Officer/Founder 85SATS EchoStar Corp Charles William Ergen Chairman 86SBUX Starbucks Corporation Howard D. Schultz Chairman/President/Chief Executive Officer 87SCHW Charles Schwab Corp/The Charles R. Schwab Chairman 88SHLD Sears Holdings Corp Edward S. Lampert Chairman 89SPG Simon Property Group Inc. Herbert Simon Chairman Emeritius90SWSH Swisher Hygiene Inc H. Wayne Huizenga Jr. Chairman 91SYNT Syntel Inc Bhrat Desai Chairman/Co-Founder 92TAT T Atl ti P t l Ltd N M l Mit h ll III Ch i /Chi f E ti Offi 40FDX FedEx Corp Frederick Wallace Smith Chairman/President/Chief Executive Officer
41GMCR Green Mountain Coffee Roasters Inc. Robert P. Stiller Chairman/Founder 42GOOG Google Inc Lawrence E. Page Chief Executive Officer/Co-Founder 43GRMN Garmin Ltd Min H. Kao Chairman/Chief Executive Officer 44GRPN Groupon Inc. Eric P. Lefkofsky Chairman/Co-Founder 45H Hyatt Hotels Corp Thomas J. Pritzker Chairman 46HST Host Hotels & Resorts Inc Richard E. Marriott Chairman 47HTH Hilltop Holdings Inc Gerald J. Ford Chairman 48IACI IAC/InterActiveCorp Barry Diller Chairman 49IBKR Interactive Brokers Group Inc Thomas Peterffy Chairman/President/Chief Executive Officer
92TAT TransAtlantic Petroleum Ltd N. Malone Mitchell III Chairman/Chief Executive Officer 93TEVA Teva Pharmaceutical Industries Ltd Phillip Frost Chairman 94TIE Titanium Metals Corp Harold C. Simmons Chairman 95TRIP TripAdvisor Inc. Barry Diller Chairman 96URBN Urban Outfitters Inc Richard A. Hayne Chairman/President 97VHI Valhi Inc Harold C. Simmons Chairman 98VIAB Viacom Inc Sumner M. Redstone Chairman/Founder 99VNO Vornado Realty Trust Steven Roth Chairman
100WEN Wendy's Co/The Nelson Peltz Chairman 101WMT Wal-Mart Stores Inc Samuel Robson Walton Chairman
© 2012 Horizon Kinetics LLC.™ All rights reserved. 12
Source: Horizon Kinetics LLC, International Securities Exchange, Bloomberg, Factset. See important disclosures for additional information.
p y / /50IVAN Ivanhoe Energy Inc Robert M. Friedland Chairman/Co-Founder 51IVN Ivanhoe Mines Ltd/CA Robert M. Friedland Chief Executive Officer/Founder 52JNY Jones Group Inc/The Sidney Kimmel Chairman
101WMT Wal Mart Stores Inc Samuel Robson Walton Chairman 102WYNN Wynn Resorts Ltd Stephen A. Wynn Chairman/Chief Executive Officer/Founder 103ZNGA Zynga Inc. Mark J. Pincus Chief Executive Officer/Founder
Biographies
Murray StahlChairman, Chief Investment Officer
Douglas KramerChief Executive Officer
Murray is Chairman of the Board of Horizon Kinetics and was aco-founder of the Firm. He has over thirty years of investingexperience and is responsible for overseeing the Horizon KineticsResearch Team. Murray also serves as Chairman of the Firm’sInvestment Committee, which is responsible for all portfoliomanagement decisions. Previously, Murray spent 16 years at
Prior to joining Horizon Kinetics, Doug was a Managing Principal ofQuadrangle Group. Prior to Quadrangle, Doug was a Partner ofGoldman, Sachs & Co. where he served as Chief InvestmentOfficer and head of the Global Manager Strategies Group withinGoldman Sachs Asset Management (GSAM). Doug wasresponsible for manager selection across all traditional asset
Bankers Trust Company (1978-1994) as a senior portfolio managerand research analyst. As a senior fund manager, he wasresponsible for investing the Utility Mutual Fund, along with threeof the bank’s Common Trust Funds: The Special OpportunityFund, The Utility Fund, and The Tangible Assets Fund. He was alsoa member of the Equity Strategy Group and the InvestmentStrategy Group, which established asset allocation guidelines for
responsible for manager selection across all traditional assetclasses for Goldman's private wealth management businessesglobally. In addition, Doug oversaw the strategic development ofGSAM's Institutional Fiduciary Management business where heserved as Chief Investment Officer to some pension plans in theUnited States and Europe. Prior to Goldman Sachs, Doug workedat Columbia Energy Group in Houston, TX and as a portfoliomanager at Fischer Francis Trees & Watts, Inc. where he managed
the Private Bank. By 1994, Murray managed approximately $600million in trust and fund assets and was deeply involved in newproduct development. Murray received a BA and MA fromBrooklyn College and an MBA from Pace University.
g gcorporate and mortgage backed fixed income portfolios. Doughas a BS from the Wharton School of the University of Pennsylvaniaand an MBA with Beta Gamma Sigma honors from ColumbiaUniversity.
Horizon Kinetics’ Analyst/Investment Staff:
Murray Stahl Ryan Casey Matthew Houk Fredrik TjernstromChief Investment Officer Research Analyst Portfolio Manager, Research Analyst Portfolio Manager , Research AnalystSteven Bregman James Davolos David Kingsley Aya WeissmanSteven Bregman James Davolos David Kingsley Aya WeissmanDirector of Research Research Analyst, Client Portfolio Manager Portfolio Manager Portfolio Manager , Research AnalystPeter Doyle Andrea DeMichele Utako Kojima Steven Tuen Portfolio Manager, Research Analyst Client Portfolio Manager Research Analyst Research Analyst, Portfolio ManagerRich Begun Derek Devens , CFA© David Leibowitz
Research Analyst, , Portfolio Manager Client Portfolio Manager, Research Analyst Research Analyst
Therese Byars Michael Gallant CFA© Eric Sites
© 2012 Horizon Kinetics LLC.™ All rights reserved. 13
Research Analyst Research Analyst Research Analyst, Portfolio Manager
Contact Information
Offices: New York, NY
470 Park Avenue South
New York, NY 10016
Elmsford, NY
555 Taxter Rd #175
Elmsford, NY 10523
Telephone: 646.495.7334
Fax: 646.495.00784 495 7
Email: [email protected]
Website(s) www horizonkinetics comWebsite(s) www.horizonkinetics.com
www.kineticsfunds.com
© 2012 Horizon Kinetics LLC.™ All rights reserved. 14
Disclosures
Past performance is not an indication of future results and the value of the investments and the income derived from them may increase or decrease. Returns are subject tochange. Note that indices are unmanaged and the figures shown herein do not reflect any investment management fee or transaction costs. Investors cannot directly invest inan index. References to market or composite indices, benchmarks or other measures of relative market performance (a “Benchmark”) over a specific period are provided forp , p ( ) p p pyour information only. Reference to a Benchmark may not reflect the manner in which a portfolio is constructed in relation to expected or achieved returns, portfolio guidelines,correlation, concentrations, volatility, or tracking error targets, all of which are subject to change over time. The Portfolios are total return strategies and the benchmark isprovided for illustrative purposes only. It is not our intention to state, indicate or imply in any manner that our future results will be profitable or equal past results. The S&P 500 Indexis property of Standard & Poor’s.
Back-tested performance from slide 11 is hypothetical (it does not reflect trading in actual accounts) and is provided for informational purposes to indicate historical performancehad the index been available over the relevant period. Actual performance may be materially lower than that of the index, as they do not include expenses and fees. Suchp p y y y presults do not represent the impact that material economic and market factors might have on the investment adviser’s decision making process if the adviser were actuallymanaging client money. Back-tested performance also differs from actual performance because it is achieved through the retroactive application of portfolios designed withthe benefit of hindsight. Horizon Kinetics generally employs the same methodology in its back‐test calculations as it does when the actual index was officially launched. Anyoneinterested in better understanding the methodology for the Index, including details on the manner in which the Index is rebalanced, the timing of such rebalancing, the criteriaused in determining additions and deletions to the Index as well as other Index calculations may contact Horizon Kinetics at [email protected] or (646) 495‐7333.
Horizon Kinetics ISE Wealth Index (the “Index”) was created in conjunction with the International Securities Exchange, LLC (“ISE”), which operates a leading U.S. options exchangeand offers option trading on over 2,000 underlying equity, EFT, index, and FX products. Any returns or performance provided in this presentation is provided for illustrative purposesonly and does not demonstrate actual performance. Past performance is not a guarantee of future investment results. It is not possible to invest directly in the Index. Exposure tothe Index is only available through investable instruments. Horizon Kinetics, its subsidiaries and ISE may receive compensation in connection with licensing the Index to third parties.Horizon Kinetics or its subsidiaries may sponsor, endorse, sell, promote or manage investment funds or other vehicles that seeks to provide an investment return based on thereturns of the Index. There is no assurance that investment products based on the Index will accurately track Index performance or provide positive investment returns.
Except as noted, the portfolio characteristics shown for separate accounts relate to the composite as of the date noted above. Not every client's account will have these exactcharacteristics. The actual characteristics with respect to any particular client account will vary based on a number of factors including but not limited to: (i) the size of theaccount; (ii) market prices of individual securities at the time of investment and (iii) individual client circumstances. Horizon Kinetics LLC. reserves the right to modify its currentinvestment strategies and techniques based on changing market dynamics or client needs. This strategy may invest in both equity and fixed income securities without regard tomarket capitalizations or issue size. Horizon Kinetics LLC does not necessarily fully invest portfolios immediately after an account is funded. There can be no assurance we will everfully invest an account. There is no assurance that any securities discussed herein will remain in an account. The securities discussed might not represent an entire account and inthe aggregate may represent only a small percentage of an account's holdings.
i i f i i i i f ifi i i i i i i iThis information should not be used as a general guide to investing or as a source of any specific investment recommendations, and makes no implied or expressed indicationsconcerning the manner in which an account should or would be handled, as appropriate investment strategies depend upon specific investment guidelines and objectives. Thisis not an offer or solicitation to any person in any jurisdiction in which such action is not authorized or to any person to whom it would be unlawful to make such offer or solicitation.Horizon Kinetics LLC is not a registered investment adviser, but serves as parent company to Horizon Asset Management LLC (“Horizon”) and Kinetics Asset Management LLC(“Kinetics”), both of which are registered investment advisors. Horizon Kinetics LLC, its affiliates, employees, or products managed by Horizon and Kinetics may have positions inthe securities referenced herein.
N ith H i Ki ti LLC it ffili t id t l l d i t th i li t d ll i t t l d t lt th i t d l l d i di
© 2012 Horizon Kinetics LLC.™ All rights reserved.
Neither Horizon Kinetics LLC nor its affiliates provide tax or legal advice to their clients and all investors are strongly urged to consult their tax and legal advisors regarding anypotential strategy or investment. Opinions expressed are Horizon Kinetics’ present opinions only. No part of this material may be: a) copied, photocopied, or duplicated in anyform, by any means; or b) redistributed without Horizon Kinetics’ prior written consent.
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