Institutional Indexing

How Our Institutional Indexing Compares w/ Cumulative Results

Understanding that investor results were impacted by the flaws of index funds, the team at Linden Thomas & Company set out to build a more efficient index for our affluent investors. This meant moving from a cap-weighted pooled index to an earnings quality, institutional index.

  1. Earnings Quality. Our indexes apply an earnings quality screen, which enables us to identify the companies that have the best earnings quality. When a selected company no longer meets our earnings standards, it is replaced with one that does.
  2. Investor Ownership. Each index gives our clients direct ownership of the holdings or stocks. This eliminates the negative impacts of small investor herding commonly found in pooled mutual funds and ETFs. It also gives each client total transparency of holdings and the control to take advantage of tax-loss harvesting and gifting.
  3. Cost. Since each stock is held directly by each of our clients, there is not a continuous flow of investors moving in and out of a pooled fund. In addition, investors avoid the high transactional fees that are often not disclosed in index mutual funds.

Use the links below to learn more about each Linden Thomas & Company institutional index and how it compares to other retail mutual funds:

• Linden Thomas US All-Cap Quality Growth Index (LTACQG)

• Linden Thomas US Equity Large/Mid Cap Growth 100 Index (LT100LG)

• Linden Thomas US Equity Large/Mid Cap Growth 50 Index (LT50LG)

• Linden Thomas US Equity Mid Cap Quality Growth 50 Index (LT50MG)

• Linden Thomas US Equity Large Cap Quality Growth 50 Index (LTQGQ)

• Linden Thomas US Equity Small Cap Quality Value 50 Index (LT50SV)

• Linden Thomas Quality Dividends US Large Cap (LTQDLX)

• Linden Thomas Quality Dividends US Mid Cap (LTQDMX)

• Linden Thomas Quality Dividends US Small Cap (LTDQSX)

Linden Thomas US All-Cap Quality Growth Index (LTACQG)

The Linden Thomas US Equity All-Cap Quality Growth 150 Index (LTACQG) utilizes Separately Managed Accounts (SMA) so the shortcomings of market-cap index mutual funds are eliminated. We call this approach Institutional Direct. The index itself utilizes 9 quality screens and equal weighting to help ensure that stocks chosen for inclusion are companies with strong quality and growth factors.

By giving clients exposure through SMAs, they receive direct ownership of the stocks, which offers full transparency and control for tax-loss harvesting and gifting of individual stocks. Direct ownership also eliminates hidden costs and small investor behaviors like herding, which eat into investor results.

The chart below illustrates how a Linden Thomas & Company Institutional Index outperforms a traditional retail index fund:

Linden Thomas US Equity Large/Mid Cap Growth 100 Index (LT100LG)

The Linden Thomas US Equity Large/Mid-Cap Growth 100 Index (LT100LG) utilizes Separately Managed Accounts (SMA) so the shortcomings of market-cap index mutual funds are eliminated. We call this approach Institutional Direct. The index itself utilizes 9 quality screens, a tax advantage overlay, and equal weighting to help ensure that stocks chosen for inclusion are companies with strong quality factors, all while increasing tax efficiency.

By giving clients exposure through SMAs, they receive direct ownership of the stocks, which offers full transparency and control for tax-loss harvesting and gifting of individual stocks. Direct ownership also eliminates hidden costs and small investor behaviors like herding, which eat into investor results.

The chart below illustrates how a Linden Thomas & Company Institutional Index outperforms a traditional retail index fund:

Linden Thomas US Equity Large/Mid Cap Growth 50 Index (LT50LG)

The Linden Thomas US Equity Large/Mid-Cap Growth 50 Index (LT50LG) utilizes Separately Managed Accounts (SMA) so the shortcomings of market-cap index mutual funds are eliminated. We call this approach Institutional Direct. The index itself utilizes 9 quality screens and equal weighting to help ensure that stocks chosen for inclusion are companies with strong quality and growth factors.

By giving clients exposure through SMAs, they receive direct ownership of the stocks, which offers full transparency and control for tax-loss harvesting and gifting of individual stocks. Direct ownership also eliminates hidden costs and small investor behaviors like herding, which eat into investor results.

The chart below illustrates how a Linden Thomas & Company Institutional Index outperforms a traditional retail index fund:

Linden Thomas US Equity Mid Cap Quality Growth 50 Index (LT50MG)

The Linden Thomas US Equity Mid-Cap Quality Growth 50 Index (LT50MG) utilizes Separately Managed Accounts (SMA) so the shortcomings of market-cap index mutual funds are eliminated. We call this approach Institutional Direct. The index itself utilizes 9 quality screens, a tax advantage overlay, and equal weighting to help ensure that stocks chosen for inclusion are companies with strong quality factors, all while increasing tax efficiency.

By giving clients exposure through SMAs, they receive direct ownership of the stocks, which offers full transparency and control for tax-loss harvesting and gifting of individual stocks. Direct ownership also eliminates hidden costs and small investor behaviors like herding, which eat into investor results.

The chart below illustrates how a Linden Thomas & Company Institutional Index outperforms a traditional retail index fund:

Linden Thomas US Equity Large Cap Quality Growth 50 Index (LTQGQ)

The Linden Thomas US Equity Large-Cap Quality Growth 50 Index (LTQGQ) utilizes Separately Managed Accounts (SMA) so the shortcomings of market-cap index mutual funds are eliminated. We call this approach Institutional Direct. The index itself utilizes 9 quality screens and equal weighting to help ensure that stocks chosen for inclusion are companies with strong quality factors, and not simply given a higher weight due to their size.

By giving clients exposure through SMAs, they receive direct ownership of the stocks, which offers full transparency and control for tax-loss harvesting and gifting of individual stocks. Direct ownership also eliminates hidden costs and small investor behaviors like herding, which eat into investor results.

The chart below illustrates how a Linden Thomas & Company Institutional Index outperforms a traditional retail index fund:

Linden Thomas US Equity Small Cap Quality Value 50 Index (LT50SV)

The Linden Thomas US Equity Small Cap Quality Value 50 Index (LT50SV) utilizes Separately Managed Accounts (SMA) so the shortcomings of market-cap index mutual funds are eliminated. We call this approach Institutional Direct. The index itself utilizes 9 quality screens and equal weighting to help ensure that stocks chosen for inclusion are companies with strong quality and value factors.

By giving clients exposure through SMAs, they receive direct ownership of the stocks, which offers full transparency and control for tax-loss harvesting and gifting of individual stocks. Direct ownership also eliminates hidden costs and small investor behaviors like herding, which eat into investor results.

The chart below illustrates how a Linden Thomas & Company Institutional Index outperforms a traditional retail index fund:

Linden Thomas Quality Dividends US Large Cap (LTQDLX)

The Linden Thomas Quality Dividends US Large-Cap Index (LTQDLX) utilizes Separately Managed Accounts (SMA) so the shortcomings of market-cap index mutual funds are eliminated. We call this approach Institutional Direct. The index itself utilizes 9 quality screens and equal weighting to help ensure that stocks chosen for inclusion are companies with strong quality and income factors.

By giving clients exposure through SMAs, they receive direct ownership of the stocks, which offers full transparency and control for tax-loss harvesting and gifting of individual stocks. Direct ownership also eliminates hidden costs and small investor behaviors like herding, which eat into investor results.

The chart below illustrates how a Linden Thomas & Company Institutional Index outperforms a traditional retail index fund:

Linden Thomas Quality Dividends US Mid Cap (LTQDMX)

The Linden Thomas Quality Dividends US Mid-Cap Index (LTQDMX) utilizes Separately Managed Accounts (SMA) so the shortcomings of market-cap index mutual funds are eliminated. We call this approach Institutional Direct. The index itself utilizes 9 quality screens and equal weighting to help ensure that stocks chosen for inclusion are companies with strong quality and income factors.

By giving clients exposure through SMAs, they receive direct ownership of the stocks, which offers full transparency and control for tax-loss harvesting and gifting of individual stocks. Direct ownership also eliminates hidden costs and small investor behaviors like herding, which eat into investor results.

The chart below illustrates how a Linden Thomas & Company Institutional Index outperforms a traditional retail index fund:

Linden Thomas Quality Dividends US Small Cap (LTDQSX)

The Linden Thomas Quality Dividends US Small-Cap Index (LTQDSX) utilizes Separately Managed Accounts (SMA) so the shortcomings of market-cap index mutual funds are eliminated. We call this approach Institutional Direct. The index itself utilizes 9 quality screens and equal weighting to help ensure that stocks chosen for inclusion are companies with strong quality and income factors.

By giving clients exposure through SMAs, they receive direct ownership of the stocks, which offers full transparency and control for tax-loss harvesting and gifting of individual stocks. Direct ownership also eliminates hidden costs and small investor behaviors like herding, which eat into investor results.

The chart below illustrates how a Linden Thomas & Company Institutional Index outperforms a traditional retail index fund:

Flaws of Retail Mutual Funds

As the retail investment firms have grown, there has been a push by the retail investment advisor to place investors in pooled index funds. This is often associated with investors paying an advisor fee along with additional hidden costs of mutual funds. Many of the index funds want investors to believe these funds are benefiting the client due to the low expense ratios, but what is never discussed is the hidden costs and inefficiencies which impact results.

    • Trading costs
    • Spreads on trades
    • High advisor cost
    • Small investor herding impact
    • Phantom taxes
    • Pricing disadvantages

All these items (while seldom discussed) can be found in not only index funds but other retail investment products as well. This is why Linden Thomas & Company set out to develop an institutional approach with a focus on client results through building efficient portfolios and our institutional indexes.

Click on the button to get a copy of this informative guide.

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LEGAL DISCLAIMERS: Securities services offered through Linden Thomas & Company Securities, LLC; member FINRA/SIPC. Advisory services offered through Linden Thomas Advisory Services, LLC. Linden Thomas & Company Securities, LLC and Linden Thomas Advisory Services, LLC are affiliated entities.

Investing is subject to a high degree of investment risk, including the possible loss of the entire amount of an investment. An investor should carefully read and review all information provided by Linden Thomas Advisory Services, LLC ("Linden Thomas & Company"), including, the Form ADV, Part 2A brochure and all supplements thereto, before making an investment.

The information contained herein reflects the opinions and projections of Linden Thomas & Company as of the date of publication, which are subject to change without notice at any time subsequent to the date of issue. Linden Thomas & Company does not represent that any opinion or projection will be realized. All information provided is for informational purposes only and should not be deemed as investment advice or a recommendation to purchase or sell any specific security. While the information presented herein is believed to be reliable, no representation or warranty is made concerning the accuracy of any data presented. Prospective clients should not treat these materials as advice in relation to legal, taxation, or investment matters.

Statements herein that reflect projections or expectations of future financial or economic performance of investments, including investments in the Linden Thomas & Company Indexes (the "Index"), are forward-looking statements. Such "forward-looking" statements are based on various assumptions, which assumptions may not prove to be correct. Accordingly, there can be no assurance that such assumptions and statements will accurately predict future events or the Fund's actual performance. No representation or warranty can be given that the estimates, opinions or assumptions made herein will prove to be accurate. Any projections and forward-looking statements included herein should be considered speculative and are qualified in their entirety by the information and risks disclosed in the confidential offering document. Actual results for any period may or may not approximate such forward-looking statements. Prospective investors are advised to consult with their own independent tax and business advisors concerning the validity and reasonableness of the factual, accounting and tax assumptions. No representations or warranties whatsoever are made by Linden Thomas & Company or any other person or entity as to the future profitability of the Index or the results of making an investment based on the Index. Past performance is not a guarantee of future results.

The Index performance results presented do not represent the results of an actual client and investment, but were achieved by means of the retroactive application of the rules of the Index to a portfolio. This portfolio is hypothetical only and may include estimates, projections, and forward looking and back tested projections. The trades during the back test were not actually executed, and the back tested results are not necessarily indicative of the performance of the Index. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

Hypothetical back tested performance results have many inherent limitations, some of which are described herein. In fact, there are frequently sharp differences between hypothetical back tested performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical back tested performance results is that they are generally designed with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results; including, but not limited to, changes in the investment landscape and unexpected changes in the market or economic landscape. Performance posted by system providers may have had little or no experience in trading actual accounts for itself or for customers. Because there are no actual trading results to compare to the hypothetical performance results, clients should be particularly wary of placing undue reliance on these hypothetical performance results. There can be no assurance that these, or comparable results, will be achieved.

Various indices, including, but not limited to the S&P 500 Index and the Russell 2000 Index (each a "Third-party Index") are unmanaged indices of securities that are used as a general measure of market performance, and their performance is not reflective of the performance of any specific investment. The Third-party Index comparisons are provided for informational purposes only and should not be used as the basis for making an investment decision. Further, the performance of the Index and each Third-party Index may not be comparable. There may be significant differences between the Index and each Third-party Index, including, but not limited to, risk profile, liquidity, volatility and asset comparison. The performance shown for each Third-party Index reflects no deduction for client withdrawals, fees or expenses. Accordingly, comparisons between the Index and each Third-party Index may be of limited use. Investments cannot be made directly into the Index or any Third-party Index.

By accepting this information, the recipient agrees that it will not divulge any information contained herein to any other party. This presentation and its contents are confidential and proprietary information of Linden Thomas & Company and any reproduction of this information, in whole or in part, without the prior written consent of Linden Thomas & Company is prohibited.