1st QTR 2006 - News & Events
Our letter this quarter serves several purposes. First, I’ll outline some changes that we’ve made to our fee structure (I think you’ll find them favorable!). Second, enclosed is a form to consolidate your monthly statements. Third, I provide an overview of the quarter along with the quarterly fund and benchmark returns. Fourth, please also find enclosed a copy of your quarterly performance and balance statements. Finally, some news on our future location (we’re moving!).
Please review carefully and respond at your earliest convenience. As always, if you have any questions, please do not hesitate to give us a call.
Annual Fee Structure
During July 2005 we began a transition from an outside service provider (BAM). They provided us “back office” support, which included preparation of quarterly statements, invoices and use of their trading platform. When starting AMDG Financial, the cost of entry into this industry was prohibitive. Initially, utilizing an outside service provider allowed me to get things in place without having to make certain investments in extremely expensive software and technology. Since this time, other competitors emerged in the software marketplace, providing us a reasonable cost alternative and allowing us to invest and establish our own “back office”. I believe that to most of you, this was fairly transparent. The significant change for many has been the change in the format of our quarterly statements. We continue to explore solutions for reporting limitations, but as of now, we believe that we have a fairly good set of reports that we provide you on a quarterly basis. Please let us know if you’d like to see any other reports or if you have any comments or suggestions for the existing reports we prepare. The most significant impact of this change (the one you’ll like!) is that we have been able to reduce our costs, and as good stewards, we’d like to share this decrease with you. Provided your fee arrangement was based on the “Previous Fee Schedule” (see Attachment A), you probably noticed your 2nd quarter invoice Annual Fee percentage decreased. In all cases, the Annual Fee percentage noted on your 2nd quarter invoice is your current annual investment management fee percentage.
Consolidating Monthly Statements
You may receive multiple monthly investment statements from Fidelity. To simplify your recordkeeping and reduce the paperwork, you may complete the enclosed “Relationship
Household Form”. Please review the information on the form, sign where indicated and return it to us.
Your Statements and Quarterly Results
Enclosed are your first quarter 2006 quarterly reports. These reports show your total asset balances and an Executive Summary of performance as of March, 31, 2006, for the prior year and since inception.
Here is a representative sample, as of March 31, 2006, of DFA funds currently recommended for use in our client portfolios. This is not a complete list of all DFA funds, and your portfolio may or may not contain all these funds. Also below are returns of two indexes, giving you an idea of how the US (S&P 500) and International (MSCI EAFE) markets have performed (also commonly called “benchmarks”). Note that historical returns are not predictive of future results.
Fund Name/Ticker 4th Quarter One-Year Three-Year Five-Year
DFA US Large Co. Institutional Index (DFUSX) 4.16 11.72 17.15 3.87
DFA Tax-Managed US Equity (DTMEX) 4.99 13.84 18.81 N/A
DFA US Large Cap Value III (DFUVX) 6.29 17.05 25.58 10.25
DFA Tax-Managed US Mktwide Value II (DFMVX) 7.79 21.41 27.60 7.41
DFA US Micro Cap (DFSCX) 14.39 29.20 33.81 19.44
DFA Tax-Managed US Small Cap (DFTSX) 13.35 27.69 32.37 14.49
DFA US Small Cap Value (DFSVX) 15.04 27.71 38.95 21.18
DFA Tax-Managed US Small Cap Value (DTMVX) 13.78 26.84 36.07 17.14
DFA International Value III (DFVIX) 12.44 29.30 39.59 16.47
DFA Tax-Managed International Value (DTMIX) 12.09 29.47 38.00 15.33
DFA International Small Company (DFISX) 11.13 29.05 41.29 22.05
DFA International Small Cap Value (DISVX) 12.69 30.21 46.13 26.16
DFA Emerging Markets (DFEMX) 10.67 42.48 45.68 22.80
DFA Emerging Markets Value (DFEVX) 13.69 44.67 54.90 31.35
DFA Two-Year Global Fixed (DFGFX) 0.75 2.82 1.54 2.98
S&P 500 Index 4.20 11.72 17.21 3.97
MSCI EAFE Index 9.48 24.94 31.65 10.05
We’re Moving!
Can you believe that we’ve been at this location almost 2 ½ years? When we consolidated the Farmington Hills location with Northville, we signed a three year lease with two – three year renewable options. My intention was to develop a long term presence in Northville. During the fall and spring of 2004/5, we noticed a foundation leak had developed. We contacted our landlord, but after months of inaction, mold began to develop. This leak worsened this past fall and we had a pool of water in the kitchen area of our office, along with an increase in mold and of course a musty smell to boot! Given this experience, I decided to purchase a building. I searched throughout the Northville area to no avail. We did, however, find and purchase a charming building 4 miles from here, two blocks south of Kellogg Park in the heart of downtown Plymouth. Our plans are to move in by June 1st. We will send out formal notice of this move in the near future, as our plans begin to solidify. Stay tuned!
*****
Spring has finally sprung here in Michigan! Wherever you are, please take time to enjoy those blooming, fragrant flowers, and the peaceful music of the songbirds. May you find peace, rest and relaxation in the summer months to come. Please give me a call if you have any questions or concerns. You can reach me directly at 248-305-5572 ext. 101, or if you cannot reach me, please contact my associate, Becky, at ext. 107.
Best Regards,
Wayne B. Titus III
P.S. If you would like a copy of our revised Form ADV you can access it on our website (http://www.amdgservices.com) or we’d be happy to send you a copy upon request.
Wayne's Wisdom
"My vision is to be able to impart meaningful financial wisdom and tax advice that enables people to achieve better stewardship for their families and businesses."
