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Kathy King

Folio News


Investing: Folio Investing is New…And Improved?
(by Linda Stern, Washington Post)

February 11, 2006 — First there were mutual funds, now almost a $9-trillion industry embraced by a majority of American investors. more

Then there were exchange-traded funds, which have some trading and tax advantages that traditional mutual funds don’t. Since they first appeared in 1993, they’ve grown into a $300-billion business, and Wall Street loves them.

Enter folios, which backers are calling the next generation of stocks in a basket. They’ve been around barely 3 years, and on an asset basis, they are probably less than 1 percent of the ETF market. But they're growing fast and are worth learning about.

“The center of the folio world is FOLIOfn, a Web site and company started by former Securities and Exchange Commissioner Steven Wallman.

“The premixed folios are numerous and diverse.

“Some are based on stock indexes, like the Folio 30, which includes all the stocks in the Dow Jones Industrial Average. Others aim for certain social goalsStill others focus on various sectors, or parts of the world, or theories of investing…like the one that singles out companies with the highest Wall Street analysts’ ratings.

“Because investors in these portfolios actually own the underlying shares, they are free to buy and sell individual securities out of their portfolios, for any reason they want.”

Investing: Folio Investing is New…And Improved?
(by Linda Stern, MSN Money)

February 11, 2006 — Folios also provide a low-cost way to invest in stocksPlans start at $199 a year, allowing you one folio and 200 trades a month in it and out of it, so you can contribute small amounts, and switch in and out of stocks if you want to. more

Because the company is a full brokerage, it also offers market orders to members at $3.95 a pop. The most expensive account is $400 a year, allowing 3 full folios, 600 folio trades a month and 10 other stock trades a month. That’s less than 1 percent a year for an investor with $50,000. It’s 0.1 percent for investors with $400,000 to put up, and that’s about as cheap as the cheapest stock index funds.

Investing: Folio Investing is New…And Improved?
(by Linda Stern, ABC News)

February 11, 2006 — Clients whose advisers have been pitching “separately managed accounts” may indeed have their money invested in folios. Fee-driven advisers like this platform because they can diversify their clients without paying mutual fund fees and because they can tailor the portfolios to their clients. FOLIOfn’s assets have increased by about 30 percent in the past year, with much of the growth coming through advisers who use the technology to invest and move their clients’ money.

Investing: Folio Investing is New…And Improved?
(by Linda Stern, Reuters)

January 23, 2006 — Folios are organized very differently from funds. Instead of owning shares in funds that own stock shares, folio investors actually own fractional shares of the underlying stocks. At the FOLIOfn Web site, they can build their own basket of up to 50 stocks or buy a premixed folio (think portfolio). more

Investors in these portfolios don’t have to eat any taxable capital gains distributions until they sell the shares in their folio. Funds and ETFs, on the other hand, are required to distribute their own realized gains every year, although ETFs, based on index funds, trade infrequently enough to have low gains distributions.

Because folio investors are free to buy and sell the individual shares, they can unload their losers every year for tax losses, but hold onto their winners.

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