Investment Management For Nonprofits

Simple. Ethical. Software based.

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We offer socially responsible investing *
Certified Women-Owned Small Business
* ESG (Environmental, Social and Governance) investments

Frequently Asked Questions

Fees

We charge a monthly advisory fee based on an annual fee rate of 0.25%. For accounts below $1,000,000 we also charge a one-time set up fee of $500.

Meritam’s 0.25% fee is already well below the average fee charged by investment advisors.

There are no exit fees associated with Meritam accounts.

Each month you are charged an advisory fee equal to 1/365 (1/366 on a leap year) of the annual fee rate multiplied by the net market value of your invested assets as of close of the market for each day in the month. This is summed by the number of days in a month your money was with us, to arrive at the fee for the month.

Advisory fees for a calendar month are charged on the first business day of the following month.

General Questions

Meritam protects your assets by doing the following:

  • We use a Third party custodian: Your assets are held in an account at a third-party custodian, Interactive Brokers. You are the only one who can deposit to or withdraw from your account. Meritam only has the right to issue trading instructions against your account. We cannot access your cash other than to receive our monthly advisory fee.
  • SIPC Insurance: Your brokerage account is protected by SIPC insurance. This insurance covers up to $500,000 in securities for each type of account you hold with Meritam. SIPC insurance also covers up to $250,000 in cash – which almost always exceeds the minimal cash balance we maintain.
  • We hold all assets “street name”: Meritam only invests in SIPC covered securities registered in street name at our custodian. That means the securities purchased on your behalf by Meritam are held separately from other Meritam assets and other assets of our brokerage partner and are fully insured as described above.
  • We don’t do any proprietary trading.
  • No rehypothecation - no one can lend out your assets: Meritam clients only have cash accounts (vs. "margin accounts"). That means at no time can the cash or securities held in your account be loaned out or borrowed.

Your account(s) is insured by the Securities Investor Protection Corporation (SIPC) up to $500,000 in total value per entity.

Insurance on cash is limited to $250,000 per entity. Money market funds are considered a security. Cash is defined as funds not invested in a money market fund.

SIPC coverage provides protection against failure of a broker-dealer, not against loss of market value of securities.

Please visit sipc.org for more information.

If Meritam is acquired or goes public, very little would change with your account. Your brokerage account would remain in your own name and you would be free to add or withdraw money at any time.

In the unlikely event Meritam stopped doing business, your account would be held by our custodian until you transferred your account to a new broker or chose to liquidate your account (and receive a check). During this period your account would not be managed by our brokerage partner.

As an SEC registered investment advisor, Meritam is prohibited from posting on its website marketing material (including any statement by a former or present client) that endorses Meritam’s advisory services or refers to the client’s positive experiences with Meritam. This includes links to such materials. We make sure we comply. You’re always free to email us at info@Meritam.org or visit our About Us page to see our latest news.

There are four primary methods of calculating investment performance: Time-weighted return, Simple return, Internal rate of return and Money-weighted return.

We think it is most appropriate to evaluate your account performance at Meritam like an index fund, therefore we display time-weighted returns on your account dashboard.

Time-Weighted Return (TWR)

TWR compounds the daily returns of your account from the time it was initially funded until present. It is the best way to evaluate the performance of an investment manager because it does not consider when a client deposits or withdraws cash from her account. TWR is also the method used by index funds to measure performance. For these reasons we have chosen to display Time-weighted returns on your dashboard. It is a true reflection of how we have managed your money, not a reflection of how your contributions and withdrawals affected your performance.

Below is a description of the other performance metrics and why we believe these other methods are inferior to Time-weighted performance:

Simple Return

The simple return is your portfolio's total net gain divided by net contributions. In effect, this weights all cash flows to the beginning of your account's life and therefore is not a very good way of evaluating an investment manager's performance.

Internal rate of return (IRR)

IRR is calculated by finding the annual rate of return that will cause the net present value of your portfolio's cash flows (deposits and withdrawals) and terminal value to equal the value of your initial investment. IRR is most often applied to private equity funds because they have many cash inflows and outflows and all cash flows are under the control of the fund manager. It is seldom used to calculate the performance of a publicly traded portfolio because a public equity portfolio's cash flows are controlled by the investor, not the manager and the timing of the cash flows can significantly impact the return.

Money-Weighted Return (MWR)

MWR is the IRR of your account applied to the period your portfolio has been managed. For example if your IRR is 8% and your account has only been managed for 6 months then the MWR would be 2.82%. Like IRR, it is a better measure of how you manage your money than how your investment manager performs because it is sensitive to when you deposit and withdraw cash. For example if you initially deposit $10,000 in your account and it doubles in one month and then you deposit $100,000 and the market drops 25% in the following month then your TWR will be positive 50% and your MWR will be negative 91% (and your IRR would be negative 17%). In this example your investment manager invested well, but you timed the market poorly. Employing the MWR would unfairly make the investment manager look as though she performed poorly when it was you who made a bad decision as to when to deposit your funds into the account.

Your Funds

An exchange-traded fund (ETF) is an investment fund that is traded on stock exchanges throughout the trading day, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Many ETFs track an index, such as the S&P 500 or MSCI EAFE. Meritam evaluates ETFs based on their low cost, tax efficiency, and stock-like features.

An index fund is an investment fund (usually a mutual fund or exchange-traded fund) that aims to replicate the movements of an index of a specific financial market, or a set of rules of ownership that are held constant, regardless of market conditions.

We look for ETFs and Index Funds with the lowest annual expense ratios, minimal tracking error, with enough liquidity. We provide the expense ratio (fees) on our site.

Yes, Meritam supports socially responsible investments. We utilize ESG (environmental, social and governance) products when low cost index funds are available in a given market. Clients can choose whether they prefer the ESG option or standard product set.

Our model, and Modern Portfolio theory, calls for assets to be diversified across broad asset classes. Meritam qualifies funds for each asset class based their returns, risk, tracking errors, and tax liabilities. Once chosen these are a best representatives of that asset class.

Meritam’s service is designed to recommend the same funds to everyone to save you time and effort. Please email us at info@Meritam.org if you have questions.

Meritam invests your money as it is received.

No. Our service is based on the benefits of diversification and maintenance of an asset allocation over time using ETFs and Index Funds. So we don’t hold individual securities, and are not set up to allow our clients to use their Meritam related brokerage account to hold securities other than the ones we choose and manage.

Our default is to rebalance quarterly. You can adjust this on the account settings page.

Accounts

Meritam currently supports accounts for cash, reserves and long term assets. These are cash and investment accounts for nonprofit organizations.

Meritam’s service is designed specifically for nonprofit organizations. We currently require all Meritam clients to have a tax ID number and a permanent U.S. mailing address due to financial regulations.

We designed our service to be available to the broadest range of organizations. A minimum of $300,000 allows us to provide an optimized allocation across up to 9 asset classes for tax neutral accounts, but we can work with smaller accounts. Please email us at info@Meritam.org if you have questions.

We currently require all Meritam clients to have a tax ID number and a permanent U.S. mailing address due to financial regulations.

Yes, we can complete a partial account transfer in one of two ways, however, each method requires some manual effort on your part:

  • You can email us at info@Meritam.org and we will send you a form to fill out that will allow us to transfer assets on your behalf.
  • You can ask your current custodian to split the account from which you want to transfer a part of its holdings into two accounts, with one containing just the assets you intend to transfer to Meritam. You can then open a new account on Meritam and fund it by choosing the “account transfer” option and entering the account number of your new account at your old custodian that only contains the contents you want to transfer. We’ll transfer that entire account to your new Meritam account.

We hope to offer a fully electronic process for partial account transfers in the foreseeable future.

Meritam offers the ability to set up 3 types of accounts with multiple subaccounts associated with a single account for your organization.

Your assets are held in a brokerage account at our custodian.

Meritam chose our custodian because they offered the best service at the best price and were free from conflicts of interest.

Meritam’s service is currently only available with accounts opened at our brokerage partner.

Your Meritam account number can be found by logging into your account and going to the "Settings" tab.

Yes, you can download and export export your Meritam account data XLS, CSV and TXF formats by logging into your account and going to the "Settings" tab.

Funding

You will be prompted to select a funding method whenever you open an account or deposit funds.

Please log into your account and go to the "Settings" tab or email us at info@Meritam.org.

Any account to be transferred must have the same Tax ID number that is associated with your organization.

Our service is based on the benefits of diversification and maintenance of an asset allocation over time using ETFs and Index Funds. We don’t hold individual securities, and are not set up to allow our clients to use their Meritam related brokerage account to hold securities other than the ones we choose and manage.

Please contact us by email (info@Meritam.org) or phone (612- 888-6363) with any account-related question, problem or suggestion.

Usually, there will be a small amount of uninvested cash in your Meritam account for the following reasons: We purchase only whole shares of ETFs for you. This leaves some cash uninvested until there is enough to buy more whole shares according to your Meritam plan. We reserve enough cash to cover Meritam’s advisory fees.

Withdrawals

To withdraw some of the funds in your account, please log into your account and go to the "Settings" tab.

To withdraw all the funds in your account, please log into your account and go to the "Settings" tab. After the withdrawal is complete we will close your account as we do not maintain accounts with a zero balance.

Meritam does not charge fees when you withdraw funds or close your account.

These FAQs were prepared to support Meritam's investment service, as well as to explain its strategies.

Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in loss.