How to Manage $100 Million of
All stocks used for this portfolio are listed on
As an example, it is not difficult to run $100 million in a US Listed Equity Separately Managed Stock Account with 40 equal positions if we plan on holding most of them for least three years while replacing laggards.
Here are some numbers: $100 mill ÷ 40 stocks = $2.5 mill per stock. Take Apple (AAPL) for example: $2.5 mill ÷ AAPL at $587.44 per share = 4255 shares. Hardly an amount of shares worthy of writing home about.
How about Merk (MRK) at $38.36? 2.5 mill ÷ MRK at $38.36 per share = 65,172 shares. Ok, so that's a few more shares. So MRK had volume of 12,318,364. Our purchase then is 0.53% of the days total volume. That might take five minutes to buy.
If we were running $1 Billion it would be $25 mill per position, so $25 mill ÷ by, say AAPL, at $587.44 per share = 42,550 shares or 0.17% of AAPL's 24,772,443 shares traded. That might take five minutes to buy.
How about Merk (MRK)? $25 mill ÷ MRK at $38.36 per share = 651,720 shares. Our purchase then is 5.30% of the days total volume, something that might take one minute to several hours.
If we were running $1 Billion, could we do it and still rank in the top 5% of US listed equity managers? I think so (because we are just holding them and, where getting in is the most important point).
The following example illustrates how it is done. $1 Billion sounds like a lot, and it is, but in reality it is just a function of liquidity if you limit your trading to 10% of each days volume. So, it's like steering a big ship.
If you look at the Total Market Cap of all the stocks in the Mid Cap model portfolio below, you will see that it was roughly $253 Billion. 1% of that is $2.5 Billion. Now divide that by 40 and you get $64 Million per position. For Google at $1100.00, $64 Million is only 57,000 shares or less than 3% of the days average volume.
Here is what a $100 million portfolio might look like equal weighted. These are actual stocks that the manager picked 5 years ago on Apl 16, 2009:
Please note: Hypothetical or Model performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. 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. Past performance is not necessarily indicative of future results. The risk of gain or loss exists in stock and futures trading. This material and any views expressed herein are provided for informational purposes only and should not be construed in any way as an endorsement or inducement to invest. If you received this message in error, please notify us immediately via return email. Not FDIC Insured No Bank Guarantees May Lose or Gain Value with inevitable market volatility. All stocks gain and lose value within economic cycles. For Institutional and Accredited Investors Only.