BASELINE + ASSET MANAGEMENT ACCOUNTS

Our Baseline + accounts are positioned for investors seeking high total returns and growing dividend income with a long time horizon. We pursue this goal by investing in REITs and infrastructure assets.  REITs and other infrastructure are broadly trading at low cashflow multiples which facilitates investment at higher than normal cashflow yield (AFFO or earnings). The high cashflows earned from the underlying infrastructure assets allow us to invest in the stocks at large going-in dividend yields, well in excess of treasuries or bonds.  This dividend yield is what we consider the Baseline return.  We seek to achieve additional returns (the +) by buying shares of companies at steep discounts to asset value and waiting for the stock prices to adjust to fair value.  The capital gains sum with the dividend yield with a goal to produce an overall market-beating return

Fees and Minimums

Management fee:  1% Annually
Minimum Investment:  $10,000

Our Baseline + accounts offer smaller account minimums intended to encourage investors to contribute monthly and accumulate wealth over time.

Important Notes and Disclosure

Material Market and Economic Conditions.  Early 2025: REITs stayed relatively stable in the presence of tariff discussions that spooked the broader market. REITs were viewed as relatively isolated from world trade.

Material Conditions, Objectives, and Investment Strategies.  Baseline + is an actively managed investment strategy focused on a dividend yield spread over Treasuries and Corporate bonds, investing primarily in discounted preferred and common REIT shares with a goal of capturing capital appreciation.

Unless identified as Hypothetical, all Performance information on this page is based on the Baseline + composite account; the average of all fee and non-fee paying discretionary accounts that are similarly managed, including closed accounts that are part of the period covered.  Performance of the discretionary accounts included in the composite is calculated by Interactive Brokers on a daily time-weighted basis, including cash, dividends and earnings distributions, and reflects the deduction of 2nd Market Capital’s advisory fee to reflect performance net of fees. Actual client returns may differ. 

Dividend Yield Chart.  Dividend Yield represents the total annual dividend income generated by a portfolio, expressed as a percentage of the portfolio's total market value.   The Dow Jones Equity All REIT Index is designed to measure all publicly traded equity real estate investment trusts (REITs) in the Dow Jones U.S. stock universe.The 10-year Treasury Note is a benchmark for long-term interest rates and pays interest (not dividends) semi-annually at the rate fixed at purchase. Actual advisory client total return will be impacted by capital gains/losses and reduced by the 1% annual advisory fee.  Future dividend yield is subject to change.

None of the performance information displayed on this page is based on the actual performance of any individual 2MCAC advisory client account investing in this portfolio. The performance in a 2MCAC client account investing in Baseline + may differ (i.e., be lower or higher) from the performance of the composite account portrayed on this page based on a variety of factors, such as trading restrictions imposed by the client (resulting in different account holdings), time of initial investment, amount of investment, frequency and size of cash flows in and out of the client account, and different corporate actions. Clients investing in this portfolio may view the actual performance of their investment in this portfolio by logging into their Interactive Brokers account and reviewing their customized dashboard.

Clients may restrict any of the securities traded in their account, but should note that any restrictions they place on their investments could affect the performance of their account leading it to perform differently, worse or better, than (a) the above-portrayed account  or (b) other client accounts invested in the same strategy.

Forward-looking statements. Commentary may contain forward-looking statements which are by definition uncertain. Actual results may differ materially from our forecasts or estimations, and 2MCAC cannot be held liable for the use of and reliance upon the opinions, estimates, forecasts, and findings in these documents.

Past performance does not guarantee future results.  Investing in publicly held securities is speculative and involves risk, including the possible loss of principal.  Historical returns should not be used as the primary basis for investment decisions.  Although the statements of fact and data in this commentary have been obtained from sources believed to be reliable, 2MCAC does not guarantee their accuracy and assumes no liability or responsibility for any omissions/errors.

Use of Leverage or Margin. Baseline + Portfolio will utilize margin only for trading purposes (the ability to use the proceeds from stock sales immediately for new purchases instead of waiting for the usual 1-day settlement period), but not for borrowing purposes.

Expenses. Returns reflect the deduction of advisory fees and any transaction expenses .   

Calculation Methodology.  Returns are calculated by Interactive Brokers LLC using the Modified Dietz method, a time-weighted measure of performance in which cash flows are weighted based on their timing.    Dividends in Baseline + accounts are reinvested.

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