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Advanced Capital & Investments Advanced Capital & Investments

Every investment product starts with a stock or a bond

Mutual funds, ETFs, variable annuities and structured notes are all built from the same two core pieces. Each one adds something, and each one adds a cost. Knowing which is which is most of what an investor needs to know.

Education only. We explain how these products work and what they cost. We do not sell or recommend securities.

The core

Two building blocks, and the research behind them

Before any product, there is ownership and lending, and the research that decides which stocks and bonds to own. Everything else on this page is a way of packaging these.

Stocks

Ownership in a company. You share in its growth and its losses. Returns come from price changes and dividends. No promise of either.

Bonds

A loan to a company or government. You are paid interest and get your money back at maturity, if the borrower can pay. Prices move as interest rates change.

Researched by
The research behind the core

Independent research

Analysts who study stocks and bonds and publish recommendations, for a flat yearly price instead of a percentage of your money. Every by-product below starts here, with layers added on top.

The same picks, a different price tag →
↓Packaged, managed, engineered or wrapped into
The by-products

What each one adds, and what it costs

None of these is good or bad on its own. Each solves a real problem. The question is whether what it adds is worth what it costs, for you.

Pooled

Retail mutual funds

Many investors’ money pooled into one portfolio of stocks or bonds, run by a manager.

Adds: Diversification and professional management in one purchase.
Costs: Sales loads, annual expenses, 12b-1 fees, trading costs inside the fund and taxable distributions.
Read the guide →Pooled

Index funds

A fund that owns the stocks or bonds in a market index instead of picking them.

Adds: Broad exposure at a low annual cost.
Costs: Low expenses, but you own the whole index, the good and the bad.
Read the guide →Pooled

ETFs and ETNs

Funds (ETFs) or bank-issued notes (ETNs) that trade on an exchange like a stock.

Adds: Intraday trading, often lower costs and fewer taxable distributions.
Costs: Trading spreads, and with ETNs the credit risk of the issuing bank.
Read the guide →Managed

Separately managed accounts

A manager buys individual stocks and bonds directly in your own account.

Adds: You own the securities, with more control over taxes.
Costs: An annual advisory or wrap fee, often with a minimum account size.
Read the guide →Engineered

Structured notes

A bank note whose return is tied to an index, with a formula that caps gains or buffers losses.

Adds: A defined outcome: some protection in exchange for limited upside.
Costs: Built-in costs that are hard to see, issuer credit risk and limited ability to sell early.
Read the guide →Insured wrapper

Fixed indexed annuities

An insurance contract that credits interest based on a stock index, with a 0% floor and a cap.

Adds: Protection from market losses, tax deferral and optional income riders.
Costs: Capped upside, no dividends, rider fees, surrender charges, and gains taxed as income.
Read the guide →Insured wrapper

Variable annuities

Mutual-fund-like subaccounts inside an insurance contract, with tax deferral and optional guarantees.

Adds: Tax deferral and income or death benefit guarantees.
Costs: Mortality and expense charges, rider fees, fund expenses and surrender charges.
Read the guide →Alternatives

Hedge funds, CTAs and CPOs

Private funds and managed-futures programs that can go long or short, use leverage and trade futures.

Adds: Strategies that do not depend on the stock market rising.
Costs: Higher fees, often a share of profits, limited liquidity, and access limited to accredited or qualified investors.
Read the guide →
Know the numbers

From the Client Education Series

The same core-versus-by-product idea, worked through with numbers.

Series No. 1 · PDF

What your returns are really worth

How fees and taxes cut into a return before you ever see it.

Open the PDF → Series No. 2 · PDF

Four core products

The core products and the by-products built on top of them.

Open the PDF → Series No. 3 · PDF

The long way up

What market losses do to the time it takes to get back to even.

Open the PDF →
Own one of these already? Bring the statement or prospectus to a product review. We will walk through how it works and what it costs you each year. We do not recommend buying or selling securities. Schedule a product review →

Advanced Capital & Investments pages are for education only. Nothing here is an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or investment strategy, and we do not sell securities through this site. Examples are hypothetical, do not represent any actual product and do not reflect taxes unless stated. Investing involves risk, including loss of principal. Before investing in any fund, read its prospectus and talk with a properly registered professional.