Select Strategies Closing at Assetmark

As part of our ongoing evaluation, we have identified five strategies that will no longer be offered on the AssetMark platform:

• Altegris Futures Evolution Fund
• Litman Gregory Global Standard and Tax Sensitive
• Litman Gregory GuideMark ACE and Tax Sensitive
• Model Capital Tactical US
• Windham Adaptive Risk

AssetMark will stop accepting new accounts in these strategies after October 29, 2021. Existing clients can continue to access and add to their accounts. The strategies will be terminated from the AssetMark platform on or around May 18, 2022.

Replacement Strategy

The full range of comparable strategies available on the AssetMark platform were evaluated as potential replacements for the strategies that are being removed, focusing on third-party solutions with similar characteristics where possible. In some situations (e.g. Model Capital), AssetMark’s due diligence team recommended a proprietary strategy over a third-party solution. Based on relevant characteristics, AssetMark’s due diligence team indicated that the proprietary strategy is the better fit to maintain investment objectives for clients. In these cases, third-party alternatives have also been identified (see above), with the intent to give advisors time to evaluate both options and choose what is best for their clients. Following is the rationale for the designated replacement strategies:

AssetMark Managed Futures Strategy Fund: Similar to Altegris Futures Evolution Fund, the AssetMark Managed Futures Strategy Fund seeks low correlation to traditional equity/fixed income markets, with performance largely tied to persistence of market trends.

J.P. Morgan Global Standard: Similar to Litman Gregory Global Standard (includes Tax Sensitive), J.P. Morgan Global Standard (includes Tax Sensitive) combines high conviction tactical asset allocation with an emphasis on actively managed mutual funds, blending both long-term fundamental analysis and security selection.

New Frontier GuideMark ACE: Similar to Litman Gregory GuideMark ACE (includes Tax Sensitive), New Frontier GuideMark ACE (includes Tax Sensitive) provides a globally allocated portfolio implemented with GuideMark funds.

Savos U.S. Risk Controlled Strategy: Similar to Model Capital Tactical US, the Savos U.S. Risk Controlled Strategy uses a systematic risk-based approach to build a U.S. focused strategy that significantly adjusts equity exposure seeking to limit losses in extreme market downturns.

Beaumont Decathlon Aspect: Similar to Windham, Beaumont Decathlon Aspect can experience significant changes in equity exposure, uses a quantitative systematic approach, and is implemented using ETFs.

Strategy Pricing

There will be no Platform Fee increase for your clients if they transition their assets to the designated replacement strategy or alternative replacement. Their Platform Fee will be the same or reduced. For clients invested in Altegris Futures Evolution Fund, Litman Gregory Global Standard (includes Tax Sensitive), and Model Capital Tactical US strategies, AssetMark anticipates that the transition to the designated replacement strategy will also reduce the total cost of investing, as the replacement strategies had lower estimated expense ratios than their corresponding strategies, as of June 30, 2021. For clients transitioning from Litman Gregory GuideMark ACE (includes Tax Sensitive) to New Frontier GuideMark ACE (includes Tax Sensitive), AssetMark anticipates underlying expense ratios to remain nearly identical to what they are currently in Litman Gregory GuideMark ACE (includes Tax Sensitive) as of June 30, 2021.

For clients moving from Windham Adaptive Risk to Beaumont Decathlon Aspect, the underlying costs of investment are anticipated to rise between 6-26 basis points based on the strategies’ respective estimated expense ratios, risk profile, and allocations as of June 30, 2021.

See Tables 1-6 below for a total cost comparison and information regarding the calculation of estimated expense ratios.

The transition to a replacement strategy or an alternative investment solution may result in taxable gains or losses. We suggest that investors consult with their financial advisor or a tax professional to evaluate their individual situation.

Proprietary Replacement Strategies:

In some cases, AssetMark will be taking over investment oversight of the strategies that were once the responsibility of a third party. In these instances, client fees may be reduced or remain the same, but AssetMark’s revenue will increase as a result of mapping to a proprietary strategy.

Please note that AssetMark is compensated for the management and administrative services it provides to the GuideMark funds, which are used in the Litman Gregory GuideMark ACE strategy and the New Frontier GuideMark ACE strategy. AssetMark’s revenue may increase depending on the New Frontier GuideMark ACE strategy’s allocation to the underlying GuideMark funds.

Revenue considerations were not a factor when AssetMark’s due diligence team was evaluating and selecting alternative mapping options for the terminating strategies. Third-party alternatives have also been identified with the intent to give advisors time to evaluate both options and choose what is best for their clients.

Model Capital: Accounts Below Investment Minimum

For clients invested in Model Capital Tactical US, the primary replacement is the Savos U.S. Risk Controlled Strategy (USRC). USRC allocates a portion of the portfolio to individual securities, presenting challenges to fully invest any client accounts below the required trading minimum of $20,000. As a result of this, any clients accounts below this required investment minimum cannot be moved to USRC.

AssetMark has identified a non-proprietary alternative solution, Julex Dynamic Sector, which invests solely in ETFs and has a lower trading minimum of $1,000. For client accounts below the $20,000¹ minimum of USRC, AssetMark’s primary replacement is Julex Dynamic Sector.

For Referral Model advisors with client accounts below the USRC minimum, accounts will be transitioned to Julex Dynamic Sector on or around May 18th unless an alternative solution is selected by the advisor or client prior to the termination date. There will be no platform fee changes if clients are transitioned to Julex Dynamic Sector.

For Advisor Model advisors with client accounts below the USRC minimum, you will be unable to transition accounts to USRC. You can elect to invest in Julex Dynamic Sector or an alternate solution available to your client on the platform. Accounts that remain invested at the close of business of the designated termination date will become “No Strategist” accounts and remain in the last allocations. “No Strategist” accounts will be charged a reduced Platform Fee (see Tables 6 and 6A below).

¹ AssetMark will transition existing Model Capital accounts based off prior-day account values

Referral Model Advisors:

Your clients were notified by mail, on November 16, 2021, that the strategies are being removed from the AssetMark platform and assets will be transitioned to the “Designated Replacement Strategies” listed above, unless an alternative investment solution is selected.

First Client Notification – sent on November 16, 2021:

• Altegris Futures Evolution Strategy Fund
• Litman Gregory Global Standard and Tax Sensitive
• Litman Gregory GuideMark ACE and Tax Sensitive
• Model Capital Tactical US
• Windham Adaptive Risk
• Multiple Strategies Client Notification

Second Client Notification – to be sent on March 15, 2022:

• Altegris Futures Evolution Strategy Fund
• Litman Gregory Global Standard and Tax Sensitive
• Litman Gregory GuideMark ACE and Tax Sensitive
• Model Capital Tactical US
• Windham Adaptive Risk
• Multiple Strategies Client Notification

On or around May 18, 2022, AssetMark will automatically transition referral model accounts invested in the terminating strategies to the corresponding replacement strategies, unless you take other action prior to the final termination date.

Advisor Model Advisors:

Your clients will not receive any communication from AssetMark. You will need to act to transition your affected clients into the corresponding replacement strategy listed above or an alternative solution, prior to or around May 18, 2022 termination date. Accounts that remain invested in any of the strategies earmarked for termination at the close of business of the designated termination date will become “No Strategist” accounts and remain in the last allocations of the terminated model. “No Strategist” accounts will be charged a reduced Platform Fee (see Tables 6 and 6A below). The client letters below may be customized and used to notify your clients:

• Altegris Futures Evolution Strategy Fund
• Litman Gregory Global Standard and Tax Sensitive
• Litman Gregory GuideMark ACE and Tax Sensitive
• Model Capital Tactical US
• Windham Adaptive Risk
• Multiple Strategies Client Notification

Additional Resources

To see a list of your impacted clients, login to eWealthManager and select the “View Client’s Accounts” button at the bottom. This page can also be reached by logging into eWealthManager and selecting the Investments > Overview > Platform Updates tabs.

If you have questions, please contact your AssetMark Consultant or Advisor Services at 800-664-5345.

Table 1 – Total Cost Comparison for Accounts Transitioning from Altegris Futures Evolution Fund to AssetMark Managed Futures Strategy Fund

¹ The Platform Fees above are tiered and do not account for householding of assets. The first dollar under management receives the highest fee rate and assets over each breakpoint receive reduced fees rates as listed. The pricing shown on the table is not a blended rate of the stated Platform Fee.

² Client accounts transitioned to the AssetMark Managed Futures strategy will retain a 0 bps platform fee

³ Fund and Strategy expenses are subject to change. Strategy expenses are estimated annual expense ratios comprised of the most recent publicly-available expense ratios of underlying mutual funds, which may or may not include administrative service fees. Calculations are based on the model allocations for each strategy as of 12/31/21 and represent allocation weighted values.

Table 1A – Total Cost Comparison for Accounts Transitioning from Altegris Futures Evolution Fund to AlphaSimplex Risk Efficient Alternatives

¹ The Platform Fees above are tiered and do not account for householding of assets. The first dollar under management receives the highest fee rate and assets over each breakpoint receive reduced fees rates as listed. The pricing shown on the table is not a blended rate of the stated Platform Fee.

² Client accounts transitioned to the AlphaSimplex Risk Efficient Alternatives strategy will retain a 0 bps platform fee.

³ Fund and Strategy expenses are subject to change. Strategy expenses are estimated annual expense ratios comprised of the most recent publicly-available expense ratios of underlying mutual funds, which may or may not include administrative service fees. Calculations are based on the model allocations for each strategy as of 12/31/21 and represent allocation weighted values.

Table 2 – Total Cost Comparison for Accounts Transitioning from Litman Gregory Global Standard Portfolios (including Tax Sensitive) to J.P. Morgan Global Standard Portfolios (including Tax Sensitive)

¹ The Platform Fees above are tiered and do not account for householding of assets. The first dollar under management receives the highest fee rate and assets over each breakpoint receive reduced fees rates as listed. The pricing shown on the table is not a blended rate of the stated Platform Fee.

² For Risk Profile 3. Fund and Strategy expenses are subject to change. Strategy expenses are estimated annual expense ratios comprised of the most recent publicly-available expense ratios of underlying mutual funds, which may or may not include administrative service fees. Calculations are based on the model allocations for each strategy as of 12/31/21 and represent allocation weighted values. Expenses for other Risk Profiles will vary and are available upon request.

Table 3 – Total Cost Comparison for Accounts Transitioning from Litman Gregory GuideMark ACE Portfolios to New Frontier GuideMark ACE Portfolios

¹ The Platform Fees above are tiered and do not account for householding of assets. The first dollar under management receives the highest fee rate and assets over each breakpoint receive reduced fees rates as listed. The pricing shown on the table is not a blended rate of the stated Platform Fee.

² For Risk Profile 3. Fund and Strategy expenses are subject to change. Strategy expenses are estimated annual expense ratios comprised of the most recent publicly-available expense ratios of underlying mutual funds, which may or may not include administrative service fees. Calculations are based on the model allocations for each strategy as of 12/31/21 and represent allocation weighted values. Expenses for other Risk Profiles will vary and are available upon request.

Table 4 – Total Cost Comparison for Accounts Transitioning from Model Capital Tactical US to Savos U.S. Risk Controlled Strategy

¹ The Platform Fees above are tiered and do not account for householding of assets. The first dollar under management receives the highest fee rate and assets over each breakpoint receive reduced fees rates as listed. The pricing shown on the table is not a blended rate of the stated Platform Fee.

² Fund and Strategy expenses are subject to change. Strategy expenses are estimated annual expense ratios comprised of the most recent publicly-available expense ratios of underlying mutual funds, which may or may not include administrative service fees. Calculations are based on the model allocations for each strategy as of 12/31/21 and represent allocation weighted values.

Table 4A – Total Cost Comparison for Accounts Transitioning from Model Capital Tactical US to Julex Dynamic Sector

¹ The Platform Fees above are tiered and do not account for householding of assets. The first dollar under management receives the highest fee rate and assets over each breakpoint receive reduced fees rates as listed. The pricing shown on the table is not a blended rate of the stated Platform Fee.

² Fund and Strategy expenses are subject to change. Strategy expenses are estimated annual expense ratios comprised of the most recent publicly-available expense ratios of underlying mutual funds, which may or may not include administrative service fees. Calculations are based on the model allocations for each strategy as of 12/31/21 and represent allocation weighted values.

³ Please note the increase in underlying fund expense ratios associated with mapping from Model Capital Tactical US to Julex Dynamic Sector.

Table 5 – Total Cost Comparison for Accounts Transitioning from Windham Adaptive Risk to Beaumont Decathlon Aspect

¹ The Platform Fees above are tiered and do not account for householding of assets. The first dollar under management receives the highest fee rate and assets over each breakpoint receive reduced fees rates as listed. The pricing shown on the table is not a blended rate of the stated Platform Fee.

² Reflects a 20 bps discount from the standard platform at each tier. The pricing tiers shown above represent the lower of the two rates in each tier and reflect the rates that will be applied to accounts transitioned from Windham Adaptive Risk.

³ For Risk Profile 3. Fund and Strategy expenses are subject to change. Strategy expenses are estimated annual expense ratios comprised of the most recent publicly-available expense ratios of underlying mutual funds, which may or may not include administrative service fees. Calculations are based on the model allocations for each strategy as of 12/31/21 and represent allocation weighted values. Expenses for other Risk Profiles will vary and are available upon request.

⁴ Please note the increase in underlying fund expense ratios associated with mapping from Windham Adaptive Risk to Beaumont Decathlon Aspect.

Table 6 – “No Strategist” Platform Fee Rates, Closed Third Party Mutual Fund Models

¹ The Platform Fees above are tiered and do not account for householding of assets. The first dollar under management receives the highest fee rate and assets over each breakpoint receive reduced fee rates as listed. The pricing shown on the table is not a blended rate of the stated Platform Fee. Standard Custodial Account Fees for accounts managed pursuant to Third-Party Mutual Fund Solutions still apply.
Note: The above fee table applies to the following third-party mutual fund models: Litman Gregory Global Standard (including Tax Sensitive) and Litman Gregory GuideMark ACE (including Tax Sensitive). The Altegris Futures Evolution Fund standard platform fee is zero basis points, so the “No-Strategist” platform fee will be waived.

Table 6A – “No Strategist” Platform Fee Rates, Closed Third Party ETF Models

¹ The Platform Fees above are tiered and do not account for householding of assets. The first dollar under management receives the highest fee rate and assets over each breakpoint receive reduced fee rates as listed. The pricing shown on the table is not a blended rate of the stated Platform Fee.
Note: The following are considered third-party ETF models: Model Capital Tactical US and Windham Adaptive Risk.