Cardinal Capital Management
Cardinal Capital Building

FAQs

Every investment decision should be carefully studied and, at Cardinal Capital, we hope you’ll contact us with specific questions relating to your own investment needs and expectations. In the meantime, here are some questions we are often asked about our firm, our investment style, and our approach.

Individual Investors

1. How do you work with individual investors?

We develop an understanding of each client’s needs and expectations in areas such as acceptable risk, the level of returns sought, income requirements, taxes and other important issues. This leads to a comprehensive individual Investment Policy Statement that states our mutually-agreed-upon target asset allocation and client-specific requirements.

2. What are typical client-specific requirements?

These range widely. They may include a plan to reduce a very large, low-basis stock holding; the need for a specific amount of cash at regular intervals or at a future point in time; incorporating unexercised stock options in the investment plan; or avoiding certain investments all together.

3. What differentiates you from other investment organizations?

Cardinal Capital is an independent, research-based firm with a well-developed relative valuation investment approach that has produced better than market returns with significantly reduced risk over time. We have a clear focus on our clients who are the only source of income for our firm. We are heavily invested alongside our clients, creating a very tight alignment of client and advisor interests. Our clients have a level of direct contact with the investment decision-makers, which is not possible in many investment organizations.

4. Do you manage bonds as well as stocks?

Yes, we have many years of successful experience in both taxable and tax-exempt bond investing. There are opportunities in the fixed income markets to achieve excellent returns while maintaining high quality, cash flow and maturities appropriate to specific client needs.

5. How are you compensated for your services?

Client investment management fees are our only source of income.

6. What is your fee schedule?

On domestic equity accounts we charge a base fee of 1% of assets under management with an annual minimum of $5,000. On our non-US equity and small cap equity accounts we charge a base fee of 1.5% of assets under management with an annual minimum of $5,000. Bonds are charged 0.5% a year. Rates scale down for clients with assets in excess of $2 million. We also discount our fees to charitable organizations as a direct form of support.

7. What are the likely tax consequences of your investment management?

Cardinal Capital’s turnover rate has been less than 20% on average over the past five years. This reduces the “tax drag” and transaction costs associated with active trading. We actively consider tax consequences in our investment decisions and work to minimize our clients’ tax bills. We coordinate with the client’s tax advisor to harvest gains or losses as may be appropriate in individual situations and years.

Trusts

1. What is your approach to investing trust assets?

We work closely with trustees, the trust attorneys, and trust accountants to develop an appropriate investment plan to meet the needs of the trust’s beneficiaries.

2. Are you available to meet with trust beneficiaries?

Yes. We report to and meet regularly with the trustees and beneficiaries, as requested by the trustees.

3. Do you provide estate and trust planning services?

No. We are specialists in investment management and do not provide legal or accounting advice or services. Clients are best served by seeking advice from specialists in these areas.

4. How long have you provided trust investment management services?

Cardinal Capital has provided trust investment management services since 1992. The principals of the firm have more than 75 years of successful experience in fiduciary asset management from trusts to pension plans, charitable foundations, and insurance company assets under a wide variety of economic and investment market conditions.

Charitable Foundations and Endowments

1. How do you work with charitable foundations and endowments?

Our approach is customized to the client’s needs. For smaller charitable organizations, we offer a variety of services including trustee education, investment policy statements, investment management services, and performance reporting. For larger organizations, we provide specialty asset management services for single or multiple asset classes.

2. How long have you provided foundation investment management services?

Cardinal Capital received its first appointment in 2002. With a combined three-quarters of a century in fiduciary asset management, Cardinal Capital principals oversee trusts, pension plans, charitable foundations, and insurance company assets. Our experience includes management of these assets under a wide variety of economic and investment market conditions.

3. How do you support the goals of charitable organizations?

We regularly educate, advise, and assist individual clients in making charitable gifts. We also discount our fees to charitable organizations as a direct form of support.

Attorneys & Accountants

1. How do you work with attorneys and accountants?

We are a member of the team of advisors many of our clients employ to manage their financial affairs. In this position, we work closely with the other advisors in either a support or lead role, as appropriate.

2. Do you pay or receive referral fees?

No. Client fees are our only source of income and we neither receive nor pay referral fees to others.

3. Do you provide estate planning or accounting services?

No. We are specialists in investment management and do not provide legal or accounting advice or services. Clients are best served by seeking advice from specialists in these areas.

Cardinal Capital Management Inc. Copyright © 2010