Fee
Fee Model
Simple fee structure for EPT-based ETF design
For the Market Portfolio Replacement portfolio, the reference annual fee is $65,000 plus 10 basis points (0.10%) of supported assets under management (AUM). The AUM-based portion applies only to the ETF assets for which 5thN Financial provides EPT-based portfolio design and direct support. Fees for other portfolios may vary.
Market Portfolio Replacement — design / licensing reference rate
Fees
Annual fee: $65,000 base fee plus 10 basis points on the Market Portfolio Replacement portion of ETF assets directly supported by 5thN Financial. The fixed fee is annual, not a one-time charge. Fees for other portfolios may vary.
Advisory firm participation threshold: $25,000,000 of supported assets across the firm’s offered ETFs.
Plus:
One-time setup / integration fee
Inflation-adjusted server system fee
The $65,000 annual base fee plus 10 basis points of supported AUM applies specifically to the Market Portfolio Replacement portfolio. The AUM-based charge covers only assets for which 5thN Financial directly provides EPT-based portfolio design, computational resources, server infrastructure, analytical support, and related operational resources. It does not apply to ETF assets outside of that direct support relationship. Fees for other portfolios may vary.
Advisory firm participation threshold
5thN Financial works with advisory firms having at least $25,000,000 of total supported assets across the ETFs in which we participate. That amount may be distributed across any number of ETFs offered by the advisory firm. For example, an advisory firm with five ETFs can meet the threshold when 5thN Financial’s supported portions of those ETFs total $25,000,000 or more in aggregate.
This is a firm-level participation threshold, not a minimum annual fee for an individual ETF.
Our strength: replacing the market portfolio with EPT
A primary strength of 5thN Financial is the use of Expanded Portfolio Theory (EPT) as a replacement for the market-portfolio component within an ETF’s broader portfolio construction.
An advisory firm does not have to apply EPT to the entire ETF. If the firm’s existing construction uses a market portfolio for only a portion of the ETF—for example, 40%, 50%, or 60%—5thN Financial can replace only that market-portfolio allocation with an EPT-based portfolio. In that structure, the 10 basis point variable fee applies only to the EPT-managed portion, in addition to the $65,000 annual base fee, not to the entire ETF.
For example, if the Market Portfolio Replacement portfolio replaces 50% of a $100 million ETF, the annual fee would be $65,000 + (0.10% × $50 million) = $115,000. The variable charge applies to the $50 million EPT portion, not the full $100 million ETF.
EPT can also be used for the entire ETF
For advisory firms that prefer a broader implementation, 5thN Financial can also apply EPT-based portfolio design to the entire ETF. If the entire ETF uses the Market Portfolio Replacement portfolio, the annual fee would be $65,000 plus 0.10% of the full amount of ETF assets directly supported under that relationship. Fees for other EPT-based portfolios may vary.
Effective annual fee versus supported AUM
The effective annual fee is the total annual fee divided by supported AUM. Because the $65,000 base fee is spread across more assets as AUM grows, the effective percentage declines toward 0.10% (10 basis points). The chart spans $25 million to $500 million of supported AUM; the participation threshold remains $25 million.
The plot is generated by the included R script (R/create_fee_plot.R) and stored as an SVG, so it is displayed directly by the static website without requiring a live R process.
| Supported AUM | Annual fee | Effective annual fee |
|---|---|---|
| $25 million | $90,000 | 0.360% |
| $50 million | $115,000 | 0.230% |
| $100 million | $165,000 | 0.165% |
| $250 million | $315,000 | 0.126% |
| $500 million | $565,000 | 0.113% |
The chart shows the annual base and AUM-based fee only. It excludes the separately described one-time setup/integration fee and inflation-adjusted server system fee.
What the fee supports
Server construction
The fee supports construction of dedicated server infrastructure placed in a professionally managed server center.
Offsite daily backups
The fee supports a disciplined backup process, with daily offsite backups designed to protect research files, application code, reports, and operational history.
Offsite software updates
The fee supports offsite software maintenance and update work for the public website, server applications, analytical tools, and supporting server components.
Continual relationship
The fee supports an ongoing working relationship rather than a single static deliverable, allowing the active ETF design process to evolve as markets, data, and client needs change.
Continuing education course creation
The fee supports development of continuing education course materials, including instructional content, learning objectives, quiz structures, documentation, and related educational delivery support.
Derivative inclusion research
The fee supports ongoing research targeting the possible inclusion of derivative instruments designed to support asset value protection, risk management, and portfolio behavior under stressed market conditions.
Research design
The fee supports ETF concept development, objective framing, portfolio rule design, and model documentation.
Computational testing
The fee supports historical analysis, backtest review, scenario comparisons, and constraint testing.
Analytics layer
The fee supports static public reporting through the website and interactive exploration through server applications running on separate infrastructure.
This page presents a planning framework for discussion. Final terms would depend on the exact business relationship, regulatory structure, scope of work, and written agreements.