Members Trust Company – the Forbes #1 Top Performer in Managed Exchange-Traded Fund Portfolios

Members Trust investment team sitting at small table

Many Americans trust credit unions with their savings and investments. Since 2014, the number of Americans using credit unions surpassed 100 million. For most people, the customer-centric approach and proven stability of the credit union structure are attractive when deciding where to bank. It makes sense, then, that credit unions should work with a company that shares their philosophy and offers a similar track record of stability. Members Trust Company, a credit-union owned company, has been rated the #1 performer by Forbes when it comes to managing portfolios. What sets Members Trust Company apart from the rest? What qualities do we embrace, and how have we managed to survive challenges such as the 2008 recession?

The Traits You Need in a Trust Company

We’ve embraced a simple business philosophy that we’ve summed up in our motto: Main Street values. Wall Street expertise.™ We hire employees that understand and embrace this mentality, which has produced several qualities in our daily operations:

  • We put the customer first. Our policies are always designed to create a safe place for our clients to invest. We don’t determine success by our current revenue or payouts to a board of directors, but instead by how stable our investments are and what long-term growth our assets can produce. Our team is responsive to our clients’ needs and continually seeks to improve each portfolio to generate more value.
  • We invest in our team. Our team embraces a growth mentality, which inspires us to support continued education for our managers and advisors. We consistently hire portfolio managers with proven confidence. In the fact, all our portfolio managers are CFA holders. Additionally, we seek to take advantage of automation technologies that can streamline the way we do business and give our team more opportunities to serve our clients.
  • We take advantage of exchange-traded funds. The future of financial management involves 100 percent ETF transactions and as much computer assistance as possible, which empowers portfolio managers to produce real results. ETFs are both more portable and less expensive than traditional mutual funds. As these funds have become more common, it’s easier than ever to achieve a diverse portfolio in fewer transactions, which minimizes transaction costs. Further, ETFs are less subject to capital gains taxes than mutual funds during portfolio adjustments, making them a more tax-efficient option.
  • We make simple, understandable decisions. Many firms that embrace risky philosophies will rebalance their portfolios to take advantage of short-term opportunities. While this practice can create flashy results, it creates unnecessary risk for the firm’s clients. On the other hand, firms can also rebalance according to a strict schedule and neglect examining why they make their trades when they do. Members Trust Company takes a different approach. We focus on rebalancing at the best times for our clients, minimizing risk but not making any wasteful trades because it adheres to a schedule.

In all things, we leverage the latest technologies and our financial experience to serve our clients better. Credit unions rely on us to manage their trust assets for each of these reasons. The most compelling example of why they turn to us for long-term stability is our successful management of the 2008 recession crisis.

Surviving the Recession and Thriving in the Aftermath

Generally, credit unions were less disrupted by the 2008 recession and recovered more quickly. Data from the Federal Deposit Insurance Corp and CUNA reveal that nearly four times as many private banking firms were liquidated following the financial crisis. While credit unions benefit from tax-exempt status, we suggest that a far more important reason for their success is that they maintain safer portfolios. Members Trust Company has firsthand experience with managing portfolios that aren’t vulnerable to the same financial problems that plagued the private banks. In fact, Forbes recognized our performance in 2008, revealing that we know how to manage a crisis situation effectively.

Despite the contracted economy’s challenges, we continued to expand our ETF holdings and carefully invest for our clients. Our team avoided risky investments that could backfire and negatively impact our customer holdings. Through this patient, thoughtful approach, we managed to exit the other side of the crisis with our clients’ assets intact and stronger as a firm. While no business is invulnerable to market conditions, we have shown that our methods withstand even extreme market duress.

A Vision for Future Success

Our method of incorporating ETF funds into our client portfolios has proven to be a success during both recessionary and growth economic states. Members Trust Company continues to enhance its business operations by working with young talent and helping them develop their financial acumen through continuing education. We also empower our team to seek innovative ways to improve our workflows, continually improving the way that we do business. In everything we do, we put our clients first and make safe investments that give them the most likely chance of stable growth rather than making high-risk trades that could cost millions.