Description of Firm
Carret Asset Management, LLC (the “Registrant”) is a limited liability company formed in May 2004 in
the State of New York. The Registrant became registered as an Investment Adviser Firm in May 2004.
The Registrant is wholly owned by Carret Holdings, Inc. Carret Holdings, Inc. is ultimately owned
through various intermediaries, including SBI Holdings, Inc.
As discussed below, the Registrant offers to its clients (individuals, investment companies, investment
limited partnerships, pension and profit-sharing plans, investment advisors, business entities, trusts,
estates and charitable organizations, etc.) investment advisory services. To the extent specifically
requested by a client, Registrant may provide limited consultation services to its investment
management clients on investment and non‐investment related matters. Any such consultation
services, to the extent rendered, shall be rendered on an unsolicited basis, for which Registrant shall
generally not charge a fee. In the event that the client requires extraordinary consultation services (to
be determined in the sole discretion of the Registrant), the Registrant may determine to charge for
such additional services, the dollar amount of which shall be set forth in a separate written notice to the
client.
To commence the investment advisory process, the Registrant will ascertain each client’s investment
objective(s) and then invest the client’s assets consistent with the client’s designated investment
objective(s). Once invested, the Registrant provides ongoing supervision of the account(s). Before
engaging Registrant to provide investment advisory services, clients are required to enter into an
Investment Advisory Agreement with Registrant setting forth the terms and conditions of the
engagement (including termination), describing the scope of the services to be provided, and the fee
that is due from the client.
Investment Advisory Services
We offer discretionary portfolio management services. Our investment advice is tailored to meet our
clients' needs and investment objectives.
If you participate in our discretionary portfolio management services, we require you to grant us
discretionary authority to manage your account. Subject to a grant of discretionary authorization, we
have the authority and responsibility to formulate investment strategies on your behalf. Discretionary
authorization will allow us to determine the specific securities, and the amount of securities, to be
purchased or sold for your account without obtaining your approval prior to each transaction. We will
also have discretion over the broker or dealer to be used for securities transactions, and over the
commission rates to be paid. Discretionary authority is typically granted by the investment advisory
agreement you sign with our firm.
You may limit our discretionary authority (for example, limiting the types of securities that can be
purchased or sold for your account) by providing our firm with your restrictions and guidelines in
writing.
Registrant has a fiduciary duty to provide services consistent with the client’s best interest. As part of
its investment advisory services, Registrant will review client portfolios on an ongoing basis to
determine if any changes are necessary based upon various factors, including, but not limited to,
investment performance, account additions/withdrawals, mutual fund manager tenure, style drift,
and/or a change in the client’s investment objective. Based upon these factors, there may be extended
periods of time when the Registrant determines that changes to a client’s portfolio are neither
necessary nor prudent. Of course, as indicated below, there can be no assurance that investment
decisions made by Registrant will be profitable or equal any specific performance level(s). Clients
nonetheless remain subject to the fees described in Item 5 below during periods of account inactivity.
Investment Methodology
Registrant structures portfolio strategies (each a “Strategy” and collectively the “Strategies”) developed
to meet client investment objectives. These Strategies are composed of, but not limited to, equity
securities, as well as mutual funds, exchange traded funds, fixed-income securities, and other
exchanged traded securities. The Strategies are based on fundamental research on a wide range of
securities to determine their qualification for initial and continuing investment. This is described further
in Item 8: Method of Analysis, Investment Strategies and Risk of Loss. The Strategies are rebalanced
periodically. The Strategies selected for each client are intended to meet the client objectives. Clients
can place restrictions on securities selected.
Registrant has developed specialized tailored strategies being offered to clients:
Fixed Income Opportunity Strategy
Leveraged Opportunity Strategy
Taxable Bond Strategy
Municipal Bond Strategy
Enhanced Cash Strategy
Large Cap Equity Strategy
Custom Balanced Strategy
Sub-Advisory Services
The Registrant may serve as a sub‐advisor to unaffiliated registered investment advisors according to
the terms and conditions of a written Sub‐Advisory Agreement. With respect to its sub‐advisory
services, the unaffiliated entities that engage the Firm’s sub‐advisory services maintain both the initial
and ongoing day‐to‐day relationship with the underlying client, including initial and ongoing
determination of client suitability for the Registrant’s designated investment strategies and/or
programs. If the custodian/broker‐dealer is determined by the unaffiliated investment adviser, the
Registrant will be unable to negotiate commissions and/or transaction costs, and/or seek better
execution. As a result, clients may pay higher commissions or other transaction costs or greater
spreads, or receive less favorable net prices, on transactions for the account than would otherwise be
the case through alternative clearing arrangements recommended by Registrant. Higher transaction
costs adversely impact account performance.
With respect to these types of engagements, the unaffiliated entities that engage the Registrant’s
sub‐advisory services and/or assist their clients in selecting the Registrant as a separate account
manager, maintain both the initial and ongoing day‐to‐day relationship with the underlying client,
including the initial and ongoing determination of client suitability for the Registrant’s investment
strategies. The Registrant’s obligation shall be to manage the client’s account consistent with the
investment strategy designated by the unaffiliated firm. In addition, for all such engagements, the
Registrant does not generally have the ability to choose and/or determine: (1) the custodian and/or
broker‐ dealer for the client’s account; (2) whether the services are part of a wrap program or provided
on an unbundled basis; or (3) program and/or transaction cost pricing. Thus, the Registrant is unable
to control or confirm best execution for account transactions. Higher fees and transaction costs
adversely impact account performance.
Adviser to Registered Investment Company
The Registrant also serves as the investment manager to the Carret Kansas Tax Exempt Bond Fund,
which is an investment company (also referred to as mutual fund) registered under the Investment
Company Act of 1940, as amended (the “Fund”). A complete description of the Fund, its strategy,
objectives, and cost is set forth in the Fund’s then‐current prospectus, a copy of which is available from
the Registrant upon request. As the investment manager to the Fund, Registrant has discretionary
authority over the management of the Funds’ assets. The Registrant does not recommend the Fund to
its managed account clients.
Financial Consulting and Planning
Although the Registrant does not hold itself out as providing financial planning, estate planning or
accounting services, to the extent specifically requested by the client, the Registrant may provide
limited consultation services to its investment management clients on investment and non‐investment
related matters, such as estate planning, tax planning, insurance, etc. the Registrant shall not receive
any separate or additional fee for any such consultation services. Neither the Registrant, nor any of its
representatives, serves as an attorney, accountant, or licensed insurance agent, and no portion of the
Registrant’s services should be construed as same. Accordingly, the Registrant does not prepare legal
documents or tax returns, nor does it sell insurance products. To the extent requested by a client, the
Registrant may recommend the services of other professionals for certain non‐investment
implementation purposes (i.e. attorneys, accountants, insurance, etc.). The client is under no obligation
to engage the services of any such recommended professional. The client retains absolute
recommendation from the Registrant.
To the extent requested by a client, the Registrant may provide investment advice regarding private
investment funds (generally, positions purchased by the client independent of the Registrant). The
Registrant’s role relative to such private investment funds shall be limited to its ongoing monitoring
services. The amount of assets invested in the fund(s) shall not be included as part of “assets under
management” for purposes of Registrant calculating its investment advisory fee. Registrant’s clients
are under absolutely no obligation to consider or make
an investment in a private investment fund(s).
If the client engages any professional (i.e. attorney, accountant, insurance agent, etc.), recommended
or otherwise, and a dispute arises thereafter relative to such engagement, the client agrees to seek
recourse exclusively from the engaged professional. At all times, the engaged licensed professional(s),
and not Registrant, shall be responsible for the quality and competency of the services provided.
It remains the client’s responsibility to promptly notify the Registrant if there is ever any change in
his/her/its financial situation or investment objectives for the purpose of reviewing/evaluating/revising
Registrant’s previous recommendations and/or services.
Retirement Plan Services
Trustee Directed Plans. The Registrant may be engaged to provide discretionary investment advisory
services to ERISA retirement plans, whereby the Firm shall manage Plan assets consistent with the
investment objective designated by the Plan trustees. In such engagements, the Registrant will serve
as an investment fiduciary as that term is defined under The Employee Retirement Income Security
Act of 1974 (“ERISA”). The Registrant will generally provide services on an “assets under
management” fee basis per the terms and conditions of an Investment Advisory Agreement between
the Plan and the Firm.
Participant Directed Retirement Plans. Registrant may also provide investment advisory and consulting
services to participant directed retirement plans per the terms and conditions of a Retirement Plan
Services Agreement between Registrant and the plan. For such engagements, Registrant shall assist
the Plan sponsor with the selection of an investment platform from which Plan participants shall make
their respective investment choices (which may include investment strategies devised and managed by
Registrant), and, to the extent engaged to do so, may also provide corresponding education to assist
the participants with their decision-making process.
Wrap Fee Program(s)
Registrant manages accounts in wrap fee programs sponsored by third-party financial services firms
(typically broker/dealers). Under an agreement to participate as an outside investment manager in a
wrap program, Registrant acts as an outside manager with the custodian handling all transactions. A
wrap fee program is an investment advisory program under which a client typically pays a single fee to
the sponsor based on assets under management. Fees paid are not based directly upon transactions
in the client’s account or the execution of client transactions. The program sponsor determines the fee
to charge to the wrap fee program clients and has primary responsibility for client communications and
service. Registrant provides investment management services. Wrap fee accounts are considered
directed brokerage accounts. When determining whether to participate in a wrap fee program you
should consider, among other things, our brokerage practices and the fees charged by the program
sponsor in relation to the expected trading volume. (Item 12 provides more information about our
brokerage practices, including our treatment of directed brokerage accounts.)
Payment of advisory fees to Registrant and wrap fees to the sponsor will increase overall costs.
Therefore, performance will differ in these “wrap fee” arrangement portfolios in comparison to other like
managed portfolios. We choose investments and manage the accounts of clients in the wrap fee
program the same way we manage other client accounts in similar strategies, and these clients have
the same access to their portfolio managers as all other clients.
The Registrant does not sponsor a wrap program. In the event that the Registrant is engaged to
provide investment management services as part of an unaffiliated wrap‐fee program, Registrant will
be unable to negotiate commissions and/or transaction costs. Under a wrap program, the wrap
program sponsor arranges for the investor participant to receive investment advisory services, the
execution of securities brokerage transactions, custody and reporting services for a single specified
fee. In the event the Registrant elects to effect fixed income securities transactions through broker
dealers other than the wrap program sponsor, the investor participant may incur costs in addition to
those arranged by the wrap program sponsor.
Participation in a wrap program may cost the participant more or less than purchasing such services
separately. In the event that the Registrant is engaged to provide investment management services as
part of an unaffiliated managed account program, Registrant will likewise be unable to negotiate
commissions and/or transaction costs. If the program is offered on a non‐wrap basis, the
program sponsor will determine the broker‐dealer though which transactions must be effected, and the
amount of transaction fees and/or commissions to be charged to the participant investor accounts.
IRA Rollover Recommendations
Effective December 20, 2021 (or such later date as the US Department of Labor (“DOL”) Field
Assistance Bulletin 2018-02 ceases to be in effect), for purposes of complying with the DOL’s
Prohibited Transaction Exemption 2020-02 (“PTE 2020-02”) where applicable, we are providing the
following acknowledgment to you. When we provide investment advice to you regarding your
retirement plan account or individual retirement account, we are fiduciaries within the meaning of Title I
of the Employee Retirement Income Security Act and/or the Internal Revenue Code, as applicable,
which are laws governing retirement accounts. The way we make money creates some conflicts with
your interests, so we operate under a special rule that requires us to act in your best interest and not
put our interest ahead of yours. Under this special rule’s provisions, we must:
•Meet a professional standard of care when making investment recommendations (give
prudent advice);
•Put your interests ahead of our own when making recommendations (give loyal advice);
•Avoid misleading statements about conflicts of interest, fees, and investments.
•Follow policies and procedures designed to ensure that we give advice that is in your best
interest;
•Charge no more than is reasonable for our services; and
•Give you basic information about conflicts of interest.
We may benefit financially from the rollover of your assets from a retirement account to an account that
we manage or provide investment advice, because the assets increase our assets under management
and, in turn, our advisory fees.
Descriptions of the educational background and employment history of our investment professionals
are included in the Brochure Supplement (Form ADV Part 2B), which is available from Registrant upon
request.
Discretionary and Non-Discretionary Services
As a discretionary investment adviser, Registrant will have the authority to supervise and direct client
portfolios without prior consultation with the client.
In a non-discretionary arrangement, we retain the responsibility for the final decision on all actions
taken with respect to client’s portfolio. For non-discretionary accounts, the client may also execute a
limited power of attorney, which allows us to carry out trade recommendations and approved actions in
the client’s portfolio. However, in accordance with our non-discretionary investment advisory
agreement with the client, Registrant does not implement trading recommendations or other actions in
the account unless and until the client has approved the recommendation or action.
The use of non-discretionary accounts may result in a delay in executing recommended trades, which
could adversely affect the performance of the portfolio. This delay also normally means the affected
account(s) will not be able to participate in block trades, a practice designed to enhance the execution
quality, timing and/or cost for all accounts included in the block.
Carret provides investment advisory services specific to the needs of each client. Prior to providing
investment advisory services, your investment adviser representative will ascertain your investment
objective(s). Thereafter, we allocate and/or recommend that the client allocate investment assets
consistent with the designated investment objective(s). The client may, at any time, impose reasonable
restrictions, in writing, on the Registrant’s services.
Types of Investments
We offer advice on equity securities, corporate debt securities (other than commercial paper), United
States government securities, private placements, mutual funds, and ETFs.
Additionally, we may advise you on various types of investments based on your stated goals and
objectives. We may also provide advice on any type of investment held in your portfolio at the inception
of our advisory relationship.
Since our investment strategies and advice are based on each client’s specific financial situation, the
investment advice we provide to you may be different or conflicting with the advice we give to other
clients regarding the same security or investment.
If you participate in a wrap fee program, the sponsor will provide you with a separate Wrap Fee
Program Brochure explaining the program and costs associated with the program. You should also
review this Part 2A thoroughly to evaluate any differences between wrap versus non-wrap services.
Assets Under Management
As of December 31, 2023, the Registrant had $3,115,450,861 in assets under management on a
discretionary basis.