How We Invest.
Mercury's investment process begins with the demographic thesis and works forward: from research to selection, portfolio construction, and risk discipline. Every step is designed around one constraint: the time horizon of the shift itself.
See Our PerformanceWe Start With the Household, Not the Stock.
Most equity analysis begins with a company: its earnings, its management, its competitive position. We begin with the household. Before evaluating a single security, we ask which demographic forces are reshaping demand in a given sector over the next decade, and which companies are structurally positioned to benefit.
We do not screen for stocks and then check whether they happen to benefit from demographic trends. We map the demographic structure of the economy first, identify the sectors and sub-sectors where that structure creates durable demand, and then conduct rigorous company-level research within those bounds.
Company analysis begins only after the demographic structure of the sector has been mapped. The thesis narrows the research agenda before fundamental work begins.
We hold between 30 and 35 positions. Concentrated ownership requires a smaller research universe and a higher conviction threshold per position.
Four stages from thesis to portfolio.
Each stage applies a distinct discipline. Together they produce a portfolio whose holdings can be traced directly back to a specific demographic argument.
Demographic Mapping
We begin with population data including Census Bureau projections, Social Security Administration cohort analysis, and labor force participation trends. We identify which demographic forces are accelerating, which are plateauing, and where the market has not yet priced the decade ahead.
Sector & Industry Selection
From our ongoing demographic mapping process, we identify the sectors and industries where structural demand is both large and durable. We apply a filter: the demand must be demographic in origin, not cyclical. Education, financial services, housing, and consumption categories where cohort size drives volume are recurring areas of focus.
Security Selection
Within targeted sectors, we conduct fundamental analysis on individual companies: business model, competitive moat, balance sheet, management quality, and earnings leverage to the specific demographic driver. A strong demographic tailwind is necessary but not sufficient. The company must also be positioned to translate that tailwind into earnings at an acceptable valuation.
Portfolio Construction
Approved positions are sized based on conviction, valuation, and contribution to portfolio-level risk. We manage concentration deliberately; it must be high enough that our best ideas matter, but not so high that a single error is disqualifying. No single position exceeds 10% of the portfolio at cost. Sector exposures are monitored against the demographic thesis, not a benchmark index.
When to Hold, When to Exit.
The most common error in long-horizon investing is selling too early. A position that has appreciated but whose thesis has not fully played out is not a reason to sell. Neither is a position that has declined. In both cases the right question is whether the thesis remains intact, and whether the valuation still reflects the remaining duration of the shift. Price movement and thesis exhaustion are entirely different events, and we treat them that way.
We exit positions when the underlying demographic driver has run its course, when the company's earnings leverage to the thesis has diminished through structural change, or when our initial thesis is proven wrong by subsequent evidence. We do not exit because a position has become a large percentage of the portfolio, and we do not trim positions to manage tracking error against a benchmark.
Thesis exhaustion: the demographic driver has run its course or the company's earnings leverage to it has structurally changed.
Short-term underperformance, benchmark tracking error, or a position growing to a large percentage of the portfolio through appreciation.
11% average annual turnover across the composite. A structural consequence of thesis-driven holding periods, not a policy target.
Fee Structure
Fee-only. No commissions, no referral fees.
Mercury is compensated exclusively through advisory fees paid directly by clients. We earn no commissions on securities transactions, no referral fees from third parties, and no revenue from any financial product we recommend.
This structure eliminates conflicts of interest that arise when an advisor's compensation depends on product sales, transaction volume, or asset gathering. Our revenue grows when our clients' portfolios grow. That is the alignment we are willing to accept.
Advisory fees and fee schedules are disclosed in our Form ADV Part 2A, available in the utility bar at the top of this page.
Fiduciary Standard
A legal obligation to act in your interest.
Mercury is held to the fiduciary standard — the highest duty of care under U.S. securities law — requiring us to act in each client's best interest, disclose all material conflicts, and never place our interests above theirs.
The fiduciary standard is not a marketing position. It is a legal and regulatory obligation that shapes every decision we make — from security selection to fee disclosure to how we handle conflicts when they arise.
Our Form CRS Relationship Summary describes our services, fees, conflicts, and standards of conduct in detail.
A process built for investors with a long horizon.
If the approach we have described matches how you think about capital, review our performance history or reach out to begin a conversation.