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HomeMy WebLinkAboutAgenda Fire Pension 021111THE R ESOURCE C ENTERS , LLC 4360 Northlake Boulevard, Suite 206 Palm Beach Gardens, FL 33410 Phone (561) 624-3277 Fax (561) 624-3278 WWW .R ESOURCE C ENTERS .COM PALM BEACH GARDENS FIREFIGHTERS’ PENSION FUND Special Meeting of Friday, February 11, 2011 Location: Council Chambers, Palm Beach Gardens City Hall 10500 North Military Trail Palm Beach Gardens, FL 33410 Time: 11:30 A.M. A GENDA 1. Call Meeting to Order 2. Investment Manager Presentations • ICC • Rockwood 3. Other Business 4. Schedule Next Meeting: Monday, March 28, 2011 at 9:00 A.M. 5. Adjourn PLEASE NOTE: Should any interested party seek to appeal any decisi on made by the Board with respect to any matter considered at such meeting or hearing, he will need a record of t he proceedings, and for such purpose he may need to insure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based. In a ccordance with the Americans With Disabilities Act of 1990, persons needing a special a ccommodation to participate in th is meeting should contact The Resource Centers, LLC no later t han four days prior to the meeting. February 11, 2010 PREPARED FOR CAPITAL MANAGEMENT, INC. Pr E s ENTATI o N F or INVE s TMENT MANAGEMENT s E r VICE s PALM BEACH GA r DEN s FI r EFIGHTE rs ’ PEN s I o N FUND FI r M o VE r VIEW MULTI-CAP EQUITY s UPPLEMENTAL MATE r IAL s I II III s TEVE s TACK e-mail: sstack@icccapital.com tel: 407-926-7774 ICC OVERVIEW OUR INVESTMENT STRATEGIES BIOGRAPHIES OUR CLIENTS 1 2 3 4 CAPITAL MANAGEMENT, INC. FIRM OVERVIEW 1 OVERVIEW ICC Capital is an employee-owned organization headquartered in Orlando, FL. We are solely dedicated to the practice of investment management. • Offices in Orlando, FL; New York, NY; Walnut Creek, CA • 100% Employee-owned • Assets under management: $3.27 billion The founders of the company have over 125 years of combined experience in investment management. All senior professionals are owners of the company. This ownership structure is significant because it: • Provides stability to our organization • Aligns our incentives directly with those of our clients At ICC, we are focused on developing solid, long-term relationships with our clients as educators and partners in the investment process. We understand that while strong performance gets us in the door, it takes consistent performance based on a rigorous and value-added investment process, and trusted client-manager relation -ships to keep us there. • Public Funds • Taft-Hartley • Corporate • Endowments & Foundations We believe the key to consistent, long-term performance is first based on preserving the capital entrusted to us. Therefore, portfolios are managed not only to maximize returns within client guidelines, but also to minimize risk. We implement our philosophy through: • Innovative investment concepts • Rigorous processes • Risk control OUR COMPANY OUR PHILOSOPHY OUR TEAM OUR CLIENTS Assets Under Management by Client Assets Under Management by Asset Type Public Funds 49% Taft-Hartley 48% Other 3% Equity 86% Fixed 14% 2 OUR INVESTMENT STRATEGIES This strategy blends quantitative multi-factor modeling along with traditional bottom up fundamental analysis to identify securities which exhibit above average earnings growth rates while trading at attractive relative valuations. Portfolios consist of 40-50 large cap, high growth securities with broad diversification across market sectors. LARGE CAP GROWTH EQUITY The International ADR Equity strategy utilizes our quantitative multi-factor model for top-down analysis of broad regions and bottom-up analysis of individual securities. Portfolios consist of approximately 25 large-cap ADR securities diversified across regions and industries. INTERNATIONAL ADR EQUITY This strategy meets client goals and objectives and controls portfolio risk by accenting yield and carefully managing sector weightings. We further minimize volatility by evaluating duration risk on an issue specific and total portfolio basis. CORE FIXED INCOME / SECTOR ROTATION Our Multi-Cap Equity product is a successful complement to traditional equity strategies offered by most investment firms. Based on anticipated economic, market and investment trends, portfolios rotate among market capitalizations (small/mid/large), investment styles (growth/value) and market sectors. Portfolios consist of 25-55 securities with potential for concentration in both sectors/industry groups and individual holdings. This strategy is driven by our quantitative multi-factor model which filters large quantities of macroeco - nomic, fundamental and technical data to rank broad industry sectors and individual securities according to relative attractiveness. Portfolios consist of 40-50 value-oriented large-cap securities diversified across market sectors. MULTI-CAP EQUITY CORE VALUE EQUITY 3 INVESTMENT PROFESSIONALS J. Andrew Richey, CFA President/Portfolio Manager/CIO Andy serves as the lead portfolio manager for our Multi-Cap Equity product in addition to managing his responsibili - ties as Chief Investment Officer. Prior to joining ICC in 1995, Andy worked as portfolio manager and investment strategist at Alliance Capital Management LP. During this decade long tenure he appeared in numerous public and industry forums as a spokesman for the firm’s investment products. Andy received his BA from Wabash College, his MBA from Indiana University. He is a CFA charterholder. Vittorio Fratta, CFA Assistant Portfolio Manager Vittorio joined the company in August 2005 as a Senior Operations Analyst and was promoted to a Multi-Cap Eq - uity trader in November 2006. Vittorio joined Multi-Cap Equity strategy team as the Assistant Portfolio Manager in October 2008. Prior to coming to ICC he interned at KCM Asset Management. He graduated as a Roland George Merit Scholar from Stetson University, where he earned a BBA in Finance with an Information Technology minor in 2005 and MBA in 2007. Vittorio is a CFA charterholder. He works out of our Walnut Creek office in California. Grant McMurry Managing Director Grant is responsible for servicing our Florida Municipal relationships and heads our Public Fund client servicing efforts. He joined the firm in 1986 following ten years of service as a pension consultant with Rogers, Casey & Barksdale and later with William M. Mercer, Inc. Prior to his consulting experience, Grant served as a staff attorney with General Mills, Inc. He received a BA from Drake University, a JD from the William Mitchell College of Law, is a licensed attorney and a member of the Minnesota State Bar. Grant is an owner of the firm. Steven Stack Chief Compliance Officer Steve joined ICC in 2001 and is responsible for maintaining client relationships and policy administration within our Public Fund client services group. In addition to his role within our client services team, Steve is the Chief Compli - ance Officer of ICC. Prior to joining our firm, Steve worked for the Georgia Lottery Corporation in a marketing and client servicing role. He received his BA from Ferris State University and MBA in Marketing from Mercer University. Steve is a member of the National Association of Compliance Professionals and is a Certified Regulatory and Compliance Professional through the FINRA Institute at the Wharton School of Business. 4 PUBLIC, ENDOWMENTS & CORPORATE CLIENTS Archdiocese of Galveston-Houston Pension Plan Arkansas State Teachers’ Retirement System Avon Park Police Officer’s Retirement Fund Bay Harbor Islands Pension Fund Boy Scouts of America Cape Coral Firefighters’ Retirement Plan Cape Coral General Employees’ Retirement Plan Cape Coral Police Officers’ Retirement Plan Children’s Home Society of Florida Foundation City of Brockton Retirement System City of Cocoa Firefighters’ Retirement Fund City of Coral Springs General Employees’ Pension Fund City of Dania Beach Police & Firefighters’ Pension Fund City of Saginaw Police & Fire Pension Fund City of Sarasota Firefighters’ Pension Fund Cooper City General Employees’ Retirement Fund Dade City Police Pension Fund Dade City Firefighters’ Pension Fund Delray Beach Police & Firefighters’ Pension Fund Deerfield Beach Police Officers’ Pension Fund Eatonville Police Pension Trust Fund Eustis Firefighters’ Retirement Fund Eustis Municipal Police Officers’ Retirement Fund Fernandina Beach General Employees’ Pension Fund Fernandina Beach Police & Fire Pension Fund Fort Meade Combined Investment Fund Fort Meade Firemen’s Pension Trust Fund Fort Meade General Employees’ Retirement Fund Fort Meade Policemen’s Pension Trust Fund Fort Meade Renewal & Replacement Fund Frostproof Police Officers’ Retirement Fund Georgia Sheriffs Retirement Fund Haines City Municipal Firefighters’ Retirement Trust Haines City Municipal Police Officers’ Retirement Trust Hialeah Gardens Police Pension Fund Holly Hill Firefighters’ Retirement Fund Homestead Firefighters’ Pension Fund International Association of Firefighters Pension Fund Jesuit High School of New Orleans John Deere Pension Trust Fund Key West General Employees’ Fund Key West Police & Fire Retirement Fund Kissimmee General Employees’ Retirement Plan Lake Mary Police Officers’ Pension Fund Lake Wales Firemen’s Pension Trust Fund Lake Wales General Employees’ Pension Fund Lake Wales Police Officers’ Pension Fund Lake Worth Firemen’s Pension Trust Fund Lake Worth Police Relief & Pension Fund, Div II Lantana Police Pension Fund Lauderhill General Employees’ Retirement System Lauderhill Confidential & Managerial Pension Plan Lauderhill Police Retirement System Leesburg Firemen’s Retirement Trust Longboat Key General Employees’ Retirement System Melbourne Firemen’s Pension Trust Melbourne Police Pension Trust Miami Beach General Employees’ Retirement Fund Miami Springs Employees’ Retirement System Fund Miami Springs Police & Fire Pension New Haven Police & Fire Retirement System North Palm Beach Police & Fire Pension Fund Ocoee General Employees Pension Fund Orange Park Police Officers’ Retirement Fund Palm Beach Gardens Police Officers’ Retirement Fund Port Orange General Employees’ Retirement System Port St. Lucie Police Pension Trust Fund Punta Gorda Firefighters’ Retirement Fund Punta Gorda Municipal Employees’ Retirement Fund Punta Gorda Police Officers’ Retirement Fund San Antonio Police & Fire Retiree Healthcare Fund Sebastian Police Officers’ Pension Fund South Pasadena Firefighters’ Fund Sunrise Firefighters’ Retirement Fund Surfside Pension Trust Fund Tarpon Springs Firefighters’ Pension Trust Temple Terrace Firefighters’ Retirement Fund Temple Terrace Police Officers’ Retirement Fund United Methodist Children’s Endowment Fund Vero Beach Firemen’s Relief & Pension Fund Vero Beach Police Officers’ Retirement Fund Village of Palm Springs Police Officers’ Pension Plan Winter Garden Firefighters’ & Police Pension Fund Winter Garden General Employees’ Pension Fund Winter Haven Firefighters’ Pension Fund Winter Haven General Employees’ Pension Fund Winter Park Firemen’s Pension Trust Fund 5 TAFT-HARTLEY CLIENTS Asbestos Workers Local #10 Pension Plan Asbestos Workers Local #55 Pension Plan Asbestos Workers Local #78 Pension Plan Boston Pipefitters Local #537 Pension Fund Bricklayers Local Union #1 Fringe Benefit Fund Carpenters Local Union #127 Pension Plan Carpenters Local Union #345 Pension Plan Cement & Concrete Workers Pension Cement Mason Local Union #521 Pension Plan Cement Masons Local Union #780 Pension Fund Cement Masons Local Union #780 Annuity Fund Cement Masons Local Union #780 Trust Fund Coral Gables Firefighters’ Local 1210 Insurance Fund Empire State Carpenters Annuity Fund Empire State Carpenters Welfare Florida Firefighters’ Insurance Trust Fund General Building Laborers’ Local 66 Pension Fund Hialeah Firefighters’ Local 1102 Insurance Trust Fund Iron Workers Local 40, 361 & 417 Security Funds IBEW Local #505 Pension Plan - N.E.C.A. IBEW Local #508 Pension Plan IBEW Local #903 Pension Plan IBEW Local #164 Pension Fund International Painters & Allied Trades Annuity Plan IUPAT Death Benefit Fund IUPAT General Convention Fund IUPAT Operating Fund Laborers Local #1298 Pension Fund Local #638 Steamfitters Industry Pension Fund Louisiana Carpenters Pension Fund Louisiana Carpenters Health Benefit Trust Fund Mason Tenders District Council Trust Funds Mechanical Contractors Local Union #119 Pension Metal Trade Branch Local Union #638 Pension Fund Miami Beach Firefighters’ Local 1501 Insurance Fund Middle Tennessee Carpenters & Millwrights Pension Mid-South Carpenters Regional Council H&W Fund Millwrights Local Union #1192 National Automatic Sprinkler Industry Fund NY District Council of Carpenters Pension Fund NJ Statewide Building Laborers Pension Fund PACE Industry Union-Management Pension Fund PACE International Union Fund Painters Local #35 Painting Industry Annuity Plan Pipefitters Local #274 Pension Fund Plumbers Local #17 Pension Plan Palm Beach County Fire Insurance Trust RWDSU Local #338 Southeastern Carpenters and Millwrights Southern Region of Teamsters Steamfitters Local #475 Pension Fund Steamfitters Local Union #614 Pension Plan Sheetmetal Workers Local #85 Pension Fund Sheetmetal Workers Local #441 Pension Fund Stonesetters’ Local #84 Pension & Annuity Fund Teamsters Local #553 Pension Fund Teamsters Local #677 Health Service & Insurance Plan Tile Layers Local #52 Pension Fund TriState Carpenters of Chattanooga UA Local 198 Pension Trust Fund UA Local 198 Annuity Trust Fund UA Local 198 Education Trust Fund UA Local 198 Health & Welfare Trust Fund 1 2 3 4 5 8 9 10 INVESTMENT PROCESS PRIOR CYCLE ROTATIONS RELATIVE SECTOR WEIGHTS PORTFOLIO PROFILE RELATIVE PERFORMANCE COMPOSITE PERFORMANCE FEE SCHEDULE DISCLOSURES CAPITAL MANAGEMENT, INC. MULTI-CAP EQUITY 1 MULTI-CAP EQUITY - Investment Process Our Multi-Cap Equity investment philosophy is driven by the following beliefs: • Capital markets are ultimately efficient and operate in an environment of generally useful and correct information over time. However, through accurate evaluation areas of opportunity can be identified and prioritized based on their potentials and risks. • In such environments, the value added reward in active portfolio management comes from a process based on relative portfolio positioning rather than targeted stock picking. Our investment decision making process is driven by a proprietary methodology which reviews large quantities of macroeconomic, fundamental and technical data in an attempt to detect situations within individual securities and broad market sectors that represent potential investment opportunities for our portfolio managers to evaluate. Our process underpins portfolio management decisions, which are operationally effective on several levels: • They expand the potential investment universe, allowing for the evaluation of hundreds of individual securities as market conditions evolve over time. • They minimize consensus behavior, providing for rational and consistent investment decision making. • They identify underlying trends in securities and sectors that often go unnoticed in traditional fundamental analysis. • They assist in both identifying the current status of expected rates of return in financial markets as well as prioritizing opportunity and risk potential. Knowing the status of expected returns and the priorities associated with them leads to efficient analysis and effective decision making. Our proprietary methodology provides portfolio managers with the tools necessary to identify trends as they develop and respond quickly to rapidly changing market conditions. INVESTMENT PHILOSOPHY Our firm’s quantitative and qualitative investment process focuses on the pivotal investment questions of HOW MUCH to commit and WHEN to make the commitment, rather than the traditional approach of WHAT to invest in and WHY . INVESTMENT PROCESS 2 MULTI-CAP EQUITY - Prior Cycle Rotations Previous Rotations: Repositioning Portfolios in Advance of a New Market Cycle Over the course of the last 10 years, our investment process has correctly forecasted 2 major inflection points in the market: 2000 bull market peak & 2002 bear market bottom. In both instances, our model based processes suggested significant shifts in portfolio positioning in anticipation of a change in market leadership. These shifts took on average 4-6 months to complete, during which time, our portfolio underperforms as we “step away” from the market leaders. Once the repositioning is complete, our anticipatory shifts have paid off in the form of significant outperformance for the next 24-36 months. 1998 Rotation: Repositioned Portfolios in Advance of 2000 Bull Market Peak 2002 Rotation: Repositioned Portfolios in Advance of 2002 Bear Market Bottom Nature of Rotation: Increasing Market Cap, Emphasis toward Defensive Sectors, Increasing Exposure to Value Stocks, Decreasing Exposure to Growth Stocks. Pre-Rotation Portfolio Structure: Post-Rotation Portfolio Structure: Weighted Average Market Cap: $39B Weighted Average Market Cap: $60B Exposure To Growth Stocks: 55% Exposure To Growth Stocks: 15% Exposure To Value Stocks: 45% Exposure To Value Stocks: 85% Largest Sector Exposure: Largest Sector Exposure: Technology (Aggressive) 25% Energy (Defensive) 24% Smallest Sector Exposure: Smallest Sector Exposure: Healthcare (Defensive) 0.6% Communications (Aggressive) 0.9% Nature of Rotation: Decreasing Market Cap, Emphasis toward Cyclical Sectors, Increasing Exposure to Aggressive Growth Stocks, Decreasing Exposure to Value Stocks. Pre-Rotation Portfolio Structure: Post-Rotation Portfolio Structure: Weighted Average Market Cap: $35B Weighted Average Market Cap: $19B Exposure To Growth Stocks: 10% Exposure To Growth Stocks: 40% Exposure To Value Stocks: 90% Exposure To Value Stocks: 60% Largest Sector Exposure: Largest Sector Exposure: Energy (Defensive) 24% Industrials (Cyclical) 22% Smallest Sector Exposure: Smallest Sector Exposure: Communications (Aggressive) 1.0% Healthcare (Defensive) 1.5% 3 MULTI-CAP EQUITY - Relative Sector Weights Multi-Cap Equity 04/30/05 - 12/31/10 Russell 3000 04/30/05 - 12/31/10 0% 20% 40% 60% 80% 100% 1 Q 0 6 2 Q 0 6 3 Q 0 6 4 Q 0 6 1 Q 0 7 2 Q 0 7 3 Q 0 7 4 Q 0 7 1 Q 0 8 2 Q 0 8 3 Q 0 8 4 Q 0 8 1 Q 0 9 2 Q 0 9 3 Q 0 9 4 Q 0 9 1 Q 1 0 2 Q 1 0 3 Q 1 0 4 Q 1 0 0% 20% 40% 60% 80% 100% 1 Q 0 6 2 Q 0 6 3 Q 0 6 4 Q 0 6 1 Q 0 7 2 Q 0 7 3 Q 0 7 4 Q 0 7 1 Q 0 8 2 Q 0 8 3 Q 0 8 4 Q 0 8 1 Q 0 9 2 Q 0 9 3 Q 0 9 4 Q 0 9 1 Q 1 0 2 Q 1 0 3 Q 1 0 4 Q 1 0 Util itie s En ergy Te ch no lo gy Co mm un ic at io ns He al th Car e Co ns um er S tapl es Fi na nc ia ls Co ns um er D iscr et io na ry Industrials Ma terial s 4 Multi-Cap R3000 Avg. Market Capitalization (Bil.)50.54 71.74 Price to Earnings 12.7 14.3 Price to Sales ttm 0.74 1.27 Price to Book ttm 2.4 2.2 Dividend Yield 1.8%1.7% 5 Year EPS Growth 3%7% 5 Year Standard Deviation 19.9%18.5% Beta (10 Year vs. Russell 3000)1.04 ------ Alpha (10 Year vs. Russell 3000)6.4%------ R 2 (10 Year vs. Russell 3000)0.81 ------ Sharpe Ratio (10 Year vs. Russell 3000)0.31 ------ Info Ratio (10 Year vs. Russell 3000)0.73 ------ MULTI-CAP EQUITY - Portfolio Profile As of December 31, 2010 Relative Valuation Screening Statistical Analysis Active Concentration & Sector Rotation Fundamental & Technical Evaluation Russell 3000 Universe Step 1: Step 2: Step 3: Step 4: 0.00% 10.00% 20.00% 30.00% B a s i c M a t e r i a l s I n d u s t r i a l s C o m m u n i c a t i o n s C o n s . D i s c r e t i o n a r y C o n s . S t a p l e s E n e r g y F i n a n c i a l s H e a l t h C a r e T e c h n o l o g y U t i l i t i e s Multi-Cap R3000 SECURITY SELECTION PROCESS SECTOR ALLOCATION PORTFOLIO CHARACTERISTICS TOP 10 HOLDINGS ttm - trailing twelve months Company Name Portfolio % Hewlett Packard Co.5.8% Chesapeake Energy Corp.5.2% Eli Lilly and Company 5.0% AMR Corp.5.0% Coca Cola Company 4.8% International Paper Company 4.4% Boeing Co.4.3% Barrick Gold Corp.4.1% Micron Technology Inc.4.0% Pall Corp.3.9% Supplemental Information 5 $0 $1 $2 $3 $4 $5 $6 Ap r-9 6 Ma r-97 F eb - 98 Ja n - 99 De c-99 No v-00 Oc t-01 Se p-02 Au g -0 3 Ju l-04 Ju n - 05 Ma y-06 Ap r-0 7 Ma r-08 Fe b - 09 Ja n - 10 De c-10 Ru sse ll 3 00 0 I CC Mu lti-Ca p ICC Multi-Cap vs Russell 3000 Growth of $1 (4/1996 - 12/2010) (gross of management fees) $5.34 $2.62 MULTI-CAP EQUITY - Relative Performance 6 $0 $1 $2 $3 Ma r-00 Ja n - 01 No v-01 Se p-02 Ju l-03 Ma y-04 Ma r-05 Ja n - 06 No v-06 Se p-07 Ju l-08 Ma y-09 Ma r-10 Ru ssel l 300 0 I CC Mu lti-Ca p ICC Multi-Cap vs Russell 3000 Growth of $1 (3/2000 - 12/2010) (gross of management fees) $2.67 $1.18 MULTI-CAP EQUITY - Relative Performance 7 $0 $1 $2 No v-07 J an - 08 Ma r-0 8 Ma y-08 J ul- 08 Se p-08 No v-08 J an - 09 Ma r-09 Ma y-09 Ju l-09 Se p-09 No v-09 Ja n-10 Ma r-10 Ma y-10 J ul- 10 Se p-10 No v-10 Ru sse ll 3 00 0 I CC Mu lt i-Ca p ICC Multi-Cap vs Russell 3000 Growth of $1 (11/2007 - 12/2010) (gross of management fees) $1.11 $0.89 MULTI-CAP EQUITY - Relative Performance 8 As of December 31, 2010 MULTI-CAP EQUITY - Composite Performance -10.0% 0.0% 10.0% 20.0% Multi-Cap 17.5%6.7%10.5%12.0%8.3% R3000 16.9%-2.0%2.7%4.5%2.2% 1 Year 3 Year 5 Year 7 Year 10 Year ANNUALIZED RETURNS (gross of fees) CUMULATIVE RETURNS (gross of fees) 0% 10% 20% 30% 40% 50% 60% 70% Multi-Cap 65.0% R3000 14.5% 5 Year 0% 20% 40% 60% 80% 100% 120% 140% Multi-Cap 122.6% R3000 23.8% 10 Year 5 Year Cumulative Return 10 Year Cumulative Return 9 Assets Fee First $25 Million 0.85% Next $25 Million 0.65% Next $50 Million 0.50% Over $100 Million Negotiable • Proven Investment Process • Experienced Team • Strong Historical Pattern of Performance • Commitment to Clients FEE SCHEDULE WHAT WE OFFER MULTI-CAP EQUITY - Fee Schedule 10 Year Gross-of- Fees Return (%) Net-of- Fees Return (%) Benchmark 1 Return (%) Composite 3-Yr St. Dev. (%) Benchmark 1 3-Yr St. Dev. (%) Number of Portfolios Composite Dispersion (%) Total Composite Assets (Millions) Total Firm Assets (Billions) 2000 10.0 9.0 -7.5 17.80 17.97 9 1.30 $521.2 $1.34 2001 -2.6 -3.4 -11.5 17.78 17.12 7 0.47 $490.6 $1.40 2002 -25.9 -26.5 -21.5 21.42 18.82 7 1.29 $375.1 $1.28 2003 39.1 38.0 31.1 21.75 18.37 8 5.13 $561.7 $1.63 2004 15.0 14.1 11.9 20.24 15.05 8 0.25 $646.8 $2.02 2005 16.6 15.7 6.1 15.12 9.63 20 1.20 $910.6 $2.36 2006 23.5 22.5 15.7 12.03 7.62 28 0.78 $1,294.9 $2.89 2007 9.9 8.9 5.1 11.81 8.26 40 2.10 $1,390.5 $3.03 2008 -25.3 -25.9 -37.3 17.32 16.02 53 1.68 $1,177.4 $2.20 2009 38.5 37.4 28.3 23.46 20.61 57 5.17 $1,671.9 $2.84 2010 17.5 16.5 16.9 24.36 22.94 74 1.56 $2,005.4 $3.27 January 1, 2000 through December 31, 2010 MULTI-CAP EQUITY- Disclosures ICC Capital Management claims compliance with the Global Investment Performance Standards (GIPS) and has prepared and presented this report in compliance with the GIPS standards, ICC has been independently verified for the periods 1/1/1995 - 9/30/2010. The verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. Firm and Composite Information ICC Capital Management, Inc. is an independent registered investment advisor investing in domestic equity, domestic fixed income and international equity securities. The Multi-Cap Equity composite was created on April 1, 1996. The Multi-Cap Equity composite includes all institutional and trust portfolios invested in multi-capitalization asset classes with emphasis placed on sector and style rotation. The Multi-Cap Equity composite invests in small, mid and large capitalization domestic and international stocks. Beginning April 1, 2006, the minimum account size for inclusion into the Multi- Cap Equity composite is $500,000. Beginning January 1, 2006, this composite changed its name from Active Core Equity to Multi-Cap Equity to better reflect the investment philosophy of the composite. Prior to July 1, 2005, ICC carved out single asset class portfolios from multiple asset class port - folios and carved out cash based on clients’ target allocation. No alteration of the composite has occurred because of changes in personnel or other reasons. A complete list and description of firm composites is available upon request by contacting compliance department by tel: (800)-480-6445. 1 Benchmark(s) The benchmark is the Russell 3000 index or other indices that reflect the investment strategy of the composite. The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. The Russell 3000 Index is constructed to provide a comprehensive, unbiased, and stable barometer of the broad market and is completely reconstituted annually to ensure new and growing equities are reflected. The Russell 3000 Index is calculated on a total return basis with dividends reinvested and is not assessed a management fee. Performance Calculations Valuations and returns are computed and stated in U.S. Dollars on a time-weighted basis. Results reflect the reinvestment of dividends and other earnings. Beginning January 1, 2005, dividends are being recognized on an accrual basis. Gross-of-fees returns are presented before management fees that were paid, but after all trading expenses. Net-of-fees returns are calculated using the highest fee that may be charged and presented after the deduction of trading expenses. The standard investment fee is 0.85% for first $25 million, 0.65% for next $25 million, 0.50% for next $50 million, over $100 million is negotiable. To illustrate the effect that the 0.85% investment advisory fee may have on your return, after deduction of the advisory fee, the 1-, 3-, 5-, 7- and 10-year returns presented would be 16.49%, 5.84%, 9.62%, 11.09% and 7.42%, respectively. Additional information about regarding ICC’s fees is included in its Form ADV Part II. Dispersion of annual returns has been measured by the asset-weighted standard deviation of all accounts included in the composite for the entire year. As of September 30, 2008, significant cash flow is defined as an account within the compos - ite that has over 20% external cash flow as compared to the average cash position of the composite. Prior to this date it was defined as an account within the composite that had over 10% external cash flow. The exclusion of the account is the month in which the significant cash flow occurred. The 3-year annualized standard deviation measures the variability of the composite and the benchmark returns over the preceding 36-month period. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request by contacting compliance department by tel: (800)-480-6445. Past performance does not guarantee future results. ICC Capital Mu l t i - C a p E q u i t y P e r f o r ma n c e A t t r i b u t i o n R e v i e w September 30, 2010 1 Supplemental Materials 1 So u r c e s o f e x c e s s r e t u r n a r e c o n s i s te n t w i t h t h e i n v e s t m e n t p h i l o s o p h y As of September 30, 2010 H i s t o r i c a l P e r f o r m a n c e D e c o m p o s i t i o n -4 . 0 -2 . 0 0. 0 2. 0 4. 0 6. 0 8. 0 10 Y e a r s ( a n n u a l i z e d ) 5 Y e a r s (a n n u a l i z e d ) 3 Y e a r s ( a n n u a l i z e d ) 1 Y e a r 3 Months Return (%) B e t a P o l i c y S t y l e S e c t o r Security Selection 2 Supplemental Materials 2 As of September 30, 2010 Cu m u l a t i v e P e r f o r m a n c e D e c o m p o s i t i o n -4 0 -2 0 0 20 40 60 80 10 0 10 / 0 0 0 4 / 0 1 1 0 / 0 1 0 4 / 0 2 1 0 / 0 2 0 4 / 0 3 1 0 / 0 3 0 4 / 0 4 1 0 / 0 4 0 4 / 0 5 1 0 / 0 5 0 4 / 0 6 1 0 / 0 6 0 4 / 0 7 1 0 / 0 7 0 4 / 0 8 1 0 / 0 8 0 4 / 0 9 1 0 / 0 9 0 4 / 1 0 Be t a P o l i c y St y l e Se c t o r s Se c u r i t y S e l e c t i o n Active Management 3 Supplemental Materials Lo n g - t e r m e x c e s s r e t u r n s a r e v e r y a t t r a c t i v e Tr a c k i n g E r r o r 0 2 4 6 8 10 12 14 16 S e p - 0 0 S e p - 0 1 S e p - 0 2 S e p - 0 3 S e p - 0 4 S e p - 0 5 S e p - 0 6 S e p - 0 7 S e p - 0 8 S e p - 0 9 S e p - 1 0 Percent (%) Ex p o n e n t i a l l y S m o o t h e d T r a c k i n g E r r o r 1 Y e a r R o l l i n g T r a c k i n g E r r o r Cumulative Information Ratio 0 20 40 60 80 10 0 12 0 14 0 16 0 18 0 S e p - 0 0 S ep-01 S ep -0 2 Se p -03 Se p -04 Se p -05 Sep-06 Sep-07 Se p -08 Se p -09 Se p -10 Cu m u l a t i v e E x c e s s R e t u r n 0 10 20 30 40 50 60 70 80 S e p - 0 0 S e p - 0 1 S e p - 0 2 S e p - 0 3 S e p - 0 4 S e p - 0 5 S e p - 0 6 S e p - 0 7 S e p - 0 8 S e p - 0 9 S e p - 1 0 Percent (%) 4 Supplemental Materials IC C C a p i t a l M a n a g e m e n t , I n c . : M U L T I - C A P E Q U I T Y vs . R u s s e l l 3 0 0 0 As o f S e p t e m b e r 2 0 1 0 5t h P e r c e n t i l e 25 t h P e r c e n t i l e 50 t h P e r c e n t i l e 75 t h P e r c e n t i l e 95 t h P e r c e n t i l e IC C C a p i t a l M a n a g e m e n t 3 Y r Ac t u a l % R a n k Ac t u a l % Rank Actual % Rank IC C C a p i t a l M a n a g e m e n t , I n c . : M U L T I - C A P E Q U I T Y 0 . 9 9 1 . 4 1 0.9 4 5t h P e r c e n t i l e 1 . 1 0 . 8 0.9 25 t h P e r c e n t i l e 0 . 6 0 . 5 0.7 50 t h P e r c e n t i l e 0 . 2 0 . 1 0.4 75 t h P e r c e n t i l e ( 0 . 2 ) ( 0 . 1 ) 0.2 95 t h P e r c e n t i l e ( 0 . 6 ) ( 0 . 5 ) (0.1) Po p u l a t i o n 1 1 2 9 9 49 Ru s s e l l 3 0 0 0 ( 6 . 6 ) 0 . 9 0.1 In f o r m a t i o n R a t i o 5 Y r 10 yr In f o r m a t i o n R a t i o -1 0 1 2 3 Y r 5 Yr 10 Yr Percent (%) 5 Supplemental Materials 5 De s p i t e s i g n i f i c a n t a c t i v e s t y l e a n d s e l e c t i o n e x p o su r e s , s e c t o r ex p o s u r e i s t h e l a r g e s t c o n t r i b u t o r to t r a c k i n g e r r o r As of September 30, 2010 Ob s e r v e d T r a i l i n g 1 2 - M o n t h T r a c k i n g E r r o r 0. 0 5. 0 10 . 0 15 . 0 20 . 0 25 . 0 11/00 03/01 07/01 11/01 03/02 07/02 11/02 03 /03 07/03 11/03 03/04 07/04 11/04 03/ 05 07/05 11/05 03/06 07/06 11/06 03/07 07/07 11/07 03/08 07/08 11/08 03/09 07 /09 11/09 03/10 07/10 Percent (%) Be t a P o l i c y St y l e Se c t o r s Se c u r i t y S e l e c t i o n To t a l T r a c k i n g E r r o r Hi s t o r i c P r e d i c t e d T r a c k i n g E r r o r 0. 0 5. 0 10 . 0 15 . 0 20 . 0 25 . 0 11/00 03/01 07/01 11 /01 03/02 07/02 11/02 03/03 07/03 11/ 03 03/04 07/04 11/04 03/05 07/05 11/05 03/06 07/06 11/06 03/07 07/07 11/07 03/08 07/08 11 /08 03/09 07/09 11/09 03/10 07/10 Percent (%) Be t a P o l i c y St y l e Se c t o r s Se c u r i t y S e l e c t i o n To t a l T r a c k i n g E r r o r 6 Supplemental Materials 6 Th e a d d i t i o n o f I C C M u l t i - C a p t o a q u a r t e r o f a R 3 0 0 0 p o r t f o l i o o f f e r s s i g n i f i c a n t a l p h a f o r mi n i m a l a d d i t i o n a l r i s k o v e r a 1 0 y e a r p e r i o d -2 . 0 0 -1 . 5 0 -1 . 0 0 -0 . 5 0 0. 0 0 0. 5 0 1. 0 0 1. 5 0 2. 0 0 17 . 0 0 17 . 5 0 18 . 0 0 18.50 Annualized Return St a n d a r d D e v i a t i o n ( M o n t h l y R e t u r n s ) IC C M u l t i - C a p I m p a c t i n R 3 0 0 0 I n d e x P o r t f o l i o O c t o b e r 2 0 0 0 - S e p t e m b e r 2 0 1 0 10 0 % R 3 0 0 0 5% I C C M u l t i - C a p 10 % I C C M u l t i - C a p 15 % I C C M u l t i - C a p 20 % I C C M u l t i - C a p 25 % I C C M u l t i - C a p 7 Supplemental Materials 7 On a 3 , 5 a n d 1 0 y e a r b a s i s t h e I C C M u l t i- C a p p r o d u c t i s a t o p d e c i l e pe r f o r m e r IC C C a p i t a l M a n a g e m e n t , I n c . : M U L T I - C A P E Q U I T Y vs . R u s s e l l 3 0 0 0 As o f S e p t e m b e r 2 0 1 0 5t h P e r c e n t i l e 25 t h P e r c e n t i l e 50 t h P e r c e n t i l e 75 t h P e r c e n t i l e 95 t h P e r c e n t i l e IC C C a p i t a l M a n a g e m e n t Ru s s e l l 3 0 0 0 1 Y r 3 Y r Ac t u a l % R a n k Ac t u a l % R a n k Actual % Rank Actual % Rank IC C C a p i t a l M a n a g e m e n t , I n c . : M U L T I - C A P E Q U I T Y 1 3 . 5 2 7 0 . 7 6 9.5 0 7.2 6 5t h P e r c e n t i l e 1 9 . 7 0 . 7 6.6 7.9 25 t h P e r c e n t i l e 1 3 . 7 ( 3 . 6 ) 3.3 5.6 50 t h P e r c e n t i l e 1 1 . 0 ( 5 . 5 ) 1.7 3.5 75 t h P e r c e n t i l e 9 . 2 ( 7 . 8 ) 0.7 0.9 95 t h P e r c e n t i l e 5 . 8 ( 1 0 . 9 ) (2.1) (0.4) Po p u l a t i o n 1 1 8 1 1 2 99 49 Ru s s e l l 3 0 0 0 1 0 . 9 ( 6 . 6 ) 0.9 0.1 5 Yr 10 yr Ra t e o f R e t u r n Ra t e o f R e t u r n -1 5 -1 0 -5 0 5 10 15 20 25 1 Y r 3 Y r 5 Yr 10 Yr Percent (%) 8 Supplemental Materials 5t h P e r c e n t i l e 25 t h P e r c e n t i l e 50 t h P e r c e n t i l e 75 t h P e r c e n t i l e 95 t h P e r c e n t i l e IC C C a p i t a l M a n a g e m e n t Ac t u a l % R a n k Ac t u a l % R a n k Ac t u a l % R a n k Ac t u a l % Rank Actual % Rank Actual % Rank IC C C a p i t a l M a n a g e m e n t , I n c . : M U L T I - C A P E Q U I T Y 1 1 1 . 1 1 8 1 3 1 . 9 2 1 3 3 . 7 2 7 9 . 6 15 78.1 13 86.9 60 5t h P e r c e n t i l e 1 3 1 . 8 1 2 4 . 8 1 2 9 . 4 1 1 3 . 6 113.9 101.2 25 t h P e r c e n t i l e 1 0 6 . 8 1 0 6 . 5 1 1 2 . 4 1 0 1 . 3 102.3 92.9 50 t h P e r c e n t i l e 9 4 . 7 9 9 . 2 9 7 . 7 9 3 . 8 94.5 84.9 75 t h P e r c e n t i l e 8 3 . 8 9 0 . 9 8 8 . 5 8 3 . 1 83.4 75.4 95 t h P e r c e n t i l e 6 1 . 1 7 5 . 2 7 1 . 9 7 0 . 0 70.8 47.5 Po p u l a t i o n 1 1 2 9 9 4 9 3 Yr 3 Y r 5 Y r Down Market Capture Up M a r k e t C a p t u r e 5 Yr 10 Yr 10 Y r DownMarket Capture 0 50 10 0 15 0 20 0 3 Yr 5 Yr10 Yr Percent (%) Up M a r k e t C a p t u r e 0 50 10 0 15 0 20 0 3 Y r 5 Y r 1 0 Percent (%) Si g n i f i c a n t a l p h a i n u p a n d d o w n m a r k e t s IC C C a p i t a l M a n a g e m e n t , I n c . : M U L T I - C A P E Q U I T Y vs . R u s s e l l 3 0 0 0 As o f S e p t e m b e r 2 0 1 0 10 Y r R OC K W O O D C AP I T A L A DV I S O R S P AGE0 Pa l m B e a c h G a r d e n ’ s Fi r e f i g h t e r ’ s R e t i r e m e n t P l a n E q u i t y M a n a g e m e n t F e b r u a r y 1 1 , 2 0 1 1 Ro c k w o o d C a p i t a l A d v i s o r s Pr e s e n t e d B y : An d y H o l t g r i e v e Ma n a g i n g P a r t n e r an d y @ r o c k w o o d c a p i t a l . c o m R OC K W O O D C AP I T A L A DV I S O R S P AGE1 Ro c k w o o d C a p i t a l A d v i s o r s • In d e p e n d e n t , e m p l o y e e - o w n e d i n v e s t m e n t m a n a g e m e n t f i r m fo u n d e d i n 1 9 9 7 a n d l o c a t e d i n S t . L o u i s , M i s s o u r i • Te a m e d u p w i t h C o n t r a v i s o r y I n v e s t m e n t M a n a g e m e n t i n 2 0 0 4 • Of f e r i n g F i x e d I n c o m e , E q u i t y & B a l a n c e d i n v e s t m e n t m a n a g e m e n t se r v i c e s f o r T a f t - H a r t l e y , P u b l i c , C o r p o r a t e , E n d o w m e n t & Fo u n d a t i o n f u n d s • Ma n a g i n g a p p r o x i m a t e l y $ 1 b i l l i o n i n c o m b i n e d f i x e d a n d e q u i t y as s e t s ( R C A & C I M ) • De d i c a t e d t o s e r v i n g t h e n e e d s o f o u r c l i e n t s – y o u r s u c c e s s i s o u r s u c c e s s “R e l a t i o n s h i p s a n d t r u s t a r e th e f o u n d a t i o n o f o u r b u s i n e s s ” R OC K W O O D C AP I T A L A DV I S O R S P AGE2 Th e R o c k w o o d D i f f e r e n c e ? 1. E x p e r i e n c e d t e a m o f p r o f e s s i o n a l s 2. H i g h q u a l i t y , d i s c i p l i n e d i n v e s t m e n t p r o c e s s 3. P r o v e n t r a c k r e c o r d o f s u c c e s s “F o r t h e p e r f o r m a n c e y o u e x p e c t a n d t h e s e r v i c e y o u d e s e r v e ” R OC K W O O D C AP I T A L A DV I S O R S P AGE3 Ro c k w o o d S t r a t e g i c E q u i t y “ T e a m ” Co n t r a v i s o r y I n v e s t m e n t M a n a g e m e n t ( C I M ) – F o u n d e d 1 9 7 2 i n H i n g h a m , M A a n d s u b - a d v i s o r to R o c k w o o d C a p i t a l s i n c e 2 0 0 4 – I n d e p e n d e n t , e m p l o y e e - o w n e d R I A p r o v i d i n g a s s e t m a n a g e m e n t se r v i c e s b a s e d o n m o r e t h a n 3 5 y e a rs o f p r o p r i e t a r y e q u i t y r e s e a r c h (1 m i l l i o n a n d s i g n a l s ) – S u p e r i o r G I P S c o m p l i a n t p e r f o r m a n c e “B u i l d i n g o u r b u s i n e s s o n e r e l a t i o n s h i p a t a t i m e ” R OC K W O O D C AP I T A L A DV I S O R S P AGE4 As m a n a g e d b y C o n t r a v i s o r y ( C I M ) , i s a n Al l - C a p , op p o r t u n i s t i c & th e m e b a s e d ap p r o a c h to e q u i t y m a n a g e m e n t Ob j e c t i v e : Se e k s c a p i t a l a p p r e c i a t i o n t h r o u g h a d i v e r s i f i e d p o r t f o l io o f p r i m a r i l y d o m e s t i c e q u i t i e s . T h e g o a l i s to o u t p e r f o r m a n a p p r o p r i a t e b e n c h m a r k ( ex . S & P 5 0 0 ) , w i t h a p a rt i c u l a r e m p h a s i s o n ou t p e r f o r m i n g d u r i n g d o w n m a r k e t s . Ph i l o s o p h y : Lo n g - t e r m r e l a t i v e p r i c e t r e n d a n a l y s i s , ex p o s e s t h e t w o p r i m a r y d r i v e r s o f s t o c k p r i c e b e h a v i o r – un d e r l y i n g f u n d a m e n t a l s an d in v e s t o r s p o n s o r s h i p (o r p s y c h o l o g y ) , t h u s i d e n t i f y i n g l e a d i n g ( o r la g g i n g ) s t o c k s a n d s e c t o r i n d u s t r y g r o u p s , t h a t l e a d t o c h a n g e s i n tr e n d d i r e c t i o n , e i t h e r p o s i t i v e o r ne g a t i v e ( 1 8 - 2 4 m o n t h s ) , a nd m a r k e t t h e m e c h a n g e s . Ro c k w o o d S t r a t e g i c E q u i t y R OC K W O O D C AP I T A L A DV I S O R S P AGE5 ?- F E D -W C B A +W ?+ Re l a t i v e P r i c e C y c l e Un c l e a r Up t r e n d Ea r l y Ac c e l e r a t i o n De v e l o p i n g Up t r e n d Ac c e l e r a t i n g Up t r e n d Es t a b l i s h e d Up t r e n d Ea r l y De c e l e r a t i o n De v e l o p i n g Do w n t r e n d Ac c e l e r a t i n g Do w n t r e n d Es t a b l i s h e d Do w n t r e n d Unclear Downtrend Ne g a t i v e Ph a s e Po s i t i v e Ph a s e An n u a l R e l a t i v e R e t u r n -0 . 3 % 2. 1 % 1. 6 % 1. 4 % 1. 0 % 2. 0 % -2 . 2 % -4 . 2 % -3 . 8 % -2.2% R OC K W O O D C AP I T A L A DV I S O R S P AGE6 Re l a t i v e P r i c e T r e n d A n a l y s i s - E x a m p l e AB C C o . Re l a t i v e t o S & P 5 0 0 Ne g a t i v e T r e n d Re v e r s a l Ne g a t i v e T r e n d Re v e r s a l R OC K W O O D C AP I T A L A DV I S O R S P AGE7 Mo n t h Mo n t h –– En d En d An a l y s i s An a l y s i s (P r i c i n g ) (P r i c i n g ) Su p e r i o r Su p e r i o r St o c k s St o c k s In f e r i o r In f e r i o r St o c k s St o c k s Su p e r i o r Su p e r i o r Gr o u p s Gr o u p s Su p e r i o r Su p e r i o r Se c t o r s Se c t o r s Po r t f o l i o Po r t f o l i o Re v i e w Re v i e w Se l l Se l l De c i s i o n De c i s i o n Bu y Bu y De c i s i o n De c i s i o n In f e r i o r In f e r i o r Gr o u p s Gr o u p s In f e r i o r In f e r i o r Se c t o r s Se c t o r s 11 S e c t o r s & A D R ’ s Po r t f o l i o De c i s i o n s Se l l D r a t e d St o c k s - f i r s t 40 Stock Portfolio •2 ½% positions •fully invested Bu y A - C r a t e d St o c k s - n e x t 80 I n d u s t r y Gr o u p s 20 0 0 St o c k s Ra t e d • S& P 5 0 0 • 13 0 0 o t h e r • 20 0 A D R ’ s Mo n t h l y An a l y s i s • 35 + y e a r s • 1 m i l l i o n si g n a l s Ro c k w o o d S t r a t e g i c E q u i t y In v e s t m e n t P r o c e s s “I n v e s t i n g i n s t o c k s e x p e c t e d t o r i s e w i t h o u t r e g a r d f o r s i z e o r t y p e ” R OC K W O O D C AP I T A L A DV I S O R S P AGE8 Ro c k w o o d S t r a t e g i c E q u i t y A C o m p e l l i n g C a s e f o r D i v e r s i f i c a t i o n (t r a i l i n g p e r f o r m a n c e r e c o r d b y E q u i t y i n v e s t m e n t s t y l e ) Co n t r a v i s o r y 19 . 2 3 % La r g e C a p Va l u e 19 . 6 9 % S& P 5 0 0 26 . 5 0 % Sm a l l C a p St o c k s 27 . 1 7 % In t l . S t o c k s 31 . 7 8 % La r g e C a p Gr o w t h 37 . 2 1 % Mi d C a p St o c k s 40 . 4 8 % Na s d a q 43 . 8 9 % 20 0 9 Intl. Stocks 4.90%S&P 500 14.79%Large Cap Value 15.51%Large Cap Growth 16.71%Nasdaq 18.02%Mid Cap Stocks 25.47%Small Cap Stocks 26.85%Contravisory 31.17%2010 In t l . S t o c k s -4 6 . 8 4 % Mi d C a p St o c k s -4 1 . 4 6 % Na s d a q -4 0 . 5 4 % La r g e C a p Gr o w t h -3 8 . 4 4 % S& P 5 0 0 -3 7 . 0 3 % La r g e C a p Va l u e -3 6 . 8 5 % Co n t r a v i s o r y -3 5 . 7 8 % Sm a l l C a p St o c k s -3 3 . 7 9 % 20 0 8 Sm a l l C a p St o c k s -1 . 5 7 % La r g e C a p Va l u e -0 . 1 7 % S& P 5 0 0 5. 4 8 % Mi d C a p St o c k s 5. 6 0 % Na s d a q 9. 8 1 % In t l . S t o c k s 11 . 1 7 % Co n t r a v i s o r y 11 . 7 9 % La r g e C a p Gr o w t h 11 . 8 1 % 20 0 7 C u m u l a t i v e 20 0 6 20 0 5 20 0 4 20 0 3 20 0 2 20 0 1 20 0 0 Ra n k i n g Nasdaq -35.40% La r g e C a p Gr o w t h 9. 0 7 % Na s d a q 1. 3 7 % La r g e C a p Gr o w t h 6. 3 0 % S& P 5 0 0 28 . 7 0 % Na s d a q -3 1 . 6 0 % Na s d a q -2 2 . 4 0 % Na s d a q -3 9 . 3 0 % Wo r s t Large Cap Growth -22.36% Na s d a q 9. 5 2 % Sm a l l C a p St o c k s 4. 3 2 % Na s d a q 8. 5 9 % La r g e C a p Gr o w t h 29 . 8 0 % La r g e C a p Gr o w t h -2 7 . 9 0 % In t l . S t o c k s -2 1 . 2 0 % La r g e C a p Gr o w t h -2 2 . 4 0 % 95 th Pe r c e n t i l e S&P 500 4.16% Co n t r a v i s o r y 13 . 7 0 % S& P 5 0 0 4. 8 4 % S& P 5 0 0 10 . 9 2 % La r g e C a p Va l u e 30 . 0 0 % S& P 5 0 0 -2 2 . 1 0 % La r g e C a p Gr o w t h -2 0 . 4 0 % In t l . S t o c k s -1 4 . 0 0 % Lo w e r Qu a r t i l e Intl. Stocks 17.90% Mi d C a p St o c k s 15 . 2 6 % La r g e C a p Gr o w t h 5. 0 9 % La r g e C a p Va l u e 16 . 4 9 % Co n t r a v i s o r y 31 . 1 0 % Sm a l l C a p St o c k s -2 0 . 5 0 % S& P 5 0 0 -1 1 . 9 0 % S& P 5 0 0 -9 . 1 0 % Th i r d Qu a r t i l e Large Cap Value 47.32% S& P 5 0 0 15 . 8 0 % Co n t r a v i s o r y 6. 0 0 % In t l . S t o c k s 17 . 5 9 % In t l . S t o c k s 38 . 6 0 % In t l . S t o c k s -1 6 . 3 0 % Mi d C a p St o c k s -5 . 6 0 % Sm a l l C a p St o c k s -3 . 0 0 % Me d i a n Small Cap Stocks 79.03% Sm a l l C a p St o c k s 18 . 3 7 % La r g e C a p Va l u e 6. 9 7 % Sm a l l C a p St o c k s 18 . 3 3 % Mi d C a p St o c k s 40 . 1 0 % Mi d C a p St o c k s -1 6 . 2 0 % La r g e C a p Va l u e -5 . 6 0 % Co n t r a v i s o r y 2. 3 7 % Up p e r Qu a r t i l e Mid Cap Stocks 103.90% La r g e C a p Va l u e 22 . 2 5 % Mi d C a p St o c k s 12 . 6 2 % Mi d C a p St o c k s 20 . 2 2 % Sm a l l C a p St o c k s 47 . 3 0 % La r g e C a p Va l u e -1 5 . 5 0 % Co n t r a v i s o r y -4 . 4 4 % La r g e C a p Va l u e 7. 0 0 % 5 th Pe r c e n t i l e Contravisory 109.11% In t l . S t o c k s 26 . 3 4 % In t l . S t o c k s 13 . 5 4 % Co n t r a v i s o r y 24 . 8 4 % Na s d a q 50 . 0 0 % Co n t r a v i s o r y -3 . 4 8 % Sm a l l C a p St o c k s 2. 6 0 % Mi d C a p St o c k s 8. 2 0 % To p Pe r c e n t i l e Ru s s e l l 10 0 0 G r w t h In d e x Ru s s e l l 10 0 0 V a l u e In d e x Russell Mid-Cap Index Ru s s e l l 20 0 0 In d e x Na s d a q In d e x MS C I EA F E In d e x S&P 500 Co n t r a v i s o r y R OC K W O O D C AP I T A L A DV I S O R S P AGE9 Ca p i t a l i z a t i o n & V a l u e v s . G r o w t h 20 0 0 Va l u e C o r e G r o w t h Av g M k t C a p : $ 5 5 . 2 b i l Me d i a n M k t C a p : $ 1 5 . 8 b i l La r g e Mi d Sm a l l 20 0 1 20 0 2 20 0 3 Va l u e C o r e G r o w t h Av g M k t C a p : $ 4 8 . 0 b i l Me d i a n M k t C a p : $ 6 . 5 b i l La r g e Mi d Sm a l l Va l u e C o r e G r o w t h Av g M k t C a p : $ 9 . 3 b i l Me d i a n M k t C a p : $ 4 . 9 b i l La r g e Mi d Sm a l l Va l u e C o r e G r o w t h Av g M k t C a p : $ 8 . 2 b i l Me d i a n M k t C a p : $ 3 . 6 b i l La r g e Mi d Sm a l l 2004 Value Core Growth AvgMktCap:$11.1 bil Median MktCap:$ 4.1 bil Large Mid Small 20 0 5 20 0 6 20 0 7 Va l u e C o r e G r o w t h Av g M k t C a p : $ 1 2 . 6 b i l Me d i a n M k t C a p : $ 7 . 1 b i l La r g e Mi d Sm a l l Va l u e C o r e G r o w t h Av g M k t C a p : $ 1 5 . 8 b i l Me d i a n M k t C a p : $ 1 0 . 4 b i l La r g e Mi d Sm a l l Va l u e C o r e G r o w t h Av g M k t C a p : $ 2 2 . 2 b i l Me d i a n M k t C a p : $ 1 3 . 6 b i l La r g e Mi d Sm a l l 20 0 8 Va l u e C o r e G r o w t h Av g M k t C a p : $ 4 2 . 6 b i l Me d i a n M k t C a p : $ 1 5 . 4 b i l La r g e Mi d Sm a l l 2009 Value Core Growth AvgMktCap:$33.0 bil Median MktCap:$9.2 bil Large Mid Small R OC K W O O D C AP I T A L A DV I S O R S P AGE10 Ro c k w o o d S t r a t e g i c E q u i t y P e r f o r m a n c e As of December 31, 2010 1. 0 % Yi e l d Be t a Nu m b e r o f S t o c k s 1. 3 38 10 . 9.8.7.6.5.4.3.2.1. CB R i c h a r d E l l i s G r o u p Ci t r i x S y s I n c BE A e r o s p a c e I n c . Wi l l i a m s S o n o m a I n c In f o r m a t i c a C o r p . Sa l e s f o r c e C o m I n c St a r w o o d H o t e l s & R e s o r t s Ri v e r b e d T e c h n o l o g y Fo r d M o t o r C o . CN H G l o b a l N V 3. 0 2. 9 3. 0 3. 0 3. 0 3. 1 3. 3 3. 5 4. 0 4. 1 Va l C o r e G r w La r g e C a p – 13 . 5 % Mi d C a p – 69 . 1 % Sm a l l C a p – 15 . 2 % Av e r a g e M a r k e t C a p $ 1 1 . 6 b i l l i o n Me d i a n M a r k e t C a p $ 7 . 6 b i l l i o n To p 1 0 H o l d i n g s Cons. Disc.32% Co n s . S t a p l e s 7% Fi n a n c e 14 % Energy 3%Utilities 8%Info Tech 15% In d u s t r i a l s 21% Ch a r a c t e r i s t i c s 15 . 1 % 31 . 0 % 20 1 0 26 . 5 % 19 . 0 % 20 0 9 -3 7 . 0 % -3 6 . 4 % 20 0 8 2. 3 % 4. 9 % Fi v e Ye a r s -2 . 9 % 0. 2 % Th r e e Ye a r s 15 . 1 % 31 . 0 % On e Ye a r 10 . 8 % 15 . 7 % 4 th Qt r 20 1 0 5.5%11.8%2007 4.8%15.8% S& P 5 0 0 6.0%13.3% St r a t e g i c Eq u i t y 2005 2006 Pe r f o r m a n c e Tr a i l i n g R e t u r n s Ca l e n d a r Y e a r R e t u r n s R OC K W O O D C AP I T A L A DV I S O R S P AGE11 Fe e S c h e d u l e EQ U I T Y M A N A G E M E N T 0. 7 0 % o n t h e f i r s t $ 1 0 m i l l i o n Ou r s t a n d a r d a n n u a l f e e s f o r e q u i t y i n v e s t m e n t m a n a g e m e nt s e r v i c e s a r e b a s e d o n th e f a i r m a r k e t v a l u e o f di s c r e t i o n a r y a s s e t s a c c o r d in g t o t h e s c h ed u l e s b e l o w : No s e p a r a t e a d m i n i s t r a t i v e c h a r g e s , l o ad f e e s o r t e r m i n a t i o n p e n a lt i e s a p p l y . F e e s c h e d u l e in c l u d e s m o n t h l y p o r t f o l i o ac c o u n t i n g , c u s t o d i a n r e c o n c i l i a t i o n a n d p e r f o r m a n c e m e a s u r e m e n t s er v i c e s , a s w e l l a s c o m p r e h e n s i v e q u a r t e r l y re p o r t s a n d i n v e s t m e n t n e w s l e t t e r s . R OC K W O O D C AP I T A L A DV I S O R S P AGE12 Wh y R o c k w o o d ? Experienced Team Di s c i p l i n e d Pr o c e s s Pr o v e n Re s u l t s Du n e d i n F i r e Cr e s t v i e w G . E In d i a n S h o r e s P o l i c e Ve n i c e F i r e Ha v a n a F i r e No r t h B a y F i r e Te q u e s t a Pu b l i c Sa f e t y Ar c a d i a Po l i c e & F i r e Mt . D o r a F i r e , G. E . & P o l i c e Mo n t i c e l l o P o l i c e Gu l f p o r t Po l i c e Bo n i t a Sp r i n g s F i r e & N o n - F i r e St . P e t e B e a c h G . E . & P o l i c e Ce n t r a l F L S p e e c h & H e a r i n g W. M e l b o u r n e Po l i c e Ho l m e s B e a c h P o l i c e Cr e s t v i e w P o l i c e & F i r e VI S T E En g l e w o o d F i r e Oc o e e G . E . S. M i a m i Po l i c e N. N a p l e s Fi r e Mo n t i c e l l o F i r e Bu n n e l l F i r e Ve n i c e P o l i c e R OC K W O O D C AP I T A L A DV I S O R S P AGE13 Bi o g r a p h i e s D. A n d r e w H o l t g r i e v e is a M a n a g i n g P a r t n e r a n d C h i e f O p e r a t i n g Of f i c e r . A n d y h a s o v e r t w e n t y - f i v e y e a r s of e x p e r i e n c e i n t h e i n v e s t m e n t m anagement in d u s t r y . P r i o r t o t h e f o r m a t i o n o f R o c k w o od C a p i t a l , h e s p e n t t h i r t e e n y e a r s w i t h Bo a t m e n ' s T r u s t C o m p a n y s p e c i a l i z i n g i n i n s titutional and personal trust po r t f o l i o m a n a g e m e n t a n d w a s a m e m b e r o f t h e f i r m s f i x e d i n c o m e s t r a te g y t e a m . H e a l s o s p e n t s e v e r a l y e a r s i n i n s t i t u t i o n a l m ar k e t i n g . P r e v i o u s l y , A n d y w a s a r e g i s t e r e d i n v e s t m e n t r e p r e s en t a t i v e w i t h t h e b r o k e r a g e f i r m s o f S h e a r s o n a n d D e a n W i t t e r R e y n o l d s . H e e a r n e d h i s b a c h e l o r ' s degree in business ad m i n i s t r a t i o n f r o m t h e U n i v e r si t y o f M i s s o u r i - C o l u m b i a . Pa u l D . R a p p o n o t t i , C F A is a M a n a g i n g P a r t n e r a n d C h i e f I n v e s t m e n t O f f i c e r . P au l h a s m o r e t h a n t w o d e c a d e s of investment management ex p e r i e n c e w i t h a n e m p h a s i s o n t h e f i x e d i n c o m e m a r k e t s . P r i o r t o t h e f o r m a t i o n o f R o c k w o o d C a p i t a l , P a u l s p e n t m o r e t h a n s i x years with Boatmen's Trust Co m p a n y . A s a s e n i o r p o r t f o l i o m a n a g e r a t B oa t m e n ' s , P a u l s e r v e d a s a m e m b e r o f t h e fi r m ' s f i x e d i n c o m e s t r a t e g y t e a m . P r e v i o usly, he spent five years with Ch e m i c a l B a n k i n N e w Y o r k a s a c a p i t a l m a r k e t s a n a l y s t , s p e c i a l i z i ng i n f i x e d i n c o m e r e s e a r c h . P a u l a l s o s p e n t s e v e r a l y e a r s w it h t h e N o r t h r o p C o r p o r a t i o n a s a se n i o r d e s i g n e n g i n e e r . H e e a r n e d a b a c h e l o r ' s d e g r e e i n e l e c t r i c a l e n g i n e e r i n g f r o m th e U n i v e r s i t y o f I l l i n o i s - U r b a n a a s w e l l a s a n M B A f r o m N o r t h w e s t e r n Un i v e r s i t y . P a u l a l s o e a r n e d t h e C h a r t e r e d F i n a n c i a l A n a l y s t d e s i g n a t i o n a n d i s a m e m b e r o f t h e C F A S o c i e t y o f S t . L o u i s . Da n i e l W . L a n e , C F A is a S e n i o r P a r t n e r a n d S e n i o r P o r t f o l i o M a n a g e r . D a n h a s a c c u m u l a t e d m o r e t ha n t w o d e c a d e s o f i n v e s t m e n t m a n a g e m e n t ex p e r i e n c e w i t h a c o n s i s t e n t f o c u s o n t h e f i x e d i n c o m e a n d e q u i t y ma r k e t s . P r i o r t o t h e f o r m a t i o n o f R o c k w o o d C a p i t a l , D a n s p e nt t w o y e a r s a s a s e n i o r p o r t f o l i o ma n a g e r w i t h B o a t m e n ' s T r u s t C o m p a n y w h e r e h e s e r v e d a s a m e m b e r o f t h e f i r m ' s f i x e d i n c o m e s t r a t e g y t e a m . P r e v i o u s l y , D a n w a s with General American Li f e I n s u r a n c e C o m p a n y w h e r e h e s p e n t m o r e t h a n f i v e y e a r s a s a s e n i o r p o r t f o l i o m a n a g e r a n d f o u r y e a r s a s a n i n v e s t m e n t r e s e a r ch analyst and a senior mo r t g a g e a n a l y s t . H e e a r n e d a b a c h e l o r ' s d e g r e e i n b u s i n e s s a d m i n i s t r at i o n f r o m t h e U n i v e r s i t y o f Mi s s o u r i - C o l u m b i a a s w e l l a s an MBA from Washington Un i v e r s i t y , S t . L o u i s . H e a l s o e a r n e d t h e C h a r t e r e d F i n a n c i a l A na l y s t d e s i g n a t i o n a n d i s a m e m b e r of t h e C F A S o c i e t y o f S t . L o ui s . Li s a L o n g o W i l d e i s e n , C F A , C P A is a P a r t n e r , C h i e f F i n a n c i a l O f f i c e r a n d C h i e f C o m p l i a n c e O f f i ce r . L i s a h a s a c c u m u l a t ed nearly two decades of in v e s t m e n t m a n a g e m e n t e x p e r i e n c e i n b o t h t h e f i x e d i n c o m e a n d e q u i ty m a r k e t s . P r i o r t o j o i n i n g R o c k w o o d , L i s a w a s a p o r t f o l i o m an a g e r a t A . G . E d w a r d s T r u s t Co m p a n y i n S t . L o u i s . P r e v i o u s l y , s h e w a s a p o r t f o l i o m a n a g e r f o r C o n n i n g A s s e t M a n a g e m e n t , i n S t . L o u i s , m a n a g i n g e q u i t y a n d f ixed income portfolios. She al s o w a s a m a n a g e r o f a c c o u n t i n g r e s e a r c h a n d sy s t e m s . S h e i s a g r a d u a t e o f J o h n C a r r o l l Un i v e r s i t y w i t h a B . S . B . A . i n a c c o u n t i ng and a Certified Public Ac c o u n t a n t . L i s a a l s o e a r n e d t h e C h a r t e r e d F i n a n c i a l A n a l y s t d e s ig n a t i o n a n d i s a m e m b e r a n d f o r m e r g o v e r n o r o f t h e C F A S o c i e t y o f S t . L o u i s . . An t h o n y K . B r o w n is a S e n i o r P a r t n e r a n d D i r e c t o r o f M a r k e t i ng . T o n y h a s a c c u m u l a t e d m o r e t h a n t h r e e de c a d e s o f e x p e r i e n c e in employee benefits , pe n s i o n a d m i n i s t r a t i o n a n d i n v e s t m e n t s . P r i o r to t h e f o r m a t i o n o f R o c k w o o d C a p i t a l , h e sp e n t n i n e y e a r s w i t h B o a t m e n ' s T r u s t C om p a n y w h e r e h e s p e c i a l i z e d i n cl i e n t s e r v i c e a n d m a r k e t i n g w i t h a n e m ph a s i s o n p u b l i c f u n d s a n d j o i n t l y - t r u s t e e d b e n ef i t p l a n s . F r o m 1 9 8 8 t o 1 9 9 1 T o n y s e r v e d as manager of Boatmen's ma s t e r t r u s t / c u s t o d y d i v i s i o n . P r e v i o u s l y , h e w a s w i t h t h e B a n k o f N e w Y o r k f o r m o r e t h a n t e n y e a r s w h e r e h e d i r e c t e d a m a s t e r tr u s t r e l a t i o n s h i p m a n a g e m e n t te a m . T o n y s t u d i e d a c c o u n t i n g a n d b u s i n e s s a d m i n is t r a t i o n a t P a c e U n i v e r s i t y i n N e w Y o r k . H e i s a m e m b e r o f t h e A s s o c i a t i o n o fInvestment Management Sa l e s E x e c u t i v e s a n d t h e N a t i o n a l A s s o c i at i o n o f S e c u r i t i e s P r o f e s s i o n a l s . R OC K W O O D C AP I T A L A DV I S O R S P AGE14 Bi o g r a p h i e s Wi l l i a m M . N o o n a n Bi l l i s P r e s i d e n t a n d C E O o f C o n t r a v i s o r y In v e s t m e n t M a n a g e m e n t . B i l l ' s d u t i e s i n c l u d e m an a g i n g t h e f i r m ' s e q u i t y r e s e a r c h e f f o r ts, se r v i c i n g i n s t i t u t i o n a l r e s e a r c h c l i e n t s , an d e q u i t y p o r t f o l i o s t r a t e g y . B i l l j o i n e d C o nt r a v i s o r y I n v e s t m e n t M a n a g e m e n t i n 1 9 9 5, f o l l o w i n g s e v e r a l y e a r s a s a n in v e s t m e n t p r o f e s s i o n a l w i t h S c u d d e r F u n d s an d F i d e l i t y I n v e s t m e n t s . P r i o r t o t h a t , h e wo r k e d f o r t h e A m e r i c a n C h a m b e r o f C o m m e rce in Mexico City, where he co n d u c t e d r e s e a r c h o n c r o s s - b o r d e r t r a d e i s s u e s . B i l l h a s s e r v ed a s g u e s t s p e a k e r a t i n d u s t r y co n f e r e n c e e v e n t s a n d i s a f r e q u ent participant on CNBC and Bl o o m b e r g f o r d i s c u s s i o n s r e l a t i n g t o c u r r e n t e q u i t y t r e n d s . B il l g r a d u a t e d f r o m t h e C a t h o l i c U n iv e r s i t y o f A m e r i c a a n d r e c e i v ed h i s M . B . A . f r o m B a b s o n C o l l e g e . Ph i l i p A . N o o n a n Ph i l i s C h i e f O p e r a t i n g O f f i c e r o f C o n t r a v i so r y I n v e s t m e n t M a n a g e m e n t . P h i l ’ s d u t i e s i n c l u d e m a n a g i n g t h e firm’s investment op erations, co n t r i b u t i n g t o p o r t f o l i o s t r a t e g y a s a m e mb e r o f t h e I n v e s t m e n t C o m m i t t e e , a n d s e r v i c in g b r o k e r - s p o n s o r e d w r a p a n d p r i v a t e c l i e nt r e l a t i o n s h i p s . Ph i l h a s b e e n i n t h e i n v e s t m e n t i n d u s t r y s i n c e h i s g r a d u a t i o n f r o m S a i n t A n s e l m C o l l e g e . P r i o r t o j o i n i n g C o n t r a v i s o r y i n 1 9 9 9 , P h i l w a s a n i n v e s t m e n t p r o f e s s i o n a l at M a s s a c h u s e t t s F i n a n c i a l S e r v i c e s ( M F S ) a n d l a t e r F i d e l i t y I n v e s t m e n t s . Da v i d C a n a l Da v i d j o i n e d C o n t r a v i s o r y a s a R e s e a r c h A n a l y s t i n M a r c h 2 0 0 0 . T od a y , a s S e n i o r V i c e P r e s i d e n t o f C o n t r a v i s o r y , D a v e i s r e s p o n sible for ma n a g i n g C o n t r a v i s o r y ’ s r e s e a r c h p r o d u c t a n d c l i e n t s , p o r t f o l i o m a n a g e m e n t , p e r f o r m i n g s t a t i s t i c a l a n a l y s i s o n C o n t r a v i s o r y d a t a , a n d a s s i s t i n g w i t h c l i e n t s e r v i c e an d t r a d i n g . D a v e i s a m e m b e r o f C o n t r a v i s o r y ’ s I n v e s t m e n t C o m m i t t ee . D a v e i s a n a f f i l i a t e o f th e M a r k e t T e c h n i c i a n s A s s o c i a t io n ( M T A ) a n d a c a n d i d a t e f o r t h e Ch a r t e r e d M a r k e t T e c h n i c i a n s ( C M T ) d e s i g n a t io n ( l e v e l I I I ) . H e i s a g r a d u a t e o f P r o v id e n c e C o l l e g e w i t h d e g r e e s i n F i n a n c e a n d M a n a g e m e n t . R OC K W O O D C AP I T A L A DV I S O R S P AGE15 Ro c k w o o d P e r f o r m a n c e F o o t n o t e St r a t e g i c E q u i t y 789 1. 1 8. 9 NA 3 NA NA 20 0 4 509 7. 7 39 . 2 0. 5 17 4. 9 1 6. 0 1 20 0 5 515 10 . 6 54 . 8 3. 7 20 15 . 7 8 13 . 3 1 20 0 6 616 11 . 2 69 . 2 5. 7 23 5. 4 8 11 . 7 3 20 0 7 600 9. 1 54 . 5 3. 2 26 -3 6 . 9 9 -3 5 . 7 3 20 0 8 427 21 . 5 91 . 7 5. 4 31 26 . 4 7 19 . 2 2 20 0 9 Total Firm Assets ($mil) % o f F i r m A s s e t s Co m p o s i t e A s s e t s ( $ m i l ) Co m p o s i t e D i s p e r s i o n ( % ) 2 Nu m b e r o f P o r t f o l i o s Be n c h m a r k R e t u r n ( % ) To t a l R e t u r n ( % ) Ye a r No t e s : 1. R o c k w o o d C a p i t a l A d v i s o r s , L L C c l a i m s c o m p l i a n c e w i t h G l o b a l I n v e s t m e n t P e r f o r m a n c e S t a n d a r d s ( G I P S ) a n d h a s p r e p a r e d a n d p r e se n t e d t h i s r e p o r t i n c o m p l i a n c e w i t h G I P S s t a n d a r d s . 2. R o c k w o o d C a p i t a l A d v i s o r s , L L C i s a n i n d e p e n d e n t i n v e s t m e n t a d v i s o r r e g i s t e r e d u n d e r t h e I n v e s t m e n t A d v i s o r s A c t o f 1 9 4 0 . R o ck w o o d w a s f o u n d e d o n A p r i l 1 , 1 9 9 7 , a n d s p e c i a l i z e s i n t h e ma n a g e m e n t o f f i x e d i n c o m e p o r t f o l i o s f o r i n s t i t u t i o n a l c l i e n t s . 3. P e r f o r m a n c e f i g u r e s f o r e a c h a c c o u n t a r e c a l c u l a t e d m o n t h l y o n a t r a d e - d a t e b a s i s u s i n g a n i n t e r n a l r e t u r n c a l c u l a t i o n . M o n t h ly m a r k e t v a l u e s i n c l u d e i n c o m e a c c r u a l s a n d r e f l e c t t h e d a i l y we i g h t i n g o f c a s h f l o w s . T h e c o m p o s i t e r e s u l t s a r e a s s e t w e i g h t e d o n a m o n t h l y b a s i s . Q u a r t e r l y a n d a n n u a l c o m p o s i t e p e r f o r m a nc e f i g u r e s a r e c o m p u t e d b y l i n k i n g m o n t h l y r e t u r n s r e s u l t i n g in a “ t i m e - w e i g h t e d ” r a t e o f r e t u r n . 4. T h e b e n c h m a r k : S t a n d a r d & P o o r ’ s 5 0 0 I n d e x . 5. N o l e v e r a g e o r d e r i v a t i v e s h a v e b e e n u s e d . R o c k w o o d C a p i t a l A d v i s o r s d o e s n o t m a n a g e a n y n o n - f e e - p a y i n g a c c o u n t s . 6. V a l u a t i o n s a n d r e t u r n s a r e r e p o r t e d g r o s s o f f e e s a n d a r e s t a t e d i n U . S . D o l l a r s . P o l i c i e s f o r v a l u i n g p o r t f o l i o s , c a l c u l a t i n g p e r f o r m a n c e , a n d p r e p a r i n g c o m p l i a n t p r e s e n t a t i o n s a r e a v a i l a b l e up o n r e q u e s t . 7. T h e d i s p e r s i o n o f a n n u a l r e t u r n s i s m e a s u r e d b y t h e d i f f e r e n c e b e t w e e n t h e h i g h e s t a n d l o w e s t p o r t f o l i o r e t u r n s r e p r e s e n t e d w it h i n t h e c o m p o s i t e f o r t h e f u l l y e a r . 8. T h i s c o m p o s i t e w a s c r e a t e d i n J u l y 2 0 0 4 . P e r f o r m a n c e r e s u l t s a r e p r e s e n t e d b e f o r e m a n a g e m e n t a n d c u s t o d i a l f e e s b u t a f t e r a l l t r a d i n g c o s t s . C l i e nt r e t u r n s w i l l b e r e d u ced by advisory fees in c u r r e d i n t h e m a n a g e m e n t o f t h e i r a c c o u n t s . F o r e x a m p l e , a $ 1 0 0 m i l l i o n a c c o u n t , p a y i n g a 0 . 2 5 % a n n u a l f e e , w i t h a g r o s s a n n ua l r a t e o f r e t u r n o f 1 0 % c o m p o u n d e d o v e r a 1 0 y e a r p e r i o d wo u l d r e s u l t i n a n e t o f f e e a n n u a l i z e d r e t u r n o f 9 . 7 2 5 % . T h e e n d i n g d o l l a r v a l u e o f t h e a c c o u n t w o u l d b e r e d u c e d f r o m $ 2 5 9 , 3 7 4 ,2 4 6 t o $ 2 5 2 , 9 6 2 , 3 5 5 . P a s t r e s u l t s a r e n o g u a r a n t e e o f f u t u r e pe r f o r m a n c e . 9. E f f e c t i v e 1 - 1 - 2 0 0 7 , R o c k w o o d C a p i t a l A d v i s o r s a s s u m e d t r a d i n g r e s p o n s i b i l i t i e s f o r t h e p r o d u c t . P r i o r t o t h i s d a t e , C o n t r a v i s or y e x e c u t e d a l l t r a n s a c t i o n s . 10 . T h e s t a n d a r d m a n a g e m e n t f e e s c h e d u l e i s a s f o l l o w s : 0 . 7 0 % o n a l l a s s e t s t h e r e a f t e r . T h i s f e e s c h e d u l e i s a l s o d e s c r i b e d i n P ar t I I o f R o c k w o o d C a p i t a l A d v i s o r s ’ F o r m A D V . 11 . P a s t p e r f o r m a n c e i s n o t a n i n d i c a t o r o f f u t u r e r e s u l t s . 12 . T o r e c e i v e a c o m p l e t e l i s t a n d d e s c r i p t i o n o f R o c k w o o d C a p i t a l A d v i s o r s ’ c o m p o s i t e s , c o n t a c t A n t h o n y B r o w n a t ( 3 1 4 ) 9 6 2 - 6 1 4 3 . Revised Mar 2010