ETFs (Exchange Traded Funds) Based Investment Portfolio

Management

Why Should you invest in ETFs?

PERFORMANCE LOW EXPENSES TAX EFFICIENCY TRADING FLEXIBILITY DIVERSIFICATION TRANSPARENCY

PERFORMANCE

Close to 100% of portfolio managers and traditional do NOT reach their benchmark (index)

Source: Sharpe, “Arithmetic of Active Management”, Financial Analyst Journal, Jan-Feb, 1991. Waring, Whitney, Pirone and Castille, “Optimizing Manager Structure and Budgeting Manager Risk,” Journal of Portfolio Management 25, Spring 2000.

Benchmark =Mgr. Avg.

+5.5%

-5.5%

Before fees and costs

Benchmark Mgr. Avg. = -1%

-6.5%

+4.5%

“Good”Managers

“Bad”Managers

After fees and costs

A model of active manager returns

• “Properly measured, the average actively managed dollar must under-perform the average passively managed dollar, net of costs”

Bill Sharpe, The Arithmetic of Active Management

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Real world comparison

Actively managed funds that underperformed their corresponding Russell index over a 10-year period.

Source: Morningstar. US equity mutual funds. All total returns reflect 10 year annualized figures. Funds are categorized by their Morningstar objective.

Past performance is no guarantee of future results.

Before tax %

After tax %

Before tax %

After tax %

Before tax %

After tax %

Large-cap 87 96 81 94 54 80

Mid-cap 82 91 67 84 57 78

Small-cap 43 94 17 44 16 29

12/31/94-12/31/04

Value Blend Growth

2002

-iS-0

705

LOW EXPENSES

Average active fund category:1.52%

Average ETF:

0.29%

TAX EFFICIENCY

For various technical reasons, the taxcomparison is always at the advantage of the ETFs.

The advantage is depending on the local tax law relevant for the investor.

TRADING FLEXIBILITY

One share = One market Buy and sell continuously during

markets hours Limit orders Stop orders Short orders Options

ETFs: Ideal Diversification Tool

Diversification at each ETF level Diversification at the portfolio level Asset class allocation Regional allocation Country diversification Sector diversification Company profile selection

TRANSPARENCY

Transparency at the ETF level Easy and transparent access to the

portfolio individually for each investor

How is TrackBull managing ETFs Portfolios?

Individual analysis and advice Bank or Broker account Country of operations Investment structure Currency choice Asset Allocation

INVESTMENT HOLDING STRUCTURE

Individual Company

Bank or Broker account

Costs matters Overall relationship matters too New or existing account

Countries of Operation

USA

Switzerland

The currency choice

US $ Based InvestorInvestment: Bond ETF iShares Lehman 7-10 Year

Treasury

SELL BUY

Profit % Profit 31/12/2004 31/07/2002

14.75% $10.58 $82.32 $71.74

The currency choiceEUR Based

Investor

Investment: Bond ETF iShares Lehman 7-10 Year Treasury

SELL BUY

Profit % Profit

31/01/2004

31/07/2002

14.75% $10.58 $82.32 $71.74

1 EUR= 1 EUR=$1.3621 $0.9783

-17.58%

-12.90 € 60.44 € 73.33 €

in 2.5 years only

32.33%

Difference

Asset Allocation

Initial assets allocation: Assets type first.

Ongoing technical analysis. Fundamental analysis, then only. Choice among ETFs tracking the

same index: Volume, Spread, Expense ratio, Tracking error, specific details.

Correlation analysis.

TrackBull: management styles

A Cash, Bonds, Bonds funds or Fixed income ETFs all in investor’s reference currency

B A program plus same investment instruments but in other currencies

C A and B programs plus REITs, REIT's ETFs, utilities ETFs and dividend yielding value stocks ETFs

D A, B and C programs plus all other ETFs Sectors/Countries/Companies Profiles/Assets Rotation

TrackBull commitment

Registered Investment Adviser (SEC in the USA).

Private company, highest confidentiality level.

Focusing on one niche: ETFs. Totally independent: Our customers

are our sole and only dedication.

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