lindner capital advisors “managing risk” – modern portfolio theory, post-modern portfolio...
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Lindner Capital Advisors
Lindner Capital Advisors“Managing Risk” – Modern Portfolio Theory, Post-
Modern Portfolio Theory, and Tactical Asset Management
Kovack Securities. October 2011
About Lindner
• Registered Investment Advisor (Founded 1996 in Atlanta, Georgia)
• Apply Academic Research, Analytical Skills and Practical Experience to Create Portfolios using Institutional Asset Class Strategies –• Dimensional Fund Advisors as our Core Strategy• Plus Alternative Investments and Enhanced
Strategies
• Full Service Turn-key Asset Management Program – TAMP
• Investment Management• Sales & Marketing Support• Practice Management • Trading & Rebalancing• Operations and Performance Reporting
• Retirement, Tax-Managed, 401K, & Custom Portfolios FOR ADVISOR USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Fiduciary Oversight
Independent recognition of an Investment Stewards conformity to all 23 Fiduciary
Practices defined by the Prudent Practices for Investment Stewards handbook
Certification for Global Fiduciary Standards of Excellence
ORGANIZE FORMALIZE IMPLEMENT
MONITOR
3
Traditional Defensive
Contemporary Tactical
LCA
Lindner Capital Portfolio Strategies
Low Costs: Internal Fund Expenses
16
Traditional Defensive
Contemporary Tactical
LCA
Lindner Capital Portfolio Strategies
LCA Defensive Portfolio Series
Defensive
Defensive Portfolio Overview
A Managed 100% Fixed Income Portfolio
– High Quality – 90+% AAA Rated– Short Term - < 2.5 years duration– Low Internal Expenses (22bps)– Low Turnover– Liquid, No Lock Up Periods– No Deferred Sales Charge
As of December 31, 2010
Defensive Portfolio Performance Comparison
Performance as of August 31, 20112010 2011
– Defensive Capital – Qualified 4.53% 2.56%
– Defensive Capital - Taxable 4.15% 2.83%
– Net of fees and transactions costs
Compare to:– Average Money Market Rate – practically zero– 6 Month T Bills - .06%– 1 Yr CD’s – 0.90%
Past performance is not indicative of future results. For illustrative purposes only. Please review this information in conjunction with LCA’s Composite Performance Disclosure which accompanies this presentation.Source: LCA Coposites
Gathering Assets
Over the next 20 years, the youngest baby boomer will be 66 yrs old. Investable assets will increase 40% over the next 4 years to $12 trillion. Theses boomers don’t understand that the REAL BIG SCARE is “Extinction of Purchasing Power”. How do you help a client/prospect preserve
capital for 30 yrs?
Invest in a Growth Portfolio with Risk Management
Two LCA Growth Strategies for Baby Boomers:
Contemporary Portfolio and Tactical Economic Portfolio
Traditional Defensive
Contemporary Tactical
LCA
Lindner Capital Portfolio Strategies
Contemporary Portfolio
Equities 55%
Fixed Income 20%
Alternatives 25%
Types of Alternative Investments
Alternative Investment vehicles have challenges:
Private Equity: Lock up periods of 5 yrs, capital calls are uncertain, lack of liquidity, and correlations to public equity. High $25 mm minimums.
Real Estate: High maintenance cost, and requires local real estate expertise.
Hedge Funds: Lack of transparency and requires extensive due diligence. Most funds have experienced correlations with stocks and bonds.
There is no guarantee any investment product will achieve its objectives, generate profits or avoid losses. Past performance is not indicative of future results.
What Are Managed Futures?
METALS AGRICULTURALS EQUITIES INTEREST RATES
ENERGY CURRENCIES
An Alternative to Traditional Investments
Managed Futures:
An alternative asset class in which Commodity Trading Advisors seek to generate returns using futures contracts on financial instruments such as currencies, treasury bonds, and equity indexes, and commodities such as corn, oil, gold, and sugar.
Steel Rebar Futures, SHFECopper Futures, SHFEHigh Grade PrimaryAluminum Futures,LME Gold Futures,Nymex SPDR Gold SharesETF Options
Soy Meal Futures, DCEWhite Sugar Futures, ZCESoy Oil Futures, DCERubber Futures, SHFECorn Futures, CME
Kospi 200 Options, KRXE-mini S&P 500 Futures, CMESPDR S&P 500 ETF OptionsDJ Euro Stoxx 50 Futures, EurexS&P CNX Nifty Options, NSE India
Eurodollar Futures, CMEEurobor Futures, Liffe10 Year Treasury NoteFutures, CMEEuro-Bund Futures,Eurex One Day Inter-BankDeposit Futures, BM&F
Light, Sweet Crude Oil Futures,CME Brent Crude Oil Futures,ICE Futures EuropeNatural Gas Futures,CME WTI Crude Oil Futures,ICE Futures EuropeFuel Oil Futures, SHFE
U.S. DollarEuroBritish PoundJapanese YenAustralian Dollar
The products listed above are a representative sampling of those traded by money managers. The list is provided for illustrative purposes and is not intended to be exhaustive.
30-Year Performance Commodities, Managed Futures, Equities
Managed Futures Performance During Equity Up Markets(with increases of at least 5% per month) January 1980 – December 2010
In the 63 months when equities were up 5% or more, managed futures were up 39 times (62%).
Managed Futures Performance During Equity Up Markets
S&P 500® Total Return Index.
Source: PerTrac Financial Solutions.
Equities Managed Futures
Each of these asset classes has its own set of investment characteristics and risks and investors should consider these risks carefully prior to making any investments.
See the section entitled "Important Consideration, Descriptions of Indices and Definitions of Terms" for a fuller description of each of the indices.
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CASAM CISDM CTA Asset Weighted Index through
Oct.2010. Barclay BTOP50 Index® thereafter. Source:
PerTrac Financial Solutions.
Managed Futures Performance During Equity Down Markets(with declines of at least 5% per month) January 1980 – December 2010
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In the 33 months when equities were down 5% or more, managed futures were up 26 times (79%).
Managed Futures Performance During Equity Down Markets
Equities Managed FuturesS&P 500® Total Return Index.
Source: PerTrac Financial Solutions.
CASAM CISDM CTA Asset Weighted Index through
Oct.2010. Barclay BTOP50 Index® thereafter. Source:
PerTrac Financial Solutions.
Each of these asset classes has its own set of investment characteristics and risks and investors should consider these risks carefully prior to making any investments.
See the section entitled "Important Consideration, Descriptions of Indices and Definitions of Terms" for a fuller description of each of the indices.
Five Worst Drawdowns in the S&P 500® TRI Since 1980
The selected periods are used for illustrative purposes only and may not correspond with the precise starting and ending dates surrounding any particular period of crisis, real or perceived.
Each of these asset classes has its own set of investment characteristics and risks and investors should consider these risks carefully prior to making any investments.
See the section entitled "Important Consideration, Descriptions of Indices and Definitions of Terms" for a fuller description of each of the indices.
Managed Futures Returns During Five Worst Equity Drawdowns
S&P 500® Total Return Index. Source:
PerTrac Financial Solutions.
CASAM CISDM CTA Asset Weighted Index. Source:
PerTrac Financial Solutions.
Low Correlation with Traditional Markets
Low Correlation when NEEDED MOST!
Fat Tail Events
Source: Equinox Fund Management, LLC
Contemporary Portfolio
Contemporary PortfolioMinimum Investment $100,000Investor AllRisk Profile Moderate
Contemporary Portfolio Options
CPS – Accredited VersionMinimum Investment $250,000Investor Accredited OnlyRisk Profile Moderate
Contemporary PortfolioMinimum Investment $100,000Investor AllRisk Profile Moderate
Traditional Defensive
Contemporary Tactical
LCA
Lindner Capital Portfolio Strategies
LCA Tactical Portfolio
Tactical
LCA Tactical Economic
Managed account platform Tactical shift among equity/fixed
income allocations; nice complement to existing buy and hold portfolios
Model driven by quantitative signals $100,000 minimum Maximum management fee - 80 bps Eligible for advisory fees
LCA Tactical Economic
The Tactical Economic: Objective
Align with the stock market during market rallies and move defensively during market downturns
The Tactical Economic: Goal
Capture equity risk premium that coincides with the business cycle
LCA Tactical Economic
LCA Tactical Economic Markets
LCA Tactical Economic
Quantitative Model generates signals for shift to 80-100% equity or 80-100% fixed income. (0-20% alternative and 2% cash buffer)
Only uses major U.S. asset classes for asset allocation
Not short term trading or high frequency trading
Only 6 signals given using the simulated model from 2000-2010.
Source: www.standardsandpoors.com. For Illustrative purposes only
LCA Tactical Economic
LCA Tactical Economic
No Leverage No Over The Counter Short Selling No Derivatives No Sector trading No stock picking No Buy&Hold or static model
allocation, e.g. 60/40 equity/fixed
LCA Tactical Economic Portfolio
Quantitative Signals within the Model:
* ECRI = Economic Research Institute * US Treasury Yield - curve slope * Monetary Policy - direction of Fed
Funds * ECRI’s US Weekly Leading Index * ECRI’s US WLI growth rate * Technical analysis of S&P 500 * Mathematical confirmation signals
What is ECRI?Economic Cycle Research Institute
This proprietary system of quantitative analysis distinguishes ECRI from other forecasters. As The Economist noted, “ECRI is perhaps the only organization to give advance warning of each of the past three recessions; just as impressive, it has never issued a false alarm.”
Over three generations of continuous research covering dozens of economies and hundreds of leading indicators.
ECRI researchers have uncovered reliable sequences of events that occur around turning points in economic growth, inflation and employment.
Source: www.businesscycle.com
What Makes ECRI Different
The approach used by most economists extrapolates economic
trends;ECRI has a leading indicators
approach
Source: www.businesscycle.com
Benefits of Leading Indicators
Source: www.businesscycle.com For Illustrative Purposes Only
August Market Movers
Q2 GDP disappointed 1.3% vs. 2.5% expectations; Q1 GDP revised to0.4% from 1.9%
US Treasury Downgrade to AA+ (S&P only)
ISM Manufacturing @ 50.9 vs. expected 54.3
European Default Crisis
Headlines
LCA Tactical Economic Portfolio
The stock market is a reaction not a prediction
Recessions and stock market performance have historically shown that equities are flat to negative during recessions.
Prior to 1979, there were no formal announcements of business cycle turning points.Indices are not available for direct investment; their performance does not reflect the expenses associated with the management of an actual portfolio. For illustrative purposes only. Past performance is not a guarantee of future results and there is always the risk that an investor will lose money. Source: National Bureau of Economic Research (NBER) for economic expansions and recessions data; the S&P data are provided by Standard & Poor’s Index Services Group; US Bureau of Labor Statistics for unemployment data.
Recession BeginsNovember 1973
Recession EndsMarch 1975
Unemployment Peaks at 9.0%May 1975
Recession17 months
Recession BeginsJuly 1981
Recession AnnouncedJanuary 6, 1982
Unemployment Peaks at 10.8%Nov/Dec 1982
Recession17 months
Recession EndsNovember 1982
Recession End AnnouncedJuly 8, 1983
Recessionary PeriodsMid 1970s and Early 1980s
S1396.6
Indices are not available for direct investment; their performance does not reflect the expenses associated with the management of an actual portfolio. For illustrative purposes only. Past performance is not a guarantee of future results and there is always the risk that an investor will lose money. Source: National Bureau of Economic Research (NBER) for economic expansions and recessions data; the S&P data are provided by Standard & Poor’s Index Services Group; US Bureau of Labor Statistics for unemployment data.
Recession BeginsJuly 1990
Recession AnnouncedApril 25, 1991
Unemployment Peaks at 7.8%June 1992
Recession9 months
Recession EndsMarch 1991
Recession End AnnouncedDecember 22, 1992
Recession BeginsMarch 2001
Recession EndsNovember 2001
Unemployment Peaks at 6.3%June 2003
Recession9 months
Recession AnnouncedNovember 26, 2001
Recession End AnnouncedJuly 17, 2003
Recessionary PeriodsEarly 1990s and Early 2000s
S1396.6
For illustrative purposes only. Indices are not available for direct investment; their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results and there is always the risk that an investor will lose money. Source: National Bureau of Economic Research (NBER) for economic expansions and recessions data; the S&P data are provided by Standard & Poor’s Index Services Group; US Bureau of Labor Statistics for unemployment data.
Recessionary PeriodJanuary, 2007 – December, 2010
Recession BeginsDecember 2007Unemployment Rate at 5.0%
Unemployment Rate Peaks at 10.1%October 2009
Recession AnnouncedDecember 1, 2008Unemployment Rate at 7.3%
Unemployment Rate at 9.4%December 2010
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Recession Ends June 2010Unemployment Rate at 9.5%
End of Recession AnnouncedSeptember 20, 2010Unemployment Rate at 9.6%
Recession30 months
ETF Equity Asset Allocation
Market weighted approach with an emphasis on diversification (>2,500 securities within the allocation)
45% Large Cap U.S. Equity 30% Mid Cap U.S. Equity 23% Small Cap U.S. Equity 2% Cash* allocation subject to change
ETF Fixed Income Asset Allocation
Allocation is a very conservative high credit quality allocation to AAA
US Fixed Income 49% 1-3 Year 49% 3-7 Year 2% Cash ANGLX fixed income alternative*allocation subject to change
ETF Benefits
High level of transparency for each of the ETF holdings in the model.
Low internal expense ratios; 9-20 bps.
Intra day liquidity. Access to broad market index’s with
a very low internal management fee. Tax efficiency.
Model Update AUGUST
Model is updated every Friday Last signal July 29 , 2011 to fixed
income Trigger signal on May 13th 2011 to fixed Model typically moves to fixed income
within 8-10 weeks of trigger signal Model was allocated to equities from
Oct 2010 to July 2011
Tactical Economic PortfolioReturns YTD As Of 9/30/11
LCA Tactical Economic Series: YTD composite performance returns are as of 9/30/11
*Net of fees MTD QTD YTDTactical Economic +0.04% -2.45% +3.38%S&P 500 -7.03% -13.87 -
8.68%
Source: LCA Composites
Past performance is not an indication of future performance. All information is qualified by the disclosures set forth on the accompanying pages, which must be read in conjunction with this information.
Investors May Need to Get Used to Greater Downside Volatility
Past performance is not an indication of future performance. All information is qualified by the disclosures set forth on the accompanying pages, which must be read in conjunction with this information.
Contemporary Plus
Blended Portfolio Allocation
37.5% Tactical Economic37.5% DFA 65.35 25% Managed Futures
Alternatives
Allocation subject to change
Summary
The past few years have been volatile for everyone
Growing your business by managing portfolios is not efficient
With more regulations every year, the cost and hassle of doing business gets worse by the day.
Investors are more demanding and knowledgeable. The wealthiest are looking for wealth management vs. financial advise.
It is time to make a positive change: Outsource portfolio management and reclaim your time building relationships
Partner with Linder Capital Advisors
The LCA Advantage Strategic Partnership with
Institutional Investment Manager Academically Sound Portfolio
Construction Low Costs Fiduciary Responsibility Leverage the power of outsourcing:
– Allowing you to focus on business development and client relationships
– Capture Additional Assets– Leverage current relationships
Lindner’s Standards of Service Excellence and Training
Performance Disclosure
This presentation is confidential and may not be disseminated or reproduced without LCA’s consent. This presentation is intended for informational purposes only and is not intended to constitute investment advice or recommendations by LCA or any other party. Lindner Capital Advisors, Inc. (“LCA”) is an SEC registered investment adviser. Past performance of LCA’s Portfolio Composites (the “Composites”) is no guarantee of future performance, and LCA’s strategies, like most investment strategies, involve the risk of loss. No chart, graph, or other figure provided should be used to determine which securities to buy or sell. Asset allocation and diversification strategies do not assure a profit or protect against a loss.
The performance data shown represents the performance of the various Composites, each of which is based on the performance of client accounts managed in the identified strategy, subject to the qualifications set forth in the following paragraphs. LCA creates the Composites as of each month-end by calculating the performance returns for fully discretionary client accounts over $50,000, temporarily excluding client accounts whose inclusion LCA believes is not appropriate for one of the following reasons: (1) accounts with a significant cash flow of 30% or more in one month; (2) all outlier accounts, which are those accounts with a performance return that exceeds a z-score of 3.0; and (3) accounts that have changed management strategies at the request of the client or external relationship manager. Excluded accounts are removed as of the beginning of the month and re-enter their previous or enter a new Composite (as applicable) the first full month after the occurrence of the applicable exclusion reason.
Composite returns including periods prior to June 2008 may include return information from client accounts that were not managed in the identified strategy for the entirety of the periods. LCA implemented the portfolio accounting system used to create the Composites in June 2008. LCA applied the system’s methodologies to its existing historical data. Such data did not support adjusting the accounts that appeared in each Composite based on historical changes in such accounts’ management strategies. LCA believes the effect of the inclusion of such accounts in the Composites is immaterial, however, based on its policy of excluding outlier accounts as described above and its belief that the number of accounts that changed management strategies over the period was minimal. Please contact LCA if there are questions concerning Composite returns.
The z-score is defined as how far a performance return deviates from the average performance return of all account in the composite list. A z-score of 3.0 indicates three standard deviations that an account’s performance return is above or below the mean. Previously, LCA published hypothetical model returns for its strategies. LCA now presents the Composites, each of which is based on actual performance of client accounts. As a result, the returns presented are slightly different than those previously published.
Performance Disclosure
Returns are presented net of advisory fees and account transaction expenses and include the reinvestment of dividends and other earnings. LCA management fees have ranged from 0.40% - 2.10% during the periods presented. Management fees incurred by clients may vary. LCA’s current fee schedule is described in its Form ADV Part II, which is available upon request. Each strategy’s underlying investments include commingled investment vehicles such as mutual funds that pay other fees and expenses in addition to LCA’s advisory fees.
Inclusion of market index information is for informational purposes only and does not imply that a strategy will achieve similar returns. Index performance does not reflect the deduction of transaction costs, management fees, or other costs which would reduce returns. An investor cannot invest directly in an index. The composition of an index does not reflect the manner in which a strategy is constructed in relation to expected or achieved returns, investment guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which may change over time.
The S&P 500 Index is a capitalization-weighted index of 500 stocks intended to be a representative sample of leading companies in leading industries within the U.S. economy and is widely used as indicative of the performance of the U.S. stock market. The Barclays Capital U.S. Aggregate Bond Index is an unmanaged index that covers the U.S. dollar denominated, investment-grade, fixed-rate, taxable bond market securities, The index includes bonds from the Treasury, government-related, corporate, mortgage backed securities (MBS), asset backed securities (ABS), and commercial mortgage backed securities (CMBS) sectors. The Blended Benchmark Indices were created by LCA to reflect the performance of a benchmark comprised of the stated percentages of the S&P 500 and Barclays Capital U.S. Aggregate Bond Index.
Actual client performance in the strategies and the periods depicted may be materially different and possibly lower than the performance data presented, due to various factors including: different rebalancing frequency and implementation, investment cash flows, cash balances, different management fees, varying custodian fees and transaction costs, different timing of fee deduction and other factors. Clients must refer to their individualized performance evaluation for information concerning their actual account’s performance.
Performance Disclosure
Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment strategy will be profitable. Each asset class has inherent risks associated with that asset class. Understanding these risks is critical to making reasonable risk/return comparisons and sound investment decisions. Each of LCA’s strategies may make small and micro-cap investments, which are subject to greater volatility than those in other asset categories. Each of LCA’s strategies may invest in sector funds, which may involve a greater degree of risk than an investment in other funds with greater diversification.
Each of LCA’s strategies may invest in fixed-income investments, which are subject to various risks, including changes in interest rates, credit quality, market valuations, liquidity, prepayments, corporate events, tax ramifications, and other factors. Each of LCA’s strategies may make international investments, which are subject to additional risks, such as currency fluctuation, confiscatory policy, political instability, or potential illiquidity. Investing in emerging markets may accentuate these risks. Since no one manager is suitable for all types of investors, it is important to review investment objectives, risk tolerance, liquidity needs, tax consequences and any other considerations with a financial professional before choosing an investment style or manager
LCA Composite Disclosure
Composite performance results are based on a composite of LCA’s managed accounts that fall within the specified stock-to-bond ratios in each of the identified products. Performance results may or may not depict the actual investment experience of any single client due to the timing of investment contributions, withdrawals, trade implementations and client or adviser directed investments. The annual composite dispersion is an equal-weighted standard deviation calculated for the accounts in the composite over the entire year. Composite performance results exclude (i) accounts under management which do not maintain a balance during the entire composite period, and (ii) certain accounts under management that have temporarily been removed from discretion through client initiated actions.
Past performance is not indicative of future results.
Performance Disclosure Lindner Capital Advisors, Inc. (LCA) Disclosure for Back tested Performance Information Back tested performance is hypothetical (it does not reflect trading in actual accounts) and is provided for
informational purposes to indicate historical performance had the model portfolios been available over the relevant period.
Back tested performance does not represent actual performance and should not be interpreted as an indication of such performance. Actual performance for client accounts may be materially lower than that of the model portfolios. Performance information of benchmark indices are included for comparison purposes only, however, it should be recognized that the volatility of the benchmarks is materially different from the volatility of the back tested portfolios.
Back tested performance results have certain inherent limitations. Such results do not represent the impact that material economic and market factors might have on an investment adviser’s decision-making process if the adviser were actually managing client money. Back tested performance also differs from actual performance because it is achieved through the retroactive application of model portfolios designed with the benefit of hindsight. As a result, the models theoretically may be changed from time to time to obtain more favorable performance results. Additionally, the models may include some types of securities that the adviser no longer recommends for its clients.
Back tested performance results assume the reinvestment of dividends, ordinary and capital gains and quarterly rebalancing. The performance of the strategy reflects and is net of the effect of LCA's annual investment management fee of 1.5%. Clients who open accounts for less than 200k will be charged a one time $200 set up fee, the proceeds of which accrue solely to Lindner Capital. Actual LCA advisory fees are deducted quarterly in increments of 0.375%. Depending on the size of your assets under management, your investment management fee may be more or less. Back tested risk and return data are a combination of live (or actual) mutual fund results and simulated index data, and mutual fund fees and expenses have been deducted from both the live (or actual) results and the simulated index data.
Performance results do not reflect transaction fees charged by custodians and other expenses charged by broker-dealers, which reduce returns.
Not all of LCA’s clients follow our recommendations and depending on unique and changing client and market situations we may customize the construction and implementation of the portfolios for particular clients, including the use of tax-managed mutual funds, tax-harvesting techniques and rebalancing frequency and precision. In taxable accounts, LCA uses tax-managed index or asset class funds (where available and/or appropriate) to manage client assets. However, the tax-managed index funds are not used in calculating the back tested performance of the model portfolios, unless specified in the table or chart. Some client’s substitute the mutual funds recommended by LCA with other investment options available through the custodian, thereby creating a custom asset allocation. The performance of custom asset allocations may differ materially from (and may be higher or lower than) that of the model portfolios.
As with any investment strategy, there is potential for profit as well as the possibility of loss. LCA does not guarantee any minimum level of investment performance or the success of any model portfolio or investment strategy. All investments involve risk (the amount of which may vary significantly) and investment recommendations will not always be profitable. The investment return and principal value of investor portfolios will fluctuate so that an investor's shares, when redeemed, maybe worth more or less than their original cost. Further, there can be no assurance that any of the portfolios will achieve its investment objective.
Past performance does not guarantee future results.
Disclosure Alternative Investments
Alternative investment products, including hedge funds and managed futures, involve a high degree of risk, often engage in leveraging and other speculative investment practices that may increase the risk of investment loss, can be highly illiquid, are not required to provide periodic pricing or valuation information to investors, may involve complex tax structures and delays in distributing important tax information, are not subject to the same regulatory requirements as mutual funds, often charge high fees which may offset any trading profits, and in many cases the underlying investments are not transparent and are known only to the investment manager. Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop. There may be restrictions on transferring interests in any alternative investment. Alternative investment products often execute a substantial portion of their trades on non-U.S. exchanges. Investing in foreign markets may entail risks that differ from those associated with investments in U.S. markets. Additionally, alternative investments often entail commodity trading, which involves substantial risk of loss. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
Disclosure Risk
You should carefully consider whether your financial condition permits you to participate in a commodity pool. In so doing, you should be aware that futures and options trading can quickly lead to large losses as well as gains. Such trading losses can sharply reduce the net asset value of the pool and consequently the value of your interest in the pool. In addition, restrictions on redemptions may affect your ability to withdraw your participation in the pool. Further, commodity pools may be subject to substantial charges for management, and advisory and brokerage fees. It may be necessary for those pools that are subject to these charges to make substantial trading profits to avoid depletion or exhaustion of their assets. The disclosure document contains a complete description of each expense to be charged this pool and a statement of the percentage return necessary to break even, that is, to recover the amount of your initial investment. You should carefully study those sections of the disclosure document prior to making an investment decision.
This brief statement cannot disclose all the risks and other factors necessary to evaluate your participation in this commodity pool. Therefore, before you decide to participate in this commodity pool, you should carefully study this disclosure document, including a description of the principal risk factors of this investment.
You should also be aware that this commodity pool may trade foreign futures or options contracts. Transactions on markets located outside the united states, including markets formally linked to a united states market, may be subject to regulations which offer different or diminished protection to the pool and its participants. Further, united states regulatory authorities may be unable to compel the enforcement of the rules of regulatory authorities or markets in non-united states jurisdictions where transactions for the pool may be effected.
Disclosures Growth of a Dollar: The charts are generated by Advisory World- ICE. They are hypothetical in nature, do not reflect actual
investment results and are not guarantees of future results. Results may vary over time. The Performance Data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate; thus an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than return data quoted herein.
The graphs displays the hypothetical historical performance of the selected portfolios) for the indicated time horizon. The information displayed above is for illustrative purposes solely. No guarantees can be given about future performance and this illustration shall not be construed as offering such a guarantee. It should be recognized that the portfolio may invest in both passive and actively managed accounts and securities, that the actual weightings of these investments can and will vary and, as a result, actual returns and volatility characteristics can be higher or lower than those presented above. Indexes are not available for investment and they are not indicative of any particular investment.
Asset class data provided by various sources including Standard & Poors, Salomon Brothers, Wilshire Associates and Russell. Mutual Fund, Variable Annuity and Closed End Fund data provided by Thomson Financial. Separate Account data provided by Morningstar, Inc. All data and the aforementioned business names are copyrights of their respective corporations, all rights reserved. Investors should consider the investment objectives, risks and charges and expenses of the investment company carefully before investing. The prospectus contains this and other information about the investment company. You can obtain a prospectus from your financial representative. Read the prospectus carefully before investing.
Asset allocations may vary from target allocations. Asset allocation does not guarantee future results, assure a profit or protect against loss. Investment in an individual fund or funds, in a single asset class, may outperform or underperform an asset allocations fund. Share values will fluctuate and, when redeemed, may be worth more or less than the original cost.
Integrated Capital Engine (ICE) Disclosures: IMPORTANT: The projections or other information generated by ICE regarding the likelihood of various investment outcomes
are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results may vary over time.
Graphs displayed hypothetical historical performance of the selected portfolio(s) for the indicated time horizon. The information displayed is for illustrative purposes solely. No guarantees can be given about future performance and these illustrations shall not be construed as offering such a guarantee. It should be recognized that the portfolio may invest in both passive and actively managed accounts and securities, that the weightings of these investments can and will vary and, as a result, actual returns and volatility characteristics can be higher or lower than those presented above. Indexes are not available for investment an they are not indicative of any particular investment.
Definitions: Cumulative Rate of Return displays the holding period return for the time horizon specified; Annualized Rate of Return displays the annualized rate of return for the number of 12 month periods within the time horizon specified; High Growth Rate displays the highest historical 12 month rate of return experienced during the time horizon specified; Low Growth Rate displays the lowest historical 12 month rate of return experienced during the time horizon specified; Number of Positive Periods indicates how many historical rolling 12 months periods experienced positive growth; Number of Negative Periods indicates how many historical rolling 12 months periods experienced negative growth.
Portfolio returns and Standard Deviation are based on historical performance of indexes and/or securities.