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Tactical Managers Discuss the Importance of Tax Efficiency

For Financial Professional Use Only. Not For Consumer Use. JNL201303-A021

Advisors Responding to Volatile Market

Research shows More Pressure to Change Strategy •  More advisors turning to tactical management and hedging strategies •  68% of advisors are feeling pressure to revise their asset management strategy

Research shows Use of Alternatives on the Rise •  68% using more alternative investments over the past five years •  61.5% claim alternatives will become more important than traditional investments

in the future

But alternatives and tactical strategies often have tax implications.

Minimizing Tax Implications

•  Understand that certain asset classes and strategies are inherently tax inefficient

•  Utilize tools such as Morningstar’s Tax Cost Ratio

•  Tax Deferral is a great solution to preserve returns generated by tax inefficient investment strategies –  According to Morningstar over the 74-year period ending in 2010, investors who

did not manage investments in a tax-sensitive manner gave up between 1%-2% of their annual returns to taxes.

–  Findings of Jefferson National’s whitepaper, written in conjunction with the University of Chicago shows you can potentially increase returns by over 100 bps without increasing risk by holding tax inefficient assets in a flat fee variable annuity.

–  White Papers from Fidelity and Alliance Bernstein

•  Bond Funds •  Alternatives

•  Dividend Focused Funds •  Tactically Managed Portfolios

Solve for Tax Inefficiency

•  Traditional Methods –  Muni’s, IRA, 401(k) –  Traditional Variable Annuities

•  New category of variable annuity created for Fee Based and Fee Only Advisors – Jefferson National’s Monument Advisor –  Low cost – Industry’s first ever flat fee VA

–  Completely liquid – no surrender charges1

–  Investment options •  390+ subaccounts •  Over 70 Alternative funds •  Tactical models from CMG & Braver •  TPIA Marketplace

–  Ability to contribute up to $10 Million –  Powerful technology and operations platform

•  Mass transactions and ability to rebalance multiple contracts at once •  Integration with your portfolio management tools

Increases your ability to leverage the power of tax deferral

1. The IRS may charge a 10% tax penalty on any withdrawal made before age 59½.

Disclosures

Variable annuities are subject to market fluctuation and risk. Principal value and investment returns will fluctuate and you may have a gain or loss when money is withdrawn. Variable annuities are long-term investments to help you meet retirement and other long-range goals. Withdrawals of tax-deferred accumulations are subject to ordinary income tax. Withdrawals made prior to age 59 ½ may incur a 10% IRS tax penalty. Monument Advisor is issued by Jefferson National Life Insurance Company (Dallas, TX) and distributed by Jefferson National Securities Corporation, FINRA member. Policy series JNL-2300-1, JNL-2300-2.

David J. D’Amico, CFA President & Chief Market Strategist | 617-969-0223 | [email protected] www.bravercapital.com

The Power Of Tactical Investing & Tax Deferral

Practical Portfolio Enhancements in Today’s Market

7

Relationship Management Challenges:

1.  Client has built a large nest egg and doesn’t want to lose those hard earned assets.

2.  Client has mostly taxable assets and needs tax deferral as he/she is growing more agitated with the tax bite.

3.  Client requires downside protection but still wants an opportunity for competitive returns. (Fixed Income no longer prudent)

4.  Client has sat on the sidelines and missed this equity market – but is now afraid of investing only for the bottom to fall out.

5.  Client has caught this equity rally but now is concerned with losing recent gains to a potential correction which has been commonplace in the past 5 year cycle – Yet doesn’t want to miss the market if it continues to rise. (Greed factor)

6.  Client has expressed concerns in the past that the portfolio has not been active enough to protect and consistently grow capital.

Portfolio Management Challenges – Investment Strategy

1.  Fixed Income - Low Yields, concerns of the future – Where to go?

2.  Equity Rally – want to take profits but not miss the rally if it continues.

3.  Continued concerns over volatile return streams – How to create a more broadly diversified portfolio for the long term

4.  How to avoid significant drawdown and potential negative returns – Can’t have a repeat of 2008!

Business Challenges

1.  Desire to differentiate your practice given competitive pressures & add more value to the client.

2.  Desire to increase client retention rates & increase referrals

3.  Want to smooth out your fee revenue stream to avoid revenue falls such that occurred in 2008.

4.  Want to build better portfolios.

Client Relationship & Portfolio Management Challenges Solutions of Tactical Investing & JeffNat

8

  Recently celebrated our 25th Year in Business

  Over $700 Million in assets under management

  Tactical ETF Managed portfolios and Traditional Investment Strategies

  Proprietary investment strategies with a keen focus on risk control & down market protection

  Proprietary models, long term track records & GIPS Verified Performance track records.

  Our Clients:

  Investment Advisors, Broker/Dealers, Institutions, Retirement Plans, Corporations & Public and Private Pension Plans

  Managed Account Strategies available on multi-custodian platforms including Jefferson National’s Monument Advisor

  Braver Tactical Opportunity Fund (BRAVX) available on Fidelity, TD Ameritrade & Schwab

8

*Braver Capital Management is an unincorporated division of Braver Wealth Management. Braver Wealth Management was founded in 1987 as Tandem Financial Services, Inc. Tandem Financial Services was purchased by Braver, P.C. shareholders in 2002. In 2004, Tandem Financial Services was renamed Braver Wealth Management, Inc. In 2008, Braver Wealth Management, Inc. changed its legal form to a limited liability company (LLC) and has since conducted business as Braver Wealth Management, LLC.

Act. Preserve. Protect.

Braver Capital Management Overview

Our Unique Perspective

Joseph Ludwig Founded firm 1986 Engineer by trade Designed Market Tracking Models to protect clients from market downturns in mid 1980s

9

David D’Amico, CFA President & Chief Market Strategist Over 20 years of Managing close to $6 Billion in Large & Mid Cap Equity strategies

Our Investment Committee is comprised of a seasoned group of investment professionals. Each member contributes a unique set of skills, knowledge and experience to our time-tested approach.

•  Over 75 Years collective investment experience. •  Quantitative (engineering & math) & Fundamental (traditional) backgrounds. •  Manages and monitors the quantitative models. •  Monitors global macro economic and market themes. •  Tracks market trends relative to the proprietary models.

Andrew Griesinger Chief Investment Officer Joined Braver in 1998 Designs Quantitative Models Cornell Graduate

Charles Toole, CFA, CFP Portfolio Manager Engineer by trade Worcester Polytechnic Institute

Seasoned Investment Team Quantitative & Fundamental Focus

William Royer Analyst University of New Hampshire Graduate BS and MS in Mathematics

10

Jefferson National launches 4 Braver Tactical Investment Strategies

  Braver Tactical Opportunity – defensive equity with risk control focus

  Braver Tactical Sector Rotation – aggressive equity with capital appreciation

  Braver Tactical Balanced – balanced portfolio with risk control focus

  Braver Tactical Core Bond – core fixed income with a tactical focus

Advisors can seamlessly tap into 25 years of tactical investment management experience

  Select from one or multiple tactical strategies

  Select a tactical strategy to complement existing methodology

  Match traditional “buy and hold” strategies with tactical downside protection

10 Act. Preserve. Protect.

Braver Investment Strategies Jefferson National Monument Advisor Platform

BRAVER TACTICAL STRATEGY LINEUP Braver Tactical Balanced Four quantitative models which monitor US Large Cap equities and US Aggregate Bonds. Fully invested this strategy will maintain a maximum 75% position in US Large Cap Equities and a maximum 25% position in US Fixed Income.

Braver Tactical Sector Rotation seeks aggressive equity investment returns. Using an advanced algorithm, we rank seventeen individual sectors and subsectors and invest in the three sectors with the greatest price momentum.

Braver Tactical Core Bond A core fixed income portfolio with a tactical, quant model overlay. The fundamental portion (50%) of the portfolio stays fully invested while the quantitative models to analyze the high yield and long-term US Treasury, seeking opportunities and avoidance of risk.(50%)

MAXIMUM CASH POSITION

INVESTMENT PROCESS

STRATEGY/MODELS USED

BENCHMARK

50% 100% 100%

50%: 2 Tactical Bond Models, 50%: Fundamental Research

Each model constitutes 25% of the Portfolio

33% allocated to each of top 3 performing sectors

One Model Ranks 17 Equity Sectors Weekly

4 Tactical Models: 3 Equity / 1 Fixed Income

Since 1986, Braver has focused on tactical strategies that seek to offer risk control while providing competitive returns. Our quantitative models can move assets to cash for protection in declining markets. Based on real results, not back-tested numbers, our performance is GIPs verified.

Category: Balanced Benchmark: 60% S&P 500 Index/40% BarCap Agg

Category: Aggressive Equity Benchmark: S&P 500 Index

Category: Core Bond Benchmark: BarCap Agg

100%

Braver Capital Management 117 Kendrick St., Needham, MA 02494 Ph. (617) 969-0223 www.bravercapital.com TSCS - 122012

Fundamental portion of the portfolio is fully invested and prudently diversified while the tactical overlay component is active seeking upward momentum and downside risk control.

Braver Tactical Opportunity Braver’s longest running tactical portfolio. Our models seek equity like returns over the long term by avoidance of drawdown. Significantly lower risk and capital preservation is a primary characteristic achieved through active, daily risk management. Momentum, trend following & mean reversion models apply.

Category: Alternative /Defensive Equity Benchmark: BarclayHedge Equity Long/Short

12 Tactical Models

11 equity asset classes, invested in on 1st come 1st served basis at

15% position weights

5

Tactical as a Fixed Income Surrogate

Money Market

Short Term Bond

Core Fixed Income

High Yield

Large Cap Equity

Mid Cap Equity

Small Cap Equity

Global Equity International Emerging Markets

0.76 1.95 26.39 26.35 21.81 25.46 24.53 31.35

25.75

Using Braver’s risk controlled tactical management as a component of the ‘total portfolio’ will keep correlation and risks low. This ‘alternative like’ portion of the portfolio seeks to keep volatility low while seeking equity-like returns.

3.32 16.64 4.84

7.76

9.75

Braver Core Bond Braver Tactical Opportunity Braver Tactical Balanced

Braver Tactical Sector Rotation

25.75

This unique Braver Tactical Strategy is meant to provide aggressive equity returns with similar risk to the broad equity markets. This is meant as an alpha generator to an equity portfolio and risk control is not as paramount as our other tactical strategies.

Standardized Asset Class Risk Spectrum Based on Volatility using 5-Year Standard Deviation (as of 12/31/12)

13

Why Tactical Investment Management

  Focus on risk control, down market protection and wealth preservation by combining traditional, long-term investing with actively managed, tactical solutions.

  Tactical strategies compliment traditional investing to improve diversification and risk adjusted performance.

  Our philosophy for long term client success is that we believe it is more important to avoid major market declines than it is to fully capture every last gain

  Cash is a true investment – In times of market weakness and negative trends, our quantitative programs have the ability to move partially or fully to money market securities (cash) to protect assets.

  No use of leverage, derivatives, shorting, or other complicated strategies.

  Alternative asset classes are growing in importance across investor portfolios – Tactical Strategies are more liquid, more transparent and lower cost forms of an alternative

  We believe in full transparency to our clients.

13 Act. Preserve. Protect.

14

More Important to Miss the Worst 10 Days

$674,447

$156,922

$313,687

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

12/3

0/19

94

12/3

0/19

95

12/3

0/19

96

12/3

0/19

97

12/3

0/19

98

12/3

0/19

99

12/3

0/20

00

12/3

0/20

01

12/3

0/20

02

12/3

0/20

03

12/3

0/20

04

12/3

0/20

05

12/3

0/20

06

12/3

0/20

07

12/3

0/20

08

12/3

0/20

09

12/3

0/20

10

12/3

0/20

11

Missing the Best and Avoiding the Worst 1/1/1995 - 9/30/2012

Missing Worst 10 DaysMissing Best 10 DaysS&P 500 Price Only

Compared to the fully invested S&P 500 Index,avoiding the 10 worst days earned investors an extra $360,760

Compared to the fully invested S&P 500 Index,missing the 10 best days cost investors $156,765

S&P 500 Price only


15

Alpha Generation, Low Standard Deviation and Low Correlation Rates Are Ideal for True Portfolio Diversification

Portfolio CharacteristicsZephyrStyleADVISOR: Braver Wealth Management

Braver Tactical Opportunity Net

Annualized Return

3.50%

Braver Tactical Balanced Net 3.66%

CumulativeReturn

18.75%

19.68%

StandardDeviation

7.76%

9.75%

Alphavs.

Market

2.94%

2.55%

Betavs.

Market

0.21

0.39

Excess Returnvs.

Market

1.83%

2.00%

SharpeRatio

0.39

0.33

MaximumDrawdown

-6.99%

-9.99%

Braver Tactical Bond Net 5.77% 32.38% 4.84% 5.90% -0.00 4.11% 1.10 -2.49%

DownCapture

vs.Market

19.71%

40.10%

-13.11%

S&P 500 1.66% 8.59% 21.81% 0.00% 1.00 0.00% 0.06 -43.94% 100.00%

January 2008 – December 2012

16

Performance of the Braver portfolios is based on actual returns of the Braver separate account composites for the period ending 12/31/2012. Composite net investment returns for all periods are net of a managed-account fee of 100bps and include all trading commissions. Different types of investments involve varying degrees of risk, and there can be no guarantee the future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by Braver) will be profitable. Past performance is not necessarily indicative of future results. Please refer to the back of this presentation for additional important information including the definitions on the risk statistics contained herein.


Drawdown-Braver Tactical Strategies

DrawdownZephyrStyleADVISOR: Braver Wealth Management

January 2008 - December 2012

-50%

-40%

-30%

-20%

-10%

0%

Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012

Braver Tactical Opportunity Net Braver Tactical Balanced Net Braver Tactical Bond NetBraver Tactical Sector Rotation Net S&P 500

17

Performance of the Braver portfolios is based on actual returns of the Braver separate account composites for the period ending 12/31/2012. Composite net investment returns for all periods are net of a managed-account fee of 100bps and include all trading commissions. Different types of investments involve varying degrees of risk, and there can be no guarantee the future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by Braver) will be profitable. Past performance is not necessarily indicative of future results. Please refer to the back of this presentation for additional important information including the definitions on the risk statistics contained herein.

Risk vs. Return


Risk / ReturnZephyrStyleADVISOR: Braver Wealth Management

January 2008 - December 2012 (Single Computation)

Retu

rn

-1%

0%

1%

2%

3%

4%

5%

6%

Standard Deviation0% 5% 10% 15% 20% 25%

Braver Tactical Opportunity Net Braver Tactical Balanced Net Braver Tactical Bond Net

Braver Tactical Sector Rotation Net Market Benchmark:S&P 500

Cash Equivalent:Citigroup 3-month T-bill

18

  Tactical Strategies: Investor Benefits   Superior downside protection   Low correlation to the market – Improves diversification   Consistent return stream through all market cycles

  Potential Drawbacks to Tactical investing   High turnover rate (75%- 600%)   Generation of short term capital gains   Commission costs

  Solutions to Potential Drawbacks   Asset location   Utilization of tactical strategies in tax-deferred accounts (IRAs, Pension plans, tax-

deferred annuities)   Tax-Deferred Annuity Criteria

  Low cost   Robust fund selection   Modern trading platform and website

Tactical Strategies


  Low cost   $20 flat fee

  Transparent – Managed account structure

  Robust fund selection   Over 400 investment options

  State-of-the-art technology platform   User-friendly and comprehensive in providing contract detail

  Good business partners   Understand RIA and fee-based advisor needs   Service oriented

19

Why Jefferson National?


20

Real Portfolio Solutions to Solve Today’s Investor Challenges & Improve Your Business

  The combination of Tactical + Tax Deferral at JeffNat is a significant opportunity for advisors to help clients while differentiating their business.

  Improved Risk Control & active management to benefit client portfolios.

  Simply better portfolios – more diversified and more prudent

  Smoother investment return stream for clients leading to more consistent compounding.

  Improved stability in fee generation for the firm.

  Improved client relationships as clients appreciate the pro-active action to protect wealth.

1.  Retention Rates Rise

2.  Client referrals Increase

21

Solution:

1.  Establish a JeffNat tax deferred annuity – provides a low cost tax deferral solution to the client to solve the tax headaches.

2.  Employ a tactical manager through JeffNat’s model manager platform to provide the desired risk/return characteristics.

3.  The total portfolio is now significantly more diversified.

4.  Client receives the desired risk/return and tax deferral – a win, win situation.

5.  Costs are very low for these benefits.

Action Items & Solutions

22

  This presentation is neither an offer to sell nor a solicitation of an offer to buy and securities.   Past performance is not necessarily indicative of future returns and the value of investments and the income derived from them can go down as well as up. Future returns are not

guaranteed and a loss of principal may occur.   Rankings and/or recognition by unaffiliated rating services and/or publications should not be construed as a guarantee of a positive experience if Braver is engaged to provide investment

advisory services, nor should it be construed as a current or past endorsement of Braver by any of its clients. Rankings published by magazines, and others, generally base their selections exclusively on information prepared and/or submitted by the recognized adviser.

  References to market or composite indices, benchmarks or other measures of relative market performance over a specified period of time are provided for your information only. Reference to an index does not imply that the Braver portfolio will achieve returns, volatility or other results similar to the index. The composition of a benchmark index may not reflect the manner in which a Braver portfolio is constructed in relation to expected or achieved returns, investment holdings, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which are subject to change over time.

  Criteria for choosing the benchmarks for each Braver strategy are as follows: Braver Tactical Opportunity – The S&P 500 Index was chosen as the benchmark based on the approximate equivalent risk between the benchmark and the strategy when fully invested and because clients will generally use the Tactical Equity Opportunity strategy as a substitute for or a complement to an all-equity portfolio. Braver Tactical Sector Rotation - The S&P 500 Index was chosen as the benchmark based on the approximate equivalent risk between the benchmark and the strategy when fully invested and because clients will generally use the Tactical Sector Rotation strategy as a substitute for or a complement to an all-equity portfolio. Braver Dividend Income Strategy - The S&P 500 Index was chosen as the benchmark based on the approximate equivalent risk between the benchmark and the strategy and because clients will generally use the Dividend Income strategy as a substitute for or a complement to an all-equity portfolio. Braver Tactical Balanced Strategy – A blended benchmark (60% S&P 500 and 40% Barclays Capital Aggregate Bond Index) was chosen as the benchmark for the Tactical Balanced Strategy based on the same underlying holdings are present consisting of the S&P 500 Index and the Barclays Aggregate Bond index and because clients will generally use the Tactical Balanced strategy as a substitute for a ‘balanced portfolio’. Maximum S&P 500 Exposure in the strategy is 75%. Braver Strategic Portfolio - A blended benchmark (60% S&P 500 and 40% Barclays Capital Aggregate Bond Index) was chosen as the benchmark for the Strategic Portfolio based on the approximate equivalent risk between the benchmark and the strategy and because clients will generally use the Tactical Balanced strategy as a substitute for a ‘balanced portfolio’. Braver Tactical High Yield Bond & High Yield Bond ETF–The Merrill Lynch High Yield Master Trust was chosen as the benchmark for the High Yield Bond Strategy as when the strategy is fully invested it is comprised of a similar mix of High Yield Bonds and because clients will generally use the Tactical High Yield Bond strategy as a substitute for or a complement to an all High Yield Bond fully invested portfolio. Braver Asset Allocation Growth – A blended benchmark (60% Russell 3000, 20% MSCI World Ex US and 20% Barclays Aggregate Bond Index) was chosen as the benchmark. Braver Asset Allocation Moderate – A blended benchmark (45% Russell 3000, 15% MSCI World Ex US and 40% Barclays Aggregate Bond Index) was chosen as the benchmark. Braver Asset Allocation Conservative – A blended benchmark (30% Russell 3000, 10% MSCI World Ex US and 60% Barclays Aggregate Bond Index) was chosen as the benchmark.

  Braver’s Tactical Balanced strategy does not invest in the exact 60% S&P 500 /40% Barclays Aggregate Bond Index and when fully invested, it will be 75% S&P 500 Index and 25% Barclays Aggregate Bond Index so its performance relative to the benchmark will be impacted by this difference.

  We chose the years 2004-2012 as examples of short term periods in which equities and capital markets in general performed in a very volatile manner. The purpose is to show that while equities declined, several other more active and tactical investment strategies may have increased in value and there was a benefit to being diversified into more active investment strategies. We do not mean to suggest that when equities decline the Braver Tactical investment strategies will always decline less or will increase in value or that they will do so by the same percentages as shown. There are some time periods when nearly all asset classes and investment strategies decline simultaneously but this is unusual.

Disclosures


  The Braver separate account investment strategy performance, portfolio characteristics, portfolio volatility, and other portfolio data shown were derived from the Braver separate account composites. The Braver separate account composites include all discretionary, fee paying accounts with the named investment mandate, including those clients that are no longer with the firm. Accounts are included in each composite after the first full month of performance to the present or to the cessation of the client relationship with the firm. Investment results are time weighted performance calculations representing total return. Composites are valued monthly and portfolio returns are asset weighted by using beginning of month market values plus weighted cash flows. Monthly geometric linking of performance results issued to calculate annual returns. Total return figures, I.e., performance calculations, are calculated using trade date accounting. All realized and unrealized capital gains and losses as well as all dividends and interest from investments and cash balances are included. Composite performance results are presented in United States currency. The performance figures presented are net of brokerage commissions and all other expenses, including the firm’s investment advisory fee. The investment results shown are not necessarily representative of an individually managed account’s rate-of-return. Securities used for implement the strategies can differ based on account size, custodian, and client guidelines.

  The Braver performance composites are available upon request.   Performance results for the Braver strategies referred to herein and their respective benchmarks reflect total return figures. This means their performance includes the reinvestment of

dividends, interest and other earnings.   Performance of each of the Braver strategies relative to its respective performance benchmark may have been impacted positively or negatively by economic and market conditions which affect

either the benchmark or the Braver strategy to a greater degree. For example, in 2008, the S&P 500 declined over 20%. Since Braver’s tactical strategies do not always invest to the same extent as their benchmark portfolio as money market is often utilized to preserve wealth in declining markets, the impact of this decline on these strategies was less than on the benchmark

  All of the Braver Tactical Investment strategies employ computer models that may determine it is safer to be invested in money market securities and out of the underlying asset class indicated by the performance benchmark. This tactical allocation to money market differs from the static benchmark portfolio and will create performance differences either positively or negatively relative to the performance benchmark.

  Tactical High Yield Bond ETF – The results displayed in the Performance Summary are not actual returns but are hypothetical in nature and represent the back-tested performance history as if the strategy was in existence since January 1, 2008 and utilizing historical data for the Exchange Traded Funds, JNK and HYG, and a money market fund. These results may not reflect the impact that material economic and market factors may have had on BWM’s investment decisions and subsequent results. Past and/or hypothetical performance is no guarantee of future results. There is potential for loss as well as gain in securities investments of any type as well as in the employment of any particular investment strategy including those of BWM.

  Braver’s portfolio risk management process includes an effort to monitor and manage risk, but should not be confused with and does not imply low risk. All investments are subject to principal loss.

  Asset classes and proportional weightings in the portfolios may change materially at any time without notices subject to the discretion of Braver Wealth Management.   This material is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and makes no implied or express recommendations

concerning the manner in which any client’s account should or would be handled, as appropriate strategies depend upon the client’s specific circumstances and investment objectives.   Braver Wealth Management, LLC is a Securities and Exchange Commission (SEC) registered investment advisor. However, please note that in no way has the Securities and Exchange

Commission approved or endorsed Braver Wealth Management, its strategies or any of its marketing materials. Any representation to the contrary is a criminal offense.   All results were calculated quarterly for all fee paying accounts under management for the entire quarter.   Investment advisory fees are fully described in Braver Wealth Management, LLC SEC Form ADV-Part 2A.   Please refer to Braver Wealth Management’s ADV Part 2A for more information.   A complete list of Braver's investment programs and a description of the composites is available upon request.

23

Disclosures


Benchmark Definitions   Barclays Capital U.S. Aggregate Bond Index –This market capitalization-weighted index (formerly the Lehman Brothers Aggregate Bond Index; name change November 1,

2008) includes Treasury securities, Government agency bonds, Mortgage-backed bonds, Corporate bonds, and a small amount of foreign bonds traded in the United States. Municipal bonds, and Treasury Inflation-Protected Securities are excluded, due to tax treatment issues.

  Compound Annual Return (CAR) – The percentage that a given amount or number would need to increase each year over a multi-year period in order to reach a corresponding cumulative return.

  Exchange Traded Fund (ETF) –A fund that tracks an index, but can be traded like a stock.   iBoxx USD Liquid Investment Grade Index –The iBoxx USD Liquid IG Index is a basket of 100 bonds, re-balanced monthly following the close of the market on the last

business day of each month. It is designed to provide balanced representation of the US dollar investment grade corporate market by the means of the most liquid corporate bonds available. All 100 bonds in the basket are equally price-weighted in returns (assuming equal quantity of each bond). The iBoxx USD Liquid IG Index is designed to be a subset of the broader USD corporate bond market, and it may be replicable by portfolio managers; or from the basis of a tradable portfolio.

  NASDAQ – The National Association of Securities Dealers Automated Quotation System is a nationwide computerized quotation system for over 5,500 over the counter stocks. The index is compiled of more than 4,800 stocks that are traded via this system.

  NASDAQ 100 –the NASDAQ-100 is a stock market index of 100 of the largest domestic and international non-financial companies listed on the NASDAQ stock exchange based on market capitalization.

  S&P 500 Index – The S&P 500 is the Standard & Poor’s composite index of 500 stocks, a widely recognized, unmanaged index of common stock prices. Performance & Risk Statistics   Annualized Return - The annualized return is the geometric mean of the returns with respect to one year.   Standard Deviation – Standard Deviation measures the dispersal or uncertainty in a random variable (in this case, investment returns). It measures the degree of variation of

returns around the mean or (average) return. The higher the volatility of the investment returns, the higher the standard deviation will be. For this reason, standard deviation is often used as on e measure of investment risk. A more volatile stock or investment would have a higher standard deviation.

  Maximum Drawdown – A measure of risk which captures the largest percentage drop of an investment from any peak to trough in a given period. It is generally calculated using month-end data. It will show in percentage terms how much money you would have lost (as a percentage) until you return to the investment’s breakeven point. For example, if you began with a $100,000 investment and you lost $30,000 before that investment returns to its breakeven level, then your ’maximum drawdown’ would be measured as 30%.

BCMJN - 092012 24

Disclosures


© 2013 CMG Capital Management Group, Inc.

Steve Blumenthal Founder & CEO, CMG Capital Management Group, Inc.

March 28, 2013


Advancements in trading technologies and the creaDon of ingenious investment instruments are real, dramaDc and liberaDng.

They give today’s investor porJolio soluDons that were previously available only to insDtuDons and high net worth investors.

Innova/ve Investment Solu/ons


Through the years, CMG has brought knowledge-‐based opDons to the market. •  Drawing on over two decades of experience, CMG incorporated the use of liquid, tacDcal investment soluDons.

•  Our experience transcends an array of trading plaJorms, custodians and third-‐party investment service providers.

Result? •  We’re able to provide our investment partners with a significant range of uncommon soluDons.



Today’s investment world calls for unique solu/ons. The goal: create stronger, more resilient por5olios to counterbalance risk and enhance modern por5olio construc/on.



1.  The expected returns for stocks and bonds.

2.  The industry is largely 60/40.

3.  Why I believe you have the single greatest opportunity to grow your AUM.


0% 2% 4% 6% 8%

10% 12% 14% 16% 18%

Expected 60/40 Return

Realized 60/40 Return

Conclusion 140 Years (14 Decades):

  Current 4.26% (Lowest in 14 Decades)   Expected Future 60/40 Return historically has been predictable

60/40 Expected Returns The Green line – Reflects the Expected 60/40 Return The Blue line – Reflects the Realized 60/40 Return

*note the high degree of correlaDon 1871 to present

Source: Research Affiliates, LLC., based on data from Morningstar Encorr and Bloomberg. Research Affiliates – X-‐Factor 2011


Data Suppor/ng Chart

Source: Research Affiliates, LLC., based on data from Morningstar Encorr and Bloomberg. Research Affiliates – X-‐Factor 2011 Research Affiliates, LLC

January 15, 2013: 2.12% + 1.7% + 2.26% = 6.08% 1.80% 4.37%


60/40 Expect 4.37% Annualized returns Next 10 Years – Research Affiliates, CMG research

OUR EXPERTISE:

Enhancing investment porJolios by including strategic allocaDons to the best-‐of-‐breed tacDcal investment strategies.


Debt Storms, Currency Wars and

Unintended Consequences

Debt! EU

Japan

U.S.


QE1 +42%

QE2 +24%

Op. Twist +20%

QE3

On our way to $4 Trillion


Impact of Rising Interest Rates on Bond Prices

The Single Biggest Por5olio Risk I See


0.00%

5.00%

10.00%

S & P 500 Index

Average Equity Investor

Barclays Aggregate Bond index

Average Fixed Income

Investor

InflaDon

7.81%

3.49%

6.50%

0.94% 2.56%

Average Annual Returns 20 Year DALBAR Study Ending December 31, 2011

Investor Behavior Mahers


MODERN PORTFOLIO THEORY

“A mathema/cal formulaDon of the concept of diversifica/on in invesDng, with

the aim of seeking a collecDon of investment assets that has collec/vely lower risk than any individual asset.”

MPT – Defini/on


Enhanced Modern Por5olio Theory

1.   Equi/es – beta (with risk protec/on)

2.   Fixed Income (tac/cally managed)

3.   Tac/cal Trading Strategies and Alts (Non-‐correla/ng valuable risk diversifica/on)

Enhanced MTP Construc/on


60%

40%

Enhanced MPT

Take 7% From Fixed Income

CMG Managed High Yield Bond Program

CMG Opportunis/c

All Asset Strategy

System Research Treasury Bond Program

Sco/a Partners Growth S&P Plus

Program

Take 27% From Equity …and shi) to tac-cal

Tradi/onal Por5olio Tac/cal Por5olio

Tac/cal

Equity

Fixed Income

21%

12%

21% 12%

5% 5%

24%


33/33/34

Bonds

S&P 500

33/33/34


CMG Opportunis/c All Asset Strategy

Strategy Incep/on: 1995

CMG Pla5orm Introduc/on: 2011

Investment Category: TacDcal Equity

Strategy Summary: •  QuanDtaDve investment strategy that analyzes a diverse

universe of mutual funds to determine an opDmal porJolio allocaDon.

•  The mutual fund selecDon process uDlizes proprietary mathemaDcal and technical indicators to idenDfy funds with emerging price trends across asset classes and market sectors.

•  PorJolio is comprised of up to 11 mutual fund posiDons.

System Research

Treasury Bond Program

CMG Managed High Yield Bond

Program

CMG Opportunis/c

All Asset Strategy

System Research



Program


Heat Map – 2008 through 2009

Light blue and pink = Fixed Income models Note move in Feb ‘09 to Equity models – Grey, Red, Green, Brown, Orange, Blue, Black


System Research Treasury Bond Program



Investment Category: TacDcal Long/Short

Strategy Summary: •  A quanDtaDve investment strategy that trades long and short

30 year US Treasury Bond Mutual Funds. •  Model looks at commodity, fixed income and equity

indicators. •  Strategy designed to generate returns in both rising and falling

interest rate environments.

System Research


CMG Managed High Yield Bond

Program

CMG Opportunis/c

All Asset Strategy

System Research



Program


Domes/c Long-‐Dura/on Fixed Income

Top Performing Managers of DomesDc Long-‐DuraDon Fixed Income, 3rd Quarter 2012

Pensions & Investments: November 12, 2012 Performance is net of a 2.50% management fee and includes the reinvestment of dividends and capital

gains. Past performance can not predict or guarantee future performance.

5 year gross return

5 year net

return CMG SR Treasury Bond Program 24.20 21.15

TCW Securitized Opportunities 23.86 22.51

Reams Long Duration Fixed Income 17.71 17.46

NISA 15+ STRIPS 15.07 14.79

NISA Long Dur Govt Only Consolidated 14.86 14.58

Delaware -‐ Long Dur Fix-‐Inc 14.55 13.95

Hillswick Long Duration Government 14.38 14.05

Standish US Long Duration 14.38 14.13

Logan Circle Long Duration 14.06 13.66

PIMCO Long Term Bond Full Authority 13.72 13.46

Top Performing Strategy


Sco/a Partners Growth S&P Plus Program



Investment Category: TacDcal Long/Short

Strategy Summary: •  Applies a quanDtaDve approach to determining long-‐,

intermediate-‐ and short-‐term trends on the S&P 500. •  Based on the alignment of signals across mulDple Dme frames,

ScoDa will invest long or short the S&P 500. •  Strategy also uDlizes an overbought/oversold overlay that is

meant to capitalize on mean reversion trades.

System Research Treasury

Bond Program

CMG Managed High Yield

Bond Program

CMG Opportunis/c

All Asset Strategy

System Research


Sco/a Partners Growth S&P Plus Program


Jefferson Na/onal Tax Efficiency 1.  For years, the most successful endowments, such as Harvard and Yale, have

invested in a wide range of asset classes and trading strategies that have been unavailable to most investors.

2.  Now, due to advances in technology and investment products a number of strategies are available to ALL investors.

3.  Three proven strategies available in JN’s flat fee tax deferred VA.

60/40 remains challenged. An Enhanced MPT por5olio will enable you to help your clients and grow your AUM as your compe//on is 60/40.

4.37% less 1% advisory fee will cause money to seek a beher plan.


Joe Yoon – Northeast VP InsDtuDonal Sales 610.989.9090 ext. 121 [email protected]

Mike SciorDno Managing Director Head of DistribuDon 610.989.9090 ext. 122 [email protected]

Elissa Magnavita MarkeDng Coordinator 610.989.9090 ext. 144 [email protected]

Leadership Team

External Internal

Nick Dodds – South VP InsDtuDonal Sales 610.989.9090 ext. 142 [email protected]

Avi Rutstein – Great Lakes VP InsDtuDonal Sales 610.989.9090 ext. 123 [email protected]

Tom Hannafin Internal Sales Associate 610.989.9090 ext. 145 [email protected]

John Jaszczyszyn Internal Sales Associate 610.989.9090 ext. 126 [email protected]

John Jaszczyszyn Internal Sales Associate 610.989.9090 ext. 126 [email protected]

Tom Hannafin Internal Sales Associate 610.989.9090 ext. 145 [email protected] CMG Capital Management Group, Inc.

1000 ConDnental Drive, Suite 570 King of Prussia, PA 19406

P: 610.989.9090 I F: 610.989.9092 www.cmgwealth.com

Jason Wilder ExecuDve Vice President Business Development/ Key Accounts 610.989.9090 ext. 120 [email protected]

– West

CMG Sales Distribu/on


The views expressed in this presentaDon are the views of Steve Blumenthal and are subject to change at any Dme based on market and other condiDons. Furthermore, these strategies are not reflecDve of the strategies and/or posiDons of investment programs available through CMG. This message (and any associated files) is intended only for the use of the individual or enDty to which it is addressed and may contain informaDon that is confidenDal or subject to copyright. If you are not the intended recipient, you are hereby noDfied that any disseminaDon, copying or distribuDon of this message, or files associated with this message is strictly prohibited. If you have received this message in error, please noDfy us immediately by replying to the message and deleDng it from your computer. This is not an offer or solicitaDon for the purchase or sale of any security and should not be construed as such. References to specific securiDes, investment programs or funds are for illustraDve purposes only and are not intended to be, and should not be interpreted as recommendaDons to purchase or sell such securiDes. Please remember that past performance may not be indicaDve of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this document will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your porJolio. Due to various factors, including changing market condiDons, the content may no longer be reflecDve of current opinions or posiDons. DerivaDves and opDons strategies are not suitable for every investor, may involve a high degree of risk, and may be appropriate investments only for sophisDcated investors who are capable of understanding and assuming the risks involved. Moreover, you should not assume that any discussion or informaDon contained herein serves as the receipt of, or as a subsDtute for, personalized investment advice from CMG Capital Management Group, Inc.(or any of its related enDDes), or from any other investment professional. To the extent that a reader has any quesDons regarding the applicability of any of the content to his/her individual situaDon, he/she is encouraged to consult with the professional advisor of his/her choosing. A copy of CMG's current wriwen disclosure statement discussing our advisory services and fees is available upon request or you can access this informaDon on CMG's website (www.cmgwealth.com/public/adv.asp). Performance Disclosure CMG Capital Management Group, Inc. (“CMG”) is an SEC registered investment adviser located in the Commonwealth of Pennsylvania. It is important to note that inclusive with this presentaDon are the accompanying individual performance tear sheets with addiDonal disclosure on each underlying investment strategy. Individual returns may vary substanDally from those presented due to differences in the Dming of contribuDons and withdrawals, account start dates and actual fees paid. All performance is presented net of the current advisor fee for the program, 2.50%, paid quarterly in arrears. CMG Managed High Yield Bond Program -‐ Performance from October 1, 1993 through September 30, 1999 was awested to by Deloiwe & Touche LLP and reflects the performance of one conDnuously managed account. A copy of awestaDon results is available from CMG upon request. Performance results from October 1999 to December 2003 reflect performance on a conDnuously managed account held at Trust Company of America (“TCA”). From January 2004 to the present, performance results are based off a blend of accounts managed by CMG and held at TCA. Note: from March 2004 to Sept. 2005 CMG created and managed the CMG High Income Bond Plus Fund. Performance of the fund is reflected in the blended accounts held at TCA. ScoDa Partners Growth S&P Plus Program -‐ Performance from July 2004 to June 2008 represents performance from an actual tracking account managed by Cliff Montgomery, Managing Member of ScoDa Partners, LLC, tracked independently by Theta Investment Research, LLC. Mr. Montgomery was an independent consultant to Theta Investment Research, LLC. Performance from July 2008 to the present is based on a blend of actual accounts managed by CMG. System Research Treasury Bond Program -‐ Performance from July 2007 to December 2009 represents performance from an actual tracking account managed by System Research, LLC, tracked independently by Theta Investment Research, LLC. Performance from January 2010 to the present is based on a blend of actual accounts managed by CMG. CMG OpportunisDc All Asset Strategy-‐ TCA PorJolio -‐ For the period of January 2000 through January 2011, performance represents a hypotheDcal back-‐test of an allocaDon to the CMG OpportunisDc All Asset Strategy at TCA (Trust Company of America). Performance from February 2011 to the present is based on a blend of actual accounts managed by CMG. The CMG Opportunis/c All Asset Strategy and the Tac/cal Por5olio performance results reflect hypothe/cal results that were achieved by means of the retroacDve applicaDon of a back-‐tested model and, as such, the corresponding results have inherent limitaDons, including: (1) the model results do not reflect the results of actual trading using client assets, but were achieved by means of the retroacDve applicaDon of each of the above referenced models, certain aspects of which may have been designed with the benefit of hindsight; (2) back-‐tested performance may not reflect the impact that any material market or economic factors might have had on the adviser’s use of the model if the model had been used during the period to actually mange client assets; (3) for various reasons (including the reasons indicated above), CMG’s clients may have experienced investment results during the corresponding Dme periods that were materially different from those portrayed in the model; and please note: the hypotheDcal performance results reflect the deducDon of the maximum investment management fee, 2.50%, which would have been charged by CMG during the corresponding Dme periods for CMG strategies. Indices used in the TacDcal PorJolio illustraDon do no reflect the deducDon of management fees. The porJolio reflects annual rebalancing of posiDons. Past performance may not be indicaDve of future results. Therefore, no current or prospecDve client should assume that future performance will be profitable, or equal to any corresponding historical index. The composiDon/percentage weighDng of each corresponding CMG index (i.e. S&P 500 Total Return or Dow Jones Wilshire U.S. 5000 Total Market Index) is also disclosed. For example, the S&P 500 Composite Total Return Index (the “S&P”) is a market capitalizaDon-‐weighted index of 500 widely held stocks oyen used as a proxy for the stock market. Standard & Poor’s chooses the member companies for the S&P based on market size, liquidity, and industry group representaDon. Included are the common stocks of industrial, financial, uDlity, and transportaDon companies. The historical performance results of the S&P (and those of or all indices) do not reflect the deducDon of transacDon and custodial charges, nor the deducDon of an investment management fee, the incurrence of which would have the effect of decreasing indicated historical performance results. The S&P is not an index into which an investor can directly invest. The historical S&P performance results (and those of all other indices) are provided exclusively for comparison purposes only, so as to provide general comparaDve informaDon to assist an individual client or prospecDve client in determining whether the performance of CMG’s porJolio meets, or conDnues to meet, his/her investment objecDve(s). A corresponding descripDon of the other comparaDve indices, are available from CMG upon request. It should not be assumed that any CMG holdings will correspond directly to any such comparaDve index. The CMG performance results do not reflect the impact of taxes. PAST PERFORMANCE MAY NOT BE INDICATIVE OF FUTURE RESULTS

Disclosure

Contact Info

Advisor Support Desk [email protected]

(866) 667-0564 www.jeffnat.com

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