EANEST Parnrs, LLC 1180 Pachr S. - Sui 2300 Alana, Gorgia 30309 Syl: Sub-Syl: Firm AUM: Firm Sragy AUM: US laiv Valu $20.0 billion $70.0 million Yar Foundd: GIMA Saus: Firm Ownrship: Profssional-Saff: 1998 Focus Employ-Ownd 46 PODUCT OVEVIEW Earns Parnrs, LLC's quiy invsmn sragy mploys a fundamnal, boom-up approach as i sks o ouprform is bnchmark, h ussll Indx, whil sking o manag volailiy and risk. Earns implmns his philosophy using an inrnally dvlopd scrning procss calld urn Parn cogniion, horough fundamnal analysis and ffciv risk managmn. Earns scrns h Mid Cap univrs o idnify socks i blivs ar likly o add valu basd on hir financial characrisics and h currn nvironmn. Earns sks companis wih dvlopd sragis, solid managmn ams, sufficin funding and srong financial rsuls. Earns's procss may, a ims, rsul in porfolios ha will b ovr/undrwighd in paricular scors/indusris vrsus h S&P 500 Indx. MANAGE'S INVESTMENT STATEGY Top-down / porfolio srucurs basd on conomic rnds Boom-up / porfolio srucur basd on individual scuriis TAGET POTFOLIO CHAACTEISTICS Numbr of sock holdings: 50 o 55 P/E raio: Abov h S&P 500 Cash lvl ovr mark cycl: 0 o 5% isk (sandard dviaion): Similar o h S&P 500 Avrag urnovr ra: 20 o 25% Us ADs: Capializaion: No Larg, Mdium and Small companis POTFOLIO'S EQUITY SECTO WEIGHTINGS + ---------------12/18--------- 06/18 Scor Earns Indx*** Earns Enrgy 7.50 10.94 10.02 Marials 9.01 3.11 7.11 Indusrials 13.69 5.24 11.00 Consumr Discrionary 10.21 3.56 9.74 Consumr Sapls 0.00 9.07 0.00 Halh Car 6.66 19.88 6.52 Financials 18.52 24.76 17.36 Informaion Tchnology 20.90 9.72 25.41 Communicaion Srvics 3.17 9.15 0.00 Uiliis 1.51 3.93 1.21 al Esa/EITs 8.82 0.65 7.71 Cash/Cash Equivalns 0.00 0.00 3.92 POTFOLIO STATISTICS ---------------12/18------ 06/18 Earns Indx*** Earns Numbr of sock holdings 57 592 56 Dividnd Yild 1.7% 2.7% 1.4% Disribuion a Wd avg P/E raio ¹ 15.61x 14.90x 19.45x Wd avg porfolio ba 0.97 0.93 Mga capializaion + 0.0% 0.0% 0.0% Larg capializaion + 0.0% 49.1% 0.0% Mdium capializaion + 0.0% 49.4% 0.0% Small capializaion + 0.0% 1.4% 0.0% Micro capializaion + 0.0% 0.2% 0.0% POTFOLIO'S TOP FIVE EQUITY HOLDINGS Inui Inc. 4.5 Amrican Towr Corporaion 4.4 Inrconinnal Exchang, Inc. 3.3 CSX Corporaion 3.3 Acivision Blizzard, Inc. 3.1 % POCESS BASED ON 0 Ass allocaion - cash vs. sock 0 Indusry or scor wighing 100 Sock Slcion % ¹Th P/E usd hr is calculad by h harmonic man. +Toal may no qual 100% du o rounding. ***Indx : ussll Mid Cap Vl rms. Informaion shown is as of Dcmbr 31, 2018, unlss ohrwis nod. All daa ar subjc o chang. Pag 1 of 7
MANAGE'S INVESTMENT POCESS Th firs sp in hir invsmn procss is o scrn h rlvan univrs o idnify socks ha hy bliv ar likly o ouprform basd on hir financial characrisics and h currn nvironmn. Using a scrning approach calld urn Parn cogniion, hy sk o idnify h financial and mark characrisics ha hav bn in plac whn an individual company has producd ousanding prformanc. Th approximaly 150 bs companis idnifid in hir scrning procss ar pu hrough a scond, mor rigorous rviw. In his sp, hy dvlop an invsmn hsis for ach company. This hsis mus b sd. Thy limina from considraion any company ha dos no pass hir xhausiv fundamnal analysis. Th final sp in hir invsmn procss is o consruc a porfolio ha includs hos socks hy xpc o hav h bs prformanc and ha ffcivly manags risk. Thir clins ar primarily concrnd abou h risk of maningfully undrprforming h assignd bnchmark. Hnc, hy focus hir anion on rducing his possibiliy. Thy us a saisical approach calld downsid dviaion o masur and hn consrain h liklihood of significanly undrprforming h assignd bnchmark. ISK CONSIDEATIONS Equiy scuriis prics may flucua in rspons o spcific siuaions for ach company, indusry, mark condiions and gnral conomic nvironmn. Companis paying dividnds can rduc or cu payous a any im. Sragis ha invs a larg prcnag of asss in only on indusry scor (or in only a fw scors) ar mor vulnrabl o pric flucuaion han porfolios ha divrsify among a broad rang of scors. Invsing in scuriis nails risks, including: Th socks of mdium-sizd companis ar ofn associad wih highr risk han socks of largr companis, including highr volailiy. Invsing in smallr/mid-cap companis involvs grar risks no associad wih invsing in mor sablishd companis, such as businss risk, significan sock pric flucuaions and illiquidiy. Valu invsing involvs h risk ha h mark may no rcogniz ha scuriis ar undrvalud and hy may no apprcia as anicipad. Whn invsing in valu scuriis, h mark may no ncssarily hav h sam valu assssmn as h managr, and, hrfor, h prformanc of h scuriis may dclin. Growh invsing dos no guaran a profi or limina risk. Th socks of hs companis can hav rlaivly high valuaions. Bcaus of hs high valuaions, an invsmn in a growh sock can b mor risky han an invsmn in a company wih mor mods growh xpcaions. Valu invsing dos no guaran a profi or limina risk. No all companis whos socks ar considrd o b valu socks ar abl o urn hir businss around or succssfully mploy corrciv sragis which would rsul in sock prics ha do no ris as iniially xpcd. Bonds rad blow invsmn grad may hav spculaiv characrisics and prsn significan risks byond hos of ohr scuriis, including grar crdi risk and pric volailiy in h scondary mark. Invsors should b carful o considr hs risks alongsid hir individual circumsancs, objcivs and risk olranc bfor invsing in high-yild bonds. If a sragy xpcs o hold a concnrad porfolio of a limid numbr of scuriis, i should b nod ha a dclin in h valu of hs invsmns would caus h porfolio s ovrall valu o dclin o a grar dgr han ha of a lss concnrad porfolio. POTFOLIO'S ALLOCATION HISTOY (%) + 12/18 09/18 06/18 03/18 U.S. Socks 98 98 96 96 Cash/Cash Equivalns 2 2 4 4 ¹Th P/E usd hr is calculad by h harmonic man. +Toal may no qual 100% du o rounding. ***Indx : ussll Mid Cap Vl rms. Informaion shown is as of Dcmbr 31, 2018, unlss ohrwis nod. All daa ar subjc o chang. Pag 2 of 7
ISK/ETUN ANALYSIS - 5 YEAS ENDING 12/31/18 a o f u r n s Sandard Dviaion STD O Earns (Gross) 11.42 7.93 Earns (N) 11.38 5.31 ussll Mid Cap Vl 10.55 5.44 90-Day T-Bills 0.37 0.60 AVEAGE ANNUAL TOTAL ETUN (%) - PEIODS ENDING 12/31/18 a o f u r n s INVESTMENT ESULTS Annual as of urn (%) 10 Yar - Ending 12/31/18 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Annual Sd. Dv. Earns (Gross) 41.07 25.96-4.92 16.18 33.27 10.91 1.16 17.47 22.79-9.50 14.38 16.49 Earns (N) 37.27 22.47-7.37 13.40 30.15 8.18-1.27 14.59 19.86-11.71 11.53 16.43 ussll Mid Cap Vl 34.21 24.75-1.38 18.49 33.45 14.75-4.79 20.00 13.35-12.29 13.03 17.21 ISK VOLATALITY (%) a o f u r n s POTFOLIO'S QUATELY ETUNS (%) Quarr1 Quarr2 Quarr3 Quarr4 Gross N Gross N Gross N Gross N 2009-6.81-7.55 20.83 20.09 18.50 17.76 5.72 4.99 2010 9.33 8.59-9.12-9.86 11.64 10.90 13.55 12.82 2011 7.73 7.00-1.95-2.69-20.14-20.65 12.71 12.11 2012 13.16 12.52-5.24-5.82 4.53 3.89 3.64 3.00 2013 11.12 10.48 0.52-0.09 8.17 7.55 10.29 9.64 2014 4.15 3.49 3.56 2.92-2.89-3.51 5.89 5.26 2015 4.24 3.59 0.52-0.10-7.31-7.88 4.16 3.56 2016 1.64 0.97 4.46 3.83 4.94 4.31 5.44 4.78 2017 5.77 5.14 3.22 2.59 4.95 4.31 7.16 6.53 2018 0.64 0.05 2.34 1.71 6.38 5.75-17.40-17.95 lad POTFOLIO'S ISK STATISTICS - PEIODS ENDING 12/31/18 ¹ ² 3 Yar 5 Yar Sandard Dviaion 13.11% 11.42% Sandard Dviaion of Primary 11.34% 10.55% Bnchmark Sharp aio 0.63 0.64 Sharp aio of Primary 0.45 0.46 Bnchmark Alpha 2.73% 2.35% Ba 1.10 1.03 Downsid isk 2.02% 1.88% -Squard 0.92 0.91 Tracking Error 3.86% 3.49% Informaion aio 0.84 0.71 Earns (Gross) Earns (N) ussll Mid Cap Vl Numbr Of Up Qrs. 17 16 15 Down Qrs. 3 4 5 POTFOLIO DIVESIFICATION - ²(INCEPTION THOUGH 12/14)+ ² Earns vs. ussll Mid Cap Vl 0.94 +Saisics ar calculad using gross of f prformanc only. 1. Saisics ar calculad using gross of f prformanc only. 2. ussll Mid Cap Vl was usd as h primary bnchmark and h 90-Day T-Bills Indx as h risk-fr bnchmark. S imporan nos and disclosurs pags for a discussion of h sourcs of h prformanc daa usd o calcula h prformanc rsuls and rlad analyss shown abov. rms. Informaion shown is as of Dcmbr 31, 2018, unlss ohrwis nod. All daa ar subjc o chang. Pag 3 of 7
COMPOSITE DISCLOSUES Th disclosurs providd blow apply o prformanc informaion in his profil, if any. Pas prformanc is no a guaran of fuur rsuls. Acual individual accoun rsuls may diffr from h prformanc shown in his profil. Thr is no guaran ha his invsmn sragy will achiv is inndd rsuls undr all mark condiions. Do no rly upon his profil as h sol basis for your invsmn dcisions. Prformanc rsuls in his profil ar calculad assuming rinvsmn of dividnds and incom. urns for mor han on yar ar annualizd and basd on quarrly daa. urns for priods of lss han a calndar yar show h oal rurn for h priod and ar no annualizd. Sourcs of Prformanc suls and Ohr Daa: Th prformanc daa and crain ohr informaion for his sragy (including h daa on pag 1 of his profil) may includ on or mor of h following: (i) h prformanc rsuls of a composi of Morgan Sanly accouns managd by h hird pary invsmn managr, (ii) h prformanc rsuls for accouns and invsmn producs managd by h hird pary invsmn managr, in h sam or a subsanially similar invsmn sragy ousid of h applicabl Morgan Sanly program, and/or (iii) in h cas of Modl Porfolio Sragis, h Modl Porfolio Providr s rsuls in managing insiuional accouns ousid of h Morgan Sanly program prior o Modl Porfolio Sragy s incpion in h Morgan Sanly program. For priods hrough Jun 2012, h Fiduciary Srvics program oprad hrough wo channls h Morgan Sanly channl and h Smih Barny channl and any prformanc and ohr daa rlaing o Fiduciary Srvics accouns shown hr for hs priods is calculad using accouns in only on of h hs channls.) Plas no ha h Fiduciary Srvics program was closd on January 2, 2018. Alhough h Fiduciary Srvics and programs ar boh Morgan Sanly managd accoun programs, h prformanc rsuls and ohr faurs of similar invsmn sragis in h wo programs may diffr du o invsmn and opraional diffrncs. Prformanc in on program is no indicaiv of ponial prformanc in h ohr. For xampl, h individual invsmn sragis in program accouns may conain fwr scuriis, which would lad o a mor concnrad porfolio. Th auomaic rbalancing, wash sal loss and ax harvsing faurs of h program, which ar no availabl in Fiduciary Srvics, also could caus diffrncs in prformanc. In addiion, any prformanc rsuls includd in his profil ha ar basd on a hird pary invsmn managr s accouns ha ar no par of h Morgan Sanly program accouns or insiuional accouns ha ar par of h Modl Porfolio sragy may diffr du o invsmn and opraional diffrncs as wll. As such, prformanc rsuls of h hird pary invsmn managr's composis and h hird pary Modl Porfolio Sragis may diffr from hos of accouns managd in h sam or a subsanially similar invsmn sragy. For xampl, in h cas of Modl Porfolio Sragis, Morgan Sanly, as h invsmn managr, may dvia from h Third Pary Modl Porfolios. lad Prformanc: Th Global Invsmn Prformanc Sandards ("GIPS") Guidanc Samn for Wrap F/Sparaly Managd Accoun (SMA) Porfolios (h "Guidanc Samn") bcam ffciv January 1, 2006. In accordanc wih h Guidanc Samn, EANEST Parnrs dfind is Insiuional Division and Non-Insiuional Division as Spara Firms wih only h Insiuional Division claiming complianc wih GIPS. Prior o January 1, 2006, firm, produc, and composi informaion rprsn ha of h Insiuional Division. Prior o January 1, 2006, prformanc is ha of h rlvan Insiuional Division composi. Th Insiuional Division adopd a composi policy on January 1, 2000. Undr his policy, accouns wih a valu undr $2.5 million ar considrd non-discrionary. Gross prformanc rsuls rflc h dducion of ransacion coss and "n rsuls" also rflc h dducion of h highs wrap f chargd o ach clin mploying h paricular sragy during h priod undr considraion and rflcs h dducion of advisory fs, brokrag or ohr commissions, and any ohr xpnss ha a clin would hav paid. From January 1, 2006 and forward, firm, produc, and composi informaion rprsn ha of h Non-Insiuional Division. From January 1, 2006 and forward, prformanc is ha of h rlvan Non-Insiuional Division modl porfolio. Ba masurs an quiy porfolio's volailiy vrsus an appropria bnchmark. Porfolio ba grar han 1.00 rprsns porfolio volailiy xcding h bnchmark and porfolio ba lss han 1.00 rprsns porfolio volailiy lss han h bnchmark. Thr ar inhrn limiaions in modl porfolio rsuls, paricularly h fac ha such rsuls do no rprsn acual rading and ha hy may no rflc h impac ha marial conomic and mark facors migh hav had on h advisr's dcision-making if h advisr wr acually managing clins' mony. Gross prformanc rsuls do no rflc h dducion of any ransacion coss. "N rsuls" rflc h dducion of h highs wrap f chargd o ach clin mploying h paricular sragy during h priod undr considraion. Th wrap f rflcs h dducion of advisory fs, brokrag or ohr commissions, and any ohr xpnss ha a clin would hav paid. All Priods Th Equiy Composi objciv is h apprciaion of capial by invsing in companis blivd o b undrvalud and having an abov-avrag ponial o incras in pric. Pas prformanc is hisorical and is no a guaran of fuur rsuls. Prformanc rsuls includ h rinvsmn of all incom. Morgan Sanly Prformanc: rms. Informaion shown is as of Dcmbr 31, 2018, unlss ohrwis nod. All daa ar subjc o chang. Pag 4 of 7
Th composi consiss of 166 accoun(s) wih a mark valu of $61.5 million as of 12/31/2018. In his profil, h prformanc from January 1, 2011 hrough Jun 30, 2012 consiss of accouns managd by h invsmn managr in his sragy in ihr h Morgan Sanly or h Smih Barny form of h Fiduciary Srvics program. From July 1, 2012 hrough Dcmbr 31, 2015, prformanc consiss of all Fiduciary Srvics (FS) accouns managd by h invsmn managr in his sragy, subjc o any ohr limiaions sad in his profil. From January 1, 2016, prformanc consiss of h prformanc of all FS accouns (as dscribd in h prvious snnc) as wll as h prformanc of all singl syl accouns managd by h invsmn managr in his sragy, subjc o any ohr limiaions sad in his profil. Prformanc composis calculad by Morgan Sanly includ all f-paying porfolios wih no invsmn rsricions. Nw accouns ar includd bginning wih h scond full calndar monh of prformanc. Trminad accouns ar rmovd in h monh in which hy rmina (bu prior prformanc of rminad accouns is raind). Prformanc is calculad on a oal rurn basis and by ass wighing h individual porfolio rurns using h bginning of priod valus. Gross Prformanc: Earns s gross rsuls do no rflc a dducion of any invsmn advisory fs or program fs, chargd by Earns or Morgan Sanly, bu ar n of commissions chargd on scuriis ransacions. N Prformanc for all Priods: N prformanc rsuls rflc a dducion of 0.6125% quarrly. This consiss of hr componns: 0.5% maximum quarrly MS Advisory F and 0.0175% maximum quarrly Program Ovrlay F (which, oghr covr h srvics providd by Morgan Sanly), plus 0.095% quarrly SMA Managr Fs (bing h f currnly chargd by Earns o nw clins for managing hir asss in h program). Th SMA Managr Fs may diffr from managr o managr, and managrs may chang hir f o nw clins from im o im. If you slc his managr for your accoun, chck h SMA Managr Fs spcifid in h wrin clin agrmn, in cas hs hav changd sinc you rcivd his profil. Hisorical n fs rflc h Advisory F Schdul as of Ocobr 1, 2018. Morgan Sanly program fs ar usually dducd quarrly, and hav a compounding ffc on prformanc. Th Morgan Sanly program f, which diffrs among programs and clins, is dscribd in h applicabl Morgan Sanly ADV brochur, which is availabl a www.morgansanly.com/adv or on rqus from your Financial Advisor or Priva Walh Advisor. Documn approval da Fbruary 2013. Focus Lis, Approvd Lis, and Wach Saus: Global Invsmn Managr Analysis ("GIMA") uss wo mhods o valua invsmn producs in applicabl advisory programs. In gnral, sragis ha hav passd a mor horough valuaion may b placd on h "Focus Lis", whil sragis ha hav passd hrough a diffrn and lss comprhnsiv valuaion procss may b placd on h "Approvd Lis". Somims an invsmn produc may b valuad using h Focus Lis procss bu hn placd on h Approvd Lis insad of h Focus Lis. Invsmn producs may mov from h Focus Lis o h Approvd Lis, or vic vrsa. GIMA may also drmin ha an invsmn produc no longr ms h criria undr ihr valuaion procss and will no longr b rcommndd in invsmn advisory programs (in which cas h invsmn produc is givn a "No Approvd" saus). GIMA has a "Wach" policy and may dscrib a Focus Lis or Approvd Lis invsmn produc as bing on "Wach" if GIMA idnifis spcific aras ha (a) mri furhr valuaion by GIMA and (b) may, bu ar no crain o, rsul in h invsmn produc bcoming "No Approvd". Th Wach priod dpnds on h lngh of im ndd for GIMA o conduc is valuaion and for h invsmn managr o addrss any concrns. GIMA may, bu is no obligad o, no h Wach saus in his rpor wih a "W" or "Wach" on h covr pag. For mor informaion on h Focus Lis, Approvd Lis, and Wach procsss, plas s h applicabl Morgan Sanly ADV brochur (www.ms.com/adv). Your Financial Advisor or Priva Walh Advisor can provid on rqus a copy of a papr nild "GIMA: A A Glanc ". ADDITIONAL DISCLOSUES Th informaion abou a rprsnaiv accoun is for illusraiv purposs only. Acual accoun holdings, prformanc and ohr daa will vary dpnding on h siz of an accoun, cash flows wihin an accoun, and rsricions on an accoun. Holdings ar subjc o chang daily. Th informaion in his profil is no a rcommndaion o buy, hold or sll scuriis. Acual porfolio saisics may vary from arg porfolio characrisics. Th Modl Porfolio Providr or Invsmn Managr may us h sam or subsanially similar invsmn sragis, and may hold similar porfolios of invsmns, in ohr porfolios or producs i manags (including muual funds). Ths may b availabl a Morgan Sanly or lswhr, and may cos an invsor mor or lss han his sragy in Morgan Sanly's program. Th porfolio may, a ims, invs in xchang-radd funds (ETFs), which ar a form of quiy scuriy in sking o mainain coninud full xposur o h broad quiy mark. Morgan Sanly invsmn advisory programs may rquir a minimum ass lvl and, dpnding on your spcific invsmn objcivs and financial posiion, may no b suiabl for you. Invsmn advisory program accouns ar opnd pursuan o a wrin clin agrmn. Th invsmn managr acs indpndnly of, and is no an affilia of, Morgan Sanly Smih Barny LLC. Divrsificaion dos no guaran a profi or proc agains a loss. No obligaion o noify Morgan Sanly has no obligaion o noify you whn informaion in his profil changs. Sourcs of informaion Marial in his profil has bn obaind from sourcs ha w bliv o b rliabl, bu w do no guaran is accuracy, complnss or imlinss. Third pary daa providrs mak no warranis or rprsnaions rlaing o h accuracy, complnss or imlinss of h daa hy provid and ar no liabl for any damags rlaing o his daa. No ax advic rms. Informaion shown is as of Dcmbr 31, 2018, unlss ohrwis nod. All daa ar subjc o chang. Pag 5 of 7
Morgan Sanly and is affilias do no rndr advic on lgal, ax and/or ax accouning mars o clins. Each clin should consul his/hr prsonal ax and/or lgal advisor o larn abou any ponial ax or ohr implicaions ha may rsul from acing on a paricular rcommndaion. No an EISA fiduciary Morgan Sanly is no acing as a fiduciary undr ihr h Employ irmn Incom Scuriy Ac of 1974, as amndd, or undr scion 4975 of h Inrnal vnu Cod of 1986, as amndd, in providing h informaion in his profil. 2018 Morgan Sanly Smih Barny LLC Mmbr SIPC. INDEX DESCIPTIONS 90-Day T-Bills Th 90-Day Trasury Bill is a shor-rm obligaion issud by h Unid Sas govrnmn. T-bills ar purchasd a a discoun o h full fac valu, and h invsor rcivs h full valu whn hy maur. Th diffrnc of discoun is h inrsd arnd. T-bills ar issud in dnominaions of $10,000 aucion and $1,000 incrmns hrafr. ussll Mid Cap Vl Th ussll Indx conains ussll Midcap companis wih lowr pric-o-book raios and lowr forcasd growh valus. Th socks ar also mmbrs of h ussll 1000 Valu Indx. S&P 500 Th S&P 500 Toal urn has bn widly rgardd as h bs singl gaug of h larg cap U.S. quiis mark sinc h indx was firs publishd in 1957. Th indx has ovr $5.58 rillion bnchmarkd, wih indx asss comprising approximaly $1.31 rillion of his oal. Th indx includs 500 lading companis in lading indusris of h U.S. conomy, capuring 75% covrag of U.S. quiis. This indx includs dividnd rinvsmn. Indics ar unmanagd and hav no xpnss. You canno invs dircly in an indx. GLOSSAY OF TEMS Alpha is a mahmaical sima of risk-adjusd rurn xpcd from a porfolio abov and byond h bnchmark rurn a any poin in im. Amrican Dposiary cips (ADs) ar rcips for shars of a forign-basd corporaion hld in h vaul of a U.S. bank. Avrag Porfolio Ba is a masur of h snsiiviy of a bnchmark or porfolio's ras of rurn o changs agains a mark rurn. Th mark rurn is h S&P 500 Indx. I is h cofficin masuring a sock or a porfolio's rlaiv volailiy. Boom-Up Sock Slcion Emphasis primarily on individual sock slcion. Considraions of conomic and indusry facors ar of scondary imporanc in h invsmn dcision-making procss. Capializaion is dfind as h following: Mga (Abov $100 billion), Larg ($12 o $100 billion), Mdium ($2.5 - $12 billion), Small ($.50 - $2.5 billion) and Micro (blow $.50 billion). Disribuion a is dfind as h mos rcn disribuion paid, annualizd, and hn dividd by h currn mark pric. Disribuion ra may consis of invsmn incom, shor-rm capial gains, long-rm capial gains, and /or rurns of capial. Dividnd a porion of a company's profi paid o common and prfrrd sharholdrs. Dividnd Yild annual dividnd pr shar dividd by pric pr shar. Dividnd Yild for h porfolio is a wighd avrag of h rsuls for h individual socks in h porfolio. Downsid isk is a masur of h risk associad wih achiving a spcific arg rurn. This saisic sparas porfolio volailiy ino downsid risk and upsid uncrainy. Th downsid considrs all rurns blow h arg rurn, whil h upsid considrs all rurns qual o or abov h arg rurn. Duraion is a masur of pric snsiiviy xprssd in yars. High Grad Corpora Bonds corpora bonds from issurs wih crdi raings of AA or AAA. Informaion aio is a masur of h invsmn managr's skill o add aciv valu agains a givn bnchmark rlaiv o how sabl ha aciv rurn has bn. Essnially, h informaion raio xplains how significan a managr's alpha is. Thrfor, h highr h informaion raio, h mor significan h alpha. Invsmn Grad Bonds ar hos rad by Sandard & Poor's AAA (highs rad), AA, A or BBB (or quivaln raing by ohr raing agncis or, in h cas of scuriis no rad, by h invsmn managr). Pric/Book aio (P/B) wighd avrag of h socks' pric dividd by book valu pr shar. Book valu pr shar is dfind as common quiy, including inangibls, dividd by shars ousanding ims h adjusmn facor. Pric/Cash Flow aio a raio usd o compar a company's mark valu o is cash flow. I is calculad by dividing h company's mark cap by h company' opraing cash flow in h mos rcn fiscal yar (or h mos rcn four fiscal quarrs); or, quivalnly, divid h pr-shar sock pric by h pr-shar opraing cash flow. Ba is a masur of h snsiiviy of a porfolio's ras of rurn o changs in h mark rurn. I is h cofficin masuring a sock or a porfolio's rlaiv volailiy. rms. Informaion shown is as of Dcmbr 31, 2018, unlss ohrwis nod. All daa ar subjc o chang. Pag 6 of 7
Pric/Earnings aio (P/E aio) shows h mulipl of arnings a which a sock slls. Drmind by dividing currn sock pric by currn arnings pr shar (adjusd for sock splis). Earnings pr shar for h P/E raio ar drmind by dividing arnings for pas 12 monhs by h numbr of common shars ousanding. Th P/E raio shown hr is calculad by h harmonic man. Pric/Sals aio drmind by dividing currn sock pric by rvnu pr shar (adjusd for sock splis). vnu pr shar for h P/S raio is drmind by dividing rvnu for pas 12 monhs by numbr of shars ousanding. 2 (-Squard)/Porfolio Divrsificaion indicas h proporion of a scuriy's oal varianc ha is bnchmark-rlad or is xplaind by variaions in h bnchmark. Sharp aio masurs h fficincy, or xcss rurn pr uni of volailiy, of a managr's rurns. I valuas managrs' prformanc on a volailiy-adjusd basis. Sandard Dviaion is a saisical masur of hisorical variabiliy or sprad of rurns around a mahmaical avrag rurn ha was producd by h invsmn managr ovr a givn masurmn priod. Th highr h sandard dviaion, h grar h variabiliy in h invsmn managr's rurns rlaiv o is avrag rurn. Top-Down/Economic Analysis Emphasis primarily on macroconomic rnds as opposd o boom-up sock slcion. Tracking Error rprsns h sandard dviaion of h diffrnc bwn h prformanc of h invsmn sragy and h bnchmark. This provids a hisorical masur of h variabiliy of h invsmn sragy's rurns rlaiv o is bnchmark. U.S. Trasury Bonds a markabl, fixd inrs U.S. govrnmn db scuriy wih a mauriy of mor han 10 yars. Trasury bonds mak inrs paymns smi-annually and h incom ha holdrs rciv is only axd a h fdral lvl. Volailiy a masur of risk basd on h sandard dviaion of h ass rurn. Volailiy is a variabl ha appars in opion pricing formulas, whr i dnos h volailiy of h undrlying ass rurn from now o h xpiraion of h opion. Thr ar volailiy indxs. Such as a scal of 1-9; a highr raing mans highr risk. rms. Informaion shown is as of Dcmbr 31, 2018, unlss ohrwis nod. All daa ar subjc o chang. Pag 7 of 7