Ar welcome - exploring alternative sources of income - 06 08 12

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Ar welcome - exploring alternative sources of income - 06 08 12

  1. 1. Exploring Alternative Sources of IncomeJ. Alan Reid, Jr.Co-Founder and CEO, ForwardJune 12, 2012
  2. 2. Helping investors move forwardThe power to adaptForward helps investors, advisors and institutions meet the challenges of an ever-changing globalinvestment climate. With fresh ideas and innovative strategies, we are striving to lead the industry innew directions.  Unbounded thinking  Outcome-oriented  Access to alternatives  Strong investment framework  Specialized expertiseFOR INVESTMENT PROFESSIONAL USE ONLY. Exploring Alternative Sources of Income | 6/12/2012 1
  3. 3. Outcome-oriented solutions TACTICAL LONG/SHORT • Tactical Growth • Commodity Long/Short • Tactical Enhanced • Real Estate Long/Short Alternative • Tactical Growth (SMA) • Credit Long/Short Solutions • Global Credit Long/Short • Endurance (LP) • Condor (LP) DIVIDEND STRATEGIES INCOME ORIENTED ASSET STRATEGIES • Large Cap Dividend Fund • Select Income • US Dividend (SMA) • High Yield Bond Strategic • Investment Grade Fixed Income Income • Real Estate • Emerging Markets Corporate Debt • PYP (LP) GLOBAL STRATEGIES EMERGING • Global Infrastructure • Emerging Markets • International Small Company • Frontier Strategy Global • International Dividend • Select Emerging Markets Dividend Exposure • International Real Estate • Global Dividend (SMA) • International Dividend (SMA) ALLOCATION FUNDS SMALL CAP PORTABLE ALPHA • Aggressive Allocation • Banking & Finance • Core Plus • Growth Allocation • Growth • Extended MarketPlus Advanced • Growth & Income Allocation • Small Cap Equity • Strategic Alternatives Diversification • Balanced Allocation • Focus • Income & Growth Allocation • SmallMid Core (SMA) • Income Allocation • US GovernmentFOR INVESTMENT PROFESSIONAL USE ONLY. Forward Firm Overview | 1/18/2012| Version 1 2
  4. 4. Lightning doesn’t strike twiceFOR INVESTMENT PROFESSIONAL USE ONLY. Exploring Alternative Sources of Income | 6/12/2012 3
  5. 5. A frightening amount of money into bonds… Net New Flows AUM Category YTD 2011 2010 1 Year ∆ AUM Mar 12 Mar 11 1 Intermed-Term Bond 43,316.1 46,903.3 68,092.7 18.0 974,070.0 825,187.1 2 High Yield Bond 22,925.3 21,099.7 17,885.4 19.0 263,693.9 221,545.5 3 Diversified EM 18,391.5 19,143.9 58,261.2 4.9 319,857.7 305,027.3 4 Municipal Bond** 17,602.5 (10,594.9) 13,228.2 16.9 622,497.7 532,529.5 5 Target Date* 14,261.1 39,907.9 42,657.5 14.8 399,258.4 347,743.2 6 Short-Term Bond 11,534.9 15,457.7 42,331.8 13.9 233,200.1 204,662.6 7 World Allocation 9,259.0 25,569.3 28,056.9 10.3 327,237.2 296,719.2 8 Commodities**** 7,677.1 9,830.7 26,731.2 1.8 166,268.7 163,340.0 9 EM Bond 7,291.5 14,841.4 15,758.9 52.9 68,162.7 44,584.3 10 Conservative Allocation 7,234.0 12,228.3 13,516.3 12.0 189,042.0 168,854.2 16 Real Estate 3,851.1 4,505.9 4,017.7 19.8 86,473.9 72,168.0 23 Multialternative 1,496.5 5,274.3 4,301.5 41.4 19,178.3 13,566.3 26 Global Real Estate 1,219.6 3,664.0 2,077.3 9.8 32,694.6 29,771.7 30 Long/Short Equity 1,021.2 2,122.5 3,409.0 16.3 22,705.9 19,526.1 39 Managed Futures 540.5 4,740.3 1,823.6 48.5 9,207.7 6,200.3 67 Nontraditional Bond (2,121.2) 9,442.7 29,234.8 (1.5) 51,551.4 52,360.0 CONFIDENTIAL| Board of Directors Meeting| 5/31/2012
  6. 6. The “Lost Decade” Forced Investors to RethinkTheir Investment Strategies -23.4% Actual Return (by Decade) S&P 500 350% 10,000 300% 250% 1,000Actual Return per Decade (%) S&P Daily Close (Log Scale) 200% 150% 100 100% 50% 10 0% -50% 1 30s 40s 50s 60s 70s 80s 90s 00sSource: Standard & Poor’s, Forward Analysis. As of 12/31/2010.© 2012 Forward Management, LLC. All rights reserved.FOR INVESTMENT PROFESSIONAL USE ONLY. Exploring Alternative Sources of Income | 6/12/2012 5
  7. 7. Running from the Perceived Volatility of EquityProducts, Investors Have Flocked to Bond Funds Cumulative Net New Flows to Fixed Income Mutual Funds 1/1/2004 - 12/31/2011 2004 - 2007 2008-2011 % Increase Credit Quality High 34,676.5 235,067.4 578% Medium 98,010.5 258,534.2 164% Low 49,792.0 175,576.1 253% Duration Long 75,120.5 92,278.6 23% Intermediate 107,000.0 240,271.4 125% Short 358.5 336,627.8 93796%Past performance does not guarantee future resultsSource: Morningstar, Strategic Insight. As of 12/31/11FOR INVESTMENT PROFESSIONAL USE ONLY. Exploring Alternative Sources of Income | 6/12/2012 6
  8. 8. Alternative Income Strategies: REIT PreferredsForward Select Income FundLead Manager Joel BeamTicker KIFYXCUSIP 34987A160FOR INVESTMENT PROFESSIONAL USE ONLY. Exploring Alternative Sources of Income | 6/12/2012 7
  9. 9. Alternative Income Strategies: Real Estate & InfrastructureForward International Real Estate FundLead Manager Michael McGowanTicker KIRYXCUSIP 34986P101Forward Real Estate Long/Short FundLead Manager Ian GoltraTicker KSRYXCUSIP 34987A145Forward Global Infrastructure FundLead Manager Aaron Visse, CFA*Ticker KSRYXCUSIP 34987A145* Aaron Visse and Jim O’Donnell have earned the right to use the Chartered Financial Analyst designation. CFA Institute marks are trademarks of the CFA Institute.Aaron Visse is a registered representative of ALPS Distributors, Inc.FOR INVESTMENT PROFESSIONAL USE ONLY. Exploring Alternative Sources of Income | 6/12/2012 8
  10. 10. Alternative Income Strategies: MunisForward Credit Analysis Long/Short FundTeam Guy Benstead, Alan Hart, Jeffrey HudsonSubadvisor Cedar Ridge Partners, LLCTicker FLSIXCUSIP 349913533FOR INVESTMENT PROFESSIONAL USE ONLY. Exploring Alternative Sources of Income | 6/12/2012 9

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