INVESTMENT STRATEGISTS for
              SUCCESSFUL ADVISORS




    Asset Allocation in the 21st Century


  “The Noah Ru...
Today’s Market Landscape

 A serious retirement crisis looms for boomers, young and old:

• Investment climate            ...
The Danger of Market-dependent Investing

   History has shown that 1 or 2 down years can ruin a retirement plan.
     – ...
The Cycle of Market Emotions




An investor should consider investment objectives, risks, charges and expenses of the Fun...
The Objective

1.   PRESERVE WHAT YOU HAVE
     –   Produce a long-term return that is above inflation and taxes
     –   ...
Genesis of the Emerald Allocation Strategies

  From inception, Emerald has focused on constructing portfolios
   using s...
Asset Allocation is Changing…


EMERALD’S ALTERNATIVE APPROACH HAS GENERATED NOTEWORTHY ATTENTION




   Publication: Nove...
Our Mission
                                           Fighting the good fight toward retirement

•   Be flexible in our i...
Emerald’s Distinct Separate Account Strategies



                                                           CONCENTRATED ...
Emerald’s Distinct Separate Account Strategies


                                                                         ...
Investment Philosophy
                                                                               There is a bull in ev...
Application of Themes
 Reward                                                                                             ...
EAS Hybrid

 Exhibits low volatility and low correlation to the broad markets.
 Uses traditional, highly-liquid investme...
EAS Concentrated Equity

     Seeks long-term growth of capital using equity managers who pursue superior long-
      ter...
EAS Global Cycle

      Seeks to capitalize on long-term global themes identified by Emerald's research team.
      Ofte...
Complementary Models Across All Markets


                                                                           Aggre...
EAS Growth of $1,000 Chart


                                        EAS NET RETURNS VS. THE S&P 500 TR
                  ...
EAS Separate Account Composites:
                                                                                         ...
Conclusions

     The investment climate has changed – relying on traditional asset
      allocation may be insufficient....
APPENDIX


Additional background information:
    Composite Information
    Investment Structure
    Investment Team
  ...
Hybrid Composite information
                                                                                    Total Fir...
Concentrated Equity Composite information
                                                                                ...
Global Cycle Composite information
                                                                                     To...
Emerald’s Alternative Solution
                                                                                The Best of...
Investment Team

Seasoned professionals with 90+ years collective experience


Robert A. Isbitts                          ...
Multi-dimensional Portfolio Construction Process



     Top-down Macroeconomic Assessment
                               ...
Ongoing Due Diligence Process



              Review written             Assess market
               material &         ...
Sell Discipline

     Proactive portfolio monitoring and sell discipline

                                         Price ...
DJIA: 1900 – December 31, 2009




The information and statistical data quoted herein were gathered from sources that we b...
DJIA: 1980 - 2000 was the exception, not the rule!




The information and statistical data quoted herein were gathered fr...
DJIA: 1900 - 1920




The information and statistical data quoted herein were gathered from sources that we believe to be ...
DJIA: 1920 - 1940




The information and statistical data quoted herein were gathered from sources that we believe to be ...
DJIA: 1940 - 1960




The information and statistical data quoted herein were gathered from sources that we believe to be ...
DJIA: 1960 - 1980




The information and statistical data quoted herein were gathered from sources that we believe to be ...
DJIA: 2000 – December 31, 2009




The information and statistical data quoted herein were gathered from sources that we b...
Hybrid Mutual Fund Style Definitions
Equity Market Neutral: This investment strategy is designed to exploit equity market ...
Statistical Definitions

Annualized Return: The increase in value of an investment, expressed as a percentage per year.

S...
INVESTMENT STRATEGISTS for
                                                   SUCCESSFUL ADVISORS




Medon A. Michaelides...
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  1. 1. INVESTMENT STRATEGISTS for SUCCESSFUL ADVISORS Asset Allocation in the 21st Century “The Noah Rule: Predicting rain doesn’t count; building arks does.” - Warren Buffet VISION. EXPERIENCE. DEDICATION to our CLIENTS VISION. EXPERIENCE. DEDICATION to our CLIENTS
  2. 2. Today’s Market Landscape A serious retirement crisis looms for boomers, young and old: • Investment climate Very different from the 1980’s and 1990’s • Secular stock bear market Continues to derail retirement plans • The return of inflation A serious threat to wealth and retirement • High-Quality Bond investing Returns too limited to be a retirement savior anymore • Asset allocation Traditional “style boxing” has many flaws “The problem is never to get new, innovative thoughts into your mind, but how to get old ones out.” - Dee Ward Hock 1 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  3. 3. The Danger of Market-dependent Investing  History has shown that 1 or 2 down years can ruin a retirement plan. – Few investors can afford a picture like this! S&P 500 Returns (12/31/99 through 12/31/09) 2 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  4. 4. The Cycle of Market Emotions An investor should consider investment objectives, risks, charges and expenses of the Fund(s) carefully before investing. To obtain a prospectus, which contains this and other important ` information about the Fund(s), please call 1-800-734-WEST (9378) or visit us online at www.westcore.com. Please read the prospectus carefully before investing. Westcore Funds distributed by ALPS Distributors, Inc. 3 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  5. 5. The Objective 1. PRESERVE WHAT YOU HAVE – Produce a long-term return that is above inflation and taxes – Markets often decline faster than they rise 2. GROW YOUR PORTFOLIO AS MUCH AS YOU CAN – Consistent growth is the key – Losing money has a bigger emotional impact than making money 3. RULE #1 IS MORE IMPORTANT THAN RULE #2! 4 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  6. 6. Genesis of the Emerald Allocation Strategies  From inception, Emerald has focused on constructing portfolios using styles that go well beyond traditional “style box” strategies  Currently offer three distinct strategies designed to provide an effective alternative to what Wall Street typically offers advisors 1998 1999 2000 - 2002 2002 Discontent with Began using low Developed flaws of correlation diversified Created dedicated “conventional” strategies via absolute return Hybrid Strategy portfolio hedged mutual portfolios construction funds 2003 2004 2004 - 2005 2005 Expanded Created dedicated Expanded Created dedicated spectrum to alpha- Concentrated spectrum to global Global Cycle generating equity Equity Strategy theme-based funds Strategy managers 5 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  7. 7. Asset Allocation is Changing… EMERALD’S ALTERNATIVE APPROACH HAS GENERATED NOTEWORTHY ATTENTION Publication: November 2006 Cover Story: Registered Rep, February 2007 Cover Story: Wealth Manager, March 2008 6 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  8. 8. Our Mission Fighting the good fight toward retirement • Be flexible in our investment approach • Be adaptive to changes in the global economy and markets • Be opportunistic but not aggressive • Avoid “style box” thinking in portfolio construction • Find bull markets wherever they exist (via long or short investments) • Capture as much of the market’s upside and as little of its downside as possible • Keep losses short in duration and shallow in magnitude PROVIDE AN ALTERNATIVE PATH TO LONG-TERM CAPITAL PROTECTION AND GROWTH 7 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  9. 9. Emerald’s Distinct Separate Account Strategies CONCENTRATED GLOBAL HYBRID EQUITY CYCLE Investment Horizon: 3+ Years 5+ Years 10+ Years Investments Used: Hedged Mutual Funds Conc. Equity Mutual Funds Theme-based Mutual Funds Number of funds: 10 - 15 5 - 10 8 - 12 Long/Short Equity Contrarian Value India Equity Sample Investment Market Neutral High ROE Growth China Equity Styles: Merger Arbitrage Sector Rotation Alternative Energy Convertibles Multi-Cap Investing Global Infrastructure Uses Short funds? YES YES YES Benchmark Index: DJ US Conservative Allocation Russell 3000 MSCI World Free 8 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  10. 10. Emerald’s Distinct Separate Account Strategies INVESTMENT HORIZON: 10 years INVESTMENTS USED: Theme Based Mutual Funds + ETFs NUMBER OF FUNDS/ETFS: 8-12 INVESTMENT HORIZON: 5 years GLOBAL INVESTMENTS USED: Concentrated Equity CYCLE Mutual Funds + ETFs USES SHORT FUNDS/ETFS: Yes NUMBER OF FUNDS/ETFS: 5-10 BENCHMARK INDEX: MSCI World Free CONCENTRATED EQUITY USES SHORT FUNDS/ETFS: Yes BENCHMARK INDEX: INVESTMENT HORIZON: 3 years Russell 3000 AGGRESSIVE INVESTMENTS USED: Hedged Mutual Funds + ETFs NUMBER OF FUNDS/ETFS: 10-15 MODERATE HYBRID USES SHORT FUNDS/ETFS: Yes BENCHMARK INDEX: DJ US Conservative Allocation CONSERVATIVE 9 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  11. 11. Investment Philosophy There is a bull in every market – our job is to find it As an asset allocation strategist, we employ a flexible and adaptive investment approach to portfolio management. Emerald’s BULL MARKET FORECASTER is a compilation of what we believe to be our investment committee’s best macro thinking. The investment themes below and their ranking reflect our view of the relative risk-reward potential on world-wide investment themes over a 3-year period. The selection of these themes is the genesis of our portfolio construction process. We follow with how these themes are applied across our three distinct investment strategies, the EMERALD ALLOCATION STRATEGIES. EXCELLENT GOOD FAIR POOR Contrarian Global Bank Loan Equity-Income Agricultural Large Cap Balanced Funds India Value Equity Infrastructure (Dividends) Commodities Relative Value Funds Convertible Equity Market- Non-Japan Emerging Dedicated Hedged Equity Brazil Equity Non-US Bonds Arbitrage Neutral Asia Equity Market Bonds Short Equity Environmental Merger “Busted” Financial ROI Growth High-Quality Energy Stocks Oil Equities Arbitrage Convertibles Stocks Equity Bond Funds Equity L/S Natural Gas Small-Midcap S&P 500 Index China Global REITs Europe Equity US Dollar Stocks Frontier Convertible Tactical Asset Healthcare US T-bills (90- Markets Gold Utility Stocks Securities Allocation Stocks day) Dedicated High Yield US REITs Japan Equity “Vice” Equity Short Treasury Bonds Emerging Homebuilding Large Cap Pharma Stocks Stocks Growth The above illustration is not a complete analysis and should not be considered investment advice. The positioning of the investment themes and styles highlighted above reflect the Advisor’s outlook as of 12/31/09 and may change at any time. Projections are not guaranteed and may vary significantly. Any statements nonfactual in nature constitute current opinions, which are subject to change. 10 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  12. 12. Application of Themes Reward - Environmental - Energy Stocks Equities - Healthcare Stocks - Frontier Markets - Japan Equity CONCENTRATED EQUITY STRATEGY OVERVIEW - Global - Non-US Bonds Moderate: 5-year horizon Infrastructure - Oil - Natural Gas • Concentrated equity portfolios GLOBAL • Long equity-biased CYCLE • Periodic hedge overlay - China - Emerging Pharma - Dedicated Short - Europe Equity Stocks - Contrarian Value Equity - Large Cap Growth - Global REITs Equity - Gold - US Dollar HYBRID STRATEGY OVERVIEW - S&P 500 Index - India Conservative: 3-year horizon • Absolute return focus GLOBAL CYCLE STRATEGY OVERVIEW • Low net equity exposure CONCENTRATED EQUITY Aggressive: 10-year horizon • Hedged strategies • Global portfolio - Equity-Income • Primarily net long - Convertible (Dividends) • Opportunistic short positions Arbitrage - ROI Growth Equity - Dedicated Short - Equity L/S Equity - Small-Midcap - Hedged Equity Stocks - Merger Arbitrage HYBRID - Convertible Securities - Equity Market- Risk/Reward EXCELLENT Neutral - High Yield Bonds - Dedicated Short Assessment: GOOD Equity - Tactical Asset FAIR Allocation POOR Risk The above illustration is not a complete analysis and should not be considered investment advice. The positioning of the investment themes and styles highlighted above reflect the Advisor’s outlook as of 12/31/09 and may change at any time. Projections are not guaranteed and may vary significantly. Any statements nonfactual in nature constitute current opinions, which are subject to change. 11 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  13. 13. EAS Hybrid  Exhibits low volatility and low correlation to the broad markets.  Uses traditional, highly-liquid investment vehicles (mutual funds and ETFs) that employ hedge fund-like strategies.  Seeks to deliver bond-like volatility with higher long-term return.  The desired result is an absolute return alternative to fixed income strategies. Risk/Reward (1) Allocation 6% Annualized Return Market-Neutral Currency Inverse Bond REITs 5% Global Macro Long-Short 4% Dedicated Short High Yield 3% 5% 7% 9% 11% 13% 15% Equity Convertibles Arbitrage Annualized Standard Deviation EAS Hybrid Strategy--Net Dow Jones - Conservative U.S. Relative Risk Portfolio Index S&P 500 TR (1) Reflects net performance from 11/02 through 12/09. Please see full performance disclosure in the Appendix for the Hybrid Composite. 12 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  14. 14. EAS Concentrated Equity  Seeks long-term growth of capital using equity managers who pursue superior long- term returns through portfolios with limited number of holdings (typically 30 or less).  Attempts to lower portfolio volatility by diversifying among a group of managers.  May also buy short-index securities as a hedge in perceived periods of high market risk.  The result is a diversified equity portfolio exhibiting attractive risk/reward characteristics. Risk/Reward (1) Allocation 8% Annualized Return 7% Contrarian 6% Dedicated Short Value 5% 4% Concentrated 3% Sector Rotation Equity 2% 1% Multi-Cap High ROE 12% 13% 14% 15% 16% Investing Growth Annualized Standard Deviation EAS Concentrated Equity Strategy--Net Russell 3000 Index (DRI) S&P 500 TR (1) Reflects net performance from 05/04 through 12/09. Please see full performance disclosure in the Appendix for the Concentrated Equity Composite. 13 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  15. 15. EAS Global Cycle  Seeks to capitalize on long-term global themes identified by Emerald's research team.  Often involves investing in areas of the markets that exhibit high short-term volatility.  Trends are expected to occur over a long period of time, but position sizing is made along the way.  May also buy short-index securities as a hedge in perceived periods of high market risk. Risk/Reward (1) Allocation Anualized Return 8% Dedicated India Equity 6% Short Global China Equity 4% Infrastructure 2% 0% Frontier Alternative Global REITs Energy -2% Markets 13% 14% 15% 16% 17% 18% 19% Annualized Standard Deviation EAS Global Cycle Strategy--Net MSCI The World Index - Net S&P 500 TR (1) Reflects net performance from 10/05 through 12/09. Please see full performance disclosure in the Appendix for the Global Cycle Composite. 14 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  16. 16. Complementary Models Across All Markets Aggressive: 10-year horizon GLOBAL • Global portfolio CYCLE • Primarily net long • Opportunistic short positions Moderate: 5-year horizon CONCENTRATED • Concentrated equity portfolios Reward EQUITY • Long equity-biased • Periodic hedge overlay Conservative: 3-year horizon HYBRID • Absolute return focus • Low net equity exposure • Hedged strategies • Treasury Bills CASH • Bank CDs Risk 15 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  17. 17. EAS Growth of $1,000 Chart EAS NET RETURNS VS. THE S&P 500 TR (10/1/05 – 12/31/09) Performance shown is for the period 10/01/2005 through 12/31/2009 and is net of fees. The performance data shown for the EAS Composites vs. the S&P 500 TR is not presented for point-by-point comparison purposes, but to demonstrate the overall return characteristics of the Emerald Allocation Strategies when contrasted with more traditional familiar styles. The appropriate EAS composite benchmarks, statistical comparisons and other important information are located on the full disclosure presentations pages in the Appendix. Past performance is not indicative of future results. 16 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  18. 18. EAS Separate Account Composites: Risk/Reward Summary (as of 12/31/09) CONCENTRATED GLOBAL HYBRID EQUITY CYCLE Inception Date for Strategy 11/01/02 05/01/04 10/01/05 Annualized Return since inception (Net of fees) 5.3% 7.9% 7.8% Cumulative Return since inception (Net of fees) 45.0% 54.1% 37.4% Annualized Std. Deviation since inception 5.0% 13.5% 14.2% Strategy’s Worst 12 months since its inception -14.8% -34.4% -27.9% S&P 500 S&P 500 S&P 500 S&P Annualized Return since strategy inception 5.3% 2.2% -0.2% S&P Cumulative Return since strategy inception 45.2% 13.1% -0.6% S&P Annualized Std. Deviation since strategy inception 14.8% 15.3% 17.1% S&P Worst 12 months since strategy inception -43.3% -43.3% -43.3% Annualized 3.8% 6.1% 7.8% EAS Alpha STATISTICS Beta 0.26 0.79 0.69 R-Squared 0.58 0.81 0.69 VS. Up Capture 21.3% 101.4% 85.9% S&P 500 Down Capture 27.6% 80.8% 66.7% Performance shown is through 12/31/09 and is net of fees. The performance data shown for the EAS Composites vs. the S&P 500 is not presented for point-by-point comparison purposes, but to demonstrate the overall return characteristics of the Emerald Allocation Strategies when contrasted with more traditional familiar styles. The appropriate EAS composite benchmarks, statistical comparisons and other important information are located on the full disclosure presentations pages in the Appendix. 17 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  19. 19. Conclusions  The investment climate has changed – relying on traditional asset allocation may be insufficient.  Alternative strategies that can enhance return and reduce overall risk are important to capital preservation and growth.  Investing aggressively and/or beyond your risk tolerance is not necessary to produce solid long-term returns.  Employing a flexible and adaptive approach with the comfort of daily liquidity, transparency, diversification and tax-sensitivity are key ingredients of the Emerald Allocation Strategies, a 21st Century asset allocation plan. “A lot of times, people don’t know what they want until you show it to them.” - Steve Jobs 18 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  20. 20. APPENDIX Additional background information:  Composite Information  Investment Structure  Investment Team  Investment Process  Historical Market Analysis  Definitions (Hybrid mutual fund styles and Statistical Measures) 19 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  21. 21. Hybrid Composite information Total Firm Composite Assets Performance Results Emerald Asset Advisors, LLC Year Assets USD Number of Composite Composite DJ US Composite HYBRID COMPOSITE End (millions) (millions) Accounts Net Gross Cons. Alloc Dispersion 2009 274 52 86 13.9% 14.8% 11.0% 0.8% Disclosure Presentation 2008 224 48 88 -11.2% -10.5% -1.9% 0.5% 2007 284 46 86 7.4% 8.1% 5.7% 0.4% 2006 242 15 26 6.3% 6.9% 6.2% 0.4% 2005 212 18 46 5.6% 6.2% 3.5% 1.3% 2004 190 18 56 3.5% 4.1% 5.9% 1.5% 2003 180 19 57 12.8% 13.6% 10.9% 4.3% Five o r Fewer *2002 119 <1 1.9% 1.9% 2.2% *Performance starts on November 1, 2002. The Hybrid Composite contains all discretionary, fee paying, Hybrid accounts that invest primarily in Hybrid mutual funds with a minimum of at least three Hybrid mutual funds and $35,000 minimum account value. Hybrid holdings typically come from the 11 sub-sectors/styles we have defined in the alternative mutual fund universe through our own research (such as equity long-short, market-neutral, arbitrage, commodities, high-yield and bond hedge.) Accounts may contain 10% or less non-Hybrid assets and may be included or excluded based on the potential of those assets to materially affect the ability to invest to the mandate or the account performance. For comparison purposes the composite is measured against the Dow Jones US Conservative Allocation Index. Emerald Asset Advisors, LLC is a SEC Registered Investment Advisor providing wealth management services for high net worth individuals and institutions. The firm maintains a complete list and description of composites which is available upon request. Emerald Asset Advisors, LLC has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®). Net of fee performance was calculated using actual management fees. Gross performance results do not reflect the deduction of investment advisory fees and are calculated after the deduction of actual trading expenses. Your return will be reduced by the advisory fees and other expenses that may be incurred in the management of your account. Net and gross of fees performance includes the reinvestment of all income including realized and unrealized gains and losses. The management fee schedule is as follows: 1.25% for the first $2 Million; 1.00% for the next $3 Million and 0.75% for over $5 Million. Actual investment advisory fees incurred by clients may vary. Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. The U.S. Dollar is the currency used to express performance. The annual composite dispersion is an asset-weighted standard deviation calculated for the accounts in the composite the entire year. Additional information regarding the policies for calculating and reporting returns is available upon request. Past performance is not indicative of future results. The Hybrid Composite was created April 1, 2006. Emerald Asset Advisors, LLC's compliance with the GIPS standards has been verified by Ashland Partners from 1/01/2002 to 9/30/2008 and by Beacon Verification Services from 9/30/2008 to 9/30/2009. In addition, a performance examination was conducted on the Hybrid Composite for the period 10/31/2002 through 9/30/2009. A copy of the verification report is available upon request. Important information for Investors: The performance shown is for separate accounts managed by Emerald Asset Advisors, LLC using the Hybrid strategy. It is important to note that Emerald may use securities such as ETF’s, mutual funds or other completion strategies within their separate accounts that are not available through other programs. Therefore, the results obtained through Emerald’s separate account management program should not be viewed as indicative of the results of the Hybrid Model Portfolio available through Adhesion, FTJ FundChoice, FOLIOfn, SummitAlliance/WE2, World Equity Group or other broker/dealer platforms and TAMPS where our models are offered. 20 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  22. 22. Concentrated Equity Composite information Total Composite Assets Performance Results Emerald Asset Advisors, LLC Year Firm Assets USD Number of Composite Composite Russell Composite CONCENTRATED EQUITY End (millions) (millions) Accounts Net Gross 3000 Dispersion 2009 274 32 84 22.7% 24.1% 28.3% 11.1% COMPOSITE 2008 224 33 106 -25.9% -24.9% -37.3% 7.9% Disclosure Presentation 2007 284 50 129 12.6% 14.2% 5.1% 2.1% 2006 242 28 43 15.3% 16.9% 15.7% 2.4% 2005 212 13 24 15.5% 17.2% 6.1% 1.4% *2004 190 4 8 13.1% 14.2% 11.8% *Performance starts on May 1, 2004. The Concentrated Equity Composite contains all discretionary, fee paying, concentrated equity accounts that invest primarily in concentrated equity managers. The accounts within this composite are managed by sub-advisors that are reviewed and chosen (hired/fired) by Emerald Asset Advisors, LLC ("Emerald") using a concentrated equity strategy or by Emerald using a mix of concentrated equity mutual funds and ETFs. Sub-advisors have been used since inception of the strategy to present date. We may also buy dedicated short funds as a portfolio hedge in perceived periods of market risk. This strategy may contain both domestic and foreign securities. For comparison purposes the composite is measured against the Russell 3000 Index. The Russell 3000 Index is comprised solely of domestic securities while the Concentrated Equity Strategy may invest in both domestic and foreign securities. Emerald Asset Advisors, LLC has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®). Emerald Asset Advisors, LLC is a registered investment advisor registered with the SEC. The firm maintains a complete list and description of composites, which is available upon request. Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. The U.S. Dollar is the currency used to express performance. The annual composite dispersion is an asset-weighted standard deviation calculated for the accounts in the composite the entire year. The $35,000 account minimum was removed on January 1, 2007. Additional information regarding the policies for calculating and reporting returns is available upon request. Past performance is not indicative of future performance. Net and gross of fees performance includes the reinvestment of all income including realized and unrealized gains and losses. Net of fee performance was calculated using actual management fees. If sub-advisors are used to manage all or a portion of your account, you may be charged management fees by the sub-advisor and by Emerald. Sub-advisor fees vary by advisor and are available in their respective ADV Part II and Schedule F which is available upon request. The gross performance results shown do not reflect the deduction of investment advisory fees and are calculated after the deduction of actual trading expenses. Your return will be reduced by the advisory fees and other expenses that may be incurred in the management of your account. The management fee schedule is as follows: 1.25% for the first $2 Million; 1.00% for the next $3 Million and 0.75% for over $5 Million. Actual investment advisory fees incurred by clients may vary. The Concentrated Equity Composite was created April 1, 2006. Emerald Asset Advisors, LLC's compliance with the GIPS standards has been verified by Ashland Partners from 1/01/2002 to 9/30/2008 and by Beacon Verification Services from 9/30/2008 to 9/30/2009. In addition, a performance examination was conducted on the Concentrated Equity Composite for the period 4/30/04 through 9/30/09. A copy of the verification report is available upon request. Important information for Investors: The performance results shown are for separate accounts managed by Emerald Asset Advisors, LLC using the Concentrated Equity Strategy. It is important to note that Emerald may use securities such as ETF’s, mutual funds or other completion strategies within their separate accounts that are not available through other programs. Therefore, the results obtained through Emerald’s separate account management program should not be viewed as indicative of the results of the Concentrated Equity Model Portfolio available through Adhesion, FTJ FundChoice, FOLIOfn, SummitAlliance/WE2, World Equity Group or other broker/dealer platforms and TAMPS where our models are offered. 21 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  23. 23. Global Cycle Composite information Total Firm Composite Assets Performance Results Emerald Asset Advisors, LLC Year Assets USD Number of Composite Composite MSCI Composite End (millions) (millions) Accounts Net Gross World Index Dispersion ⁽²⁾ GLOBAL CYCLE COMPOSITE 2009 274 6 13 38.5% 39.6% 30.0% 3.0% Disclosure Presentation 2008 224 3 12 -25.3% -24.8% -40.7% 0.3% 2007 ⁾ ⁽ 284 4 14 12.0% 12.7% 9.0% N.A. 2006 242 1 F ive o r F e we r 20.6% 21.3% 20.1% N.A. 2005 ¹ 212 <1 F ive o r F e we r -1.7% -1.7% 2.7% (1) Performance starts on October 1, 2005. (2) N.A. - Information is not statistically meaningful due to an insufficient number of portfolios in the composite for the entire year. The Global Cycle Composite contains all discretionary, fee paying, accounts that invest primarily in long term business trends or "cycles" with a minimum of $50,000 account value. This strategy uses mutual funds, ETFs, stocks, options and other completion strategies. The composite may contain both domestic and foreign securities. For comparison purposes the composite is measured against the MSCI World Free (net) Index. Emerald Asset Advisors, LLC has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®). Emerald Asset Advisors, LLC (Emerald) is a registered investment advisor registered with the SEC. The firm maintains a complete list and description of composites, which is available upon request. Performance includes the reinvestment of all income including realized and unrealized gains and losses. Net of fee performance was calculated using actual management fees. Gross performance results do not reflect the deduction of investment advisory fees and are calculated after deduction of actual trading expenses. Your return will be reduced by the advisory fees and other expenses that may be incurred in the management of your account. The management fee schedule is as follows: 1.25% for the first $2 Million; 1.00% for the next $3 Million and 0.75% for over $5 Million. Actual investment advisory fees incurred by clients may vary. Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. Composite performance is presented net of foreign withholdings taxes, where applicable. The U.S. Dollar is the currency used to express performance. The annual composite dispersion is an asset-weighted standard deviation calculated for the accounts in the composite the entire year. Additional information regarding the policies for calculating and reporting returns is available upon request. Past performance is not indicative of future performance. The Global Cycle Composite was created April 1, 2006. Emerald Asset Advisors, LLC's compliance with the GIPS standards has been verified by Ashland Partners from 1/1/2002 to 9/30/2008, and by Beacon Verification Services from 9/30/2008 to 9/30/2009. In addition, a performance examination was conducted on the Global Cycle Composite for the period 09/30/2005 through 9/30/2009. A copy of the verification report is available upon request. (The "Global Cycle" Composite was formerly known as the "Cycle" Composite). Important information for Investors: The performance results shown are for separate accounts managed by Emerald Asset Advisors, LLC using the Global Cycle Strategy. It is important to note that Emerald may use securities such as ETF’s, mutual funds or other completion strategies within their separate accounts that are not available through other programs. Therefore, the results obtained through Emerald’s separate account management program should not be viewed as indicative of the results of the Global Cycle Model Portfolio available through Adhesion, FTJ FundChoice, FOLIOfn, SummitAlliance/WE2, World Equity Group or other broker/dealer platforms and TAMPS where our models are offered. 22 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  24. 24. Emerald’s Alternative Solution The Best of all Worlds  HEDGED STRATEGIES IN A DIVERSIFIED SEPARATE ACCOUNT EMERALD SMA’S • Absolute return focus • Low market correlation • Low relative volatility • Tax aware USING NO-LOAD MUTUAL FUNDS • No lock-up period • Daily liquidity • Full transparency • SEC-registered vehicles • Cost effective HEDGED INVESTMENT STRATEGIES/STYLES • Top manager talent • Flexible investment styles • Alpha generators 23 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  25. 25. Investment Team Seasoned professionals with 90+ years collective experience Robert A. Isbitts Allan M. Budelman Mathew J. MacEachern Chief Investment Officer Managing Partner Portfolio Manager •Co-Founded Emerald in 1998 •Joined Emerald in 1999 •Joined Emerald in 2004 •20+ years in the investment field •15+ years in the investment field •16+ years in the investment field •DLJ, Morgan Stanley, Fiduciary Trust •JP Morgan, Bankers Trust, Chase Manhattan •Fidelity Investments, Leerink Swann & •CFS Designation, 1997 •MBA, University of Miami Company, Inc. •MBA, Rutgers University •BA, University of Maryland •Suffolk University •BS, SUNY Albany Keith D. Stoloff Michael N. Kahn Research Analyst Technical Analyst •Joined Emerald in 2007 •Joined Emerald 2008 •20+ years in the investment field •20+ years in the investment field •Stoloff Advisory, Raymond James, Citicorp, •Barron’s Online Columnist since 2001 Great Western Securities •CMT designation, 2008 ® ® SM ® ® •CIMA , CIMC , CPWA , CMFC , AAMS •MBA, New York University •BS, University of South Florida •BA, Brandeis University 24 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  26. 26. Multi-dimensional Portfolio Construction Process Top-down Macroeconomic Assessment Theme Fundamental analysis of critical factors that drive markets and prices Bottom-up Analysis Investments Identify the investment vehicles that best express the themes Quantitative Analysis Analyze all key metrics (trading turnover; expenses; risk stats and tax Weightings implications) Technical Analysis Trade Determine entry / exit points through charting analysis 25 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  27. 27. Ongoing Due Diligence Process Review written Assess market material & factors and their interview impact on managers manager’s strategy Monitor any change Continuous Analyze valuation in manager thinking Interactive ratios and economic and style Process indicators consistency Identify change in Evaluate bond macro rates and yield environment curve 26 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  28. 28. Sell Discipline  Proactive portfolio monitoring and sell discipline Price objective is achieved Firm becomes too Economic or institutionalized market changes Portfolio Manager Lagging performance change/turnover for unexplained reasons Fund changes its Our investment thesis is objective or process A superior investment wrong; yes, it happens!  is identified “Avoiding trouble is more important than finding that next big winner.” - Michael Kahn 27 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  29. 29. DJIA: 1900 – December 31, 2009 The information and statistical data quoted herein were gathered from sources that we believe to be reliable; however, it is not warranted to be accurate. This information is intended to be general in nature and should not be construed as investment advice or a recommendation of any specific security. Indexes are unmanaged portfolios and investors cannot invest directly in an index. As in any investment situation, past performance is no guarantee of future results. Chart courtesy of StockCharts.com. 28 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  30. 30. DJIA: 1980 - 2000 was the exception, not the rule! The information and statistical data quoted herein were gathered from sources that we believe to be reliable; however, it is not warranted to be accurate. This information is intended to be general in nature and should not be construed as investment advice or a recommendation of any specific security. Indexes are unmanaged portfolios and investors cannot invest directly in an index. As in any investment situation, past performance is no guarantee of future results. Chart courtesy of StockCharts.com. 29 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  31. 31. DJIA: 1900 - 1920 The information and statistical data quoted herein were gathered from sources that we believe to be reliable; however, it is not warranted to be accurate. This information is intended to be general in nature and should not be construed as investment advice or a recommendation of any specific security. Indexes are unmanaged portfolios and investors cannot invest directly in an index. As in any investment situation, past performance is no guarantee of future results. Chart courtesy of StockCharts.com. 30 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  32. 32. DJIA: 1920 - 1940 The information and statistical data quoted herein were gathered from sources that we believe to be reliable; however, it is not warranted to be accurate. This information is intended to be general in nature and should not be construed as investment advice or a recommendation of any specific security. Indexes are unmanaged portfolios and investors cannot invest directly in an index. As in any investment situation, past performance is no guarantee of future results. Chart courtesy of StockCharts.com. 31 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  33. 33. DJIA: 1940 - 1960 The information and statistical data quoted herein were gathered from sources that we believe to be reliable; however, it is not warranted to be accurate. This information is intended to be general in nature and should not be construed as investment advice or a recommendation of any specific security. Indexes are unmanaged portfolios and investors cannot invest directly in an index. As in any investment situation, past performance is no guarantee of future results. Chart courtesy of StockCharts.com. 32 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  34. 34. DJIA: 1960 - 1980 The information and statistical data quoted herein were gathered from sources that we believe to be reliable; however, it is not warranted to be accurate. This information is intended to be general in nature and should not be construed as investment advice or a recommendation of any specific security. Indexes are unmanaged portfolios and investors cannot invest directly in an index. As in any investment situation, past performance is no guarantee of future results. Chart courtesy of StockCharts.com. 33 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  35. 35. DJIA: 2000 – December 31, 2009 The information and statistical data quoted herein were gathered from sources that we believe to be reliable; however, it is not warranted to be accurate. This information is intended to be general in nature and should not be construed as investment advice or a recommendation of any specific security. Indexes are unmanaged portfolios and investors cannot invest directly in an index. As in any investment situation, past performance is no guarantee of future results. Chart courtesy of StockCharts.com. 34 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  36. 36. Hybrid Mutual Fund Style Definitions Equity Market Neutral: This investment strategy is designed to exploit equity market inefficiencies and usually involves being simultaneously long and short matched equity portfolios of the same size within a country. Market neutral portfolios are designed to be either beta or currency neutral, or both. Well-designed portfolios typically control for industry, sector, market capitalization, and other exposures. Long/Short Equity and Hedged Equity: This directional strategy involves equity-oriented investing on both the long and short sides of the market. The objective is not to be market neutral. Managers have the ability to shift from value to growth, from small to medium to large capitalization stocks, and from a net long position to a net short position. In the Hybrid Strategy, we separate this category into “long-short” and “hedged equity.” The difference is the degree to which they short. A long-short fund typically shorts more than a hedged equity fund. Dedicated Short: The strategy is to maintain net short exposure. Short bias managers take short positions in mostly equities and derivatives. Bond Hedge: Funds that short bonds. That is, as interest rates rise, bond prices fall and these funds appreciate in value. High Yield Bonds: Often called junk bonds, this subset refers to investing in low-graded fixed-income securities of companies that show significant upside potential. Managers generally buy and hold high yield debt. Distressed Debt: Funds that invest in the debt, equity or trade claims of companies in financial distress and generally bankruptcy. The securities of companies in need of legal action or restructuring to revive financial stability typically trade at substantial discounts to par value and thereby attract investments when managers perceive a turn-around will materialize. Convertibles: Funds that invest in bonds and preferred stock issues that are convertible into the stock of the same issuer if the stock reaches a certain price level. The convertible therefore has stock and bond features. It is expected to increase in price as the issuer’s stock rises, while the bond structure of the convertible may limit its losses when the stock’s price falls. REITs: Funds that invest in publicly-traded Real Estate Investment Trusts, which are real estate companies that trade on the stock exchanges. Merger Arbitrage: Specialists who invest simultaneously in long and short positions in both companies involved in a merger or acquisition. Risk arbitrageurs are typically long the stock of the company being acquired and short the stock of the acquirer. The principal risk is deal risk, should the deal fail to close. Asset Allocation: Managers of this style (aka as “Global Macro” styles) carry long and short positions in any of the world's major capital or derivative markets. These positions reflect their views on overall market direction as influenced by major economic trends and/or events. The portfolios of these funds can include stocks, bonds, currencies, and commodities in the form of cash or derivatives instruments. Commodities: Funds that use derivatives or stocks to gain exposure to the performance of a basket of commodities such as energy, metals and grains. Sources: Hedgeworld and Emerald Asset Advisors, LLC 35 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  37. 37. Statistical Definitions Annualized Return: The increase in value of an investment, expressed as a percentage per year. Standard Deviation: A statistical measure of the historical volatility of a portfolio’s returns. More generally, a measure of the extent to which numbers are spread around their average. Alpha: A measure of investment performance adjusted for risk taken. It indicates the portion of a manager’s return that can be attributed to the manager’s skill rather than the movement of the overall market A positive alpha implies that a manager has added value over and above the performance of the market (also referred to “excess return.”) Conversely, a negative alpha would indicate that the manager has reduced value by underperforming the market. Beta: A measure of the manager’s systematic risk (i.e., - market risk). It compares the return volatility of the manager to the volatility of returns for a comparable market index. The index has a beta of 1 by definition. A beta of 1.20 would imply a volatility level 20% higher than the overall market, and a beta of 0.80 would indicate a volatility 20% lower than the market. R-Squared: A measure of how closely the manager’s returns match the returns of the market index against which it is compared. This serves to indicate what percentage of a portfolio’s performance had to do with what the market did. For example, an R-squared of 90% indicates that the manager correlates with the style or benchmark index by a factor 90% over time. An R-squared of 40% would indicate very little correlation with the chosen benchmark. Volatility: The relative rate at which the price of a security moves up and down. Volatility is found by calculating the annualized standard deviation of daily change in price. If the price of a stock or portfolio moves up and down rapidly over short time periods, it has high volatility. If the price almost never changes, it has low volatility. Up Capture: The up-market capture ratio is a measure of a manager’s performance in up markets relative to the index during the same period. A ratio value of 115 indicates that the manager has outperformed the market index by 15% in periods when the index has risen. Down Capture: This ratio is the direct opposite of the up-market capture ratio, gauging performance of the manager relative to the index in down markets. A ratio value of 80 would indicate the manager has declined only 80% as much as the declining overall market, indicating relative outperformance. Source: www.investopedia.com (a Forbes media company) 36 VISION. EXPERIENCE. DEDICATION to our CLIENTS
  38. 38. INVESTMENT STRATEGISTS for SUCCESSFUL ADVISORS Medon A. Michaelides Jack F. Gonzalez Managing Partner Director of Business Development Leana C. Alu Sales & Marketing Assistant Emerald Allocation Strategies, LLC 2843 Executive Park Drive Weston, Florida 33331 Telephone: 954.385.9624 www.EmeraldAssetAdvisors.com 37 VISION. EXPERIENCE. DEDICATION to our CLIENTS
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