D I V E R S I F I E D M A N A G E D
A L L O C A T I O N S
Securities and Insurance Products:
NOT INSURED BY FDIC OR ANY MAY LOSE NOT A DEPOSIT OF OR GUARANTEED
FEDERAL GOVERNMENT AGENCY VALUE BY A BANK OR ANY BANK AFFILIATE
Diversified Managed Allocations
At Wachovia Securities, we understand that it may be
easier to reach your lifetime investment goals when
you have a team working for you. Wachovia Securities
makes available, through the Diversified Managed
Allocations program, a combination of high-quality
professional investment-management firms, a disci-
plined process and a choice of investment styles —
in a single investment account.
Diversified Managed Allocations (DMA), an innovative
program designed for the affluent investor, offers
separately managed portfolios featuring asset allocation,
diversification and risk-based portfolio management
to investors with a minimum investment of $150,000.
Using our due diligence process, our Manager Strategy
Group has assembled a roster of select investment-
management firms representing a broad array of invest-
ment classes and styles. You and your Financial Advisor a risk-based portfolio constructed with diversified but
will use a disciplined investment process to create an complementary investment managers from the DMA
asset-allocation strategy and select two or more invest- roster of managers — or you and your Financial Advisor
ment managers to handle the day-to-day management may assemble a portfolio of managers to meet your
of your account. You may choose an Optimal Blend — specific needs.
How Can DMA Help Guide Me to
My Lifetime Goals?
Asset Allocation. DMA allows you to tailor an invest- Investment Style Cycles 1996 – 2006
ment plan to your unique needs. Your strategy will be
Highest Returns Lowest Returns
based on the principles of asset allocation — the way
your money is divided among stocks, bonds and money- 1996 Large-Cap Stocks Bonds
market instruments. A study of large pension funds 1997 Large-Cap Stocks International Stocks
indicated that this single factor — asset allocation — 1998 Large-Cap Stocks Small-Cap Stocks
accounted for over 90 percent of the eventual outcome 1999 International Stocks Bonds
of an investment program.* 2000 Bonds International Stocks
2001 Bonds International Stocks
Diversification by Style. The following chart demon-
2002 Bonds Small-Cap Stocks
strates the importance of exposing your portfolio to
various investments in many different markets. This 2003 Small-Cap Stocks Bonds
diversification allows you to reduce the volatility 2004 Mid-Cap Stocks Bonds
associated with investments in just one investment 2005 International Stocks Bonds
category. “Don’t put all your eggs in one basket” is one 2006 International Stocks Bonds
of the oldest investment adages. Indeed, at Wachovia
Securities, we believe that proper diversification lies at
Indexes used to represent these markets are as follows: for Bonds, the Lehman
the heart of successful investing. As illustrated, you Intermediate Govt./Credit Index; for Large-Cap Stocks, the S&P 500 Index;
for Mid-Cap Stocks, the Russell Mid-Cap Index; for Small-Cap Stocks, the
can see that this year’s worst-performing asset class Russell 2000 Index; and for International Stocks, the Morgan Stanley EAFE
just may be next year’s darling.
Indexes are used for illustrative purposes only. An investor cannot invest
directly in an index. Past performance is no guarantee of future results.
The lesson in the diversification story is a simple one:
Stocks of small companies are typically more volatile than stocks of larger
No one asset class consistently outperforms all others, companies. They often involve higher risks because they may lack the manage-
ment expertise, financial resources, product diversification, and competitive
and there is no way to foresee which investment style strengths to endure adverse economic conditions.
will surpass others in any given year. * Financial Analyst’s Journal, May/June 1991.
Spreading your assets among different investment
styles can increase the chance that if one investment
style decreases in value, another may increase, poten-
tially providing a buffer for your portfolio during down
markets. By implementing your investment plan in a
DMA account, you can diversify your assets across a
variety of investment styles. 1
Disciplined Investment Process
The Manager Strategy Group of Wachovia Securities roster of meticulously screened investment managers
works with your Financial Advisor using a time-tested for the DMA program. Selecting investment managers
process to help you create and implement a personal- is a very serious task, and guiding you through this
ized investment strategy. Our approach uses the same process is one of the most important services the
concepts embraced by the fiduciaries of retirement Manager Strategy Group and your Financial Advisor
plans, foundations and charitable organizations. We provide. We also monitor the managers you select
adhere to these methods to assist our clients in following to ensure that they adhere to their stated investment
a particular path for investing and achieving lifetime styles within your DMA account.
goals. In a single account, DMA offers a disciplined
The Manager Strategy Group created Optimal Blends
process to managing your wealth:
using the DMA roster of investment managers based
• Develop an investment strategy. Your Financial on specific risk. Optimal Blends provide potential
Advisor will thoroughly examine your investment solutions for investors with Conservative, Moderate
needs, including financial requirements, time hori- and Long-Term risk tolerance for each of our three
zon, liquidity concerns and risk tolerance. Based on investment objectives (Income, Growth and Growth
this analysis, you and your Financial Advisor will & Income). We believe each combination represents
determine whether your DMA portfolio should be an optimal blend of investment classes and styles
invested in stocks, bonds or a combination of both. using some of the nation’s most exclusive investment
Your Financial Advisor can then guide you in develop- managers. You can choose from one of these Optimal
ing a clearly defined plan for pursuing your financial Blends, or create your own portfolio based on your
objectives. Your strategy helps guide the selection of specific needs.
professional investment managers and serves as the
• Monitor, evaluate and report your progress. Your
benchmark against which you, your Financial Advisor,
Wachovia Securities Financial Advisor closely tracks
and Wachovia Securities’ Manager Strategy Group will
the progress of your DMA account toward your goals.
measure your DMA account’s performance.
You will receive a single comprehensive quarterly
• Customize your asset allocation and manager report detailing your portfolio’s activity and overall
implementation. After establishing a strategy, your performance.
Financial Advisor will identify investment managers
whose philosophies, performance and risk character-
istics best suit that strategy. The Manager Strategy
Group’s rigorous due-diligence process results in a
Professional Investment Management
Wachovia Securities recommends maintaining a
personalized portfolio using professional investment
managers for several reasons. DMA provides you with
access to investment managers who assume discre-
tionary responsibility for your portfolio. Successful
investing requires a significant commitment of time,
energy and attention. While most investors manage
their investments part-time, professional investment
managers focus their entire careers on managing assets.
A professionally managed portfolio offers you the
opportunity to manage investment tax liabilities — a
feature not typically available in many other profession-
ally managed investment vehicles. Your cost basis is
established at the initial investment in each security,
as you own all securities in your account. DMA allows
you to manage your taxes by taking gains and losses
as dictated by your specific tax needs.2
What Differentiates DMA?
Objectivity. Our investment manager recommendations performance of your total portfolio is consistent
are based on a unique due-diligence approach. The with your long-term investment goals, as DMA offers
Manager Strategy Group evaluates a broad range of comprehensive performance monitoring in a single
asset classes and investment styles and identifies classes report on your total portfolio. We also offer periodic
or styles that have historically performed differently rebalancing to ensure that you are within your personal
under varying market conditions. The Manager Strategy asset-allocation target ranges. You pay no commissions,
Group then uses quantitative and qualitative measures but rather a simple quarterly fee that covers all the
to select what we believe are the “best of breed” invest- services provided through DMA.
ment managers for these classes and styles.
Customization. DMA allows you and your Financial
The DMA research process focuses both on the merits Advisor to tailor your portfolio’s asset-allocation and
of the individual investment managers and on how the investment options, based on your risk tolerance and
various investment managers on our roster may com- investment objectives, using some of the nation’s most
plement one another. Through this process, we have exclusive investment managers. Your portfolio may be
developed what we believe to be a continuum of customized based on your specific needs. In addition,
diversified strategies for investors, based on specific you own each of the securities in your portfolio. You
risk tolerances and financial situations, called Optimal have the freedom to constrain or restrict specific
Blends. You can select one of the Optimal Blends, or securities or industries.
you and your Financial Advisor can construct your own
Lower investment minimum.3 DMA allows you to
strategy using our DMA roster of investment managers.
diversify among multiple investment styles for a lower
Simplicity. DMA is sophisticated, yet simple. In one minimum than is required in many separate account
DMA account, our technology allows you to achieve programs.
diversification by allocating your portfolio among
professional investment managers, who each manage
a portion of your account in the investment style of
their expertise. Since your investments will be held in
a single account, you can easily determine whether the
How Can I Access DMA?
For more information about diversifying your assets
among investment styles with professional portfolio
management in one investment account, contact
your Wachovia Securities Financial Advisor and ask
1 Asset allocation/diversification cannot eliminate the risk of fluctuating
prices and uncertain returns.
2 Wachovia Securities does not provide legal or tax advice, but your Financial
Advisor will be happy to work with your chosen legal and tax advisors to help
you achieve your financial goals.
3 Subject to manager minimum — DMA offers the ability to invest with two
investment managers for an investment of $150,000.
The fees for the Diversified Managed Allocations (DMA) program are assessed
quarterly in advance. The fees include advisory services, performance mea-
surement, transaction costs, custody services and trading. The fees do not
cover the fees and expenses of any underlying mutual funds in the portfolio.
The fee schedule, which is negotiable, is based on account size and an assumed
active equity portfolio. There is a minimum client fee requirement of $500 per
calendar quarter to maintain this type of account. Fee-based programs are not
designed for excessively traded or inactive accounts and may not be suitable
for all investors. Please carefully review the Wachovia Securities advisory
disclosure document for a full description of our services, including fees and
expenses. The minimum account size for this program is $150,000.
Wachovia Securities is the trade name used by two separate registered
broker-dealers: Wachovia Securities, LLC, and Wachovia Securities
Financial Network, LLC, Members SIPC, non-bank affiliates of
Wells Fargo & Company.