SMID Cap

Investment Considerations

·	Proprietary quantitative model based on research and testing of the relationship between

earnings expectations and equity price movements

·	Portfolio manager has 35 years of investment management experience

Investment Strategy

·	Implicit in the approach is an equity valuation model
·	Earnings expectations are continuously monitored

- Equities outperforming earnings expectations are purchased

·	Two part equity selection process

- Proprietary “breakout” model
- Strong consensus among analysts’ estimates of improvement in earnings

·	Strict sell discipline
·	Constrained by factor and industry risk
·	Uses no derivatives
·	Competitive edge comes from a disciplined and “rapid response” model

Investment Results

·	Fifty issues in each portfolio
·	Earnings growth of portfolio companies is greater than the market
·	Benchmarked to the Russell 2500 Index