Q4: December 31, 2012
Asset Class: Target-Date Funds
Trademark Capital 2010 Fund Class R1Retirement 2010 Fund R1 Trademark Capital Target Growth of $10,000 Fund Description
Class R1 Shares 05/31/2007 - 12/31/2012
The Trademark Capital Target Retirement 2010 Fund seeks a moderate level of total return and the preservation of purchasing power of accumulated assets prior to and beyond the target retirement date. The10 Trademark Capital Target Date Series are collective investment funds (“CIFs”) created by TOP HOLDINGS the Hand Composite Employee Benefit Trust and sponsored by Hand Benefits & Trust Company, a BPAS company, that invest in the strategies of 1) HB&TCapital Short Term 6) IShares Brclys 20+ Yr Treasury Bnd Fnd TLT Trademark which Income serves asFund the sub-advisor to the CIFs.
2) iShares Barclays Trademark CapitalTIPS Bond Fd Portfolio Management 3) Vanguard S&P 500 Team Joseph Ezernack, MBA
4) Market VctrsOfficer Emrgng Mrkts Lcl Crncy Bn Chief Investment 5) SPDR Barclays International Treasry Bnd Don Beasley Managing Director
TIP Mid-Cap The Trademark/Wilshire glide path design adjusts the broadly diversified 7) Vanguard VO asset mix on a quarterly basis, gradually moving toward a more conservative allocation up to and VOO 8) Vanguard MSCI EAFE VEA “through” retirement to life expectancy. This approach takes into account investor behavior assumptions before andTotal after Bond the target retirement date, whichBND are used to create the EMLC both Market 9) Vanguard slope of the glide path. BWX 10) Vanguard Small-Cap VB Allocation
FUND FACTS
Equity
1
80%
R1
Alpha
The asset allocation and glide path strategy is 60% 41023X815 CUSIP powered by Wilshire Associates. Investment selection, management and downside protection 40% Fund Expense Ratio 0.90% overlay is managed by Trademark Capital.
Weighted Average ETF
Advisor
Total ExpenseCapital Ratio* Trademark
FUND DATA Trademark Flexguard Overlay expands in adverse
100%
Investment Share Class Approach
Beta R
2
under positive market conditions Standard Deviation
0% 1.02%
3.79%
market conditions
V o l a t i l i t y
Trademark Flexguard Overlay contracts
20% 0.12% ($10.20 per $1,000 invested)
Trademark Flexguard Overlay
Fixed Income
0.19 M a 0.32 n a g e m e 6.10% n t
Sharpe Ratio
Retirement Age
0.53
Maturity Age
Trademark Capital Management, Inc. is aTarget Date 2010 Age TR 25 Annual 30 35 4 0 Turnover 45 50 55 60 65 70 75 80 8855 45 50 55 60 65 70 119% 75 80 Portfolio Benchmark Morningstar Q4: December 31, 2012 federally registered investment advisor with *The fund expense ratio has 10 bps of service fees payable to the plan’s serviceYoung Savers In-Retirement Harvesters InceptionMature DateAccumulators Near-Retirement Transitioners 2/1/2011 a Capital team The of2010 experienced and credentialed providers. total expense includes the fund expense ratio and the weighted (34 and younger) (35-49) (50-65) (65+) rademark Fund ratio Class R1 1 professionals. For nearly two decades, average ETF expense. Fund vs. the S&P 500 rowth of $10,000 Class R1 Shares 05/31/2007 - 12/31/2012The Trademark Flexguard Overlay (TFO), can reduce exposure to the “equity” glide path Trademark Capital has been steadfast in holding true to its core principles:TOP putting client’s interest during periods of elevated market risk. While the level of the TFO is lower for younger 10 HOLDINGS Brclys 20+ Yr Treasury Bnd first and delivering The ) HB&T Short Term Income Fund goal-oriented solutions. 6) IShares TLT investors, theFnd pre-determined maximum levels of protection increase up to and “through” CALENDAR YEAR RETUR Trademark Capital investment TIP philosophy ) iShares Barclays TIPS Bond Fd 7) Vanguard Mid-Cap VO 2012 retirement. Q4: December 31, QTD Y VOO Vanguard MSCI EAFE by not ) Vanguardcenters S&P 500 on the idea of “winning 8) losing.” VEA the maximum equity exposure is 55%. At age 85, the target maturity date, the maximum At age 65, the target retirement date, equity
) Market Vctrs Emrgng Mrkts Lcl Crncy Bn
EMLC
) SPDR Barclays International Treasry Bnd
BWX
Glide Path Consultant Wilshire FUND Associates FACTS
Trademark Capital 2010 Fund Class R1
exposure is 15%, which represents the lowest allocation to equities along the glide path. Market 9) Vanguard Total Bond BND 10) Vanguard Small-Cap
Trademark Capital 2010 Fund Class R1
-0.84%
3.8
Morningstar Target Date 2010 TR
1.18%
9.6
VB Growth of $10,000 Class R1 Shares 05/31/2007 - 12/31/2012
FUND DATA $14,000
1
R1 Alpha 3.79% Founded in 1972, Wilshire Associates TOP 10 HOLDINGS $12,560.48 $13,000 41023X815 Beta USIP 0.19 (“Wilshire®”), a leading global independent IShares Brclys 20+ Yr Treasury Bnd Fnd 1) HB&T Short Term Income Fund 6) TLT nd Expenseinvestment Ratio 0.90% 0.32 CALENDAR YEAR HYPOTHETICAL & R2 $12,000 consulting and services firm, has TIP Bond Fd 7) Vanguard Mid-Cap VO eighted Average Standard Deviation 2) iShares Barclays TIPS6.10% moreETF than three decades0.12% of experience providing $11,000 12/31/2007 12/31 Sharpe Ratio 1.02% 0.53 otal Expenserisk Ratio* VOO 3) Vanguard S&P 500 8) Vanguard MSCI EAFE VEA analytics, investment consulting, and ($10.20 per $1,000 invested) $11,616.71 $10,000 Annual Portfolio Turnover enchmark investment Morningstar Target 2010 TR 119% solutions toDate institutional investors 0.00% 0.5 EMLC Vanguard Total Bond Market Trademark Capital 2010 Fund Class R1 4) Market Vctrs Emrgng Mrkts Lcl Crncy Bn 9) BND he fund expense ratio has 10 bps of service fees payable to the plan’s service $9,000 Date 2/1/2011 currently serves Inception in excess viders. The total worldwide. expense ratio includesWilshire the fund expense ratio and the weighted BWX Small-Cap 5) SPDR Barclays International 10) Vanguard VB rage ETF expense. Fund vs. the S&P 500 Treasry Bnd $10 Growth of $10,000 $10,593 of 600 organizations in more than 20 countries $8,000 representing assets totaling more than US $6 1 FUND FACTS 0.00% -22. $7,000 FUND Morningstar Date 2010DATA TR CALENDAR YEAR RETURNS (%) - CLASSTarget R1 SHARES trillion.* Inception to
hare Class
2007-05 2007-07 2007-09 2007-11 2008-01 2008-03 2008-05 2008-07 2008-09 2008-11 2009-01 2009-03 2009-05 2009-07 2009-09 2009-11 2010-01 2010-03 2010-05 2010-07 2010-09 2010-11 2011-01 2011-03 2011-05 2011-07 2011-09 2011-11 2012-01 2012-03 2012-05 2012-07 2012-09 2012-11
1
Share Class
Trustee Hand Benefits & Trust Company Hand Benefits & Trust Company (HB&T), a BPAS company, is a state-chartered trust company serving the retirement industry since 1963. HB&T, headquartered in Houston, is regulated by the Texas Department of Banking and is one of the country’s largest full service trust companies dedicated to retirement plans. *As of 12/31/09, based on published data in the 12/27/10 issue of Pension and Investments.
YTDR1
1 Year Alpha
3.83% 41023X815
3.83% Beta
QTD
Trademark Capital 2010 Fund Class R1 CUSIP
-0.84%
1.18% Morningstar Target Date TR 20102010 Trademark Fund
Fund Expense Ratio
R1 0.90%
9.65%
3 Year
Date Growth of $10,000 2.90%
4.11%
$10,050
9.65% 6.89% Morningstar Target Date2.72% 2010
R2
Benchmark $13,000
Morningstar Target Date 2010 TR $10,648 Growth of $10,000 $10,593
*The fund expense ratio has 10 bps of service fees payable to the plan’s service $12,000 0.00% -22.46% Morningstar Target Date 2010 TR providers. The total expense ratio includes the fund expense ratio and the weighted $10,050 $7,793 Growth of $10,000 $11,000 average ETF expense.
12/31/2009
12/31/2010 Sharpe Ratio
12/31/2011
12/31/2012
8.38%
-3.18%
3.83%
22.05% 10.55% Inception Date
0.75%
7.93%
Annual Turnover $11,492 Portfolio $12,455 $12,084 $9,511
$10,515
$10,594
$7,
0.19 0.32
CALENDAR RESULTS ($) 5/31/07 - 12/31/12 Weighted Average ETF YEAR HYPOTHETICAL 0.12%& ACTUAL Standard Deviation 12/31/2007 12/31/2008 Total Expense Ratio* ($10.20 per $1,000 invested) 1.02% 0.00% 0.52% Trademark Capital 2010 Fund Class R1
3.79%
$12,560
$11,890.17 9.65%
6.10% 0.53 119% 2/1/2011
1 $11,617
Fund vs. the S&P 500
$10,000 a $10,000 investment made on 5/31/2007 with no additional deposits. Illustrates Performance prior to February 1, 2011 is back-tested while performance after February 1, 2011 is based on actual results. Hypothetical, $10,830.92 $9,000 performance information for the Fund is for illustrative purposes only and does not represent actual Fund back-tested performance. CALEND Hypothetical, back-tested performance has inherent limitations and is not indicative of future results. No representation is being made that $8,000 the Fund will achieve performance similar to that shown. The hypothetical performance does not reflect brokerage fees but is net of stated Fund expenses. $7,000 $6,000
Trademark Capital 2010 Fund Clas
r $1,000 invested)
r Target Date 2010 TR
Annual Portfolio Turnover
s payable to the plan’s service expense ratio and the weighted
Inception Date
119% 2/1/2011
Fund vs. the S&P 500 Trademark Capital Target Retirement 2010 Fund R1 1
CALENDAR YEAR RETURNS (%) - CLASS R1 SHARES Trademark Capital 2010 Fund Class R1
-0.84%
3.83%
3.83%
2.90%
Inception to Date 4.11%
Morningstar Target Date 2010 TR
1.18%
9.65%
9.65%
6.89%
2.72%
QTD
YTD
1 Year
3 Year
YEAR HYPOTHETICAL ACTUAL 12/31/12 Past Performance is no guarantee of future resultsCALENDAR and the actual performance of the benchmark and the & Fund may be lowerRESULTS or higher than($) the 5/31/07 hypothetical- past performance shown above. Fund returns are calculated net of fees. Fund returns are compared to the Morningstar Target Date 2010. Performance prior to February 1, 2011 is back-tested while performance after February 1, 2011 is based on actual 12/31/2007 12/31/2008 12/31/2009 12/31/2010 12/31/2011 12/31/2012 results. Date prior to actual inception is representative of the manager’s performance of a like strategy. Inception date used in the hypothetical return is May 31, 2007.
Trademark Capital Target Retirement 2010
Trademark Capital 2010 Fund Class R1
Target and Actual Allocation
0.00%
0.52%
7.93%
8.38%
-3.18%
12/31/2012$10,648 Target Allocation $11,492 $12,455 Growth of $10,000 $10,593
The actual allocation of the fund may differ from the Morningstar Target Date 2010 TR target allocation depending on the current position of Growth of $10,000 the Trademark Flexguard Overlay (TFO).
Real-22.46% Assets 5% $7,793
22.05%
10.55%
$9,511
$10,515 US$10,594 Stocks
0.75% Int’l Stocks 9.65% $11,617 7%
Int’l Stocks 14%
Other Bonds 11%
Cash/TIPS 36%
Cash/TIPS 77% Bonds
36% Trademark Capital 2010 Fund 9% Class R1
A winning combination - Combining Wilshire’s glide path expertise with a proprietary downside protection strategy that has been used in client accounts since 1991. A balanced approach - The management style not only balances risk with return, but also seeks to improve performance per unit of risk over traditional “diversified” portfolios. A great value - The underlying securities are exchangetraded funds (ETFs) resulting in significant cost savings.
Growth of $10,000 Class R1 Shares 05/31/2007 - 12/31/2012 TOP 10 HOLDINGS 6) IShares Brclys 20+ Yr Treasury Bnd Fnd
1) HB&T Short Term Income Fund TIP
2) iShares Barclays TIPS Bond Fd
VOO
3) Vanguard S&P 500 4) Market Vctrs Emrgng Mrkts Lcl Crncy Bn
EMLC
5) SPDR Barclays International Treasry Bnd
BWX
7) Vanguard Mid-Cap
Trademark Capital Target Retirement Fund 2010
1950-1959
2020
1960-1969
2030
1970-1979
2040
After 1980
2050
CUSIP
R1 41023X815
9) Vanguard Total Bond Market
BND
10) Vanguard Small-Cap
R2
Weighted Average ETF
0.12%
Standard Deviation
($10.20 per $1,000 invested)
1.02%
Morningstar Target Date 2010 TR
*The fund expense ratio has 10 bps of service fees payable to the plan’s service providers. The total expense ratio includes the fund expense ratio and the weighted average ETF expense.
As defined in the Declaration of Trust and Participation Agreement documents, the Funds are available for investment by eligible qualified retirement plan trusts only. Principal invested is not guaranteed at any time, including at or after the fund’s specific target retirement date. Participants and beneficiaries may experience losses near, at or after the target date and there is no guarantee that the investment will provide adequate retirement income. The participants and beneficiaries on whose behalf assets are invested in a QDIA have the right to direct the investment to any other investment alternative under the plan, subject to any fees or limitation that may apply to such transfer under the plan. The target date fund should be selected based on factors in addition to age or retirement date, including investment objectives, time horizon, risk tolerance and fees and the stated asset allocation may be subject to change. It is possible to lose money by investment in the fund including at and after the target date. The glide path methodology assumes at the target retirement age the participant or beneficiary withdraws 5% of the account value per year. The Trademark Capital Target Retirement Funds performance prior to February 1, 2011 represents hypothetical back-tested results for the funds while performance after February 1, 2011 is based on actual results. The performance results reflect the reinvestment of dividends and other account earnings, and the maximum Fund investment manage-ment fee that would have been charged by Trademark had Trademark managed the Fund during the corresponding time period plus estimated corresponding Fund expenses (estimated at .90% annually), and any separate fees assessed directly by each security (mutual funds, exchange traded funds, etc.) that comprised the portfolio. Therefore all results are net of fees. As market conditions fluctuate, the investment return and principal value of any investment will change. Diversification may not protect against market risks. There are risks involved with investing, including possible loss of principal. Different types of investments and/ or investment strategies involve varying levels of risk, and there can be no assurance that any specific investment or investment strategy (including the investments purchased and/or investment strategies devised or undertaken by Trademark) will be profitable.
0.19 0.32 6.10%
Sharpe Ratio
0.53
Annual Portfolio Turnover
119%
Inception Date
IMPORTANT RISK CONSIDERATIONS The Trademark Capital Target Retirement Funds are Collective Investment Funds (CIFs) sponsored by Hand Benefit & Trust Company. The CIFs are not mutual funds and shares are not deposits of Hand Benefits & Trust, a BPAS company, or Trademark Capital Management, and are not insured by the Federal Deposit Insurance Corporation or any other agency. The CIFs are securities which have not been registered under the Securities Act of 1933 and are exempt from investment company registration under the Investment Act of 1940.
3.79%
Beta
0.90%
Benchmark
VB 1
Alpha
Fund Expense Ratio Total Expense Ratio*
VO VEA
FUND DATA
Share Class
TLT
8) Vanguard MSCI EAFE
FUND FACTS
Before 1949
Real Assets 1%
Other Q4: December 31, 2012 US Stocks
A one-step, broadly diversified, ‘managed for you’ solution that adjusts to an investors age, as well as, changes in the financial markets.
Year of Birth
Allocation
9%
The TFO can reduce exposure to the “equity” portion of the glide path when our model indicates periods of elevated market risk. The TFO provides higher levels of capital protection up to and “through” retirement for the near-dated Funds [2010, 2020 and 2030], while allowing for a higher standard deviation (i.e. up/down volatility) in the longer-dated Funds [2040 & 2050].
Key Considerations
0.00% $10,050
3.83%
12/31/2012 Actual $12,084 $12,560
2/1/2011 1
Fund vs. the S&P 500
CALENDAR YE
Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that future performance will be profitable, equal the performance results reflected, or equal the corresponding historical benchmark index. The historical performance results for the benchmark does not reflect the deduction of transaction and custodial charges, or the deduction of an investment management fee, the incurrence of which would have the effect of decreasing indicated historical 2010 Fund Class R1 performance results. Benchmarks are unmanaged and one cannot Trademark invest directlyCapital in a benchmark. The historical performance results for the benchmark is provided exclusively for comparison purposes only, Targetclient Datein2010 TR so as to provide general comparative information to assist an individualMorningstar client or prospective determining whether Trademark Funds meets, or continues to meet, his/her investment objective(s). Please Also Note: (1) performance results do not reflect the impact of taxes; (2) It should not be assumed that account holdings will correspond directly to any benchmark index; and, (3) comparative indices may be more or less volatile than the Trademark Funds. CALENDAR YEAR HYPOT
The performance results (5/31/07-12/31/10) reflect hypothetical, back-tested results, that were achieved by 1 means of the retroactive application of a back-tested portfolio and, as such, the corresponding results have inherent limitations, including: (1) Fund results do not reflect the results of actual trading using client assets, but were achieved by means of the retroactive application of each Trademark of the referenced portfolios, certain Capital 2010 Fund Class R1 aspects of which may have been designed with the benefit of hindsight; (2) back-tested performance may not reflect the impact that any material market or economic factors might have had on the adviser’s use of of $10,000 the hypothetical portfolio if the portfolio had been used during the period to actually mangeGrowth client assets; and, (3) Trademark’s clients may have experienced investment results during the corresponding time periods that were materially different from those portrayed in the portfolio. Hypothetical performance results have2010 TR Morningstar Target Date been compiled solely by Trademark, are unaudited, and have not been independently verified. Trademark maintains all information supporting the performance results in accordance with regulatory requirements. Growth of $10,000 Information pertaining to Trademark’s advisory operations, services, and fees is set forth in Trademark’s current disclosure statement, a copy of which is available from Trademark upon request Performance results have been compiled solely by Trademark, are unaudited, and have not been independently verified. Trademark maintains all information supporting the performance results in accordance with regulatory requirements. Benchmark performance reflects results as reported directly by each respective index and/or obtained by Trademark from other reliable sources, and have not been independently verified by Trademark. This material is for Investment Professional use only.
For more information, contact your financial advisor or call Trademark Capital at 1-800-808-8960 www.TrademarkCapital.com