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Asset Class: Target-Date Funds
Q4: December 31, 2013
Trademark Capital 2020 Fund ClassTarget R5 Trademark Capital Retirement 2020 Fund R5 Growth of $10,000 Class R5 Shares 05/31/2007 - 12/31/2013 Fund Description
The Trademark Capital Target Retirement 2020 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. The Capital Target Date Series are collective investment funds (“CIFs”) created by the TOPTrademark 10 HOLDINGS Hand Composite Employee Benefit Trust and sponsored by Hand Benefits & Trust Company, a BPAS company, that invest in the strategies of Trademark 1) Cash 6) Vanguard Small Cap ETF VB Capital which serves as the sub-advisor to the CIFs.
ETFpath design adjusts the broadly diversified 7) Vanguard REIT VNQ asset mix The VOO Trademark/Wilshire glide on a quarterly basis, gradually moving toward a more conservative allocation VEA 8) SPDR Barclays International Treasury Bond ETF BWX up to and “through” retirement to life expectancy. This approach takes into account investor behavior VO Emerging Mkts Local Currency 9) Market assumptions both beforeVectors and after the target retirement date, whichEMLC.K are used to create the slopeBND of the glide path. 10) Vanguard FTSE Emerging Markets Fund ETF VWO
2) Vanguard S&P 500 ETF
Trademark Capital 3) Vanguard FTSE Developed Markets Portfolio Management Team ETF 4) Vanguard Mid Cap ETF Joseph Ezernack, MBA CEO & Chief Investment Officer
5) Vanguard Total Bond Market Index Fund;E
Don Beasley Managing Director
Allocation
FUND FACTS
100%
Share Class
R5
41023V645
Total Expense Ratio* Benchmark Advisor
V
Beta
60% $15,000
The asset allocation and glide path strategy is powered by Wilshire Fund Expense RatioAssociates. Investment selection, management and downside protection Weighted AveragebyETF overlay is managed Trademark Capital.
o
Risk Management Overlay expands in adverse market conditions
l a
2
t i l i t y
1.05%$14,000
R
0.12%$13,000
Standard DeviationOverlay Risk Management
40% 20%
M
a
n a
Morningstar Target Date 2020 $10,000TR
Trademark *The fund expenseCapital ratio has 25 bps of service fees payable to the plan’s$9,000 service
25
Annual Portfolio Turnover 30
35 35
Inception Date
The Capital total expense ratio includes Inc. the fund Trademark Management, is a expense ratio and the weighted ecemberproviders. 31, 2013 $8,000 Young Savers average ETF registered expense. federally investment advisor with a team (34 and younger) $7,000 mark Capital 2020 Fund Class R5
40
45
g
e
m
e
7.24% n t
Retirement Age 50
55
60
$13,501.71
0.65
Sharpe Ratio
($11.70 per $1,000 invested) 1.17% 0% $11,000
65
Mature Accumulators Near-Retirement Transitioners 1 Fund (35-49) (50-65)
0.46
$12,576.75 Maturity Age
101%
70
75
80
5/1/2013
85
Age
In-Retirement Harvesters
vs. the S&P(65+) 500
The Risk Management Overlay, can reduce exposure to the “equity” glide path during 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 2013-01 2013-03 2013-05 2013-07 2013-09 2013-11
of experienced and credentialed professionals. For
2.04% 0.34
contracts under positive market conditions
$12,000
h of $10,000 R5 Shares 05/31/2007 - 12/31/2013 overClass two decades, Trademark Capital has been
Risk Management Overlay
Fixed Income
FUND DATA1
Alpha
80%
Investment Approach CUSIP
Equity
periods of elevated market risk. While the level of the Risk Management Overlay is lower YEAR RE CALENDAR steadfast in holding true to its core principles: TOP 10 HOLDINGS for younger investors, theTrademark pre-determined maximumMorningstar levels of protection increase up to and putting client’s interest first and delivering 2010 Fund R5 Target Date 2010 6) Vanguard Small Cap ETF QTD Y Q4: December 31,VB2013 goal-oriented solutions. The Trademark Capital “through” retirement. VOO uard S&P 500 ETF 7) Vanguard REIT ETF VNQ investment philosophy centers on the idea of At age 65, the target retirement date, the maximum equity exposure is 55%. At age 85, the target maturity date, the maximum equity VEA Treasury Bond ETF uard FTSE Developed Markets ETF 8) SPDR Barclays InternationalTrademark BWX2020 Fund Class R5 Capital 4.70% 9. Trademark Capital exposure is 15%, which represents the lowest allocation to equities along the glide path. 2020 Fund Class R5 “winning by not losing.”
ss
VO
BND
9) Market Vectors Emerging Mkts Local Currency
FUND FACTS Glide Path Consultant R5
Wilshire Associates 41023V645
EMLC.K
Growth of $10,000 - 12/31/2013 Morningstar Target Date 2020 TR VWO Class R5 Shares 05/31/2007
10) Vanguard FTSE Emerging Markets Fund ETF
FUND DATA
Alpha Beta
Founded in 1972, Wilshire Associates (“Wilshire®”), 1.05% R2 a leading global independent investment consulting Average ETF 0.12% Standard Deviation and services firm, has more than four decades of Sharpe Ratio ense Ratio* ($11.70 per $1,000 invested) 1.17% experience providing risk analytics, investment Annual Portfolio Turnover rk Morningstar Target Date 2020 TR consulting, and investment solutions to institutional pense ratio has 25 bps of service fees payable to the plan’s service Inception Date e total expense ratio includes the fund expense ratio andWilshire the weighted serves in excess of 500 investors worldwide. xpense. organizations in 20 countries representing assets totaling approximately US $7 trillion.*
ense Ratio
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.
*Assets are as of December 31, 2011, based on data published in the December 24, 2012 issue of Pensions and Investments.
1 $14,000
$13,000
TOP 10 HOLDINGS
CALENDAR Small CapYEAR ETF 6) Vanguard
2.04%
1) $12,000 Cash
0.34
7.24% 3) $10,000 Vanguard FTSE Developed Markets ETF 0.46
$8,000
$5,000
Fund vs. the S&P 500
ETF 8) SPDR Barclays International Treasury Bond 0.00%
9) Market Vectors Emerging Mkts Local Currency
Growth of $10,000
$10,450
10) Vanguard FTSE Emerging Markets Fund ETF
Morningstar Target Date 2020 TR 1 0.00% FUND DATA CALENDAR YEAR RETURNS (%) - CLASS R5 SHARES Growth of $10,000 $9,897 R5 Alpha
FUND FACTS
Share Class CUSIP
7) Vanguard REIT ETF
VEA
BND
5) $7,000 Vanguard Total5/1/2013 Bond Market Index Fund;E 1
$12,996.27
HYPOTHETICAL &VB
VOO VO
4) Vanguard Mid Cap101% ETF $6,000
QTD
Trademark Capital 2020 Fund Class R5
4.70%
YTD
1 Year
3 Year
5 Year
9.05%
9.05%
3.66%
6.24%
41023V645
Fund Expense Ratio 1.05% 4.14% Fund 11.59% Trademark R5 Morningstar Target Date 2020 2020 TR Weighted Average ETF
0.12%
Beta
Inception to Date 4.06%
2 RMorningstar 11.59% 7.48% Target 11.64% 2.92% Date 2020
Standard Deviation
Sharpe Ratio 1.17% ($11.70 per $1,000 invested) 12/31/2007 12/31/2008 12/31/2009 12/31/2010
$10,450 $9,604 $10,727 $11,669 *The fund expense ratio has 25of bps of service fees payable to the plan’s service Growth $10,000 Inception Date providers. The total expense ratio includes the fund0.00% expense ratio -29.57% and the weighted24.18% 12.45% Morningstar Target Date 2020 TR average ETF expense. $14,000 Growth of $10,000
$9,897
$6,971
$8,657
$9,735
5.79%
9.05%
$11,918
$12,996
-0.23%
11.53%
11.59%
$9,712
$10,831
$11,266
$9
VWO
-29
$6
2.04%
0.34
7.24%
12/31/2011 12/31/2012 12/31/2013
0.00% -8.09% 8.78% -3.45% Annual Portfolio Turnover Trademark Capital 2020 Fund Class R5 Benchmark Morningstar Target Date 2020 TR11.69%
EMLC.K
0.65
CALENDAR YEAR HYPOTHETICAL & ACTUAL RESULTS ($) 5/31/07 - 12/31/13
Total Expense Ratio*
11
VNQ 12/31/2007 12/3 $12,085.08 BWX -8 Trademark Capital 2020 Fund Class R5
2) $11,000 Vanguard S&P 500 0.65 ETF $9,000
4.14%
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 2013-01 2013-03 2013-05 2013-07 2013-09 2013-11
uard Mid Cap ETF
uard Total Bond Market Index Fund;E
1
0.46
101%
5/1/2013
Fund vs. the S&P 500
$12,085 $12,838.71
$13,000 Illustrates $12,000a $10,000 investment made on 5/31/2007 with no additional deposits. Performance prior to February 1, 2011 is back-tested while performance after February 1, 2011 is based on actual results. Hypothetical, back-tested $11,000 performance information for the Fund is for illustrative purposes only and does not represent actual Fund performance. Hypothetical, back-tested performance has inherent limitations and is not indicative of future results. No representation is being made that$10,000 the Fund will achieve performance similar to that shown. The hypothetical performance does not reflect brokerage fees but is net of stated Fund expenses. $11,893.11 Trademark Capital 2020 Fund Cl $9,000 $8,000 $7,000
Morningstar Target Date 20
0 invested)
get Date 2020 TR
Annual Portfolio Turnover
le to the plan’s service e ratio and the weighted
Inception Date
101% 5/1/2013
vs. the S&P 500 Trademark Capital TargetFundRetirement 2020 Fund R5 1
CALENDAR YEAR RETURNS (%) - CLASS R5 SHARES Trademark Capital 2020 Fund Class R5
4.70%
9.05%
9.05%
3.66%
6.24%
Inception to Date 4.06%
Morningstar Target Date 2020 TR
4.14%
11.59%
11.59%
7.48%
11.64%
2.92%
QTD
YTD
1 Year
3 Year
5 Year
Past Performance is no guarantee of future results and the actual performance the benchmark and& theACTUAL Fund may RESULTS be lower or higher than the hypothetical past performance shown above. Fund returns are CALENDAR YEAR ofHYPOTHETICAL ($) 5/31/07 - 12/31/13 calculated net of fees. Fund returns are compared to the Morningstar Target Date 2020. Performance prior to February 1, 2011 is back-tested while performance after February 1, 2011 is based on actual results. 12/31/2008 12/31/2010 Date prior to actual inception is representative of the manager’s performance of a like12/31/2007 strategy. Inception date used12/31/2009 in the hypothetical return is 12/31/2011 May 31, 2007.12/31/2012 12/31/2013
Trademark Capital 2020 Fund Class R5
Target and Actual Allocation
Growth of $10,000
Trademark Capital Target Retirement 2020 0.00%
-8.09%
11.69%
8.78%
-3.45%
5.79%
9.05%
$10,450
$9,604
$10,727
$11,669
$11,266
$11,918
$12,996
$9,897
$6,971
$8,657 Real Assets 4%
$9,735
$9,712
$10,831
$12,085
12/31/2013 Target Allocation 0.00% -29.57% 24.18% 12.45%
12/31/2013 Actual Allocation 11.53% 11.59%
-0.23%
Morningstar Target Date 2020 TR
The actual allocation of the fund may differ from the target Growth of $10,000 allocation depending on the current position of the Risk Management Overlay. The Risk Management Overlay can reduce exposure to the “equity” portion of the glide path when our model indicates periods of elevated market risk. The Risk Management Overlay 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
A one-step, broadly diversified, ‘managed for you’ solution that adjusts to an investors age, as well as, changes in the financial markets. 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.
Other Bonds 14%
Other Bonds 14%
Int'l Stocks 16%
Cash & TIPS 27%
Q4: December 31, 2013
US Stocks 38%
US Stocks 39%
Trademark Capital 2020 Fund Class R5 Growth of $10,000 Class R5 Shares 05/31/2007 - 12/31/2013 TOP 10 HOLDINGS 6) Vanguard Small Cap ETF
1) Cash VOO
7) Vanguard REIT ETF
VNQ
3) Vanguard FTSE Developed Markets ETF
VEA
8) SPDR Barclays International Treasury Bond ETF
BWX
9) Market Vectors Emerging Mkts Local Currency
EMLC.K
VO BND
5) Vanguard Total Bond Market Index Fund;E
Trademark Capital Target Retirement Fund
Before 1949
2010
1950-1959
2020
1960-1969
2030
1970-1979
2040
After 1980
2050
VB
2) Vanguard S&P 500 ETF
10) Vanguard FTSE Emerging Markets Fund ETF
Share Class
R5 41023V645
CUSIP
Alpha
1.05%
R2
Weighted Average ETF
0.12%
Standard Deviation
Benchmark
($11.70 per $1,000 invested)
1.17%
Morningstar Target Date 2020 TR
*The fund expense ratio has 25 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.
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. 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. Principal Risks - Any of the principal risks summarized below may adversely affect the Fund’s net asset value, performance and ability to meet its investment objective. Active Management: The investment is actively managed and subject to the risk that the advisor’s usage of investment techniques and risk analyses to make investment decisions fails to perform as expected, which may cause the portfolio to lose value or underperform investments with similar objectives and strategies or the market in general. Target Date: Targetdate funds, also known as lifecycle funds, shift their asset allocation to become increasingly conservative as the target retirement year approaches. Still, investment in target date funds may lose value near, at, or after the target retirement date, and there is no guarantee they will provide adequate income at retirement. Underlying Fund/Fund of Funds: A portfolio’s risks are closely associated with the risks of the securities and other investments held by the underlying or subsidiary funds, and the ability of the portfolio to meet its investment objective likewise depends on the ability of the underlying funds to meet their objectives. Investment in other funds may subject the portfolio to higher costs than owning the underlying securities directly because of their management fees. ETF: Investments in exchange-traded funds generally reflect the risks of owning the underlying securities they are designed to track, although they may be subject to greater liquidity risk and higher costs than owning the underlying securities directly because of their management fees. Shares of ETFs are subject to market trading risk, potentially trading at a premium or discount to net asset value. Suitability: Investors are expected to select investments whose investment strategies are consistent with their financial goals and risk tolerance. 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 management fee that would have been charged by Trademark had Trademark managed the Fund during the corresponding
2.04%
Beta
Fund Expense Ratio
Total Expense Ratio*
VWO
FUND DATA1
FUND FACTS
Year of Birth
Int'l Stocks 15%
Cash & TIPS 29%
4) Vanguard Mid Cap ETF
A great value - The underlying securities are exchangetraded funds (ETFs) resulting in significant cost savings.
Real Assets 4%
0.34 0.65 7.24%
Sharpe Ratio
0.46
Annual Portfolio Turnover
101%
Inception Date
5/1/2013 1
Fund vs. the S&P 500
CALENDA
time period plus estimated corresponding Fund expenses (estimated at 0.90% 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 Trademark Capital 2020 Fund Class (including the investments purchased and/or investment strategies devised or undertaken by Trademark) will be profitable.
Q R5
4
Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that future Morningstar Target Date 2020 TR 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 performance results. Benchmarks are unmanaged and one cannot invest directly in a benchmark. The historical performance results for the benchmark is provided exclusively for comparison purposes only, so as to provide general comparative information to assist an individual client or prospective client in 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. Trademark Capital 2020 Fund Class R5
4
CALENDAR YEAR HYPOTH
The performance results (5/31/07-12/31/10) reflect hypothetical, back-tested results, that were achieved by means of the retroactive of $10,000 application of a back-tested portfolio and, as such, the corresponding results have inherent limitations, including:Growth (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 of the referenced portfolios, certain aspects of which may have been designed with the benefit ofMorningstar hindsight; (2) back-tested Targetperformance Date 2020 TR may not reflect the impact that any material market or economic factors might have had on the adviser’s use of the hypothetical portfolio if the portfolio had been used during the period to actually mange client assets; and, (3) Trademark’s clients may Growth of have $10,000 experienced investment results during the corresponding time periods that were materially different from those portrayed in the portfolio. Hypothetical 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. 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.
For more information, contact your financial advisor or call Trademark Capital at 1-800-808-8960 www.TrademarkCapital.com
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12/3
0
$1
0
$9