Q1: March 31, 2013
Asset Class: Target-Date Funds
Trademark Capital 2040 Fund Class R1Retirement 2040 Fund R1 Trademark Capital Target Growth of $10,000 Fund Description
Class R1 Shares 05/31/2007 - 3/31/2013
The Trademark Capital Target Retirement 2040 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 VOO 1) Vanguard S&P 500serves as the sub-advisor to the CIFs. 6) Vanguard Small-Cap VB Trademark Capital which
2) VanguardCapital MSCI EAFE Trademark Portfolio Management 3) Vanguard Mid-Cap Team Joseph Ezernack, MBA
4) Vanguard Total Bond Market Chief Investment Officer 5) iShares Don BeasleyBarclays TIPS Bond Fd Managing Director
VEA REIT The Trademark/Wilshire glide path design adjusts the broadly diversified 7) Vanguard VNQ asset mix on a quarterly basis, gradually moving toward a more conservative allocation up to and VO 8) Vanguard FTSE Emerging Markets VWO “through” retirement to life expectancy. This approach takes into account investor behavior assumptions beforeShort and after theIncome target retirement date, which are used to create the BND both Term Fund 9) HB&T slope of the glide path. TIP 10) SPDR Barclays High Yield Bond JNK Allocation
FUND FACTS
Equity
1
FUND DATA Trademark Flexguard Overlay expands in
100%
Investment Share Class Approach
80%
R1
Alpha
adverse market conditions
V o l a t i l i t y
The asset allocation and glide path strategy is 60% 41023X674 CUSIP powered by Wilshire Associates. Investment selection, management and downside protection Fund Expense Ratio 0.90%40% overlay is managed by Trademark Capital.
R
Weighted Average ETF
Standard Deviation under positive market conditions
Advisor
Total ExpenseCapital Ratio* Trademark
Beta 2
0% 1.00%
-0.79% 0.80
M a 0.95 n a g e m e 14.83% n t
Trademark Flexguard Overlay contracts
0.10%20% ($10.00 per $1,000 invested)
Trademark Flexguard Overlay
Fixed Income
Sharpe Ratio
Retirement Age
0.05
Maturity Age
Trademark Capital Management, Inc. is aTarget Date 2040 TR 25 Annual 30 35 40 Turnover 45 50 55 60 65 70 75 80 85 45 Portfolio Benchmark Morningstar 46% Age Q1: March 31, 2013 federally registered investment advisor with *The fund expense ratio has 10 bps of service fees payable to the plan’s service InceptionMature DateAccumulators Near-Retirement Transitioners 2/1/2011 In-Retirement Harvesters a Capital team The of2040 experienced and credentialed providers. total expense includes the fund expense ratio and the weighted Young Savers rademark Fund ratio Class R1 (34 and younger) (35-49) (50-65) 1 (65+) professionals. For nearly two decades, average ETF expense. vs. the S&P 500 rowth of $10,000 Class R1 Shares 05/31/2007 - 3/31/2013 The Trademark Flexguard Overlay (TFO), can reduceFund 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 VOO solutions. and delivering goal-oriented TheSmall-Cap investors, the pre-determined maximum levels of protection increase up to and “through” ) Vanguardfirst S&P 500 6) Vanguard VB CALENDAR YEAR RETUR philosophy ) VanguardTrademark MSCI EAFE Capital investmentVEA 7) Vanguard REIT Q1: VNQ retirement. March 31, 2013 QTD Y Vanguard FTSE Emerging by not ) Vanguardcenters Mid-Cap on the idea of “winningVO 8) losing.” At age 65,Markets the target retirementVWO date, the maximum equity exposure is 55%. At age 85, the target maturity date, the maximum equity
) Vanguard Total Bond Market
) iShares Barclays TIPS Bond Fd
Glide Path Consultant Wilshire FUND Associates FACTS
BND TIP
Trademark Capital 2040 Fund Class R1
exposure 15%, which represents the lowest allocation to equities along the glide path. IncomeisFund 9) HB&T Short Term 10) SPDR Barclays High Yield Bond
Trademark Capital 2040 Fund Class R1
5.21%
5.2
Morningstar Target Date 2040 TR
6.42%
6.4
JNK Growth of $10,000 Class R1 Shares 05/31/2007 - 3/31/2013
FUND DATA
1
$12,000
R1 Alpha -0.79% Founded in 1972, Wilshire Associates TOP 10 HOLDINGS $10,966.81 $11,000 41023X674 Beta USIP 0.80 (“Wilshire®”), a leading global independent VOO 1) Vanguard S&P 500 6) Vanguard Small-Cap VB 2 nd Expenseinvestment Ratio 0.90% 0.95 CALENDAR YEAR HYPOTHETICAL & R consulting and services firm, has $10,000 VEA 7) Vanguard REIT VNQ eighted Average Standard Deviation 2) Vanguard MSCI EAFE 14.83% moreETF than three decades0.10% of experience providing $10,621.38 $9,000 12/31/2007 12/31 Sharpe Ratio 1.00% 0.05 otal Expenserisk Ratio* VO 3) Vanguard Mid-Cap 8) Vanguard FTSE Emerging Markets VWO analytics, investment consulting, and ($10.00 per $1,000 invested) $8,000 Annual Portfolio Turnover enchmark investment Morningstar Target Date 2040 TR 46% solutions to institutional investors -30. BND ShortFund Term Income Fund 0.00% Trademark Capital Class R1 4) Vanguard Total Bond Market 9) HB&T2040 he fund expense ratio has 10 bps of service fees payable to the plan’s service $7,000 Date 2/1/2011 currently serves Inception in excess viders. The total worldwide. expense ratio includesWilshire the fund expense ratio and the weighted TIP Barclays High Yield Bond $10,264 5) iShares Barclays Bond 10) SPDRGrowth JNK rage ETF expense. Fund vs.TIPS the S&P 500 Fd $7, of $10,000 of 600 organizations in more than 20 countries $6,000 representing assets totaling more than US $6 1 $5,000 FUND FACTS 0.00% -37. FUND Morningstar Target Date 2040DATA TR CALENDAR YEAR RETURNS (%) - CLASS 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 2013-01 2013-03
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.
5.21%
Trademark Fund 6.42% Morningstar Target 2040 Date 2040 TR
Fund Expense Ratio
YTDR1
1 Year Alpha
5.21% 41023X674
7.75% Beta
QTD
Trademark Capital 2040 Fund Class R1 CUSIP
R1
6.42%
0.90%
3 Year
Date Growth of $10,000 6.10%
1.52%
-0.79%
$9,755
$6,
0.80
Morningstar Target 10.01% 8.83% Date 2040 1.04% 2
0.95
R
CALENDAR RESULTS ($) 5/31/07 - 12/31/12 Weighted Average ETF YEAR HYPOTHETICAL 0.10%& ACTUAL Standard Deviation 12/31/2007 12/31/2008 Total Expense Ratio* ($10.00 per $1,000 invested) 1.00% 0.00% -30.58% Trademark Capital 2040 Fund Class R1
Benchmark
Morningstar Target Date 2040 TR $7,125 Growth of $10,000 $10,264
*The$12,000 fund expense ratio has 10 bps of service fees payable to the plan’s service 0.00% -37.91% Morningstar Target Date 2040 TR providers. The total expense ratio includes the fund expense ratio and the weighted $11,000 $9,755 $6,057 Growth of $10,000 average ETF expense.
12/31/2009
12/31/2010 Sharpe Ratio
12/31/2011
12/31/2012
10.53%
-4.91%
11.39%
30.66% 14.29% Inception Date
-3.51%
24.41%
Annual $8,864 Portfolio $9,797Turnover $9,335 $7,915
$9,045
$8,728
14.83% 0.05 46%
$10,423
$10,789.78 2/1/2011 14.35% 1 $9,981
Fund vs. the S&P 500
$10,000a $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, $9,000 performance information for the Fund is for illustrative purposes only and does not represent actual Fund performance. back-tested Hypothetical, back-tested performance has inherent limitations and is not indicative of future results. No representation is being made $9,764.59 $8,000 that 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
CALEND
*As of 12/31/09, based on published data in the 12/27/10 issue of Pension and Investments.
$6,000
Trademark Capital 2040 Fund Clas
r $1,000 invested)
r Target Date 2040 TR
Annual Portfolio Turnover
s payable to the plan’s service expense ratio and the weighted
Inception Date
46% 2/1/2011
Fund vs. the S&P 500 Trademark Capital Target Retirement 2040 Fund R1 1
CALENDAR YEAR RETURNS (%) - CLASS R1 SHARES Trademark Capital 2040 Fund Class R1
5.21%
5.21%
7.75%
6.10%
Inception to Date 1.52%
Morningstar Target Date 2040 TR
6.42%
6.42%
10.01%
8.83%
1.04%
QTD
YTD
1 Year
3 Year
YEAR HYPOTHETICAL ACTUAL 12/31/12 Past Performance is no guarantee of future resultsCALENDAR and the actual performance of the benchmark and the & Fund may be lowerRESULTS or higher than($) 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 2040. 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 2040
Trademark Capital 2040 Fund Class R1
Target and Actual Allocation
Growth of $10,000
The actual allocation of the fund may differ from the Morningstar Target Date 2040 TR target allocation depending on the current position of Growth of $10,000 the Trademark Flexguard Overlay (TFO). 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%
-30.58%
24.41%
10.53%
-4.91%
$10,264
$7,125
$8,864
$9,797
$9,335
3/31/13 Target Allocation
11.39%
3/31/13* Actual Allocation $10,423
Real Assets -37.91% 0.00%
30.66% Cash/TIPS 14.29%
Real Assets -3.51% 14.35%
$9,755
8% $7,915
$8,728
5%
$6,057
$9,045
Other Bonds 14%
Int’l Stocks 28%
5%
US Stocks 45%
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.
US Stocks 47%
Growth of $10,000 Class R1 Shares 05/31/2007 - 3/31/2013
*Actual Allocation reflects allocation as of 3/31/13.
TOP 10 HOLDINGS 1) Vanguard S&P 500
VOO
6) Vanguard Small-Cap
2) Vanguard MSCI EAFE
VEA
7) Vanguard REIT
VNQ
8) Vanguard FTSE Emerging Markets
VWO
VO
3) Vanguard Mid-Cap 4) Vanguard Total Bond Market
BND
9) HB&T Short Term Income Fund
5) iShares Barclays TIPS Bond Fd
TIP
10) SPDR Barclays High Yield Bond
FUND FACTS
Trademark Capital Target Retirement Fund 2010
1950-1959
2020
1960-1969
2030
1970-1979
2040
After 1980
2050
Other Bonds 16%
Trademark Capital 2040 Fund 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.
Before 1949
Cash/TIPS 10%
Int’l Stocks 22%
Q1: March 31, 2013
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
$9,981
FUND DATA
Share Class CUSIP
R1 41023X674
R2
Weighted Average ETF
0.10%
Standard Deviation
($10.00 per $1,000 invested)
1.00%
Morningstar Target Date 2040 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.
0.80 0.95 14.83%
Sharpe Ratio
0.05
Annual Portfolio Turnover
46%
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.
-0.79%
Beta
0.90%
Benchmark
JNK 1
Alpha
Fund Expense Ratio Total Expense Ratio*
VB
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 Capital 2040 Fund Class R1 performance results. Benchmarks are unmanaged and one cannot Trademark invest directly in a benchmark. The historical performance results for the benchmark is provided exclusively for comparison purposes only, Targetclient Datein2040 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 2040 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 have Morningstar Target Date 2040 TR 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