Glide Path Powered By:
Asset Class: Target-Date Funds
Q2: June 30, 2013
Trademark Capital 2040 Fund ClassTarget R1 Trademark Capital Retirement 2040 Fund R1 Growth of $10,000 Class R1 Shares 05/31/2007 - 6/30/2013 Fund Description
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. The Trademark Capital Target Date Series are collective investment funds (“CIFs”) created by the TOP 10 HOLDINGS Hand Composite Employee Benefit Trust and sponsored by Hand Benefits & Trust Company, a BPAS company, that invest in the strategies of Trademark VOO 1) Vanguard S&P as 500 6) Vanguard Small Cap ETF VB Capital which serves theETF sub-advisor to the CIFs.
2) Vanguard FTSE Developed Markets ETF
Trademark Capital 3) Vanguard Mid Cap ETF Portfolio Management Team Joseph Ezernack, MBABond Market ETF 4) Vanguard Total CEO & Chief Investment Officer
5) iShares TIPS Bond ETF
Don Beasley Managing Director
VEA Markets Fund 7) Vanguard FTSE VWO asset mix The Trademark/Wilshire glideEmerging path design adjusts theETF broadly diversified on a quarterly basis, gradually moving toward a more conservative allocation VO 8) Vanguard REIT ETF VNQ up to and “through” retirement to life expectancy. This approach takes into account investor behavior BND both Barclays High Bond ETF 9) SPDR assumptions before and after theYield target retirement date, which are JNK used to create the slope of the glide path. TIP 10) SPDR Barclays International Treasury Bond ETF BWX Allocation
FUND FACTS
80%
CUSIP 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.
Total Expense Ratio*
Advisor Benchmark
Trademark Capital
Q2:
R1
Alpha
41023X674 60%
V
Beta
o
Risk Management Overlay expands in adverse market conditions
l a
2
t i l i t y
0.90%40%
R
0.12%20%
Risk Management Standard DeviationOverlay
($10.20 per $1,000 invested)
Risk Management Overlay
Fixed Income
FUND DATA1
100%
Share Class
Investment Approach
Equity
0.80 M
a
n a
0.94 g
contracts under positive market conditions
Sharpe Ratio
1.02% 0%
30
35
40
45
e
m
e
14.59% n t
Retirement Age
Portfolio Turnover Morningstar Target Date 2040 TR 25 Annual 30 35 40 45 50 25
-1.27%
55
50
60
65
70
0.04
75
46%8 0
Maturity Age
80
*The fund expense ratio has 10 bps of service fees payable to the plan’s service Inception Date 2/1/2011 Trademark Management, is a expense ratio and the weighted The Capital total expense ratio includesInc. the fund June providers. 30, 2013 Young Savers Mature Accumulators Near-Retirement Transitioners In-Retirement Harvesters 1 federally registered investment advisor with a team average ETF expense. (34 and younger) (35-49) (50-65) (65+) Fund vs. the S&P 500
85
Age
rademarkofCapital 2040 and Fund Class R1 professionals. For experienced credentialed The Risk Management Overlay, can reduce exposure to the “equity” glide path during twoClass decades, Trademark Capital has- 6/30/2013 been rowth ofnearly $10,000 R1 Shares 05/31/2007
)
)
)
periods of elevated market risk. While the level of the Risk Management Overlay is lower steadfast in holding true to its core principles: CALENDAR YEAR RETURNS TOP 10 HOLDINGS for younger investors, the pre-determined maximum levels of protection increase up to and putting client’s interest first and delivering VOO Vanguard S&P 500 ETF 6) Vanguard Small Cap ETF VB goal-oriented solutions. The Trademark Capital “through” Q2: Juneretirement. 30, 2013 VWO QTD VEA Vanguard FTSE Developed Markets ETF 7) Vanguard FTSE Emerging Markets Fund ETF 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 VO Vanguard Mid Cap ETF 8) Vanguard REIT ETFTrademark Capital 2040 VNQFund Class R1 exposure is 15%, which represents the lowest allocation to equities along the glide path. “winning by not losing.” -0.87% 4 Trademark Capital 2040 Fund Class R1
) Vanguard Total Bond Market ETF
) iShares TIPS Bond ETF
hare Class
USIP
BND TIP
Glide Path Consultant
9) SPDR Barclays High Yield Bond ETF
1
FUND FACTS
Wilshire Associates
R1
41023X674
JNK
Growth of $10,000 Class - 6/30/2013 BWX R1 Shares 05/31/2007 Morningstar Target Date 2040 TR
10) SPDR Barclays International Treasury Bond ETF
FUND $12,000DATA Alpha Beta
1)$11,000 Vanguard S&P 500 ETF
TOP 10 HOLDINGS
-1.27%
VOO
0.80
Founded in 1972, Wilshire Associates (“Wilshire®”), 0.90% R2 2)$10,000 Vanguard FTSE Developed0.94 Markets ETF a leading global independent investment consulting eighted Average ETF 0.12% Standard Deviation 14.59% $9,000 and services firm, has more than four decades of 3) Vanguard Mid Cap ETF Sharpe Ratio 0.04 otal Expense Ratio* ($10.20 per $1,000 invested) 1.02% experience providing risk analytics, investment 4) $8,000 Vanguard Total Bond Market Annual Portfolio Turnover enchmark Morningstar Target Date 2040 TR 46%ETF consulting, and investment solutions to institutional he fund expense ratio has 10 bps of service fees payable to the plan’s service Inception Date 5) $7,000 iShares TIPS Bond ETF2/1/2011 viders. The total investors expense ratio includes the fund expense ratio and the serves weighted in excess of 500 worldwide. Wilshire 1 erage ETF expense. Fund vs. the S&P 500 $6,000 organizations in 20 countries representing assets FUND FACTS totaling approximately US $7 trillion.* $5,000
und Expense Ratio
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.
VO
HYPOTHETICAL &V
ETF 7) Vanguard FTSE Emerging Markets Fund VWO 12/31/2007 12/ 8) Vanguard REIT ETF
$10,574.57
Trademark Capital 2040 Fund Class R1
0.00%
Growth of $10,000
$10,000
BND TIP
9) SPDR Barclays High Yield Bond ETF
10) SPDR Barclays International Treasury Bond ETF
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 QTD
CUSIP Trademark Capital 2040 Fund Class R1
YTD
41023X674 4.29%
-0.87%
Fund Expense Ratio Target 0.90% 2040Date Trademark R1 -0.44% Morningstar 2040 TR Fund Weighted Average ETF
5.95%
0.12%
1 Year
Beta 10.03%
3 Year
5 Year
9.61%
2.77%
Morningstar Date 2040 12.40% 3.75% R 13.96% Target 2
12/31/2007 ($10.20 per $1,000 invested)
0.00% -30.58% Trademark Capital 2040 Fund Class R1Target Benchmark Morningstar Date 2040 TR $10,000 of $10,000 *The fund expense ratio has 10Growth bps of service fees payable to the plan’s$10,264 service $12,000The total providers. expense ratio includes the2040 fund expense ratio and the weighted 0.00% -37.91% Morningstar Target Date TR average ETF expense.
$11,000
Growth of $10,000
$10,000
$9,755
$7,125
$8,864
Inception Date
$9,797
30.66%
14.29%
-3.51%
$6,057
$7,915
$9,045
$1
BW
-3
$
-1.27%
0.8
0.9
14.59%
12/31/2011 12/31/2012
24.41% 10.53% Annual Portfolio Turnover-4.91%
-3
JN
0.92%
Standard Deviation
Ratio12/31/2010 1.02% 12/31/2008 Sharpe 12/31/2009
VNQ
Date 1.31%
CALENDAR YEAR HYPOTHETICAL & ACTUAL RESULTS ($) 5/31/07 - 12/31/12
Total Expense Ratio*
5
$10,870.89
Morningstar Target Date 2040 TR 1 0.00% FUND DATA CALENDAR YEAR RETURNS (%) - CLASS R1 SHARES $10,000 Growth of $10,000 R1 Alpha Inception to
Share Class
Trustee
VEA
CALENDAR Small CapYEAR ETF 6) Vanguard
-0.44%
11.39% $9,335
0.0
46%
2/1/201
14.35% $10,824.27 1 Fund vs. the S&P 50 $8,728
$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, CALEND back-tested $9,000 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$9,745.25 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 Trademark Capital 2040 Fund C $6,000
Morningstar Target Date 2
000 invested)
1.02%
Sharpe Ratio
0.04
rget Date 2040 TR
Annual Portfolio Turnover
able to the plan’s service se ratio and the weighted
Inception Date
46% 2/1/2011
vs. the S&P 500 Trademark Capital TargetFund Retirement 2040 Fund R1 1
CALENDAR YEAR RETURNS (%) - CLASS R1 SHARES 3 Year
5 Year
10.03%
9.61%
2.77%
Inception to Date 1.31%
13.96%
12.40%
3.75%
0.92%
QTD
YTD
1 Year
Trademark Capital 2040 Fund Class R1
-0.87%
4.29%
Morningstar Target Date 2040 TR
-0.44%
5.95%
Past Performance is no guarantee of future results and the actual performance of the benchmark and the Fund may be lower or higher than the hypothetical past performance shown above. Fund returns are CALENDAR YEAR HYPOTHETICAL & ACTUAL RESULTS ($) 5/31/07 - 12/31/12 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 results. Date prior to actual inception is representative of the manager’s performance of a like strategy. Inception date used in12/31/2009 the hypothetical return is May 31, 2007. 12/31/2012 12/31/2007 12/31/2008 12/31/2010 12/31/2011
Trademark Capital Target Retirement 2040
Trademark Capital 2040 Fund Class R1
Target and Actual Allocation
Growth of $10,000
0.00%
-30.58%
24.41%
10.53%
-4.91%
11.39%
$10,000
$10,264
$7,125
$8,864
$9,797
$9,335
6/30/2013 Target Allocation 0.00% -37.91% 30.66% 14.29%
Target Date 2040 TR The actual allocation of the fund may differMorningstar from the target allocation depending on the current position of the Risk Growth of $10,000 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 Cash/TIPS Overlay provides higher levels of capital protection up to 8% 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
$10,000
$9,755
Real $6,057 Assets 5%
6/30/2013 Actual Allocation 14.35%
-3.51%
$7,915
$9,045
Other Bonds 14%
Cash/TIPS 8%
Int'l Stocks 28%
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.
Q2: June 30, 2013 45%
Growth of $10,000 Class R1 Shares 05/31/2007 - 6/30/2013 TOP 10 HOLDINGS 1) Vanguard S&P 500 ETF
VOO
6) Vanguard Small Cap ETF
2) Vanguard FTSE Developed Markets ETF
VEA
7) Vanguard FTSE Emerging Markets Fund ETF
VWO
8) Vanguard REIT ETF
VNQ
VO
3) Vanguard Mid Cap ETF
BND
4) Vanguard Total Bond Market ETF
TIP
5) iShares TIPS Bond ETF
Trademark Capital Target Retirement Fund
Before 1949
2010
1950-1959
2020
1960-1969
2030
1970-1979
2040
After 1980
2050
Int'l Stocks 28%
Trademark Capital 2040 Fund Class R1
R1 41023X674
Alpha
0.90%
R2
Weighted Average ETF
0.12%
Standard Deviation
Benchmark
($10.20 per $1,000 invested)
1.02%
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.
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
BWX
-1.27%
Beta
Fund Expense Ratio
Total Expense Ratio*
JNK
10) SPDR Barclays International Treasury Bond ETF
FUND DATA1
Share Class CUSIP
VB
9) SPDR Barclays High Yield Bond ETF
FUND FACTS
Year of Birth
Other Bonds 15%
US Stocks 44%
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.
Real Assets 5%
$8,728
0.80 0.94 14.59%
Sharpe Ratio
0.04
Annual Portfolio Turnover
46%
Inception Date
2/1/2011 1
Fund vs. the S&P 500
CALENDAR YEAR
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 2040 Fund Class (including the investments purchased and/or investment strategies devised or undertaken by Trademark)Capital will be profitable.
Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that future Morningstar Date 2040 performance will be profitable, equal the performance results reflected, or equal the corresponding historicalTarget 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 2040 Fund Class
R1
-
TR
-
CALENDAR YEAR HYPOTH
12/ R1
The performance results (5/31/07-12/31/10) reflect hypothetical, back-tested results, that were achieved by means of the retroactive Growth of $10,000 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 of the referenced portfolios, certain aspects of which may have been designed with the benefit of hindsight; (2) back-tested performance Morningstar Target Date 2040 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 have $10,000 experienced investment results during the corresponding time periods that were materially different from thoseGrowth portrayed of 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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