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Glide Path Powered By:
Asset Class: Target-Date Funds
Q1: March 31, 2014
Trademark Capital 2040 Fund ClassTarget R1 Trademark Capital Retirement 2040 Fund R1 Growth of $10,000 Class R1 Shares 05/31/2007 - 3/31/2014 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 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 VOO 1) Vanguard S&P as 500 ETF 6) Vanguard Small Cap VB Capital which serves the sub-advisor to the CIFs.
VEA Index Fund 7) Vanguard REIT VNQ asset mix The Trademark/Wilshire glide path design adjusts the broadly diversified on a quarterly basis, gradually moving toward a more conservative allocation VO 8) Vanguard FTSE Emerging Markets Fund VWO up to and “through” retirement to life expectancy. This approach takes into account investor behavior BND Barclays Highthe Yield Bond 9) SPDR assumptions both before and after target retirement date, which areJNK used to create the slope of the glide path. 10) Market Vectors Emerging Mkts Local Currency EMLC.K
2) Vanguard FTSE Developed Markets
Trademark Capital 3) Vanguard Mid Cap Portfolio Management Team
4) Vanguard Total Bond Market Index Fund Joseph Ezernack, MBA CEO & Chief Investment Officer 5) Cash
Don Beasley Managing Director
Allocation
FUND FACTS
100%
Share Class
R1
41023X674
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* Benchmark Advisor
Trademark Capital
0.90% 0.12%
($10.20 per $1,000 invested)
V
Beta
60%
o
Risk Management Overlay expands in adverse market conditions
l a
2
R
40%
t i l i t y
M
a
n a
0.94 g
contracts under positive market conditions
e
m
Sharpe Ratio
1.02% 0%
Morningstar Target Date 2040 TR
25
Annual Portfolio Turnover 30
35 35
40
45
-1.33% 0.80
Standard DeviationOverlay Risk Management
20%
Risk Management Overlay
Fixed Income
FUND DATA1
Alpha
80%
Investment Approach CUSIP
Equity
e
14.11% n t
0.16
Retirement Age 50
55
60
65
Maturity Age
46%
70
75
80
*The fund expense ratio has 10 bps of service fees payable to the plan’s service Inception Date 2/1/2011 The Capital total expense ratio includes Inc. the fund Trademark Management, is a expense ratio and the weighted 31, providers. 2014 Young Savers Mature Accumulators Near-Retirement Transitioners In-Retirement Harvesters 1 average ETF registered expense. federally investment advisor with a team Fund vs. the S&P 500
mark Capital 2040 Fund and Classcredentialed R1 of experienced professionals. For h of $10,000 R1 Shares 05/31/2007 - 3/31/2014 overClass two decades, Trademark Capital has been
(34 and younger)
(35-49)
(50-65)
85
Age
(65+)
The Risk Management Overlay, can reduce exposure to the “equity” glide path during
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, the pre-determined maximum levels of protection increase up to and putting client’s interest first and delivering VOO uard S&P 500 ETF 6) Vanguard Small Cap VB QTD Y goal-oriented solutions. The Trademark Capital “through” retirement. Q1: March 31, 2014 VEA uard FTSE Developed Markets 7) Vanguard REIT Index Fund 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 VO Fund uard Mid Cap 8) Vanguard FTSE Emerging Markets VWO2040 Fund Class R1 1.50% 1. Trademark Capital Trademark Capital exposure is 15%, which represents the lowest allocation to equities along the glide path. 2040 Fund Class R1 “winning by not losing.”
uard Total Bond Market Index Fund
9) SPDR Barclays High Yield Bond
JNK
Morningstar Target Date 2040 TR Growth of $10,000 - 3/31/2014 EMLC.K Class R1 Shares 05/31/2007
10) Market Vectors Emerging Mkts Local Currency
FUND FACTS Glide Path Consultant R1
Wilshire Associates 41023X674
Alpha
1
FUND DATA $14,000
Beta
Founded in 1972, Wilshire Associates (“Wilshire®”), 0.90% 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* ($10.20 per $1,000 invested) 1.02% experience providing risk analytics, investment Annual Portfolio Turnover rk Morningstar Target Date 2040 TR consulting, and investment solutions to institutional pense ratio has 10 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
1) Vanguard S&P 500 0.80 ETF $12,000
0.94 2)$11,000 Vanguard FTSE Developed Markets
$9,000
5) $7,000 Cash $6,000 $5,000
2/1/2011 1
Fund vs. the S&P 500
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.
CUSIP
6) Vanguard Small Cap
VEA
7) Vanguard REIT Index Fund
12/31/2007 12/3 VNQ
BND
9) SPDR Barclays High Yield Bond
Growth of $10,000
$10,264
Trademark Capital 2040 Fund Class R1
YTD
R1
1.50%
1.50%
Weighted Average ETF
0.12%
-1.33%
3 Year
5 Year
6.12%
12.93%
Inception to Date 2.98%
2
14.25% 8.71% R Morningstar Target 17.20% Date 2040 2.87%
Sharpe Ratio 1.02% 12/31/2007 12/31/2008 12/31/2009 12/31/2010 12/31/2011 12/31/2012 12/31/2013 ($10.20 per $1,000 invested) 11.39%
16.05%
$10,264 $7,125 $9,797 Growth $10,000 *The fund expense ratio has 10of bps of service fees payable to the plan’s service$8,864 Inception Date providers. The total expense the fund0.00% expense ratio -37.91% and the weighted30.66% 14.29% Morningstar Target ratio Dateincludes 2040 TR $14,000 average ETF expense.
$9,335
$10,423
$12,097
-3.51%
14.35%
19.92%
$13,000
Growth of $10,000
$6,057
$7,915
$9,045
$8,728
$6
0.80
14.11%
0.00% -30.58% -4.91% Trademark Capital 2040 Fund Class R1 Annual 10.53% Portfolio Turnover Benchmark Morningstar Target Date 2040 TR24.41%
$9,755
-37
0.94
Standard Deviation
CALENDAR YEAR HYPOTHETICAL & ACTUAL RESULTS ($) 5/31/07 - 12/31/13
Total Expense Ratio*
$7
Alpha
1 Year
41023X67411.95% Beta
1.39% Fund 0.90% 1.39% Fund Expense Ratio Morningstar Target Date 2040 Trademark TR 2040 R1
JNK
EMLC.K
0.00% Morningstar Target Date 2040 TR FUND DATA1 CALENDAR YEAR RETURNS (%) - CLASS R1 SHARES Growth of $10,000 $9,755 QTD
VWO -30
10) Market Vectors Emerging Mkts Local Currency
FUND FACTS
Share Class
Trustee
0.16
4) Vanguard Total Bond Market Index Fund 46% $8,000
CALENDAR YEAR $12,277.71 HYPOTHETICAL &VB
VOO
$12,134.46 VO FTSE Emerging Markets 8) Vanguard Trademark Capital 2040 Fund Class R1 Fund0.00%
14.11%
3)$10,000 Vanguard Mid Cap
1.
TOP 10 HOLDINGS
-1.33%
$13,000
1.39%
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 2014-01 2014-03
ss
BND
0.16
46%
2/1/2011
$12,577.62 Fund vs. the S&P 500 $9,981 $11,969 1
$12,000 Illustrates a $10,000 investment made on 5/31/2007 with no additional deposits. $11,000 prior to February 1, 2011 is back-tested while performance after February 1, 2011 is based on actual results. Hypothetical, Performance back-tested $10,000 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 $11,253.45 that $9,000 the Fund will achieve performance similar to that shown. The hypothetical performance does not reflect brokerage fees but is net of stated Fund expenses. $8,000 Trademark Capital 2040 Fund Cl $7,000 $6,000
Morningstar Target Date 20
00 invested)
rget Date 2040 TR
ble to the plan’s service e ratio and the weighted
Annual Portfolio Turnover
46%
Inception Date
2/1/2011
vs. the S&P 500 Trademark Capital TargetFundRetirement 2040 Fund R1 1
CALENDAR YEAR RETURNS (%) - CLASS R1 SHARES QTD
YTD
1 Year
3 Year
5 Year
Trademark Capital 2040 Fund Class R1
1.50%
1.50%
11.95%
6.12%
12.93%
Inception to Date 2.98%
Morningstar Target Date 2040 TR
1.39%
1.39%
14.25%
8.71%
17.20%
2.87%
Past Performance is no guarantee of future results and the actual performance the benchmark and the Fund may be lower or higher than the hypothetical past performance shown above. Fund returns are CALENDAR YEARofHYPOTHETICAL & ACTUAL RESULTS ($) 5/31/07 - 12/31/13 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. 12/31/2007 12/31/2008 12/31/2010 12/31/2011 Date prior to actual inception is representative of the manager’s performance of a like strategy. Inception date used 12/31/2009 in the hypothetical return is May 31, 2007. 12/31/2012 12/31/2013
Trademark Capital Target Retirement 2040
Trademark Capital 2040 Fund Class R1
0.00%
-30.58%
24.41%
10.53%
-4.91%
11.39%
16.05%
Growth of $10,000
$10,264
$7,125
$8,864
$9,797
$9,335
$10,423
$12,097
$9,755
$6,057
$7,915 Real
$9,045
$8,728
$9,981
$11,969
Target and Actual Allocation
3/31/2014 0.00% Target -37.91% Allocation 30.66% 14.29%
3/31/2014 Actual Allocation 14.35% 19.92%
-3.51%
Morningstar Target Date 2040 TR
The actual allocation of the fund may differ from the target allocation depending on the current position of the RiskGrowth 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 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. A great value - The underlying securities are exchangetraded funds (ETFs) resulting in significant cost savings.
Other Bonds 14%
Other Bonds 17%
Cash & TIPS 8%
Cash & TIPS 8%
Int'l Stocks 28%
US Stocks 44%
45%
Trademark Capital 2040 Fund Class R1 Growth of $10,000 Class R1 Shares 05/31/2007 - 3/31/2014 TOP 10 HOLDINGS 1) Vanguard S&P 500 ETF
VOO
6) Vanguard Small Cap
2) Vanguard FTSE Developed Markets
VEA
7) Vanguard REIT Index Fund
VNQ
8) Vanguard FTSE Emerging Markets Fund
VWO
VO
3) Vanguard Mid Cap
BND
4) Vanguard Total Bond Market Index Fund
9) SPDR Barclays High Yield Bond
Before 1949
2010
1950-1959
2020
Total Expense Ratio*
1960-1969
2030
Benchmark
After 1980
2050
JNK
R1 41023X674
CUSIP
Alpha
R
Weighted Average ETF
0.12%
Standard Deviation
($10.20 per $1,000 invested)
1.02%
*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.
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
0.80
2
0.90%
Morningstar Target Date 2040 TR
-1.33%
Beta
Fund Expense Ratio
IMPORTANT RISK CONSIDERATIONS
EMLC.K
FUND DATA1
Share Class
Trademark Capital Target Retirement Fund
VB
10) Market Vectors Emerging Mkts Local Currency
5) Cash
Year of Birth
2040
Int'l Stocks 26%
Q1: March US 31,Stocks 2014
FUND FACTS
1970-1979
Real Assets 5%
Assets 5%
0.94 14.11%
Sharpe Ratio
0.16
Annual Portfolio Turnover
46%
Inception Date
2/1/2011 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 2040 Fund Class (including the investments purchased and/or investment strategies devised or undertaken by Trademark) will be profitable.
Q R1
1
Past performance may not be indicative of future results. Therefore, no current or prospective client shouldTarget assume Date that future Morningstar 2040 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 Trademark Capital 2040 Fund Class R1 Funds.
1
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 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 Targetperformance Date 2040 TR referenced portfolios, certain aspects of which may have been designed with the benefit ofMorningstar hindsight; (2) back-tested 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
Glide Path Powered By:
12/3
0
$1
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$9