W E D G E W O O D P A R T N E R S , I N C .
Investing in the Best Businesses in America Large Cap Growth
Focused Investing
Note: This presentation should be viewed in conjunction with our ADV Part II which can be obtained by visiting our website and clicking on “ADV Part II.”
1st Quarter 2015
Table of Contents Wedgewood Partners Overview ….………………………………………………………………………………………………………………….………………………...
3
Investment Philosophy ………………………………………………………………………………………………………………………………………….…………………
5
Portfolio Guidelines …………………………………………………………………………………………………………………………………………………………………
12
Portfolio Sector Breakdown ……………………………………………………………………………………………………………………………………..………………
13
Summary: The Structural Advantage of Focus Investing………………………………………………………………………………….……………………........
14
Performance Annual Net Performance …………………………………………………………………………………………………………………………………………….………..
15
Annual Performance vs. Russell 1000 Growth ……………………………………………………………………………………………………………….……….
16
Performance in Up and Down Markets …………………………………………………………………………………………………………………………….……
17
Wedgewood vs. Peers Up Market/Down Market Capture ………………………………………………………………………………………………….…….
18
Wedgewood vs. Peers Historical Performance Record ………………………………………………………………………………………………………..….
20
Performance Statistics ………………………………………………………………………………………………………………………………………………………...
21
Historical Turnover …………………………………………………………………………………………………………………………………................................................
22
Crash and Recovery …………………………………………………………………………………………………………………………………………………………..…
23
Disclosure ………………………………..…………………………………………………………………………………………………………………………………………….
24
Biographies ……………………………………………………………………………………………………………………………………………………………………….……
26
Audit Information ..…………………………………………………………………………………………………………………………………………………………….......
28
Wedgewood Partners, Inc. • St. Louis Based Investment Firm Founded in 1988 • Single Investment Strategy • Large Cap Growth Investors • Focused Investment Style • 18-22 holdings • Multiple Vehicles • Separately Managed Accounts • RiverPark/Wedgewood Fund (Tickers: RWGIX & RWGFX) • Unified Managed Accounts
• Peer Leading 20-Year Performance Record
3
Wedgewood’s Organizational Structure • 20 Employees, Robust Back Office • Key Investment Professionals • Anthony L. Guerrerio, President & CEO • David A. Rolfe, CFA, Chief Investment Officer • Michael X. Quigley, CFA, Senior Portfolio Manager and Senior Research Analyst • Morgan L. Koenig, CFA, Portfolio Manager and Research Analyst • Emily C. D’Agostino, Institutional Client Liaison
• Key Operations Professionals • Sheila R. Kilper, Compliance Officer • Sheila D. Godfrey, Director of Trading/Operations
• Marketing Affiliation with RiverPark Capital
4
We Believe There Is:
A Structural Advantage to Focus Investing • Fewer, But More Impactful Decisions.
• The Best Business Models Are Hard to Break. • The Large Cap Growth Universe Is Very Efficient. “Identifying 50-75 great businesses selling at attractive prices is a loser’s game; but a portfolio of just 20 undervalued companies, now you have a horse race!”
5
Wedgewood’s Investment Process Begins Where Other Managers Finish
Measures of Past Excellence
Large Cap Growth Universe 500-600 Companies
•Return on Equity >25% •Return on Capital >20% •Cash Flow ROI >15% •EPS Growth >15% •Revenue Growth >12%
Research Universe 100 Companies
Wedgewood Universe
40 Companies
Quest for Future Excellence •Barriers to Entry •Threat of Substitutes •Buying Power •Supplier Power •Degree of Internal Rivalry
Portfolio 18-22 Positions
Catalyst Risk Management
Valuation Portfolio Construction 6
Wedgewood’s Investment Process All 3 Legs Are Required to Ensure Stability
Fundamental Research • • •
18-22 Portfolio Holdings
Competitive Advantage Growth Financial Strength
Risk Management • •
Position Size Limits Business Model Overlap
Valuation
7
Investment Process Designed to Generate Above Average Returns While Managing Risk Fundamental Research Step 1: Structured Competitive Advantage •
Profit and Cash Flow Generation
•
Market Share Gains During Turbulent Times
Step 2: Double Digit Growth •
Growth Drives Long-term Price Appreciation
•
Intrinsic Value Grows Every Year
Step 3: Financial Strength •
Supports Reinvestment in Growth Opportunities
•
Minimize the Need for Dilutive Capital
8
Investment Process (continued)
Step 4: Compelling Valuation •
Contrarian/Value-based Opportunistic Investing
•
Impact of Short-term Disappointments Is Minimized
Step 5: Portfolio Construction •
Position Sizes Are Dictated by Valuation And Risk Parameters
•
Limited Business Model Overlap
9
Focused Investing = High Risk Risk Management in a Focused Fund • Proven Business Models • Wedgewood Universe of companies are, by definition, already successful and less risky. • Value Oriented • High P/E valuations are avoided and strict purchase and sell disciplines are followed. • Diversification • We avoid investing in companies in the same industry with high business correlation risk. • Portfolio Management Risk • Only rarely will a specific holding represent more than 10% of the overall portfolio. • Firm Risk • We are an independent firm, and are not susceptible to benchmark and herd mentality risk.
Wedgewood’s Focused Strategy should yield investors at least 1% positions in each of what we believe are the Best Businesses in America. • Example: • A 20% Allocation to Wedgewood • Position sizes in Wedgewood Average 5% • Resulting in 1% positions in what we believe are the Best Businesses in America
10
Wedgewood Adheres to a Strict Sell Discipline 1. Sales are made as intrinsic value appraisals are realized • Valuation models are continuously updated 2. Recognizing Investment Mistakes • Warrant an immediate sale
3. Opportunity for new investment • The superior risk reward profile of a new investment causes the sale of the least attractive portfolio holding 4. Portfolio structure/risk management weighting guidelines • Industry concentration and position sizes often contribute to investment decisions
11
Wedgewood Portfolio Guidelines • Annual Portfolio Turnover: 20-30% • # of Holdings: 18-22 • Cash Position: typically 3-5%, maximum 10% • Maximum Sector Exposure: 35% • Maximum Business Model Exposure: 15% • Maximum Individual Stock Weighting: 10% • Minimum Individual Stock Weighting: 2%
• Minimum Market Capitalization: $5 Billion
Portfolio guidelines are shown as supplemental information and complement the compliance presentation included as an exhibit.
12
Wedgewood Portfolio Sector Breakdown* as of March 31, 2015 Healthcare (12.8%) • Express Scripts
Financials
• Perrigo
7.4%
12.9%
3.0%
• Varian Medical
2.4% 7.7%
8.3%
Technology (29.7%) • Qualcomm
• Apple
Cash
3.0%
Consumer Staples
12.0%
Consumer Discretionary
6.5%
• Cognizant Technology 5.9%
• Visa • Google • EMC Corp.
3.6% 2.9% 2.5%
12.4% 9.5%
Energy
Industrials
Wedgewood Believes That Sectors Include Companies With Very Different Business Models. Portfolio Holdings are shown as supplemental information only and complement the compliance presentation included as an exhibit. Portfolio Holdings should not be deemed as a recommendation to buy or sell these securities. The securities identified and described do not represent all of the securities purchased, sold or recommended for client accounts.
13 *Based on RiverPark/Wedgewood Fund
Summary: The Structural Advantage of Focus Investing • Focused Portfolio • Market leaders with long-term, sustainable competitive advantages. • Only our 20 best ideas make it into the portfolio.
• Patient Investing • We are investors, not traders. • Analyze business with a time horizon measured in years. • Patiently wait for opportunities to purchase great businesses at attractive prices.
• Disciplined Culture • While we invest in growth businesses; Valuation is key. • We are anti-momentum, contrarian growth investors. • Our goal is to generate strong up-market and down-market capture performance. “We believe in both classic growth and value investing tenets.” 14
Wedgewood Partners Inc. Annual Net Performance ending March 31, 2015 18%
16% 14% 12% 10% 8% 6% 4%
2% 0% First Quarter Year to Date WWP Net R 1000 Growth S&P 500
0.57% 3.84% 0.95%
0.57% 3.84% 0.95%
1 Year
3 Year*
5 Year*
7 Year*
10 Year*
20 Year*
Since Inception: 9/30/92*
7.78% 16.09% 12.73%
13.78% 16.34% 16.11%
14.64% 15.63% 14.46%
13.60% 10.68% 8.95%
10.02% 9.36% 8.01%
12.95% 8.75% 9.39%
12.25% 8.76% 9.52%
* Total returns presented for periods less than one year are cumulative, returns for periods greater than one year are annualized. Past performance is not indicative of future results. See Annual Disclosure Presentation included as an exhibit. Returns used in these reports may contain preliminary performance that may differ from actual performance after firm-wide verification is completed through the current period. In addition, returns in the above reports are calculated net-of-fees. Please refer to the Annual Disclosure Presentation included as an exhibit. Portfolio Statistics and Characteristics are shown as supplemental information only and complement the compliance presentation included as an exhibit.
15
Wedgewood Annual Performance vs. Russell 1000 Growth 70%
50%
30%
10%
-10%
-30%
-50%
1993
1994
1995
1996
1997
1998
1999
2000
2001
2004
2005
2006
2010
2011
2012
2013
2014
WWP (Gross)
-5.26%
4.81%
43.90%
24.74%
22.27%
50.97%
58.41%
-9.38%
-6.76%
-19.57% 43.56%
10.69%
6.89%
-1.79%
15.72% -37.77% 61.84%
15.36%
6.40%
22.67%
30.84%
10.04%
WWP (Net)
-6.21%
3.78%
42.59%
23.57%
21.10%
49.60%
56.99% -10.31%
-7.72%
-20.42% 42.25%
9.61%
5.84%
-2.78%
15.04% -38.12% 60.83%
14.50%
5.61%
21.75%
29.86%
9.19%
R 1000 Growth
2.90%
2.66%
37.19%
23.12%
30.49%
38.71%
33.16% -22.42% -20.42% -27.89% 29.75%
6.30%
5.26%
9.08%
11.81% -38.44% 37.21%
16.71%
2.64%
15.26%
33.48%
13.05%
Past performance is not indicative of future results. See Annual Disclosure Presentation included as an exhibit. Returns used in these reports may contain preliminary performance that may differ from actual performance after firm-wide verification is completed through the current period. Please refer to the Annual Disclosure Presentation included as an exhibit. Portfolio Statistics and Characteristics are shown as supplemental information only and complement the compliance presentation included as an exhibit.
2002
2003
2007
2008
2009
16
Wedgewood Performance in Up and Down Markets (10 years ending March 31, 2015) Wedgewood vs. R1000 Growth
Performance Capture
10% Average Quarterly Performance
Up Markets Down Markets
5%
98% 85%
0% -5%
-10%
Correlation Statistics Up Markets 30 Quarters
Down Markets 10 Quarters
WWP Gross
6.1%
-7.2%
R 1000 Growth
6.3%
-8.4%
Past performance is not indicative of future results. See Annual Disclosure Presentation included as an exhibit. Returns used in these reports may contain preliminary performance that may differ from actual performance after firm-wide verification is completed through the current period. In addition, returns in the above reports are calculated net-of-fees. All calculations were conducted by the Advisor and/or RiverPark. Please refer to the included Annual Disclosure Presentation included as an exhibit. Portfolio Statistics and Characteristics are shown as supplemental information only and complement the compliance presentation included as an exhibit.
Alpha Beta R-Squared
0.73% 1.01 0.88
17
Wedgewood vs. Peers Up Market/Down Market Capture (5 Years ending March 31, 2015) Product
Upside Cap Ratio
Downside Cap Ratio
Upside/Downside
ROR
91.57
90.50
1.01
14.64
Brown Advisory Large Cap Growth
98.68
108.98
0.91
14.56
Edgewood Management Large Cap Growth
105.54
97.28
1.08
17.05
Janus Twenty Fund
85.66
118.25
0.72
10.98
Jensen Quality Growth
83.22
89.06
0.93
12.96
Marsico Capital Focus Growth
98.05
112.63
0.87
14.10
Montag & Caldwell Large Cap Growth
78.38
87.34
0.90
12.05
Morgan Stanley Focus Growth
109.53
107.74
1.02
17.24
Polen Capital Large Cap Growth
96.27
98.11
0.98
15.00
Sands Capital Select Growth
116.97
98.27
1.19
19.39
Winslow Capital Large Cap Growth
104.87
120.33
0.87
14.82
Wedgewood Partners, Inc.
Select Peers
PSN database as of 03/31/15. Past performance is not indicative of future results. Returns used in these reports may contain preliminary performance that may differ from actual performance after firm-wide verification is completed through the current period. In addition, returns in the above reports are calculated net-of-fees. Net returns and peer comparisons are presented as supplemental information only and complement the compliance presentation included as an exhibit. The peer companies were chosen by Wedgewood as well-known growth managers and direct competitors.
Up Market / Down Market Capture is relative to the Russell 1000 Growth Index.
18
Wedgewood vs. Peers Up Market/Down Market Capture (10 Years ending March 31, 2015) Product
Upside Cap Ratio
Downside Cap Ratio
Upside/Downside
ROR
96.42
88.98
1.08
10.02
Brown Advisory Large Cap Growth
107.42
96.95
1.11
11.02
Edgewood Management Large Cap Growth
104.97
96.55
1.09
10.64
Janus Twenty Fund
107.11
104.16
1.03
10.09
Jensen Quality Growth
79.68
79.01
1.01
8.13
Marsico Capital Focus Growth
102.28
108.31
0.94
8.74
Montag & Caldwell Large Cap Growth
86.31
84.97
1.02
8.67
Morgan Stanley Focus Growth
123.71
115.88
1.07
11.46
Polen Capital Large Cap Growth
89.78
78.19
1.15
10.04
Sands Capital Select Growth
122.22
112.06
1.09
11.70
Winslow Capital Large Cap Growth
110.25
106.33
1.04
10.37
Wedgewood Partners, Inc.
Select Peers
PSN database as of 03/31/15. Past performance is not indicative of future results. Returns used in these reports may contain preliminary performance that may differ from actual performance after firm-wide verification is completed through the current period. In addition, returns in the above reports are calculated net-of-fees. Net returns and peer comparisons are presented as supplemental information only and complement the compliance presentation included as an exhibit. The peer companies were chosen by Wedgewood as well-known growth managers and direct competitors.
Up Market / Down Market Capture is relative to the Russell 1000 Growth Index.
19
Wedgewood vs. Peers March 31, 1995 to March 31, 2015 QTD
1 Year
3 Years
5 Years
7 Years
10 Years
15 Years
20 Years
Standard & Poor's 500
0.95
12.73
16.11
14.47
8.95
8.01
4.15
9.39
Russell 1000 Growth
3.84
16.09
16.34
15.63
10.68
9.36
1.99
8.75
Wedgewood Partners, Inc.
0.57
7.78
13.78
14.64
13.60
10.02
5.36
12.95
Brown Advisory Large Cap Growth
4.08
11.06
12.44
14.56
12.29
11.02
5.27
N/A
Edgewood Management Large Cap Growth
1.94
16.69
17.51
17.05
9.64
10.64
4.70
10.55
Janus Twenty Fund
0.31
10.93
14.02
10.98
6.42
10.09
1.76
11.15
Jensen Quality Growth
1.64
13.49
15.73
12.96
9.63
8.13
6.63
10.40
Marsico Capital Focus Growth
2.48
15.76
14.88
14.10
9.61
8.74
4.53
N/A
Montag & Caldwell Large Cap Growth
2.40
12.02
13.40
12.05
8.67
8.67
3.90
9.66
Morgan Stanley Focus Growth
6.27
14.18
16.95
17.24
11.55
11.46
N/A
N/A
Polen Capital Large Cap Growth
3.55
20.51
12.76
15.00
12.14
10.04
6.70
12.08
Sands Capital Select Growth
0.53
9.01
15.82
19.39
14.58
11.70
N/A
N/A
Winslow Capital Large Cap Growth
3.14
15.64
14.72
14.82
10.25
10.37
4.44
9.14
PSN database as of 03/31/15. Past performance is not indicative of future results. Returns used in these reports may contain preliminary performance that may differ from actual performance after firm-wide verification is completed through the current period. In addition, returns in the above reports are calculated net-of-fees. Net returns and peer comparisons are presented as supplemental information only and complement the compliance presentation included as an exhibit. The peer companies were chosen by Wedgewood as well-known growth managers and direct competitors.
20
Wedgewood Partners Summary Performance Statistics (PSN Database March 31, 2015) Annualized Rate of Return
Alpha
Batting Average
Upside Capture
Downside Capture
Statistic
13.78%
-1.16%
50%
84.72%
91.79%
Percent Rank
74%
42%
20%
83%
32%
Statistic
14.64%
-0.29%
45%
91.57%
90.50%
Percent Rank
47%
30%
34%
69%
17%
Statistic
21.63%
-0.03%
50%
100.76%
90.50%
Percent Rank
11%
28%
24%
26%
18%
Statistic
13.60%
2.99%
54%
101.34%
81.61%
Percent Rank
1%
2%
14%
24%
8%
Statistic
10.02%
0.69%
48%
96.42%
88.98%
Percent Rank
13%
19%
39%
51%
20%
Statistic
5.36%
3.44%
50%
105.52%
85.92%
Percent Rank
25%
22%
51%
20%
44%
Statistic
12.95%
4.15%
52%
110.35%
85.37%
Percent Rank
1%
12%
25%
14%
38%
Periods ending 03/31/15
3 Year
5 Year
6 Year
7 Year
10 Year
15 Year
20 Year
PSN database as of 03/31/15. Past performance is not indicative of future results. Returns used in these reports may contain preliminary performance that may differ from actual performance after firm-wide verification is completed through the current period. In addition, returns in the above reports are calculated net-of-fees. Net returns are shown as supplemental information only and complement the compliance presentation included as an exhibit.
Performance statistics are calculated relative to the Russell 1000 Growth Index.
Number of Managers
192
183
177
171
145
99
56
21
Portfolio Turnover is Dictated by Market Conditions 2009, an exception to the rule •Average historical portfolio turnover 15-20% •2009 investment performance 61.9% •2009 portfolio turnover 50% •A year of profit taking and positioning the portfolio into our most attractively priced investments
Wedgewood Portfolio March 9, 2009 Apple Berkshire Hathaway CL B Qualcomm Google Monsanto Cognizant Technology Goldman Sachs Express Scripts EMC Expeditors International Gilead Sciences National Oilwell Varco American Express Ecolab Visa Northern Trust Wells Fargo Varian Medical Systems Western Union
January 2010 10.1% 9.3% 8.9% 7.9% 6.4% 6.3% 6.2% 6.1% 4.4% 4.3% 4.2% 4.2% 3.7% 3.6% 3.3% 2.9% 2.9% 2.6% 2.6%
Portfolio Holdings are shown as supplemental information only and complement the compliance presentation included as an exhibit. Portfolio Holdings should not be deemed as a recommendation to buy or sell these securities. The securities listed above include all of the holdings as of the dates noted.
Apple Berkshire Hathaway CL B Gilead Sciences Google Express Scripts Cognizant Technology Monsanto Pepsi Goldman Sachs Qualcomm Visa Wellpoint EMC Ecolab Jacobs Engineering Expeditors International Paychex Varian Medical Systems Western Union Whole Foods Market Lowes Companies
8.0% 7.1% 7.0% 6.3% 6.2% 5.8% 5.8% 5.4% 5.3% 5.2% 5.1% 4.9% 4.0% 3.4% 3.4% 3.3% 3.3% 3.3% 2.7% 2.5% 2.0%
22
Wedgewood Performance October 2007-March 2015 Crash and Recovery Time Period
Annualized Rate of Return
Alpha
Batting Average
Upside Capture
Downside Capture
Bear Market
Statistic
-33.14%
1.56%
56%
81.19%
82.75%
October 31, 2007 to February 28, 2009
Percentile Rank
9%
74%
46%
89%
8%
Bull Market
Statistic
23.03%
1.54%
49%
100.04%
87.51%
February 28, 2009 to March 31, 2015
Percentile Rank
11%
15%
53%
47%
11%
Peak to Peak
Statistic
10.25%
4.35%
51%
99.05%
84.12%
October 31, 2007 to March 31, 2015
Percentile Rank
3%
2%
52%
59%
10%
*S&P
Number of Managers
294
169
152
500 used as the benchmark for the above calculations. Bear Market
Statistic
-33.14%
-0.80%
56%
58.94%
84.73%
October 31, 2007 to February 28, 2009
Percentile Rank
9%
59%
25%
89%
8%
Bull Market
Statistic
23.03%
0.92%
52%
96.39%
86.70%
February 28, 2009 to March 31, 2015
Percentile Rank
11%
14%
23%
60%
12%
Peak to Peak
Statistic
10.25%
2.81%
53%
93.78%
84.84%
October 31, 2007 to March 31, 2015
Percentile Rank
3%
3%
15%
67%
10%
* Russell
294
169
152
1000 Growth used as the benchmark for the above calculations.
PSN database as of 03/31/15. Past performance is not indicative of future results. Returns used in these reports may contain preliminary performance that may differ from actual performance after firm-wide verification is completed through the current period. In addition, returns in the above reports are calculated net-of-fees. Net returns are shown as supplemental information only and complement the compliance presentation included as an exhibit.
23
WEDGEWOOD PARTNERS, INC. EQUITY COMPOSITE ANNUAL DISCLOSURE PRESENTATION PAGE ONE OF TWO Composite Assets
Annual Performance Results Composite
3 Year Standard Deviation
Year End
Total (millions)
UMA Assets (millions)
Firm Assets (millions)
U.S. Dollars (millions)
Number of Accounts
Net
Gross
S&P 500
Russell 1000 Growth
Composite Dispersion
WWP Gross
S&P 500
Russell 1000 Growth
2013
7,100
1,802
5,298
4,753
4,608
29.86%
30.84%
32.38%
33.48%
0.4%
12.33
11.94
12.18
2012
3,030
731
2,299
1,619
1,606
21.75%
22.67%
16.00%
15.26%
0.4%
15.34
15.09
15.66
2011
1,252
236
1,016
775
1,079
5.61%
6.40%
2.11%
2.64%
0.7%
18.14
18.71
17.76
2010
865
185
680
481
764
14.50%
15.36%
15.06%
16.71%
1.0%
22.24
21.85
22.11
2009
546
62
484
305
523
60.83%
61.84%
26.46%
37.21%
2.6%
20.58
19.63
19.73
2008
348
12
336
202
439
-38.12%
-37.77%
-37.00%
-38.44%
1.3%
15.72
15.08
16.40
2007
552
5
547
367
508
15.04%
15.72%
5.49%
11.81%
1.4%
9.57
7.68
8.54
2006
627
7
620
334
570
-2.78%
-1.79%
15.80%
9.08%
1.2%
8.80
6.82
8.31
2005
451
-
451
252
320
5.84%
6.89%
4.91%
5.26%
1.3%
12.08
9.04
9.53
2004
298
-
298
176
190
9.61%
10.69%
10.87%
6.30%
2.5%
19.47
14.86
15.45
2003
226
-
226
123
134
42.25%
43.56%
28.68%
29.75%
5.8%
2002
154
-
154
93
130
-20.42%
-19.57%
-22.10%
-27.89%
2.6%
2001
202
-
202
117
129
-7.72%
-6.76%
-11.88%
-20.42%
2.5%
2000
217
-
217
129
112
-10.31%
-9.38%
-9.11%
-22.42%
5.1%
1999
200
-
200
120
78
56.99%
58.41%
21.04%
33.16%
10.0%
1998
100
-
100
50
51
49.60%
50.97%
28.58%
38.71%
6.4%
1997
58
-
58
21
32
21.10%
22.27%
33.36%
30.49%
5.6%
1996
44
-
44
11
23
23.57%
24.74%
22.96%
23.12%
5.0%
1995
33
-
33
3
9
42.59%
43.90%
37.58%
37.19%
4.9%
1994
24
-
24
<1
Five or fewer
3.78%
4.81%
1.32%
2.66%
N.A.
1993
20
-
20
<1
Five or fewer
-6.21%
-5.26%
10.08%
2.90%
N.A.
1992
16
-
16
<1
Five or fewer
N.A. – Information is not statistically meaningful due to an insufficient number of portfolios in the composite for the entire year. For GIPS Purposes, UMA assets are not part of Firm Assets and are not considered “under management” since Wedgewood has either no or only partial trading discretion and on occasion may be shown as supplemental information. Returns are presented gross and net of fees and include the reinvestment of all income. Gross returns are shown as supplemental information because wrap accounts are calculated gross of all fees and transaction costs. Gross returns of non-wrap accounts are reduced by custodial fees and transaction costs. Net returns are reduced by all fees and transaction costs incurred.
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WEDGEWOOD PARTNERS, INC. EQUITY COMPOSITE ANNUAL DISCLOSURE PRESENTATION PAGE TWO OF TWO Equity Composite contains fully discretionary taxable and non-taxable growth equity accounts. For comparison purposes, the composite is measured against the S&P 500 and Russell 1000 Growth indices. The minimum account size for this composite is $65 thousand. Wedgewood Partners, Inc. is an independent registered investment adviser. The firm maintains a complete list and description of composites, which is available upon request. Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. Past performance is not indicative of future results. The U.S. Dollar is the currency used to express performance. Returns are presented gross and net of fees and include the reinvestment of all income. “Net (Actual)” returns are calculated using actual management fees and are reduced by all fees and transaction costs incurred. “Net (Wrap)” returns are calculated by reducing the gross returns by the highest total wrap fee of 3.0%, applied quarterly. Gross returns are shown as supplemental information because wrap accounts are calculated gross of all fees and transaction costs. Gross returns of non-wrap accounts are reduced by transactions costs.
Some accounts in the composite may pay an all-inclusive wrap fee based on a percentage of assets under management; net returns for these accounts are reduced by all actual fees and transaction costs incurred. Wrap fee schedules are provided by independent wrap sponsors and are available upon request from the respective wrap sponsor. Total wrap fees may range up to 3.0% per year. Actual investment advisory fees incurred by clients may vary. Other than brokerage commissions, this fee includes investment management, portfolio monitoring, consulting services, and in some cases, custodial services. Wrap accounts represent approximately 36% of the composite's assets as of December 31, 2014, 41% of the composite's assets as of December 31, 2013, 29% of the composite's assets as of December 31, 2012, 34% of the composite's assets as of December 31, 2011, 43% of the composite's assets as of December 31, 2010, 31% of the composite's assets as of December 31, 2009, 20% of the composite's assets as of December 31, 2008, 13% of the composite’s assets as of December 31, 2007, and approximately 18% of the composite's assets as of December 31, 2006. The annual composite dispersion presented is an asset-weighted standard deviation calculated for the accounts in the composite the entire year. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. The management fee schedule is as follows: 1.50% under $1 million; 1.25% for $1 million to $2.5 million; 1.00% for $2.5 to $5 million; and 0.75% over $5 million. Actual investment advisory fees incurred by clients may vary. Prior to May 1, 2004, performance reflected total segment plus cash returns using a beginning of period allocation and a fixed total of 5% cash. As of January 1, 2010 no percent of the composite's assets were comprised of carve-out segments. As of December 31, 2009, approximately less than one half percent of the composite's assets were comprised of carve-out segments. As of December 31, 2008, December 31, 2007, and December 31, 2006, approximately 1%, 1%, & 2% of the composite's assets were comprised of carve-out segments. Carve-outs are included in this composite and performance reflects total segment plus cash returns using an actual pro rata allocation. The Equity Composite was created in 2002. Wedgewood Partners, Inc. claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Wedgewood Partners, Inc. has been independently verified for the periods October 1, 1992 through September 30, 2014. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The Equity Composite has been examined for the periods July 1, 2014 through September 30, 2014. The verification and performance examination reports are available upon request.
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Investment Professionals Anthony L. Guerrerio, President and CEO Mr. Guerrerio is the founder of Wedgewood Partners, Inc., and serves as its President and Chief Executive Officer. Mr. Guerrerio has over 25 years of experience in the investment management industry. Mr. Guerrerio is a Trustee of the Opera Theatre of Saint Louis; the Gregorian University Foundation and a Director of Our Ladyâ&#x20AC;&#x2122;s Inn. He received a Bachelor of Science in Engineering from the United States Military Academy at West Point in 1969 and his MBA from Harvard University in 1977.
David A. Rolfe, CFA, Chief Investment Officer Mr. Rolfe joined Wedgewood Partners as our CIO in 1992 bringing with him the philosophy and process which formed our Large Cap Growth product. Prior to joining Wedgewood, he served as Portfolio Manager for four years at Boatmenâ&#x20AC;&#x2122;s Trust Company. He holds a Bachelors degree in Finance from the University of Missouri-St. Louis. He is a member of the CFA Society of St. Louis, where he has served as an Officer and Director.
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Investment Professionals Michael X. Quigley, CFA, Senior Portfolio Manager and Senior Research Analyst Mr. Quigley joined the Investment Management team in 2006. He holds a Bachelors degree in Finance from St. Louis University and is currently a member of the CFA Society of St. Louis.
Morgan L. Koenig, CFA, Portfolio Manager and Research Analyst Ms. Koenig joined the Investment Management team in 2014. She holds a Bachelors degree in Finance from the University of Missouri â&#x20AC;&#x201C; St. Louis and is currently a member of the CFA Society of St. Louis.
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Ashland Ashland Partners & Company LLP is the leading specialty firm providing Global Investment Performance Standards (GIPS速) verification and compliance consultation services to the investment management industry. The GIPS standards are ethical standards for investment performance presentation to ensure fair representation and full disclosure of an investment management firm's performance. Verification is the independent review of an investment management firm's claim of compliance with the GIPS standards. Verification tests: Whether the investment firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis. Whether the firm's processes and procedures are designed to calculate and present performance results in compliance with the GIPS standards. Verification is firm-wide and cannot be carried out for a single composite. A composite specific performance examination can be conducted on a particular composite, but only in conjunction with a firm-wide verification. For more information on the GIPS Standards, please visit www.gipsstandards.org. For more information on Ashland Partners, please enter their website http://www.ashlandpartners.com/.
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