Navellier International Equity Portfolio Process and results for the quarter ending September 30, 2016

Transcription

1 Navellier International Equity Portfolio Process and results for the quarter ending September 30, 2016 Please see important disclosures at the end of the presentation NCD

2 The Navellier Difference The Firm Institutional manager successfully managing international equities since 1999 Privately owned The Process Proprietary, quantitative research that identifies stocks with strong profitability and growth potential Dynamic fundamental stock selection process keeps portfolios on track for superior, sustainable growth Portfolios managed with the objective to outperform the index rather than imitate it Disciplined sell strategy triggers sale of stocks that fail any step of the process Portfolio Management Portfolio managed by same lead portfolio manager since inception Committed & experienced investment professionals trained in cutting edge, statistically based investment strategies 2

3 International Investment Strategies Inception Dates International Equity (1999) Emerging Markets (2006) International Select (2007) 3

4 Focused Distribution & Quality Products As of September 30, 2016 Institutional $455 million $455 million $760 million $1.38 Retail billion $1.45 billion Domestic Equity Large Cap Growth Small to Mid Cap Growth Power Dividend International Equity International Equity International Select Emerging Markets 4

5 Experienced International Equity Team Jim O Leary, CFA Sr. Portfolio Manager Michael J. Borgen Sr. Portfolio Manager Investment Professional Functional Role Industry Experience Firm Tenure Jim O Leary, CFA Lead PM Michael Borgen Analyst Pete Koelewyn Trader

6 Weekly Stock Selection Process Initial Universe 900 Stocks Foreign listed equities & ADRs Globally listed international stocks Liquidity in listed and home markets Reward/Risk Analysis 150 Stocks High alpha Low standard deviation Superior reward/risk Quantitative Fundamental Factor Analysis 100 Stocks Test fundamental variables Identify what is driving stock prices Create optimal mix Portfolio Construction Stocks Regional over/under weighting for risk mitigation Identify negative correlation for diversification 6 The number of securities in the initial universe varies depending on market conditions.

7 Step 1 Reward/Risk Analysis Key Statistics Alpha: excess return independent of the market Volatility: measure of a stocks standard deviation (risk) Reward/Risk Ratio: alpha/volatility, punishes even top performing stocks that take on excess risk Approximately 150 stocks pass step one 7

8 Reward/Risk Ratio Analysis Supplemental Information International Equity Weekly Universe of 1,000 Stocks Broken into 10 Groups Example One Year International Equity Quantitative (Reward/Risk) Test Three Year International Equity Quantitative (Reward/Risk) Test One Year Three Year Total Return (Gross) 5% 4% 3% 2% 1% 0% 1% 2% 3% 4% % 70% 60% 50% 40% 30% 20% 10% 0% 10% Groups Groups 8 Please read important disclosures at the end of the presentation. Graphs are for illustrative and discussion purposes only and may or may not reflect actual results of the application of the Reward/Risk variable at the time of publication of this presentation.

9 Step 2 Quantitative Fundamental Factor Analysis Identify underlying fundamental characteristics that explain performance Back-test performance of historical and forward looking fundamental variables Review and weight fundamentals over one and three years Approximately 100 stocks pass step two 9

10 Fundamental Variables Tested Cash Flow Variables Cash Flow Growth Free cash flow per share Free cash flow/market value Free cash flow/current liabilities Working capital growth Internal reinvestment rate Capital expenditure Sales & Earnings Variables Net earnings revisions Forecasted earnings Growth Standardized unexpected earnings (SUE) Long term growth/p/e Earnings momentum Earnings growth Sales growth Earnings growth/ltg Operating margins Operating earnings growth Historical earnings growth Price to Sales Profitability Variables Revenue growth ROE Equity turnover Net profit margin Asset turnover Present value growth opportunities (PVGO) Valuation Variables P/E growth ratio (PEG) EBITDA/enterprise value Price/Net working capital Liquidation value/price Book/price Earnings to price Market Performance Variables Reward/Risk Price/50 trading day average price Sharpe ratio Information ratio 10 Current fundamental mix criteria as of August 31, Fundamental variable results are calculated using FactSet.

11 Current Fundamental Mix International Equity Fundamental Factor Model (August 31, 2016) Return on Equity 14% Sales Growth 19% Forecasted Earnings Growth 14% Earnings Momentum 19% Price to Sales 17% Cash Flow Growth 17% 11 For Subject Institutional to change Presentation quarterly. For Use Institutional Only Presentation Use Only

12 Fundamental Factor Models International Equity 2001 through Sales Growth 19% Sales Growth 19% Cash Flow to Receivables 25% Cash Flow to Receivables 25% Free Cash Flow per Share 28% Free Cash Flow per Share 28% Long Term Growth / P/E 18% EBITDA/Enterprise Value 20% Earnings Momentum 19% Earnings Momentum 19% Standardized Standardized Unexpected Unexpected Earnings SUE 20% Earnings SUE 20% Net Earnings Revisions 20% Net Earnings Revisions 20% P/E Growth Ratio (PEG) 18% Free Cash Flow per Share 17% Cash Flow Growth 17% Cash Flow Growth 17% Forecasted Earnings Growth 20% Net Earnings Revisions 15% Long Term Growth / P/E 18% Long Term Growth / P/E 18% Operating ROE 18% Operating ROE 17% Price to Sales 17% Price to Sales 17% P/E Growth Ratio (PEG) 20% Forecasted Earnings Growth 20% P/E Growth Ratio (PEG) 18% P/E Growth Ratio (PEG) 18% Free Cash Flow per Share 17% P/E Growth Ratio (PEG) 16% Forecasted Earnings Growth 14% Forecasted Earnings Growth 14% Net Earnings Revisions 15% P/E Growth Ratio (PEG) 20% Revenue Growth 16% Revenue Growth 16% Revenue Growth 16% Earnings Momentum 11% Return on Equity 14% Return on Equity 14% Net Earnings Revisions 14% Revenue Growth 10% Net Earnings Revisions 9% Return on Equity 33% Free Cash Flow to Market Value 31% Price to Book 21% Price to Book 21% Earnings Growth 25% Earnings Forecast 33% Earnings Price Lead 33% Long Term Growth / P/E 35% P/E Growth Ratio (PEG) 27% Earnings Growth 21% Earnings Growth 20% Earnings Growth 20% Net Earnings Revisions 23% Earnings Growth 24% Sales/Enterprise Value 32% FY2 STD / Price 35% Earnings Momentum 13% Operating ROE 24% Free Cash Flow to Market Value 19% Free Cash Flow to Market Value 19% Price to Book 21% Valuation 18% Free Cash Flow per Share 24% Earnings Change 15% Net Earnings Revisions 10% Net Earnings Revision 15% Operating ROE 15% Operating ROE 15% Earnings Forecast 16% Profitability 14% Earnings Momentum 11% Cash Flow / PS Growth 15% Revenue Growth 10% Price to Book 9% Net Earnings Revisions 15% Net Earnings Revisions 15% Operating ROE 15% Cash Flow 11% - - Free Cash Flow to Market Value 7% - Earnings Forecast 10% Earnings Forecast 10%

13 Quantitative Fundamental Factor Analysis Supplemental Information International Equity Weekly Universe of 1,000 Stocks Broken into 10 Groups Example One Year Combined International Equity Fundamental Model Universe Breakdown Three Year Combined International Equity Fundamental Model Universe Breakdown One Year Three Year 15% 10% 60% 50% Total Return (Gross) 5% 0% 5% 10% 15% 20% % 30% 20% 10% 0% Groups Groups 13 Please read important disclosures at the end of the presentation. Graphs are for illustrative and discussion purposes only and may or may not reflect actual results of the application of the fundamental factor variable at the time of publication of this presentation.

14 Step 3 Portfolio Construction Regional Allocation Risk Mitigation Rank countries by reward/risk ratio (R/R) and direction of short-term interest rates Over weight countries with high R/R ratios; equal weight countries with average R/R ratios; and under weight countries with poor R/R ratios Country rankings reviewed quarterly Diversification program reduces risk, enhances return potential Maximum 5% target for any given stock Maximum 10% in emerging markets, at cost Resulting in trailing 5-year annual turnover of 19% 14

15 Disciplined Country Weighting System Risk Mitigation Example Supplemental Information 6/30/2016 9/30/2016 Category Country Average Median Weight Weight Over/under Action Weight Indonesia 24% 30% 0.00% 0.95% Over increased 1.53% Korea 29% 26% 0.00% 1.23% Over NC 1.05% Brazil 32% 23% 0.00% 1.13% Over NC 1.13% South Africa 35% 35% 0.00% 1.20% Over NC 1.29% Top Ranked New Zealand 35% 30% 0.12% 0.00% Under NC 0.00% Countries China 40% 40% 0.00% 0.00% Equal increased 1.03% Canada 42% 40% 0.00% 2.16% Over increased 3.22% Russia 43% 42% 0.00% 0.00% Equal NC 0.00% Australia 44% 40% 7.34% 1.25% Under Increased 2.32% Norway 44% 44% 0.79% 1.00% Over NC 0.99% Germany 46% 46% 9.38% 9.23% Under increased 10.14% Singapore 45% 44% 1.43% 2.74% Over NC 2.95% Chile 45% 32% 0.00% 0.00% Equal NC 0.00% Switzerland 45% 46% 9.10% 8.47% Under NC 8.43% Tawian 45% 33% 0.00% 2.38% Over NC 2.67% 28.16% 31.74% 36.76% India 49% 49% 0.00% 1.63% Over NC 1.36% Japan 50% 49% 20.97% 16.46% Under Increased 17.11% Mexico 51% 52% 0.00% 0.00% Equal NC 0.00% Netherlands 55% 55% 2.68% 2.25% Under Reduced 1.15% Middle Ranked Hong Kong 55% 55% 2.80% 1.60% under Increased 3.18% Countries France 55% 61% 9.95% 8.62% Under NC 8.03% Israel 56% 56% 0.48% 1.23% Over NC 1.15% Bermuda 57% 60% 0.00% 1.59% Over NC 1.68% Sweden 58% 63% 3.24% 2.17% Under NC 2.08% Ireland 58% 59% 0.31% 3.57% Over NC 3.43% United Kingdom 59% 59% 21.83% 18.56% Under Reduced 16.47% 62.26% 57.68% 55.63% Denmark 65% 72% 1.26% 2.39% Over Reduced 0.81% Belgium 65% 65% 1.16% 3.55% Over NC 3.51% Finland 72% 72% 0.87% 1.28% Over NC 1.18% Philippines 65% 65% 0.00% 0.00% Equal NC 0.00% Bottom Ranked Portugal 68% 66% 0.18% 0.00% Under NC 0.00% Countries Spain 77% 87% 3.44% 2.42% Under NC 2.19% Turkey 78% 78% 0.00% 0.00% Equal NC 0.00% Austria 80% 82% 0.30% 0.00% Under NC 0.00% Italy 88% 91% 2.36% 0.95% Under Reduced 0.00% 9.57% 10.59% 7.70% 15 CONCLUSION: ~Exposure to the highly-rated countries was increased. ~Exposure to the MIddle-rated countries was decreased. ~Exposure to the Bottom-rated countries was decreased Please read important disclosures at the end of the presentation.

16 Risk Management We take several steps to lower the risk of our portfolios Monitor volatility (i.e. standard deviation) of individual stocks Diversification punishes volatile stocks and combines stocks to build a less volatile portfolio Focus on fundamentally superior stocks relative to market benchmarks International diversification with exposure to all major markets Specific band variance versus the benchmark for each country Country weighting system designed for risk mitigation Stringent sell discipline: sell stocks with deteriorating quantitative or fundamental criteria 16

17 Sell Discipline Sell if a stock drops out of the top tier of reward/risk ratio rankings Sell if a stock deteriorates in Navellier s multi-factor fundamental model Sell or trim stocks after quarterly, country reward/risk rebalancing Sell or trim if a stock has excess risk Sell good stocks to buy better stocks 17

18 3 Year Return/Risk Supplemental Information Ending September 30, 2016 Annualized Summary Statistics Trailing 3 years Navellier Int l Equity-Institutional (gross) MSCI EAFE Alpha 2.43% 0.00% Beta Standard Deviation 11.38% 12.40% R-Squared 88.97% % Sharpe Ratio Down Capture 79.93% % Sortino Ratio* *Sortino Ratio: differentiates between good and bad volatility in the Sharpe ratio. This differentiation of upwards and downwards volatility allows the calculation to provide a risk-adjusted measure of a security or fund's performance without penalizing it for upward price changes. 18 Source: Navellier, FactSet. Please read important disclosures at the end of the presentation. Graphs are for discussion purposes only. Performance results presented herein do not necessarily indicate future performance. Investment in equity For strategies Institutional involves Presentation substantial Use risk Only and has the potential for partial or complete loss of funds invested. Results presented include reinvestment of all dividends and other earnings.

19 Since Inception Return/Risk Supplemental Information Return (%) Std. Dev. (%) Beta vs Market (%) Alpha vs Market (%) R Squared vs. Market (%) Sharpe Ratio Observs. Navellier International Equity Institutional (Gross) Navellier International Equity Institutional (Net) MSCI EAFE Gross Return Source: Navellier, FactSet. Please read important disclosures at the end of the presentation. Graphs are for discussion purposes only. Performance results presented herein do not necessarily indicate future performance. Investment in For equity Institutional strategies Presentation involves substantial Use Only risk and has the potential for partial or complete loss of funds invested. Results presented include reinvestment of all dividends and other earnings.

20 Upside/Downside Supplemental Information # of Months Average Return (%) vs. Market Month (%) 1 Year(%) Market Benchmark (%) Navellier International Equity Institutional (Gross) Navellier International Equity Institutional (Net) Up Down Up Market Down Market Best Worst Best Worst Up Capture Down Capture R Squared MSCI EAFE Gross Return Source: Navellier, FactSet. Please read important disclosures at the end of the presentation. Graphs are for discussion purposes only. Performance results presented herein do not necessarily indicate future performance. Investment in For equity Institutional strategies Presentation involves substantial Use Only risk and has the potential for partial or complete loss of funds invested. Results presented include reinvestment of all dividends and other earnings.

21 Annualized Performance Supplemental Information 3Q YTD 1 Year 3 Year 5 Year 7 Year 10 Year Since Inception Navellier International Equity Institutional (Gross) Navellier International Equity Institutional (Net) MSCI EAFE Growth Gross Return 6.22% 4.50% 8.33% 3.27% 10.36% 7.05% 4.63% 4.61% 6.13% 4.09% 7.81% 2.77% 9.78% 6.41% 3.94% 3.95% 6.50% 2.20% 7.06% 0.93% 7.88% 4.71% 2.30% 2.77% 21 Source: Navellier, FactSet. Please read important disclosures at the end of the presentation. Graphs are for discussion purposes only. Performance results presented herein do not necessarily indicate future performance. Investment in For equity Institutional strategies Presentation involves substantial Use Only risk and has the potential for partial or complete loss of funds invested. Results presented include reinvestment of all dividends and other earnings.

22 Calendar Year Returns Supplemental Information Calendar Year Return YTD Navellier International Equity Institutional (Gross) Navellier International Equity Institutional (Net) MSCI EAFE Gross Return 4.50% 1.67% 4.30% 27.64% 17.57% 7.90% 10.41% 26.84% 42.53% 24.15% 26.59% 17.30% 14.56% 36.17% 9.02% 11.32% 18.98% 4.09% 1.37% 4.88% 26.76% 16.96% 8.38% 9.41% 25.61% 43.05% 23.38% 25.86% 16.57% 13.71% 34.44% 9.47% 11.33% 19.25% 2.20% 0.39% 4.48% 23.29% 17.90% 11.73% 8.21% 32.46% 43.06% 11.63% 26.86% 14.02% 20.70% 39.17% 15.66% 21.21% 13.96% 22 Source: Navellier, FactSet. Please read important disclosures at the end of the presentation. Graphs are for discussion purposes only. Performance results presented herein do not indicate future performance. Investment in equity strategies For involves Institutional substantial Presentation risk and has Use the Only potential for partial or complete loss of funds invested. Results presented include reinvestment of all dividends and other earnings.

23 Portfolio Fundamentals Designed for risk mitigation Supplemental Information International Equity Portfolio as of September 30, 2016 Net Income Reinvestment Current Forward Market Forward FY2 Earn Actual Annual Earnings Surprise Company Abb Ltd Margin 4.92 Rate 9.52 ROE P/E P/E FY Value $MM $47,879 % Chg Earn % Chg % Latest Qtr 6.65 Accenture Plc $75, Adidas Ag #N/A #N/A #N/A #N/A $36, #N/A Aia Group Ltd #N/A #N/A #N/A #N/A $80, #N/A #N/A Amcor Ltd $13, #N/A Amdocs $8, Anheuser Busch Inbev $211, Arch Capital Group Ltd $9, Asahi Kasei Corp #N/A #N/A #N/A #N/A $11, #N/A #N/A Asml Holding Nv $46, Astrazeneca Plc $83, Bayer Ag $83, Bce Inc $40, Bnp Paribas $64, Broadcom Ltd #N/A $68, Bt Group Plc $50, Bunzl Plc $9, #N/A Cellectis Sa #N/A #N/A $ #N/A #N/A Cgi Group Inc Cl A $14, Check Point Software Techn $13, Chubb Ltd $58, Ck Hutchison Holdings Ltd $49, #N/A Continental Ag $42, Dassault Systems Sa $22, Diageo Plc $72, #N/A Ericsson $23, Fuji Heavy Industries Ltd $28, Source: FactSet & IBES databases. The portfolio fundamentals reflect security holdings as of the close of business on September 30, Your portfolio may or may not include any or all of these securities. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of funds invested. For Please Institutional read important Presentation disclosures Use Only at the end of the presentation. continued on following page

24 Portfolio Fundamentals Designed for risk mitigation Supplemental Information International Equity Portfolio as of September 30, 2016 cont d Net Income Reinvestment Current Forward Market Forward FY2 Earn Actual Annual Earnings Surprise Company Grifols Sa Margin Rate 9.34 ROE P/E P/E FY Value $MM $10,912 % Chg Earn % Chg 1.81 % Latest Qtr 3.83 Honda Motor Co Ltd $52, Iberdrola Sa #N/A #N/A #N/A #N/A #N/A $43,270 #N/A #N/A #N/A Infineon Technologies Ag $20, Infosys Ltd $36, Intercontinental Hotels Grp #N/A #N/A $9, Kbc Group Nv #N/A #N/A #N/A #N/A #N/A $24,348 #N/A #N/A #N/A Kddi Corp #N/A #N/A #N/A #N/A $82, #N/A Kepco Korea Elec Power Corp $31, Kubota Corp $18, Lonza Group Ag #N/A #N/A #N/A #N/A #N/A $10,132 #N/A #N/A #N/A Marine Harvest Asa #N/A $8,066 #N/A #N/A Medtronic Plc $119, Merck Kgaa #N/A #N/A #N/A #N/A $13, #N/A 3.82 Mettler Toledo Intl Inc $11, Naspers Ltd $75, #N/A Nestle Sa/Ag $239, #N/A Nidec Corp $27, Nippon Telegraph & Telephone $93, Nokia Corp #N/A $33, Novartis Ag $188, Novo Nordisk A/S $105, Randgold Resources Ltd $9, Relx Plc $39, #N/A Rio Tinto Group (Gbr) $60, #N/A #N/A Royal Dutch Shell Plc #N/A $201, Sanofi $98, Source: FactSet & IBES databases. The portfolio fundamentals reflect security holdings as of the close of business on September 30, Your portfolio may or may not include any or all of these securities. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of funds invested. For Please Institutional read important Presentation disclosures Use Only at the end of the presentation. continued on following page

25 Portfolio Fundamentals Designed for risk mitigation Supplemental Information International Equity Portfolio as of September 30, 2016 cont d Forward Actual Earnings Net Income Reinvestment Current Forward Market FY2 Earn Annual Surprise Company Sap Se Margin Rate 9.52 ROE P/E P/E FY Value $MM $109,527 % Chg Earn % Chg % Latest Qtr 6.99 Shin Etsu Chemical Co Ltd #N/A #N/A #N/A #N/A #N/A $29,878 #N/A #N/A #N/A Siemens Ag $94, Softbank Group Corp #N/A #N/A #N/A #N/A #N/A $77,330 #N/A #N/A #N/A Sony Corp $41, #N/A South32 Ltd #N/A #N/A #N/A #N/A $9, #N/A #N/A Sumitomo Mitsui Financial Gr $46, Swedbank Ab $26, Taiwan Semiconductor Mfg Co $158, Telekomunikasi Indonesia $32, Toronto Dominion Bank $82, Total Sa $113, Ultrapar Participacoes Sa $11, Valeant Pharmaceuticals Intl #N/A 3.18 $8, #N/A Valeo Sa $13, Veolia Environnement $12, Vodafone Group Plc #N/A $77, #N/A #N/A International Average $54, Growth Median $40, Source: FactSet & IBES databases. The portfolio fundamentals reflect security holdings as of the close of business on September 30, Your portfolio may or may not include any or all of these securities. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of funds invested. Please read For important Institutional disclosures Presentation the end Use of Only the presentation.

26 Portfolio Highlights Supplemental Information International Equity Portfolio as of September 30, 2016 International Equity Portfolio MSCI EAFE Index Market Cap (average) $53.8B $13.3B Market Cap (median) $40.1B $6.5B Return on Equity (weighted average) 17.3% 8.4 Batting Average (5-year) 55 N/A Turnover (trailing 3--year) 20% N/A Number of Stock Holdings Number of Countries Source: FactSet and Henry James International Management, Inc. Investment in equity strategies involves substantial risk and For has Institutional the potential Presentation for partial or Use complete Only loss of funds invested. Please read important disclosures at the end of the presentation.

27 Portfolio Characteristics Supplemental Information International Equity Portfolio as of September 30, 2016 Top Ten Securities Country % Amdocs Limited United Kingdom 2.9% Broadcom Limited Singapore 2.8% Nippon Japan 2.7% Anheuser-Busch InBev SA/NV Belgium 2.6% Taiwan Semiconductor Taiwan 2.5% KDDI Corporation Japan 2.4% RELX PLC United Kingdom 2.3% Nidec Corporation Japan 2.3% Mettler-Toledo International Inc. Switzerland 2.1% Infineon Technologies AG Germany 2.1% Top Ten Sectors % Health Technology 13.3% Technology Services 12.8% Electronic Technology 10.9% Producer Manufacturing 10.6% Communications 9.4% Finance 8.8% Consumer Non-Durables 6.3% Process Industries 4.5% Consumer Durables 4.5% Energy Minerals 4.1% 27 The Top Ten Stock Positions and Sectors reflect security holdings as of the close of business on September 30, Your portfolio may or may not include any or all of these securities. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. The holdings identified do not represent all of the securities purchased, sold, or recommended for advisory clients and it should not be assumed that investments in securities identified were or will be profitable. Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of For funds Institutional invested. Please Presentation read important Use Onlydisclosures at the end of the presentation.

28 Top Country Weightings Supplemental Information International Equity Portfolio as of September 30, % 16% Navellier Int l Equity 14% Japan 17.1% 12% 10% United Kingdom 16.5% Germany 10.1% Switzerland 8.4% 8% France 8.0% 6% Belgium 3.5% 4% 2% Ireland 3.4% Hong Kong 3.2% Canada 3.1% 0% Japan United Kingdom Germany Switzerland France Belgium Ireland Hong Kong Canada Singapore Singapore 3.0% 28 Source: FactSet. The Top Country Weightings shows the top ten countries represented in the portfolio as of the close of business on September 30, Your portfolio may or may not reflect these exact weights. Please read important disclosures For at the Institutional end of the Presentation presentation. Use For Only Institutional Presentation Use Only

29 Summary Navellier s dynamic, disciplined, quantitative approach is designed to build portfolios that significantly outperform the market over the long-term, while maintaining style consistency. International Growth Portfolio uses reward/risk to overweight strong countries and underweight weaker countries. No end point sensitivity Country weighting system, designed for risk mitigation Implementation of the investment process has resulted in long-term outperformance and superior risk adjusted relative returns. Investment process takes the emotion out of buying and selling stocks. 29

30 Financial Terms Definitions Alpha: Risk adjusted return using beta as the risk measure. The higher the alpha the better as it describes the level of risk adjusted performance in excess of the benchmark (i.e., S&P 500, NASDAQ Composite, etc.). Batting Average: Measures an investment manager s ability to meet or beat an index. Beta: Measure of systematic risk, or the sensitivity of a manager or stock to movements in the benchmark. Beta attempts to measure the movement of an asset relative to the broad market. A beta of 1 implies that you can expect the movement of a stock or portfolio to match that of the benchmark used to measure beta. In other words, if a stock or portfolio had a beta of 1.10, it can be said that the asset has historically moved higher and lower than the market by 10%. Similarly, if an asset had a beta of 0.80 then it has historically moved 20% less than the market both up and down. Down Capture: A statistical measure of a portfolio s overall performance in down markets. The down market capture ratio is used to evaluate how well or poorly a portfolio performed relative to an index during periods when that index has dropped. R Squared: A measurement of how closely a portfolio's performance correlates with the performance of a benchmark index. Sharpe Ratio: A risk adjusted measure developed by William F. Sharpe, calculated using standard deviation and excess return to determine reward per unit of risk. The higher the Sharpe ratio, the better the portfolio s historical risk adjusted performance. Sortino Ratio: Differentiates between good and bad volatility in the Sharpe ratio. This differentiation of upwards and downwards volatility allows the calculation to provide a risk adjusted measure of a security or fund's performance without penalizing it for upward price changes. Standard Deviation: Measures the volatility of returns for an investment versus its average return for a given period of time. 30

31 Disclosures Although information in this presentation has been obtained from and is based upon sources that Navellier believes to be reliable, Navellier does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute Navellier's judgment as of the date the presentation was created and are subject to change without notice. This presentation is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a security. This presentation does not constitute an offer of securities. Any decision to purchase securities mentioned in this research must take into account existing public information on such security or any registered prospectus. As a matter of normal and important disclosures to you, as a potential investor, please consider the following: The performances presented in the accompanying Reward/Risk Ratio Analysis and Fundamental Factor charts and graphs are not based on any actual securities trading, portfolio, or accounts, and should be considered mere "paper" or proforma performance results based on Navellier s research. The model portfolios, charts and other information presented do not represent actual funded trades and are not actual funded portfolios. There are material differences between Navellier Investment Products' portfolios and the model portfolios, research, and performance figures presented here. The model portfolios and the research results (1) may contain stocks that are illiquid and difficult to trade; (2) may contain stock holdings materially different from actual funded Navellier Investment Product portfolios; (3) do not include trading costs, commissions, or management fees; and, (4) may not reflect prices obtained in an actual funded Navellier Investment Product portfolio. In most cases, Navellier's Investment Products have materially lower performance results than the performances of the model portfolios presented. As a matter of important disclosure regarding the Reward/Risk Ratio Analysis and Fundamental Factor charts and graphs, the following factors must be considered when evaluating the performance figures presented: 1. Historical or illustrated results presented herein do not necessarily indicate future performance; Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. 2. The results presented were generated during a period of mixed (improving and deteriorating) economic conditions in the U.S. and positive market performance. There can be no assurance that these favorable market conditions will occur again in the future. Navellier has no data regarding actual performance in different economic or market cycles or conditions. 3. The results portrayed reflect the reinvestment of dividends and other income. 4. The results portrayed do not include any investment advisory fees, administrative fees, or transaction expenses, or other expenses that a client would have paid or actually paid. 5. LIMITATIONS INHERENT IN MODEL RESULTS: The performance results presented are from a model portfolio, not an actually funded portfolio, and may not reflect the impact that material economic and market factors might have had on the adviser s decision making if the adviser were actually managing clients money, and thus present returns which are greater than what a potential investor would have experienced for the time period. The results are presented for informational purposes only. No real money has been invested in this model portfolio. The model performance results should be considered mere 'paper' or pro forma performance results. The model results do not represent actual funded trades and may not reflect actual prices paid or received for actual funded trades. 6. The model results may or may not relate, or only partially relate, to the type of advisory services currently offered by Navellier & Associates, Inc. 7. In most cases, the adviser s clients had investment results materially lower than the results portrayed in the model. FactSet Disclosure Navellier does not calculate the statistical information included in the Statistical reports. The calculations are provided by FactSet, a company not related to Navellier. Although information contained in the Manager Statistical reports has been obtained from FactSet and is based on sources Navellier believes to be reliable, Navellier does not guarantee its accuracy, and it may be incomplete or condensed. The Manager Statistical reports and the related FactSet sourced information are provided on an as is basis. The user assumes the entire risk of any use made of this information. Investors should consider the Manager Statistical reports as only a single factor in making their investment decision. The Manager Statistical reports are for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of a security. FactSet sourced information is the exclusive property of FactSet. Without prior written permission of FactSet, this information may not be reproduced, redisseminated or used to create any financial products. 31

32 1. Compliance Statement Navellier & Associates, Inc. claims compliance with the Global Investment Performance Standards (GIPS ) and has prepared and presented this report in compliance with GIPS standards. Navellier & Associates, Inc. has been independently verified for the periods January 1, 1995 through December 31, 2014 by Ashland Partners & Company LLP. 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 Navellier International Equity Institutional Composite has been examined for the periods January 1, 2000 through December 31, The verification and performance examination reports are available upon request. 2. Definition of Firm Navellier & Associates, Inc. is a registered investment adviser established in Registration does not imply a certain level of skill or training. Navellier & Associates, Inc. manages a variety of equity assets for primarily U.S. and Canadian institutional and retail clients. The firm s list of composite descriptions as well as information regarding the firm s policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. 3. Composite Description The Navellier International Equity Institutional Composite includes all discretionary International Equity accounts managed with similar objectives for a full month, including those accounts no longer with the firm. The strategy is designed for aggressive investors and to take advantage of the global economy while achieving long term capital appreciation and seeks to achieve the highest possible returns while controlling risk. The strategy invests in international markets through the use of sponsored and unsponsored foreign listed securities and American Depositary Receipts (ADRs) with market capitalizations greater than $1 billion. At any given time, the strategy may hold up to 100% in ADRs. Typically, the strategy invests in approximately stocks that pass Navellier's stringent quantitative and fundamental criteria. This strategy is sub advised by James O Leary of Henry James International Management for the following period: January 2014 to present. Performance figures that are net of fees take into account advisory fees, foreign withholding tax and any brokerage fees or commissions that have been deducted from the account. Gross of fees returns reflect the deduction of transaction costs/commissions, but do not reflect the deduction of any investment management fees. Performance results are total returns and include the reinvestment of all income, including dividends. Returns are generally presented net of foreign withholding taxes; however, returns for some accounts are presented gross of foreign taxes depending on the treatment by their custodian. The composite was created March 31, Valuations and returns are computed and stated in U.S. Dollars. 4. Management Fees The management fee schedule for accounts is generally 90 basis points; however, some incentive fee, fixed fee, and fulcrum fee accounts may be included. Fees are negotiable, and not all accounts included in the composite are charged the same rate. The client is referred to the firm's Form ADV Part 2A for a full disclosure of the fee schedule. 5. Composite Dispersion If applicable, the dispersion of annual returns is measured by the standard deviation across asset weighted portfolio level gross returns represented within the composite for the full year. 6. Benchmark The primary benchmark for the composite is the MSCI EAFE Index. The MSCI EAFE Index (Europe, Australasia, Far East) is a free float adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada. As of June 2014, the MSCI EAFE Index consisted of the following 22 developed market country indices: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. MSCI EAFE Index targets 85% of the free float adjusted market capitalization. The secondary benchmark for the composite is the MSCI EAFE Growth Index, in which securities within the MSCI EAFE Index are categorized as growth based on five growth attributes (three attributes are used to categorize value securities, which are included in the MSCI EAFE Value Index). MSCI EAFE Growth Index targets 85% of the free float adjusted market capitalization. The returns for the MSCI EAFE and MSCI EAFE Growth indices include the reinvestment of any dividends. The asset mix of International Equity accounts may not be precisely comparable to the presented indices. Presentation of index data does not reflect a belief by the Firm that the MSCI EAFE or MSCI EAFE Growth indices, or any other index, constitutes an investment alternative to any investment strategy presented in these materials or is necessarily comparable to such strategies. 7. General Disclosure The three year annualized standard deviation measures the variability of the composite and the benchmark returns over the preceding 36 month period. Actual results may differ from composite results depending upon the size of the account, custodian related costs, the inception date of the account and other factors. Past performance does not guarantee future results. Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of funds invested. Results presented include reinvestment of all dividends and other earnings. The securities identified and described do not represent all of the securities purchased, sold, or recommended for client accounts. It should not be assumed that any securities recommendations made by Navellier & Associates, Inc. in the future will be profitable or equal the performance of securities made in this report. A list of recommendations made by Navellier & Associates, Inc. for the preceding twelve months is available upon request.