Navellier Emerging Markets Portfolio Process and results for the quarter ending September 30, 2017

Transcription

1 Navellier Emerging Markets Portfolio Process and results for the quarter ending September 30, 2017 Please see important disclosures at the end of the presentation NCD 17

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 Country allocation system that is structured for risk mitigation 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, 2017 Institutional $331 million Retail $760 million $1.50 billion Domestic Equity Large Cap Growth Small to Mid Cap Growth Power Dividend International Equity International Equity International Select Emerging Markets 4

5 Portfolio Management Team Jim O Leary, CFA Sr. Portfolio Manager Michael J. Borgen 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 Foreign listed equities & ADRs Emerging market stocks Liquidity in listed and home markets Reward/Risk Analysis High alpha Low standard deviation Superior reward/risk Quantitative Fundamental Factor Analysis Test fundamental variables Identify what is driving stock prices Create optimal mix Portfolio Construction Regional over/under weighting for risk mitigation Identify negative correlation for diversification 836 Stocks 200 Stocks 100 Stocks Stocks 6

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 200 stocks pass step one Source: Henry James International Management, Inc. 7

8 Reward/Risk Ratio Analysis Supplemental Information Reward/Risk Weekly Universe of 1,000 Stocks Broken into 10 Groups Example Quantitative (Reward/Risk) Test Total Return (Gross) Groups 8 Source: Henry James International Management, Inc. 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 Sales growth Earnings momentum Earnings growth Net earnings revisions Long term projected growth Earnings growth/ltg Margin Change Operating earnings growth Historical earnings growth Forecasted earnings growth Standardized unexpected earnings (SUE) Sales change Profitability Variables ROE Revenue growth Equity turnover Net profit margin Asset turnover Present value growth opportunities (PVGO) Valuation Variables Price/sales Market value/enterprise value P/E growth ratio (PEG) Long term growth to P/E Price/Net working capital Liquidation value/price Book to price Market Performance Variables Reward/Risk Price/50 trading day average price Sharpe ratio Information ratio 10 For Current Financial fundamental Consultant mix Use criteria Only as of August 31, Fundamental variable results are calculated using FactSet.

11 Current Fundamental Mix Emerging Markets Fundamental Factor Model (August 31, 2017) Book to Price 13% Cash Flow Growth 19% Sales Growth 15% Forecasted Earnings growth 19% Margin Change 16% Earnings Momentum 18% 11 For Subject Financial to change Consultant quarterly. Use For OnlyFinancial Consultant Use Only

12 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 Maximum 5% target for any given stock Average annual turnover of 39% 12

13 Disciplined Country Weighting System Risk Mitigation Emerging Markets Example Supplemental Information Country Country MSCI 06/30/17 12/31/16 Weight Band 09/30/17 3/31/17 RR RR Emerging Market Portfolio elative to MSCI EM Portfolio Category Country Average Median Weight Weight Over/under Action Weight Argentina 25% 21% 0.00% 2.88% Over Increased 4.34% Panama 29% 27% 0.00% 1.71% Over N/C 1.43% Brazil 35% 31% 7.69% 9.02% Over Increased 9.45% Top Ranked India 37% 33% 8.93% 7.51% Under N/C 7.20% Countries Russia 38% 38% 4.49% 8.29% Over Reduced 6.81% Chile 40% 37% 1.30% 1.16% Under N/C 1.94% Korea 40% 42% 14.42% 12.66% Under Increased 14.30% 36.83% 43.24% 45.47% Cyprus 42% 42% 0.08% 0.00% Under N/C 0.00% Peru 42% 42% 0.40% 1.94% Over N/C 1.83% Taiwan 42% 41% 12.20% 9.60% Under Reduced 9.07% Hungry 43% 43% 0.30% 0.00% Under N/C 0.00% South Africa 44% 40% 6.60% 4.77% Under N/C 5.04% Middle Ranked China 44% 45% 25.73% 21.88% Under Increased 22.32% Countries Thailand 47% 51% 2.30% 2.80% Equal N/C 2.79% Colombia 49% 52% 0.50% 0.92% Over N/C 0.89% Indonesia 51% 52% 2.70% 6.09% Over Reduced 5.06% Poland 51% 52% 1.40% 0.00% Under N/C 0.00% Mexico 60% 62% 3.50% 6.92% Over Reduced 5.77% 55.71% 54.91% 52.77% Greece 61% 60% 1.06% 0.00% equal N/C 0.00% Turkey 70% 70% 1.20% 0.00% Under N/C 0.00% Bottom Ranked Malaysia 70% 69% 2.50% 1.85% Under N/C 1.76% Countries Czech Republic 75% 75% 0.20% 0.00% Under N/C 0.00% Egypt 75% 78% 0.30% 0.00% Under N/C 0.00% Philippines 82% 83% 1.30% 0.00% Under N/C 0.00% UAE 92% 92% 0.90% 0.00% Equal N/C 0.00% 7.46% 1.85% 1.76% 13

14 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 emerging 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 14

15 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 15

16 Return/Risk Supplemental Information Ending September 30, 2017 Annualized Summary Statistics Trailing 3 years Navellier Emerging Markets (pure gross) MSCI Emerging Markets Index Alpha 2.20% 0.00% Beta Standard Deviation 14.09% 15.51% R Squared 92.76% % Sharpe Ratio Down Capture 86.42% % 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. 16 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 Financial substantial Consultant risk and Use has Only the potential for partial or complete loss of funds invested. Results presented include reinvestment of all dividends and other earnings.

17 Upside/Downside Supplemental Information /01/2006 to 09/30/ Upside % Downside % Navellier Emerging Markets (Pure Gross) Navellier Emerging Markets (Net) MSCI EMF (Emerging Markets) - Gross Return # of Months Average Return (%) Up Down Up Down Up/Down Table Average Return (%) vs. Market Up Market Down Market Month (%) 1 Year (%) Market Benchmark (%) Best Worst Best Worst Up Capture Down Capture R Squared Navellier Emerging Markets Wrap (Pure Gross) Navellier Emerging Markets Wrap (Net) MSCI EMF (Emerging Markets) 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 indicate future performance. Investment in equity strategies For involves Financial substantial Consultant risk and Use has Only the potential for partial or complete loss of funds invested. Results presented include reinvestment of all dividends and other earnings.

18 Annualized Performance Supplemental Information 30% July 1, 2006 to September 30, 2017 (not annualized if less than 1 year) 25% Return 20% 15% 10% 5% 0% QTD YTD 1 Year 3 Year 5 Year 7 Year 10 Year 11 Year Analysis Period Navellier Emerging Markets Wrap (Pure Gross) MSCI EMF (Emerging Markets) Gross Return Navellier Emerging Markets Wrap (Net) Product vs Benchmark: through September 30, 2017 QTD YTD 1 Year 3 Years 5 Year 7 Year 10 Year Analysis Period Navellier Emerging Markets Wrap (Pure Gross) Navellier Emerging Markets Wrap (Net) MSCI EMF (Emerging Markets) Gross Return 7.06% 8.89% 18.62% 6.97% 7.71% 5.77% 3.09% 6.96% 6.63% 6.99% 16.74% 5.11% 6.07% 4.30% 1.84% 5.73% 8.04% 7.54% 22.91% 5.28% 4.36% 2.90% 1.65% 6.18% 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 indicate future performance. 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. For For Financial Financial Consultant Use Use Only Only

19 Calendar Year Performance Supplemental Information July 1, 2006 to September 30, /01/2006 to 09/30/ % 60% 40% Return 20% 0% 20% 40% 60% YTD Navellier Emerging Markets Wrap (Pure Gross) Navellier Emerging Markets Wrap (Net) MSCI EMF (Emerging Markets) Gross Return Calendar Year Return YTD Navellier Emerging Markets Wrap (Pure Gross) Navellier Emerging Markets Wrap (Net) MSCI EMF (Emerging Markets) Gross Return 25.41% 14.02% 11.62% 1.31% 7.71% 19.87% 17.24% 16.25% 63.27% 49.37% 28.12% 23.92% 12.11% 13.33% 0.38% 6.67% 18.98% 18.38% 15.32% 62.03% 49.78% 27.18% 28.14% 11.60% 14.60% 1.82% 2.27% 18.63% 18.17% 19.20% 79.02% 53.18% 39.82% 19 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 involves substantial risk and For has Financial the potential Consultant for partial Use or Only complete loss of funds invested. Results presented include reinvestment of all dividends and other earnings.

20 Portfolio Fundamentals Designed for risk mitigation Supplemental Information Emerging Markets Portfolio as of September 30, 2017 Company Net Income Margin Reinvestment Rate ROE Current P/E Forward P/E FY2 Market Value $MM Forward FY2 Earn % Chg 3 Actual Annual Earn % Chg Earnings Surprise % Latest Qtr Advanced Info Service Pcl #N/A #N/A #N/A #N/A $17, #N/A 2.16 Advanced Semicon Engineering $9, Alibaba Group Hldg $452, Ambev Sa $103, America Movil Sa De Cv $57, Anglogold Ashanti Ltd #N/A $3, #N/A Arcos Dorados Holdings Inc $2, #N/A Astra International Tbk (Pt) #N/A #N/A #N/A #N/A $23, #N/A 4.33 Baidu Inc $85, Bancolombia Sa $5, Bradesco Banco 5.62 #N/A $69, Cemex Sab De Cv $13, China Constr Bank Corp #N/A #N/A #N/A #N/A 5.67 $211, #N/A China Life Insurance (Chn) $86, China Mobile Ltd $205, #N/A China Petroleum & Chem Corp $90, Cielo Sa #N/A #N/A #N/A #N/A #N/A $18,586 #N/A #N/A #N/A Cnooc Ltd $56, #N/A Coca Cola Femsa Sab De Cv $15, Credicorp Ltd $16, Fabrinet $1, Gazprom Pjsc $46, Grupo Aeroportuario Sureste $5, Hdfc Bank Ltd $79, Huaneng Power International $9, Icici Bank Ltd $24, Infosys Ltd $33, Source: FactSet. 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 For recommendations Financial Consultant made Use in the Only future will be profitable or will equal the performance of the securities in this list. Please read important disclosures at the end of the presentation. continued on following page

21 Portfolio Fundamentals Designed for risk mitigation Supplemental Information Emerging Markets Portfolio as of September 30, 2017 (continued) Net Income Reinvestment Current Forward Market Forward FY2 Earn Actual Annual Earnings Surprise Company Margin Rate ROE P/E P/E FY2 Value $MM % Chg 3 Earn % Chg % Latest Qtr Kasikornbank Pcl #N/A #N/A #N/A #N/A #N/A $14,815 #N/A #N/A #N/A Kb Financial Group $19, Kepco Korea Elec Power Corp $21, Kt Corp $6, Lg Display Co Ltd $9, Luxoft Holding Inc $1, Malayan Banking Bhd #N/A #N/A #N/A #N/A #N/A $23,857 #N/A #N/A #N/A Melco Resorts & Entertainmen $11, Mercadolibre Inc $11, Mobile Telesystems Pjsc $10, Naspers Ltd $100, #N/A Oil Co Lukoil Pjsc $37, Petroleo Brasileiro Sa Petr #N/A $67, Ping An Insurance Group #N/A #N/A #N/A #N/A $61, #N/A Pt Bank Rakyat Indonesia #N/A #N/A #N/A #N/A $27, #N/A 3.05 Sands China Ltd #N/A #N/A #N/A #N/A #N/A $40,959 #N/A #N/A #N/A Sasol Ltd $18, #N/A Sberbank Of Russia Ojsc #N/A #N/A #N/A #N/A 5.82 $72, #N/A 8.78 Shinhan Financial Group Ltd $21, Silicon Motion Tech Adr $1, Siliconware Precision Inds $4, Sk Telecom Co Ltd $15, Soc Quimica Y Minera De Chi $15, Southern Copper Corp $32, Taiwan Semiconductor Mfg Co $199, Tata Motors Ltd $21, #N/A Telekomunikasi Indonesia $33, Source: FactSet. 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. Please read For Financial important Consultant disclosures Use at Only the end of the presentation. continued on following page

22 Portfolio Fundamentals Designed for risk mitigation Supplemental Information Emerging Markets Portfolio as of September 30, 2017 (continued) Forward Actual Earnings Net Income Reinvestment Current Forward Market FY2 Earn Annual Surprise Company Tenaga Nasional Bhd Margin #N/A Rate #N/A ROE #N/A P/E #N/A P/E FY2 #N/A Value $MM $19,044 % Chg 3 #N/A Earn % Chg #N/A % Latest Qtr #N/A Tencent Holdings Ltd #N/A #N/A #N/A #N/A $426, #N/A U.S. Dollar #N/A #N/A #N/A #N/A #N/A $0 #N/A #N/A #N/A Ultrapar Participacoes Sa $13, United Microelectronics Corp $6, Vale Sa $52, Wns (Holdings) Ltd Adr $1, Woori Bank $10, #N/A Yandex N.V $10, Emerging Markets Average $50, Median $19, Average 22 Source: FactSet. 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. Please read For Financial important Consultant disclosures Use at Only the end of the presentation.

23 Portfolio Highlights Supplemental Information Emerging Markets Portfolio as of September 30, 2017 Emerging Markets Portfolio MSCI Emerging Markets Index Market Cap (average) $41.43B $4.74B Market Cap (median) $19.7B $2.3B Return on Equity (weighted average) 116.1% 10.6% Batting Average (5 years) 65% N/A Turnover (trailing 3 year) 18% 10% Number of Stock Holdings Number of Countries Source: FactSet and Henry James International Management, Inc. Please read important disclosures at the end of the presentation.

24 Portfolio Characteristics Supplemental Information Emerging Markets Portfolio as of September 30, 2017 Top Ten Securities Country % Tencent Holdings Ltd. China 3.46% Alibaba Group Holding Ltd. China 3.15% Sociedad Quimica Y Minera De Chile S.A. Chile 2.83% KB Financial Group Inc. S. Korea 2.66% HDFC Bank Limited India 2.61% Baidu, Inc. China 2.51% Sberbank Russia OJSC Russia 2.46% Taiwan Semiconductor Manufacturing Taiwan 2.40% Naspers Limited S. Africa 2.40% Yandex Russia 2.36% Top Ten Sectors % Finance 28.80% Technology Services 12.41% Communications 10.17% Consumer Services 7.50% Electronic Technology 7.24% Energy Minerals 6.27% Utilities 4.57% Non Energy Minerals 4.30% Process Industries 3.48% Consumer Non Durables 3.23% 24 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. Please read important disclosures at the end of For the Financial presentation. Consultant For Financial Use Only Consultant Use Only

25 Top Country Weightings Supplemental Information 25% Emerging Markets Portfolio as of September 30, % Navellier Emerging Markets China 22.0% South Korea 14.0% 15% Brazil 9.7% Taiwan 9.1% 10% India 7.3% Russia 6.8% Mexico 5.8% 5% Indonesia 5.1% South Africa 4.9% Argentina 4.5% 0% China South Korea Brazil Taiwan India Russia Mexico Indonesia South Africa Argentina 25 Source: FactSet. The Top Country Weightings shows the top ten countries represented in the portfolio as of September 30, Your portfolio may or may not reflect these exact weights. Please read important disclosures at the end of the For presentation. Financial Consultant For Financial Use Consultant Only Use Only

26 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. Emerging Market Portfolio country allocation system is structured for risk mitigation, overweighting stronger countries and underweighting weaker countries. No end point sensitivity 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. 26

27 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.). 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 an 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 ropped. 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: Measure the volatility of returns for an investment versus its average return for a given period of time. 27

28 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 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 generally improving 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. 28

29 5. Composite Dispersion If applicable, the dispersion of annual returns is measured by the standard deviation across asset weighted portfolio returns represented within the composite for the full year. 6. Benchmark The primary benchmark for the composite is the MSCI Emerging Markets Index. The MSCI Emerging Markets Index is a free float adjusted market capitalization index that is designed to measure equity market performance of emerging markets. As of June 2014, the MSCI Emerging Markets Index consisted of the following 21 emerging market country indices: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, South Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey. MSCI Emerging Markets targets 85% of the free float adjusted market capitalization. The returns for the MSCI Emerging Markets Index include the reinvestment of any dividends. The asset mix of emerging markets 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 Emerging Markets Index, 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. The standard deviation is not presented for 2006 through 2008 because 36 months of history were not available. 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. 29

30 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, 2016 by Ashland Partners & Company LLP. A copy of the verification report is available upon request. 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. Verification does not ensure the accuracy of any specific composite presentation. 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 Emerging Markets Wrap Composite includes all discretionary Emerging Markets equity accounts that are charged a wrap fee and are 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 emerging market economies while achieving long term capital appreciation and seeks to achieve the highest possible returns while controlling risk. The strategy invests in emerging markets through the use of sponsored and unsponsored foreign listed securities and American Depositary Receipts (ADRs) without market capitalization restrictions. 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. Due to the risk in investing in emerging markets, there could be at times high turnover and volatility. The strategy invests in smaller capitalization stocks that may trade fewer shares than larger capitalization stocks; the liquidity risk among these types of stocks may increase the strategy s risk. 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, wrap fees, foreign withholding tax and any brokerage fees or commissions that have been deducted from the account. Pure gross of fees returns do not reflect the deduction of any trading costs, fees, or expenses, and are presented only as supplemental information. 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 June 29, Valuations and returns are computed and stated in U.S. Dollars. 4. Management Fees The management fee schedule for accounts is generally 45 to 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. Bundled fee accounts make up 100% of the composite for all periods shown. Wrap fee schedules are provided by independent wrap sponsors and are available upon request from the respective wrap sponsor. Wrap fees generally range from 100 to 200 basis points and include custody, trading expenses, and other expenses associated with the management of the account. 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 assetweighted portfolio level gross returns represented within the composite for the full year. 6. Benchmark The primary benchmark for the composite is the MSCI Emerging Markets Index. The MSCI Emerging Markets Index is a free float adjusted market capitalization index that is designed to measure equity market performance of emerging markets. As of June 2014, the MSCI Emerging Markets Index consisted of the following 21 emerging market country indices: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, South Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey. MSCI Emerging Markets targets 85% of the free float adjusted market capitalization. The returns for the MSCI Emerging Markets Index include the reinvestment of any dividends. The asset mix of emerging markets 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 Emerging Markets Index, 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. The standard deviation is not presented for 2006 through 2008 because 36 months of history were not available. 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.