General Employees Retirement System

Transcription

1 General Employees Retirement System As of March 31, WEST BLUEMOUND ROAD SUITE 250 P.O. BOX 1067 BROOKFIELD, WISCONSIN

2 Table of Contents Page 3 Portfolio Summary 4 Performance & Allocation 5 Equity Market Update 7 Dana Large Equity Strategy Overview 16 Economic Update 27 Current List of Holdings 29 Disclosure

3 Dana Investment Advisors, Inc. PORTFOLIO SUMMARY Portfolio: Sanibel General Employees' Retirement System From: September 28, 2012 to March 28, 2013 Portfolio Allocation Summary Market % of Estimated Current 03/28/13 Assets Income Yield Cash 41, Stocks 6,525, , Total Portfolio 6,566, , Account Activity Summary Portfolio Value on 09/28/2012 $5,897, Contributions/Withdrawals $0.00 Investment Income $77, Unrealized Gain/Loss $569, Realized Gain/Loss $21, Change in Accrued Income ($418.46) Portfolio Value on 03/28/2013 $6,566, Total Gain $668, Please refer to important disclosure information on reverse side and please feel free to call us with any questions at

4 Sanibel General Employees Retirement System The information set forth above is based upon information believed to be accurate and reliable but we do not guarantee its accuracy. 4

5 Equity Market Summary U.S. equity markets had a very strong quarter Small and mid cap indices outperformed U.S. large cap stocks in both Q and Q Value indices outperformed Growth indices across most market cap spectrums in both Q1 and the last 12 months; Value Growth performance differential was driven by a wide divergence between performance in the Financial sector versus performance in the Technology sector U.S. indices generally outperformed foreign markets in Q1 and last 12 months Foreign indices generally outperformed U.S. indices for both Q4 and calendar

6 S&P 500 Sector Performance Summary All sectors within the S&P 500 Index delivered positive returns in Q1 Defensive sectors led the market in Q1, while economically sensitive sectors lagged Sector leadership Q1 2013: Health Care, Consumer Staples and Utilities Q4 2012: Financials, Industrials and Materials Sector laggards Q1 2013: Materials and Information Technology Q4 2012: Information Technology and Telecommunication Services 6

7 Dana Large Cap Equity Performance Attribution Q Sector Contributors Energy for the third straight quarter, Marathon Petroleum Corporation (MPC) drove good performance for our portfolios in the Energy sector; Oil States International (OIS) also contributed Industrials exceptional performance from Q1 additions Hertz Global Holdings (HTZ) and Delta Air Lines (DAL) Consumer Discretionary strong performance from Wyndham Worldwide (WYN) and Mattel Inc. (MAT) Q Sector Detractors Health Care underexposure to the major pharmaceutical companies (JNJ, PFE, BMY, LLY) caused a significant drag on our performance Financials weakness in insurance holdings due to poor performance from Aflac (AFL) and lack of exposure to Berkshire Hathaway Inc. (BRK.B); underweight to multinational banks (JPM, C, BAC) continued to hurt our performance Information Technology lack of exposure to Google Inc. (GOOG) accounted for more than 100% of the underperformance; slight overall weakness in our software holdings also detracted Top Individual Contributors Individual Laggards Marathon Petroleum Corp % Apple Inc. 16.4% Kroger Company +28.0% AFLAC Inc. 6.4% CBS Corporation +23.0% Lockheed Martin Corporation 5.4% CareFusion Corporation +22.4% EMC Corporation 4.1% Wyndham Worldwide +21.8% Oracle Corporation 3.0% 7

8 Dana Large Cap Equity Selected Additions/Deletions Q Additions: Allstate Corporation (ALL) Allstate reported a profit for Q4 despite analyst estimates for a loss; revenue growth of 3.8% was well above expectations; company raised the quarterly dividend and doubled the repurchase authorization to $2 billion; balance sheet metrics continuing steady growth; healthy underwriting and pricing power is helping to maintain profitability; agency growth also bodes well for future performance Hertz Global Holdings (HTZ) Consolidation and rising demand in rental car business leading to improved profitability; utilization rates are up, and depreciation costs are down (thanks to better resale results); company expects to continue double digit revenue growth for several years; fleet management and equipment rental businesses showing even stronger growth Magna International Inc. (MGA) Rising auto sales fueling steady growth at Magna; move toward lighter vehicles is benefitting the company; recent earnings beat expectations and guidance was incrementally positive; quarterly dividend boosted by 14%; company has good diversification of customers and geography; valuation, balance sheet and cash flow are all attractive Q Deletions: EMC Corporation (EMC) Declining earnings per share (EPS) and revenue estimates, and weak performance versus expectations, cause us to be concerned about the stock performance in short and intermediate time horizons; long term growth story remains attractive, but in our view analyst growth expectations are highly dependent on optimistic assumptions Quest Diagnostics (DGX) Quest reported a slight earnings miss in January even after estimates had been reduced substantially prior to the earnings report; margins broke a mild upward trend, and estimates for EPS and revenue have been falling since last summer; pricing pressure and Medicare cuts present challenges, and volumes are also under pressure Cummins Inc. (CMI) Company gave negative guidance reflecting weak demand due to challenging macro conditions; estimates for EPS and revenue have been declining since last summer; return on equity (ROE) trends have turned downward; after a 30% rise in stock price from October to early February, valuation lost its relative attractiveness 8

9 Dana Large Cap Equity Portfolio Characteristics Consistent Portfolio Characteristics Lower Valuations, High Growth, Higher Profitability 9

10 Dana Large Cap Equity Higher Dividend Yield and Growth Dana s process seeks out companies with strong, sustainable free cash flow and management teams that are shareholder friendly Dana Large Cap Equity portfolios typically generate a higher dividend yield than their benchmark Dana holdings also tend to grow their dividends much faster than the benchmark average. Large Core holdings have increased their dividends at a much higher annualized growth rate than the S&P 500 index Annualized 3 year dividend growth for Dana holdings was 28.43% per year versus 16.48% for the S&P 500 index A number of portfolio holdings are using their free cash flow in other methods that benefit shareholders, such as retirement of debt and share repurchases. Share buy back activity has increased substantially for portfolio holdings that currently do not pay substantial dividends 10

11 Large Cap Equity Consistent Earnings Execution Dana s investment process focuses on management teams that execute at a high level Dana Large Cap Equity holdings have consistently provided quarterly earnings surprises at a rate greater than the benchmark Percentage of Companies Meeting or Beating Earnings Estimates 11

12 Dana Large Cap Equity Dividend Increases Corporate governance considerations within Dana s investment process helps direct our team to companies that tend to utilize their free cash flow in a shareholder friendly manner The following is a list of portfolio holdings that have increased their dividend payout rates during 1 st quarter 2013 Dana Large Cap Equity Holdings that Raised Dividend Payments During 1st Quarter 2013 Compa ny Yield as of 3/31/13 Dividend Increase AbbVie Inc. CVS Caremark Corp. Home Depot Inc. Ensco PLC Amgen Inc. Wyndham Worldwide Corp. Coca Cola Co. Wal Mart Stores Inc. Magna International Inc. Mattel Inc. 3.92% 1.64% 2.24% 3.33% 1.83% 1.80% 2.17% 2.51% 2.18% 3.29% Initiated 38.50% 34.50% 33.30% 30.60% 26.10% 25.00% 18.20% 16.40% 16.10% Source: Standard & Poors, Factset 12

13 Dana Large Cap Equity Dividend Yields versus Bond Yields Demand for income has pushed corporate debt yields to historically low levels Many high quality equities offer dividend yields that exceed yields on their near term corporate debt 10 Year U.S. Treasury yield 1.85% BofA Merrill AAA Corporate Bond Index 2.00% BofA Merrill AA Corporate Bond Index 2.06% S&P 500 Index dividend yield 2.14% As of March 31, 2013 over 270 companies within the S&P 500 Index had dividend yields in excess of the 10 Year U.S. Treasury yield The table below illustrates current Dana Large Cap Equity holdings with dividend yields greater than their corporate bond yields as of April 8 th 2013: Name Symbol Sector Coupon Maturity Bond Yield Div Yield Mattel Inc. MAT Consumer Discretionary / Home Depot Inc. HD Consumer Discretionary / Macy's Inc. M Consumer Discretionary / ConAgra Foods Inc. CAG Consumer Staples / CVS Caremark Corp. CVS Consumer Staples / Kimberly Clark Corp. KMB Consumer Staples / Kroger Co. KR Consumer Staples / Coca Cola Enterprises Inc. CCE Consumer Staples / Wal Mart Stores Inc. WMT Consumer Staples / Encso PLC ESV Energy / Exxon Mobil Corp. XOM Energy / Chevron Corp. CVX Energy / ConocoPhillips COP Energy / Marathon Petroleum Corp. MPC Energy / JPMorgan Chase & Co. JPM Financials / Wells Fargo & Co. WFC Financials / U.S. Bancorp USB Financials / Fifth Thrid Bancorp FITB Financials / Allstate Corp. ALL Financials / BlackRock Corp. BLK Healthcare / Amgen Inc. AMGN Healthcare / AbbVie Inc. ABBV Healthcare / United Technologies Corp. UTX Industrials / Dover Corp. DOV Industrials / Union Pacific Corp. UNP Industrials / CA Inc. CA Information Technology / International Business Machines Corp. IBM Information Technology / Microsoft Corp. MSFT Information Technology / Cisco Systems Inc. CSCO Information Technology / KLA Tencor Corp. KLAC Information Technology / Eastman Chemical Co. EMN Materials / International Paper Co. IP Materials / Verizon Communications Inc. VZ Telecommunication Services / NextEra Energy Inc. NEE Utilities / CMS Energy Corp. CMS Utilities / PRICES /YIELDS AS OF

14 Dana Large Cap Equity Better Returns With Less Risk Although the past decade was challenging for equity investors, Dana Large Cap Equity portfolios have significantly outperformed many major U.S. equity indices since inception of the strategy and with lower risk than its benchmark. 14

15 Dana Large Cap Equity Historical Up/Down Market Capture 15

16 Macroeconomic Background Financial assets are outperforming the underlying economy We need more growth to emerge from the current deficit milieu Comprehensive tax reform could be a boost Corporations have incentive to invest foreign earnings abroad rather than at home Political economics less harmful Congress authorized spending resolution to finish fiscal year, avoid shut down Debt ceiling issue could re emerge but drama likely to be more muted than in past Sequester took effect despite dire warnings Senator Baucus (Democrat, Montana) involved in bipartisan tax reform talks Europe back to disarray ECB pledge to support Euro still most important development Cyprus is a new animal, bank account holders share in bail out Politicians trying to balance austerity with re election face challenge after Italian results U.S. GDP struggling along GDP forecast to perk up in 2nd half of 2013 Employment improved in February, stumbled in March Consumer and business confidence ticking down temporary lull? Gold is in retreat is this signaling deflation, reduced fear, or both? GDP Growth Since Recession Ended 4 (% 1Q Ann) Gross Domestic Product, Bil. Chained 2005 $, SAAR - United States Trendline: Av erage Since 6/30/ Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 FactSet Research Systems 16

17 World GDP growth forecasts encouraging outlook 12 GDP Growth Forecasts Actual Forecast 10 GDP Growth (% Change Y/Y) Euro Area U.S. Japan China Brazil India Source: IMF, World Economic Outlook Update, January 23,

18 Construction and vehicles combined tailwind for GDP growth Historically these two categories have contributed >12% of GDP; today they are ~10% There is good reason to think both will continue to recover, providing a lift to GDP in the quarters ahead 16% 14% % of GDP (stacked) 12% 10% 8% Vehicles Structures 6% 4% 2% 0% 2012 IV 2011 I 2009 II 2007 III 2005 IV 2004 I 2002 II 2000 III 1998 IV 1997 I 1995 II 1993 III 1991 IV 1990 I Sources: Bureau of Economic Analysis. Data through December

19 Nonfarm Payroll and U.S. Unemployment U.S. nonfarm payroll growth is still very sluggish The unemployment rate remains high but has moved down from its 2009 peak and is now below 8% Over the past 50 years, the time it has taken to replace jobs lost in the prior recession has generally been increasing with each subsequent economic recovery Employment levels generally recover to pre recession levels during an economic recovery, that has not happened yet in this recovery US Change in NonFarm Employment MoM Launch full data release 600 (DIFF 1M) All Employees, Thousands Total Nonfarm SA - United States [Max: , Min: , Last: 88.00] Recession Periods - United States ,000 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 FactSet Research Systems January s total nonfarm employment at 135 million is still short of the 2008 peak of 138 million Below trend but steady and sufficient to drive a healthy consumer spending recovery Nonfarm Payrolls Nonfarm Payrolls (millions) % long term CAGR 1 trendline. +1.5% CAGR 1 recovery trend Mar 80 Mar 81 Mar 82 Mar 83 Mar 84 Mar 85 Mar 86 Mar 87 Mar 88 Mar 89 Mar 90 Mar 91 Mar 92 Mar 93 Clear bands indicate recession. Mar 94 Mar 95 Mar 96 Mar 97 Mar 98 Mar 99 Mar 00 Mar 01 Mar 02 Mar 03 Mar 04 Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Source: Bureau Labor Statistics, data through March Compound annual growth rate. 2 3-years ending March

20 Private jobs rising, government jobs contracting Steady private sector jobs recovery Government jobs still falling back to 2006 levels Private jobs (millions) Jobs by category Government jobs (millions) (2010 census hiring spike) Jan 13 Oct 12 Jul 12 Apr 12 Jan 12 Oct 11 Jul 11 Apr 11 Jan 11 Oct 10 Jul 10 Apr 10 Jan 10 Oct 09 Jul 09 Apr 09 Jan 09 Oct 08 Jul 08 Apr 08 Jan 08 Oct 07 Jul 07 Apr 07 Jan 07 Oct 06 Jul 06 Apr 06 Jan 06 Oct 05 Jul 05 Apr 05 Jan 05 Oct 04 Jul 04 Apr 04 Jan 04 Oct 03 Jul 03 Apr 03 Jan 03 Oct 02 Jul 02 Apr 02 Jan 02 Oct 01 Jul 01 Apr 01 Jan Source: Bureau of Labor Statistics; data through February

21 Financial obligations ratio record low Comparing consumers monthly flow of income to their fixed recurring monthly expenses, including debt service, gives a more accurate measure of consumers financial health Here s the stunner: consumers ability to cover the monthly nut has seldom been better as incomes have recovered, household debt has been reduced and interest rates remain low Financial Obligations as a Percent of DPI (%) 19% Deleveraging is done. 18% 17% 16% 15% The financial obligations ratio consists of estimated required payments on outstanding mortgage and consumer debt plus automobile lease payments, rental payments on tenant occupied property, homeowners insurance and property tax payments divided by disposable personal income. 15.5% 14% 1980Q4 1981Q4 1982Q4 1983Q4 1984Q4 1985Q4 1986Q4 1987Q4 1988Q4 1989Q4 1990Q4 1991Q4 1992Q4 1993Q4 1994Q4 1995Q4 1996Q4 1997Q4 1998Q4 1999Q4 2000Q4 2001Q4 2002Q4 2003Q4 2004Q4 2005Q4 2006Q4 2007Q4 2008Q4 2009Q4 2010Q4 2011Q4 2012Q4 Source: Federal Reserve, data through December 2012; released March 13,

22 Inflation Core CPI (CPI less food and energy) remains at relatively benign levels near the Fed s target of 2.0% College Tuition, Legal Services, Medical Care, and Food prices are rising faster than CPI Information Technology, Apparel, Auto and Recreation prices are rising less than CPI or declining Any significant increase in inflation could put upward pressure on interest rates US Consumer Price Inflation vs. 10 Year Treasury 20.0% (% 1YR) CPI-U All Items U.s. City Average SA =100 - United States (% 1YR) CPI-U, all items less food and energy ( =100) US Treasury Constant Maturity - 10 Year - Yield Recession Periods - United States 15.0% 10.0% 5.0% 0.0% Fed Inflation Target 2.0% % '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 FactSet Research Systems 22

23 S&P 500 P/E ratio versus inflation important context The S&P 500 s P/E ratio (3/5/13) on the consensus 2013 bottom up earnings estimate is 13.7X 1 still modest by historic comparison Room for P/E ratio expansion P/E Ratio S&P 500 Price/earnings Ratio Inflation CPI Y/Y (%) Mar 13 Mar 11 Mar 09 Mar 07 Mar 05 Mar 03 Mar 01 Mar 99 Mar 97 Mar 95 Mar 93 Mar 91 Mar 89 Mar 87 Mar 85 Mar 83 Mar 81 Mar 79 Mar 77 Mar 75 Mar 73 Mar 71 Mar 69 Mar 67 Mar 65 Mar 63 Mar 61 Mar 59 Mar 57 Mar 55 Mar 53 Mar 51 Mar 49 Mar 47 Sources: Standard & Poor s Corporation, Thomson Reuters I/B/E/S, BLS. Stock price data through March 5, 2013; inflation data through January Top panel, latest data point: 1540 trailing earnings of $103.93(e) through 12/31/12 = 14.8X. 1 S&P 500 at EPS(e) $

24 Are rising bond yields bad for stocks? When bond yields start to rise we will, undoubtedly, hear this refrain: rising bond yields are bad for stocks. 1 It s not so Bull markets have often been accompanied by rising bond yields 10 S&P 500 (right axis) Year Treasury Yield (left axis) Year Treasury Yield (%) S&P 500 Index Apr 13 Apr 12 Apr 11 Apr 10 Apr 09 Apr 08 Apr 07 Apr 06 Apr 05 Apr 04 Apr 03 Apr 02 Apr 01 Apr 00 Apr 99 Apr 98 Apr 97 Apr 96 Apr 95 Apr 94 Apr 93 Apr 92 Apr 91 Apr 90 Sources: Standard and Poor s; Federal Reserve Bank of St. Louis. Data through April 1, The usual reasons cited are a) higher bond yields provide competition to dividend yields, making stocks less attractive; b) higher bond yields drive down the market s P/E ratio; and, c) higher bond yields will choke off the economic recovery, taking stocks down. 24

25 Equity Market Valuations The S&P 500 s trailing PE multiple expanded 11% over the past year (ended March 2013) while earnings increased less than 1% Multiple expansion has been the main driver of stock market returns The low interest rate environment sent earnings multiples higher Analysts expect S&P 500 earnings to grow 15% in 2013, reaching all time highs Equities more fairly valued today than one year ago but continue to look attractive against alternatives S&P 500 Forward Operating EPS and PE Ratio $120 $110 $100 $90 $80 $70 $60 $50 S&P NTM Earnings per Share (Left) S&P 500 (Operating Basis) - Price to Earnings - NTM (Mean) (Right) '03 '04 '05 '06 '07 '08 '09 '10 '11 ' FactSet Research Systems 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Equity Risk Premium The Equity Risk Premium reflects equity richness/cheapness relative to risk-free bonds. (S&P Price to Earnings * 100) - US Benchmark Bond - 10 Year - Yield Recession Periods - United States Trendline: Average '03 '04 '05 '06 '07 '08 '09 '10 '11 ' FactSet Research Systems 25

26 Market Bull and Bear Arguments Bull Case: Global monetary policy remains accommodative and governments are focused on supporting economic growth The recovery in U.S. residential housing and auto sectors has gained momentum U.S. labor market showing steady, if unspectacular, growth Inflation remains muted Equity market valuations appear attractive relative to alternatives Corporations are sitting on record amounts of cash, leading to shareholder friendly actions Majority of political economic risk has been mitigated Bear Case: Muddle through economic growth is uninspiring Unemployment remains stubbornly high Weak European economies continue to serve as a brake on global growth Corporate earnings estimates for 2013 may be too aggressive if margins retreat Leaders in both the U.S. and Europe seem unwilling to seriously address long term budget deficits Fear that Fed withdrawal of stimulus will reduce demand for risk assets 26

27 Dana Investment Advisors, Inc. PORTFOLIO HOLDINGS Portfolio: Sanibel General Employees' Retirement System Report as of: 03/28/ Cash - Money Fund 41, ,990 CBS CBS Corp (Cl B) , HD Home Depot Inc , ,500 M Macy`s Inc , ,150 MGA Magna International Inc , ,880 MAT Mattel Inc , ,720 ROST Ross Stores Inc , ,880 WYN Wyndham Worldwide Corp , ,770 CCE Coca-Cola Enterprises Inc , ,200 CAG ConAgra Foods Inc , ,250 CVS CVS Caremark Corp , ,280 KMB Kimberly-Clark Corp , , ,700 KR Kroger Co , ,400 WMT Wal-Mart Stores Inc , ,008 CVX Chevron Corp , ,860 COP Conocophillips , ESV Ensco International Inc , ,235 XOM Exxon Mobil Corp , ,800 HP Helmerich & Payne , ,900 MPC Marathon Petroleum Corp , PSX Phillips , ,340 ALL Allstate Corp , ,860 AGNC American Capital Agency Corp , , ,740 AXS AXIS Capital Holdings Ltd , BLK BlackRock Inc , ,100 DFS Discover Financial Services , ,580 FITB Fifth Third Bancorp , ,460 JPM JPMorgan Chase , ,200 USB US Bancorp , ,900 WFC Wells Fargo & Co , ,520 ABBV Abbvie Inc , ,460 AMGN Amgen Inc , ,640 CFN CareFusion Corp , ,060 CI Cigna Corp , MCK McKesson Corp , ,200 MYL Mylan Laboratories Inc , ,180 TMO Thermo Fisher Scientific Inc ,

28 Dana Investment Advisors, Inc. PORTFOLIO HOLDINGS Portfolio: Sanibel General Employees' Retirement System Report as of: 03/28/2013 7,400 DAL Delta Air Lines Inc , ,530 DOV Dover Corporation , ,900 HTZ Hertz Global Holdings Inc , ,360 SNA Snap-On Inc , UNP Union Pacific Corp , ,260 UTX United Technologies Corp , ADS Alliance Data Systems Corp , AAPL Apple Inc , ,485 CSCO Cisco Systems Inc , IBM International Business Machine , ,310 KLAC KLA-Tencor Corp , ,360 MXIM Maxim Integrated Products Inc , ,618 MSFT Microsoft Corp , ,480 ORCL Oracle Corp , ,660 QCOM Qualcomm Inc , ,500 STX Seagate Technology Inc , ,600 EMN Eastman Chemical Co , ,810 IP International Paper Co , ,041 BCE BCE Inc , , ,260 VZ Verizon Communications Inc , CMS CMS Energy Corp , ,440 NEE NextEra Energy Inc , ,240 XEL Xcel Energy Inc ,

29 Dana Investment Advisors, Inc. PORTFOLIO SUMMARY Portfolio: Sanibel General Employees' Retirement System From: September 28, 2012 to March 28, 2013 * * * Disclosure * * * Dana Investment Advisors, Inc. is an independent federally registered investment adviser providing equity and fixed income investment management services to a broad range of clients. All data is presented in U.S. Dollars. Portfolio Characteristics, Performance Report, Portfolio Holdings, and Sector Distributions reflect applicable investment holdings as of market close on the date indicated. Returns presented are exclusive of investment management and custodial fees, and net of transaction costs. Investment management fees would reduce the returns presented, for example: on a one-million dollar portfolio with an advisory fee of.75% earning a 10% return, the total compounded advisory fee over a five year period would be $50,368. The resulting average annual return for the period would therefore be 9.17%. All returns were calculated on a time weighted total return basis. Performance does include the accrual of income and the reinvestment of dividends and interest received. During various market cycles, the strategies discussed herein have demonstrated portfolio characteristics and returns that have been both more and less volatile than that of the comparable index. Indices shown were selected because they demonstrated a broad range of characteristics, some of these characteristics being deemed useful for limited comparison purposes only. Historical performance results for investment indices and/or categories have been provided for general comparison purposes only, and generally do not reflect the deduction of transaction and/or custodial charges, the deduction of an investment management fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results. It should not be assumed that your account holdings do or will correspond directly to any comparative indices. While data contained herein was gathered from sources deemed reliable, the accuracy of the data presented can not be guaranteed. Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy made reference to directly or indirectly in this report, will be profitable, equal any corresponding indicated historical performance level(s), or will continue to be suitable for your portfolio. Due to various factors, including changing market conditions, the content of this report may no longer be reflective of current opinions, positions, investments or account allocations. Moreover, you should not assume that any discussion or information contained in this report serves as the receipt of, or as a substitute for, personalized investment advice from Dana Investment Advisors, Inc. Dana Investment Advisors is not a custodian. Clients should be receiving detailed statements from their custodian at least quarterly. While Dana Investment Advisors regularly reconciles to custodian information, we encourage clients to review their custodian statement(s). The market prices shown on these pages represent the last reported sale on the stated report date as to listed securities or the bid price in the case of over-the-counter quotations. Prices on bonds and some other investments are based on round lot price quotations and are for evaluation purposes only and may not represent actual market values. Bonds sold on an odd lot basis (less than $1 million) may have a dollar price lower than the round lot quote. Where no regular market exists, prices shown are estimates by sources considered reliable by Dana Investment Advisors, Inc. While the prices are obtained from sources we consider reliable, we cannot guarantee them. Please remember to contact Dana Investment Advisors, Inc. at (800) , or P.O. Box 1067 Brookfield, WI with any questions or if there are any changes in your personal financial situation or investment objectives for the purpose of reviewing, evaluating, and revising any previous recommendations or investment services. Please also advise Dana if you would like to impose, add, or modify any reasonable restrictions to your account. A copy of Dana s current Form ADV Brochure detailing a complete list of Dana s advisory services and fees continues to remain available for your review upon request. 29

30 This page intentionally blank