Quarterly Commentary Fourth Quarter 2018

Transcription

1 Quarterly Commentary Fourth Quarter 2018 Performance Summary For the quarter ending December 31, 2018, the Composite slightly underperformed its benchmark, the Russell 2000 Index, returning % gross of fees and % net of fees. This compares with a return of % for the Russell 2000 Index during the same period. For the full year, the Composite declined % compared to a decline of % for the Russell 2000 Index. Performance Summary as of December 31, 2018¹ 4Q18 YTD 1 Year 3 Year 5 Year 10 Year Composite Gross % Net % % % % % 2.64% 1.72% 3.64% 2.71% 13.92% 12.90% Russell 2000 Index % % % 7.36% 4.41% 11.97% 1 Data as of December 31, Source: Advent Portfolio Exchange (APX). Performance returns are presented gross and net of fees and include the reinvestment of all income. Gross of fee performance returns do not reflect the payment of investment advisory fees and other expenses. Actual returns will be reduced by advisory fees and other expenses that may be incurred in the management of the account. Net of fee performance was calculated using the highest management fee of 0.90%, representing the maximum advisory fees charged to client accounts invested in the Composite during the respective period. Past performance is no guarantee of future results. For information regarding the current investment advisory fees of PNC Capital Advisors, LLC, please refer to Form ADV, Part 2A, which is available at: Please refer to our GIPS -compliant Presentation, which includes additional important disclosures and is located at the end of this commentary. During the quarter, stock selection negatively impacted performance while sector allocation contributed to performance. Stock selection within Consumer Discretionary, Health Care, and Communication Services contributed to performance while stock selection within Information Technology, Industrials, Financials, Real Estate, and Materials negatively impacted performance. From an allocation perspective, underweights to Energy and Health Care and an overweight to Financials contributed the most to Composite performance for the quarter. No exposure to Utilities and Consumer Staples, an overweight to Industrials, and an underweight to Information Technology were the largest detractors. As we review calendar year 2018, the Composite posted relative outperformance in the first and third quarters but caught in the middle was poor relative performance in the second quarter. As noted above, Composite returns slightly underperformed the benchmark in the final quarter of the year. Stock selection drove the underperformance for the year while sector selection had a slight negative impact on performance. Consumer Discretionary stock selection had the most negative impact on performance followed by Financials while Information Technology and Real Estate also participated on the downside. Underperformance in positions in recreational vehicles (including parts suppliers and OEMs), consumer benefits providers, building products, and banks had a pronounced negative impact on performance. In regards to sector allocation, an underweight to Energy had a positive impact on performance but was offset by an overweight to Industrials, underweights to Health Care and Information Technology, along with no exposure to Utilities. The underweight to Health Care and Information Technology had the biggest negative impact prior to the market decline that began in early September. As a reminder, we have historically had zero exposure to biotechnology/pharmaceuticals in the strategy compared to the ~8% current weighting in the Russell 2000 Index. Market Commentary The fourth quarter of 2018 is not one that investors will soon forget. The 20.2% decline was the seventh worse quarter in the 40 year history of the small cap index. Ouch! The Russell 2000 Index was having a banner year through the end of August as it had jumped an amazing 14%! The tide began to turn as the Russell 2000 Index began its decline in September although despite the monthly decline the benchmark was still in positive territory for the YTD period. All of that changed in October as the benchmark eliminated all of the YTD gains with close to an 11% decline for the month. November marked a positive month for the Russell 2000 Index but that was followed by a tough to take 12% decline for December which left the index with its first annual decline since 2015.

2 During Q4, investors were preoccupied with slowing growth of the domestic economy given the Fed rate hike as well as the tariff impact. Investors were valuing equities as if a recession was right around the corner! As bottom up stock pickers, we take our cues on the economic environment from what we hear and see from the companies we own. What we re hearing from our management teams does not line up with investors fears of an impending recession. From a style perspective, after trailing in the third quarter, the Russell 2000 Value Index, showed relative strength compared to the Russell 2000 Growth Index during the fourth quarter pullback. The Russell 2000 Value Index declined 18.7% compared to the Russell 2000 Growth Index decline of 21.7%. Investors favored the less cyclical sectors during the decline as Utilities and Consumer Staples were the best performing sectors. Investors had zero patience with the Energy sector as it declined nearly twice that of the Russell 2000 Index during the quarter while investors battered biotechnology and pharmaceutical companies which contributed to a nearly 26% decline in the Health Care sector. For calendar year 2018, despite giving back some of its lead in the fourth quarter, the Russell 2000 Growth Index declined 9.3% and outperformed the Russell 2000 Value Index which declined 12.9%. Purchases H&E Equipment Services, Inc. provides non-residential equipment rental, sales, parts, and service across faster growing southeastern and western states. Equipment rental is steadily taking market share from purchased equipment. The company is led by a group of highly tenured executives with significant ownership stakes. Capital allocation has been disciplined historically with a recent focus on acquisitions that are too small to draw the attention of industry leaders United and Sunbelt. The balance sheet has room to accommodate a couple of these acquisitions annually over the next several years. Quarterly Attribution Analysis, December 31, Representative Account vs. Russell 2000 Index GICS Sector to Russell 2000 Variation Attribution Analysis to 3 Source: Factset. The attribution presented above reflects the results of the representative account of the Composite. Performance attribution is an analysis of the strategy s representative account return relative to a selected benchmark and is calculated using daily holding information within Factset for the representative account. Please refer to the performance attribution disclosure located at the end of this report for additional attribution information. The sectors or industries reflected herein are subject to change and securities within a sector or industry may no longer be held in an account s portfolio. Sector and industry weights of any particular client may vary based on investment restrictions applicable to the account. It should not be assumed that investments in any of the sectors or industries listed were or will prove profitable. FactSet is a registered trade mark of FactSet Research Systems, Inc. and its affiliates. Past performance is no guarantee of future results. to Allocation Effect Selection + Interaction Communication Services Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Real Estate Utilities Cash Effect

3 One-Year Attribution Analysis, December 31, Representative Account vs. Russell 2000 Index GICS Sector to Russell 2000 Variation Attribution Analysis to 4 Source: Factset. The attribution presented above reflects the results of the representative account of the Composite. Performance attribution is an analysis of the strategy s representative account return relative to a selected benchmark and is calculated using daily holding information within Factset for the representative account. Please refer to the performance attribution disclosure located at the end of this report for additional attribution information. The sectors or industries reflected herein are subject to change and securities within a sector or industry may no longer be held in an account s portfolio. Sector and industry weights of any particular client may vary based on investment restrictions applicable to the account. It should not be assumed that investments in any of the sectors or industries listed were or will prove profitable. FactSet is a registered trade mark of FactSet Research Systems, Inc. and its affiliates. Past performance is no guarantee of future results. to Allocation Effect Selection + Interaction Communication Services Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Real Estate Utilities Cash Representative Account Top Contributors and Detractors for the Quarter December 31, 2018 Top Contributors Avg. Top Detractors Avg. Dorman Products, Inc AMN Healthcare Services, Inc Willdan Group, Inc KLX, Inc Helen of Troy Limited PRA Group Inc ASGN Inc Patrick Industries, Inc. John Bean Technologies Corporation Insperity, Inc The holdings identified above do not represent all of the securities purchased, sold, or recommended for advisory clients. is determined by averaging the daily weights of each holding in the representative account. The weight is the day s market value for each holding divided by the total value of all account holdings. is the contribution of each representative account holding determined by multiplying the for each holding by the rate of return for that holding during the quarter. The result shows each holding s contribution to the account s overall return during the quarter. Past performance does not guarantee future results. To obtain the calculation methodology, a list showing each holding s contribution to the overall performance during the measurement period, or for the complete list of all securities in the strategy that were recommended during the previous year, please contact pcacompliancegroup@pnc.com. Effect

4 irobot Corporation is a leading consumer robotics company that designs and sells robots that perform functions inside and outside the home. The company s primary products are Roomba and Braava which are robot vacuuming and robot mopping products. Their products boast industry leading features and technology that helped establish market leading positions within their respective categories. The company continues to build on their proprietary mapping, navigation, and machine vision technologies to introduce new products as well as new models of established products. Management is led by the co-founder of the business who has an impressive background in computer science, having earned a masters degree from MIT and subsequently worked at NASA. We believe the market for robot vacuums will continue to grow in the U.S. as well as developed international markets in Europe and Asia. Technology will continue to improve and the company s investment in R&D and advertising / marketing will further solidify their market leading position and set the stage for future new product introductions. The company also benefits from trends in connected and smart home technology adoption where consumers increasingly enjoy automated and vocal interaction with their home appliances / electronics. We expect revenue growth to create operating expense leverage long term which should have a positive impact on margins and CFROI. Medpace Holdings, Inc. is a contract research organization (CRO) that specializes in Phase I-IV clinical development for small- and mid-sized pharmaceutical, biotechnology, and medical device industries. The company differentiates itself by utilizing a fullservice model that holistically covers the entire clinical study process, from proof-of-concept to commercialization. Competitors that serve large pharmaceuticals tend to engage in functional resourcing, which allows the customer to mix and match services among different CROs. By taking the entire process in-house, Medpace is able to make more efficient use of resources and deliver higher margins. The company s small- and mid-sized end market has been responsible for much of the recent innovation in the healthcare sector and has seen robust funding growth as a result. An improved funding environment and accelerated FDA approvals under the current administration have created a very favorable macroeconomic backdrop that is conducive to growth. We expect that Medpace will continue to benefit from a strong environment and capitalize on new business opportunities, as they have effectively done in the past. PetIQ, Inc. engages in the manufacture, procurement, packaging, and distribution of pet health and wellness products. It offers veterinarian-grade pet prescription medications, over-the-counter flea and tick preventatives, and health and wellness products for dogs and cats under the brands VetIQ, PetAction Plus, Advecta, PetLock Plus, and TruProfen. It also manages VetIQ and VIP Pet Care stores inside retailers that provide basic veterinary services. We expect demand for the company s products and services to grow at a mid-single digit rate over the next five years, believe the company will gain market share as they open new stores and expand distribution to additional retailers (both physical and online), and expect margins to expand as they gain scale in vet services. Top Contributors Dorman Products, Inc. is a supplier of replacement parts and fasteners for both light vehicle and heavy duty trucks in the automotive aftermarket. The company designs, engineers and distributes over 215,000 SKU s. The company is primarily an aftermarket supplier of original equipment manufacturers dealer exclusive parts. Dorman s growth continues to be driven by market share gains due to aging cars as vehicle owners have become more likely to keep their vehicles longer through performing necessary repairs and maintenance. In the quarter, customer destocking issues eased and market conditions improved in the quarter. AMN Healthcare Services, Inc. is a provider of staffing services and workforce solutions to hospitals and healthcare facilities across the United States. The company s solutions aim to optimize a client s workforce by reducing staffing complexity, increasing efficiency, and enhancing the patient experience. AMN does this by offering a comprehensive suite of solutions that provide technology, analytics, and services to build and manage clients healthcare workforce needs, from nurses, doctors, and allied health professionals, to healthcare leaders and executives, both on a temporary and permanent basis. The company has benefited from high levels of demand for qualified, skilled healthcare professionals, and reported continued positive trends during the quarter. Willdan Group, Inc. provides energy efficiency and related engineering services to customers of public utilities. The company has been an active acquirer over the past few years, bringing in-house additional engineering capabilities and research tools, expanding geographically, and reducing customer concentration. The company maintains a conservative balance sheet. During the quarter, Willdan completed its largest ever acquisition at a reasonable valuation.

5 KLX Inc. engaged in the provision of aerospace fasteners and consumables. Its Aerospace Solutions segment offered fasteners, chemicals, Honeywell proprietary parts, bearing, electrical, clamps, and lighting. The Energy Services segment provided onshore completion services, wire line services, fishing services and tools, pressure control, remanufacturing shop and accommodations, and surface rental equipment. The Aerospace segment was sold to Boeing during the quarter while the Energy segment was spun out into a separate publicly traded company under ticker KLXE. Helen of Troy Limited is a consumer products company selling a variety of housewares, home health, and beauty products under industry leading brand names such as Revlon, Braun, Hydroflask, OXO, PUR, and others. The company focuses on product innovation and differentiation to drive premium price points with attractive margins. Organic revenue accelerated in the company s fiscal second quarter and operating margin showed strong improvement. On the back of a strong quarter, management raised revenue and earnings guidance above consensus estimates and was optimistic about the holiday shopping season. Top Detractors PRA Group, Inc. purchases and collects portfolios of nonperforming loans both in the Americas and Europe. The company is benefitting from a strong supply of nonperforming loans in the United States where pricing has been attractive while the European market remains in a competitive pricing environment. Portfolio purchase activity continued to be strong in the third quarter 2018 with near record purchases in the Americas. Cash collections growth, although positive, did slow in the third quarter as compared to the second quarter. On the third quarter call, management announced a higher than expected fourth quarter investment in the insolvency area of their business which was the main reason shares underperformed for the quarter. ASGN Inc. is a provider of highly skilled professionals in the technology, digital, healthcare technology, life sciences, and government sectors. Due to its wide service offerings, the company has grown faster than the industry for 19 consecutive quarters. The company reported a strong third quarter with organic revenue growth of +10.5% which was a slight acceleration from the second quarter. The business has never had a larger backlog or visibility than it does today. Much of what is being spent with the company is a must-have where customers are digitizing and automating their businesses. Patrick Industries, Inc. is a manufacturer of component products and distributor of building products and materials serving the original equipment manufacturers primarily in the recreational vehicle (RV), marine, and manufactured housing markets. The company also supplies products to the adjacent industrial markets for items such as kitchen cabinets, office and household furniture, fixtures and commercial furnishings. Patrick has had a very successful capital allocation strategy focusing on the expansion of current product lines, new product introductions, and strategic diverse acquisitions. They consistently grow organically above their end markets in all areas they serve. A recent decline in wholesale RV shipments due to dealer destocking after a huge buildup of inventory in early 2018, and a slowing of retail sales has put pressure on the industry. Outside of RVs, manufactured housing, industrial (both residential and commercial) and marine all continue to show growth. John Bean Technologies Corp. is a provider of food processing systems and also supplies the air transportation industry with cargo loaders, passenger boarding bridges, and aircraft deicers. Increased protein consumption, a growing worldwide middle class, increased adoption of automation and IT at food and beverage companies, and also a growing commercial airline fleet all remain drivers for the business. After reporting a strong second quarter, third quarter results indicated an increased level of uncertainty due to global trade concerns that led to shipments and orders that were under expectations. The Food Tech business was more impacted by the global trade concerns but still managed to grow 5% during the quarter while the Aero Tech business posted robust revenue growth of 20%. Insperity, Inc. is an outsourced human-resource services company focused on small- and medium sized businesses. The company s main clients are businesses that require human resource services but lack the scale and / or expertise to execute these functions efficiently. Insperity provides payroll and benefits administration, health and worker s compensation insurance programs, compliance, recruiting, and employer liability management, among other services. During the quarter, the company posted results that were ahead of consensus estimates and raised guidance above full year consensus estimates. The stock has done exceedingly well over the past few years but began moving lower in mid-november in concert with broader market declines. We continue to believe that Insperity has a multi-year runway in terms of growth and further margin improvement opportunities.

6 Portfolio Positioning Turnover for the representative account was 16.5% for the trailing 12 month period. At the end of the fourth quarter, the strategy s largest overweight remained Industrials, followed by Financials and Consumer Discretionary. Within Industrials, the overweight is concentrated in professional services, aerospace and defense, and building products. The Financials overweight includes exposure to consumer finance, insurance, commercial banks, and capital markets. The focus within Consumer Discretionary includes auto components, household durables, and specialty retail. The largest sector underweights were in Health Care and Information Technology. Even with the addition of Medpace Holdings, Inc. and PetIQ, Health Care remains the largest sector underweight driven by the lack of exposure to the biotechnology and pharmaceutical industries together about 8% of the Russell 2000 Index. This lack of exposure is intentional as these types of companies do not fit within our investment process due to lack of revenue generating products, inability to produce positive CFROI levels, or dependence on one product for a majority of their revenue. The next largest underweight is in Information Technology, exposures include software, IT services, and electronic instruments with the underweight due to no exposure to semiconductors or communications equipment. MANAGEMENT TEAM James E. Mineman Managing Director, Lead Portfolio Manager M. Jed Ellerbroek, CFA Associate Portfolio Manager Lisa A. Teter Senior Analyst Brian Reynolds, CFA Senior Analyst Christopher Stam Research Analyst Natalie Marvi-Romeo, CFA, CAIA Client Portfolio Manager

7 Firm Description: As of September 29, 2009, PNC Capital Advisors, Inc. and its affiliate Allegiant Asset Management Company each merged into and with PNC Capital Advisors, LLC ( PNC Capital Advisors or the Firm ). PNC Capital Advisors, a registered investment adviser and direct wholly owned subsidiary of The PNC Financial Services Group, Inc. ( PNC ), provides investment advice with respect to equity and fixed income securities for a variety of clients, including institutional accounts and registered investment companies. For Global Investment Performance Standards (GIPS ) purposes, PNC Capital Advisors, LLC includes: 1) Assets under management of PNC Bank, N.A. that were previously attributed to a predecessor firm, Mercantile, which prior to September 14, 2007 was defined to include the assets of Mercantile-Safe Deposit and Trust Company and its subsidiary, Mercantile Capital Advisors, Inc. Effective September 14, 2007, Mercantile-Safe Deposit and Trust Company was merged into PNC Bank, N.A., and in conjunction with such merger, PNC Capital Advisors, Inc. became a subsidiary of PNC Bank, N.A. PNC Capital Advisors, Inc. commenced serving as subadvisor to certain clients of PNC Bank, N.A. effective February 11, ) Assets under management of PNC Municipal Investment Group, formerly a part of PNC Bank, N.A., now a business unit of PNC Capital Advisors. 3) Assets under management of the Advantage Equity Portfolio Management Team, formerly a part of PNC Institutional Investment Group ( PNC IIG ), a part of PNC Bank, N.A., now a business unit of PNC Capital Advisors. 4) Wrap program assets managed by Allegiant Advisory Services, formerly a part of Allegiant Asset Management Company. 5) Assets under management of Allegiant Asset Management Company (excluding Allegiant Advisory Services), formerly a wholly owned subsidiary of National City Corporation, now an institutional subsidiary of the PNC Financial Services Group, Inc. and part of PNC Capital Advisors. Compliance Statement: PNC Capital Advisors, LLC claims compliance with the Global Investment Performance Standards (GIPS ) and has prepared and presented this report in compliance with the GIPS standards. PNC Capital Advisors, LLC has been independently verified for the period beginning September 29, 2009 through December 31, 2016 by Ashland Partners and Company, LLP, and for the periods January 1, 2017 through December 31, 2017 by ACA Performance Services, LLC. 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 Composite has been examined by Ashland Partners & Company LLP for the period January 1, 2008 through December 31, 2016, and for the periods January 1, 2017 through December 31, 2017 by ACA Performance Services, LLC. The verification and performance examination reports are available upon request. Verification: Compliance with the GIPS standards for the predecessor firm (Allegiant Asset Management Company) was verified by Ashland Partners & Company LLC for the period January 1, 2008 through September 29, 2009 and by a previous verifier for the period January 1, 1998 through December 31, In addition, a performance examination was conducted on the Composite for the period January 1, 1998 through December 31, 2007 by a previous verifier. Copies of the verification reports as well as policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. A list of composite descriptions is also available upon request. PNC Capital Advisors Composite Composite Inception Date: December 31, 1993 Composite Creation Date: December 31, 1993 Gross of Fees Net of Fees 3 Yr Ex-Post Benchmark 3 Yr Ex-Post Number of Composite Composite Firm Std Dev Std Dev Portfolios Dispersion Assets Assets Year % % Comp % % Benchmark % (Year-end) (Std Dev %) ($ millions) ($ millions) , , , , (4.41) , , , , , (4.18) , , , (35.91) (36.51) (33.79) ,606 Composite Description: The investment objective of the Composite is to seek capital appreciation by investing in a diversified portfolio of publicly traded small-capitalization equity securities. Effective October 31, 2014, James Mineman and Peter Roy, CFA became co-lead portfolio managers for the Select Equity team. Senior Portfolio Manager Gordon Johnson, who founded the team in 1994 and provided overall investment direction and management to the team since inception, retired effective June 30, Effective on October 22, 2018, James Mineman assumed the role of sole Lead Portfolio Manager of the strategy, and Peter A. Roy, CFA no longer serves as a co-lead portfolio manager. Results from all accounts have been continuous from the first full month under management to present or last full month under management. Effective July 1, 2011, the Firm changed the composite name from Small Cap Core to to better reflect the portfolios flexible approach to managing small capitalization stocks. The Composite was created December 31, Benchmark: The benchmark for the composite is the Russell 2000 Index. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership and is constructed to provide a comprehensive and unbiased small-cap barometer. Minimum Account Size: All fee-generating accounts managed in this style for which the Firm has full discretionary investment decision-making authority have been included in this composite. Calculation of Results: Accounts are valued using trade date accounting and are denominated in U.S. dollars. Performance results reflect the reinvestment of interest, dividends, and realized capital gains and include cash, cash equivalents, convertible securities, and preferred securities, if applicable. Dividends and interest are recorded on an accrual basis and are gross of all applicable foreign withholding taxes, if any. Performance results are presented on a gross and net basis. The net results reflect actual net returns prior to 2007 and a deduction of 0.90% for the periods thereafter, representing the maximum advisory fee charged to client accounts from 2007 to the present. The actual fees paid by a client may vary based on assets under management and other factors. Past performance is no guarantee of future results. Significant Cash Flows: As of January 1, 2012, PNC Capital Advisors, Inc. defines a significant cash flow for the portfolios of the Composite as one or more external cash flows during the month equaling an absolute value greater than 10% of the portfolio s assets at the beginning of the month. Dispersion: The dispersion of annual return is measured by the standard deviation across asset-weighted portfolio returns represented within the composite for a full year. Fee Schedule: The management fee schedule is as follows: 0.90% on the first $25 million, 0.80% on the next $25 million, and 0.70% on amounts over $50 million. The actual fees paid by a client may vary based on assets under management and other factors.

8 The Russell 2000 Index is an unmanaged index that tracks the common stock price movement of the 2000 smallest companies of the Russell 3000 Index, which measures the performance of the 3000 largest US companies based on total market capitalization. The Russell 2000 Value Index is an unmanaged index representative of small-cap value stocks that measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. The Russell 2000 Growth Index is an unmanaged index representative of small-cap growth stocks that measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. Performance attribution is an analysis of the representative account return relative to a selected benchmark and is calculated using daily holding information within Factset for the representative account. It does not reflect the payment of transaction costs, fees and expenses of the portfolio. Attribution is broken down into two primary effects: sector allocation (that portion of the representative account s excess return that is attributable to over-or under-weighting a sector or industry relative to the benchmark) and security selection (the portion of the representative account s excess return that is derived from choosing different securities from the benchmark). s are calculated using the closing price of any given security and do not necessarily reflect the actual trading price of such security. Accordingly, s shown above may differ from actual portfolio returns. Portfolio to measures the impact that each security has on the portfolio s total return and is calculated using daily holding information within Factset by multiplying the beginning weight for a given security by its total return on a daily basis, and geometrically linked for any given period. Accordingly, the to shown above could differ from actual returns when there is a significant different between the trade price and the closing price of a given security. Portfolio holdings that are included in the benchmark index are assigned to the same industries and sectors to which they are assigned by the index provider. Portfolio holdings that are not assigned by the index provider but that are included in the Factset database are assigned to the index providers, industries, and sectors by PNC Capital Advisors, LLC. Attribution is not exact, but should be considered an approximation of the relative contribution of each of the factors considered. This publication is for informational purposes only. Information contained herein is believed to be accurate, but has not been verified and cannot be guaranteed. Opinions represented are not intended as an offer or solicitation with respect to the purchase or sale of any security and are subject to change without notice. Statements in this material should not be considered investment advice or a forecast or guarantee of future results. To the extent specific securities are referenced herein, they have been selected by the author on an objective basis to illustrate the views expressed in the commentary. Such references do not include all material information about such securities, including risks, and are not intended to be recommendations to take any action with respect to such securities. The securities identified do not represent all of the securities purchased, sold or recommended and it should not be assumed that any listed securities were or will prove to be profitable. Past performance is no guarantee of future results. PNC Capital Advisors, LLC claims compliance with the Global Investment Performance Standards (GIPS ). To receive a list of composite descriptions of PNC Capital Advisors, LLC and/or a presentation that complies with the GIPS standards, please send an to Compliance at pcacompliancegroup@pnc.com. PNC Capital Advisors, LLC is an SEC-registered investment adviser, offering an array of investment strategies. Registration with the SEC does not imply any level of skill or training. PNC Capital Advisors, LLC is an indirect subsidiary of The PNC Financial Services Group, Inc. PNC Capital Advisor s strategies and the investment risks and advisory fees associated with each strategy can be found within Part 2A of the firm s Form ADV, which is available at The PNC Financial Services Group, Inc. All rights reserved. INVESTMENTS: NOT FDIC INSURED NO BANK OR FEDERAL GOVERNMENT GUARANTEE MAY LOSE VALUE