Leave No Stone Unturned

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Edgar Blake
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1 First Quarter 2015 Leave No Stone Unturned Dreyfus Research Growth Fund Not for use with the general public.

2 Indexes Don t Achieve Investment Objectives Benchmark indexes are a good guide, but tracking to them could lead to missed opportunities. The range of returns (dispersion) varies widely between and within market sectors, as shown by the span of each sector bar to the right. Annual Sector Performance Dispersion Across Russell 1000 Growth Sectors July 2005 Dec Market-cap-weighted strategies miss out on the opportunity that dispersion may provide. Index funds and passive ETFs are designed to approximate the markets, but they will always underperform the market. Can your clients afford not to pursue alpha and above-market returns? Percentage Return (%) Consumer Discretionary Consumer Staples Energy Financial Health Care Industrial Information Technology Materials Telecom Services Utilities Maximum/Minimum Spread Average Spread Source: Russell, The Boston Company, December Based on the GIPS sector designations of the Russell 1000 Growth Index, a widely used, unmanaged stock market proxy. The top of the bar is the highest performance dispersion observed over the entire period, and the bottom of each bar is the lowest performance dispersion observed over the period. Past performance is no guarantee of future results. Investors cannot invest directly in any index. Actual results will vary. Not for use with the general public. 2

3 Current Trends May Signal an Active Approach Bias Stocks have become much less correlated even as prices have increased. In low-correlation markets, dispersion of returns tends to be greater and overall market returns tend to be more flat. High dispersion causes strength in some individual stocks to be offset by weakness in others. This trend may support an actively managed large-cap strategy, where managers can seek alpha in a more meaningful way relative to index strategies. Rolling 20-Day Average Sector Correlation Russell 1000 Growth Rolling 20-Day Average Sector Correlation 1/1/ /31/ Index Price Correlation R1000G Source: FactSet. Past performance is no guarantee of future results. Investors cannot invest directly in any index. Correlation measures the degree to which the performance of a given asset class moves in relation to another, on a scale of -1 to 1. Negative 1 indicates a perfectly inverse relationship, 0 indicates no relationship, and 1 indicates a perfectly positive relationship. Not for use with the general public. 3

4 Identifying Unique Opportunities Takes Deep Research Am I paying for an actively managed benchmark-hugger? How do I know if my large-cap fund stands out in the category? Do my fund managers take the time to analyze the stocks, or are they just investing in stocks found in the benchmark? Challenge Finding an actively managed large-cap fund that s distinctive and offers proven results Solution A high-conviction, analyst-driven approach that stays in step with changing sector and industry dynamics How will you accomplish this and still have the time and resources to remain responsive to clients immediate needs and long-term goals? Point clients to a fund that s driven by fundamental research and analyst convictions and uses benchmarks as a guide, not as a source of investment ideas. Not for use with the general public. 4

5 The Solution: Dreyfus Research Growth Fund Class A DWOAX Class C DWOCX Class I DWOIX Leveraging the Power of Analysts Convictions Analysts as Decision Makers The managers believe there is no single definition of growth. In Dreyfus Research Growth Fund, the alpha engine is its research team, those closest to the information. The analysts are the decision makers not just idea generators and they have the leeway to pursue growth where they see it. The result is a portfolio composed only of highconviction stocks. Aligned With Investors The analysts are tasked with beating their sectors opportunity set and do not compete with other analysts on the team. The collaboration that takes place benefits every member of the team and seeks to align with you the investor. Performance Consistency The fund s approach to defining and uncovering growth at the sector level may prove increasingly important given the widening dispersion of returns. In other words, finding growth can be improved upon with good stock selection. The fund has demonstrated this with consistent historical outperformance versus its Lipper peer group average since Not for use with the general public. 5

6 Structured to Leverage Analysts Strongest Convictions The power is in the hands of a seasoned team of investment research professionals. The fund s team of investment professionals has an average of more than 15 years experience. Capital is distributed to analysts based on benchmark, supporting a collaborative, no-competition approach. Erik Swords Barry Mills Matt Griffin Robin Wehbe Jason Gibson Tim McCormick Trey Bowers David Sealy Leigh Todd Connie DeBoever Mike Holton Rick Rosania Decisions are made by those closest to the information. High-conviction stock selection drives portfolio returns we either overweight or don t own at all. Broad research platform provides a diversified stream of investments. Portfolio construction rules allow for managing unintended risk. Consumer Financials Health Care Industrials Natural Resources Technology Not for use with the general public. 6

7 Drivers of Growth Are Different for Each Market Sector Analysts stay in step with changing industry dynamics. Each analyst is fully accountable for his or her allocation. Freedom to invest where they believe the greatest opportunities exist. Portfolio reflects efficient use of information. Consumer Financials Health Care Capital allocation Brand strength Cyclical and secular trends Structural factors Demographics Economic factors Interest rates and yield curve Regulatory environment Debt spreads Capital market activity levels GDP growth Loan levels Pipeline Product market opportunities Health care utilization Reimbursement dynamics Government-funded stimulus/expansion Industrials Natural Resources Technology Cycles typically drive 80% of returns Secular trends that can push cycle duration Identify dramatic changes intracompany that can drive growth Capital deployment Supply/demand cycle Management quality Asset valuation Commodity sensitivity Asset resource quality Capital reinvestment Competitive technology End-market health New product cycles Capital allocation Management quality Valuation Gaining market share Margin improvement Supply/demand cycle Not for use with the general public. 7

8 Consistent Record of Relative Outperformance The fund has outperformed its Lipper category average on a historical basis Fund (Class Z) Outperformance Vs. Category Average % Source: Lipper as of 3/31/15. Individual funds composing the Lipper category may have achieved higher or lower returns. The performance data quoted represent past performance, which is no guarantee of future results. Share price and investment return fluctuate, and an investor s shares may be worth more or less than original cost upon redemption. Current performance may be lower or higher than the performance quoted. Please refer to next slide for standardized returns. During certain of the rolling three-year periods cited, the fund achieved a negative return. Results vary for other rolling periods and for the fund s other share classes. The fund s legacy share class, Class Z, is closed to new accounts. Not for use with the general public. 8

9 A Highly Rated Large-Cap Growth Solution Overall Rating Class I shares Morningstar Overall Ratings Class I shares were rated among 1,710 Large Growth funds as of 3/31/15. Ratings reflect riskadjusted performance and are derived from a weighted average of the fund s three-, five- and 10-year (as applicable) ratings.* Average Annual Total Returns as of 3/31/15 Class Shares YTD (as of 3/31/15) 1 YEAR 3 YEAR 5 YEAR 10 YEAR Class A (NAV) 2.87% 9.67% 15.03% 14.84% 9.15% Class A (5.75% max. load) -3.04% 3.36% 12.79% 13.48% 8.51% Class I 2.85% 9.92% 15.31% 15.16% 9.32% The performance data quoted represent past performance, which is no guarantee of future results. Share price and investment return fluctuate, and an investor's shares may be worth more or less than original cost upon redemption. Current performance may be lower or higher than the performance quoted. Year-to-date performance is not annualized. Go to dreyfus.com for the fund s most recent month-end returns. Total expense ratios: Class A 1.18% and Class I 0.86%. Other share classes may be subject to fee waivers, by prospectus. * Source: Morningstar. Please refer to back of presentation for additional information. Not for use with the general public. 9

10 Why Invest in Dreyfus Research Growth Fund Today? 1 Large caps have historically performed well during periods like the current phase of the U.S. economic growth cycle. 2 Currently, the P/E s of large-cap growth stocks are the most attractively valued compared with the historical 20-year average. 3 As companies begin to put the nearly $3.7 trillion of cash* on their balance sheets to work, underspent areas such as IT, industrials, telecom services and energy may be poised to benefit as pent-up demand drives spending. The fund offers a good way of potentially capturing the benefits of higher corporate growth rates. * Source: Bloomberg. Not for use with the general public. 10

11 Large-Cap Growth Is Currently Attractively Priced Current P/E Ratio as a Percentage of 20-Year Average Ended 3/31/15 VALUE CORE GROWTH Large Cap % % 91.35% Large-cap growth stocks are currently the most inexpensively priced stocks compared with all other equity asset classes. Midcap % % % Small Cap % % % Source: Russell Investments, based on historical 12-month P/E. Price-to-earnings is the ratio of the market price of a firm s common stock to its current (or predicted) earnings per share. Russell Investments is the owner of all copyrights and trademarks related to the Russell Indexes. Russell Index data reproduced in this report by permission. Not for use with the general public. 11

12 Recent Trends in Earnings Growth Rates Heavily Favor Growth Over Value Stocks Historical Uptrend for Growth Stocks Starting in mid-2005, secular tailwinds in technology and health care have helped drive earnings growth rates of growth stocks higher, while value has remained in a narrower historical range. Earnings Growth % 15% 14% 13% 12% 11% 10% 9% 8% 7% 6% Russell 1000 Growth Index Growth Rate Russell 1000 Value Index Growth Rate Past performance is no guarantee of future results. Source: TBCAM. Data as of 12/31/14. The Institutional Brokers Estimates System (I/B/E/S) is a database of earnings data obtained from independent financial analysts. The Russell 1000 Growth Index is an unmanaged index that measures the performance of the Russell 1000 companies with higher price-to-book ratios and higher forecast growth values. The Russell 1000 Value Index is an unmanaged index that measures the performance of the Russell 1000 companies with lower price-to-book ratios and lower forecast growth values. An investor cannot invest directly in any index. Not for use with the general public. 12

13 How Dreyfus Research Growth May Fit in Your Clients Portfolios Three potential roles: 1 2 As a core large-cap equity allocation As a suitable style-box selection within a retirement or platform model Core large-cap allocation Stocks Bonds Growth allocation 3 As a complement to passively managed large-cap strategies to potentially improve alpha generation Complementary allocation Alt Dreyfus Research Growth Fund Class A: DWOAX Class C: DWOCX Class I: DWOIX Not for use with the general public. 13

14 The Right Partners: BNY Mellon and The Boston Company Not for use with the general public. 14

15 BNY Mellon: A Leader in Investment Management and Investment Services Expertise Across Our Efforts Design and deliver innovative solutions for managing and servicing investments Combine a wide range of financial services into a comprehensive, clientcentered approach Provide access and opportunities in markets around the world Not for use with the general public. 15

16 BNY Mellon: A Leader in Investment Management and Investment Services 7th Largest Global Asset 3,4 Manager $28.5 T Assets under custody and administration 1 7th Largest U.S. Asset Manager 2,3 7th Largest U.S. Wealth Manager 3,5 $1.74T Assets Under Management 1 1 As of 3/31/ Institutional Investor, July Rankings based on 2013 year-end data. 4 Pensions & Investments, November Barron s, September Not for use with the general public. 16

17 The BNY Mellon Organization BNY MELLON BNY Mellon is a premier global investments company dedicated to helping clients manage and service their financial assets throughout the investment life cycle. BNY Mellon provides financial services for institutions, corporations and individual investors, delivering informed investment management and investment services in 35 countries and more than 100 markets. BNY MELLON INVESTMENT MANAGEMENT Diversity of styles and risk profiles No house view or centralized CIO Composed of 12 autonomous investment subsidiaries with distinct philosophies and processes THE BOSTON COMPANY ASSET MANAGEMENT, LLC Since 1970, The Boston Company has been a research-driven active equity manager with expertise in both traditional and alternative equity investment products. Also referred to as The Boston Company, TBC or TBCAM. Not for use with the general public. 17

18 Firm Overview: The Boston Company Asset Management, LLC Independent teams focused on a fundamental research approach to global equity management Total assets under management: $47.3 billion Total staff: 157 Total clients: 197 Total investment professionals: 81 U.S. Equity Non-U.S. Equity Alternative All Cap Large Cap Midcap Small/Midcap Small Cap Sector Specific Global Developed Markets Emerging Markets Region/Country Specific Small Cap Equity Long/Short Event-Driven Master Limited Partnerships (MLP) Values as of 3/31/15. Where applicable, includes assets managed by investment personnel of The Boston Company Asset Management, LLC acting in their capacity as officers of affiliated entities. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Not for use with the general public. 18

19 Investment Philosophy We believe that successful growth investing is best achieved through a process that optimizes information, ensures decision-making freedom and requires accountability within a framework of oversight and risk management. Diversified Approach No single definition of growth across portfolio. Capital Distribution Capital distributed by analyst opportunity set within benchmark. Selection Driven Analysts are responsible for stock selection and weighting decisions within their area of coverage. Clear Accountability Analysts understand what they are specifically responsible for. Risk Managed Manage risk from an overall portfolio level. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Not for use with the general public. 19

20 Portfolio Construction Sector Allocation Generally within ± 3 percentage points relative to the benchmark weight Analyst Allocation Generally within ± 1% versus weight of analyst coverage in benchmark Stock Selection All stocks recommended for inclusion must be rated Buy Number of Companies Approximately holdings Market Capitalization Generally, minimum $2 billion market cap at time of purchase; portfolio capitalization monitored for large-cap orientation Position Size Minimum position size normally 50 basis points at time of purchase Normally, no underweight positions in the portfolio Position must normally be an active overweight versus benchmark Maximum position size is the greater of 5% or 300 basis points above the index weight Predicted Tracking Error * Generally 4 6% * As per Northfield: Northfield Tracking Error measures the expected dispersion of the portfolio's return versus the benchmark. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Not for use with the general public. 20

21 General Investment Process Overview Sector/Industry Growth themes Cyclical themes Product cycles Winners/losers Portfolio Construction Guideline adherence Min/max weight Stock-specific risk Fundamental Research Supply chain coverage Management meetings Channel checks Financial modeling Potential earnings power Alpha Engine Ongoing Assessment Thematic changes Thesis violated Better ideas Risk-Reward Valuation Upside/downside target Confidence interval Risk Assessment Factor analysis Top-down alignment Industry positioning No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Not for use with the general public. 21

22 Investment Team Portfolio Management Industry Experience Years at Firm* Title Coverage Elizabeth Slover BA, Union College George C. Saffaye BBA, Baruch College, CUNY Director of Research Portfolio Management & Risk Oversight Senior Portfolio Strategist Portfolio Strategy Research Analysts: Consumer Raymond S. Bowers, III, CFA BA, Dartmouth College David M. Sealy BA, Brown University; MBA, Columbia Business School Leigh N. Todd, CFA BS, Lehigh University Research Analysts: Financials Connie F. DeBoever, CFA, CPA BS, Wharton School of the University of Pennsylvania Michael W. Holton BS, Washington and Lee University; MBA, Stanford University Research Analysts: Health Care 18 8 Senior Research Analyst Senior Research Analyst Senior Research Analyst Senior Research Analyst 20 8 Senior Research Analyst Consumer Discretionary: Media, Entertainment, Leisure, Automotive Consumer Staples: Beverages, Household Products, Food Products, Tobacco Consumer Discretionary: Retail, Restaurants Financials: Consumer Finance, Insurance Financials: Banks, Capital Markets, Homebuilding Matthew T. Jenkin BS, Tulane University; MBA, NYU Stern School of Business 21 6 Senior Research Analyst Health Care Rick R. Rosania, CFA BA, Dartmouth College; MSF, Boston College Senior Research Analyst Health Care: Health Care Providers & Services * Includes tenure at The Bank of New York Mellon Corporation affiliates. CFA and Chartered Financial Analyst are registered trademarks owned by CFA Institute. Not for use with the general public. 22

23 Investment Team (continued) Industry Experience Years at Firm* Title Coverage Research Analysts: Natural Resources Jason L. Gibson BS, United States Naval Academy; MBA, Harvard University Robin Wehbé, CFA, CMT BS, Lehigh University; MBA & MSF, Boston College 8 8 Senior Research Analyst 16 9 Senior Research Analyst Materials: Chemicals, Metals & Mining Energy: Oil, Gas & Consumable Fuels, Energy Equipment & Services Brock A. Campbell, CFA BA, Wheaton College Research Analyst Utilities Research Analysts: Technology Matthew D. Griffin, CFA BA, Duke University Barry K. Mills, CFA BA, Hobart College Erik A. Swords BS, Lehigh University Research Analysts: Industrials 24 9 Senior Research Analyst Senior Research Analyst Senior Research Analyst Information Technology, Telecomm. Services: Communications Equipment, Telecommunication Services Information Technology: Semiconductors & Semi Equipment, Hardware Information Technology: Software, IT Services Timothy J. McCormick, CFA BS, Niagara University; MBA, SUNY Binghamton Senior Research Analyst Industrials *Includes tenure at The Bank of New York Mellon Corporation affiliates. CFA and Chartered Financial Analyst are registered trademarks owned by CFA Institute. Not for use with the general public. 23

24 Important Information Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. Investors should receive a prospectus, or a summary prospectus, if available, that contains this and other information about the fund, and should be advised to read the prospectus carefully before investing. If applicable, discuss with investors the eligibility requirements for Class I shares, which are available only to certain eligible investors, and the historical results achieved by the fund s respective share classes. Morningstar overall ratings reflect risk-adjusted performance and are derived from a weighted average of the fund s three-, five- and 10-year (as applicable) ratings. As of 03/31/15 the fund s Class A and I shares received 2 and 3, and 3 and 4 stars for 3- and 5-year periods, respectively, among 1710 and 1538 funds in the Large Growth category. Morningstar ratings reflect applicable sales loads. Other share classes may have different ratings. The Morningstar Ratings formula measures the amount of variation in a fund s performance and gives more emphasis to downward variations. The top 10% of the funds in the category receive five stars; the next 22.5% four stars; the next 35% three stars; the next 22.5% two stars; and the last 10% one star. Ratings reflect sales loads. The fund represents a single portfolio with multiple share classes that have different expense structures. Diversification and asset allocation cannot ensure a profit or protect against loss of principal. MAIN RISKS Equity funds are generally subject to market, market sector, market liquidity, issuer and investment style risks, among other factors, to varying degrees. Investing internationally involves special risks, including changes in currency exchange rates, political, economic and social instability, a lack of comprehensive company information, differing auditing and legal standards, and less market liquidity. These risks are generally greater with emerging market countries. The Dreyfus Corporation is the fund s investment adviser. Investment professionals from The Boston Company Asset Management (TBCAM) are dual employees of Dreyfus and TBCAM, and apply TBCAM s proprietary investment process in managing the fund for Dreyfus. The Russell 1000 Growth Index is an unmanaged index that measures the performance of the Russell 1000 companies with higher price-to-book ratios and higher forecast growth values. Investors cannot invest directly in any index. Not for use with the general public. 24

25 6232PPT MBSC Securities Corporation, Distributor Not for use with the general public. 25

The Glenmede Fund, Inc. The Glenmede Portfolios

The Glenmede Fund, Inc. The Glenmede Portfolios Annual Report The performance for the portfolios shown on pages 2 to 4 and 6 to 24 represents past performance and is not a guarantee of future results.