Investment Proposal for Valued Client Presented on July 07, 2015, by Trusted Advisor 2300 Litton Lane Hebron, KY 41048 800-379-2513 Sales@ftjfundchoice.com
Market Movement Strategies Investing with Confidence Stock and bond market investment are historically one of the most powerful creators of investment wealth. However, variables such as geopolitical uncertainty and shifting central bank policies can contribute to the uncertainty of markets often resulting in investors taking an emotional response to managing their portfolios. This lack of clarity drives investors to take more risk at market peaks and less risk at market bottoms. These reactions undermine the investor s long-term interests. In a crowded field of potential investment options, Market Movement Strategies (MMS) offers investors a clear and defined process. MMS was designed to let investment managers focus on the things outside of your control, while we focus on the things that are within your control, allowing you to invest with confidence, regardless of market conditions.
Introducing Market Movement Strategies Market cycle changes are unpredictable, yet inevitable. Through recognition of their impact, the potential negative effects may be minimized. MMS seeks to address this challenge by delivering clients a common sense approach to managing portfolios regardless of external market variables. MMS allows you to focus on things within your control by: Setting clear expectations and replacing emotion with discipline Recognizing the biggest driver of return and risk Identifying dedicated investment strategies to properly diversify portfolios History shows that the market typically moves in cycles. In the past 116 years, there have been five bull markets (yellow) and four bear markets (grey). Investment strategies that work in bull markets may not be effective in flat or bear markets.
How Does Market Movement Strategies Work? According to a 2010 award winning study, Roger Ibbotson and Associates identified cyclical market movement as the primary driver of investment returns. Evolving from this research, we have created a program of select strategies that have been individually categorized for their specific contribution to the Market Movement of your overall portfolio, resulting in three distinct mandates. Financial Analysts Journal, March/April 2010, Volume 66. The Equal Importance of Asset Allocation and Active Management. 2010 CFA Institute
Mandate 1 Strategic Market Movement Building Confidence based on Long-Term Trends Strategists in this mandate are optimized and stay fully invested in all market conditions. Key Characteristics: Source of Risk/Return: Dependent on market direction, less reliance on active management. Role in portfolio: and fully participate in market returns; long term growth, effectively manage longevity and inflationary risks.
Mandate 2 Tactical Market Movement Turning Frustration into Opportunity Strategists in this mandate are highly flexible and able to adjust for changing market conditions. Their active approach allows them to increase and decrease their exposure to Market Movement as their research dictates. Key Characteristics: Source of Risk/Return: Increasingly dependent on active manager decisions; Variable market exposure. Role in portfolio: Moderate/Flexible allocation designed to actively manage risk while opportunistically allocating to attractive asset classes.
Mandate 3 Market Movement Diversifiers Managing Concern by Providing Consistency Strategists in this mandate are designed to disengage from Market Movement and provide new sources of potential return and risk. They tend to exhibit low correlation to the other mandates. Key Characteristics: Source of Risk/Return: Very active strategies that are heavily reliant on manager skill; use wider spectrum of asset classes and approaches; very little dependence on market direc- tion. Role in portfolio: Counterbalance to the Strategic Mandate; focus on risk, then return, enhance diversification and protection; improve overall risk management of portfolio.
Step Two Risk Assessment Our objective is to provide you with the best opportunity to meet your goals based on the risk you are willing to take in your portfolio. Based on the information we have collected through your Risk Tolerance Questionnaire responses, we are able to calculate your score. Account Risk Score: 57, Target Risk Score: 54 Account Objective is: Balanced, Target Objective is: Balanced Proposed Account 57 Target Range 1-20 21-40 41-60 61-80 81-100 Capital Preservation Balanced Income Balanced Balanced Growth Growth The common understanding of investment objectives and risk/return tolerances is established through the creation of your formal investment policy. This document guides all future investment decisions and forms the central repository for all intelligence regarding client investment time horizons, objectives, tax-sensitivities, etc.
Strategist Selection Market Movement Strategies reviews and monitors hundreds of potential investment firms to act as a Strategist for the specific mandates. Strategists are selected based on a number of factors including their ability to manage to the expectations of the mandated role within the overall portfolio mix. By placing an emphasis on how each mandate is managed, we believe the portfolio structure will be more durable throughout future market cycles. Valued Client Strategic Mandate Tactical Mandate Diversifier Mandate Vanguard CRSP 100% Equity - ETF Amount : $630,000 Risk Score: 85 Meeder Balanced Portfolio Amount : $315,000 Risk Score: 46 361 Hedged Growth Portfolio Amount : $135,000 Risk Score: 39 Toews Balanced Amount : $315,000 Risk Score: 22 MMS - John Hancock Global Absolute - Low Amount : $105,000 Risk Score: 11 Mandate Allocation Asset Class Allocation Strategic 42.00% Tactical 42.00% Diversifier 16.00% Global Macro 15.56% Balanced 13.44% Large Cap Value 13.23% Large Cap Growth 11.76% International Equity 11.00% Absolute Return 6.86% Tactical General Equity 6.30% General Fixed Income 3.99% Small Cap Blend 3.82% Hedge 3.20% Managed Futures 2.65% Other 8.17%
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Strategists MMS: John Hancock The John Hancock Global Absolute Return Strategy ( GARS ), sub-advised by Standard Life, attempts to generate attractive riskadjusted returns (cash plus 5% with 1/3 to 1/2 of the volatility of equities) through a variety of directional and non-directional strategies, such as beta timing, equity security selection and relative value trades. GARS invests in global equity, fixed income, and currency markets, both synthetically and on a cash basis. GARS seeks to avoid a high correlation to equities, strives to limit downside risk and seeks multiple diversifying sources of return. The strategy has been designed to profit in a variety of economic scenarios and should not require strong risk asset markets to meet its stated objective. The portfolio managers for GARS have the flexibility to take a long term view of the markets in which they operate and can aim for a horizon of three years. Toews Corporation Toews' primary objective is to participate in market gains, but to avoid significant losses. Their research shows that virtually all market declines of significance are preceded by periods of negative, more moderate price decreases. Toews' strategy attempts to exit markets during the preliminary phase of the decline, before large losses are realized. When markets are rising, assets are fully invested and attempt to track the market indices. During significant long-term declines, Toews attempts to mimic the return of money market or fixed income instruments and avoid the majority of losses. Meeder Investment Management Meeder Investment Management is an investment firm that supports financial advisors working to grow and protect client wealth. Since 1974, Meeder has been responding to the needs of institutional and individual investors. As of 12/31/14, Meeder manages, advises and administers nearly $10 billion in assets. For more than 40 years Meeder has specialized in customized investment solutions that incorporate their proprietary tactical multi-discipline/multi-factor approach to investing. The Meeder Advantage Meeder believes there are multiple forces that influence the market and many ways to achieve investment objectives. This is why they have developed a tactical investment philosophy that is both multi-discipline and multi-factor. Meeder believes that the process of incorporating factors that respond to current market conditions into their multi-discipline models is a competitive advantage and key differentiator among other strategists. 361 Capital 361 Capital is an award-winning*, liquid alternative investments firm focused on providing institutional quality mutual funds to investment advisors and their clients. Since our founding in 2001, we have been exclusively focused on alternative investments, creating innovative portfolio solutions that seek to lower risk, enhance returns, and provide transparency. This experience has provided 361 Capital with a deep understanding of the strategies that make up alternative investing, including long/short equity, managed futures, market neutral, global macro, and multi-alternative. Today, we combine our investment skills and experience with that of other high quality alternative investment managers to offer a family of single-manager alternative mutual funds. Our goal is to provide our clients with the highest quality mutual funds, whether managed by 361 Capital, or sub-advised by another proven alternative investment firm. ETF - Vanguard Since its beginning in 1975, Vanguard has grown to become one of the world s largest investment management companies, with more than $3.01 trillion in U.S. fund assets as of March 31, 2015. Vanguard provides an extensive array of investment products, including a full range of low-cost ETFs and mutual funds designed to help financial advisors grow and preserve the wealth of their clients. Most investment firms are either publicly traded or privately owned. Vanguard is different: They're owned by the Vanguard funds, which are owned by their clients. Vanguard makes every decision with only their clients needs in mind. Vanguard's unique structure, along with their commitment to provide outstanding performance and service at the lowest possible cost, provides financial advisors with many opportunities for building their businesses and enhancing their client relationships.
Custody TD Ameritrade Institutional The TD Ameritrade Institutional Difference TD Ameritrade Institutional* is a leading provider of comprehensive brokerage and custody services to over 4,000 fee-based independent Registered Investment Advisors (RIAs) and their clients. Their collaborative approach and innovative technology solutions ensure that we spend less time navigating a one-size-fits-all solution and more time focused on exceeding your expectations. *TD Ameritrade Institutional, Division of TD Ameritrade, Inc., member FINRA/SIPC.
Proposed Strategies Registration Name Model Name Mandate Risk Score Amount Valued Client Individual Toews Balanced Tactical 22 $315,000 Valued Client Individual Meeder Balanced Portfolio Tactical 46 $315,000 Valued Client Individual 361 Hedged Growth Portfolio Diversifier 39 $135,000 Valued Client Individual Vanguard CRSP 100% Equity - ETF Strategic 85 $630,000 Valued Client Individual MMS - John Hancock Global Absolute - Low Diversifier 11 $105,000
Fact Sheet: Valued Client Portfolio Historical Performance 1/1/2015-5/31/2015 $ 1 560 000.00 $ 1 540 000.00 $ 1 520 000.00 $ 1 500 000.00 $ 1 480 000.00 $ 1 460 000.00 Jan '15 Feb '15 Mar '15 Apr '15 May '15 Jun '15 Blended Model Performance Trailing Non-Standardized Returns 1 Year - - - - - 2.79% 2.79% Performance Best Period Return Worst Period Return Up Periods Down Periods 3 Months End - 4/30/15 3.38% End - 5/31/15 0.45% - - 1 Year End - - End - - - - End - - End - - - - Risk vs. Return 1 Year 3 Years 5 Years Since 1/1/15 Macro Allocation Return 4% 2% 0% 0% 5% Standard Deviation Blended Model Performance Std. Deviation - - - 6.06% Sharpe Ratio - - - 1.13 Alpha (%) - - - -3.26 Best Fit Beta - - - 1.16 R 2 - - - 0.96 Max Drawdown - - - -0.88% Tracking Error - - - 4.89% Up Market Down Market - - - 105.32% - - - 174.44% Equities Fixed Income Cash Other Convertibles 20.97% 12.01% 8.81% 0.00% 58.21%
Fact Sheet: Valued Client Individual Historical Performance 1/1/2015-5/31/2015 $ 1 560 000.00 $ 1 540 000.00 $ 1 520 000.00 $ 1 500 000.00 $ 1 480 000.00 $ 1 460 000.00 Jan '15 Feb '15 Mar '15 Apr '15 May '15 Jun '15 Blended Model Performance Trailing Non-Standardized Returns 1 Year - - - - - 2.79% 2.79% Performance Best Period Return Worst Period Return Up Periods Down Periods 3 Months End - 4/30/15 3.38% End - 5/31/15 0.45% - - 1 Year End - - End - - - - End - - End - - - - Risk vs. Return 1 Year 3 Years 5 Years Since 1/1/15 Macro Allocation Return 4% 2% 0% 0% 5% Standard Deviation Blended Model Performance Std. Deviation - - - 6.06% Sharpe Ratio - - - 1.13 Alpha (%) - - - -3.26 Best Fit Beta - - - 1.16 R 2 - - - 0.96 Max Drawdown - - - -0.88% Tracking Error - - - 4.89% Up Market Down Market - - - 105.32% - - - 174.44% Equities Fixed Income Cash Other Convertibles 20.97% 12.01% 8.81% 0.00% 58.21%
Fact Sheet: Toews Balanced Historical Performance 9/1/2007-5/31/2015 $ 500 000.00 $ 450 000.00 $ 400 000.00 $ 350 000.00 $ 300 000.00 $ 250 000.00 2008 2009 2010 2011 2012 2013 2014 2015 Toews Balanced Performance Trailing Non-Standardized Returns 1 Year -0.08% 19.58% 6.14% 18.36% 3.43% 41.38% 4.57% Performance Best Period Return Worst Period Return Up Periods Down Periods 3 Months End - 6/30/09 14.71% End - 8/31/11-8.08% - - 1 Year End - 3/31/10 33.83% End - 12/31/11-11.57% 0 1 End - 2/28/11 34.66% End - 12/31/12 1.91% 19 6 Risk vs. Return 1 Year Return 5% 3% 0% 0% 5% Standard Deviation Toews Balanced Performance Since 9/1/07 Std. Deviation 5.17% 5.36% 6.75% 7.99% Sharpe Ratio -0.02 1.14 0.50 0.52 Alpha (%) -1.99 0.17-2.03 1.54 Best Fit Beta 1.28 1.13 0.96 0.68 R 2 0.70 0.59 0.51 0.45 Max Drawdown -4.80% -4.80% -15.05% - 15.05% Tracking Error 10.32% 12.05% 16.38% 22.35% Up Market Down Market 94.20% 118.00% 89.88% 93.68% 130.35% 120.23% 126.60% 87.71% Macro Allocation Fixed Income Other Cash 4.48% Equities 0.25% Convertibles 0.00% 48.87% 46.40%
Fact Sheet: Vanguard CRSP 100% Equity - ETF Historical Performance 1/1/2010-5/31/2015 $ 1 200 000.00 $ 1 000 000.00 $ 800 000.00 $ 600 000.00 $ 400 000.00 2010 2011 2012 2013 2014 2015 Vanguard CRSP 100% Equity - ETF Performance Trailing Non-Standardized Returns 1 Year 6.34% 54.79% 15.68% 76.35% 12.02% 70.81% 10.39% Performance Best Period Return Worst Period Return Up Periods Down Periods 3 Months End - 11/30/10 12.65% End - 9/30/11-17.00% - - 1 Year End - 6/30/11 29.22% End - 5/31/12-8.95% 1 0 End - 9/30/14 62.48% End - 12/31/12 24.06% 25 0 Risk vs. Return 1 Year Return 15% 10% 5% 0% 0% 5% 10% Standard Deviation Vanguard CRSP 100% Equity -ETF Since 1/1/10 Std. Deviation 8.15% 8.27% 12.94% 13.44% Sharpe Ratio 0.77 1.89 0.92 0.77 Alpha (%) -1.27-1.37-1.14-1.01 Best Fit Beta 0.97 0.98 0.98 0.98 R 2 0.99 0.98 0.99 0.99 Max Drawdown -3.07% -3.70% -19.89% -19.89% Tracking Error 3.05% 4.25% 4.06% 3.96% Up Market Down Market 94.09% 92.87% 94.56% 95.16% 105.34% 101.56% 100.57% 100.41% Macro Allocation Equities Cash 2.00% Other 0.59% Fixed Income 0.02% 97.38%
Fact Sheet: MMS - John Hancock Global Absolute - Low Historical Performance 1/1/2012-5/31/2015 $ 125 000.00 $ 120 000.00 $ 115 000.00 $ 110 000.00 $ 105 000.00 $ 100 000.00 Jan '12 Jul '12 Jan '13 Jul '13 Jan '14 Jul '14 Jan '15 MMS - John Hancock Global Absolute - Low Performance Trailing Non-Standardized Returns 1 Year 4.95% 11.55% 3.71% - - 15.53% 4.32% Performance Best Period Return Worst Period Return Up Periods Down Periods 3 Months End - 3/31/12 6.06% End - 8/31/13-2.75% - - 1 Year End - 3/31/15 6.35% End - 4/30/14-0.30% 1 0 End - 12/31/14 12.30% End - 4/30/15 8.44% 24 1 Risk vs. Return 1 Year Return 5% 3% 0% 0% Standard Deviation MMS -John Hancock Global Absolu 5 Years Since 1/1/12 Std. Deviation 2.84% 2.71% - 3.53% Sharpe Ratio 1.73 1.35-1.21 Alpha (%) 4.67 1.71-1.42 Best Fit Beta 0.37 0.66-0.93 R 2 0.08 0.30-0.34 Max Drawdown -1.28% -3.13% - -3.13% Tracking Error 10.56% 8.26% - 9.94% Up Market Down Market 140.52% 95.33% - 116.99% 1.55% 56.33% - 84.18% Macro Allocation Fixed Income 47.64% Cash 43.89% Equities 32.24% Convertibles 0.00% Other -23.77%
Fact Sheet: Meeder Balanced Portfolio Historical Performance 7/1/2006-5/31/2015 $ 500 000.00 $ 450 000.00 $ 400 000.00 $ 350 000.00 $ 300 000.00 $ 250 000.00 $ 200 000.00 2007 2008 2009 2010 2011 2012 2013 2014 2015 Meeder Balanced Portfolio Performance Trailing Non-Standardized Returns 1 Year 4.71% 37.98% 11.33% 45.82% 7.84% 46.71% 4.39% Performance Best Period Return Worst Period Return Up Periods Down Periods 3 Months End - 5/31/09 9.76% End - 11/30/08-17.43% - - 1 Year End - 3/31/10 24.47% End - 2/28/09-24.49% 1 0 End - 9/30/14 43.74% End - 6/30/10-13.77% 25 0 Risk vs. Return 1 Year Since 7/1/06 Macro Allocation 5% Std. Deviation 6.04% 6.76% 8.47% 9.36% Return 3% 0% 0% 5% Standard Deviation Meeder Balanced Portfolio Perfor Sharpe Ratio 0.78 1.67 0.92 0.37 Alpha (%) 1.28-0.47-1.65-1.04 Best Fit Beta 1.11 1.18 1.06 0.87 R 2 0.79 0.84 0.90 0.88 Max Drawdown -2.45% -3.10% -14.79% -30.16% Tracking Error 9.67% 10.03% 9.59% 12.05% Up Market Down Market 102.16% 111.45% 100.44% 90.61% 77.27% 105.34% 116.26% 101.79% Equities Fixed Income Cash Other 1.04% 18.54% 26.87% 53.55%
Fact Sheet: 361 Hedged Growth Portfolio Historical Performance 1/1/2015-5/31/2015 $ 137 000.00 $ 136 000.00 $ 135 000.00 $ 134 000.00 $ 133 000.00 Jan '15 Feb '15 Mar '15 Apr '15 May '15 Jun '15 361 Hedged Growth Portfolio Performance Trailing Non-Standardized Returns 1 Year - - - - - 1.00% 1.00% Performance Best Period Return Worst Period Return Up Periods Down Periods 3 Months End - 5/31/15 0.95% End - 4/30/15-0.74% - - 1 Year End - - End - - - - End - - End - - - - Risk vs. Return 1 Year 3 Years 5 Years Since 1/1/15 Macro Allocation Return 2% 1% 1% 0% 0% Standard Deviation 361 Hedged Growth Portfolio Perfo Std. Deviation - - - 3.71% Sharpe Ratio - - - 0.65 Alpha (%) - - - 0.72 Best Fit Beta - - - 0.22 R 2 - - - 0.02 Max Drawdown - - - -1.14% Tracking Error - - - 14.31% Up Market Down Market - - - 57.80% - - - 212.95% Equities Cash Fixed Income Other Convertibles 2.95% 0.00% 19.07% 41.71% 36.28%
Fees For Our Services The Summary below is based on your recommended Portfolio value of: $1,500,000 Fee Summary Portfolio Summary Value Advisory Fee 1.00% Platform / Strategist Fee 0.15% Total 1.15% Account Maintenance Fee $25 electronic/$50 physical mail Annual fees will be prorated monthly. FTJFC will debit your account at the beginning of each month based on the average daily balance of the preceding month. Your fee will vary based upon the investment strategy selected and total account value (resulting from appreciation, depreciation, liquidations, or additional contributions) in accordance with our fee schedule for the FTJ FundChoice (FTJFC) program. FTJFC may change the fee schedule for the by providing 30 days written notice to you. Important: This summary may not be indicative of all fees that may be charged to this account. For list of all fees, please refer to the FTJFC Miscellaneous Fee Document. ETFs used in the program will be subjected to the ETF Trading and Custody Fee as indicated on the application.
Asset Performance Horizon *Earliest share class performance and asset class Index returns may be appended to investment returns where historical data for the investment is deemed insufficient to provide statistically accurate results or as a broad representation of investment performance. These benchmark rates of returns should not be considered as exact replications of the investment returns, but rather as an approximation for illustrative purposes. The projections or other information generated by this report regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Hypothetical Performance Asset Name Starting Date Ending Date Meeder Balanced Portfolio 1/1/2015 5/31/2015 Toews Balanced 1/1/2015 5/31/2015 361 Hedged Growth Portfolio 1/1/2015 5/31/2015 MMS - John Hancock Global Absolute - Low 1/1/2015 5/31/2015 Vanguard CRSP 100% Equity - ETF 1/1/2015 5/31/2015
Disclosures Your Financial Advisor has prepared this report utilizing a web-based investment software and data service (the Service ) made available by an independent vendor FTJ Fundchoice, LLC (the Vendor ). The Service is made available to the advisor on an as is basis. The Vendor expressly disclaims all warranties with respect to the Service and its output (or any results to be obtained from the use thereof), including but not limited to any implied warranty of merchantability or fitness for a particular purpose or use, accuracy, completeness, originality or non-infringement and all warranties arising from course of performance, course of dealing and usage of trade or their equivalents. The Service is not intended to provide any assurances as to the suitability of any investment strategies, asset allocations, or purchases or sales of securities mentioned in this report. The advisor assumes full responsibility for determining the suitability and fitness of any investment strategies, asset allocations or securities purchases or sales detailed in this report. In no event shall Vendor or its suppliers or their respective affiliates have any liability for damages of any kind based on any person s use of the Service, including this report, or on any person s decision, actions or analyses arising out of any use of the Service. Investors should consider the investment objectives, risks, charges and expenses of each fund carefully before investing. A free prospectus containing this and other information is available from your Financial Advisor for any investment company product mentioned in this report. Read it and consider it carefully before you invest. Performance Data: Performance data quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment in the fund(s) will fluctuate so that an investor s shares when redeemed may be worth more or less than their original cost. The current performance for the fund(s) illustrated may be higher or lower than the performance data quoted. Performance data and other information contained herein is unaudited and based on information that is deemed to be reliable. Performance figures prior to January 1, 2013 represent the return on a qualified account invested in each strategy which had no capital additions or withdrawals during the relevant period. Non-qualified account returns will vary with the presented performance due to differences in settlement dates of these accounts held at FTJ FundChoice, LLC. Beginning on January 1, 2013 all performance figures are calculated using composites constructed based on the underlying model assignment of an account. All composites are comprised of accounts continuously invested in a strategist model with a market value greater than $25,000 at the beginning of the performance reporting period. Mutual Fund strategy performance is presented based on a 1% advisory fee, a strategist fee of 0% to 0.10% depending on the strategy, and an asset-based administrative fee of 0.45%. ETF strategy performance is based on a 1% advisory fee, a strategist fee of 0% to 0.20% depending on the strategy, an asset-based administration fee of 0.35%, and an ETF Custody and Trading Fee of 0.20%. Returns presented prior to the strategist s inception at FTJ FundChoice, LLC were computed based upon monthly return figures provided by the strategist, and may not reflect the actual investment results of any individual account. In addition, such results may not reflect the impact that material economic and market factors might have had if accounts had actually been managed by the strategist for the entire period portrayed. A complete list of all fees and model start dates is available upon request. Blended model performance is hypothetical (it does not reflect actual trading in actual accounts) and is provided for informational purposes only to indicate historical performance had the household and/or registration been allocated in the weightings specified on the preceding pages over the relevant time period. Blended model performance results do not represent the impact that material economic and market factors might have on an advisor s decision making process if the advisor were actually managing client money. Blended model performance also differs from actual performance because it is achieved through the retroactive application of model portfolios designed with the benefit of hindsight. Performance results for clients may vary from the blended model performance due to market conditions and other factors, including investments cash flow, mutual fund allocations, frequency and precision of rebalancing, tax-management strategies, lower or higher strategist fees, administrative fees and advisor Fees, varying custodian, brokerage and other administrative fees and/or the timing of fee deductions. As a result of these and potentially other variances, actual performance for accounts may differ materially from (and may be lower than) that of the blended model performance. Performance data may not be available for all models, because these models do not yet have a sufficient level of assets to create composites for performance calculation; however, they are currently offered through the FTJFC Strategist Program as investment options. Once all of the above cited composite creation criteria are met, composites will be constructed and performance will begin being calculated for these models. Because clients will have different fee arrangements and specific investments in the strategy may be made at different times, net performance for any individual client will vary from the net performance as stated herein. The portfolio is valued monthly and year-todate returns are calculated by geometrically linking the monthly returns. The returns presented reflect the reinvestment of dividends and other earnings.
Capital Preservation Balanced Income Balanced Balanced Growth Growth Fixed Income Diversifier - Low Vol Diversifier - Moderate Vol Diversifier - High Vol MSCI World (GR) 18.00% 38.00% 58.00% 78.00% 98.00% 0.00% 0.00% 0.00% 0.00% Barclays Agg Bond 80.00% 60.00% 40.00% 20.00% 0.00% 98.00% 79.00% 64.00% 49.00% MSCI ACWI (GR) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 19.00% 34.00% 49.00% US T-bill (3 month) 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% MSCI World (GR) - The MSCI World Index represents large and mid-cap equity performance across 23 developed markets countries, covering approximately 85% of the free float-adjusted market capitalization in each. This index offers a broad global equity benchmark, without emerging markets exposure. MSCI ACWI (GR) - The MSCI ACWI Index covers a set of approximately 14,000 securities and includes large, mid, small and micro-cap size segments for all developed markets countries plus large, mid and small-cap size segments for emerging markets. Barclays Agg Bond - The Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency). The information on indices is presented for illustrative purposes only and is no intended to imply the potential performance of any fund or investment. Indices are not available for direct investment. Index performance assumes the reinvestment of all distributions but does not assume any transaction costs, taxes, management fees, or other expenses. Definitions Historical Performance - The Performance Summary Graph plots the approximate market value of investments, indices or portfolios over the investment horizon. It may also include the total investment assumed in the illustration and/or comparative hypothetical(s) or benchmark(s). Total investment includes dollar inflows and outflows, including outflows representing taxes and fees paid out of pocket. If a benchmark index or blended benchmark is included on the graph, it assumes a similar pattern of investment and withdrawal as that of the investments, indices or portfolios. Direct investment in an index is not possible. Indexes are unmanaged portfolios representing different asset classes, with varying levels of associated risk. The benchmark index or blended benchmark index included in the graph may or may not represent an appropriate or accurate comparison with the investments, indices or portfolios illustrated. Benchmark - A blended asset class benchmark may be used for all comparison purposes in the Hypothetical and Portfolio Overview. This blended benchmark consists of the weighted blend of all asset allocations that make up the portfolio. Performance of this benchmark is displayed as being greater than (+) or less than (-) the investment or portfolio. Trailing Performance Return - Non-annualized performance over a given period of time. Return - The geometric mean of cumulative returns with respect to one year. Best & Worst Analysis Best Period Return - The highest rolling 3 month, 12 month and 36 month rolling period total return since inception. Worst Period Return - The lowest rolling 3 month, 12 month and 36 month rolling period total return since inception. Investment Detail % of Portfolio - The value of an investment as a percentage of a portfolio s total value. Max. Front End Load - The highest sales charge or commission paid when purchasing an investment, such as a mutual fund or an annuity.
Max. Redemption and/or CDSC fee - The highest sales charge or commission paid when selling an investment, such as a mutual fund or an annuity. Expense Ratio - The expense ratio is a percentage of assets deducted each year for management fees, distribution fees (12b-1), and any other expenses, gross of any fee waivers or expense reimbursements. The expense ratio does not include brokerage costs for trading the portfolio. Asset Allocation - The Asset Allocation pie chart combines the various asset allocation weights of the portfolio investments. See the Asset Allocation & Investment Detail table for more information. Mandate Allocation - The portfolio s allocation based on FTJFC s assigned mandates. Risk vs. Return Standard Deviation - A measure of the variability of an investment s or portfolio s returns. All standard deviations shown have been annualized. Investors use the standard deviation of historical performance to try to predict the range of returns that are most likely for a given fund. When a fund has a high standard deviation, the predicted range of performance is wide, implying greater volatility. Alpha - A coefficient which measures risk-adjusted performance, factoring in the risk due to the specific investment or portfolio, rather than the overall market. A high value for alpha implies that the investment or portfolio has performed better than would have been expected given its beta. Beta - A quantitative measure of the volatility of a given investment or portfolio, relative to its benchmark. Specifically, the performance the investment or portfolio has experienced historically as the benchmark moved 1% up or down. A beta above 1 is more volatile than the overall market, while a beta below 1 is less volatile. R² - A measurement of how closely an investment or a portfolio s performance correlates with the performance of a benchmark and thus a measurement of what portion of its performance can be explained by the performance of the overall market or index. Sharpe Ratio - A risk-adjusted measure calculated using standard deviation and excess return to determine reward per unit of risk. The higher the Sharpe ratio, the better the investment or portfolio s historical risk-adjusted performance. Tracking Error - A measure of how closely a portfolio follows the index to which it is benchmarked. Up Market - A statistical measure of an investment manager's overall performance in up-markets. The up-market capture ratio is used to evaluate how well an investment manager performed relative to an index during periods when that index has risen. Down Market - A statistical measure of an investment manager's overall performance in down-markets. The downmarket capture ratio is used to evaluate how well an investment manager performed relative to an index during periods when that index has declined. Macro Allocation - The portfolio s high-level allocation to cash, U.S. & non-u.s. equities and fixed income is displayed in this graphic. The classification of other includes issue types that do not perfectly fit the previously mentioned classes, such as convertible bonds and preferred stocks. Not classified refers to the portion of the portfolio that AdvisoryWorld, Lipper or Standard & Poor s could not classify due to missing data. In the graph and data labels, net allocation (long positions net of short) is displayed. For example, if an investment has many long equity positions, the percent of assets in the macro allocation of the portfolio may by greater than 100% whereas the percent of assets in cash is less than 0%. Standardized Returns - For mutual funds, standardized return is total return adjusted for sales charges, and reflects all ongoing fund expenses. For money-market mutual funds, 7-Day Yield more closely reflects the current earnings than the total return quotation. The charges and expenses used in the standardized returns are obtained from the most recent prospectus and/or shareholder report available to Standard & Poor s or Lipper. Non-Standardized Returns - For mutual funds, Closed End Funds, ETFs, Variable Annuity Sub-Accounts and Stocks, non-standardized return is total return unadjusted for sales charges, and reflects all ongoing fund expenses.