Core Portfolio

Investment Objective
The primary objective of the Core Portfolio is to achieve long-term capital appreciation. The Core Portfolio seeks to generate returns through capital appreciation and dividends.

Characteristics

Core

 S&P 500

Market Capitalization $80,439 $81,900
Yield 1.6% 1.9%
Beta 1.0 1.0
Long-Term Earnings Growth 12.0% 11.0%
Forward Price Earnings Ratio 14.5 14.4

As of December 31, 2009

Risk/Reward
The Core Portfolio is expected to have similar returns and volatility to the Standard & Poor's 500 Index (S&P 500). The portfolio seeks to outperform the S&P 500 over a full market cycle.

Investor Profile
Clients interested in a portfolio that has similar risk/return characteristics to the S&P 500.

Strategy
The Core Portfolio emphasizes bottom-up, fundamental analysis and stock selection, placing less importance on matching S&P 500 sector weights. The portfolio reflects a "growth at a reasonable price"-style bias. Earnings growth will be similar to the market, with more emphasis on valuation measures.

Strategy characteristics such as market capitalization, dividend yield, beta, price/earnings ratio, earnings growth, and dividend growth are expected to be similar to the S&P 500 over time. While the strategy’s characteristics will be somewhat similar to the S&P 500, we seek to achieve outperformance by virtue of superior sector allocation and stock selection decisions.

 
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