rg investments - concordia university...

RG Investments

Request For Proposal

For Outsourced Chief Investment Officer Services

(Master Copy)

May 13, 2014

May 8, 2014

Concordia University, Nebraska ATTN: Curt Sherman, Director of Investments 800 N. Columbia Ave. Seward, NE 68434 Dear Mr. Sherman: Enclosed please find the requested proposal for Outsourced Chief Investment Officer services for the investment portfolio of the Endowment Fund of Concordia University, Nebraska. RG Investments is willing and able to perform the services outlined in the enclosed proposal. Furthermore, the resources and staff necessary to perform the services and provide all the required deliverables outlined in the attached proposal are available to comply with all requests within the specified time frames.

Additionally, as President and CEO of Roger Gamble Investments, Inc., dba RG Investments, I acknowledge that this proposal is a firm and irrevocable offer for one (1) year from the date of the proposal. Furthermore, I acknowledge that I have the legal authority to bind my firm to the contract if the University accepts the terms of the enclosed proposal. I will remain the primary contact for this portfolio.

I thank you for the opportunity to present my proposal. Please do not hesitate to contact my office with any questions you may have regarding the enclosed materials. Please find my contact information below.

Sincerely,

Roger L. Gamble

President & CEO Roger Gamble Investments, Inc. dba RG Investments 222 South 5th St. P.O. Box 273 Seward, NE 68434 Phone: (402) 643-6669 Toll Free: (800) 873-6669 Fax: (402) 643-6829 Email: [email protected] Federal EIN: 20-0528554 Corporate IN: 20-0528554 Enclosure

Concordia University, Nebraska Request for Proposal

For Outsourced Chief Investment Office Services

QUESTIONNAIRE

I. Organizational Background and Personnel A) Provide a brief summary and history of your firm, including year of inception, ownership structure, affiliated and subsidiary companies and relationships, joint ventures, business partners, number and location of offices, and number of professional consultants. Indicate which office would service our account. Roger Gamble founded RG Investments in 1991. RG Investments has been serving the

financial needs of the Seward community and surrounding areas for over 20 years. The goal at RG Investments is to help develop a personalized strategy to meet your risk management needs and achieve your financial goals. RG Investments is based in Seward, Nebraska.

VSR Financial Services, Inc. (VSR) was founded in 1987. Two of the original four founding members are still working on a daily basis with the firm. VSR remains privately held. There are approximately 275 independent Reps that work through VSR to serve their Clients. Roger Gamble is one of those licensed to do business through VSR for both commissions and fees (as an IAR of the VSR RIA). VSR Advisory Services is a division of VSR Financial Services, Inc. and was originally created in 1993.

Stonebridge Capital Advisors (Stonebridge) is an SEC Registered Investment Advisor under the Act of 1940. Stonebridge was founded in 1997 to provide customized, separately managed equity and fixed income portfolios for high net worth individuals and institutions. Stonebridge is an independent and privately owned investment advisory firm. The majority owners of Stonebridge are the employees with outside minority shareholders who serve on our board of directors. There are 18 portfolio managers and securities analysts who work as a team to deliver superior investment performance and client service. Stonebridge has consistently been recognized by Nelson’s (a division of Thomson Reuters), Lipper Analytics, Prima Capital and Envestnet as a top performing money manager since our inception. Stonebridge is based in St. Paul, MN with an office in Traverse City, Michigan.

Dorsey, Wright & Associates (Dorsey Wright) is an independent and privately owned Registered Investment Advisory firm with offices in Richmond, VA and Pasadena, CA. Since 1987, Dorsey Wright has been a leading advisor to Wall Street and investment managers worldwide. Dorsey Wright provides three essential services for their clients: comprehensive investment research and analysis, professional money management for institutions and individuals, and sub-advisory and licensing services to mutual funds and ETF providers. Dorsey Wright currently has $4 billion in assets under management and licensing. Dorsey Wright’s majority owner is a financial investment firm, Falfurrias Capital Partners (FCP). Hugh McColl, the founder of FCP, is the former Chairman and CEO of Bank of America. Tom Dorsey, one of the founding partners, remains a large minority shareholder. The remainder of the firm is owned by employees of Dorsey Wright.

B) Provide the names, titles, home office locations and biographies of key individuals who would be directly responsible for providing services to our account, include the year each individual joined your firm, current responsibilities, area of expertise, experience, education, professional designations and memberships. Detail their roles and the scope of their involvement for this assignment.

Roger Gamble and VSR will lead the team that serves the Investment Committee of the Concordia University Nebraska Foundation. Outlined below is a chart of the team dedicated to the Foundation: Page 2

Roger Gamble, with 27 years of investment experience will lead the team, as OCIO, that will oversee and manage the portfolio of the Foundation. Mr. Gamble is a local investment manager to be readily accessible to the Investment committee to address any needs or question from the members of the Investment Committee. In addition, Mr. Gamble will have at his immediate access the significant resources of VSR to assist him in his responsibilities to the Foundation.

RG Investments 222 South 5th Street P.O. Box 273 Seward, NE 68434 (800) 873-6669/ (402)643-6669 Roger L. Gamble is a 1982 graduate of Seward High School. In May 1986 he graduated with honors from Wayne State College in Wayne, NE with a Bachelor of Science degree in Business Administration with a Finance emphasis. That same year, Roger began his investment career with the PaineWebber office located in Hastings, NE. During his employment at PaineWebber, Roger obtained his securities, commodities and life insurance licenses. After several other moves in the Hastings area, Roger returned to his hometown of Seward, NE to establish RG Investments in August, 1991. The RG Investments office in downtown Seward opened on June 1, 1992, where it remains today. Roger holds the FINRA Series 3, 7, 24, 63 and 65 licenses.

VSR Financial Services, Inc. 8620 W 110th Street Overland Park, Kansas 66210 (800) 800-3177 VSR is the Broker/Dealer and RIA for Roger Gamble. Roger Gamble is independent of VSR. VSR has Solicitor Agreements with 3rd Party Managers (“Managers”) and platforms that Roger may use as solutions for OCIO services.

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VSR Team: Peter Hughes, CFA, Chief Investment Officer Peter Hughes joined VSR in February of 2013 as Chief Investment Officer. Previously, Peter worked for investment advisory firms in California and Kansas City in research and portfolio management. He holds the FINRA Series 7, 63, 65 and 99 licenses. Account responsibilities: Due-Diligence, Portfolio Management, and Portfolio Reviews for VSR Financial Advisors and their Clients. Jeff Goodnow VP – Advisory Services Jeff Goodnow joined VSR's Marketing Department as Product Coordinator for VSR Advisory Services in March of 2003. In 2010 he became vice president. Jeff, a native of Topeka, KS, started in the financial services industry in 1993 in banking, subsequently worked for Security Benefit Group in Topeka, followed by American Century in Kansas City prior to VSR. He has the FINRA Series 7 and 66 licenses. Account responsibilities: performing Due-Diligence on third-party vendors, assisting Financial Advisors with their fee-based business, and marketing Advisory Services fee-based programs.

Stonebridge Capital Advisors, LLC 2550 University Avenue South, Suite 180 South Saint Paul, MN 55114 (800) 317-1127 The Stonebridge team responsible for the management of the Foundation would be based in St.Paul, MN. The Investment Committee and Director of Investments always have direct contact with the Stonebridge Team. Stonebridge Team: Robert A. Kincade Portfolio Manager & President Mr. Kincade founded Stonebridge in 1997 and serves on the Board of Directors. He is responsible for equity portfolio management, marketing and administration. Mr. Kincade is a member of the Stonebridge Investment Review Committee and the Stonebridge Research Committee. Account responsibilities: Investment Strategy Asset Allocation and compliance with Investment Policies and Guidelines. Heidi Hukriede, CFA, Director of Fixed Income Management Mrs. Hukriede co-founded Stonebridge in 1997. Mrs. Hukriede is responsible for management of the taxable and tax-exempt portfolios for institutions and high net worth individuals, as well as credit analysis and trading of securities.Mrs. Hukriede also serves on the Stonebridge Investment Review Committee and the Stonebridge Research Committee. Account responsibilities: Fixed Income Portfolio Management and Allocation. John Schonberg, CFA, Principal & Portfolio Manager Mr. Schonberg joined Stonebridge in 2012 and is responsible for the management of equity portfolios for institutions and high net worth individuals. As a member of the Equity Team he serves on the Research Committee and works with the members of the equity team in the analysis, selection and structuring of the equity portfolios. Account responsibilities: Equity Portfolio Management Page 4

Michael Dashner CFA Level III Candidate and Portfolio Manager Mr. Dashner joined Stonebridge in 2009. Mr. Dashner is a member of the Equity Team at Stonebridge and is responsible for equity trading. As a member of the Research Committee, Mr. Dashner follows sector specific companies and maintains the equity universe and models for each equity strategy. Account responsibilities: Co-Equity Portfolio Manager

Dorsey, Wright & Associates 790 E Colorado Blvd., Ste. 808 Pasadena, CA 91101 (626)-535-0630 The account would be managed by our portfolio management team in Pasadena, CA. Harold Parker, CMT, Senior Portfolio Manager Mr. Parker joined Dorsey Wright Money Management in 1994. As Senior Portfolio Manager, he is responsible for investment strategy across DWA’s funds, ETFs and SMA accounts. He began his investment career with E.F. Hutton & Co. in 1978 and later moved to Smith Barney. He was one of the original portfolio managers of Smith Barney’s Portfolio Management (PM) Program, which provided discretionary institutional portfolio management. He has also authored several original research papers on the subject of technical analysis. John Lewis, CMT, Senior Portfolio Manager Mr. Lewis joined Dorsey, Wright Money Management in 2002. As Senior Portfolio Manager, he is responsible for investment strategy across DWA’s funds, ETFs and SMA accounts. He has worked in the investment industry since 1994. Mr. Lewis is one of the foremost experts on relative strength investing and has authored several original research papers on the subject. Andy Hyer, CFP®, CIMA®, CMT, Client Portfolio Manager Mr. Hyer joined Dorsey, Wright Money Management in 2004. He has authored original research on the subject of technical analysis and speaks and writes regularly on the topic of momentum investing. He is a CERTIFIED FINANCIAL PLANNER TM, Investment Management Analyst, and a Chartered Market Technician.

C) Does your firm have any ownership or financial relationships with any other financial firms, including asset management, broker/dealer, banking, insurance or actuarial firms? VSR is the firm that holds the licenses for the independent Rep, Roger Gamble. In addition,

VSR signs the agreements for partners that Roger may use for solutions with his Clients. Stonebridge is an independent investment advisor and does not have any ownership or financial

relationships with any other financial firms, including asset management, broker/dealer, banking, insurance or actuarial firms.

Dorsey Wright – is an independent investment Advisor and does not have any ownership or financial relationships with any other financial firms.

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D) Is your firm, its parent or affiliate(s) a registered investment advisor with the SEC under the Investment Advisors Act of 1940? If not, what is your fiduciary classification? Please provide a copy of your most recent SEC Form ADV Part II. VSR Financial Services, Inc. is the nationally Registered Investment Advisor. Our independent

Reps can be Investment Advisor Reps (“IARs”). Roger Gamble of RG Investments is an IAR of VSR. The VSR ADV Part 2A and Roger’s ADV Part 2B are included.

Stonebridge is an SEC Registered Investment Advisor with the SEC under the Investment Advisors Act of 1940. A form ADV Part II is provided in the Exhibits.

Dorsey Wright is an SEC Registered Investment Advisor with the SEC under the Investment Advisors Act of 1940. A form ADV Part II is provided in the Exhibits.

E) Within the last five years has your organization or an officer or principal been involved in any business litigation or other legal proceedings relating to your investment advisory and/or consulting services? If so, provide an explanation and indicate the current status or disposition. Roger Gamble/RG Investments – No. VSR has only had one Advisory arbitration since its founding in 1993. It was a complaint against

a different VSR Rep alleging mismanagement of a “Rep-as-Portfolio Manager” account. It was settled earlier this year for $34,000 (less than half of the complaint amount). Rep was also terminated.

Stonebridge – No. Dorsey Wright – No.

F) What protection does your firm offer it clients from negligence or willful acts of omission? Acts of fraud? Describe any insurance coverage your firm may have that is applicable in this area. VSR has an Error & Omissions (“E&O”) policy in place. Roger Gamble of RG Investments is

part of that policy. A copy of the E&O Certificate is included. Stonebridge is covered with Errors and Omissions and Directors & Officers liability insurance

in the amount of $1,000,000 through Chubb Group of Insurance Companies. Dorsey Wright is covered Errors & Omissions: Federal Insurance-Chubb, Coverage: $3 million

Fiduciary Liability: Federal Insurance-Chubb, Coverage: $1 million Fidelity Bond: Federal Insurance-Chubb, Coverage: $500,000 - $1 million

II. Client Services A) Describe your firm’s client service philosophy in regards to the OCIO services model. If you provide

traditional consulting services, how do your OCIO services differ? RG Investments believes that client policies and objectives come first in the selection of

investment managers. Selection of appropriate managers focused on those objectives will be based on experience, consistency of applying styles of management, diversification and superior long term risk adjusted performance. Investment managers must offer a compliment of styles of management and an ability to serve the distinctive needs of each client. We differ in that our focus is only for improving the financial situation of the local area. We are here to service those people and businesses that need our help meeting the goals we set together. If a potential donor wants to ask questions or understand our process, we can meet for lunch, or I can stop by their home, or even go to their place of business at their convenience. Face-to-face is simply different.

RG Investments offers the resources of a national firm on a local basis in Seward, NE with the resources of a VSR a prominent nationally recognized firm and investment management firms selected from a broad search of thousands of qualified investment advisors. We are here and fully committed to the needs of the Concordia University, NE Foundation.

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RG Investments also believes that it is our responsibility to work closely with the Investment Committee to establish a strategy of partnership to deliver service levels consistent with the needs and requirements of the Foundation. This includes:

Review and recommendations of Investment Policies Confirmation of short and long-term investment objectives Reporting and Statements specifically designed to meet the needs and at intervals

requested Investment Review meetings and performance analysis consistent with policies, strategy

and requests of the Investment Committee Consistent Economic and Market Education with the assistance of Investment Managers. Review of overall performance IOIC and services annually Meet locally, at the request of the Foundation, with current and potential Donors.

VSR has over $4 Billion AUA (Assets Under Advisement). Nearly $2 Billion is with 3rd Party

Independent Managers (considered OCIO). It is RG Investments (the Rep’s) responsibility to make suggestions and work with each Client independently to determine which Advisory solution would be most appropriate for their situation.

B) What services does your firm provide for the education and enhancement of our IC members?

RG Investments believes that a part of our responsibility to keep the Board and Investment Committee aware of economic, market, investment management and fiduciary roles through the resources of VSR and investment managers. You will have access to newsletters, economic and market updates. VSR and our managers will offer presentations to the investment committee and board members on established schedules. We hope you will view us as a resource for information for the betterment of the foundation. Examples of educational materials are attached.

III. Investment Philosophy and Process A) Describe your firm’s investment philosophy. Has it changed significantly over the past 5 years? RG Investments: There has been no significant change in our philosophy or process in the last 5

years. We have created a concept of prudent core investments in conjunction with tactical opportunities as solutions for the securities markets. This concept has been created over the 27 years that we have worked with both securities and commodities. That combination of markets and experience brings a unique view of risk to the Foundation. Once the solution has been determined, the philosophy continues with the same recurring process. Markets have cycles. It is important to keep a consistent philosophy and process to meet the goals of the Foundation.

Stonebridge: Consistent superior risk-adjusted performance is achieved through a customized,

well-diversified portfolio built by solid fundamental analysis and strategic portfolio construction.

We strive to maintain portfolios in a fully invested position in accordance with the client’s stated investment objectives. New client cash allocations are methodically deployed into the portfolio structure over a reasonable timeframe

Dorsey Wright: With each passing year, global financial markets offer more and more choices to investors. More choices can be good, if investors have a logical framework to analyze this broad universe of securities. We all know that the financial markets offer ample quantities of both risk and return. In fact, it is because of the risk that the return is possible. We believe financial markets continue to provide the best available opportunities for investors to build and preserve long-term wealth. However, to capitalize on the opportunities in the financial markets, an investor needs to

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have a systematic investment strategy. Our Relative Strength portfolios offer just such a systematic approach to investing. Relative strength is the investment factor upon which each of our portfolios is built.

We rely on relative strength to manage portfolios because of its adaptive nature and its long-term track record. Relative strength is simple in concept, yet powerful in application. Relative strength is simply the comparison of price performance within a universe of securities. Analyzing securities by their relative strength provides a way to identify the current leaders. It is those market leaders that we want to own. Relative strength also allows us to identify the laggards. Successful investing also requires avoiding big losers. We believe relative strength is equally good at identifying long-term winners and losers.

B) Describe the process your firm will use to construct a portfolio for us, including a description of your

approach to developing the investment goals/objectives/policies and the expected role of the IC and University staff.

RG Investments has already begun this process by accessing resources of VSR Financial

Services to assess the specific needs of the Foundation. The due-diligence process that occurs between our two firms is used specifically to bring appropriate 3rd party managers to the project. Returns are never guaranteed. That is why it is crucial to find quality organizations that are capable and familiar with working in this type of projects and assisting institutions. Below are a few highlighted functions used to construct this portfolio. Some have been mentioned in other sections of this RFP. Construction Process includes:

Establishment of Investment Strategy: - Economic and Market overview - Asset allocation - Investment style and manager selection - Specific investment parameters relative to strategy in accordance with policies.

Investment Manager selection and oversight - Select managers based on objectives and strategy established by the Investment

Committee - Define the roles of the manager relative to style and guidelines - Establish appropriate benchmarks for managers - Managers will also participate in economic, market, educational and presentations to

the Investment Committee at regularly scheduled meetings - Oversight of implementation of strategy and review of investment performance - Addition, removal and replacement of investment managers based on change of

objectives, market cycles and/or investment performance Investment Review meetings and performance analysis consistent with policies, strategy

and requests of the Investment Committee Consistent Economic and Market Education with the assistance of Investment Managers Review of overall performance IOIC and services annually

C) Included with this Request is our portfolio and return history as of December 31, 2013. Per our

current IPS, the primary investment objective of the Endowment is to achieve an annualized total return (net of fees and expenses) over a full market cycle (3 to 5 years) which equals or exceeds the assumed spending rate of 5% plus the rate of inflation. If you wish to do so, we would be interested in your opinion on our return history and current portfolio and its ability to meet our investment objective. Discuss how your firm, if given full discretion, would change the portfolio. Please provide your rationale. Page 8

We have reviewed the investment objectives of the Endowment, annual spending, costs of management and current portfolio. Outlined below are our observations and recommendations:

Investment Objectives and Annual Spending One of our first steps with the Investment Committee will be to further confirm and clarify the investment objectives and cash flow needs of the endowment. As stated above, the investment objective is to achieve a long-term average rate of return of 5% plus the rate of inflation (currently 1.8%). This objective would imply a growth oriented long-term focus for the management of the assets. Historical spending has averaged approximately 2.5%. Cash flow needs are conservative, further allowing for a growth orientation. This investment objective is appropriate given the long-term nature of the Endowment with the need to grow principal in order to meet future spending needs. At this stage of the economic and market cycle, this would imply a net average total rate of return of approximately 7%. Current Portfolio Securities and Asset Allocation The current portfolio is well-diversified with mutual funds, exchange traded funds and hedge funds. The management and consulting fees would appear to be 1% when including internal expense ratios, consulting fees and hedge fund fees. It is difficult to assess the hedge fund total fees given the “carry” provisions. The portfolio has a conservative asset allocation given the investment objective and current market cycle. Asset allocation is as follows:

Income Allocation 44% Bond Funds 32% MLP’s & REIT”s 12% Equity “Growth Allocation” 28% Domestic Stocks 14% International Stocks 14% Alternative Allocation 28%

The asset allocation does not reflect the investment objective of long-term growth given only 28% of the portfolio is allocated to equity growth. We consider the MLP’s and REIT’s to the income allocation as they are traditionally acquired to achieve income objectives with low to moderate growth opportunities. MLP’s and REITS will also perform similar to bonds in an interest rate rising scenario. We were not able to fully assess the alternative investments in hedge funds as information on the hedge funds is not publicly available.

In general the portfolio is a conservative portfolio with an income orientation and hedges against the risks of the stock market. This is not uncommon to see in portfolios coming out of the credit crisis of 2008 and the extended time frame of the declining interest market cycle. It is not consistent with a long-term “growth” objective and inappropriate for this stage of the market cycle.

This portfolio will be challenged to meet its investment objective given the under exposure to growth securities and relatively high allocation to income securities. Traditional fixed income (bonds) offer historically low income yields today with the 10 Year U.S. Treasury currently yielding 2.7% (see yield chart below).

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We are also likely entering a different stage of the market cycle where interest rates are likely to rise. Rising interest rates have historically caused bonds and income oriented securities such as REIT’s and MLP’s to drop in value. This would have a negative impact on the total net return of the Endowment. We also believe we are in a stage in the market cycle where equities offer the most competitive investment vehicle for total return.

Recommendations We believe this portfolio would be better served with individual securities as opposed to the current fund orientation. The portfolio would be well-diversified with individual securities across asset allocations, sectors and securities. Individual securities will allow for more direct management to objectives and effective oversight of the portfolio. Management of the portfolio with individual securities will also reduce the fees of oversight and management by approximately 35%, by eliminating the internal expense ratios of mutual, exchange traded and hedge funds.

As stated above, we believe a reallocation to a more growth oriented portfolio is appropriate given the long-term investment objectives and current market cycle. Suggested allocation:

Fixed Income (Individual Bonds) 15% Alternatives (including REIT’s, MLP’s & Hedge Funds) 25%-30% Public Equities (Domestic and International Stocks) 55%-60% We believe a lower allocation to bonds is appropriate given the low historical yields available and the likelihood of interest rates rising over the course of the next few years. The reduced allocation to alternatives is also based on lower income yields and investment opportunities in public equities.

The higher allocation to equity “growth” securities is consistent with the Endowment’s investment objective of long-term growth over a market cycle. Equities have historically been the best performing asset class with a long-term average rate of return of 8.5%. The risks associated with investments in equities are balanced by the lower allocation to income and alternatives. The strategy of higher allocation is further supported by where we believe we are positioned in the current economic and market cycles. Equities offer the best total return potential at this time in the cycle. Page 10

The recommendation as listed above does include a solution with two managers. These managers, Stonebridge Capital and Dorsey Wright, are complimentary in their process of a core “long-term” approach and a “tactical” all-market approach. This combination is a best-fit as a 70/30 mixture at this time. An attached supplement of the combined 5 year returns is included along with the Stonebridge Balanced Portfolio and the Global Macro Factsheets. Foundation needs, market cycles, and continued due-diligence may effect this combination in the future.

IV. Investment Manager Research and Selection A) How are investment managers/funds selected? RG Investments will work closely with VSR in the selection of investment managers for the

Foundation. Along with the due diligence VSR offers for each manager, RG Investments will focus on the objectives of the Foundation and our expectations for the economy and market cycle. We will also select experienced long term successful managers that will compliment each other’s styles to provide reasonable diversification of styles, markets, sectors and securities in accordance with the Foundations policies. The objective is to select managers that will maximize performance on a risk adjusted basis.

VSR utilizes a due-diligence approach for Managers called “Firm CPR” (Firm Structure, Communications, Program Design, and Returns). Effectively, VSR acts as a filter for RG Investments, when additional managers are needed, a manager removal may be warranted, and for on-going manager review. VSR provides Roger insight to the expansive list of the hundreds of choices that are available.

B) How does your firm evaluate and monitor investment managers/funds? What key criteria do you consider in the review of an investment manager/fund? RG Investments evaluation of investment managers begins with the selection process. Managers

are selected to provide a specific style of management, in conjunction with their ability to mold a viable risk-adjusted overall portfolio that meets the Client needs and objectives. VSR offers assistance in databases that allow us to analyze each manager in accordance with their style and in comparison to comparable managers. This review will include the following steps in due diligence and analysis:

Management consistent with policies and objectives Consistent application of investment process Turnover of management team Net investment performance

- Compared to established index - Compared to managers of similar styles - Relative to risk parameters - Consistent with style

Services relative to Foundation needs

VSR: As part of the “Firm CPR” process, there is continued monitoring of ADV Part 1 and 2 updates annually. In addition, Portfolio returns and communication for program design changes are reviewed. Reviews include Morningstar Research along with other sources as they become available.

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V. Risk Management A) Describe the manner in which your firm accounts for and allocates risk at the total portfolio level. How are decisions as to allocation of portfolio risk taken and who makes those decisions?

The key focus of RG Investments is to monitor the items listed below and review the allocation of managers (through their stated investment strategy and process) relative to a stated risk and objective. Therefore, risk management begins with a thorough review and understanding of the policies and objectives. We must mitigate any risk that the portfolio or any part of the portfolio is outside the policies and stated investment strategy. Any occurrence of the portfolio being out of compliance must be reported to the investment committee immediately, with a strategy and time frame to bring the portfolio back into compliance. Strategies for mitigating risk include:

Diversification – There must be diversification across sectors, securities and styles of management. Liquidity - Assessing the liquidity of each investment and appropriate balance of non-liquid investments. Quality Constraints – Each security should be analyzed and regularly reviewed to assure it maintains its credit quality. Hedging Strategies – Hedging strategies should be reviewed to assure they are mitigating risk and not compounding risk. Styles of Management – Styles of management should be reviewed to assure they are managed consistently with the style they were hired to provide. Style drift can cause a portfolio to be over concentrated in one style of management. Performance – There must be a regular review of the performance of each manager and style being utilized to assure it is consistent with the objectives of the Foundation.

VI. Performance Evaluation and Reporting A) Does your firm offer comprehensive performance reporting that tracks progress against goals and

monitors the level of risk across the entire portfolio? If so, how frequently and how soon after the end of a period are the reports available? Please provide a sample performance report. Describe your firm’s ability to provide customized reporting based on specific client preferences or requirements.

RG Investments/VSR: The Foundation will receive a monthly statement from the custodian of

accounts (*Wells Fargo/First Clearing, LLC). This is to account for basic holdings and activity. As part of the advisory relationship, a quarterly performance report is available that provides an overview of portfolio current and longer-term performance. Clients have the option of looking at the overall household investment portfolio and/or receiving individual account reports. These reports help your clients stay informed about their portfolio and, with you, make decisions regarding their future. The performance report includes:

Quarterly Economic Comment Executive Summary Investment Growth Time-weighted Returns Historical Performance Consolidated Report. *Wells Fargo/First Clearing, LLC - Custody Services: Third-largest full-service provider of retail brokerage services in the U.S. (based on the number of Financial Advisors as of December 31, 2013). They are also the third-largest provider of managed accounts (based on assets as of September 30, 2013).

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Stonebridge Investment Performance is calculated gross of fees on a GIP’s (AIMR) compliant system, Advent.

Dorsey Wright: Yes we offer comprehensive investment performance reporting.

B) How do you benchmark client portfolios? How should we, as a client, measure our joint success? RG Investments will work closely with the Investment Committee to develop clearly defined

benchmarks and time frames for; Compliance with policies and objectives Net Investment performance as compared to a defined set of indices and return

objectives of the Foundation Client service standards

The benchmarks and standards of management will be clearly defined and drafted into the investment strategy for the portfolio in total and for each investment manager.

VII. Client Base A) What is the total dollar amount of client assets advised by your firm? Please provide a current client

summary by client type. VSR Financial Services, Inc. has over $10 Billion with $4.2 Billion (as of 3/31/14) AUA

(Assets Under Advisement). Nearly $2 Billion is with 3rd Party Independent Managers. Stonebridge has over $850 million in assets under management. Our separately managed

accounts consist of institutional and individual clients. Dorsey Wright currently has over $4 billion in assets under management and licensing. Our

separately managed accounts consist of both institutional and retail clients. B) Provide a list of clients that may be contacted as references for which you provide OCIO services. RG Investments:

1.) Kaliff Farms Contact: John Kaliff (402) 710-0123

Stonebridge: 2.) The Builders Group

Contact: Stu Thompson, CEO (651)-389-1136

3.) North Dakota Famers Union Mutual Insurance Co. Contact: Mark Anderson, GM (701) 952-0122

VIII. Code of Ethics & Conflicts of Interest A) Describe your firm’s code of ethics and conflict of interest policies. Include an explanation of how

these policies and any other measures taken by your firm insure that your firm’s actions are always aligned with your clients’ best interests. All firms participating in this RFP have attached a code of Ethics.

B) If you answered yes to the question at section I, E), then describe how your firm avoids any potential conflicts of interest. VSR Code of Ethics, Personal Trading, and Insider Trading Polics, along with the ADV Part 2A

have been included for review.

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IX. Fees A) Specify all fees (consulting, custodial, management, etc.) applicable to the OCIO services described in the “Scope of Services” section. Please specify whether the fee quoted is all inclusive or could other expenses occur as a result of this relationship (travel, special projects, etc.).

Dorsey Wright (Global Macro) fee: .30%

FCC Platform fee: .10%

Rep Fee: .25%

All in: .65%

Stonebridge Capital fee: .30%

FCC Platform fee: .10%

Rep Fee: .25%

All in: .65%

NOTE: Include allocation detail between managers,

especially if there is a fee discrepancy between them.

Allocation between managers may change over time as markets adjust.

X. Additional Information A) Provide an executive summary that explains your firm’s strengths and competitive advantages (i.e. why should we select your firm?). RG Investments strength is clearly that we are local and yet have access to solutions from

across the United States. Being Independent allows the freedom to choose who we want to work with to solve Client needs. Our primary partner since 1998 - VSR, has a broad selection of solutions ranging from large platforms and direct 3rd party manager relationships like we have with Dorsey Wright and Stonebridge. Understanding the needs of the local community cannot be done from afar. Face-to-face is simply different.

B) Provide the primary contact information for questions and future contact.

Roger Gamble RG Investments 222 South 5th Street P.O. Box 273 Seward, NE 68434 (800) 873-6669/ (402)643-6669 [email protected]

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VSR D03ADV (Rev. 2014-01-01) i VSR Form ADV Part 2A Brochure

Item 1 – Cover Page

Form ADV Part 2A Brochure

VSR Advisory Services

A Division of VSR Financial Services, Inc.

8620 W. 110th Street

Overland Park, KS 66210

(800) 800-3177

www.vsrfinancial.com

January 1, 2014 This Brochure provides information about the qualifications and business practices of VSR Advisory Services. If you have any questions about the contents of this Brochure, please contact us at 1-800-800-3177. The information in this Brochure has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority.

VSR Advisory Services is a Registered Investment Adviser. Registration of an Investment Adviser does not imply any level of skill or training. The oral and written communications of an Adviser provide you with information about which you determine to hire or retain an Adviser.

Additional information about VSR Advisory Services also is available on the SEC’s website at www.adviserinfo.sec.gov.

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VSR D03ADV (Rev. 2014-01-01) ii VSR Form ADV Part 2A Brochure

Item 2 – Material Changes

On July 28, 2010, the United States Securities and Exchange Commission published “Amendments to Form ADV” which amends the disclosure document that we provide to clients as required by SEC Rules.

Pursuant to the SEC rule, we will ensure that you receive a summary of any material changes to this and subsequent Brochures within 120 days of the close of our business financial year. We may further provide other ongoing disclosure information about material changes as necessary.

We will further provide you with a new Brochure as necessary based on changes or new information, at any time, without charge. A brochure may be requested by contacting Richard Holt at 800-800-3177.

Additional information about VSR Advisory Services is also available via the SEC’s website, www.adviserinfo.sec.gov. The SEC’s website also provides information about any persons affiliated with VSR Advisory Services who are registered, or are required to be registered, as investment adviser representatives of VSR Advisory Services.

This summary of material changes identifies, and briefly discusses, the changes to VSR Advisory Services’ Form ADV 2A Brochure since its last update on August 15, 2013. To see all changes since the last update, please review the entire brochure.

VSR hired a new Chief Compliance Officer, Mr. Chris Cokinis, on December 9, 2013. Item 4 (Advisory Business) We have updated this Item to reflect the current value of assets under management.

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VSR D03ADV (Rev. 2014-01-01) iii VSR Form ADV Part 2A Brochure

Item 3 – Table of Contents

Item 1 – Cover Page ...................................................................................................................................... i

Item 2 – Material Changes ............................................................................................................................ ii

Item 3 – Table of Contents ............................................................................................................................ iii

Item 4 – Advisory Business ........................................................................................................................... 1

Item 5 – Fees and Compensation ................................................................................................................. 4

Item 6 – Performance-Based Fees and Side-By-Side Management ............................................................ 8

Item 7 – Types of Clients .............................................................................................................................. 8

Item 8 – Methods of Analysis, Investment Strategies and Risk of Loss ....................................................... 8

Item 9 – Disciplinary Information ................................................................................................................... 9

Item 10 – Other Financial Industry Activities and Affiliations ...................................................................... 10

Item 11 – Code of Ethics, Participation in Client Transactions and Personal Trading ............................... 10

Item 12 – Brokerage Practices .................................................................................................................... 12

Item 13 – Review of Accounts .................................................................................................................... 14

Item 14 – Client Referrals and Other Compensation .................................................................................. 15

Item 15 – Custody ....................................................................................................................................... 16

Item 16 – Investment Discretion ................................................................................................................. 16

Item 17 – Voting Client Securities ............................................................................................................... 16

Item 18 – Financial Information ................................................................................................................... 17

Brochure Supplement(s)

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VSR D03ADV (Rev. 2014-01-01) 1 VSR Form ADV Part 2A Brochure

Item 4 – Advisory Business Description and History of VSR Advisory Services

VSR Advisory Services is a division of VSR Financial Services, Inc. VSR Financial Services, Inc. is registered as a Broker/Dealer and Investment Adviser with the United States Securities and Exchange Commission (“SEC”), and as a Broker/Dealer with all 50 states. Registration as an Investment Adviser does not imply any level of skill or training.

VSR Financial Services, Inc. is wholly owned by its parent company VSR Group, Inc. VSR Group Inc. may enter into transactions on behalf of VSR Financial Services, Inc. with respect to office space or equipment leases. All expenses associated with these transactions are paid by VSR Financial Services, Inc.

In this document we usually refer to our investment advisory operations under the name “VSR Advisory Services” or as "we," "us," or "our." We refer to our securities brokerage operations under the name “VSR,” even though these are merely trade names for the same corporation. VSR was founded on March 1, 1985. VSR began its advisory operations in January 2003.

Nearly all of VSR’s Registered Representatives are dually registered as brokers and Investment Adviser Representatives (Advisory Representatives). This means they may sell investment products which pay a commission and they also may manage money or recommend third-party advisers who manage money for a fee.

In this document we refer to our Registered Representatives who perform advisory services as Advisory Representatives.

Types of Services Offered

Advisory Representatives may offer advice on a variety of investment products, including stocks, bonds, mutual funds, exchange traded funds (ETFs), structured products, managed futures products, and direct participation programs, among others. Depending on the type of investment, the recommendation may be made for a brokerage account (which charges a commission) or a managed account (which charges a fee). See Item 5 (Fees and Compensation) for additional information on commissions and fees.

The Advisory Representative determines the general investment advice to be provided to their clients based on information provided by the client. Background information regarding each Advisory Representative is contained in the Brochure Supplement, Part 2B of Form ADV. A copy of the Supplement will be provided to each client at or before the time that the client executes the advisory agreement with VSR Advisory Services.

VSR and the Advisory Representative will not provide any advice regarding whether to participate in class action lawsuits brought by a third-party against the issuers of securities held in an account.

VSR offers three types of advisory services: Financial Planning; Investment Supervisory/Investment Management Services; and Third-Party Advisers.

Financial Planning

The financial planning services provided by the Advisory Representative may involve a number of different services, depending upon the needs and desires of the client. Not all Advisory Representatives offer financial planning services, or offer the same types of financial planning services. The services that may be offered through the Advisory Representative include, but are not limited to: financial consultation services; portfolio reviews; retirement projections; asset allocation advice; estate tax projections; survivor income projections; education funding; insurance reviews; and disability income analysis. Advisory Representatives may offer additional services to particular clients. The client may include their other advisors, such as attorneys or accountants, in meetings with the Advisory Representative if they wish.

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The financial plan will consist of various observations, assumptions, strategies and recommendations. The recommendations noted in the plan will be implemented at the discretion of the client. You may choose to implement all, some, or none of the recommendations suggested. You also will have the discretion to implement the plan through any advisor or financial firm you choose.

The services to be rendered by the Advisory Representative will be described in the written contract between VSR Advisory Services and the client. The Advisory Representative will provide only the services described in the contract.

Investment Supervisory/Investment Management Services

Advisory Representatives may provide investment supervisory and investment management services on either a discretionary or non-discretionary basis. In discretionary accounts, the client authorizes the Advisory Representative to engage in securities transactions on the client’s behalf without consulting the client in advance. In non-discretionary accounts, the Advisory Representative must consult with the client prior to initiating transactions in the client’s account.

Investment management services are provided pursuant to a written contract between VSR Advisory Services and the client. Under this contract, the Advisory Representative will initiate (if a discretionary account) or recommend to the client (if a non-discretionary account) buying, selling, reinvesting, or holding securities, cash, or other investments held in the managed account, based on the information provided by the client regarding their financial and personal situation, investment goals and objectives, and risk tolerance. If the client’s personal or financial situation or objectives change they are advised to promptly notify their Advisory Representative.

The Managed Asset Planning Program

VSR Advisory Services has established The Managed Asset Planning Program for those clients who would like to have their investment assets managed by their Advisory Representative on a discretionary or non-discretionary basis.

Generally, the Advisory Representative designated by the client will manage the assets in the managed account, although the Advisory Representative may use a third-party to manage the assets in the account. In those situations, the Advisory Representative will provide the client with the third-party manager's disclosure documents. The assets in the account may be comprised of individual stocks, bonds, mutual funds, options, certificates of deposit, ETFs, unit investment trusts, variable annuities, and other securities.

For most clients, the account assets may be invested largely, and sometimes entirely, in mutual funds. The mutual fund investments will be made only from those fund families that allow either no-load or load-waived investments. Mutual fund shares on which a load or commission was charged will not be charged a management fee until a certain amount of time has passed (i.e., the Advisory Representative’s management fee is deferred). See VSR’s Advisory Services Fee Deferral Policy for more information.

VSR Advisory Services may adopt other policies regarding the character of the assets purchased or transferred into the managed account, and will provide such policies upon entering in a managed account agreement.

This is not a so-called “wrap-fee” program. The client may pay, in addition to the quarterly investment management fee, an Account Activation Fee, and any transaction charges assessed by the brokerage firm that holds the client’s account. However, the Advisory Representative shall waive or credit against the investment management fee all commissions that would otherwise be charged to the client for purchases of managed securities.

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Each Advisory Representative will make his own determinations of how the account should be managed (for discretionary accounts), or the recommendations he makes to the client (for non-discretionary accounts) and use whatever research resources as he deems appropriate. Each Advisory Representative will have their own style of investment management and their own source of financial information and research. The manner and extent to which the Advisory Representative uses such information is left to the discretion of the Advisory Representative. Clients are urged to discuss with their Advisory Representative the methods of analysis and strategies utilized by that Representative.

Third-Party Advisers

Advisory Representatives may recommend that the client engage the services of third-party investment advisers to provide investment management services regarding the client’s account. Third-party advisers will be recommended when the adviser’s strategy fits within a particular client's investment objectives and risk tolerance. The services to be provided by the third-party adviser, the compensation to be paid, and other terms of the relationship between the client and the third-party adviser will be described in the third-party adviser’s disclosure documents and account agreement. VSR Advisory Services will receive a portion of the fee paid by the client.

Advisory Representatives are not permitted to recommend third-party advisers unless the adviser has been approved by us. Before approving a third-party adviser, we review information provided by the adviser about its programs and performance, review the adviser’s client materials (including their Part 2A of Form ADV and the adviser’s advisory agreement), perform a review of their registration history and speak with the adviser’s personnel to discuss the adviser’s investment style and strategy.

We will not approve a third-party adviser until we are satisfied that the adviser has the resources, knowledge, and experience to help our clients reach their financial goals. A third-party adviser will not be recommended to a client unless the adviser is registered or exempt from registration in the client’s state of residence. VSR will receive compensation from the third-party manager. The amount varies depending on the adviser and the amount of funds in the account. The compensation will be disclosed when the account is opened.

While neither VSR Advisory Services nor the Advisory Representative will supervise or be responsible for the actions or advice provided by any third-party investment advisers, we do review their investment performance periodically and the Advisory Representative will review their performance with the client. VSR Advisory Services does not represent that third-party advisers will provide the highest performance or the lowest cost in providing their services.

Retirement Plan Advisory and Consulting Services

Some Advisory Representatives may provide investment advisory services to retirement plans, which may consist of services offered through VSR Advisory Services, a third-party manager or through general consulting services. The Advisory Representative and Plan Sponsor will outline the services provided and the fees to be charged through the VSR Retirement Plan Disclosure Document.

Tailored Relationships

The Advisory Representative determines the general investment advice to be provided to his clients. The advice given is based on information provided by the client, and will take in to consideration the client’s investment objectives, time horizon, risk tolerance, liquidity needs, and any other factors relevant to the client. The client may impose reasonable investment restrictions on certain securities, industries, or sectors.

The background information regarding each Advisory Representative is contained in the Brochure Supplement, Part 2B of Form ADV. A copy of the Supplement will be provided to each client at or before the time that the client executes the advisory agreement with VSR Advisory Services.

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Wrap Fee Programs

Certain Advisory Services Representatives may offer a wrap fee program, as may some of the third-party managers referred to previously. A wrap fee program is a program under which a client is charged a specified fee or fees that is not based directly on transactions in a client's account for investment advisory services, such as portfolio management or advice concerning the selection of other advisers, and execution of client transactions. Under our traditional management programs, there are two separate types of fees. We charge a management fee for our advisory services, and another fee (“ticket charge”) is charged for each transaction (i.e., buy/sell/exchange).

If a client wishes to use a wrap fee program they will receive the necessary disclosures and account paperwork to open and maintain the account.

Assets Managed

As of September 30, 2013, VSR managed approximately $1.7 billion on a discretionary basis and approximately $0.9 billion on a non-discretionary basis.

Item 5 – Fees and Compensation Description of Fees & Compensation

We base our management fees on a percentage of assets under management. The initial assets under management are determined from the amount indicated on the investment advisory agreement when the agreement is signed. Financial planning fees are typically charged on either a flat fee or hourly basis. VSR and the Advisory Representative share the fees. Additional information on how fees are charged is described below.

Financial Planning

The fees for financial planning services are negotiable. Each Advisory Representative is authorized to negotiate and set their own fee (within the parameters set forth below) for the particular services requested by a client, depending on the nature, complexity and time involved in providing the services, as well as the nature of the client and the amount of business transacted with the Advisory Representative. Fees for financial planning services may be charged in the following manner:

Hourly Fees - Advisory Representatives may charge an hourly fee for financial planning services. The amount of the hourly fee is set by each Advisory Representative and is described in the financial planning contract with the client. The minimum charge is $75 per hour and the maximum charge is $350 per hour.

Fixed Fees - Advisory Representatives may charge a fixed fee for particular financial planning services. The total fee will be determined based upon the nature of the services and the particular Advisory Representative who provides the service. While there is no minimum or maximum fixed fee for financial planning services, the fee charged will be reasonable based on the client’s situation and the level of service requested.

The hourly or fixed fees are in addition to any commissions that may be earned by VSR and the Advisory Representative in their capacity as a Registered Representative as a result of the client implementing any recommendations made by the Advisory Representative. Generally, financial planning fees are payable upon completion of the financial planning services. However, the Advisory Representative may require advance payment of up to 50% of the estimated total cost of the services. Clients should understand that their financial planning or hourly consulting fee client may be higher than the fees charged by other investment advisors for similar services. Clients should consider the level and complexity of the planning services to be provided when negotiating the fee with their Advisory Representative.

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The agreement for financial planning services may be terminated at any time by providing written notice to the appropriate parties. Services will be terminated upon receipt of such notice without penalty.

However, the client will be charged for services rendered through the date of termination. After receiving notice of termination, we will promptly mail you a pro-rata refund of any fees paid in advance.

Advisory Services

The Managed Asset Planning Program

Fees for investment supervisory and investment management services are negotiable and are based on a percentage of assets under management, unless the client is charged a performance-based fee as described in Item 6. VSR does not set fees for the Advisory Representative. Each Advisory Representative is authorized to set the fees for his clients; however base advisory fees may not exceed 3% of the assets under management. The fees for investment supervisory and management services will be in addition to any commissions, transactions fees, 12b-1 fees or other charges resulting from transactions in the account.

VSR will generally bill its fees on a quarterly basis. Except for the first calendar quarter in which the managed account is open, the advisory fee is paid in advance, and is due and payable on the first day of each calendar quarter. Clients may elect to be billed directly for fees or authorize VSR to directly debit fees from client accounts. The fees charged and the manner in which they will be calculated will be disclosed in the client agreement.

In no event shall a client be required to pre-pay more than $1,200 six or more months in advance.

Clients are urged to review the client agreement thoroughly before signing to be sure they understand the terms and fees of the agreement.

Third-party Investment Advisers and Wrap Fee Programs

Clients pay an advisory fee as set out in the client agreement with the Sponsor of the third-party management or wrap fee program. The Sponsor may establish a fee schedule or set a minimum or maximum fee. The fee schedule will be set out in the client agreement provided by the Sponsor. The advisory fee typically is based on the value of assets under management as valued by the custodian of the assets for the account and will vary by Sponsor. The advisory fee typically will be deducted from the account by the custodian and paid quarterly either in arrears or in advance, depending on the Sponsor. The advisory fee is always paid to VSR. VSR and the Advisory Representative share a portion of the advisory fee. An account managed by a Sponsor may be terminated pursuant to the terms outlined in the client agreement. The client agreement will explain how clients can obtain a refund of any pre-paid fee if the agreement is terminated before the end of a billing period.

There are other fees and charges imposed by third parties that may apply to investments in third-party managed accounts. The client may be charged commissions, markups, markdowns, or transaction charges by the broker/dealer who executes transactions in the account. There may be custodial fees imposed by the custodian of assets for the program account. These additional fees and charges will be set out in the client agreement executed by the client when the account is opened.

If a client has elected to use a third-party adviser or wrap fee program they are urged to review the client agreement and disclosure documents thoroughly before signing to be sure they understand the program.

ERISA Accounts

To avoid engaging in prohibited transactions, VSR may only charge fees for investment advice about products for which our firm and/or our related persons do not receive any commissions or 12b-1 fees, or conversely, investment advice about products for which our firm and/or our related persons receive commissions or 12b-1 fees, however, only when such fees are used to offset advisory fees.

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Other Fees and Expenses

We may charge clients an Account Activation Fee for Representatives’ services in setting up, opening, and activating the managed account. Unless otherwise directed by the client in writing, the Account Activation Fee will be paid from the managed account. The amount of the Account Activation Fee may be either a fixed amount or a percentage of the value of the assets in the managed account. The amount of the Account Activation Fee shall not exceed one-half percent of the value of such assets in the managed account.

VSR’s fees are exclusive of brokerage commissions, transaction fees, and other related costs and expenses which shall be incurred by the client. Clients may incur certain charges imposed by custodians, brokers, third-party investment and other third parties such as fees charged by managers, custodial fees, deferred sales charges, odd-lot differentials, transfer taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage accounts and securities transactions.

Mutual funds, variable annuities and ETFs may also charge 12b-1 and internal management fees, which are disclosed in a fund’s prospectus.

Prepaid Fees

Other than the first calendar quarter when an account is opened, investment management fees are billed quarterly, in advance, meaning that we may deduct the fee before the three-month billing period has begun. Fees are usually deducted from a designated client account to facilitate billing. The client must consent in advance to direct debiting of their investment account.

For the calendar quarter in which an advisory agreement is terminated, the fee will be prorated based upon the number of days that services are provided, and you will receive a refund of any remaining balance of prepaid fees. Upon termination of an agreement, you will be charged VSR's, any clearing broker's, and the Custodian's usual commissions and transaction fees for transactions in and services provided with respect to your account.

As noted previously, fees for financial plans may be billed 50% in advance, with the balance due upon delivery of the financial plan. The agreement for financial planning services may be terminated at any time, without penalty, by providing written notice to the appropriate parties. However, the client will be charged for services rendered through the date of termination. Within 30 days after the date VSR Advisory Services receives client’s notice of termination, a pro rata amount of any prepaid fees will be refunded to the client.

Other Compensation

In most cases, third-party advisers agree to pay some form of compensation or direct economic benefit to us. Such economic benefits may include solicitation fees, marketing support, sponsorship of various meetings and functions, and directed brokerage transactions, among others. Compensation arrangements will differ among approved adviser programs. These arrangements may represent a conflict of interest since they may affect the independent judgment of VSR Advisory Services or the Advisory Representatives in the recommendation of one adviser program over another. However, the best interests of the client will be of utmost importance to all Advisory Representatives in recommending any particular third-party adviser or service.

VSR and the Advisory Representative shall receive commissions from the execution of securities transactions, unless specified otherwise in the advisory agreement. The fact that VSR, VSR Advisory Services or the Advisory Representative may receive in certain circumstances commissions, fees, or other economic benefits as a result of the client’s execution of securities and insurance transactions recommended by the Advisory Representative creates a potential conflict of interest. The Advisory

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Representative’s recommendation of any particular security, advisory, or insurance product or service is required to be based upon his evaluation of the best interests of the client.

Clients who invest in mutual funds or other registered investment companies are advised that such funds pay investment advisory or management fees to investment advisers and others, and pay marketing or service fees (including without limitation so-called “12b-1 fees”) to broker/dealers (including, in some cases, VSR) who provide services to or for the fund or its shareholders. These fees constitute indirect expenses ultimately borne by the client, and are in addition to the investment advisory fees paid to VSR Advisory Services pursuant to the client’s advisory agreement with us.

Our Advisory Representatives may sell securities to any client for commissions in their separate capacities as Registered Representatives. This situation could represent a potential conflict of interest since VSR and the Representative could receive fees and commissions if the client chooses to implement the recommendations of the Advisory Representative through him in his separate capacity as a Registered Representative.

Certain product sponsors will provide VSR with other economic benefits as a result of the client’s investments, including sponsorship of meetings, marketing support, incentive awards, payment of travel expenses, and direction of brokerage transactions to VSR.

Clients are under no obligation to accept or implement the Advisory Representative’s recommendations, and may use any other broker/dealer or insurance agent to implement such recommendations.

Advisory Representatives may agree that the advisory fee paid by the client may be reduced by a portion of the commissions earned by the Advisory Representative from the client’s implementation, within certain time periods, of securities (but not insurance) transactions recommended by the Advisory Representative. Advisory Representatives are not obligated to enter into any such agreement with any client. Any such reduction will involve only that portion of the bonafide advisory fee payable to us, and will not involve any reduction or rebate of commissions earned on securities sold by prospectus (such as mutual funds or IPO’s). Any such agreement must be made in writing between us and the client.

Advisory Fees in General

Clients should note that similar advisory services may (or may not) be available from other investment advisers for similar or lower fees. A client could also invest in a security or portfolio of securities directly, without our services. In that case, the client would not receive the services provided by our firm which are designed, among other things, to assist you in determining which investments are most appropriate to each client's financial condition and objectives. You should be aware that program fees charged may be higher or lower than those otherwise available if you were to select a separate brokerage service and negotiate commissions in the absence of the extra advisory service provided. Our fee may be subject to negotiation depending upon a range of factors including, but not limited to, account size and overall range of services provided.

You should consider the value of these advisory services when making such comparisons. The combination of custodial, advisory and brokerage services may not be available separately or may require multiple accounts, documentation, and fees. You should also consider the amount of anticipated trading activity when selecting among the programs and assessing the overall cost. Advisory programs typically assume a normal amount of trading activity and, therefore, under particular circumstances, prolonged periods of inactivity or asset allocations with significant fixed income or cash weightings may result in higher fees than if commissions were paid separately for each transaction.

A portion of the fees or commissions charged for the programs described here may be paid to us in connection with the introduction of accounts as well as for providing client-related services within the

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programs. This compensation may be more or less than if you paid separately for investment advice, brokerage, and other services, and may vary depending on the program or services offered.

Item 6 – Performance-Based Fees and Side-By-Side Management Performance Fees

In some cases VSR may enter into performance fee arrangements with qualified clients. The amount of and method of calculating the fees are subject to individualized negotiation with each such client. VSR will structure any performance or incentive fee arrangement subject to the provisions of the Investment Advisors Act of 1940 (The Advisers Act).

Performance-based fee arrangements may create an incentive for VSR to recommend investments which may be riskier or more speculative than those which would be recommended under a different fee arrangement. No client will be allowed to enter into a performance fee arrangement unless VSR determines that the performance fee arrangement is suitable and the client is knowledgeable and qualified under applicable regulations.

Clients who agree to pay a performance-based fee may pay total fees greater than 3% annually.

Side by Side Management

Many of our Advisory Representatives also manage commission based accounts for clients. The financial backgrounds, risk tolerance, and investment objectives for brokerage clients may be vastly different than those of advisory clients. As such, Advisory Representatives may execute trades for brokerage clients that are in direct conflict to trades recommended for an advisory account. Additionally, clients in brokerage accounts may receive an execution price that may be higher or lower than your execution price.

Our Advisory Representatives do not manage any hedge funds, outside funds, or other products that may cause conflicts of interest in relation to their fiduciary obligation to you.

Item 7 – Types of Clients Type of Client

VSR’s Advisory Representatives provide services to individuals, personal retirement plans, pension and profit-sharing plans, charitable institutions, foundations, endowments, trusts, estates, and corporations.

Account Minimums

VSR does not impose a minimum dollar value of assets or quotas (other than general sales minimums) on its Advisory Representatives.

Individual Advisory Representatives may decline to provide services to clients whose assets are less than a certain size set by the Advisory Representative, or whose account value falls below certain limits set by them.

Some third-party advisers may decline to provide services to clients whose assets are less than a certain size set by the adviser, or whose account value falls below certain limits set by them.

Item 8 – Methods of Analysis, Investment Strategies and Risk of Loss Methods of Analysis and Investment Strategies

Security analysis methods used by the Advisory Representative may include charting, fundamental analysis, technical analysis, and cyclical analysis, among others. The Advisory Representative may utilize due diligence and marketing information, if any, provided by VSR, third-party money managers, or program sponsors to evaluate specific investments. Other sources of information may include financial

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newspapers and magazines, research materials prepared by others, annual reports, prospectuses, filings with the SEC, and corporate rating services.

Analyses and recommendations will be based on the information provided by the client, the Advisory Representative’s discussions with the client, and general economic or tax considerations. If the client’s personal or financial situation or objectives change they are advised to promptly notify their advisor. Clients are urged to discuss with their Advisory Representative the methods of analysis and strategies utilized by that Representative.

Background information regarding each Advisory Representative is contained in the Brochure Supplement, Part 2B of Form ADV. A copy of the Supplement will be provided to each client by the Advisory Representative at or before the time that the client executes the advisory agreement with VSR Advisory Services.

Risks

All investments and investment strategies involve various risks, and there is no guarantee that any investment or investment strategy will meet its objective. The Advisory Representative will keep in mind the clients’ investment objectives, risk tolerance, time horizon, and other pertinent information when recommending an investment or investment strategy.

Investing in securities involves the risk of loss of principal that clients should be prepared to bear.

Item 9 – Disciplinary Information Legal and Disciplinary Events

On June 24, 2005, the National Association of Securities Dealers (NASD) approved a settlement of the NASD’s investigation into whether VSR failed to properly supervise trading activity in its customers’ brokerage accounts. The investigation arose as a result of an active trading strategy used by a former Representative, although VSR received no complaint from the client involved. All of the alleged active trading occurred in brokerage accounts and no investment advisory client accounts were involved.

Without admitting or denying the allegations, VSR consented to a censure and a $10,000 fine.

On December 12, 2006, the NASD accepted a settlement related to its investigation into whether a management person in VSR's trade department failed to detect and prevent trades resulting from a Registered Rep's unsuitable recommendations to a public customer.

Without admitting or denying the findings, the management person consented to a $7,500 fine and was suspended in 2007 from association with any NASD member in a principal or supervisory capacity for 15 business days.

In June 2007, NASD and NYSE merged to become the Financial Industry Regulatory Authority (FINRA). At the time of the above actions, however, NASD was the regulatory body.

On March 3, 2008, FINRA approved a settlement of FINRA's investigation into whether VSR, as a broker/dealer, failed to properly supervise a particular Registered Representative. The Representative recommended purchasing Class B shares, despite the fact that the client was eligible to purchase Class A shares at lower cost and annual expense. Another client did not receive the sales discount, resulting in higher front-end loads. No investment advisory accounts were involved. Without admitting or denying the allegations, VSR consented to a censure and a $20,000 fine.

On December 1, 2011, the State of Missouri found that VSR, as a broker/dealer, failed to make, maintain, and preserve records relating to private securities transactions. Without admitting or denying the allegations, VSR agreed to a censure and was ordered to pay $55,470 to the State.

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On May 15, 2013, the Financial Industry Regulatory Authority (FINRA) accepted a settlement related to its assertions regarding VSR’s supervisory system, and suitability related to certain sales to customers. Without admitting or denying the assertions, VSR consented to a $550,000 fine. As part of the settlement, a senior member of VSR’s management team was suspended from association with any FINRA member in a principal capacity for 45 days and was fined $10,000.

These assertions did not involve VSR’s advisory operations or any investment advisory products or services.

Item 10 – Other Financial Industry Activities and Affiliations Financial Industry Affiliations

VSR Financial Services Inc. is a securities broker/dealer registered with the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC). All of our Advisory Representatives are also Registered Representatives of VSR Financial Services Inc. As Registered Representatives they may sell a variety of investment products for a commission.

Advisory Representatives may be licensed as agents for various life insurance companies or may be associated with independent life insurance general agencies. VSR is an agent for many insurance companies. As with the implementation of investment advice given to clients, the Advisory Representative will generally only recommend insurance products of those companies for whom the Advisory Representative is a sales agent and with which he is familiar with the benefits, exclusions, and other terms.

VSR may act as a broker in effecting the securities transactions or financial planning strategies directed to it for VSR Advisory Services’ clients and receive commissions and other economic benefits as a result of such transactions.

Other Business Activities

Some Advisory Representatives own or are affiliated with independent advisory firms. These firms are not affiliated with VSR Advisory Services and they are not supervised by VSR. Typically, Advisory Representatives that own or are affiliated with an independent advisory firm may only provide financial planning services through the independent advisory firm.

Fees for financial planning services provided by an Advisory Representative through their independent advisory firm are separate and distinct from any fees paid to VSR Advisory Services in their capacity as an Advisory Representative of VSR Advisory Services.

Clients that engage an Advisory Representative through an independent advisory firm will receive a copy of that firm’s disclosure documents and execute a client agreement specifying the services to be provided and fees to be charged by the independent advisory firm.

Certain Advisory Representatives may have other business activities, such as tax preparation, accounting, legal, real estate, employee benefits consulting, or other businesses, that are not directly related to their registration as an Advisory Representative. VSR does not supervise or receive compensation from these other business activities. Advisory Representatives engaging in these other business activities do so independently of their association with VSR.

Item 11 – Code of Ethics, Participation in Client Transactions and Personal Trading Code of Ethics

VSR has adopted a Code of Ethics that includes a Personal Trading Policy, which will apply to all of our employees and Representatives. The Code of Ethics includes provisions relating to the confidentiality of

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client information, a prohibition on insider trading, a prohibition of rumor mongering, restrictions on the acceptance of significant gifts, the reporting of certain gifts and business entertainment items, and personal securities trading procedures, among other things. Upon employment or affiliation and at least annually thereafter, all supervised persons will acknowledge that they have read, understand and agree to comply with VSR’s Code of Ethics.

In compliance with the Insider Trading and Securities Fraud Enforcement Act of 1988 (“ITSFEA”), VSR has established, and will maintain and enforce, written policies reasonably designed to prevent the misuse of material, nonpublic information by us or any person associated with us. In consideration of and in compliance with ITSFEA, we will forbid any officer or employee, either personally or on behalf of others, to trade on material, nonpublic information or to communicate such information to others in violation of the law.

An investment adviser is considered a fiduciary according to the Investment Advisers Act of 1940. As a fiduciary, it is an investment adviser’s responsibility to provide fair and full disclosure of all material facts and to act solely in the best interest of each of our clients at all times. VSR, its employees, and its Representatives have a fiduciary duty to all advisory clients. To assist our employees and Representatives in meeting these obligations, VSR has adopted standards of business conduct that are outlined in our Code of Ethics. VSR requires all of its supervised persons to conduct business with integrity and to comply with all federal and state securities laws at all times.

Participation or Interest in Client Transactions

There may be instances where an Advisory Representative will recommend to investment advisory clients or prospective clients the purchase or sale of securities in which VSR, its affiliates, the Advisory Representative and/or clients may have a position or interest.

Certain affiliated accounts may trade in the same securities with client accounts on an aggregated basis when consistent with VSR's obligation of best execution. Generally, in such circumstances the affiliated and client accounts will share commission costs equally and receive securities at a total average price. VSR will retain records of the trade order (specifying each participating account) and its allocation. Completed orders will be allocated as specified in the initial trade order. Partially filled orders will be allocated on a pro rata basis. Any exceptions will be explained on the trade order. Additional information on VSR’s trade aggregation policies can be found in Item 12.

Personal Trading

Subject to VSR’s Code of Ethics and applicable securities laws, the employees and Advisory Representatives of VSR and its affiliates may trade for their own accounts in securities which are recommended to and/or purchased for VSR’s clients. The Code of Ethics is designed to assure that the personal securities transactions of the employees and Advisory Representatives of VSR will not interfere with (i) making decisions in the best interest of advisory clients and (ii) implementing such decisions while, at the same time, allowing employees to invest for their own accounts.

VSR, VSR Advisory Services, and the Advisory Representatives may or may not maintain investment positions in their personal portfolios that are recommended to clients. In fact, VSR, VSR Advisory Services, and the Advisory Representatives may take positions or execute transactions for their personal accounts which are materially different than the positions or transactions recommended for their clients.

Employees and Representatives are expected to purchase or sell a security for their personal accounts only after trading of that same security has been completed in customer accounts. An exception to this policy may be made if the Vice President, Trade Desk Director, or designee has approved block executions of customer and employee or Representative accounts through VSR’s average price account.

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The Code of Ethics requires pre-clearance of certain transactions and restricts trading in close proximity to client trading activity. Nonetheless, because the Code of Ethics in some circumstances would permit employees to invest in the same securities as clients, there is a possibility that employees might benefit from market activity by a client in a security held by an employee. Trading activity of Advisory Representatives and employees is monitored under the Code of Ethics to reasonably prevent conflicts of interest between VSR and its clients.

VSR’s clients or prospective clients may request a copy of the firm's Code of Ethics by contacting the firm at the address noted on the cover of this brochure.

Item 12 – Brokerage Practices Research and Other Soft Dollar Benefits

The custodians used by VSR may make available to us other products and services that benefit us but may not directly benefit you or your account. These products and services assist us and the Advisory Representative in managing and administering your account. These include investment research, access to client account data (such as duplicate trade confirmations and account statements), facilitation of trade execution, allocation of aggregated trade orders for multiple client accounts, pricing and other market data, facilitation of payment of our fees from clients’ accounts, assistance with back-office functions, recordkeeping, and client reporting.

Some services help us manage and further develop our business enterprise. These services include publications, educational conferences and events, and consulting on technology, compliance, legal, and other business needs. The availability of these services from our custodians benefits us because we do not have to produce or purchase them.

Client Referrals

Information related to client referrals can be found in Item 14 of this Brochure.

Directed Brokerage

The Custodian and Brokers We Use

VSR does not maintain custody of client assets, although we may be deemed to have custody if we have authority to withdraw assets from client accounts to pay management fees or if we accept stock or bond certificates from a client for forwarding to our clearing firm.

Your assets will be maintained in an account at a “qualified custodian,” generally a broker/dealer. We generally recommend that our clients use First Clearing Corporation or Pershing, both of which are broker/dealers registered with FINRA and the SEC, and are members of SIPC, as the qualified custodian. The custodians will hold your assets and buy and sell securities when instructed to do so. You will enter into an account agreement directly with the custodian. We do not open the account for you. VSR is independently owned and operated and is not affiliated with any of these custodians.

If you use a third-party money manager, they may have arrangements with a different custodian. The client agreement for that manager will disclose the custodial arrangements.

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How We Select Brokers/Custodians

When recommending a custodian we consider a wide range of factors, including among others their quality of service, competitiveness of the price of their services, and their reputation, financial strength, and stability.

Your Brokerage and Custody Costs

For our clients’ accounts maintained at these custodians they will not generally charge you separately for custody services but are compensated by charging you commissions or other fees on trades that they execute or that settle into your account. These fees are in addition to the commissions or other compensation you pay the executing broker/dealer.

In no event shall VSR Advisory Services or the Advisory Representative have the discretion, without obtaining specific client consent, to determine the broker/dealer to be used or the commission rates to be paid. However, the Advisory Representatives will usually recommend that the client use the brokerage services of VSR and one of our primary clearing firms noted previously.

Neither VSR Advisory Services nor the Advisory Representative negotiates commission rates with our clearing firms. Clients will pay the usual commission rates charged by the designated broker/dealer, unless discounted by the Advisory Representative (in his capacity as a VSR Registered Representative). The decision to discount the commissions on any particular transaction will be made on a case by case basis by the Advisory Representative, unless agreed otherwise in the advisory agreement. Insurance transactions may be executed through agencies or companies not affiliated with VSR, and will be at the commission rates set by such agencies or companies.

VSR Advisory Services, the Advisory Representative, and VSR do not represent that the commissions or other amounts charged by VSR, any other clearing firm or any insurance agency or company are the same as, or lower than, prevailing commissions rates in the brokerage or insurance industries. The commissions or other amounts charged by the designated clearing firm or insurance agency may be higher than those available from other clearing firms. However, the client may choose to implement securities or insurance transactions through other clearing firms or insurance agents.

Neither VSR Advisory Services nor the Advisory Representative shall attempt to locate firms that may have lower clearing costs.

Trade Aggregation

Transactions implemented for client accounts are generally effected independently, unless an Advisory Representative decides to purchase or sell the same securities for several clients at approximately the same time. This process is referred to as aggregating orders, batch trading, or block trading and it is done when the Advisory Representative believes such action may prove advantageous to clients. When aggregating client orders, the allocation of securities among client accounts will be done on a fair and equitable basis. Typically, the process of aggregating client orders is done in order to achieve better execution or to avoid differences in various transaction costs than might be obtained when orders are placed independently. Under this procedure, transactions will be averaged as to price and will be allocated among the Advisory Representative’s clients in proportion to the purchase and sale orders placed for each client account on any given day.

VSR does not allow its Advisory Representatives to receive any additional compensation or remuneration as a result of aggregation. See the Participation in Client Transactions section of Item 11 for a description of VSR’s policies regarding trade aggregation with affiliated accounts.

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Best Execution

Although we do not negotiate commission rates, VSR periodically evaluates the costs and quality of order execution by our clearing firms. To the extent required by law, we endeavor to ensure the firms which clear transactions for clients’ accounts satisfy their obligations of “best execution” under the particular circumstances. Although our efforts to obtain “best execution” does not ensure that a client will always receive the best price or lowest transaction costs for any particular transaction, we believe our on-going evaluation of the quality and costs of execution will contribute to the overall economic benefit of our clients.

When an account is being managed by a third-party adviser, VSR Advisory Services is not able to change, and often is not able to monitor, the costs of execution charged by the custodian that holds the account or the quality of the execution services provided by the clearing firm used. Clients must address concerns or questions regarding the costs or quality of execution services to the clearing firm which holds the account, or the third-party adviser who manages the account.

Trade Errors

On infrequent occasions, an error may be made in a client’s account. For example, a security may be erroneously purchased for a client account instead of sold. In these situations, VSR generally seeks to rectify the error by placing the client account in a similar position as it would have been had there been no error. Depending on the circumstances, various corrective steps may be taken, including but not limited to, cancelling the trade, adjusting an allocation, and/or reimbursing the account. In the event the trading error results in an erroneous profit, the profit will not be allocated to the client as VSR would retain the profit.

Agency Cross & Principal Transactions

An agency cross transaction is defined as a transaction where a person acts as an investment adviser in relation to a transaction in which the investment adviser, or any person controlled by or under common control with the investment adviser, acts as broker for both the advisory customer and for another person on the other side of the transaction (SEC Rule 206(3)-2). Agency cross transactions typically may arise where an adviser is dually registered as a broker/dealer or has an affiliated broker/dealer.

A principal transaction is defined as a transaction where an adviser, acting as principal for its own account or the account of an affiliated broker/dealer, buys from or sells any security to any advisory customer.

It is our policy that VSR will not engage in agency cross transactions involving advisory customers. VSR does not generally engage in principal transactions with advisory customers, except for riskless principal transactions. VSR will not cross trades between client accounts.

VSR’s policy prohibits any allocation of trades in a manner such that any particular customers or group of customers receive more favorable treatment than other customer accounts.

Item 13 – Review of Accounts Account Reviews

Advisory Representatives are responsible for providing investment advice and conducting reviews on their client accounts on a regular basis. Reviews are generally done on a quarterly basis, and are designed to ensure that the investments and investment strategy employed remains consistent with the client’s investment objectives and financial situation as provided by the client.

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Financial Plans

VSR Advisory Services does not review each written financial plan an Advisory Representative prepares for his clients, except to the extent they may be reviewed during a routine compliance examination. Often, the plans contain recommendations and proposals which are never effected by the clients, or involve projections and analysis which are not within the scope of investment advisory activities under the Advisers Act.

Clients should understand that the services provided to them, and the content of any financial plan prepared for them, are provided by the Advisory Representative and clients are dependent solely on the expertise of the Advisory Representative for the quality of the advice or plan. VSR Advisory Services does not have direct access to the underlying work papers or assumptions used to develop the recommendations or projections in the plan.

Other Reviews

Conditions that may trigger a review more frequently than noted above include changes in securities laws, changes in the client’s personal situation, substantial market movements or per specific client request.

Reports

Unless noted otherwise in the client agreement, reports will be sent to the client by the custodian that holds the client’s account, at such times as is provided in the client’s account agreement with such custodian. Clients who have engaged a third-party adviser will receive reports from the adviser as outlined in the client agreement and disclosure documents. Clients should carefully review these reports and contact the custodian or their Advisory Representative if they have any questions.

VSR Advisory Services or the Advisory Representative may provide other reports to the client. Clients should carefully review these reports and compare them to the reports received from the custodian.

Some clearing firms or third-party money managers used by VSR to effect transactions in client accounts may have the ability to suppress receipt of individual trade confirmations.

Item 14 – Client Referrals and Other Compensation Client Referrals

VSR Advisory Services and our Advisory Representatives may act as solicitors for various third-party investment advisers who compensate us and the Advisory Representative for the solicitation. Each solicitation arrangement is documented and a solicitor's disclosure statement is provided to the client.

VSR Advisory Services and our Advisory Representatives may offer advisory services on the premises of unaffiliated financial institutions, like banks or credit unions. VSR has entered into agreements with the financial institutions whereby VSR may share compensation, including a portion of the advisory fee, with the financial institution for the use of the financial institution’s facilities and for client referrals.

Other Compensation

Our Advisory Representatives may sell securities and/or insurance to any client for commissions in their separate capacities as Registered Representatives. This situation could represent a potential conflict of interest since VSR and the Representative could receive fees and commissions if the client chooses to implement the recommendations of the Advisory Representative through him in his separate capacity as a Registered Representative. Clients are not obligated to implement any recommendation through VSR or the Representative and are free to choose any broker/dealer or insurance company they wish to implement the recommendations.

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Certain product sponsors may provide VSR or the Advisory Representative with economic benefits as a result of the client’s investments, including sponsorship of meetings, marketing support, an occasional dinner or ticket to a sporting event, incentive awards, payment of travel expenses, and direction of brokerage transactions to VSR.

These arrangements may represent a conflict of interest since they may affect the independent judgment of VSR Advisory Services or the Advisory Representatives in the recommendation of one adviser program over another. However, the best interests of the client will be of utmost importance to all Advisory Representatives in recommending any particular third-party adviser or service.

Item 15 – Custody Under government regulations, we are deemed to have custody of your assets if, for example, you authorize us to instruct the custodian of your assets to deduct our advisory fees directly from your account. It should be noted that VSR does not keep or control any client assets or investments.

You will receive account statements directly from the custodian who holds your investments at least quarterly. They will be sent to the email or postal mailing address you provided to the custodian. You should carefully review those statements promptly when you receive them.

We urge you to compare the custodian’s account statements to any reports you may receive from us or the Advisory Representative. Our statements may vary from custodial statements based on accounting procedures, reporting dates, or valuation methodologies of certain securities.

Please note that payment for fees, securities or any other items cannot be made payable to a VSR Advisory Representative, their staff members or entities owned by the Advisory Representative. Payment for the purchase of securities or for funding an account must be made payable to the account’s qualified custodian. The qualified custodian for a VSR client account will never be VSR or the Advisory Representative.

Item 16 – Investment Discretion VSR Advisory Services and its Advisory Representatives may execute securities transactions on a discretionary basis. Prior to executing any discretionary transactions, we will obtain written consent from the client to execute transactions in this manner. Written consent will be obtained as part of the advisory agreement executed by the client and us. If written discretionary authority is not obtained, no transactions will be implemented by us in a client's account without obtaining specific client consent regarding the securities to be bought or sold.

Within the Managed Asset Planning Program the client may authorize the Advisory Representative to have discretion over the account. This gives the Advisory Representative the authority to determine which investments to be bought or sold and the time and the price at which they may be bought or sold. The Advisory Representative will not have the authority to withdraw funds from the account or change the address of record of the account.

VSR Advisory Services may establish relationships with various third-party investment advisers. These third-party advisers may require that they have investment discretion over your account. The terms of the relationship between the client and the third-party adviser will be described in the third-party adviser’s disclosure document and agreement with the client. The third-party money manager will not have the authority to withdraw funds from the account or change the address of record of the account, other than management fees.

Item 17 – Voting Client Securities VSR Advisory Services does not vote proxies on behalf of its clients. It is the responsibility of the client to vote all proxies for securities held in the managed account. All proxy materials received by us on behalf of

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a client will be sent directly to the client or a representative that has been previously designated by the client to be responsible for voting proxies. Advisory Representatives may answer customer questions regarding proxy voting materials in an effort to assist the client in determining how to vote the proxy, however, the final decision of how to vote the proxy rests with the client.

Third-party investment advisers may have their own policies regarding proxy voting. Clients are advised to review the policies of their third-party adviser to determine their proxy voting policy.

Item 18 – Financial Information This item is not applicable to our Disclosure Brochure. We do not require or solicit prepayment of more than $1,200 in fees per client, six months or more in advance therefore VSR is not required to include a balance sheet for its most recent fiscal year. VSR is not subject to a financial condition that is reasonably likely to impair our ability to meet contractual commitments to our clients, nor have we been the subject of a bankruptcy petition at any time.

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Part 2A of Form ADV: Firm Brochure

2550 University Avenue West Suite 180 South

St Paul, MN 55114

Telephone: 651-251-1000 Email: [email protected]

Web Address: www.stonebridgecap.com

January 1, 2014

This brochure provides information about the qualifications and business practices of Stonebridge Capital Advisors LLC. If you have any questions about the contents of this brochure, please contact us at 651-251-1006 or [email protected]. The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority. Additional information about Stonebridge Capital Advisors LLC (“Stonebridge”) is also available on the SEC’s website at www.adviserinfo.sec.gov. You can search this site by a unique identifying number, known as a CRD number; ours is 111447.

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Item 2 Material Changes This Firm Brochure, dated March 31, 2014, provides you with a summary of Stonebridge’s advisory services and fees, professionals, certain business practices and policies, as well as actual or potential conflicts of interest, among other things. This Item is used to provide our clients with a summary of new and/or updated information; we will inform of the revision(s) based on the nature of the information as follows.

1. Annual Update: We are required to update certain information at least annually, within 90 days of our firm’s fiscal year end as of December 31, 2011. We will provide you with either a summary of the revised information with an offer to deliver the full revised Brochure within 120 days of our fiscal year end, or we will provide you with our revised Brochure that will include a summary of those changes in this Item.

2. Material Changes: Should a material change in our operations occur, depending on its

nature we will promptly communicate this change to clients (and it will be summarized in this Item of the document). "Material changes" requiring prompt notification will include changes of ownership or control; location; disciplinary proceedings; significant changes to our advisory services or advisory affiliates – any information that is critical to a client’s full understanding of who we are, how to find us, and how we do business.

The following summarizes new or revised disclosures based on information previously provided in our Firm Brochures dated March 31, 2013 and July 1, 2013.

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Item 3 Table of Contents Page Item 1 Cover Page 1

Item 2 Material Changes 2

Item 3 Table of Contents 3

Item 4 Advisory Business 4

Item 5 Fees and Compensation 5

Item 6 Performance-Based Fees and Side-By-Side Management 6

Item 7 Types of Clients 6

Item 8 Methods of Analysis, Investment Strategies and Risk of Loss 7

Item 9 Disciplinary Information 9

Item 10 Other Financial Industry Activities and Affiliations 9

Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading 9

Item 12 Brokerage Practices 11

Item 13 Review of Accounts 12

Item 14 Client Referrals and Other Compensation 13

Item 15 Custody 13

Item 16 Investment Discretion 14

Item 17 Voting Client Securities 14

Item 18 Financial Information 15

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Item 4 Advisory Business Stonebridge is an SEC-registered investment adviser with its principal place of business located in Minnesota. We began conducting business in 1997. The firm has several owners, ranging up to a maximum of 23.17% ownership.

INVESTMENT SUPERVISORY SERVICES ("ISS")

We offer the following advisory services to our clients: Our firm provides continuous advice to a client regarding the investment of client funds based on the individual needs of the client. Through personal discussions in which goals and objectives based on a client's particular circumstances are established, we develop a client's personal investment policy and create and manage a portfolio based on that policy. During our data-gathering process, we determine the client’s individual objectives, time horizons, risk tolerance, and liquidity needs. As appropriate, we also review and discuss a client's prior investment history, as well as family composition and background. We manage these advisory accounts on a discretionary or non-discretionary basis. Account supervision is guided by the client's stated objectives (i.e., maximum capital appreciation, growth, income, or growth and income), as well as tax considerations. Clients may impose reasonable restrictions on investing in certain securities, types of securities, or industry sectors. Our investment recommendations are not limited to any specific product or service offered by a broker-dealer or insurance company and will generally include advice regarding the following securities:

Exchange-listed securities Commercial paper

Securities traded over-the-counter Certificates of deposit Foreign issuers Municipal securities

Warrants Mutual fund shares

Corporate debt securities (other than commercial paper)

United States governmental securities Options contracts on securities

Because some types of investments involve certain additional degrees of risk, they will only be implemented/recommended when they are consistent with the client's stated investment objectives, tolerance for risk, liquidity and suitability.

PUBLICATION OF PERIODICALS

Stonebridge publishes a quarterly newsletter providing general information on various financial topics including, but not limited to, estate and retirement planning, market trends, etc. No specific investment recommendations are provided in this newsletter and the information provided does not purport to meet the objectives or needs of any individual. This newsletter is distributed free of charge to our advisory clients.

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CONSULTING SERVICES

Clients can also receive investment advice on a more focused basis. This may include advice on only an isolated area(s) of concern such as estate planning, retirement planning, or any other specific topic. We also provide specific consultation and administrative services regarding investment and financial concerns of the client. Consulting recommendations are not limited to any specific product or service offered by a broker-dealer or insurance company. All recommendations are of a generic nature.

AMOUNT OF MANAGED ASSETS

As of 12/31/2013, we were actively managing $829,103,590 of clients' assets, of which $736,905,422 were on a discretionary basis and $92,198,168 were on a non-discretionary basis. Item 5 Fees and Compensation

INVESTMENT SUPERVISORY SERVICES ("ISS") INDIVIDUAL PORTFOLIO MANAGEMENT FEES

The annualized fee for Investment Supervisory Services is charged as a percentage of assets under management, according to the following schedule(s). The fee schedules below show the maximum fees chargeable by Stonebridge. Fees are charged quarterly in advance: Tax-Exempt Fixed Income Annual Fee First $1,000,000 1.00% Next $2,000,000 0.80 of 1% In excess of $3,000,000 0.70 of 1%

Taxable Fixed Income Annual Fee

First $1,000,000 0.80 of 1% Next $2,000,000 0.60 of 1% In excess of $3,000,000 0.50 of 1%

Large Capitalization Growth Equity Annual Fee First $1,000,000 1.75% Next $2,000,000 1.25% In excess of $3,000,000 1.00%

Limited Negotiability of Advisory Fees: Although Stonebridge has established the aforementioned fee schedule(s), we retain the discretion to negotiate alternative fees on a client-by-client basis. Client facts, circumstances and needs are considered in determining the fee schedule. These include the complexity of the client, assets to be placed under management, anticipated future additional assets; related accounts; portfolio style, account composition, reports, among other factors. The specific annual fee schedule is identified in the contract between the adviser and each client. We may group certain related client accounts for the purpose of determining the annualized fee. Discounts, not generally available to our advisory clients, may be offered to family members and friends of associated persons of our firm.

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PUBLICATION OF PERIODICALS OR NEWSLETTERS

We publish a quarterly newsletter providing general information on various financial topics, including, but not limited to, market commentary and economic commentary. No specific investment recommendations are provided in this/these newsletter(s) and the information provided does not purport to meet the objectives or need of any individual. This/these newsletter(s) are distributed free of charge to our advisory clients.

CONSULTING SERVICES FEES

Our fee for consulting services is determined based on the nature of the services being provided and the complexity of each client’s circumstances. All fees are agreed upon prior to entering into a contract with any client. Our Consulting Services fees are calculated and charged either on an hourly basis or on a fixed basis, and fully negotiable, subject to the specific arrangement reached with the client. An estimate for the total hours is determined at the start of the advisory relationship.

GENERAL INFORMATION

Termination of the Advisory Relationship: A client agreement may be canceled at any time, by either party, for any reason upon receipt of 30 days written notice. Upon termination of any account, any prepaid, unearned fees will be promptly refunded. Additional Fees and Expenses: In addition to our advisory fees, clients are also responsible for the fees and expenses charged by custodians and imposed by broker dealers, including, but not limited to, any transaction charges imposed by a broker dealer with which an independent investment manager effects transactions for the client's account(s). Please refer to the "Brokerage Practices" section (Item 12) of this Form ADV for additional information. Advisory Fees in General: Clients should note that similar advisory services may (or may not) be available from other registered (or unregistered) investment advisers for similar or lower fees. Prepayment of Fees: Under no circumstances do we require or solicit payment of fees in advance of services rendered. Item 6 Performance-Based Fees and Side-By-Side Management Stonebridge has no clients who pay performance-based fees; we do not charge performance-based fees. Item 7 Types of Clients Stonebridge Capital Advisors LLC provides advisory services to the following types of clients:

Individuals (other than high net worth individuals)

Corporations

High net worth individuals Charitable organizations

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Investment companies Federal and state governmental entities

Foundations, endowments and retirement plans

Financial, insurance, and health care institutions

Trusts Other

Item 8 Methods of Analysis, Investment Strategies and Risk of Loss

METHODS OF ANALYSIS

We use the following methods of analysis in formulating our investment advice and/or managing client assets: Charting. In this type of technical analysis, we review charts of market and security activity in an attempt to identify when the market is moving up or down and to predict how long the trend may last and when that trend might reverse. Fundamental Analysis. We attempt to measure the intrinsic value of a security by looking at economic and financial factors (including the overall economy, industry conditions, and the financial condition and management of the company itself) to determine if the company is underpriced (indicating it may be a good time to buy) or overpriced (indicating it may be time to sell). Fundamental analysis does not attempt to anticipate market movements. This presents a potential risk, as the price of a security can move up or down along with the overall market regardless of the economic and financial factors considered in evaluating the stock. Technical Analysis. We analyze past market movements and apply that analysis to the present in an attempt to recognize recurring patterns of investor behavior and potentially predict future price movement. Technical analysis does not consider the underlying financial condition of a company. This presents a risk in that a poorly-managed or financially unsound company may underperform regardless of market movement. Cyclical Analysis. In this type of technical analysis, we measure the movements of a particular stock against the overall market in an attempt to predict the price movement of the security. Risks for all forms of analysis. Our securities analysis methods rely on the assumption that the companies whose securities we purchase and sell, the rating agencies that review these securities, and other publicly-available sources of information about these securities, are providing accurate and unbiased data. While we are alert to indications that data may be incorrect, there is always a risk that our analysis may be compromised by inaccurate or misleading information.

INVESTMENT STRATEGIES

We use the following strategies in managing client accounts, provided that such strategies are appropriate to the needs of the client and consistent with the client's investment objectives, risk tolerance, and time horizons, among other considerations:

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Long-term purchases. We purchase securities with the idea of holding them in the client's account for a year or longer. Typically we employ this strategy when:

we believe the securities to be currently undervalued, and /or we want exposure to a particular asset class over time, regardless of the current projection

for this class. A risk in a long-term purchase strategy is that by holding the security for this length of time, we may not take advantage of short-term gains that could be profitable to a client. Moreover, if our predictions are incorrect, a security may decline sharply in value before we make the decision to sell. Short-term purchases. When utilizing this strategy, we purchase securities with the idea of selling them within a relatively short time (typically a year or less). We do this in an attempt to take advantage of conditions that we believe will soon result in a price swing in the securities we purchase. Margin transactions. We will purchase stocks for your portfolio with money borrowed from your brokerage account. This allows you to purchase more stock than you would be able to with your available cash, and allows us to purchase stock without selling other holdings. Option writing. We may use options as an investment strategy. An option is a contract that gives the buyer the right, but not the obligation, to buy or sell an asset (such as a share of stock) at a specific price on or before a certain date. An option, just like a stock or bond, is a security. An option is also a derivative, because it derives its value from an underlying asset. The two types of options are calls and puts:

A call gives us the right to buy an asset at a certain price within a specific period of time. We will buy a call if we have determined that the stock will increase substantially before the option expires.

A put gives us the holder the right to sell an asset at a certain price within a specific period of time. We will buy a put if we have determined that the price of the stock will fall before the option expires.

We will use options to speculate on the possibility of a sharp price swing. We will also use options to "hedge" a purchase of the underlying security; in other words, we will use an option purchase to limit the potential upside and downside of a security we have purchased for your portfolio. We use "covered calls", in which we sell an option on security you own. In this strategy, you receive a fee for making the option available, and the person purchasing the option has the right to buy the security from you at an agreed-upon price. We use a "spreading strategy", in which we purchase two or more option contracts (for example, a call option that you buy and a call option that you sell) for the same underlying security. This effectively puts you on both sides of the market, but with the ability to vary price, time and other factors.

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Risk of Loss. Securities investments are not guaranteed and you may lose money on your investments. We ask that you work with us to help us understand your tolerance for risk. Item 9 Disciplinary Information We are required to disclose any legal or disciplinary events that are material to a client's or prospective client's evaluation of our advisory business or the integrity of our management. Our firm and our management personnel have no reportable disciplinary events to disclose. Item 10 Other Financial Industry Activities and Affiliations Our firm and our related persons are not engaged in other financial industry activities and have no other industry affiliations. Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading Our firm has adopted a Code of Ethics which sets forth high ethical standards of business conduct that we require of our employees, including compliance with applicable federal securities laws. Stonebridge and our personnel owe a duty of loyalty, fairness and good faith towards our clients, and have an obligation to adhere not only to the specific provisions of the Code of Ethics but to the general principles that guide the Code. Our Code of Ethics includes policies and procedures for the review of quarterly securities transactions reports as well as initial and annual securities holdings reports that must be submitted by the firm’s access persons. Among other things, our Code of Ethics also requires the prior approval of any acquisition of securities in a limited offering (e.g., private placement) or an initial public offering. Our code also provides for oversight, enforcement and recordkeeping provisions. Our Code of Ethics further includes the firm's policy prohibiting the use of material non-public information. While we do not believe that we have any particular access to non-public information, all employees are reminded that such information may not be used in a personal or professional capacity. A copy of our Code of Ethics is available to our advisory clients and prospective clients. You may request a copy by email sent to Terry Olsen at [email protected], or by phone at 651-251-1006. Stonebridge or individuals associated with our firm may buy securities for the firm or for themselves from our advisory clients; or sell securities owned by the firm or the individual(s) to our advisory clients. We will ensure, however, that such transactions are conducted in compliance with all the provisions under Section 206(3) of the Advisers Act governing principal transactions to advisory clients. Stonebridge may, at times, effect an agency cross transaction for an advisory client, provided

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that the transaction is consistent with our firm's fiduciary duty to the client and that all requirements outlined in Sec. 206(3)-2 of the Investment Advisers Act of 1940 are met. An agency cross transaction is a transaction in which Stonebridge acts as an investment adviser and broker-dealer for an advisory client and another person on the other side of the transaction. Our Code of Ethics is designed to assure that the personal securities transactions, activities and interests of our employees will not interfere with (i) making decisions in the best interest of advisory clients and (ii) implementing such decisions while, at the same time, allowing employees to invest for their own accounts. Our firm and/or individuals associated with our firm may buy or sell for their personal accounts securities identical to or different from those recommended to our clients. In addition, any related person(s) may have an interest or position in a certain security(ies) which may also be recommended to a client. It is the expressed policy of our firm that no person employed by us may purchase or sell any security prior to a transaction(s) being implemented for an advisory account, thereby preventing such employee(s) from benefiting from transactions placed on behalf of advisory accounts. We may aggregate our employee trades with client transactions where possible and when compliant with our duty to seek best execution for our clients. In these instances, participating clients will receive an average share price and transaction costs will be shared equally and on a pro-rata basis. In the instances where there is a partial fill of a particular batched order, we will allocate all purchases pro-rata, with each account paying the average price. Our employee accounts will be excluded in the pro-rata allocation. As these situations represent actual or potential conflicts of interest to our clients, we have established the following policies and procedures for implementing our firm’s Code of Ethics, to ensure our firm complies with its regulatory obligations and provides our clients and potential clients with full and fair disclosure of such conflicts of interest:

No principal or employee of our firm may put his or her own interest above the interest of an advisory client.

1. No principal or employee of our firm may buy or sell securities for their personal portfolio(s) where their decision is a result of information received as a result of his or her employment unless the information is also available to the investing public.

2. It is the expressed policy of our firm that no person employed by us may purchase or sell any security prior to a transaction(s) being implemented for an advisory account. This prevents such employees from benefiting from transactions placed on behalf of advisory accounts.

3. Our firm requires prior approval for any IPO or private placement investments by related persons of the firm.

4. We maintain a list of all reportable securities holdings for our firm and anyone associated with this advisory practice that has access to advisory recommendations ("access person"). These holdings are reviewed on a regular basis by our firm's Chief Compliance Officer or his/her designee.

5. We have established procedures for the maintenance of all required books and records.

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6. Clients can decline to implement any advice rendered, except in situations where our firm is granted discretionary authority.

7. All of our principals and employees must act in accordance with all applicable federal and state regulations governing registered investment advisory practices.

8. We require delivery and acknowledgement of the Code of Ethics by each supervised person of our firm.

9. We have established policies requiring the reporting of Code of Ethics violations to our senior management.

10. Any individual who violates any of the above restrictions may be subject to termination.

Item 12 Brokerage Practices For discretionary clients, Stonebridge requires these clients to provide us with written authority to determine the broker dealer to use and the commission costs that will be charged to these clients for these transactions. Stonebridge does not have any soft-dollar arrangements and does not receive any soft-dollar benefits. Stonebridge will aggregate trades (group together in a block) where possible and when advantageous to clients. This blocking of trades permits the trading of aggregate blocks of securities composed of assets from multiple client accounts, so long as transaction costs are shared equally and on a pro-rated basis between all accounts included in any such block. Block trading may allow us to execute equity trades in a timelier, more equitable manner, at an average share price. We will typically aggregate trades among clients whose accounts can be traded at a given broker, and generally will rotate or vary the order of brokers through which it places trades for clients on any particular day. Our block trading policy and procedures are as follows:

Transactions for any client account may not be aggregated for execution if the practice is prohibited by or inconsistent with the client's advisory agreement with Stonebridge, or our firm's order allocation policy.

The trading desk in concert with the portfolio manager must determine that the purchase or sale of the particular security involved is appropriate for the client and consistent with the client's investment objectives and with any investment guidelines or restrictions applicable to the client's account.

The portfolio manager must reasonably believe that the order aggregation will benefit – and will enable us to seek best execution for – each client participating in the aggregated order. This requires a good faith judgment at the time the order is placed for the execution. It does not mean that the determination made in advance of the transaction must always prove to have been correct in the light of a "20-20 hindsight" perspective. Best execution includes the duty to seek the best quality of execution, as well as the best net price.

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Prior to entry of an aggregated order, a written order ticket must be completed which identifies each client account participating in the order and the proposed allocation of the order, upon completion, to those clients.

If the order cannot be executed in full at the same price or time, the securities actually purchased or sold by the close of each business day must be allocated pro rata among the participating client accounts in accordance with the initial order ticket or other written statement of allocation. However, adjustments to this pro rata allocation may be made to participating client accounts in accordance with the initial order ticket or other written statement of allocation. Furthermore, adjustments to this pro rata allocation may be made to avoid having odd amounts of shares held in any client account, or to avoid excessive ticket charges in smaller accounts.

Generally, each client that participates in the aggregated order must do so at the average price for all separate transactions made to fill the order, and must share in the commissions on a pro rata basis in proportion to the client's participation. Under the client’s agreement with the custodian/broker, transaction costs may be based on the number of shares traded for each client.

If the order will be allocated in a manner other than that stated in the initial statement of allocation, a written explanation of the change must be provided to and approved by the Chief Compliance Officer no later than the morning following the execution of the aggregate trade.

Stonebridge's client account records separately reflect, for each account in which the aggregated transaction occurred, the securities which are held by, and bought and sold for, that account.

Funds and securities for aggregated orders are clearly identified on Stonebridge's records and to the broker-dealers or other intermediaries handling the transactions, by the appropriate account numbers for each participating client.

10) No client or account is/will be favored over another. Item 13 Review of Accounts

INVESTMENT SUPERVISORY SERVICES (ISS) INDIVIDUAL PORTFOLIO MANAGEMENT

Reviews: While the underlying securities within Individual Portfolio Management Services accounts are continually monitored, these accounts are reviewed internally at least annually. Accounts are reviewed in the context of each client's stated investment objectives and guidelines. More frequent reviews may be triggered by material changes in variables such as the client's individual circumstances, or the market, political or economic environment. In addition to internal reviews, accounts are reviewed with the client no less than annually. These accounts are reviewed by: Dave Eckenrode, Portfolio Manager; Dennis Hippen, Portfolio Manager; Heidi Hukriede, Portfolio Manager; Ronald Hume, Portfolio Manager; Robert Kincade, Portfolio Manager; Jon Lynn, Portfolio Manager; Michael Dashner, Portfolio Manager; Theresa Olsen, Client Relations.

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Reports: In addition to the monthly statements and confirmations of transactions that clients receive from their broker-dealer (custodian), we provide quarterly reports detailing account performance, balances and holdings, and investment activity.

CONSULTING SERVICES

Reviews: Reviews may occur at different stages of the contract process, depending on the nature and terms of the specific engagement, unless otherwise contracted for by the client. Such reviews will be conducted by the client's account representative. Reports: These client accounts will receive reports as agreed upon, at the inception of the advisory engagement and conclusion. Item 14 Client Referrals and Other Compensation

CLIENT REFERRALS

Our firm has entered into referral agreements that may pay referral fees to independent persons or firms ("Solicitors") for introducing clients to us. Whenever we pay a referral fee, we require the Solicitor to provide the prospective client with a copy of this document (our Firm Brochure) and a separate disclosure statement that includes the following information:

the Solicitor's name and relationship with our firm;

the Solicitor’s firm name and relationship with our firm;

the fact that the Solicitor is being paid a referral fee;

the amount of the fee; and

whether the fee paid to us by the client will be increased above our normal fees in order to compensate the Solicitor.

As a matter of firm practice, the advisory fees paid to us by clients referred by solicitors are not increased as a result of any referral.

We have agreements with seven firms and three individuals in this capacity at this time.

OTHER COMPENSATION

Our firm has entered into agreements with firms who contract with us to sub-advise for their clients and they may share fees with us for that. The referring firm is responsible for all required and appropriate disclosures. We have agreements with five firms in this capacity at this time. Item 15 Custody We previously disclosed in the "Fees and Compensation" section (Item 5) of this Brochure that our firm directly debits advisory fees from client accounts. As part of this billing process, the client and the client's custodian are advised of the amount of the fee to be deducted from that client's account. On at least a quarterly basis, the custodian is required to send to the client a statement showing all transactions within the account during the reporting period.

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Because the custodian does not calculate the amount of the fee to be deducted, it is important for clients to carefully review their custodial statements to verify the accuracy of the calculation, among other things. Clients should contact us directly if they believe that there may be an error in their statement. In addition to the periodic statements that clients receive directly from their custodians, we also send account statements directly to our clients on a quarterly basis. We urge our clients to carefully compare the information provided on these statements to ensure that all account transactions, holdings and values are correct and current. If our clients should find discrepancies or have a question, they are encouraged to contact us. Our firm does not have actual or constructive custody of client accounts. Item 16 Investment Discretion Clients may hire us to provide discretionary asset management services, in which case we place trades in a client's account without contacting the client prior to each trade to obtain the client's permission. Our discretionary authority includes the ability to do the following without contacting the client:

Determine the security to buy or sell;

Determine the amount of the security to buy or sell;

The amount of commission to be paid; and, in some cases,

Determine the broker/dealer to be used. The primary consideration in selecting a broker/dealer is that broker’s ability to provide appropriate product at a competitive price, as well as financial responsibility, and the full range and quality of a broker’s services. Clients give us discretionary authority when they sign a discretionary agreement with our firm, and may limit this authority by giving us written instructions. Clients may also change/amend such limitations by once again providing us with written instructions. Item 17 Voting Client Securities We offer to vote proxies for all client accounts, and do so for most; however, you always have the right to vote proxies yourself. You can exercise this right by instructing us in writing to not vote proxies in your account. We will vote proxies in the best interests of our clients and in accordance with our established policies and procedures. Our firm will retain all proxy voting books and records for the requisite period of time, including a copy of each proxy statement received, a record of each vote cast, a copy of any document created by us that was material to making a decision how to vote proxies, and a copy of each written client request for information on how the adviser voted proxies. If our

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firm has a conflict of interest in voting a particular action, we will notify the client of the conflict and retain an independent third-party to cast a vote. Clients may obtain a copy of our complete proxy voting policies and procedures by contacting Terry Olsen by telephone (651.251.1006), email ([email protected]), or in writing. Clients may request, in writing, information on how proxies for his/her shares were voted. If any client requests a copy of our complete proxy policies and procedures or how we voted proxies for his/her account(s), we will promptly provide such information to the client. We will neither advise nor act on behalf of the client in legal proceedings involving companies whose securities are held in the client’s account(s), including, but not limited to, the filing of “Proofs of Claim” in class action settlements. If desired, clients may direct us to transmit copies of class action notices to the client or a third party. Upon such direction, we will make commercially reasonable efforts to forward such notices in a timely manner. You can instruct us to vote proxies according to particular criteria (for example, to always vote with management, or to vote for or against a proposal to allow a so-called "poison pill" defense against a possible takeover). These requests must be made in writing. You can also instruct us on how to cast your vote in a particular proxy contest by contacting us through Terry Olsen (contact information above). Item 18 Financial Information Stonebridge has no additional financial circumstances to report. Under no circumstances do we require or solicit payment of fees in excess of $1,200 per client more than six months in advance of services rendered. Therefore, we are not required to include a financial statement. Stonebridge has not been the subject of a bankruptcy petition at any time during the past ten years.

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Part 2B of Form ADV: Brochure Supplement

Michael J Dashner Portfolio Manager

Stonebridge Capital Advisors LLC 2550 University Avenue West

Suite 180 South St Paul, MN 55114

January 1, 2014

This brochure supplement provides information about Michael J Dashner that supplements the Stonebridge Capital Advisors LLC brochure. You should have received a copy of that brochure. If you did not receive Stonebridge Capital Advisors’ brochure, or if you have any questions about the contents of this supplement, please contact Terry Olsen at 651.251.1000 or at [email protected].

Page 50

Item 2 Educational, Background and Business Experience

Full Legal Name: Michael J Dashner Born: 1985

Education

University of South Dakota; MBA; 2009 University of South Dakota; BBA, Economics; 2007

Business Experience

Stonebridge Capital Advisors LLC; Portfolio Manager; 2009-Present UBS Financial; Intern; 2008-2009

Designations

Mr. Dashner is currently sitting for the following designation(s):

Chartered Financial Analyst; CFA Institute; Level Two completed 2013

Item 3 Disciplinary Information Mr. Dashner has no reportable disciplinary history.

Item 4 Other Business Activities Investment-Related Activities

Mr. Dashner is not engaged in any other investment-related activities. Mr. Dashner does not receive commissions, bonuses or other compensation on

the sale of securities or other investment products.

Non-Investment-Related Activities

Mr. Dashner is not engaged in any other business or occupation that provides substantial compensation or involves a substantial amount of his time.

Item 5 Additional Compensation

Mr. Dashner does not receive any economic benefit from a non-advisory client for the provision of advisory services.

Item 6 Supervision

Supervisor: Dave Eckenrode Title: Portfolio Manager; Head of Equity Management Phone Number: 651-251-1000

Note: The Chartered Financial Analyst (CFA) designation is a qualification for finance and investment professionals, particularly in the fields of investment management and financial analysis of stocks, bonds, and their derivative assets. The CFA is an international professional designation offered by the DFA Institution (formerly AIMR) to financial analysts who complete a series of three successive examinations. To become a CFA charter holder, candidates must pass each of the three 6-hour exams, possess a Bachelor’s degree from an accredited institution (or have equivalent work experience), and have 48 months of qualified work experience. CFA charter holders are required to adhere to a strict Code of Ethics and Standards governing their professional conduct. The first CFA was granted in 1963. As of August 2010, CFA Institute has more than 100,000 members around the work, including more than 90,000 CFA charter holders.

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David A Eckenrode Portfolio Manager

Stonebridge Capital Advisors LLC 630 E Front St

Suite 300 Traverse City, MI 49686

January 1, 2014

This brochure supplement provides information about David A Eckenrode that supplements the Stonebridge Capital Advisors LLC brochure. You should have received a copy of that brochure. If you did not receive Stonebridge Capital Advisors' brochure, or if you have any questions about the contents of this supplement, please contact Terry Olsen at 651.251.1000 or at [email protected].

Page 52


Full Legal Name: David A Eckenrode Born: 1952

Education

Michigan State University; BA, History; 1978

Business Experience

Stonebridge Capital Advisors LLC; Portfolio Manager; 2003-Present RWB Financial; Senior Vice President/Portfolio Manager; 2002-2003 Northwestern Savings Bank & Trust; Vice President/Director, Trust Dept; 1987-2002 E. F. Hutton; Account Exec; 1983-1987 Merrill Lynch Pierce Fenner & Smith; Account Exec; 1977-1983

Item 3 Disciplinary Information Mr. Eckenrode has no reportable disciplinary history.

Item 4 Other Business Activities

Investment-Related Activities

Mr. Eckenrode is not engaged in any other investment-related activities. Mr. Eckenrode does not receive commissions, bonuses or other compensation on



Mr. Eckenrode is not engaged in any other business or occupation that provides substantial compensation or involves a substantial amount of his time.


Mr. Eckenrode does not receive any economic benefit from a non-advisory client for the provision of advisory services.

Item 6 Supervision

Supervisor: Investment Review Committee Phone Number: 651.251.1000

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Dennis T Hippen Portfolio Manager



January 1, 2014

This brochure supplement provides information about Dennis T Hippen that supplements the Stonebridge Capital Advisors LLC brochure. You should have received a copy of that brochure. If you did not receive Stonebridge Capital Advisors LLC's brochure or if you have any questions about the contents of this supplement, please contact Terry Olsen at 651.251.1006 or at [email protected] Additional information about Mr. Hippen is available on the SEC website at www.adviserinfo.sec.gov.

Page 54

Item 2 Educational Background and Business Experience

Full Legal Name: Dennis T. Hippen Born: 1942

Education

University of Minnesota; MS, Insurance; 1967 Macalester College; BS, Business; 1964

Business Experience

Stonebridge Capital Advisors, LLC; CEO/CIO/Portfolio Manager; 1997-Present Insight Investment Management, Inc.; Senior Vice President/Director of Client

Relations/Portfolio Manager; 1983-1997 The St. Paul Companies; Vice President/Fixed Income Investments; 1966-1983

Designations

Mr. Hippen has earned the following designation(s) and is in good standing with the granting authority: Chartered Financial Analyst; CFA Institute; 1969 (please see Note below)

Item 3 Disciplinary Information

Mr. Hippen has no reportable disciplinary history.


Investment-Related Activities Mr. Hippen is not engaged in any other investment-related activities. Mr. Hippen does not receive commissions, bonuses or other compensation on the

sale of securities or other investment products.


Mr. Hippen is not engaged in any other business or occupation that provides substantial compensation or involves a substantial amount of his time.


Mr. Hippen does not receive any economic benefit from a non-advisory client for the provision of advisory services.

Item 6 Supervision

Supervisor: Investment Review Committee; Board of Directors Phone Number: 651.251.1000 Note: The Chartered Financial Analyst (CFA) designation is a qualification for finance and

investment professionals, particularly in the fields of investment management and financial analysis of stocks, bonds, and their derivative assets. The CFA is an international professional designation offered by the DFA Institution (formerly AIMR) to financial analysts who complete a series of three successive examinations. To become a CFA charter holder, candidates must pass each of the three 6-hour exams, possess a Bachelor’s degree from an accredited institution (or have equivalent work experience), and have 48 months of qualified work experience. CFA charter holders are required to adhere to a strict Code of Ethics and Standards governing their professional conduct. The first CFA was granted in 1963. As of August 2010, CFA Institute has more than 100,000 members around the work, including more than 90,000 CFA charter holders.

Page 55


Raymond E Hirsch Portfolio Manager



January 1, 2014

This brochure supplement provides information about Raymond E Hirsch that supplements the Stonebridge Capital Advisors LLC brochure. You should have received a copy of that brochure. If you did not receive Stonebridge Capital Advisors' brochure or if you have any questions about the contents of this supplement, please contact Terry Olsen at 651.251.1006 or at [email protected]

Page 56


Full Legal Name: Raymond E Hirsch Born: 1948

Education

University of Wisconsin/Milwaukee; MBA, Economics; 1977 University of Wisconsin/Milwaukee; BBA, Economics, 1969

Business Experience

Stonebridge Capital Advisors, LLC; Portfolio Manager; 2004-Present American Express Financial Services; Portfolio Manager & Analyst; 1986-2002 First Wisconsin Asset Management; Portfolio Manager & Analyst; 1975-1986 Heritage Investment Advisors; Research Analyst; from 1969 to 1975

Designations

Mr. Hirsch has earned the following designation(s) and is in good standing with the granting authority:

Chartered Financial Analyst; CFA Institute; 1978 (please see Note below)


Mr. Hirsch has no reportable disciplinary history.


Investment-Related Activities Mr. Hirsch is not engaged in any other investment-related activities. Mr. Hirsch does not receive commissions, bonuses or other compensation on the



Mr. Hirsch is not engaged in any other business or occupation that provides substantial compensation or involves a substantial amount of his time.


Mr. Hirsch does not receive any economic benefit from a non-advisory client for the provision of advisory services.

Item 6 Supervision

Supervisor: Investment Review Committee Phone Number: 651.251.1000 Note: The Chartered Financial Analyst (CFA) designation is a qualification for finance and


Page 57


Heidi L Hukriede Portfolio Manager



January 1, 2013

This brochure supplement provides information about Heidi L Hukriede that supplements the Stonebridge Capital Advisors LLC brochure. You should have received a copy of that brochure. If you did not receive Stonebridge Capital Advisors' brochure or if you have any questions about the contents of this supplement, please contact Terry Olsen at 651.251.1006 or at [email protected].

Page 58


Full Legal Name: Heidi L. Hukriede Born: 1967

Education

St Olaf College; BA, Economics; 1989

Business Experience

Stonebridge Capital Advisors, LLC; Portfolio Manager; 1997-Present Norwest Trust Management; Assistant Vice President; 1990-97

Designations

Ms. Hukriede has earned the following designation(s) and is in good standing with the granting authority:



Ms. Hukriede has no reportable disciplinary history.


Investment-Related Activities Ms. Hukriede is not engaged in any other investment-related activities. Ms. Hukriede does not receive commissions, bonuses or other compensation on



Ms. Hukriede is not engaged in any other business or occupation that provides substantial compensation or involves a substantial amount of his time.


Ms. Hukriede does not receive any economic benefit from a non-advisory client for the provision of advisory services.

Item 6 Supervision



Page 59


Ronald C Hume Portfolio Manager


Suite 180 South St. Paul, MN 55114

January 1, 2013

This brochure supplement provides information about Ronald C. Hume that supplements the Stonebridge Capital Advisors LLC brochure. You should have received a copy of that brochure. If you did not receive Stonebridge Capital Advisors’ brochure, or if you have any questions about the contents of this supplement, please contact Terry Olsen at 651.251.1000 or at [email protected].

Additional information about Mr. Hume is available on the SEC’s website at www.adviserinfo.sec.gov.

Page 60


Full Legal Name: Ronald C. Hume Born: 1948

Education

St Cloud State University; BS; 1968

Business Experience

Stonebridge Capital Advisors LLC; Portfolio Manager & Principal; 2007-Present Dougherty & Co Inc; Executive Vice President; 1989-2007 Marcotte Hume & Associates Inc; President; 1985-1989 Cronin Marcotte Inc; Fixed Income Sales; 1974-1985


Mr. Hume has no reportable disciplinary history.


Mr. Hume is not engaged in any other investment-related activities. Mr. Hume does not receive commissions, bonuses or other compensation on the



Mr. Hume is not engaged in any other business or occupation that provides substantial compensation or involves a substantial amount of his time.


Mr. Hume does not receive any economic benefit from a non-advisory client for the provision of advisory services.

Item 6 Supervision


Page 61


Robert A Kincade Portfolio Manager



July 1, 2014

This brochure supplement provides information about Robert A Kincade that supplements the Stonebridge Capital Advisors LLC brochure. You should have received a copy of that brochure. If you did not receive Stonebridge Capital Advisors’ brochure, or if you have any questions about the contents of this supplement, please contact Terry Olsen at 651.251.1000 or at [email protected]. Additional information about Mr. Kincade is available on the SEC’s website at www.adviserinfo.sec.gov.

Page 62


Full Legal Name: Robert A Kincade Born: 1956

Education

Central Michigan University; Budess School; 1978

Business Experience

Stonebridge Capital Advisors LLC; Portfolio Manager & President; 1999-Present The Whitecliff Group; Managing Director; 1997-99 Insight Investment Management Inc; Vice President; 1994-97 Ameriprise Financial (formerly IDS); Regional Vice President; 1991-94 Northwestern Savings Bank & Trust; Senior Vice President/Trust Dept; 1984-91 National Bank & Trust, Traverse City, MI; Vice President/Portfolio Manager/Trust

Officer; 1981-84 Michigan National Bank; Trust Officer; 1979-81


Mr. Kincade has no reportable disciplinary history.


Mr. Kincade is not engaged in any other investment-related activities. Mr. Kincade does not receive commissions, bonuses or other compensation on the



Mr. Kincade is not engaged in any other business or occupation that provides substantial compensation or involves a substantial amount of his time.


Mr. Kincade does not receive any economic benefit from a non-advisory client for the provision of advisory services.

Item 6 Supervision

Supervisor: Investment Review Committee; Board of Directors Phone Number: 651.251.1000

Page 63


Daniel E Laufenberg Economist



January 1, 2013

This brochure supplement provides information about Daniel E Laufenberg that supplements the Stonebridge Capital Advisors LLC brochure. You should have received a copy of that brochure. If you did not receive Stonebridge Capital Advisors’ brochure, or if you have any questions about the contents of this supplement, please contact Terry Olsen at 651.251.1000 or at [email protected].

Page 64


Full Legal Name: Daniel E Laufenberg Born: 1946

Education

Iowa State University; PhD, Economics/Minor Statistics; 1973 Iowa State University; MS, Economics; 1971 University of Wisconsin/Platteville; BSBA, Economics; 1969

Business Experience

Stonebridge Capital Advisors LLC; Economist; 2009-Present Ameriprise Financial; Chief Economist; 1987-2009 Board of Governors, Federal Reserve System; Research; 1974-86 Served as Adjunct Professor of Graduate and Undergraduate Courses in Economics

and Finance at several universities since 1975: George Washington University Iowa State University Syracuse University University of Maryland


Mr. Laufenberg has no reportable disciplinary history.


Mr. Laufenberg is not engaged in any other investment-related activities. Mr. Laufenberg does not receive commissions, bonuses or other compensation on



Mr. Laufenberg is not engaged in any other business or occupation that provides substantial compensation or involves a substantial amount of his time.


Mr. Laufenberg does not receive any economic benefit from a non-advisory client for the provision of advisory services.

Item 6 Supervision


Page 65


Jonathan F Lynn Portfolio Manager



January 1, 2014

This brochure supplement provides information about Jonathan F Lynn that supplements the Stonebridge Capital Advisors LLC brochure. You should have received a copy of that brochure. If you did not receive Stonebridge Capital Advisors’ brochure, or if you have any questions about the contents of this supplement, please contact Terry Olsen at 651.251.1000 or at [email protected].

Page 66


Full Legal Name: Jonathan F Lynn Born: 1976

Education

University of North Dakota; BBA; 1999

Business Experience

Stonebridge Capital Advisors LLC; Fixed Income Analyst; 2006-Present Dougherty & Co Inc; Registered Sales Assistant; 2000-06 Ameriprise Financial; Equity Trading Assistant; 1999-2000


Mr. Lynn has no reportable disciplinary history.


Mr. Lynn is not engaged in any other investment-related activities. Mr. Lynn does not receive commissions, bonuses or other compensation on the



Mr. Lynn is not engaged in any other business or occupation that provides substantial compensation or involves a substantial amount of his time.


Mr. Lynn does not receive any economic benefit from a non-advisory client for the provision of advisory services.

Item 6 Supervision


Page 67


Dennis E Nielsen Portfolio Manager



January 1, 2014

This brochure supplement provides information about Dennis E Nielsen that supplements the Stonebridge Capital Advisors LLC brochure. You should have received a copy of that brochure. If you did not receive Stonebridge Capital Advisors' brochure or if you have any questions about the contents of this supplement, please contact Terry Olsen at 651.251.1006 or at [email protected]

Page 68


Full Legal Name: Dennis E. Nielsen Born: 1937

Education

Drake University; BS, Finance; 1959

Business Experience

Stonebridge Capital Advisors, LLC; Portfolio Manager; 2006-Present Feltl & Co; Director of Research; 2003-06 Miller Johnson Steichen Kinnard & Co; Director of Research; 2000-03 RJ Steichen & Co; Director of Research; 1995-2000 Craig Hallum & Co (and successors); Director of Research’ 1980-1995

Designations

Mr. Nielsen has earned the following designation(s) and is in good standing with the granting authority:



Mr. Nielsen has no reportable disciplinary history.


Investment-Related Activities Mr. Nielsen is not engaged in any other investment-related activities. Mr. Nielsen does not receive commissions, bonuses or other compensation on the



Mr. Nielsen is not engaged in any other business or occupation that provides substantial compensation or involves a substantial amount of his time.


Mr. Nielsen does not receive any economic benefit from a non-advisory client for the provision of advisory services.

Item 6 Supervision



Page 69


John K Schonberg Portfolio Manager



January 1, 2014

This brochure supplement provides information about John K Schonberg that supplements the Stonebridge Capital Advisors LLC brochure. You should have received a copy of that brochure. If you did not receive Stonebridge Capital Advisors' brochure or if you have any questions about the contents of this supplement, please contact Terry Olsen at 651.251.1006 or at [email protected].

Page 70


Full Legal Name: John K. Schonberg Born: 1965

Education

Chartered Financial Analyst, 1991 University of Nebraska/Lincoln, BA Finance, 1987

Business Experience

Stonebridge Capital Advisors, Portfolio Manager, from 2013

Columbia Management, 1997-2012 Senior Portfolio Manager – Columbia Mid-Cap Growth Fund, Seligman Premium

Tech Fund, 2006-2012 Head of Equities, 2005-2010 Vice President & Senior Portfolio Manager – Hedge Fund Group, 2001-2005 Vice President & Senior Portfolio Manager – Advisory Group, 1997-2001

Piper Capital Management, 1989-1997 Senior Vice President & Portfolio Manager – Piper Capital Growth & Income

Fund, Institutional Account Manager Piper Jaffray Companies, 1995-1997

Senior Vice President & Portfolio Manager – Fundamental Equity Analyst and Technical Market Analyst

Mutual of Omaha Fund Management Company, 1986 Research Analyst


Mr. Schonberg has no reportable disciplinary history.


Investment-Related Activities Mr. Schonberg is not engaged in any other investment-related activities. Mr. Schonberg does not receive commissions, bonuses or other compensation on



Mr. Schonberg is not engaged in any other business or occupation that provides substantial compensation or involves a substantial amount of his time.


Mr. Schonberg does not receive any economic benefit from a non-advisory client for the provision of advisory services.

Item 6 Supervision

Supervisor: Robert A. Kincade Title: Founder & President Phone Number: 651.251.1000

Page 71


Scott M Shinnick Trader



January 1, 2014

This brochure supplement provides information about Scott M Shinnick that supplements the Stonebridge Capital Advisors LLC brochure. You should have received a copy of that brochure. If you did not receive Stonebridge Capital Advisors' brochure, or if you have any questions about the contents of this supplement, please contact Terry Olsen at 651.251.1006 or at [email protected].

Page 72

Item 2 Educational Background and Business Experience Full Legal Name: Scott M Shinnick Born: 1977

Education

Hamline University; MBA, Business; 2010 St John's University (MN); BA, Business; 2000

Business Experience

Stonebridge Capital Advisors; Fixed Income Trader; from 2012 to Present Abbot Downing Company (formerly Lowry Hill Investments); Fixed Income Trader;

from 2003 to 2012 Wells Fargo Private Client Services; Operations Specialist; from 2001 to 2003 Jundt Associaites; Equity Trader; from 2000 to 2001


Mr. Shinnick has no reportable disciplinary history.


Investment-Related Activities Mr. Shinnick is not engaged in any other investment-related activities. Mr. Shinnick does not receive commissions, bonuses or other compensation on



Mr. Shinnick is not engaged in any other business or occupation that provides substantial compensation or involves a substantial amount of his time.


Mr. Shinnick does not receive any economic benefit from a non-advisory client for the provision of advisory services.

Item 6 Supervision

Supervisor: Heidi L. Hukriede Title: Senior Vice President Phone Number: 651.251.1000

Page 73

1

Form ADV Part 2A and 2B Investment Advisor Brochure and Brochure Supplement

Item 1: Cover Page

Name of Firm Dorsey, Wright & Associates, LLC

Address 1011 Boulder Springs Drive, Suite 150, Richmond, VA, 23225

Phone Number (804) 320-8511

Website Address www.dorseywright.com

E-mail Address [email protected]

This Form ADV Part 2A (Investment Advisor Brochure) gives information about the investment advisor

and its business for the use of clients and prospective clients. If you have any questions about the

contents of this brochure, please contact us using one of the methods listed above. The information in this

brochure has not been approved or verified by the United States Securities and Exchange Commission

(“SEC”) or by any state securities authority. Registration is mandatory for all persons meeting the

definition of investment advisor and does not imply a certain level of skill or training.

Additional information about our firm is available on the SEC’s website at: www.adviserinfo.sec.gov.

Item 2: Material Changes

The purpose of this section is to discuss only material changes since the last annual update of Dorsey,

Wright & Associates, LLC (“Dorsey, Wright”) Investment Advisor Brochure. The date of the last annual

update was March 27, 2013.

Summary of Material Changes:

There were no material changes made to Dorsey, Wright & Associates’ ADV 2 filing since the

Company’s last annual amendment dated March 27, 2013.

Delivery:

Within 120 days of our fiscal year end we will deliver our annual Summary of Material Changes if there

have been material changes since the last annual updating amendment.

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http://www.dorseywright.com/

http://www.adviserinfo.sec.gov/

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Item 3: Table of Contents

Item 1: Cover Page ............................................................................................................................................ 1

Item 2: Material Changes ................................................................................................................................ 1

Item 3: Table of Contents ................................................................................................................................ 2

Item 4: Advisory Business (Advisory Firm and Services) .......................................................................... 3

Item 5: Fees and Compensation .................................................................................................................... 10

Item 6: Performance-Based Fees and Side-By-Side Management .......................................................... 12

Item 7: Types of Clients and Account Minimums ..................................................................................... 12

Item 8: Methods of Analysis, Investment Strategies, and Risk of Loss .................................................. 13

Item 9: Disciplinary Information .................................................................................................................. 16

Item 10: Other Financial Industry Activities and Affiliations ................................................................. 16

Item 11: Code of Ethics, Participation or Interest In Client Transactions, and Personal Trading ... 16

Item 12: Brokerage Practices ........................................................................................................................ 17

Item 13: Review of Accounts and Reports on Accounts ........................................................................... 18

Item 14: Client Referrals & Other Compensation..................................................................................... 19

Item 15: Custody ............................................................................................................................................. 19

Item 16: Investment Discretion ..................................................................................................................... 19

Item 17: Voting Client Securities .................................................................................................................. 19

Item 18: Financial Information ..................................................................................................................... 20

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Item 4: Advisory Business (Advisory Firm and Services)

Advisory Firm

Dorsey, Wright has been providing investment advisory services since 1987. Dorsey, Wright’s current

principal owners are:

PFCI, LLC, a Delaware limited liability company

o PFCI, LLC is controlled by Falfurrias Capital Partners, LP, a Delaware limited partnership.

DWA Legacy Holdings, Inc., a Virginia Corporation

o DWA Legacy Holdings, Inc. is owned by Thomas J. Dorsey, Watson H. Wright, Tammy

F. DeRosier, Susan L. Morrison, and James C. Ball.

Dorsey, Wright offers various types of advisory services as described in more detail below the list.

Investment Management provides personal investment advisory services for individual investors.

The Investment Management activity takes place primarily from the Money Management division in

the California office.

Research and subscription services directed primarily to institutional clients (including mutual

funds, unit investment trusts (“UITs”), exchange traded funds (“ETFs”)), and some individual

investors. These impersonal advisory services are generated from the home office in Virginia.

Seminars, Webinars, and Broker Institute.

Hourly special services.

Advisory, sub-advisory, licensing, or consultant services are provided to mutual funds, UIT

providers,providers of ETFs, and providers of structured notes and certificates of deposit.

Advisory Services

Investment Management

The Money Management arm of Dorsey Wright provides investment supervisory services (“Investment

Management”). These personalized services are provided to individual investors, who in turn are clients

of several unaffiliated broker/dealer or investment advisory firms. Our goal for Investment Management

services is to attain meaningful investment results with emphasis on meeting the particular needs and

investment goals of each client. These services are primarily provided through our California branch

office; however, the methodologies and the portfolio management strategies used are created in

collaboration with our main office. For further discussion on our methodologies and strategies see Item 8

of this brochure.

As of December 31, 2013, Dorsey, Wright has $743,588,627of assets under management on a

discretionary basis. This includes our separately managed accounts as well as our advisory and sub-

advisory arrangements.

Investment Management is based upon the same technical analysis that drives our research reports.

Investment Management provides the value-added service that the investment account is monitored and

that the advice is implemented by a qualified IA Representative of Dorsey Wright. Individual advice is

afforded the Investment Management clients. Advice and action taken on behalf of any client is likely to

be similar to, but may be different from published research of a generic nature. Dorsey Wright prepares

quarterly portfolio reports for its Investment Management clients.

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A data gathering questionnaire is reviewed to determine the client's financial situation and investment

objectives, and to give the client the opportunity to impose reasonable restrictions on the management of

the account. Clients have the ability to leave standing instructions with the Dorsey, Wright IA Rep (or

designee) to refrain from investing in particular securities or types of securities, or invest in limited

amounts of securities. Annually the IA Rep (or designee) will notify the client in writing to contact the IA

Rep (or designee) if there have been any changes in the client's financial situation or investment

objectives, or to impose or modify account restrictions. The IA Rep (or designee) will contact or attempt

to contact the client annually on these matters. It is the client's responsibility to notify the IA Rep (or

designee) at any time there are changes. In the case where a client is referred by an unaffiliated

broker/dealer or investment advisory firm (“sponsor firm”), the agent of the sponsor firm may be acting as

the designee for Dorsey, Wright.

Clients may call in at any time during normal business hours to discuss directly with the IA Rep their

account, financial situation, or investment needs. Clients will receive from the custodian/brokerage firm

timely confirmations [unless they have elected to have their confirmations suppressed] and at least

quarterly statements containing a description of all transactions and all account activity. The client will

retain the indicia of ownership of all securities and funds in the account to the same extent as if the client

held the securities and funds outside the program.

Research and Subscription Services

Dorsey Wright publishes a number of periodicals, research reports, charting services, model portfolios,

and other impersonal advisory services. This research is marketed to broker/dealers, other institutions, and

certain research to individual investors. Dorsey Wright strives to supply the tools and support necessary

for a stockbroker, money manager, or individual investor to become a true craftsman in investing. The

goal of Dorsey Wright is to provide the resources and technology needed for an investor or investment

professional to become well educated. Research subscriptions are available via the Dorsey Wright web

site.

Research is conducted along technical lines, adhering to the relationship between supply and demand.

Fundamental research tells us what ought to happen, while technical research tells us what is happening

with indications of future probabilities. There is no guarantee that technical analysis can accurately

predict the market, and there is potential for loss with any investment strategy. Technical analysis gives us

the discipline to take timely action.

Dorsey Wright provides in-depth market analysis and a comprehensive charting site. Value-added tools

include ETF model portfolios. Although certain of these tools are interactive, they do not provide

personalized investment advice.

Research Reports

Dorsey, Wright publishes research reports. Subscriptions are available on a month-to-month basis. The

fee is paid in advance. Clients may cancel at any time and refunds will be on a pro-rata basis, if required.

DAILY EQUITY REPORT

This report is a daily technical research report to broker-dealers and institutions. The report covers

a large universe of securities, which are updated on a daily basis using Point & Figure charts.

Each week we review our market indicators, highlighting any changes that may occur. The basic

fee for this service is $375 per month and this amount may be billed monthly, quarterly or semi-

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annually. Fees are due by the end of month, or the end of the first month of the quarter or semi-

annual period.

Special Reports

Dorsey, Wright has issued special reports from time-to-time on the market and/or individual stocks for

other research firms and was compensated for this research. In the future, Dorsey, Wright may do such

reports for other firms, receiving compensation for such research. Reports on such a service would not be

seen in the Daily Equity Report though there may be comments on the same stock. Should there be

comments on the same stock, these comments will be different though the recommendation could be the

same. In the event that Dorsey, Wright does enter into such an agreement, Dorsey, Wright does not plan

to recommend the stock of that firm if it is publicly traded.

Dorsey, Wright also issues other special reports on stocks periodically. These reports are then sent to our

clients on a timely basis. There is no charge for this service.

Tactical Tilt Model Licensing

Dorsey, Wright's Tactical Tilt Program is a model manager product that is licensed to broker-dealers,

RIAs or other financial institutions (the “licensee”). DWA constructs and manages the model portfolios

that are built with Exchange Traded Funds and/or open-end Mutual Funds as asset allocation investment

solutions. The Tactical Tilt methodology is a rules-based process by which Dorsey, Wright applies

relative strength analysis to major asset classes to establish recommended investment weightings for each

category, and similar analysis within asset classes to determine recommended sector weightings. The

asset class weightings are based upon the results of the relative strength ranking process, and also the

constraints of strategic boundaries. Tactical Tilt Models are generally offered as a family, which provides

a suite of risk-based options that vary materially only in the strategic boundaries within the

program. Tactical Tilt model updates are provided on a scheduled basis, as frequently as weekly, or as

infrequently as on a monthly basis, and established by the licensee. Generally, Dorsey, Wright is

compensated on an AUM basis for all assets participating within Tactical Tilt guided models. However,

Dorsey Wright may charge a flat subscription fee to licensees at Dorsey Wright’s discretion. Due to the

fact that the guided models are updated no more frequently than weekly, on a day chosen by the licensee,

the licensee may receive recommendations after such recommendations or similar recommendations are

distributed to other Dorsey Wright clients.

Chart Services

Equity Chart Services:

1. EQUITY CHART DATABASE SERVICE

The Equity Chart Database Service is only available to clients of the Daily Equity Report and is an

add-on service. This chart service offers point and figure charts, relative strength charts, a number

of ETF (Exchange Traded Funds) models, our Dynamic Asset Level Investing (D.A.L.I.)

allocation program, momentum and moving average figures, a portfolio capability as well as a

database search/sort feature. The cost of this service is $50 per month.

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Dorsey, Wright currently provides approximately 25 managed ETF Model Portfolios on its

website. The purpose of these tools is to provide a guideline for managing a piece of a portfolio.

The basis of the allocations in the models is point and figure relative strength tools (technical

analysis). No risk-management tools or suitability considerations are factored into the models. The

models are provided as impersonal research services. Investment professionals must make the

final decisions as to allocations in investment portfolios when utilizing the research. These ETF

Model Portfolios are included in subscriptions to the Equity Chart Database Service mentioned in

the preceding paragraph. Dorsey, Wright provides these models for ETF providers, including but

not limited to, iShares, Vanguard, Invesco PowerShares, WisdomTree, First Trust, Guggenheim,

and State Street, on a fee basis.

Dorsey, Wright also makes certain ETF Manager Model Portfolios available through other

websites. Dorsey, Wright has a contractual relationship with each of these companies to provide

ETF models to their representatives. The fee paid to Dorsey, Wright is based on the assets under

management in the program. Dorsey, Wright may waive this fee at its discretion.

2. CHARTS PLUS CHART SERVICE

Charts Plus is the name of the second chart service and gives subscribers up to 36 portfolios, adds

a limited search/sort feature, and also gives the subscriber the ability to get an automatic, computer

generated comment on a stock. “From The Analyst” is included here as is the Dorsey, Wright

Sector Bell Curve. Charts Plus has a cost of $35 per month. The Charts Plus chart service is not

available to new or incoming clients.

Mutual Fund Chart Services:

Dorsey, Wright also offers two different Mutual Fund Charting Services for $50 and $25 each, per

month. These are comparable to the Equity Chart Services but charting the mutual fund universe.

Prices for these services can be reduced if these mutual fund chart services are taken in

conjunction with one of the above mentioned equity chart services. Subscribers to the Mutual

Fund Database Service ($50 per month) are eligible to subscribe to the Mutual Fund Teambuilder

service, which costs $25 per month. Teambuilder aids in portfolio construction regarding mutual

funds, ETFs and stocks.

Relative Strength Matrix Service

Another service offered is the Matrix. This service evaluates a portfolio on a relative strength basis

by creating a relative strength chart of each member of the portfolio versus every other member.

This allows us to rank the portfolio by relative strength buy signals and columns. This service is

priced at $25 per month for subscribers to the Equity Chart Database Service and $50 per month to

subscribers to the Charts Plus Service.

Dorsey Wright may offer a combination of the Chart Services and Research Reports for discounted prices.

For any of the above Charting Services, billing is done either monthly, quarterly or semi-annually in

advance and payment is due by the end of the month, or the end of the first month of the quarter or

semiannual period. Clients may cancel at any time; however, clients must cancel by the 10th of the month

in order to receive a prorata refund for that month. Clients who notify Dorsey Wright of cancellation after

the 10th

of the month will be charged for the whole month and will maintain access through the end of the

month.

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Seminars, Webinars, and Broker Institute

Dorsey, Wright offers seminars to its subscription clients. These seminars are based on point and figure

charting and designed to educate our clients on point and figure charting, its origin, the basics of this

charting method, specific chart formations, relative strength, sector analysis, Exchange Traded Funds

(ETF's) and our technical indicators. These seminars are approximately 1-3 hours in length. The charge

for these seminars is $6,500 for cities east of the Mississippi River, including Houston. The charge for

west of the Mississippi River is $8,000. Dorsey, Wright also offers intense, comprehensive one-day, a day

and a half, and two day point and figure seminars for its subscription clients. The cost of the one-day

seminar, which requires two people, is $24,500 for those cities east of the Mississippi River and $28,500

for areas west of the Mississippi. Specialized seminars are also available at negotiated prices.

Dorsey, Wright also offers webinars for clients. The charge for the webinars is $900 for a 45-60 minute

session. Webinar series and specialized webinars are also available at negotiated prices.

Dorsey, Wright offers a two-day broker institute in Richmond, Virginia as well. The cost of these

seminars varies but is approximately $1,800 per person. These broker institutes are held as the need arises

but have typically been held in the spring and fall of each year. Dorsey, Wright on occasion also offers

advanced broker institutes, and institutes in other cities.

Dorsey, Wright also offers consulting services as part of its seminar services. This entails a visit to the

office of a client to advise him or her on how to better implement our service and some of the features of

our service. This service would include doing branch seminars as well as client seminars. The cost of this

service is typically $2,000 per day, though this fee can be negotiated.

Hourly Special Services

Dorsey Wright may periodically offer services where charges are on an hourly basis. This could include

such services as portfolio evaluation or conference calls. The hourly charges for these services may vary

depending on the task.

Advisory, Sub-Advisory, Licensing, and Consultant Services to Mutual Funds,

Collective Investment Trusts, UITs, Structured Products, and ETFs

Invesco PowerShares

Invesco PowerShares Capital Management LLC (“Invesco PowerShares”) is an exchange traded product

provider with a family of more than 170 domestic and international ETFs. PowerShares ETFs trade on

U.S. stock exchanges, as well as exchanges throughout Canada and Europe.

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Dorsey, Wright has created fourteen Technical Leaders indices. Technical Leaders indices are all

constructed mechanically, using objective criteria from Dorsey Wright’s proprietary ranking system, and

contain between thirty and two hundred high relative strength stocks. Dorsey Wright licenses these

indices to Invesco PowerShares for use in fourteen exchange traded funds. The PowerShares exchange

traded funds that utilize Dorsey Wright Technical Leaders indices are listed below.

PowerShares DWA Momentum (PDP)

PowerShares DWA Developed Momentum (PIZ)

PowerShares DWA Emerging Momentum (PIE)

PowerShares DWA Smallcap Momentum (DWAS)

PowerShares DWA NASDAQ Momentum (DWAQ)

PowerShares DWA Basic Materials Momentum (PYZ)

PowerShares DWA Consumer Discretionary Momentum (PEZ)

PowerShares DWA Consumer Staples (PSL)

PowerShares DWA Energy Momentum (PXI)

PowerShares DWA Financial Momentum (PFI)

PowerShares DWA Healthcare Momentum (PTH)

PowerShares DWA Industrials Momentum (PRN)

PowerShares DWA Technology Momentum (PTF)

PowerShares DWA Utilities Momentum (PUI)

Dorsey, Wright wishes to avoid the potential or even the appearance of front-running or conflict of

interest that such an Index might have in regard to our Money Management business. Dorsey Wright has

instituted policies and procedures designed to guard against potential conflicts between Money

Management accounts and DWA Technical Leaders ETF investors. These policies and procedures will

not negatively impact Dorsey Wright’s obligation to the Money Management clients. Dorsey, Wright

will not use identical methodology for the Money Management accounts. Instead, only selected output of

the proprietary ranking system, applied subjectively, will be used in the Money Management accounts.

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Arrow Funds

Dorsey, Wright acts as a sub-advisor to Arrow Funds for the Arrow Funds DWA Balanced Fund

(DWAFX). This mutual fund invests in five (5) areas: Sector Rotation, Style Rotation, International

Rotation, Fixed Income Rotation and an Alternative Rotation. Investments will typically be in ETFs or

ETNs. The Fund will rely primarily on relative strength when making the allocation decisions but other

technical indicators may be used.

Dorsey, Wright also acts as the sub-advisor to Arrow Funds for another fund, the Arrow DWA Tactical

Fund (DWTFX). This mutual fund provides broad diversification across markets, sectors, styles, long and

inverse domestic and international equities, fixed income, currencies and commodities primarily using

Exchange Traded Fund (ETFs) instruments. This fund holds approximately ten (10) ETFs or ETNs that

have strong relative strength characteristics. The fund is constructed pursuant to our proprietary ranking

and rotation methodology.

Church Capital LLC

Dorsey Wright acts as sub-advisor to Church Capital LLC for the Dorsey Wright ETF Global Growth

collective investment fund (CIF). This CIF invests in three (3) areas: Sector Rotation, Style Rotation, and

International Rotation. Investments are in ETFs. The CIF will rely primarily on relative strength when

making the allocation decisions but other technical indicators may be used. Alta Trust Company, a South

Dakota chartered trust company, acts as trustee of the CIF.

Dorsey Wright also acts as sub-advisor to Church Capital LLC for the Dorsey Wright ETF Global

Balanced collective investment fund (CIF). This CIF invests in four (4) areas: Sector Rotation, Style

Rotation, International Rotation, and Bonds. Investments are in ETFs. The CIF will rely primarily on

relative strength when making the allocation decisions but other technical indicators may be used. Alta

Trust Company, a South Dakota chartered trust company, acts as trustee of the CIF.

Elkhorn

Elkhorn Investments, LLC (“Elkhorn”) is an independent investment solutions firm, headquartered in

Wheaton, Illinois, that designs, sponsors, and distributes packaged financial products with third party

research partners. Dorsey Wright licenses indexes and provides portfolio consultation services to Elkhorn

for use in structured products that are issued by third parties but distributed by Elkhorn. The structured

products are currently based on one of three underlying indexes. The PDP/SPLV SelectionTM

is an Index

comprised of the PowerShares® DWA Momentum Portfolio (PDP) and the PowerShares® S&P 500®

Low Volatility Portfolio (SPLV), each with a 50% weighting. The DWA MLP SelectTM

strategy provides

exposure to a basket of publicly traded master limited partnerships (“MLPs”) that possess good relative

strength versus the other MLPs within the inventory. The DWA Large Cap Sector Rotation Index

consists of the five State Street exchange traded funds that correspond to the five broad economic sector

groups that possess the highest ranking according to Dorsey Wright’s relative strength based

methodology.

First Trust

Dorsey, Wright acts as a consultant to First Trust Portfolios L.P. in connection with the First Trust

Dorsey, Wright Relative Strength Top 50 unit investment trust series as well as the First Trust Dorsey,

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Wright Relative Strength Dividend unit investment trust series. The securities selected for inclusion

within a series of the First Trust Dorsey Wright Relative Strength Top 50 are selected based on relative

strength. The securities selected for inclusion within each series of the First Trust Dorsey Wright Relative

Strength Dividend are selected based on a combination of relative strength and dividend yield. Each

series of the unit investment trust is designed to be held over the fixed 15-month term of the trust.

Dorsey Wright also licenses the Dorsey Wright Focus Five Index to First Trust Advisors L.P. for use in

the First Trust Focus 5 ETF (FV). The FV seeks to track the Focus Five Index, an index designed to

provide targeted exposure to the five First Trust sector and industry based ETFs identified by Dorsey

Wright’s index methodology to possess high relative strength. First Trust sector and industry based ETFs

provide the universe for the index selection and the Focus Five Index always contains five ETFs. The

Focus Five Index follows the Dorsey Wright Focus Five Model that Dorsey Wright has been publishing

within its Equity Chart Database Service since late-October 2009. Dorsey Wright has implemented

policies and procedures regarding the release of Model portfolio changes to ensure that neither investors

in the FV nor clients of the Equity Chart Database Service are advantaged or disadvantaged over one

another.

Item 5: Fees and Compensation

The fees for Research, Seminars, and Special Services are disclosed above with the description of the

service. The fees for personal advisory services and general fee/compensation disclosures are described

below.

Investment Management

Fees for Investment Management are computed at an annualized percentage of assets under management

on a sliding scale.

Equity - Growth, Aggressive Growth,

Growth & Income, Index Plus Balanced Account

First $ 500,000 1.25% First $1,000,000 1.00%

Next $ 500,000 1.00% Next $1,000,000 0.85%

Over $1,000,000 0.75% Over $2,000,000 0.75%

(Minimum Annual Fee: $1,250) (Minimum Annual Fee: $2,000)

Systematic Relative Strength - Systematic Relative Strength –

Balanced, Global Macro Aggressive, Core, International Core

First $1,000,000 1.00% First $ 500,000 1.25%

Next $1,000,000 0.85% Next $ 500,000 1.00%

Over $2,000,000 0.75% Over $1,000,000 0.75%

(Minimum Annual Fee: $2,000) (Minimum Annual Fee: $2,500)

Systematic Relative Strength – Wealth Management -

Tactical Fixed Income First $1,000,000 1.00%

First $1,000,000 0.50% Next $4,000,000 0.75%

Next $1,000,000 0.40% Over $5,000,000 0.50%

Over $2,000,000 0.35% No minimum account size.

(Minimum Annual Fee: $1,000)

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Moderate Risk Endowment

First $1,000,000 1.00%

Next $1,000,000 0.85%

Over $2,000,000 0.75%

(Minimum Annual Fee: $2,000)

The minimum account sizes and annual fees stated above may be negotiable at the discretion of Dorsey,

Wright. These fees are for Dorsey, Wright advisory services only and do not include any transaction fees

or commissions. The fee is based on the total market value, including cash. Lower or higher fees for

comparable services may be available from other sources. Exceptions may be made to the base fee

schedule and minimum account size at the discretion of Dorsey, Wright.

In addition to fees paid for advisory services with respect to clients' investments in mutual funds, clients

pay additional fees on the mutual fund investment because the mutual funds also pay advisory and/or

management fees to an investment advisor.

Dorsey, Wright does not share these advisory fees with an unaffiliated sponsor firm that refers clients.

Please refer to Client Referrals section for more information. The sponsor firms will be compensated

under arrangements made directly with their clients, which may be commission-based and/or fee-based.

Clients referred by sponsor firms should read carefully the section on Brokerage Practices (Brokerage for

Client Referrals and Trade Aggregation).

The fee will be payable quarterly in advance. The first payment is due and payable upon execution of the

Agreement, and will be assessed pro-rata in the event the Agreement is executed other than the first day

of the new calendar quarter. Subsequent payments are calculated on the first day of each calendar quarter

based on the value of the account assets under management as of the close of business on the last business

day of the preceding quarter.

Payment of fees may be paid direct by the client, or client may authorize the custodian holding client

funds and securities to deduct advisory fees direct from the client account in accordance with statements

prepared and submitted to the custodian by Dorsey, Wright. The custodian will provide periodic account

statements to the client. Such statements will reflect all fee withdrawals by Dorsey, Wright. It is the

client’s responsibility to verify the accuracy of the fee calculation. The custodian will not determine

whether the fee is properly calculated.

Investment Management services will continue until either party terminates the agreement on thirty (30)

calendar days written notice. If termination occurs prior to the end of a calendar quarter, a pro-rata refund

of unearned fees will be made to the client.

Upon termination, all assets will be held at the custodian and it will be Client's responsibility to instruct

the custodian as to the final disposition of assets, unless Client specifically notifies Dorsey, Wright to

liquidate or take other action. As of the date of termination, Dorsey, Wright will no longer be the

investment advisor of record, and it will be Client’s responsibility to monitor the timely disposition of the

account and take all future actions in regards to the management of the account.

General Service and Fee Disclosures

Fees are not collected from any client more than six months in advance.

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Dorsey, Wright is an investment advisory firm that receives fees as compensation for research, investment

management, and seminars. Neither the firm nor any of its IA Reps receive commissions or any

compensation for the implementation of investments for advisory services.

Dorsey, Wright is compensated for licensing certain products to other firms, such as the Technical

Leaders Indices to Invesco PowerShares and the First Trust Focus Five Index to First Trust Advisors L.P.

Dorsey, Wright's fee is based on the assets under management. Fees for the exchange traded funds that

utilize the licensed products can be found on each exchange traded fund’s prospectus document.

Dorsey, Wright is compensated by Arrow Funds and Church Capital, LLC for its sub-advisory work

based on the assets under management.

The Investment Management Agreement contains a pre-dispute arbitration clause. Client understands that

the agreement to arbitrate does not constitute a waiver of the right to seek a judicial forum where such a

waiver would be void under the federal securities laws. Arbitration is final and binding on the parties.

Item 6: Performance-Based Fees and Side-By-Side Management

Dorsey, Wright does not charge performance-based fees, which are based on capital gains in the client

account.

Item 7: Types of Clients and Account Minimums

Types of Clients

Dorsey, Wright provides personal and impersonal advisory services to individuals, banking institutions,

pension and profit sharing plans and other ERISA accounts, trusts, estates, and business entities.

Dorsey, Wright acts as an investment advisor or sub-advisor to mutual funds (investment companies),

sub-advisor to collective investment funds, a licensor to providers of Exchange Traded Funds (ETFs) and

variable insurance trusts, and a consultant to providers of unit investment trusts.

Dorsey, Wright licenses Model or Index products to one or more Registered Investment Advisers.

Dorsey, Wright may have arrangements with other investment advisors to act as sub-advisor for the

purpose of providing investment research, making investment recommendations or trading. Clients would

sign an advisory agreement for the other investment advisor and would not be clients of Dorsey, Wright.

When we act as sub-advisor, the client’s primary investment advisor may offer within its Investment

Advisor Brochure to provide Dorsey, Wright’s Investment Advisor Brochure.

Account Minimums

Dorsey, Wright has minimums for account size and fees, subject to exceptions.

Minimum Size Minimum Fee

Equity Account $100,000 $1,250

(Growth, Aggressive Growth, Growth & Income, Index Plus)

Balanced Account $200,000 $ 2,000 (Balanced Account)

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Systematic Relative Strength $200,000 $ 2,500 (Aggressive, Core, International Core)

Systematic Relative Strength $200,000 $ 2,000 (Balanced, Global Macro)

Tactical Fixed Income $200,000 $ 1,000

Moderate Risk Endowment $200,000 $ 2,000

Wealth Management No account minimum

Item 8: Methods of Analysis, Investment Strategies, and Risk of Loss

The Research and investment process at Dorsey Wright Money Management are firmly based on our

principles of research. We at Dorsey Wright believe that our methods, when followed rigorously, can

help mitigate the risk and uncertainty that are inherent in all investments. There is no guarantee that the

investment strategy selected for the client will result in the client’s goals being met, nor is there any

guarantee of profit or protection from loss. For those investments sold by prospectus, clients should read

the prospectus in full. Dorsey, Wright uses internally generated charts (proprietary relative strength methods) based on technical

security analysis as a main source of information for our research reports and money management

services.

Technical analysis is a discipline for forecasting the direction of prices through the study of past market

data, primarily price. Technicians use various methods and tools – the study of price charts is but one.

Technical analysis holds that prices reflect all factors that are known to investors.

Technical analysis does not take into consideration fundamental analysis, which looks at how well the

company is operating and its competitive advantages.

All investments in securities include a risk of loss of principal (invested amount) and any profits that have

not been realized (i.e. the securities were not sold to “lock in” the profit). Stock markets and bond markets

fluctuate substantially over time. In addition, as recent global and domestic economic events have

indicated, performance of any investment is not guaranteed. As a result, there is a risk of loss of the

assets we manage that may be out of our control. We will do our very best in the management of

investors’ assets; however, DWA cannot guarantee any level of performance or that account assets will

not be lost. Dorsey, Wright does not represent, warrant, or imply that the services or method of analysis

used can or will predict future results, successfully identify market tops or bottoms or insulate clients

from major losses due to market corrections or crashes. No promises or assumptions can be made that the

advisory services offered by Dorsey, Wright will provide a better return than other investment strategies.

There are risks inherent in international investments, which may make such investments unsuitable for

certain clients. These include, for example, economic, political, currency exchange, rate fluctuations, and

limited availability of information on international securities. DWA, and their affiliates make no

representation that the companies which issue securities which are the subject of their research reports are

subject to, or in compliance with certain informational reporting requirements imposed by the Securities

Exchange Act of 1934. Sales of securities covered in the research reports may be made in only those

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jurisdictions where such securities are qualified for sale. Individuals should seek professional guidance in

assessing their own objectives and risk tolerance.

Dorsey, Wright is disclosing those risks and opportunities for the types of securities used:

A Stock represents ownership in a company. If the company prospers and grows, the value of the

stock may increase. Even if a company is profitable, the stock prices are subject to “market risk”

which is attributable to investor attitudes, and/or the performance of the broad economy. Stock

ownership in more established companies tends to be more conservative, while younger

companies typically provide the most risk and reward opportunities.

Debt Securities (corporate or municipal bonds) are basically promissory notes that pay interest and

the return of principal at the end of a specified term. Credit risk is the chance the issuer will fail to

pay the interest payments on the security or to pay the principal at maturity. Interest rate risk is

that the market value of the bonds will go down when interest rates go up. Prepayment risk is the

chance that a bond will be paid off early. For example, if interest rates fall, a bond issuer may

decide to pay off its debt. When this happens, the investor may not be able to reinvest the proceeds

in an investment with as high a return or yield.

A Government Bond is a fixed-income security issued and backed by an agency of the United

States Government.

A Mutual Fund is an investment pool, which may include money market instruments, stocks,

bonds, or other investment vehicles. Professional money managers research, select, and monitor

the performance of the securities the fund purchases. It is often easier to achieve diversification

through ownership of mutual funds rather than through ownership of individual stocks or bonds.

Even with no-load or load-waived funds, there are mutual fund expenses paid to the fund

company. Investors may have to pay taxes on capital gains distribution received by the fund, but

not distributed to the investor. Mutual funds redeem shares at net asset value (“NAV”) at the end

of the trading day.

A Unit Investment Trust (“UIT”) is similar to a mutual fund, but once the UIT selects the

securities it will hold them. The portfolio is not actively managed and does not sell securities in

response to ordinary market fluctuations. There may be special risks if a portfolio is concentrated

within a specific sector of the market.

An Exchange Traded Fund (“ETF”) holds securities to match the price performance of a certain

market index or commodity. ETFs can track stock indexes and sectors, bonds, precious metals, or

other assets. ETFs are subject to the same market risks as the index or sector they are designed to

track. ETFs can be bought and sold throughout the day like stocks. ETFs may be an index fund or

a fully transparent actively managed fund.

An Exchange Traded Notes (“ETN”) is a senior, unsecured, unsubordinated debt security typically

linked to the performance of an index, strategy, or benchmark. The note has a fixed maturity, is

backed by the credit of the issuer, and is traded on an exchange

A Futures contract is a standardized contract between two parties to buy or sell a specified asset

(e.g. oranges, oil, gold) of standardized quantity and quality at a specified future date at a price

agreed today (the futures price). The contracts are traded on a futures exchange. Futures contracts

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are not “direct” securities like stocks or bonds. They are still securities, however, although they are

a type of derivative contract. The underlying asset to a futures contract may not be traditional

“commodities” – that is, for financial futures, the underlying asset or item can be currencies,

securities or financial instruments and intangible assets or referenced items such as stock indexes

and interest rates. Futures traders are traditionally placed in one of two groups: hedgers, who have

an interest in the underlying asset, and are seeking to hedge out the risk of price changes; and

speculators, who seek to make a profit by predicting market moves and opening a derivative

contract related to the asset “on paper,” while they have no practical use for or intent to actually

take or make delivery of the underlying asset. Trading security futures contracts may not be

suitable for all investors. You may lose a substantial amount of money in a very short period of

time. The amount you may lose is potentially unlimited and can exceed the amount you originally

deposit with your broker. This is because futures trading is highly leveraged, with a relatively

small amount of money used to establish a position in assets having a much greater value. If you

are uncomfortable with this level of risk, you should not trade security futures contracts.

A Certificate of Deposit (“CD”) is a special type of deposit account with a bank or thrift institution

that typically offers a higher rate of interest than a regular savings account. Unlike other

investments, CDs feature federal deposit insurance up to $250,000.When you purchase a CD, you

invest a fixed sum of money for fixed period of time – six months, one year, five years, or more –

and, in exchange, the issuing bank pays you interest, typically at regular intervals. When you cash

in or redeem your CD, you receive the money you originally invested plus any accrued interest. If

you redeem your CD before it matures, you may have to pay an “early withdrawal” penalty or

forfeit a portion of the interest you earned. Since CDs are debt instruments, there is credit

risk associated with their purchase, although the insurance offered by the FDIC may help mitigate

this risk.

Structured products are securities derived from or based on a single security, a basket of securities,

an index, a commodity, a debt issuance and/or a foreign currency (“underlying assets”). The

return of a structured product is linked to performance of the underlying assets. Some structured

products offer full protection of principal invested while others may offer limited or no protection

of principal. Structured products are unsecured debt obligations of the issuer, so there is a credit

risk associated with their purchase. There is also a liquidity risk associated with structured

products, as they are generally not listed on an exchange or may be thinly traded. Investors who

need to sell their structured products prior to maturity are likely to receive less than the amount

they invested.

A master limited partnership (“MLP”) is a limited partnership that is publicly traded on a

securities exchange, combining the tax benefits of a limited partnership with the liquidity of a

publicly traded security. Shares of ownership are referred to as units and MLPs generally operate

in the natural resources, financial services, and real estate industries. MLPs make distributions

similar to dividends; however, cash distributions are not guaranteed and every unit holder is

responsible for the taxes on his/her proportionate share of income, even if the MLP does not pay a

cash distribution. MLPs must mail an IRS Schedule K-1 to each of their unit holders every year.

A collective investment fund (“CIF”) is a bank-administered trust that holds commingled assets that meet

specific criteria established by 12 CFR 9.18. The bank acts as a fiduciary for the CIF and holds legal title

to the fund’s assets. CIFs allow banks to avoid costly purchases of small lot investments for their smaller

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fiduciary accounts. CIFs are bank maintained and not registered with the Securities and Exchange

Commission. The Declaration of Trust for the Trust describes the procedures for admission to and

withdrawal from a Fund.

Item 9: Disciplinary Information

An investment advisor must disclose material facts about any legal or disciplinary event that is material to

a client’s evaluation of the advisory business or of the integrity of its management personnel. Dorsey,

Wright does not have any disclosure items.

Item 10: Other Financial Industry Activities and Affiliations

Dorsey, Wright is registered as a Commodities Trading Adviser and buys and sells futures contracts.

Dorsey, Wright makes no commissions from implementing commodities advice. Dorsey, Wright does

not currently advise any outside clients on commodities transactions.

Item 11: Code of Ethics, Participation or Interest In Client Transactions, and Personal

Trading

Code of Ethics

Dorsey, Wright maintains a Code of Ethics. The Code of Ethics sets forth standards of conduct expected

of advisory personnel; requires compliance with Federal securities laws; and, addresses conflicts that arise

from personal trading by advisory personnel. Clients may request a copy of the Code of Ethics.

Personal Trading

Dorsey, Wright's goal is to be fair to its research (impersonal services) clients, its investment management

(personal advisory services) clients, clients of its licensing services, and subadvisory clients. Dorsey,

Wright and its access persons will not use information for personal gain. At times Dorsey, Wright and/or

its access persons may take positions in the same securities as clients, and we will try to avoid conflicts

with clients. Dorsey, Wright and its access persons will generally be ‘last in’ and ‘last out’ for the trading

day when trading occurs in close proximity to client trades. We will not violate the Advisor's fiduciary

responsibilities to our clients. Scalping (trading shortly ahead of clients) is prohibited. If a security is

prudent for an investment management portfolio and/or a recommendation is made in a research report we

generate, we shall give clients adequate opportunity to act before acting on our own behalf. In addition,

to mitigate conflicts with clients of Dorsey Wright research and subscription services, Dorsey Wright has

implemented policies and procedures such as restricted periods wherein employees are prohibited from

trading certain securities.

DWA does not offer clients investments in initial public offerings (“IPOs,”) private placements, or thinly

traded securities because that is not the investment philosophy of the Investment Management Accounts.

However, DWA and/or its IA Reps may have different investment objectives and/or risk tolerance than

that of the managed accounts, and thus at times may invest in these types of securities that are not offered

to clients.

Should a conflict with clients occur because of materiality (i.e. the access person or firm has an existing

position in a thinly traded stock), disclosure will be made to the client(s) at the time of trading or the

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research report is released. Incidental trading not deemed to be a conflict (i.e. a purchase or sale which is

minimal in relation to the total outstanding value, and as such would have negligible effect on the market

price), would not be disclosed at the time of trading if the access person or firm has an existing position.

Dorsey, Wright licenses Index products to Invesco PowerShares as well as First Trust (Please see Item 4

for details on the Index products). Dorsey, Wright may promote and provide research reports on the

PowerShares ETFs and First Trust Focus 5 ETF (FV).

Agency Cross Transactions

Dorsey, Wright does not engage in agency cross transactions for investment management clients. Dorsey,

Wright does act as advisor or sub-advisor to mutual fund companies. On rare occasion there may be an

instance where one fund in the family is buying while another is selling a particular security, which may

be done as an agency cross to save transaction costs. In these instances Dorsey, Wright will abide with

procedures established by the mutual fund company under Rule 17a-7 of the Investment Company Act of

1940. Dorsey, Wright does not act as broker and receives no compensation (other than its advisory fee)

for affecting the agency cross.

Item 12: Brokerage Practices

Client Referrals From Brokers

Dorsey, Wright & Associates will generally maintain an existing broker/dealer relationship when the

client is referred to Dorsey, Wright. In maintaining the existing broker/dealer relationship, a conflict of

interest may exist in obtaining best execution by Dorsey, Wright on behalf of the client. A conflict of

interest may exist in obtaining future referrals from a broker/dealer if Dorsey, Wright did not maintain

these existing relationships.

Directed Brokerage

Client may direct brokerage to a particular broker/dealer other than the referring broker/dealer. In both

these instances, it is up to the client to negotiate the commission rate, as Dorsey, Wright does not. The

client may not be able to negotiate the most competitive rate. As a result, clients may pay materially

disparate commissions. In these instances, the client may not be able to participate in aggregated

(“blocked”) trades, which may help reduce the cost of execution.

Recommendation of Broker/Dealers

Where the client is not referred by an existing broker/dealer and/or the client does not otherwise designate

a broker/dealer, Dorsey Wright may recommend a broker/dealer at the client’s request; however,

ultimately it is the client’s decision to select a broker/dealer and custodian. Dorsey Wright does not

receive a referral fee from recommended broker/dealers.

Soft Dollar Practices

Dorsey, Wright does not receive any “soft dollar” compensation from a brokerage firm. Soft dollars

means products and services (anything other than trade execution) that an investment advisor receives

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from (or through) a broker/dealer in exchange for commissions paid by a client. Soft dollars is a rebate of

client commissions to the advisor in the form of goods or services.

Trade Aggregation

Dorsey, Wright may execute block trades when there are a number of accounts using the same

broker/dealer. When a client is referred to Dorsey, Wright, and the client already has an existing

brokerage relationship, we will maintain this relationship using the broker/dealer’s commission or fee

schedule. This practice results in Dorsey, Wright utilizing many different firms and limits block trading

capabilities. When placing trades at various firms, the order of phone calls is random so that no client is

disadvantaged relative to another client.

Block trading is subject to the ability of the broker/dealer to accept block trades. While generally not the

case, some brokerage firms may require Dorsey, Wright to call trades to the various branch offices and

not to a central desk, thus delaying timely trading and the ability to seek best execution.

Individual investment advice and treatment will be accorded to each advisory client within a block trade.

All trades within a block will be aggregated and done in the name of the Dorsey, Wright. The executing

broker will be informed that the trades are for the account of Dorsey, Wright's clients and not for Dorsey,

Wright itself. No advisory account within the block trade will be favored over any other advisory account,

and thus, each account will participate in an aggregated order at the average share price and commissions

will be applied on the same basis (or lower) as if the trade had been entered on an individual basis.

Dorsey, Wright will not aggregate a client's order if in a particular instance Dorsey, Wright believes that

aggregation would cause the client's cost of execution to be increased. The Custodian will be notified of

the amount of each trade for each account.

Item 13: Review of Accounts and Reports on Accounts

Reviews

Investment management services include the continuous review of underlying assets to determine what, if

any, action is necessary and timely. Comprehensive reviews are done on a monthly basis with the receipt

of the individual client’s brokerage statements. These statements are reviewed to determine accuracy,

performance, portfolio positions, exposure and possible changes in the portfolio.

The account reviews are performed by a Senior Vice President and Senior Portfolio Manager, as well as a

Vice President and Portfolio Manager.Additionally, the CCO performs periodic account reviews of a

sample of investment management client accounts.

Reports

The client receives a copy of each confirmation (unless the client has chosen to suppress the

confirmations) as well as a copy of the standard account statement from the qualified custodian of their

respective brokerage firm. Dorsey, Wright also sends quarterly statements that show the portfolio, value,

and basis for fees charged.

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Item 14: Client Referrals & Other Compensation

Referral Fees Paid

Dorsey Wright does not currently have any solicitors; however, in the future Dorsey, Wright may

compensate for client referrals. All solicitor’s agreements will be compliance with the Investment

Advisors Act of 1940. In addition, all applicable federal and state laws will also be observed. All clients

procured by solicitors for personal advisory services will be given full written disclosures describing the

terms and fee arrangements between the advisor and the solicitor prior to or at the time of entering into

the advisory agreement. All clients procured by solicitors for impersonal advisory services (subscriptions)

will be offered Form ADV 2A.

Dorsey, Wright attempts to get competitive commission rates for its clients, subject to existing

relationships. At times, a registered representative of a broker/dealer may have referred a client to Dorsey,

Wright, with instructions to direct brokerage to the firm. Dorsey, Wright does not pay a referral fee.

Generally the broker/dealer and its registered representative will be compensated by commissions, or

other agreed upon arrangements. Dorsey, Wright reserves the right to execute trades at other

broker/dealers if Dorsey, Wright believes the client will not receive best execution. In requesting directed

brokerage, the client should satisfy him or herself that they are receiving best execution, which includes

price, commissions, transaction fees, timeliness of execution, research, and other factors.

Item 15: Custody

Dorsey, Wright is deemed to have custody of client funds solely because of the fee deduction authority

granted by the client in the investment advisory agreement.

Clients will receive account statements at least quarterly from the broker-dealer or other qualified

custodian. Client is urged to compare custodial account statements against statements prepared by

Dorsey, Wright for accuracy. Minor variations may occur because of reporting dates, accrual methods of

interest and dividends, and other factors. The custodial statement is the official record of your account for

tax purposes.

Item 16: Investment Discretion

The Dorsey, Wright Money Management division maintains full discretion under a limited power of

attorney as to the securities and amount of securities. On occasion the firm may make non-discretionary

trades at a client's request.

Dorsey, Wright will not have authority to withdraw funds or to take custody of client funds or securities,

other than under the terms of the Fee Payment Authorization clause in the Agreement with the client.

Item 17: Voting Client Securities

Dorsey, Wright has the authority to vote proxies, unless the client otherwise specifically directs. Clients

may contact us direct at the phone number or address listed on the first page of this document to obtain

information on how we voted on behalf of the client. Dorsey, Wright votes proxies in the best economic

interest of the client, and not in the interest of our firm. While it is unlikely that we will have a material

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conflict when voting client proxies, a conflict could arise from time to time. We can resolve such conflicts

to include but not limited to documenting that votes were cast in the interest of the client. As a secondary

option, we can resolve more material conflicts by obtaining client's informed consent to vote a proxy in a

specific manner. When seeking a client's consent, we will provide the client with sufficient information

regarding the matter and the nature of the conflict to enable the client to make an informed decision.

There may be times when refraining from voting a proxy is in the client's best interest, such as when the

cost of voting exceeds the expected benefit to the client. Clients may request a complete a copy of our

proxy voting policy.

Item 18: Financial Information

An investment advisor must provide financial information if a threshold of fee prepayments is met; there

is a financial condition likely to impair the ability to meet contractual commitments; or, a bankruptcy

within the past ten years. Dorsey, Wright does not have any disclosure items in this section.

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Form ADV Part 2B Brochure Supplement

Item 1: Form ADV Part 2B Group Brochure Supplement Cover Page This Brochure Supplement provides information about the following IA Reps that supplements the

Dorsey, Wright brochure. You should have received a copy of that brochure. Please contact Sara F.

Giegerich ([email protected]) if you did not receive Dorsey, Wright’s brochure or if you have any

questions about the contents of this supplement.

Thomas J. Dorsey

Additional information about IA Reps is available on the SEC’s website at: www.adviserinfo.sec.gov

Item 2: Educational Background and Business Experience

Education and Business Background

Thomas J. Dorsey – President & Chief Executive Officer

Investment industry experience since 1974 including:

o Merrill, Lynch Pierce Fenner & Smith 1974 to 1977

o Wheat, First Securities 1977 to 1987

o Dorsey, Wright & Associates 1987 to present

Born 1947

Graduated 1974 BS in Business Administration & Economics, Virginia Commonwealth

University


An investment advisor and its supervised persons (IA Reps) must disclose material facts about any legal

or disciplinary event that is material to a client’s evaluation of the advisory business or of the integrity of

the IA Rep. The IA Reps do not have any disclosure items.

Item 4: Other Business Activities


Dorsey, Wright and its IA Reps make no commissions from implementing commodities advice.

Item 5: Additional Compensation An investment advisor and its IA Reps must disclose economic benefits received by non-clients for the

provision of advisory services. There are no additional compensation arrangements to disclose for this IA

Rep.

Item 6: Supervision

Sara F. Giegerich, Chief Compliance Officer, monitors portfolios for investment objectives and other

supervisory reviews. The Chief Compliance Officer may be contacted at the phone number of the main

office as shown on the cover page.

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mailto:[email protected]


22






Tammy F. DeRosier




Tammy F. DeRosier – Executive Vice President & Chief Operating Officer



Born 1970

Graduated 1992 BS in Finance & Marketing, University of Virginia










Rep.

Item 6: Supervision




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Susan L. Morrison




Susan L. Morrison – Senior Vice President & Chief Investment Officer



o Signet Bank (Bank of Virginia) 1984 to 1987

Born 1961

Graduated 1989 BS in Business Administration, Virginia Commonwealth University










Rep.

Item 6: Supervision




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24






James C. Ball




James C. Ball – Senior Vice President & Chief Technology Officer



o Paine Webber Inc. 1986 to 1990

Born 1964

Graduated 1986 BS in Civil Engineering, Virginia Military Institute










Rep.

Item 6: Supervision




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25






Harold B. Parker, Jr., CMT




Harold B. Parker, Jr., CMT - Senior Vice President, Senior Portfolio Manager



o Western International Securities 1994 to 2009 (was United California Securities)

Born 1954

Graduated 1976 BS in Agricultural Science & Management, University of California, Davis

Professional Designations Qualifications

CMT - Chartered Market Technician, conferred by Market Technicians Association.

Candidates must meet the following requirements:

Successful completion of all 3 levels of the CMT Exam.

Gainfully employed in a professional analytical or investment management capacity for a

minimum period of 3 years and regularly engaged in this capacity at the time of successfully

passing all exams.








Item 5: Additional Compensation

Harold Parker holds a minority interest (less than 1%) in San Pasqual Holding Corporation (a privately

traded company), the parent of San Pasqual Fiduciary Trust Company. Although no formal solicitor

relationship is established, and no compensation will be paid by one party to the other, referrals may be

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26

made to each other. Mr. Parker or others at DWA may recommend clients establish trust accounts with

San Pasqual. Mr. Parker has an incentive to keep San Pasqual as a viable concern. Furthermore, stock

ownership by Mr. Parker may create an incentive for San Pasqual to select DWA as an investment

manager for its trust clients and/or may create a conflict of interest for San Pasqual when performing its

due diligence of third party money managers. However San Pasqual has been built on the concept of

receiving referrals from a number of independent investment management firms. Because of the minority

interest, we believe these conflicts to be non-material events, but disclose this so that the client may

evaluate the situation. Clients of DWA may request to refrain from establishing a trust account with San

Pasqual. Clients of San Pasqual may refrain from opening an account with DWA.

Item 6: Supervision




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John G. Lewis, CMT




John G. Lewis, CMT - Vice President, Portfolio Manager



Born 1971

Graduated 1993 BS in Business Administration, University of San Diego

Graduated 2002 Masters in Business Administration, University of Southern California







passing all exams.










Rep.

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28

Item 6: Supervision




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Andrew C. Hyer, CIMA®, CMT




Andrew C. Hyer, CIMA®, CMT – Client Portfolio Manager



Born 1978

Graduated 2003 BS in Finance and Economics, Utah State University







passing all exams.

CIMA® - Certified Investment Management Analyst®, conferred by the Investment Management

Consultants Association (IMCA). Candidates must complete the following requirements:

At least three years of experience in investment management consulting or financial services

Passed a background check and qualification examination.

Completed an educational program from a top-25 business school.

Successfully passed a comprehensive certification examination

Agreed to adhere to an ethical code of professional responsibility and to complete 40 hours of

continuing education every two years.






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Rep.

Item 6: Supervision




Page 103

Code of Ethics, Personal Trading and Insider Trading Policy

VSR C05204 (Rev. 2013-10-01) Page 1 of 4

Pursuant to SEC Rule 204A-1 under the Investment Advisers Act of 1940, VSR has adopted the following Code of Ethics, Personal Trading and Insider Trading Policy for all Registered Persons and all VSR employees (“Access Persons”):

Standards of Business Conduct

Under the Advisers Act, VSR is deemed to be a fiduciary with respect to its advisory customers, and owes them the duty to act in good faith and in the customers’ best interests. To assist our Reps and employees in meeting these obligations, VSR has adopted the following standards of business conduct. These standards represent ideals to which our Reps and employees should strive in the performance of their duties and professional services.

Reps should provide investment advisory services, and employees should fulfill their responsibilities, with honesty and integrity, and in a manner which is fair and reasonable to VSR’s customers.

Reps and employees must abide by federal and state securities laws, the regulations promulgated there under, and the standards of conduct and rules adopted by Self Regulatory Organizations and VSR as they now exist and as they are amended in the future.

We expect our Reps to have attained the requisite level of skill and knowledge necessary to provide competent advisory services to their customers, and to be committed to continuing their learning and professional development. Reps should provide advisory services diligently and without undue delay.

Reps should make reasonable efforts to avoid actual or apparent conflicts of interest with their customers.

Confidential information regarding a customer’s holdings or transactions must not be used for personal gain of any Rep or employee, and must not be shared with others for their personal benefit. Reps and employees must not disclose confidential customer information to third parties without the consent of the customer, except as permitted by our privacy policies or by law.

Restrictions on Personal Conduct

Prohibition on Gifts Exceeding $100 Annually: Access Persons are prohibited from giving or receiving any gift, gratuity, or other items with a value exceeding $100 in the aggregate annually from any person or entity doing business with VSR, except as provided under FINRA rules governing cash and non-cash compensation, or except in situations involving family or close personal friends of the Rep or employee.

Outside Business Activities Any Access Person wishing to engage in an outside business activity must first notify the Compliance Department in writing. The request must provide complete details with respect to the activity and describe all direct or indirect compensation related to the activity. Compliance will determine whether such service is consistent with the interests of the firm and our customers, and will notify the Rep or employee in writing whether the activity is approved or denied.

Any Access Person wishing to serve as an officer or director (whether or not for compensation) for an outside company (public or private) must first request in writing the approval of Compliance. If serving as an officer or director of an outside company or organization, Access Persons may not structure financial offerings, raise capital through a securities offering, nor offer securities of the company or organization to new or existing customers, regardless of whether or not compensation or commissions are earned.

Personal Securities Reporting Requirements

The SEC is concerned that employees or Reps who have non-public information about customer orders or transactions will use that information to benefit themselves. As a result, Rule 204A-1 requires persons with access to that information to report their securities holdings and their securities transactions to VSR to ensure such information is not being misused. All Registered persons and all VSR employees are considered to be “Access Persons” under Rule 204A-1.

Page 104


VSR C05204 (Rev. 2013-10-01) Page 2 of 4

Reports Required from Access Persons: Holdings Reports. Each Access Person must report to VSR all securities or securities accounts in which the Access Person has a direct or indirect interest. An Access Person has an indirect interest in all securities or securities accounts owned by family members living in the same household as the Access Person, or owned by entities (such as trusts, corporations, or partnerships) controlled by the Access Person. The initial Holding Report must be made within 10 days after becoming an Access Person, and then annually thereafter. Transaction Reports Each Access Person must report to VSR all transactions in securities or securities accounts in which the Access Person has a direct or indirect interest. The transaction report must be made within 30 days after the end of each calendar quarter. Content of Reports Each Holding Report and Transaction Report must include the following information:

security name and type ticker symbol or CUSIP number number of shares or interest rate and maturity date principal amount of each security held (for Holdings Reports) or price at which each

transaction was effected (for Transaction Reports) nature of transaction, whether purchase, sale, or other type of transaction, and date of

transaction (for Transaction Reports) name of broker or bank which holds the security or effected the transaction account number date of report

How to Report: In general, the monthly or quarterly statements for each securities account will satisfy the requirements for quarterly Transaction Reports and the initial and annual Holdings Reports. Access Persons are required to direct the institutions holding their accounts to send duplicate confirmations and statements to VSR, to the attention of the Trade Desk. Statements must not be dated more than 45 days before being provided to VSR. If an account statement does not satisfy the content requirements shown above, the Access Person shall annotate the statement or provide a schedule containing the missing information. Securities which are not held in an account shall be reported by the Access Person on a schedule which contains the content described above.

Access Persons who do not own a direct or indirect interest in securities (other than Excepted Personal Securities) must confirm such lack of ownership by January 31 of each calendar year, using a report form provided by Compliance. However, such persons are not required to file quarterly Transaction Reports of “no activity.”

Exceptions to Reporting Requirements: Access Persons are not required to include the following “Excepted Personal Securities” in their Holdings Reports or Transaction Reports:

shares of open-end mutual funds (note: trades in closed-end mutual funds or exchange traded funds are not included within the definition of Excepted Personal Securities, and must be reported on the holdings and transaction reports discussed previously);

shares of any money market fund; variable annuities; third party money managers; direct obligations of the United States Government; and money market instruments, bankers’ acceptances, bank certificates of deposit, commercial

paper, or high quality short-term debt.

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VSR C05204 (Rev. 2013-10-01) Page 3 of 4

Access Persons are not required to submit Holdings Reports or Transaction Reports with respect to securities held in accounts over which the Access Person has no direct or indirect power to influence or control the investments. Additionally, Access Persons are not required to provide Transaction Reports with respect to transactions effected through an automatic investment plan so long as the investment is made pursuant to a pre-determined schedule and allocation. Any transaction that overrides the pre-set schedule or allocation of the plan must be reported as described above. All holdings acquired through automatic investment plans must be reported on the initial and annual Holdings Reports.

Access Persons may not open a brokerage account at any firm or broker/dealer unless that firm or broker/dealer has been approved by VSR. Before opening a brokerage account please check with the Trade Desk or Compliance Department for a list of approved firms.

Personal Securities Trading Restrictions

Generally: Access Persons are expected to enter orders for their personal accounts only after pending orders for that same security have been completed in customer accounts, unless all orders are executed through the average price account or as otherwise permitted by the Vice President-Trade Desk . This applies to all accounts in which the Access Person has a direct or indirect interest.

Initial Public Offerings and Private Placements: FINRA rules prohibit Access Persons and their immediate family members from purchasing or selling initial public equity offerings of securities, except in very limited circumstances. Written approval must be obtained from the Vice President-Trade Desk or from Compliance before obtaining a beneficial ownership interest in an initial public offering (“IPO”) of equities or in a private placement of an equity position in a non-public company. Private placements purchased through subscription agreements are not subject to this section, but are subject to the approval of the order by a reviewing principal of VSR.

Insider Trading Policy and Market Manipulation

Generally: The Securities Exchange Act of 1934 and the Insider Trading and Securities Enforcement Act of 1989 deal with the purchase and sale of securities (including options) by persons in possession of material, non-public information ("inside information"). These acts provide for severe civil and criminal penalties as well as a penalty in the amount of up to three times the profit gained or loss avoided. These laws also cover those who assist others in the purchase or sale of securities by communicating insider information.

VSR Insider Trading Policy

The purpose of this Policy is to establish procedures which are designed to identify insider trading (or other manipulative or deceptive) transactions which may violate SEC or FINRA rules or regulations or violate any federal or state law. Associated persons are prohibited from affecting for their own account (or for the accounts of others) any purchases or sales of securities (or options on the securities) of any company when the associated person "knows" or "has reason to believe" that he possesses material, non-public information. It is also a fraudulent trading practice for an associated person to solicit securities orders from an investor by falsely representing that the associated person possesses insider information.

Directors, officers, and controlling stockholders may possess insider information. Corporate employees may gain access to insider information based on their position within a corporation. Representatives must not effect transactions for any insider if the Representative knows or has a reason to believe that the investor is trading based upon insider information.

The law also prohibits "temporary insiders" from trading based upon material, non-public information. Securities underwriters, accountants, lawyers, consultants, and printers are examples of "temporary insiders" who may gain access to insider information while acting in behalf of their customer. Representative must not effect transactions for any "temporary insider" or the family member of a "temporary insider" if the Representative knows or has reason to believe that the investor is trading based on insider information.

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VSR C05204 (Rev. 2013-10-01) Page 4 of 4

The following is a partial list of non-public information that may be insider information:

A merger, acquisition, or joint venture; a stock split or stock dividend; the declaration or omission of a cash dividend; an earnings report; a new product or significant contract; a change in control or management; a call for redemption of a security; significant litigation (or settlement); significant labor dispute (or settlement); taking a company private; or any other material, non-public information that a reasonable investor would consider significant.

A VSR Representative must immediately contact the Chief Compliance Officer if he receives "insider information" or if he receives securities orders from any investor which he knows or has reason to believe are based upon insider information.

Manipulation

VSR Representatives must be alert for trading activities by investors that may be designed for manipulative purposes. This would include activity where there is no change in beneficial ownership (called "wash sales"), or a series of nearly simultaneous trades which tend to cancel each other out (called "matched orders"). Also prohibited are orders placed near the close of the market that would tend to increase or decrease prices or trading patterns designed to create the appearance of trading activity.

Groups of Reps and/or groups of employees may not act in concert when selling or purchasing securities in an attempt to manipulate the price of a security, or to gain a controlling interest in a company without adhering to all pertinent securities rules and regulations.

No Access Person may spread any rumors or misinformation that the Access Person knows to be false or misleading. This includes rumors of a sensational nature that might reasonably be expected to affect market conditions or the price of a particular security. Discussion of unsubstantiated information published by a widely circulated public media is not prohibited provided the source and unsubstantiated nature of the information are also disclosed.

Dissemination of Code of Ethics, Personal Trading and Insider Trading Policy

Compliance will ensure that: every new Rep and every new employee is provided with a copy of our Code of Ethics, Personal Trading and Insider Trading Policy upon joining VSR; that amendments are distributed promptly to all Access Persons; and that the firm receives from each Access Person an acknowledgment they received the Code of Ethics and Trading Policies or any amendments.

Reporting of Violations

All Access Persons are required to report promptly to Compliance any violation of the Code of Ethics, Personal Trading or Insider Trading Policies. Examples of items that should be reported include but are not limited to: noncompliance with federal securities laws, conduct that is harmful to customers, and purchasing or selling securities contrary to the Personal Trading Policies.

Access Persons are encouraged to report any violations or apparent violations. Such reports will not be viewed negatively by firm management; even if the reported event, upon further review, is determined not to be a violation, as long as it is determined the Rep or employee reported such apparent violation in good faith. VSR will not permit any form of intimidation or retaliation against any reporting person. Upon discovering a violation of our Code of Ethics, Personal Trading or Insider Trading Policies, the Chief Compliance Officer may recommend any sanctions as deemed appropriate, including disgorgement of profits, reversal of the trade, a fine, suspension, or termination.

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Stonebridge Capital Advisors, LLCCode of Ethics

to Current

Table of Contents

1 - Statement of General Policy

2 - Definitions

3 - Standards of Business Conduct

4 - Prohibition Against Insider Trading

5 - Personal Securities Transactions

6 - Gifts and Entertainment

7 - Protecting the Confidentiality of Client Information

8 - Service as an Officer or Director

9 - Compliance Procedures

10 - Certification

11 - Records

12 - Reporting Violations and Sanctions

Page 2Page 109

Statement of General Policy

This Code of Ethics (“Code”) has been adopted by Stonebridge Capital Advisors, LLC "Stonebridge") and is designed to comply with Rule 204A-1 under the Investment Advisers Act of 1940 (“Advisers Act”).

This Code establishes rules of conduct for all employees of Stonebridge and is designed to, among other things, govern personal securities trading activities in the accounts of employees, immediate family/household accounts and accounts in which an employee has a beneficial interest. The Code is based upon the principle that Stonebridge and its employees owe a fiduciary duty to Stonebridge clients to conduct their affairs, including their personal securities transactions, in such a manner as to avoid (i) serving their own personal interests ahead of clients, (ii) taking inappropriate advantage of their position with the firm and (iii) any actual or potential conflicts of interest or any abuse of their position of trust and responsibility.

The Code is designed to ensure that the high ethical standards long maintained by Stonebridge continue to be applied. The purpose of the Code is to preclude activities which may lead to or give the appearance of conflicts of interest, insider trading and other forms of prohibited or unethical business conduct. The excellent name and reputation of our firm continues to be a direct reflection of the conduct of each employee.

Pursuant to Section 206 of the Advisers Act, both Stonebridge and its employees are prohibited from engaging in fraudulent, deceptive or manipulative conduct. Compliance with this section involves more than acting with honesty and good faith alone. It means that Stonebridge has an affirmative duty of utmost good faith to act solely in the best interest of its clients.

Stonebridge and its employees are subject to the following specific fiduciary obligations when dealing with clients:

● The duty to have a reasonable, independent basis for the investment advice provided; ● The duty to obtain best execution for a client’s transactions where the Firm is in a position to direct

brokerage transactions for the client; ● The duty to ensure that investment advice is suitable to meeting the client’s individual objectives, needs

and circumstances; and ● A duty to be loyal to clients.

In meeting its fiduciary responsibilities to its clients, Stonebridge expects every employee to demonstrate the highest standards of ethical conduct for continued employment with Stonebridge. Strict compliance with the provisions of the Code shall be considered a basic condition of employment with Stonebridge. Stonebridge's reputation for fair and honest dealing with its clients has taken considerable time to build. This standing could be seriously damaged as the result of even a single securities transaction being considered questionable in light of the fiduciary duty owed to our clients. Employees are urged to seek the advice of the Chief Compliance Officer ("CCO") for any questions about the Code or the application of the Code to their individual circumstances. Employees should also understand that a material breach of the provisions of the Code may constitute grounds for disciplinary action, including, but not limited to, termination of employment with Stonebridge.

The provisions of the Code are not all-inclusive. Rather, they are intended as a guide for employees of Stonebridge in their conduct. In those situations where an employee may be uncertain as to the intent or purpose of the Code, he/she is advised to consult with the CCO. The CCO may grant exceptions to certain provisions contained in the Code only in those situations when it is clear beyond dispute that the interests of our clients will not be adversely affected or compromised. All questions arising in connection with personal securities trading should be resolved in favor of the client even at the expense of the interests of employees.

The CCO will periodically report to senior management/board of directors of Stonebridge to document compliance with this Code.

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Definitions

For the purposes of this Code, the following definitions shall apply:

● “Access person” means any supervised person who: has access to nonpublic information regarding any clients’ purchase or sale of securities, or nonpublic information regarding the portfolio holdings of any reportable fund that Stonebridge or its control affiliates manage or have access to such recommendations; or is involved in making securities recommendations to clients that are nonpublic.

● “Account” means accounts of any employee and includes accounts of the employee’s immediate family members (any relative by blood or marriage living in the employee’s household), anyone living in the employee's household, and any account in which he or she has a direct or indirect beneficial interest, such as trusts and custodial accounts or other accounts in which the employee has a beneficial interest, controls or exercises investment discretion.

● “Beneficial ownership” shall be interpreted in the same manner as it would be under Rule 16a-1(a)(2) under the Securities Exchange Act of 1934 in determining whether a person is the beneficial owner of a security for purposes of Section 16 of such Act and the rules and regulations thereunder.

● 'Fund' means an investment company registered under the Investment Company Act.

● 'Reportable fund' means any registered investment company, i.e., mutual fund, for which our Firm, or a control affiliate, acts as investment adviser, as defined in section 2(a) (20) of the Investment Company Act, or principal underwriter.

● “Reportable security” means any security as defined in Section 202(a)(18) of the Advisers Act, except that it does not include: (i) Transactions and holdings in direct obligations of the Government of the United States; (ii) Bankers’ acceptances, bank certificates of deposit, commercial paper and other high quality short-term debt instruments, including repurchase agreements; (iii) Shares issued by money market funds; (iv) Transactions and holdings in shares of other types of open-end registered mutual funds, unless Stonebridge or a control affiliate acts as the investment adviser or principal underwriter for the fund; and (v) Transactions in units of a unit investment trust if the unit investment trust is invested exclusively in mutual funds, unless Stonebridge or a control affiliate acts as the investment adviser or principal underwriter for the fund.

● “Supervised person” means directors, officers and partners of Stonebridge (or other persons occupying a similar status or performing similar functions); employees of Stonebridge; and any other person who provides advice on behalf of Stonebridge and is subject to Stonebridge's supervision and control.

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Standards of Business Conduct

Stonebridge places the highest priority on maintaining its reputation for integrity and professionalism. That reputation is a vital business asset. The confidence and trust placed in our firm and its employees by our clients is something we value and endeavor to protect. The following Standards of Business Conduct set forth policies and procedures to achieve these goals. This Code is intended to comply with the various provisions of the Advisers Act and also requires that all supervised persons comply with the various applicable provisions of the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and applicable rules and regulations adopted by the Securities and Exchange Commission (“SEC”).

Section 204A of the Advisers Act requires the establishment and enforcement of policies and procedures reasonably designed to prevent the misuse of material, nonpublic information by investment advisers. Such policies and procedures are contained in this Code. The Code also contains policies and procedures with respect to personal securities transactions of all Stonebridge supervised persons as defined herein. These procedures cover transactions in a reportable security in which a supervised person has a beneficial interest in or accounts over which the supervised person exercises control as well as transactions by members of the supervised person’s immediate family.

Section 206 of the Advisers Act makes it unlawful for Stonebridge or its agents or employees to employ any device, scheme or artifice to defraud any client or prospective client, or to engage in fraudulent, deceptive or manipulative practices. This Code contains provisions that prohibit these and other enumerated activities and that are reasonably designed to detect and prevent violations of the Code, the Advisers Act and rules thereunder.

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Prohibition Against Insider Trading

Introduction

Trading securities while in possession of material, nonpublic information, or improperly communicating that information to others may expose supervised persons and Stonebridge to stringent penalties. Criminal sanctions may include a fine of up to $1,000,000 and/or ten years imprisonment. The SEC can recover the profits gained or losses avoided through the illegal trading, impose a penalty of up to three times the illicit windfall, and/or issue an order permanently barring you from the securities industry. Finally, supervised persons and Stonebridge may be sued by investors seeking to recover damages for insider trading violations.

The rules contained in this Code apply to securities trading and information handling by supervised persons of Stonebridge and their immediate family members.

The law of insider trading is unsettled and continuously developing. An individual legitimately may be uncertain about the application of the rules contained in this Code in a particular circumstance. Often, a single question can avoid disciplinary action or complex legal problems. You must notify the CCO immediately if you have any reason to believe that a violation of this Code has occurred or is about to occur.

General Policy

No supervised person may trade, either personally or on behalf of others (such as investment funds and private accounts managed by Stonebridge), while in the possession of material, nonpublic information, nor may any personnel of Stonebridge communicate material, nonpublic information to others in violation of the law.

1. What is Material Information?

Information is material where there is a substantial likelihood that a reasonable investor would consider it important in making his or her investment decisions. Generally, this includes any information the disclosure of which will have a substantial effect on the price of a company’s securities. No simple test exists to determine when information is material; assessments of materiality involve a highly fact-specific inquiry. For this reason, you should direct any questions about whether information is material to the CCO.

Material information often relates to a company’s results and operations, including, for example, dividend changes, earnings results, changes in previously released earnings estimates, significant merger or acquisition proposals or agreements, major litigation, liquidation problems, and extraordinary management developments.

Material information also may relate to the market for a company’s securities. Information about a significant order to purchase or sell securities may, in some contexts, be material. Prepublication information regarding reports in the financial press also may be material. For example, the United States Supreme Court upheld the criminal convictions of insider trading defendants who capitalized on prepublication information about The Wall Street Journal’s “Heard on the Street” column.

You should also be aware of the SEC’s position that the term “material nonpublic information” relates not only to issuers but also to Stonebridge securities recommendations and client securities holdings and transactions.

2. What is Nonpublic Information?

Information is “public” when it has been disseminated broadly to investors in the marketplace. For example, information is public after it has become available to the general public through the Internet, a public filing with the SEC or some other government agency, the Dow Jones “tape” or The Wall Street Journal or some other publication of general circulation, and after sufficient time has passed so that the information has been disseminated widely.

3. Identifying Inside Information

Before executing any trade for yourself or others, including investment funds or private accounts managed by Stonebridge (“Client Accounts”), you must determine whether you have access to material, nonpublic information. If you think that you might have access to material, nonpublic

Page 6Page 113

information, you should take the following steps:

● Report the information and proposed trade immediately to the CCO. ● Do not purchase or sell the securities on behalf of yourself or others, including investment funds or

private accounts managed by the firm. ● Do not communicate the information inside or outside the firm, other than to the CCO. ● After the CCO has reviewed the issue, the firm will determine whether the information is material

and nonpublic and, if so, what action the firm will take.

You should consult with the CCO before taking any action. This high degree of caution will protect you, your clients, and the firm.

4. Contacts with Public Companies

Contacts with public companies may represent an important part of our research efforts. The firm may make investment decisions on the basis of conclusions formed through such contacts and analysis of publicly available information. Difficult legal issues arise, however, when, in the course of these contacts, a supervised person of Stonebridge or other person subject to this Code becomes aware of material, nonpublic information. This could happen, for example, if a company’s Chief Financial Officer prematurely discloses quarterly results to an analyst, or an investor relations representative makes selective disclosure of adverse news to a handful of investors. In such situations, Stonebridge must make a judgment as to its further conduct. To protect yourself, your clients and the firm, you should contact the CCO immediately if you believe that you may have received material, nonpublic information.

5. Tender Offers

Tender offers represent a particular concern in the law of insider trading for two reasons: First, tender offer activity often produces extraordinary gyrations in the price of the target company’s securities. Trading during this time period is more likely to attract regulatory attention (and produces a disproportionate percentage of insider trading cases). Second, the SEC has adopted a rule which expressly forbids trading and “tipping” while in the possession of material, nonpublic information regarding a tender offer received from the tender offeror, the target company or anyone acting on behalf of either. Supervised persons of Stonebridge and others subject to this Code should exercise extreme caution any time they become aware of nonpublic information relating to a tender offer.

6. Restricted/Watch Lists

Although Stonebridge does not typically receive confidential information from portfolio companies, it may, if it receives such information take appropriate procedures to establish restricted or watch lists in certain securities.

The CCO may place certain securities on a “restricted list.” Supervised persons are prohibited from personally, or on behalf of an advisory account, purchasing or selling securities during any period they are listed. Securities issued by companies about which a number of supervised persons are expected to regularly have material, nonpublic information should generally be placed on the restricted list. The CCO shall take steps to immediately inform all supervised persons of the securities listed on the restricted list.

The CCO may place certain securities on a “watch list.” Securities issued by companies about which a limited number of supervised persons possess material, nonpublic information should generally be placed on the watch list. The list will be disclosed only to the CCO and a limited number of other persons who are deemed necessary recipients of the list because of their roles in compliance.

Page 7Page 114

Personal Securities Transactions

General Policy

Stonebridge has adopted the following principles governing personal investment activities by Stonebridge supervised persons:

● The interests of client accounts will at all times be placed first; ● All personal securities transactions will be conducted in such manner as to avoid any actual, potential, or

perceived conflict of interest or any abuse of an individual’s position of trust and responsibility; and ● Supervised persons must not take inappropriate advantage of their positions.

Pre-Clearance Required for Participation in IPOs

No supervised person shall acquire any beneficial ownership in any securities in an Initial Public Offering for his/her account, as defined herein, without the prior written approval of the CCO who has been provided with full details of the proposed transaction (including written certification that the investment opportunity did not arise by virtue of the supervised person’s activities on behalf of a client) and, if approved, will be subject to continuous monitoring for possible future conflicts.

Pre-Clearance Required for Private or Limited Offerings

No supervised person shall acquire beneficial ownership of any securities in a limited offering or private placement without the prior written approval of the CCO who has been provided with full details of the proposed transaction (including written certification that the investment opportunity did not arise by virtue of the supervised person’s activities on behalf of a client) and, if approved, will be subject to continuous monitoring for possible future conflicts.

Blackout Periods

No supervised person shall purchase or sell, directly or indirectly, any security on a day during which any client has a pending "buy" or "sell" order in that same security until that order is executed or withdrawn. No supervised person shall purchase or sell, directly or indirectly, any security in which he/she has, or by reason of such transaction acquires, any direct or indirect beneficial interest within seven (7) calendar days after any client trades in that security unless all of the transactions contemplated by the client in that security have been completed prior to such transaction. If a securities transaction is executed by a client within seven (7) calendar days after an access person executed a transaction in the same security, the CCO will review the supervised person’s and the client’s transactions to determine whether the supervised person did not meet his or her fiduciary duties to the client in violation of this Code.

Interested Transactions

No supervised person shall recommend any securities transactions for a client without having disclosed his/her interest, if any, in such securities or the issuer thereof, including without limitation:

● any direct or indirect beneficial ownership of any securities of such issuer; ● any contemplated transaction by such person in such securities; ● any position with such issuer or its affiliates; and ● any present or proposed business relationship between such issuer or its affiliates and such person or any

party in which such person has a significant interest.

Short-Term Trading Profits

No supervised person shall profit from the purchase and sale, or sale and purchase, of the same securities of which such person has beneficial ownership within 60 calendar days [and which are held in client accounts]. Any prohibited short-term profits are subject to cancellation with the supervised person being responsible for any short-term profit.

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Gifts and Entertainment

Giving, receiving or soliciting gifts in a business setting may create an appearance of impropriety or may raise a potential conflict of interest. Stonebridge has adopted the policies set forth below to guide supervised persons in this area.

General Policy

Stonebrige's policy with respect to gifts and entertainment is as follows:

● Giving, receiving or soliciting gifts in a business may give rise to an appearance of impropriety or may raise a potential conflict of interest;

● Supervised persons should not accept or provide any gifts or favors that might influence the decisions you or the recipient must make in business transactions involving Stonebridge, or that others might reasonably believe would influence those decisions;

● Modest gifts and favors, which would not be regarded by others as improper, may be accepted or given on an occasional basis. Entertainment that satisfies these requirements and conforms to generally accepted business practices also is permissible;

● Where there is a law or rule that applies to the conduct of a particular business or the acceptance of gifts of even nominal value, the law or rule must be followed.

Reporting Requirements

● Any supervised person who accepts, directly or indirectly, anything of value from any person or entity that does business with or on behalf of Stonebridge, including gifts and gratuities with value in excess of $300 per year (Note: Dual registrants sometimes use a $100 gift threshold for all employees based on FINRA rule), must obtain consent from the CCO before accepting such gift.

● This reporting requirement does not apply to bona fide dining or bona fide entertainment if, during such dining or entertainment, you are accompanied by the person or representative of the entity that does business with Stonebridge.

● This gift reporting requirement is for the purpose of helping Stonebridge monitor the activities of its employees. However, the reporting of a gift does not relieve any supervised person from the obligations and policies set forth in this Section or anywhere else in this Code. If you have any questions or concerns about the appropriateness of any gift, please consult the CCO.

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Protecting the Confidentiality of Client Information

Confidential Client Information

In the course of investment advisory activities of Stonebridge, the firm gains access to non-public information about its clients. Such information may include a person's status as a client, personal financial and account information, the allocation of assets in a client portfolio, the composition of investments in any client portfolio, information relating to services performed for or transactions entered into on behalf of clients, advice provided by Stonebridge to clients, and data or analyses derived from such non-public personal information (collectively referred to as 'Confidential Client Information'). All Confidential Client Information, whether relating to Stonebridge current or former clients, is subject to the Code's policies and procedures. Any doubts about the confidentiality of information must be resolved in favor of confidentiality.

Non-Disclosure Of Confidential Client Information

All information regarding Stonebridge clients is confidential. Information may only be disclosed when the disclosure is consistent with the firm's policy and the client's direction. Stonebridge does not share Confidential Client Information with any third parties, except in the following circumstances:

● As necessary to provide service that the client requested or authorized, or to maintain and service the client's account. Stonebridge will require that any financial intermediary, agent or other service provider utilized by Stonebridge (such as broker-dealers or sub-advisers) comply with substantially similar standards for non-disclosure and protection of Confidential Client Information and use the information provided by Stonebridge only for the performance of the specific service requested by Stonebridge;

● As required by regulatory authorities or law enforcement officials who have jurisdiction over Stonebridge, or as otherwise required by any applicable law. In the event Stonebridge is compelled to disclose Confidential Client Information, the firm shall provide prompt notice to the clients affected, so that the clients may seek a protective order or other appropriate remedy. If no protective order or other appropriate remedy is obtained, Stonebridge shall disclose only such information, and only in such detail, as is legally required;

● To the extent reasonably necessary to prevent fraud, unauthorized transactions or liability.

Employee Responsibilities

All supervised persons are prohibited, either during or after the termination of their employment with Stonebridge, from disclosing Confidential Client Information to any person or entity outside the firm, including family members, except under the circumstances described above. A supervised person is permitted to disclose Confidential Client Information only to such other supervised persons who need to have access to such information to deliver the Stonebridge services to the client.

Supervised persons are also prohibited from making unauthorized copies of any documents or files containing Confidential Client Information and, upon termination of their employment with Stonebridge, must return all such documents to Stonebridge.

Any supervised person who violates the non-disclosure policy described above will be subject to disciplinary action, including possible termination, whether or not he or she benefited from the disclosed information.

Security Of Confidential Personal Information

Stonebridge enforces the following policies and procedures to protect the security of Confidential Client Information:

● The Firm restricts access to Confidential Client Information to those supervised persons who need to know such information to provide Stonebridge's services to clients;

● Any supervised person who is authorized to have access to Confidential Client Information in connection with the performance of such person's duties and responsibilities is required to keep such information in a secure compartment, file or receptacle on a daily basis as of the close of each business day;

● All electronic or computer files containing any Confidential Client Information shall be password secured and firewall protected from access by unauthorized persons;

● Any conversations involving Confidential Client Information, if appropriate at all, must be conducted by supervised persons in private, and care must be taken to avoid any unauthorized persons overhearing or intercepting such conversations.

Privacy PolicyPage 10Page 117

As a registered investment adviser, Stonebridge Capital Advisors, LLC and all supervised persons, must comply with SEC Regulation S-P, which requires investment advisers to adopt policies and procedures to protect the 'nonpublic personal information' of natural person clients. 'Nonpublic information,' under Regulation S-P, includes personally identifiable financial information and any list, description, or grouping that is derived from personally identifiable financial information. Personally identifiable financial information is defined to include information supplied by individual clients, information resulting from transactions, any information obtained in providing products or services. Pursuant to Regulation S-P, Stonebridge has adopted policies and procedures to safeguard the information of natural person clients.

Enforcement and Review of Confidentiality and Privacy Policies

The CCO is responsible for reviewing, maintaining and enforcing Stonebridge confidentiality and privacy policies and is also responsible for conducting appropriate employee training to ensure adherence to these policies. Any exceptions to this policy requires the written approval of theh CCO.

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Service as an Officer or Director

No supervised person shall serve as an officer or on the board of directors of any publicly or privately traded company without prior authorization by the CCO or a designated supervisory person based upon a determination that any such board service or officer position would be consistent with the interest of Stonebridge's clients. Where board service or an officer position is approved, Stonebridge shall implement a “Chinese Wall” or other appropriate procedure, to isolate such person from making decisions relating to the company’s securities.

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Compliance Procedures

Pre-clearance

A supervised person may, directly or indirectly, acquire or dispose of beneficial ownership of a reportable security only if: (i) such purchase or sale has been approved by a supervisory person designated by Stonebridge; (ii) the approved transaction is completed by the close of business on the second trading day after approval is received; and (iii) the designated supervisory person has not rescinded such approval prior to execution of the transaction. Post-approval is not permitted.

Clearance must be obtained by completing and signing the Pre-clearance Form provided for that purpose by the CCO. The CCO monitors all transactions by all access persons in order to ascertain any pattern of conduct which may evidence conflicts or potential conflicts with the principles and objectives of this Code, including a pattern of frontrunning.

Advance trade clearance in no way waives or absolves any supervised person of the obligation to abide by the provisions, principles and objectives of this Code.

Reporting Requirements

Every supervised person shall provide initial and annual holdings reports and quarterly transaction reports to the CCO which must contain the information described below. It is the policy of Stonebridge that each supervised person must arrange for their brokerage firm(s) to send automatic duplicate brokerage account statements and trade confirmations of all securities transactions to the CCO.

1. Initial Holdings Report

Every supervised person shall, no later than ten (10) days after the person becomes a supervised person, file an initial holdings report containing the following information:

● The title and exchange ticker symbol or CUSIP number, type of security, number of shares and principal amount (if applicable) of each reportable security in which the supervised person had any direct or indirect beneficial interest ownership when the person becomes a supervised person;

● The name of any broker, dealer or bank, account name, number and location with whom the supervised person maintained an account in which any securities were held for the direct or indirect benefit of the supervised person; and

● The date that the report is submitted by the supervised person.

The information submitted must be current as of a date no more than forty-five (45) days before the person became a supervised person.

2. Annual Holdings Report

Every supervised person shall, no later than January 31 each year, file an annual holdings report containing the same information required in the initial holdings report as described above. The information submitted must be current as of a date no more than forty-five (45) days before the annual report is submitted.

3. Quarterly Transaction Reports

Every supervised person must, no later than thirty (30) days after the end of each calendar quarter, file a quarterly transaction report containing the following information:

With respect to any transaction during the quarter in a reportable security in which the supervised persons had any direct or indirect beneficial ownership:

● The date of the transaction, the title and exchange ticker symbol or CUSIP number, the interest rate and maturity date (if applicable), the number of shares and the principal amount (if applicable) of each covered security;

● The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition); ● The price of the reportable security at which the transaction was effected; ● The name of the broker, dealer or bank with or through whom the transaction was effected; and ● The date the report is submitted by the supervised person.

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4. Exempt Transactions

A supervised person need not submit a report with respect to:

● Transactions effected for, securities held in, any account over which the person has no direct or indirect influence or control;

● Transactions effected pursuant to an automatic investment plan, e.g. a dividend retirement plan; ● A quarterly transaction report if the report would duplicate information contained in securities transaction

confirmations or brokerage account statements that Stonebridge Capital Advisors, LLC holds in its records so long as the firm receives the confirmations or statements no later than 30 days after the end of the applicable calendar quarter;

● Any transaction or holding report if Stonebridge Capital Advisors, LLC has only one supervised person, so long as the firm maintains records of the information otherwise required to be reported.

5. Monitoring and Review of Personal Securities Transactions

The CCO or a designee will monitor and review all reports required under the Code for compliance with Stonebridge's policies regarding personal securities transactions and applicable SEC rules and regulations. The CCO may also initiate inquiries of supervised persons regarding personal securities trading. Supervised persons are required to cooperate with such inquiries and any monitoring or review procedures employed Stonebridge. Any transactions for any accounts of the CCO will be reviewed and approved by the President, or other designated supervisory person. The CCO shall at least annually identify all supervised persons who are required to file reports pursuant to the Code and will inform such supervised persons of their reporting obligations.

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Certification

Initial Certification

All supervised persons will be provided with a copy of the Code and must initially certify in writing to the CCO that they have: (i) received a copy of the Code; (ii) read and understand all provisions of the Code; (iii) agreed to abide by the Code; and (iv) reported all account holdings as required by the Code.

Acknowledgement of Amendments

All supervised persons shall receive any amendments to the Code and must certify to the CCO in writing that they have: (i) received a copy of the amendment; (ii) read and understood the amendment; (iii) and agreed to abide by the Code as amended.

Annual Certification

All supervised persons must annually certify in writing to the CCO that they have: (i) read and understood all provisions of the Code; (ii) complied with all requirements of the Code; and (iii) submitted all holdings and transaction reports as required by the Code.

Further Information

Supervised persons should contact the CCO regarding any inquiries pertaining to the Code or the policies established herein.

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Records

The Chief Compliance Officer shall maintain and cause to be maintained in a readily accessible place the following records:

● A copy of any Code of Ethics adopted by the Firm pursuant to Advisers Act Rule 204A-1 which is or has been in effect during the past five years;

● A record of any violation of Stonebridge's Code and any action that was taken as a result of such violation for a period of five years from the end of the fiscal year in which the violation occurred;

● A record of all written acknowledgements of receipt of the Code and amendments thereto for each person who is currently, or within the past five years was, a supervised person which shall be retained for five years after the individual ceases to be a supervised person of Stonebridge;

● A copy of each report made pursuant to Advisers Act Rule 204A-1, including any brokerage confirmations and account statements made in lieu of these reports;

● A list of all persons who are, or within the preceding five years have been, access persons; ● A record of any decision and reasons supporting such decision to approve a supervised persons'

acquisition of securities in IPOs and limited offerings within the past five years after the end of the fiscal year in which such approval is granted.

Page 16Page 123

Reporting Violations and Sanctions

All supervised persons shall promptly report to the CCO or an alternate designee all apparent violations of the Code. Any retaliation for the reporting of a violation under this Code will constitute a violation of the Code.

The CCO shall promptly report to senior management all apparent material violations of the Code. When the CCO finds that a violation otherwise reportable to senior management could not be reasonably found to have resulted in a fraud, deceit, or a manipulative practice in violation of Section 206 of the Advisers Act, he or she may, in his or her discretion, submit a written memorandum of such finding and the reasons therefore to a reporting file created for this purpose in lieu of reporting the matter to senior management.

Senior management shall consider reports made to it hereunder and shall determine whether or not the Code has been violated and what sanctions, if any, should be imposed. Possible sanctions may include reprimands, monetary fine or assessment, or suspension or termination of the employee’s employment with the firm.

Page 17Page 124

CODE OF ETHICS These pages composing the Code of Ethics are made available to clients upon request. DEFINITIONS “Supervised person” means any partner, officer, director (or other person occupying a similar status or performing similar functions), or employee of an investment adviser, or other person who provides investment advice on behalf of the investment adviser and is subject to the supervision and control of the investment adviser. “Investment Advisor Representative” (“IA Rep”) is a supervised person who provides investment advice on behalf of the firm. The IA Rep may solicit, meet with, or otherwise communicate with clients about investment advice. “Access person” is a supervised person who has access to nonpublic information regarding clients’ purchase or sale of securities, is involved in making securities recommendations to clients or who has access to such recommendations that are nonpublic. Access persons include officers, portfolio management personnel, and client service representatives who communicate investment advice to clients. COMPLIANCE WITH FEDERAL SECURITIES LAWS This Code of Ethics is based on ethical conduct premised on fundamental principles of openness, integrity, honesty, and trust. Access persons must comply with the federal securities laws. Dorsey, Wright challenges you to live up not only to the letter of the law, but also to the spirit of the law, as well as the ideals of this firm. PROTECTION OF MATERIAL NONPUBLIC INFORMATION Information about Dorsey, Wright’s securities recommendations, and client securities holdings and transactions is material nonpublic information. Dorsey, Wright has a duty of care to safeguard this sensitive information. Access persons are to treat this information as confidential. Access persons are to refer to the Written Supervisory Procedures for details regarding the Privacy Policy and Prohibition on Insider Trading. PERSONAL SECURITIES TRADING POLICY Access persons are to refer to the applicable section of the Written Supervisory Procedures for the Personal Securities Trading Policy. The Personal Securities Trading Policy also appears in Form ADV Part 2 for client disclosure. PERSONAL SECURITIES TRADING PROCEDURES All access persons of Dorsey, Wright must report securities holdings and personal securities transactions to the Chief Compliance Officer, whether done through this firm or outside with a third party.

Dorsey, Wright & Associates

Page 1Page 125

Holdings Reports and Transaction Reports must be submitted for “reportable securities” in which the access person has, or acquires, any direct or indirect beneficial ownership. An access person is presumed to be a beneficial owner of securities that are held by his or her immediate family members sharing the access person’s household. Access persons are to refer to the Written Supervisory Procedures for details regarding the Personal Securities Trading Procedures. INITIAL PUBLIC OFFERINGS (“IPO”) AND PRIVATE PLACEMENTS Most individuals rarely have the opportunity to invest in IPOs or private placements. An access person's IPO or private placement purchase therefore raises questions as to whether the employee is misappropriating an investment opportunity that should first be offered to eligible clients, or whether a portfolio manager is receiving a personal benefit for directing client business or brokerage. Dorsey, Wright does not offer IPOs and private placements to clients. This is disclosed in Form ADV and the Investment Management Agreement. Pre-clearance is required for access person’s purchase of IPOs and private placements. Access persons must obtain Dorsey, Wright's approval before investing in an IPO or private placement. Access persons are to refer to the Written Supervisory Procedures for details regarding pre-clearance procedures under the section heading of Personal Securities Trading Procedures. REPORTING VIOLATIONS All employees (inclusive of all supervised persons and access persons) must promptly report any violations of this Code of Ethics to the Chief Compliance Officer. Any violations involving the Chief Compliance Officer will be reported to Thomas J. Dorsey, President or Tammy F. DeRosier, Executive Vice-President. Dorsey, Wright seeks to create a safe environment for those that report violations and will attempt to handle the matter discreetly to avoid retaliation. Employees however may choose to remain anonymous when reporting violations.

The anonymous reporting of violations or suspected violations can be accomplished through the use of the anonymous email address that has been set up for this purpose. Dorsey Wright’s anonymous reporting email address can be accessed by clicking the link “DWA Mail” which is located on the “DWA Only” tab inside the Dorsey Wright website. The link is available to all Dorsey Wright employees. Messages should be sent to Sara F. Giegerich ([email protected]), Tammy F. DeRosier ([email protected]), or Susan L. Morrison ([email protected]). The username and password for this email account are listed below. Name: anonymous Password: n0secrets

RECORDKEEPING Dorsey, Wright will keep the following records in regards to this Code of Ethics:

• Code of Ethics (including historical copies for 5 years after the last date in effect)


Page 2Page 126

• Records of violations of the Code and actions taken as a result of the violations • Written Receipt and Acknowledgment page from each access person (to be kept for five years

after the individual ceases to be a supervised person) • Current and historical lists of access persons will be maintained at all times (Such list need not be

maintained on paper if a list of access persons can “promptly” be generated from computer records)

• Holdings Reports and Transaction Reports made by access persons • Records of decisions approving access persons’ acquisition of securities in IPOs and limited

offerings Whistleblower reports are not required to be kept in order to maintain confidentiality of those reporting. EDUCATING EMPLOYEES ABOUT THE CODE OF ETHICS All existing employees (access persons) have obtained a copy of this Code of Ethics. All new employees will obtain a copy of this Code of Ethics. Amendments to the Code of Ethics will be distributed as/when updated. The employee should read and understand its contents prior to signing the receipt and acknowledgement page. Any questions about this Code of Ethics may be directed to the Chief Compliance Officer.


Page 3Page 127

Firm Background Stonebridge Capital Advisors is a SEC-registered investment advisor formed in 1997 to provide customized portfolio management services to high net worth individuals, insurance companies, endowments and foundations.

Stonebridge focuses on meeting each client’s unique set of investment objectives through separately managed portfolios customized to meet those objectives. It is our belief that a properly structured, customized portfolio will provide tax-efficient and superior risk adjusted long term investment performance.

Investment Philosophy Consistent superior risk-adjusted performance is achieved through a customized, well-diversified portfolio built by solid fundamental analysis and strategic portfolio construction.

We strive to maintain portfolios in a fully invested position in accordance with the client’s stated investment objectives. We do not forecast interest rate changes, nor do we attempt to time the movement of the markets as a rationale for portfolio changes. New client cash allocations are methodically deployed into the portfolio structure over time.

Balanced Portfolio Investment Process The Stonebridge Capital Advisors Balanced Composite combines the growth characteristics of our Large Capitalization Growth Equity style and interest income generating characteristics of our fixed income style of management. The balance between stocks and bonds is

largely determined by client investment needs and objectives. The client’s tax status directs the use of taxable or tax-exempt bonds. Asset allocation adjustments are implemented based on client needs and changes in market cycles.

Equity Investment Process We seek dynamic industry sectors whose financial and business characteristics create counter-cyclicality within the portfolio.

Within each sector we seek companies that lead by producing and employing productivity-enhancing products, services and technologies. We believe productivity-growth to be the single most important wealth creating factor in our economy. We focus upon large capitalization companies that consistently deliver superior rates of return on invested capital over a series of business cycles. We believe consistently high rates of return on invested capital to be a critical indicator of superior companies and their managements. Our focus is upon cash earnings and cash rates of return for it is cash that enables management to create shareholder wealth by reinvesting to grow the business, increasing dividends and repurchasing shares.

We acquire shares of companies at reasonable prices through rigorous fundamental analysis. Positions are increased as buying opportunities arise as long as the fundamentals remain strong. Positions are reduced if we believe the fundamentals of a company or its industry have been altered negatively.

Balanced Portfolio Performance and Characteristics

- Past performance is not a guarantee of future results. - Performance reported is gross of fees. - Composites are comprised of those Stonebridge Capital Advisors portfolios that are managed in the specific core style.

Stonebridge Capital Advisors

Balanced Gross Investment Performance—(Annualized as of 3/31/2014) Investment Performance - Balanced Portfolio - 3/31/14 Qtr 1yr 3yr 5yr

Stonebridge Capital Advisors Balanced Portfolio 1.01% 10.00% 8.57% 11.87%

50% S&P 500 Index/50% Merrill Lynch 1-10 Year Gov./Corp. 1.45% 10.81% 8.93% 12.74%

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Fixed Income Investment Process Once the general structure of the portfolio has been determined, we focus on individual security analysis and selection. Securities that carry investment-grade ratings from national ratings agencies undergo additional analysis by our portfolio management team. We apply our own credit analysis to confirm the ratings, and regularly review the securities for possible credit changes. Our thorough credit review process, honed by more than three decades of experience in the fixed income market, allows us to determine which bond issues have solid credit characteristics. This analysis is vital regardless of stated ratings.

Of the issues which pass this intense scrutiny, we purchase only those which meet client requirements and offer the best yields. If an issue does not meet our credit criteria, a higher yield will not make it qualify. This analytical process allows us to deliver an additional degree of safety to our clients, and to provide yield enhancement to the portfolios.

Balanced Portfolio

Stonebridge Capital Advisors

Balanced Portfolio Management Team EQUITY MANAGEMENT Michael J. Dashner David A. EckenrodeAssistant Portfolio Manager Director of Equity ManagementInvestment experience – Since 2009 Investment experience – Since 1977Phone: 651-251-3638 E-Mail: [email protected]

Phone: 231-933-0320E-Mail: [email protected]

Raymond E. Hirsch, CFA Robert A. KincadePortfolio Manager President & Portfolio ManagerInvestment experience – Since 1973 Investment experience – Since 1978E-Mail: [email protected] Phone: 651-251-1007

E-Mail: [email protected] Dennis E. Nielsen, CFA John K. Schonberg, CFAPortfolio Manager Portfolio Manager & PrincipalInvestment experience - 1976 Investment experience – Since 1987Phone: 651-251-3632 E-Mail: [email protected]


FIXED INCOME MANAGEMENT Dennis T. Hippen, CFA Heidi L. Hukriede, CFAFounder & CEO Director of Fixed IncomeInvestment experience – Since 1965 Investment experience – Since 1989Phone: 651-251-1003 E-Mail: [email protected]


Ronald C. Hume Jonathan F. Lynn Portfolio Manager & Principal Portfolio ManagerInvestment experience – Since 1969 Investment experience – Since 1999Phone: 651-251-3634 E-Mail: [email protected]


Scott M. Shinnick Head of Fixed Income Trading Investment experience – Since 2000 Phone: 651-251-3638 E-Mail: [email protected]

Page 129

Systematic RS Global Macro

Minimum Investment $200,000

Objective Seeks to achieve meaningful risk di-versification and investment returns

Strategy Description The Dorsey Wright Systematic RS Global Macro strategy provides broad diversification across markets, sec-tors, styles, long and inverse domestic and international equities, fixed in-come, currencies, and commodities using Exchange Traded Fund (ETF) instruments. The strategy holds approximately ten ETFs that demonstrate, in our opinion, favorable relative strength character-istics. The strategy is constructed pursuant to Dorsey Wright’s proprie-tary basket ranking and rotation methodology. This strategy is uniquely positioned from an investment opportunity per-spective because it is not limited to a specific market. This allows for the efficient allocation of risk capital glob-ally to opportunities where we believe potential returns are particularly com-pelling.

As of 31 Mar 2014

Correlation Data shown are that of the net strat-egy returns relative to each respective benchmark index (Apr 2009 - Mar 2014.)

Annual Performance1 (%)

Global Macro (Gross)

Global Macro (Net)

Dow Jones Moderate Portfolio Index

20092 10.84 9.30 32.02

2010 14.01 11.82 13.84

2011 -5.36 -7.23 0.38

2012 7.02 5.02 11.24

1See Important Disclosures in Appendix F; 2Inception 3/31/2009; 3Updated through 3/31/2014; Gross perfor-mance does not include the deduction of fees, expenses, and other transaction costs which will over time have a material impact on investment performance.

2013 28.74 26.55 14.46

S&P 500

42.10

15.06

2.12

15.98

32.42

20143 1.45 1.00 1.90 1.80

S&P 500 0.70

MSCI EAFE 0.59

Barclays Aggregate Bond -0.13

DJ US Real Estate 0.43

Reuters Commodity 0.56

Past performance is no guarantee of future results.

Strategy and Benchmark Performance History1 (%)

YTD 1 Year 3 Year 5 Year Inception

Global Macro (Gross) 1.45 21.28 7.42 10.81 10.81

Global Macro (Net) 1.00 19.18 5.44 8.76 8.76

DJ Moderate Portfolio Index 1.90 11.05 7.99 14.37 14.37

S&P 500 1.80 21.88 14.64 21.14 21.14 Page 130

Top Holdings (%) based on assets

Name Weight

Healthcare SPDR 12.07

Consumer Discretionary SPDR 11.62

Industrial SPDR 10.03

iShares S&P 500 Growth 9.88

iShares S&P 600 Small Cap Growth 9.83

iShares S&P 600 Small Cap Value 9.33

iShares MSCI EMU Index 9.25

First Trust Mid Cap Core Alphadex 9.24

First Trust Small Cap Core Alphadex 8.59

First Trust Large Cap Core Alphadex 8.33

Asset Allocation as of 31 Mar 2014 (%) based on assets

As of 31 Mar 2014


Performance (%) Volatility (%)

Global Macro (Net) 8.76 13.76

Dow Jones Moderate Portfolio Index

14.37 9.41

S&P 500 21.14 13.99

Statistics (Mar 2009—Mar 2014); See Appendix F Process Step 1-ETF Baskets Our unique basket ranking and rotation methodology, based on relative strength, allows the portfolio to be concentrated in what we believe to be the strongest areas. Step 2-Individual ETFs Our universe of ETFs is ranked by our proprietary relative strength model. Step 3-Portfolio Construction 10 high relative strength ETFs are slotted into the portfolio. Step 4-Sell Discipline Stops for each position are based on our proprietary relative strength rankings.

ETF Baskets

Model proposes the weight of multiple ETF baskets

Portfolio Construction

Rigorous qualitative review of suggested model changes

Individual ETFs

Universe ranked by relative strength

Sell Discipline Stops for each position based on relative strength ranking

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Hypothetical Annual Performance1 (%)

Global Macro (Gross) Global Macro (Net) S&P 500

19992 15.55 13.87 7.71

2000 9.97 6.74 -9.10

2001 -8.13 -10.87 -11.89

2002 4.71 1.62 -22.10

2003 27.79 24.08 28.69

2004 22.18 18.62 10.88

2005 17.95 14.51 4.91

2006 28.38 24.65 15.80

2007 16.27 12.87 5.50

2008 -8.99 -11.70 -37.00

20093 0.59 -0.16 -11.01

1See Important Disclosures in Appendix F; 2Hypothetical Performance Inception; 3Hypothetical Perfor-mance Through 3/31/2009

DJ Moderate Portfolio Index

9.83

-2.16

-2.51

-7.05

27.17

13.15

7.25

11.91

8.02

-24.75

-6.23

Hypothetical Performance

Statistics1 (Jul 1999—Mar 2009)

Global Macro (Gross) Global Macro (Net)

Performance (%) 12.20 8.91

Volatility (%) 12.31 12.31

S&P 500

-3.75

15.83

DJ Moderate Portfolio Index

2.58

10.74

Page 132

Diversification Across Market Segments The following table highlights historical leadership changes for various market segments and the net performance of Dorsey Wright’s Systematic RS Global Macro Strategy. The information provided here is intended to be general in nature to illustrate the variation among market segments. 2Actual Performance Inception 3/31/2009; 3Updated through 3/31/2014; . 1See Important Disclosures in Appendix F

As of 31 Mar 2014


Source Bloomberg, Dow Jones Indexes, Standard & Poor’s, MSCI Barra, and Reuters calculated by Dorsey Wright & Associates. Perfor-mance displayed represents past performance, which is no guarantee of future results. The index returns assume reinvestment of all dividends but do not reflect any management fees, transaction costs or expenses. The benchmark indices are unmanaged and may not be available for direct investment.

2000 2001 2002 2003 2004 2005 2006 2007 2008 20092 2010 2011 2012 2013

RE

27.65%

RE

11.69%

C

23.04%

ME

39.17%

RE

31.22%

C

22.54%

RE

35.50%

C

20.56%

B

5.24%

C

33.43%

C

29.96%

B

7.86%

RE

18.94%

SP

32.42%

B

11.63%

B

8.44%

B

10.25%

RE

36.89%

ME

20.70%

GM

14.51%

ME

26.86%

GM

12.87%

GM

-11.70%

ME

32.46%

RE

26.94%

RE

6.03%

ME

17.87%

GM

26.55%

C

11.06%

DJ

-2.51%

RE

3.63%

SP

28.69%

GM

18.62%

ME

14.02%

GM

24.65%

ME

11.63%

C

-23.74%

RE

30.82%

SP

15.06%

SP

2.12%

SP

15.98%

ME

23.15%

GM

6.74%

GM

-10.87%

GM

1.62%

DJ

27.17%

DJ

13.15%

RE

9.63%

SP

15.80%

DJ

8.02%

DJ

-24.75%

SP

26.45%

DJ

13.84%

DJ

0.38%

DJ

11.24%

DJ

14.46%

DJ

-2.16%

SP

-11.89%

DJ

-7.05%

GM

24.08%

C

11.21%

DJ

7.25%

C

13.51%

B

6.97%

SP

-37.00%

DJ

23.79%

GM

11.82%

GM

-7.23%

GM

5.02%

RE

1.73%

SP

-9.10%

C

-16.34%

ME

-15.66%

C

8.86%

SP

10.88%

SP

4.91%

DJ

11.91%

SP

5.50%

RE

-40.07%

GM

9.13%

ME

8.21%

C

-10.56%

B

4.23%

B

-1.98%

ME -

13.96%

ME

-21.21%

SP

-22.10%

B

4.10%

B

4.34%

B

2.43%

B

4.33%

RE

-18.15%

ME

-43.06%

B

5.93%

B

6.56%

ME

-11.75%

C

-1.49%

C

-6.96%

20143

C

11.46%

RE

8.75%

DJ

1.90%

B

1.84%

SP

1.80%

GM

1.00%

ME

0.77%

(GM) = Dorsey Wright’s Systematic RS Global Macro Strategy (Net) (RE) = Dow Jones U.S. Real Estate Total Return Index (B) = Barclays Aggregate Bond Total Return Index (C) = Reuters Continuous Commodity Index / Dorsey Wright Continuous Commodity Index (after 4/17/13) (ME) = MSCI EAFE Total Return Index (SP) = S&P 500 Total Return Index (DJ) = Dow Jones Moderate Portfolio Index Investors cannot invest directly in an index.

Hypothetical Until March 31, 20091

Page 133

Appendix F Historical Performance Of the Dorsey, Wright Systematic Relative Strength Global Macro Strategy The hypothetical performance charts compare the returns of the Dorsey, Wright Systematic Relative Strength Global Macro Strate-gy with the returns of the Dow Jones Moderate Portfolio Index and the S&P 500 total return index. The beginning of the hypothet-ical test period is June 30, 1999 and is assigned an arbitrary value of 100.00 on that date. The volatility of the Models and of actual Accounts may be different than the volatility of the Dow Jones Moderate Portfolio Index and the S&P 500 index. For the Systematic Relative Strength Global Macro Model the performance is that of a hypothetical portfolio managed in accordance with the dictates of its strategy for the historical periods indicated and the actual performance of actual Accounts since their incep-tion. Net returns assume the deduction of 0.75% per quarter (3.00% per annum) from the Gross Return to account for manage-ment fees for periods when the returns are hypothetical. Actual net returns are used beginning on March 31, 2009. The perfor-mance represented in this brochure is based on monthly performance of the Systematic Relative Strength Global Macro Model. The first full quarter of actual returns of the Model is the second quarter of 2009. The hypothetical returns have been developed and tested by the Manager, but have not been verified by any third party and are unaudited. The performance information is based on data supplied by the Manager or from statistical services, reports, or other sources which the Manager believes are reliable. Index data was used for some indexes before ETF price data was available. The performance of the Models, prior to the inception of actual accounts, was achieved by means of retroactive application of a model designed with hindsight. For the hypothetical portfolios, returns do not represent actual trading or reflect the impact that material economic and market factors might have had on the Manager’s decision-making under actual circumstances. A list of all holdings over the previous 12 months is available upon re-quest. Actual performance of each of the account styles may differ from the performance of the hypothetical portfolio for the following reasons: the Account may not be fully invested at all times; not all stocks in the Account may be weighted equally at all times due to appreciation or depreciation in a stock’s value; or in managing the Accounts, Dorsey, Wright & Associates may make limited modifications to the Strategy as necessary to comply with federal tax laws. The returns of the Hypothetical Performance Model do not include dividends. Dorsey, Wright’s advisory fees are described in Part II of the adviser’s Form ADV. All returns since inception of actual Accounts do reflect reinvestment of dividends and other earnings. Returns of actual Accounts, since inception, are a composite of all Accounts of that style that were managed for the full quarter. All returns since inception of actual Accounts are compared against the Dow Jones Moderate Portfolio Index and the S&P 500 total return index. The Dow Jones Moderate Portfolio Index is a global asset allocation benchmark. 60% of the benchmark is represented equally with nine Dow Jones equity indexes. 40% of the benchmark is represented with five Barclays Capital fixed income indexes. The S&P 500 is a stock market index based on the market capitalizations of 500 leading companies publicly traded in the U.S. stock market, as defined by Standard & Poor’s. The Barclays Aggregate Bond Index is a broad base index, maintained by Barclays Capital, and is used to rep-resent investment grade bonds being traded in the United States. The MSCI EAFE Total Return Index is a stock market index that is designed to measure the equity market performance of developed markets outside of the United States and Canada and is main-tained by MSCI Barra. The Dow Jones U.S. Real Estate Index invests in U.S. real estate stocks and real estate investment trusts (REITs). The Reuters Commodity Index comprises 17 commodity futures that are continuously rebalanced. Each investor should carefully consider the investment objectives, risks and expenses of any Exchange-Traded Fund ("ETF") prior to investing. Before investing in an ETF investors should obtain and carefully read the relevant prospectus and documents the issuer has filed with the SEC. ETFs may result in the layering of fees as ETFs impose their own advisory and other fees. To obtain more complete information about the product the documents are publicly available for free via EDGAR on the SEC website (http://www.sec.gov) There are risks inherent in international investments, which may make such investments unsuitable for certain clients. These in-clude, for example, economic, political, currency exchange, rate fluctuations, and limited availability of information on international securities. Definition of statistical terms: Performance: Net annualized performance. Volatility: Annualized standard deviation. Standard deviation shows how much variation or dispersion exists from the average val-ue. Correlation: Compresses covariance into a range of +/- 1. A negative correlation indicates an inverse relationship whereas a posi-tive correlation is indicative of a direct relationship. Past performance, hypothetical or actual, does not guarantee future results. In all securities trading, there is a potential for loss as well as profit. It should not be assumed that recommendations made in the future will be profitable or will equal the performance as shown. Investors should have long-term financial objectives when working with Dorsey, Wright & Associates.


Page 134

Concordia Dorsey(Gross) Stonebridge(Gross) Wgt'd(30/70)1 Year 8.10% 28.74% 13.55% 18.11%3 Year 6.50% 9.25% 9.12% 9.16%5 Year 13.40% 9.99% 11.34% 10.93%

Hypothetical Investment Performance Combination As of 12/13/2013

* This is not a real return component but a hypothetical, weighted combination of investment performance. * 2009 was the inception year for Dorsey’s Global Macro strategy. The first quarter of 2009 contains hypothetical performance data. * Past performance is not a guarantee of future results.

Page 135

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