whview1q13
TRANSCRIPT
WHV in Brief• AssetsundermanagementasofMarch31,2013:$14.3billion
• TotalstaffasofMarch31,2013:71employees,22investmentprofessionals
Market Highlights:• Developedinternationalequities,asmeasuredbytheEAFEindex,postedanotherstrongquarter,althoughthe
strongU.S.dollarmutedthosereturnsforU.S.basedinvestors.Inlocalcurrencyterms,theEAFEreturned9.7%butthestrengtheningdollarreducedthatto5.1%,significantlylaggingtheS&P500’s10.6%return.
• U.S.equities,particularlythesmallermarketcapsegments,outperformedforeignequitymarkets,andseveralindicesreachednewalltimehighs.
• ThestrongequitymarketrallythusfarhassignaledareturntoequitiesbyinvestorswhowereencouragedbyhopesofaEuropeanrecoveryandtheaversionofthefiscalcliffintheU.S.attheendof2012.However,astrongdegreeofriskaversionremains,asevidencedbytheleadershipofthemoredefensiveandyieldorientedhealthcareandconsumerstaplessectors,whichpostedstrongreturnsof11.2%and11.5%,respectively.
• Despitemanyconcernsaboutausterity’simpactonwhatisstillafragileeconomicrecovery,thereareseveralmacroeconomicdevelopmentsthatbodewellfortheintermediate-andperhapslong-term.Theseincludecontinuingimprovementinthehousingmarket,theimprovedbalancesheetsanddebtserviceratiosofhouseholdsandtheU.S.energyrevolution,tonameafew.
Strategy Highlight:ThecenterandpaceofglobaleconomicactivityhasbeenshiftingoverthepastseveraldecadesfromtheUnitedStates,EuropeandJapantotheEmergingMarketswithanemphasisontheAsiaPacificregion.Thevelocityofthistransitionhasacceleratednoticeablysincethelate1980’s.Just20yearsago,emergingmarketsaccountedforroughly30%ofglobalGDPonapurchasingpowerparitybasis;in2012,theyaccountedfor49%,oralmosthalfofglobalGDP.TheInternationalMonetaryFundforecaststhatthisportionofglobalGDPgeneratedbythedevelopingworldwillcontinuetogrowinthenearfuture.
Exhibit 1: GDP based on PPP, (Percent of World GDP)
AdvancedEcon. EM&DevelopedEcon.
0
10
20
30
40
50
60
70
80
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
FirstQuarter2013Update Volume32|Issue1
Source: IMF Estimates
WhileGDPestimatesformanydevelopedeconomieshavebeendecelerating,and2012growthratesformanyemergingmarketcountriesweredisappointing,GDPgrowthfortheemergingmarketsasawholeisexpectedtocontinuetooutpacegrowthinthedevelopedcountries.
Exhibit 2: Emerging Markets GDP Growth Continues to Outpace Developed Markets
Adv.Econ. EM&Dev.Econ. World
-6
-4
-2
0
2
4
6
8
10
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
Source: IMF Estimates
However,inspiteoftheseoptimisticprospects,therecentreturnsofemergingmarketequitieshavenotbeenreflectiveofthiscontinuingtrend.WHVbelievesanunsustainableimbalanceexistswhichhascreatedacompellinginvestmentopportunity:emergingmarketsaccountforonly14%oftheworld’smarketcapitalizationofpubliclytradedcompanies.Asurbanizationandindustrializationtakeholdinthedevelopingworld,theshareofglobalmarketcapforemergingmarketcompaniesisexpectedtogrowaswell.Thiswillcreatemoreopportunitiesforinvestmentintheircapitalmarkets.
Companieswithinthesecountriesarealsobecomingincreasinglycompetitivewiththeirdevelopedmarketcounterparts.Forexample,industrialproductionhasgrownfasterintheemergingeconomiesthaninthedevelopedeconomiesforthepastdecade.1AsnotedintheInternationalMonetaryFund’sApril2013EconomicOutlook,“Emergingmarketriskshavedeclined,growthhasstabilizedandexternalfundingconditionsforemergingmarketeconomiesareveryfavorable.”
Themorefavorabledemographictrendswithintheemergingmarketsareyetanothercompellingreasontoinvestinthesecountrieswiththeirexpandingpopulationsandconsumerconsumption.Withincreasedurbanization,millionsofpeoplearoundthedevelopingworldaremovingtocitiesatanunprecedentedspeedandscaleinsearchofhigherpayingjobs.Theworld’smiddleclassconsumptionisbecomingincreasinglydrivenbytheseemergingeconomies.WHVbelievesininvestingincompaniesthatarepositionedtobenefitfromthisgrowingconsumertrendintheemergingeconomies.
Exhibit 3: Spending by the Global Middle Class
Sub-SaharanAfrica1%
Middle East &North Africa
5%
NorthAmerica
26%
Europe38%
Central &South America
7%
Asia Pacific23%
2009
Sub-SaharanAfrica1%
Middle East &North Africa
4%NorthAmerica
10%
Europe20%
Central &South America
6%
Asia Pacific59%
2030E
Source: OECD Factbook 2011-2012
Lastly,emergingmarketequityvaluationsareindicativeofanattractiveinvestmentopportunityonbothanabsoluteandrelativebasis.Exhibit3showsthatprice-to-bookandprice-to-earningsvaluationsinemergingmarketeconomiesarecurrentlycheaperrelativetotheirhistoricalaverages.WhiletheU.S.equitymarketshavehadastrongrunduringthefirstquarterof2013,investorsseemtobeincreasinglyfocusedontherelativeattractivenessoftheU.S.economyand
capitalmarketscomparedtotheotherdevelopedinternationalmarkets.WHVbelievesthatthisisashort-term“sweetspot”ofearningsre-accelerationandcheapervaluationsintheU.S.Overthelongerterm,emergingmarketswillstillcontinuetogrowatsignificantlyfasterratesthantheU.S.andotherdevelopedeconomies.
Exhibit 5: Relative Indices Valuations
As of 3/31/2012
MSCI Emerging Markets
Index
MSCI EAFE Index
S&P 500
Index
P/EForward12Mo. 10.5x 12.6x 13.7x
P/B 1.4x 1.5x 2.3x
DividendYield 2.8% 3.2% 2.1%
3YearEPSGrowth 14.1% 22.5% 16.9%
Source: FactSet
Exhibit 4: Global Equity Valuations
–2.5
–2.0
–1.5
–1.0
–0.5
0.0
0.5
1.0
1.5
2.0
Cheaper
RicherMaximum
Minimum
2006 2007 2008 2009 2010 2011 2012
(In�z-scores)
10th–90th�Percentile Advanced�Economies Emerging�Market Economies
Sources: IMF Financial Stability Report (Bloomberg L.P.; IBES; and IMF staff estimates.)
Note: Based on GDP-weighted average of z-scores of price-to-book (P/B) and forward price-to-earnings (P/E) ratios. The z-scores represent the deviation from the period average expressed in the number of standard deviations. Values above zero denote richer valuations relative to historical averages, while those below zero denote cheaper valuations. P/B and P/E ratios are monthly series beginning in 1996 and 1987, respectively, or earliest available. Advanced economies include 22 countries, and emerging market economies include 17 countries.
WHVbelievesinstitutionalinvestorscantakeadvantageofthisinvestmentopportunitybyhavingexposuretoawelldiversifiedemergingmarketsequitystrategyintheirportfolio.Astrategythatallowsfordiverseexposureacrossdifferentcountries,sectorsandmarket-capitalizationsisasensiblewaytoimplementbroadexposuretotheemergingmarketsassetclass.
WHV does not guarantee the future performance of any client’s account or any specific level of performance, the success of any investment decision or strategy that we may use, or the success of our overall management of any account. Certain statements contained in this commentary are forward-looking, including those that discuss strategies, goals, outlook or other non-historical matters; or project revenues, income, returns or other financial measures. These forward-looking statements are made only as of the date on which they are made, and WHV undertakes no obligation to update or revise any forward-looking statements.
1 FactSet Economic Data
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whv.com
WHV Performance Highlights1
Annualized
1Q13 1Yr. 3Yrs. 5Yrs. 10Yrs.
International EquityGrossofFees 4.01% 8.65% 5.39% 0.34% 15.81%
NetofFees 3.80% 7.78% 4.43% -0.62% 14.69%
MSCIEAFE 5.13% 11.25% 5.00% -0.89% 9.69%
Global EquityGrossofFees 4.36% 9.27% 5.26% 0.88% n/a
NetofFees 4.17% 8.43% 4.31% -0.07% n/a
MSCIWorld 7.73% 11.85% 8.46% 2.23% n/a
Small Cap EquityGrossofFees 11.76% 11.32% 11.50% 6.92% 13.85%
NetofFees 11.59% 10.63% 10.57% 5.95% 12.78%
Russell2000 12.39% 16.30% 13.45% 8.24% 11.52%
Micro Cap EquityGrossofFees 9.04% -2.46% 10.58% n/a n/a
NetofFees 8.78% -3.44% 9.48% n/a n/a
DowJonesMicro 15.03% 7.40% 12.92% n/a n/a
Emerging MarketsGrossofFees -1.39% -1.28% 3.82% n/a n/a
NetofFees -1.64% -2.26% 2.79% n/a n/a
MSCIEmerging -1.62% 1.96% 3.27% n/a n/a
Select World EquityGrossofFees 8.43% 9.33% 9.43% 5.42% n/a
NetofFees 8.17% 8.25% 8.35% 4.38% n/a
MSCIAllCountryWorldex 6.50% 10.55% 10.79% 5.30% n/a
International Small CapGrossofFees 11.44% 9.40% n/a n/a n/a
NetofFees 11.17% 8.32% n/a n/a n/a
MSCIAllCountryWorldex 6.54% 10.48% n/a n/a n/a
Large Cap CoreGrossofFees 8.26% 8.93% 10.51% 6.16% 8.60%
NetofFees 8.15% 8.49% 9.81% 5.42% 7.79%
S&P500 10.61% 13.96% 12.67% 5.81% 8.53%
1 This information is supplemental to the GIPS-compliant presentations, which are attached.
International Equity Composite
Definition of the FirmWHV is an investment adviser, registered under the Investment Advisers Act of 1940. WHV manages a variety of equity and balanced portfolios working from offices in San Francisco and Seattle. WHV is “the firm” for purposes of determining the Total Firm Assets under management and firm-wide compliance. Registration with the SEC does not imply a certain level of skill or training.
Year Ended
Total Return (%)
Gross of Fees
Total Return (%)
Net of Fees
Benchmark Returns
(%)
Composite Dispersion
(%)
Ex-Post Standard Deviation (%) Number of
Portfolios at End of
Period
Total Assets at End of
Period($ millions)
Non-Fee-Paying
Portfolios (% of
Composite Assets)
Total Firm Assets
($ millions)Composite Benchmark
Y 12/31/12 15.24 14.32 17.32 1.34 22.54 19.37 413 4,091.4 0.01 13,404
Y 12/31/11 -14.82 -15.68 -12.14 1.63 25.98 22.43 446 4,006.5 n/a 13,250
Y 12/31/10 18.62 17.46 7.75 1.82 n/a n/a 404 4,335.0 n/a 15,213
Y 12/31/09 62.10 60.55 31.78 5.19 n/a n/a 415 3,371.7 n/a 12,646
Y 12/31/08 -49.17 -49.71 -43.38 2.43 n/a n/a 456 2,252.5 n/a 8,376
Y 12/31/07 44.35 42.95 11.17 3.82 n/a n/a 414 4,040.1 n/a 14,400
Y 12/31/06 23.73 22.51 26.34 4.41 n/a n/a 310 2,000.4 n/a 9,013
Y 12/31/05 40.92 39.56 13.54 4.77 n/a n/a 148 830.5 n/a 6,630
Y 12/31/04 30.20 28.93 20.25 3.19 n/a n/a 54 292.9 n/a 5,700
Y 12/31/03 29.26 28.00 38.59 6.59 n/a n/a 40 177.6 n/a 5,424
WHV Investment Management
Compliance StatementWHV Investment Management (WHV) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. WHV has been independently verified for the periods from October 1, 1994 through December 31, 2011.
Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The International Equity composite has been examined for the periods from January 1, 1995 through December 31, 2011. The verification and performance examination reports are available upon request.
PolicesWHV’s policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.
Composite DescriptionThe composite was created on October 31, 2004. The composite includes all non-wrap accounts, excluding mutual funds, invested in the firm’s International Equity strategy, a portfolio of international equity growth stocks that is expected to generate long-term capital appreciation. A list of composite descriptions is available upon request.
Since August 2008, WHV has used the services of its affiliated sub-advisor Hirayama Investments, LLC in the management of this strategy.
Minimum Account SizeCurrently there is no minimum asset level for inclusion in the composite. Prior to January 1, 2012, the minimum asset level for inclusion was $100,000. Prior to January 1, 2010, the minimum asset level for inclusion was $50,000.
BenchmarkThe benchmark for the International Equity composite is the MSCI-EAFE (Net) Index, which measures the equity performance of developed markets in Europe, Australia and the Far East. Previously, the benchmark presented was the MSCI-EAFE (Gross) Index. In June 2011, the benchmark was changed for all periods since the composite’s inception to better reflect how composite returns are calculated. The returns of the benchmark are provided to represent the investment environment that existed during the time period shown and are not covered by the report of the independent verifiers. For comparison purposes, the index includes the reinvestment of income and other earnings but does not include any trading expenses, management fees or other costs. The volatility of the composite and that of the benchmark may be materially different due to varying degrees of diversification and/or other factors.
A large percentage of the equity assets in the composite is invested in countries or regions not included in the benchmark.
DispersionComposite dispersion is measured by the standard deviation across returns of portfolios represented within the composite for the full period. Standard deviation is calculated on asset-weighted portfolio returns. Composite dispersion is not presented for quarterly periods or for years where the composite consisted of five or fewer accounts as it is not considered statistically meaningful. Ex-post standard deviation is the annualized standard deviation of monthly returns for the trailing 36 months of both the composite and benchmark.
Returns and FeesReturns reflect the deduction of all trading expenses and the reinvestment of dividends and other earnings. Gross returns do not reflect the deduction of investment advisory fees or any other expenses that may be incurred in the management of the account. Net returns are net of model investment advisory fees in effect for the respective time period. Actual fees may vary depending on, among other things, the applicable fee schedule and portfolio size. Further, the impact of management fees over time may be different from the actual management fees used in the calculation during periods of significant volatility. WHV’s investment advisory fees are described in Form ADV Part II. Valuations and returns are computed and stated in U.S. dollars. Past performance is not a guarantee of future results.
The Management Fee Schedule is as follows:Incremental Annual Fee Rate as a Percentage of Market Value
First $10 million @ 1.00% | Next $15 million @ 0.80% | Next $25 million @ 0.75% | Next $50 million @ 0.60% | All over $100 million @ 0.50%
901 5th Avenue, Suite 3130Seattle, WA 98164-2008Tel: (800) 258-1388 Fax: (206) 219-2479
301 Battery Street, Suite 400 San Francisco, CA 94111-3203Tel: (800) 204-2650 Fax: (415) 288-6153
whv.com
Global Equity CompositeWHV Investment Management
Definition of the FirmWHVisaninvestmentadviser,registeredundertheInvestmentAdvisersActof1940.WHVmanagesavarietyofequityandbalancedportfoliosworkingfromofficesinSanFranciscoandSeattle.WHVis“thefirm”forpurposesofdeterminingtheTotalFirmAssetsundermanagementandfirm-widecompliance.RegistrationwiththeSECdoesnotimplyacertainlevelofskillortraining.
Year Ended
Total Return (%)
Gross of Fees
Total Return (%)
Net of Fees
Benchmark Returns
(%)
Composite Dispersion
(%)
Ex-Post Standard Deviation (%)
Number of Portfolios at
End of Period
Total Assets at End of
Period($ millions)
Total Firm Assets
($ millions)Composite Benchmark
Y 12/31/12 14.92 14.03 15.83 1.21 22.68 16.74 80 578.6 13,404
Y 12/31/11 -15.22 -16.08 -5.54 1.45 25.93 20.15 102 553.2 13,250
Y 12/31/10 17.96 16.80 11.76 2.12 n/a n/a 91 372.9 15,213
Y 12/31/09 62.92 61.36 29.99 5.69 n/a n/a 80 296.2 12,646
Y 12/31/08 -48.26 -48.80 -40.71 2.17 n/a n/a 67 124.1 8,376
Y 12/31/07 44.94 43.54 9.04 n/m n/a n/a 23 128.7 14,400
Y 12/31/06 23.28 22.07 20.07 n/m n/a n/a 3 40.2 9,013
Y 12/31/05^ 9.63 9.45 5.62 n/m n/a n/a 1 27.9 6,630
^ Returnsarefortheperiodfrom11/01/2005through12/31/2005
Compliance StatementWHVInvestmentManagement(WHV)claimscompliancewiththeGlobalInvestmentPerformanceStandards(GIPS®)andhaspreparedandpresentedthisreportincompliancewiththeGIPSstandards.WHVhasbeenindependentlyverifiedfortheperiodsfromOctober1,1994throughDecember31,2011.
Verificationassesseswhether(1)thefirmhascompliedwithallthecompositeconstructionrequirementsoftheGIPSstandardsonafirm-widebasisand(2)thefirm’spoliciesandproceduresaredesignedtocalculateandpresentperformanceincompliancewiththeGIPSstandards.TheGlobalEquitycompositehasbeenexaminedfortheperiodsfromNovember1,2005throughDecember31,2011.Theverificationandperformanceexaminationreportsareavailableuponrequest.
PolicesWHV’spoliciesforvaluingportfolios,calculatingperformance,andpreparingcompliantpresentationsareavailableuponrequest.
Composite DescriptionThecompositewascreatedonOctober31,2005.Thecompositeincludesallnon-wrapaccountsinvestedinthefirm’sGlobalEquitystrategy,aportfolioofinternationalandU.S.companiesthatareindustryleadersintheglobalmarketplace.Thestrategyseekstoidentifystocksofcompaniesthatarepoisedforlong-termgrowthandhavethepotentialtosustainahighgrowthrateinregionsandcountriesaroundtheworld.Alistofcompositedescriptionsisavailableuponrequest.
SinceAugust2008,WHVhasusedtheservicesofitsaffiliatedsub-advisorHirayamaInvestments,LLCinthemanagementofthisstrategy.
Minimum Account SizeCurrentlythereisnominimumassetlevelforinclusioninthecomposite.PriortoJanuary1,2012,theminimumassetlevelforinclusionwas$100,000.PriortoJanuary1,2010,theminimumassetlevelforinclusionwas$50,000.
BenchmarkThebenchmarkfortheGlobalEquitycompositeistheMSCIWorld(Net)Indexwhichmeasurestheequitymarketperformanceof24developedcountries.Previously,thebenchmarkpresentedwastheMSCIWorld(Gross)Index.InJune2011,thebenchmarkwaschangedforallperiodssincethecomposite’sinceptiontobetterreflecthowcompositereturnsarecalculated.Thereturnsofthebenchmarkareprovidedtorepresenttheinvestmentenvironmentthatexistedduringthetimeperiodshownandarenotcoveredbythereportoftheindependentverifiers.Forcomparisonpurposes,theindexincludesthereinvestmentofincomeandotherearningsbutdoesnotincludeanytradingexpenses,managementfeesorothercosts.Thevolatilityofthecompositeandthatofthebenchmarkmaybemateriallydifferentduetovaryingdegreesofdiversificationand/orotherfactors.
Alargepercentageoftheequityassetsinthecompositeisinvestedincountriesorregionsnotincludedinthebenchmark.
DispersionCompositedispersionismeasuredbythestandarddeviationacrossreturnsofallportfoliosrepresentedwithinthecompositeforthefullperiod.Standarddeviationiscalculatedonasset-weightedportfolioreturns.Compositedispersionisnotpresentedforquarterlyperiodsorforyearswherethecompositeconsistsoffiveorfeweraccountsasitisnotconsideredstatisticallymeaningful.Ex-poststandarddeviationistheannualizedstandarddeviationofmonthlyreturnsforthetrailing36monthsofboththecompositeandbenchmark.
Returns and FeesReturnsreflectthedeductionofalltradingexpensesandthereinvestmentofdividendsandotherearnings.Grossreturnsdonotreflectthedeductionofinvestmentadvisoryfeesoranyotherexpensesthatmaybeincurredinthemanagementoftheaccount.Netreturnsarenetofmodelinvestmentadvisoryfeesineffectfortherespectivetimeperiod.Actualfeesmayvarydependingon,amongotherthings,theapplicablefeescheduleandportfoliosize.Further,theimpactofmanagementfeesovertimemaybedifferentfromtheactualmanagementfeesusedinthecalculationduringperiodsofsignificantvolatility.WHV’sinvestmentadvisoryfeesaredescribedinFormADVPartII.ValuationsandreturnsarecomputedandstatedinU.S.dollars.Pastperformanceisnotaguaranteeoffutureresults.
The Management Fee Schedule is as follows:IncrementalAnnualFeeRateasaPercentageofMarketValue
[email protected]%|[email protected]%|[email protected]%|[email protected]%|[email protected]%
901 5th Avenue, Suite 3130Seattle, WA 98164-2008Tel: (800) 258-1388 Fax: (206) 219-2479
301 Battery Street, Suite 400 San Francisco, CA 94111-3203Tel: (800) 204-2650 Fax: (415) 288-6153
whv.com
Small Cap Equity CompositeWHV Investment Management
Definition of the FirmWHVisaninvestmentadviser,registeredundertheInvestmentAdvisersActof1940.WHVmanagesavarietyofequityandbalancedportfoliosworkingfromofficesinSanFranciscoandSeattle.WHVis“thefirm”forpurposesofdeterminingtheTotalFirmAssetsundermanagementandfirm-widecompliance.RegistrationwiththeSECdoesnotimplyacertainlevelofskillortraining.
Year Ended
Total Return (%)
Gross of Fees
Total Return (%)
Net of Fees
Benchmark Returns
(%)
Composite Dispersion
(%)
Ex-Post Standard Deviation (%) Number of
Portfolios at End of Period
Total Assets at End of
Period($ millions)
Total Firm Assets
($ millions)Composite Benchmark
Y 12/31/12 13.33 12.63 16.35 1.10 22.16 20.20 31 1,295.2 13,404
Y 12/31/11 -7.06 -7.99 -4.18 0.69 28.24 24.99 33 1,174.0 13,250
Y 12/31/10 26.40 25.16 26.85 0.93 n/a n/a 35 1,165.5 15,213
Y 12/31/09 53.82 52.34 27.17 1.36 n/a n/a 43 1,057.8 12,646
Y 12/31/08 -43.46 -44.06 -33.79 0.65 n/a n/a 47 713.9 8,376
Y 12/31/07 12.82 11.71 -1.57 1.78 n/a n/a 47 1,374.7 14,400
Y 12/31/06 16.88 15.73 18.37 0.75 n/a n/a 51 1,283.0 9,013
Y 12/31/05 16.48 15.33 4.55 4.13 n/a n/a 51 1,027.0 6,630
Y 12/31/04 20.36 19.18 18.33 2.56 n/a n/a 43 727.9 5,700
Y 12/31/03 47.78 46.36 47.25 2.51 n/a n/a 37 598.2 5,424
Compliance StatementWHVInvestmentManagement(WHV)claimscompliancewiththeGlobalInvestmentPerformanceStandards(GIPS®)andhaspreparedandpresentedthisreportincompliancewiththeGIPSstandards.WHVhasbeenindependentlyverifiedfortheperiodsfromOctober1,1994throughDecember31,2011.
Verificationassesseswhether(1)thefirmhascompliedwithallthecompositeconstructionrequirementsoftheGIPSstandardsonafirm-widebasisand(2)thefirm’spoliciesandproceduresaredesignedtocalculateandpresentperformanceincompliancewiththeGIPSstandards.TheSmallCapEquitycompositehasbeenexaminedfortheperiodsfromJanuary1,2000throughDecember31,2011.Theverificationandperformanceexaminationreportsareavailableuponrequest.
PolicesWHV’spoliciesforvaluingportfolios,calculatingperformance,andpreparingcompliantpresentationsareavailableuponrequest.
Composite DescriptionThecompositewascreatedonOctober31,2004.Thecompositeincludesallnon-wrapaccountsinvestedinthefirm’sSmallCapEquitystrategy.TheSmallCapEquitystrategyisadiversifiedportfolioofcompanieshaving,atthetimeofpurchase,aminimummarketcapofthelowerboundandamaximumcapoftheupperboundofthemarketcaprangeoftheRussell2000®Index,asofthatindex’smostrecentreconstitution.Securitieseligibleforpurchaseshallbemarketablewithquotationsavailableonrecognizedexchanges.TheinvestmentstylecanbedefinedasGARP-oriented(growthatareasonablerate).Alistofcompositedescriptionsisavailableuponrequest.
Minimum Account SizeCurrently,thereisnominimumassetlevelforinclusioninthecomposite.PriortoJanuary1,2012,theminimumassetlevelforinclusionwas$100,000.PriortoJanuary1,2010,theminimumassetlevelforinclusionwas$50,000.
BenchmarkThebenchmarkfortheSmallCapEquitystrategyistheRussell2000®Index,whichmeasurestheperformanceofthesmallcapsegmentoftheU.S.equityuniverse.Thereturnsofthebenchmarkareprovidedtorepresenttheinvestmentenvironmentthatexistedduringthetimeperiodshownandarenotcoveredbythereportoftheindependentverifiers.Forcomparisonpurposes,theindexincludesthereinvestmentofincomeandotherearningsbutdoesnotincludeanytradingexpenses,managementfeesorothercosts.Thevolatilityofthecompositeandthatofthebenchmarkmaybemateriallydifferentduetovaryingdegreesofdiversificationand/orotherfactors.
DispersionCompositedispersionismeasuredbythestandarddeviationacrossreturnsofportfoliosrepresentedwithinthecompositeforthefullperiod.Standarddeviationiscalculatedonasset-weightedportfolioreturns.Compositedispersionisnotpresentedforquarterlyperiodsorforyearswherethecompositeconsistedoffiveorfeweraccountsasitisnotconsideredstatisticallymeaningful.Ex-poststandarddeviationistheannualizedstandarddeviationofmonthlyreturnsforthetrailing36monthsofboththecompositeandbenchmark.
Returns and FeesReturnsreflectthedeductionofalltradingexpensesandthereinvestmentofdividendsandotherearnings.Grossreturnsdonotreflectthedeductionofinvestmentadvisoryfeesoranyotherexpensesthatmaybeincurredinthemanagementoftheaccount.Netreturnsarenetofmodelinvestmentadvisoryfeesineffectfortherespectivetimeperiod.Actualfeesmayvarydependingon,amongotherthings,theapplicablefeescheduleandportfoliosize.Further,theimpactofmanagementfeesovertimemaybedifferentfromtheactualmanagementfeesusedinthecalculationduringperiodsofsignificantvolatility.WHV’sinvestmentadvisoryfeesaredescribedinFormADVPartII.ValuationsandreturnsarecomputedandstatedinU.S.dollars.Pastperformanceisnotaguaranteeoffutureresults.
The Management Fee Schedule is as follows:IncrementalAnnualFeeRateasaPercentageofMarketValue
[email protected]%|[email protected]%|[email protected]%|[email protected]%|[email protected]%
901 5th Avenue, Suite 3130Seattle, WA 98164-2008Tel: (800) 258-1388 Fax: (206) 219-2479
301 Battery Street, Suite 400 San Francisco, CA 94111-3203Tel: (800) 204-2650 Fax: (415) 288-6153
whv.com
Micro Cap Equity CompositeWHV Investment Management
Definition of the FirmWHV is an investment adviser, registered under the Investment Advisers Act of 1940. WHV manages a variety of equity and balanced portfolios working from offices in San Francisco and Seattle. WHV is “the firm” for purposes of determining the Total Firm Assets under management and firm-wide compliance. Registration with the SEC does not imply a certain level of skill or training.
Year Ended
Total Return (%)
Gross of Fees
Total Return (%)
Net of Fees
Benchmark Returns
(%)
Composite Dispersion
(%)
Ex-Post Standard Deviation (%)
Number of Portfolios at End of
Period
Total Assets at End of
Period($ millions)
Non-Fee-Paying
Portfolios (% of
Composite Assets)
Total Firm Assets
($ millions)Composite Benchmark
Y 12/31/12 12.90 11.79 21.11 n/m 26.06 20.23 5 6.6 79 13,404
Y 12/31/11 -11.29 -12.18 -11.33 n/m 34.60 25.51 5 6.4 n/a 13,250
Y 12/31/10 40.88 39.51 30.08 n/m n/a n/a 3 6.0 n/a 15,213
Y 12/31/09 141.62 139.37 46.62 n/m n/a n/a 3 6.0 n/a 12,646
Y 12/31/08^ 4.56 4.48 1.92 n/m n/a n/a 2 2.1 n/a 8,376
^ Returns are for the period from 12/01/2008 through 12/31/2008.
Compliance StatementWHV Investment Management (WHV) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. WHV has been independently verified for the periods from October 1, 1994 through December 31, 2011.
Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The Micro Cap Equity composite has been examined for the periods from December 1, 2008 through December 31, 2011. The verification and performance examination reports are available upon request.
PolicesWHV’s policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.
Composite DescriptionThe composite was created on November 30, 2008. The composite includes all non-wrap accounts invested in the firm’s Micro Cap Equity strategy, a portfolio of equity securities with market capitalization between $10 million and $500 million upon purchase that seeks to generate long-term capital appreciation. A list of composite descriptions is available upon request.
Minimum Account SizeCurrently, there is no minimum asset level for inclusion in the composite. Prior to January 1, 2012, the minimum asset level for inclusion was $100,000. Prior to January 1, 2010, the minimum asset level for was $50,000.
BenchmarkThe benchmark for the Micro Cap Equity composite is the Dow Jones U.S. Micro-Cap Total Stock Market Index� which is comprised of stocks with market capitalization rankings ranked below 2,501 and below within the Dow Jones U.S. Total Stock Market Index�. The returns of the benchmark are provided to represent the investment environment that existed during the time period shown and are not covered by the report of the independent verifiers. For comparison purposes, the index includes the reinvestment of income and other earnings but does not include any trading expenses, management fees or other costs. The volatility of the composite and that of the benchmark may be materially different due to varying degrees of diversification and/or other factors.
DispersionComposite dispersion is measured by the standard deviation across returns of portfolios represented within the composite for the full period. Standard deviation is calculated on asset-weighted portfolio returns. Composite dispersion is not presented for quarterly periods or for years where the composite consisted of five or fewer accounts as it is not considered statistically meaningful. Ex-post standard deviation is the annualized standard deviation of monthly returns for the trailing 36 months of both the composite and benchmark.
Returns and FeesReturns reflect the deduction of all trading expenses and the reinvestment of dividends and other earnings. Gross returns do not reflect the deduction of investment advisory fees or any other expenses that may be incurred in the management of the account. Net returns are net of model investment advisory fees in effect for the respective time period. Actual fees may vary depending on, among other things, the applicable fee schedule and portfolio size. Further, the impact of management fees over time may be different from the actual management fees used in the calculation during periods of significant volatility. WHV’s investment advisory fees are described in Form ADV Part II. Valuations and returns are computed and stated in U.S. dollars. Past performance is not a guarantee of future results.
The Management Fee Schedule is as follows:1.00% Annual Fee Rate as a Percentage of Market Value + Performance Fee
901 5th Avenue, Suite 3130Seattle, WA 98164-2008Tel: (800) 258-1388 Fax: (206) 219-2479
301 Battery Street, Suite 400 San Francisco, CA 94111-3203Tel: (800) 204-2650 Fax: (415) 288-6153
whv.com
Emerging Markets Equity CompositeWHV Investment Management
Definition of the FirmWHVisaninvestmentadviser,registeredundertheInvestmentAdvisersActof1940.WHVmanagesavarietyofequityandbalancedportfoliosworkingfromofficesinSanFranciscoandSeattle.WHVis“thefirm”forpurposesofdeterminingtheTotalFirmAssetsundermanagementandfirm-widecompliance.RegistrationwiththeSECdoesnotimplyacertainlevelofskillortraining.
Year Ended
Total Return (%)
Gross of Fees
Total Return (%)
Net of Fees
Benchmark Returns
(%)
Composite Dispersion
(%)
Ex-Post Standard Deviation (%)
Number of Portfolios at
End of Period
Total Assets at End of
Period($ millions)
Total Firm Assets
($ millions)Composite Benchmark
Y 12/31/12 17.27 16.12 18.22 n/m 23.91 21.50 2 10.5 13,404
Y 12/31/11 -18.76 -19.59 -18.42 n/m n/a n/a 2 9.0 13,250
Y 12/31/10 19.74 18.56 18.88 n/m n/a n/a 2 11.2 15,213
Y 12/31/09^ 29.90 29.27 31.24 n/m n/a n/a 1 2.5 12,646
^ Returnsarefortheperiodfrom7/1/2009through12/31/2009.
Compliance StatementWHVInvestmentManagement(WHV)claimscompliancewiththeGlobalInvestmentPerformanceStandards(GIPS®)andhaspreparedandpresentedthisreportincompliancewiththeGIPSstandards.WHVhasbeenindependentlyverifiedfortheperiodsfromOctober1,1994throughDecember31,2011.
Verificationassesseswhether(1)thefirmhascompliedwithallthecompositeconstructionrequirementsoftheGIPSstandardsonafirm-widebasisand(2)thefirm’spoliciesandproceduresaredesignedtocalculateandpresentperformanceincompliancewiththeGIPSstandards.TheEmergingMarketsEquitycompositehasbeenexaminedfortheperiodsfromJuly1,2009throughDecember31,2011.Theverificationandperformanceexaminationreportsareavailableuponrequest.
PolicesWHV’spoliciesforvaluingportfolios,calculatingperformance,andpreparingcompliantpresentationsareavailableuponrequest.
Composite DescriptionThecompositewascreatedonJune1,2009.Thecompositeincludesallnon-wrapaccounts,excludingmutualfunds,investedinthefirm’sEmergingMarketsEquitystrategy.Thestrategyseekstogeneratelong-termcapitalappreciationbyinvestingininternationalcompaniesincountriesthatareintheprocessofrapidgrowthandindustrialization.Alistofcompositedescriptionsisavailableuponrequest.
Minimum Account SizeCurrentlythereisnominimumassetlevelforinclusioninthecomposite.PriortoJanuary1,2012,theminimumassetlevelforinclusionwas$100,000.PriortoJanuary1,2010,theminimumassetlevelforinclusionwas$50,000.
BenchmarkThebenchmarkfortheEmergingMarketsEquitycompositeistheMSCIEmergingMarkets(Net)Index,whichmeasurestheequitymarketperformanceof21emergingmarketcountries.Thereturnsofthebenchmarkareprovidedtorepresenttheinvestmentenvironmentthatexistedduringthetimeperiodshownandarenotcoveredbythereportoftheindependentverifiers.Forcomparisonpurposes,theindexincludesthereinvestmentofincomeandotherearningsbutdoesnotincludeanytradingexpenses,managementfeesorothercosts.Thevolatilityofthecompositeandthatofthebenchmarkmaybemateriallydifferentduetovaryingdegreesofdiversificationand/orotherfactors.
Alargepercentageoftheequityassetsinthecompositeisinvestedincountriesorregionsnotincludedinthebenchmark.
DispersionCompositedispersionismeasuredbythestandarddeviationacrossreturnsofallportfoliosrepresentedwithinthecompositeforthefullperiod.Standarddeviationiscalculatedonasset-weightedportfolioreturns.Compositedispersionisnotpresentedforquarterlyperiodsorforyearswherethecompositeconsistedoffiveorfeweraccountsasitisnotconsideredstatisticallymeaningful.Three-yearannualizedex-poststandarddeviationisnotpresentedbecausethecompositedoesnothave36monthlyreturnsasofDecember31,2011.
Returns and FeesReturnsreflectthedeductionofalltradingexpensesandthereinvestmentofdividendsandotherearnings.Grossreturnsdonotreflectthedeductionofinvestmentadvisoryfeesoranyotherexpensesthatmaybeincurredinthemanagementoftheaccount.Netreturnsarenetofmodelinvestmentadvisoryfeesineffectfortherespectivetimeperiod.Actualfeesmayvarydependingon,amongotherthings,theapplicablefeescheduleandportfoliosize.Further,theimpactofmanagementfeesovertimemaybedifferentfromtheactualmanagementfeesusedinthecalculationduringperiodsofsignificantvolatility.WHV’sinvestmentadvisoryfeesaredescribedinFormADVPartII.ValuationsandreturnsarecomputedandstatedinU.S.dollars.Pastperformanceisnotaguaranteeoffutureresults.
The Management Fee Schedule is as follows:IncrementalAnnualFeeRateasaPercentageofMarketValue
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901 5th Avenue, Suite 3130Seattle, WA 98164-2008Tel: (800) 258-1388 Fax: (206) 219-2479
301 Battery Street, Suite 400 San Francisco, CA 94111-3203Tel: (800) 204-2650 Fax: (415) 288-6153
whv.com
International Small Cap Equity CompositeWHV Investment Management
Year EndedTotal Return (%)Gross of Fees
Total Return (%)Net of Fees
Benchmark Returns
(%)Composite
Dispersion (%)
Number of Portfolios at End
of Period
Total Assets at End of Period
($ millions)Total Firm Assets
($ millions)
Y 12/31/12^ -1.83 -2.57 3.70 n/m 1 1.9 13,404
^ Returns are for the period from 4/1/2012 through 12/31/2012.
Compliance Statement WHVInvestmentManagement(WHV)claimscompliancewiththeGlobalInvestmentPerformanceStandards(GIPS®)andhaspreparedandpresentedthisreportincompliancewiththeGIPSstandards.WHVhasbeenindependentlyverifiedfortheperiodsfromOctober1,1994throughDecember31,2011.Theverificationreportsareavailableuponrequest.
Verificationassesseswhether(1)thefirmhascompliedwithallthecompositeconstructionrequirementsoftheGIPSstandardsonafirm-widebasisand(2)thefirm’spoliciesandproceduresaredesignedtocalculateandpresentperformanceincompliancewiththeGIPSstandards.Verificationdoesnotensuretheaccuracyofanyspecificcompositepresentation.
Definition of the FirmWHVisaninvestmentadviser,registeredundertheInvestmentAdvisersActof1940.WHVmanagesavarietyofequityandbalancedportfoliosworkingfromofficesinSanFranciscoandSeattle.WHVis“thefirm”forpurposesofdeterminingtheTotalFirmAssetsundermanagementandfirm-widecompliance.RegistrationwiththeSECdoesnotimplyacertainlevelofskillortraining.
PoliciesWHV’spoliciesforvaluingportfolios,calculatingperformance,andpreparingcompliantpresentationsareavailableuponrequest.
Composite DescriptionThecompositewascreatedonMarch19,2012.Thecompositeincludesallnon-wrapaccountsinvestedinthefirm’sInternationalSmallCapEquitystrategy,aportfolioofprimarilysmallcapgrowthstocksdomiciledininternationaldevelopedandemergingmarketscountries.Theportfolioinvestsinforeignequitysecurities,U.S.dollardenominatedequitysecurities,depositoryreceiptssuchasGlobalDepositoryReceiptsandAmericanDepositoryReceipts,andNon-VotingDepositoryReceipts.Alistofcompositedescriptionsisavailableuponrequest.
BenchmarkThebenchmarkfortheInternationalSmallCapEquitycompositeistheMSCIACWIEx-USASmallCap(Net)Index,whichmeasurestheperformanceofsmallcapstocksof23developedcountriesand21emergingmarketscountries.Thereturnsofthebenchmarkareprovidedtorepresenttheinvestmentenvironmentthatexistedduringthetimeperiodshown.Forcomparisonpurposes,theindexincludesthereinvestmentofincomeandotherearningsbutdoesnotincludeanytradingexpenses,managementfeesorothercosts.Thevolatilityofthecompositeandthatofthebenchmarkmaybemateriallydifferentduetovaryingdegreesofdiversificationand/orotherfactors.
DispersionCompositedispersionismeasuredbythestandarddeviationacrossreturnsofallportfoliosrepresentedwithinthecompositeforthefullperiod.Standarddeviationiscalculatedonasset-weightedportfolioreturns.Compositedispersionisnotpresentedforquarterlyperiodsorforyearswherethecompositeconsistedoffiveorfeweraccountsasitisnotconsideredstatisticallymeaningful.Three-yearannualizedex-poststandarddeviationisnotpresentedbecausethecompositedoesnothave36monthlyreturnsasofDecember31,2012.
Returns and FeesReturnsreflectthedeductionofalltradingexpensesandthereinvestmentofdividendsandotherearnings.Grossreturnsdonotreflectthedeductionofinvestmentadvisoryfeesoranyotherexpensesthatmaybeincurredinthemanagementoftheaccount.Netreturnsarenetofmodelinvestmentadvisoryfeesineffectfortherespectivetimeperiod.Actualfeesmayvarydependingon,amongotherthings,theapplicablefeescheduleandportfoliosize.Further,theimpactofmanagementfeesovertimemaybedifferentfromtheactualmanagementfeesusedinthecalculationduringperiodsofsignificantvolatility.WHV’sinvestmentadvisoryfeesaredescribedinFormADVPartII.ValuationsandreturnsarecomputedandstatedinU.S.dollars.Pastperformanceisnotaguaranteeoffutureresults.
The management fee schedule is as follows:IncrementalAnnualFeeRateasaPercentageofMarketValue
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301 Battery Street, Suite 400 San Francisco, CA 94111-3203Tel: (800) 204-2650 Fax: (415) 288-6153
whv.com
901 5th Avenue, Suite 3130Seattle, WA 98164-2008Tel: (800) 258-1388 Fax: (206) 219-2479
Select World Equity CompositeWHV Investment Management
Definition of the FirmWHVisaninvestmentadviser,registeredundertheInvestmentAdvisersActof1940.WHVmanagesavarietyofequityandbalancedportfoliosworkingfromofficesinSanFranciscoandSeattle.WHVis“thefirm”forpurposesofdeterminingtheTotalFirmAssetsundermanagementandfirm-widecompliance.RegistrationwiththeSECdoesnotimplyacertainlevelofskillortraining.
Year Ended
Total Return (%)
Gross of Fees
Total Return (%)
Net of Fees
Benchmark Returns
(%)
Composite Dispersion
(%)
Ex-Post Standard Deviation (%)
Number of Portfolios at
End of Period
Total Assets at End of
Period($ millions)
Total Firm Assets
($ millions)Composite Benchmark
Y 12/31/12 16.46 15.32 16.13 0.72 20.02 16.94 9 19.2 13,404
Y 12/31/11 -4.70 -5.62 -1.20 1.26 21.81 20.16 11 18.4 13,250
Y 12/31/10 15.39 14.25 17.96 0.82 n/a n/a 13 24.3 15,213
Y 12/31/09 41.69 40.32 29.59 0.90 n/a n/a 11 20.8 12,646
Y 12/31/08 -38.98 -39.61 -37.13 0.87 n/a n/a 13 16.0 8,376
Y 12/31/07 15.79 14.65 5.88 n/m n/a n/a 4 5.6 14,400
Y 12/31/06^ 6.81 5.92 11.44 n/m n/a n/a 3 4.0 9,013
^ Returnsarefortheperiodfrom3/1/2006through12/31/2006.
Compliance StatementWHVInvestmentManagement(WHV)claimscompliancewiththeGlobalInvestmentPerformanceStandards(GIPS®)andhaspreparedandpresentedthisreportincompliancewiththeGIPSstandards.WHVhasbeenindependentlyverifiedfortheperiodsfromOctober1,1994throughDecember31,2011.Theverificationreportsareavailableuponrequest.
Verificationassesseswhether(1)thefirmhascompliedwithallthecompositeconstructionrequirementsoftheGIPSstandardsonafirm-widebasisand(2)thefirm’spoliciesandproceduresaredesignedtocalculateandpresentperformanceincompliancewiththeGIPSstandards.Verificationdoesnotensuretheaccuracyofanyspecificcompositepresentation.
PolicesWHV’spoliciesforvaluingportfolios,calculatingperformance,andpreparingcompliantpresentationsareavailableuponrequest.
Composite DescriptionThecompositewascreatedonFebruary28,2006.Thecompositeincludesallnon-wrapaccountsinvestedinthefirm’sSelectWorldEquitystrategy,formerlycalledAllCapPlusInternationalEquitystrategy.Thestrategy,whichencompassesmultipledistinctequitystrategies,wasredefinedeffectiveJanuary1,2012withtheadditionofemergingmarketstolargecapcore,midcap,smallcap,andinternationalstrategies.Alistofcompositedescriptionsisavailableuponrequest.
Minimum Account SizeCurrently,thereisnominimumassetlevelforinclusioninthecomposite.PriortoJanuary1,2012,theminimumassetlevelforinclusionwas$100,000.PriortoJanuary1,2010,theminimumassetlevelforinclusionwas$50,000.
BenchmarkThedesignofthisstrategywhichcombinesseveraldistinctequitystrategies,permitschangingthemixfromtimetotime.PriortoJanuary2012,thestrategycombined55%largecapcore,20%midcap,12.5%smallcap,and12.5%internationalequitiesandwasbenchmarkedagainstcorrespondingweightingsoftheS&P500®,S&PMidCap400®,Russell2000®,andMSCIEAFE(Gross)indices.BeginningJanuary2012,withtheadditionofemergingmarkets,thebenchmarkforthestrategywaschangedtotheMSCIACWI(Net)indexwhichmeasurestheequitymarketperformanceof24developedand21emergingmarketcountries.Thebenchmarkisweightedmonthly.Thereturnsofthebenchmarkareprovidedtorepresenttheinvestmentenvironmentthatexistedduringthetimeperiodshown.Forcomparisonpurposes,theindexincludesthereinvestmentofincomeandotherearningsbutdoesnotincludeanytradingexpenses,managementfeesorothercosts.Thevolatilityofthecompositeandthatofthebenchmarkmaybemateriallydifferentduetovaryingdegreesofdiversificationand/orotherfactors.
DispersionCompositedispersionismeasuredbythestandarddeviationacrossreturnsofallportfoliosrepresentedwithinthecompositeforthefullperiod.Standarddeviationiscalculatedonasset-weightedportfolioreturns.Compositedispersionisnotpresentedforquarterlyperiodsorforyearswherethecompositeconsistedoffiveorfeweraccountsasitisnotconsideredstatisticallymeaningful.Ex-poststandarddeviationistheannualizedstandarddeviationofmonthlyreturnsforthetrailing36monthsofboththecompositeandbenchmark.
Returns and FeesReturnsreflectthedeductionofalltradingexpensesandthereinvestmentofdividendsandotherearnings.Grossreturnsdonotreflectthedeductionofinvestmentadvisoryfeesoranyotherexpensesthatmaybeincurredinthemanagementoftheaccount.Netreturnsarenetofmodelinvestmentadvisoryfeesineffectfortherespectivetimeperiod.Actualfeesmayvarydependingon,amongotherthings,theapplicablefeescheduleandportfoliosize.Further,theimpactofmanagementfeesovertimemaybedifferentfromtheactualmanagementfeesusedinthecalculationduringperiodsofsignificantvolatility.WHV’sinvestmentadvisoryfeesaredescribedinFormADVPartII.ValuationsandreturnsarecomputedandstatedinU.S.dollars.Pastperformanceisnotaguaranteeoffutureresults.
The Management Fee Schedule is as follows:IncrementalAnnualFeeRateasaPercentageofMarketValue
[email protected]%|[email protected]%|[email protected]%|[email protected]%|[email protected]%
901 5th Avenue, Suite 3130Seattle, WA 98164-2008Tel: (800) 258-1388 Fax: (206) 219-2479
301 Battery Street, Suite 400 San Francisco, CA 94111-3203Tel: (800) 204-2650 Fax: (415) 288-6153
whv.com
Large Cap Core Equity CompositeWHV Investment Management
Definition of the FirmWHVisaninvestmentadviser,registeredundertheInvestmentAdvisersActof1940.WHVmanagesavarietyofequityandbalancedportfoliosworkingfromofficesinSanFranciscoandSeattle.WHVis“thefirm”forpurposesofdeterminingtheTotalFirmAssetsundermanagementandfirm-widecompliance.RegistrationwiththeSECdoesnotimplyacertainlevelofskillortraining.
Year Ended
Total Return (%)
Gross of Fees
Total Return (%)
Net of Fees
Benchmark Returns
(%)
Composite Dispersion
(%)
Ex-Post Standard Deviation (%)
Number of Portfolios at
End of Period
Total Assets at End of
Period($ millions)
Total Firm Assets
($ millions)Composite Benchmark
Y 12/31/12 16.80 16.32 16.00 0.20 19.46 15.09 11 305.4 13,404
Y 12/31/11 -2.53 -3.31 2.11 0.79 21.47 18.71 6 261.6 13,250
Y 12/31/10 13.79 12.89 15.06 0.46 n/a n/a 6 373.2 15,213
Y 12/31/09 34.51 33.46 26.46 0.39 n/a n/a 8 420.2 12,646
Y 12/31/08 -34.58 -35.12 -37.00 0.37 n/a n/a 9 314.6 8,376
Y 12/31/07 6.41 5.56 5.49 0.22 n/a n/a 9 500.6 14,400
Y 12/31/06 7.34 6.48 15.79 0.25 n/a n/a 12 555.4 9,013
Y 12/31/05 9.50 8.63 4.91 1.26 n/a n/a 14 512.0 6,630
Y 12/31/04 12.49 11.60 10.88 0.80 n/a n/a 14 457.8 5,700
Y 12/31/03 26.35 25.36 28.68 0.93 n/a n/a 10 380.9 5,424
For Tax-Exempt Accounts
Compliance StatementWHVInvestmentManagement(WHV)claimscompliancewiththeGlobalInvestmentPerformanceStandards(GIPS®)andhaspreparedandpresentedthisreportincompliancewiththeGIPSstandards.WHVhasbeenindependentlyverifiedfortheperiodsfromOctober1,1994throughDecember31,2011.
Verificationassesseswhether(1)thefirmhascompliedwithallthecompositeconstructionrequirementsoftheGIPSstandardsonafirm-widebasisand(2)thefirm’spoliciesandproceduresaredesignedtocalculateandpresentperformanceincompliancewiththeGIPSstandards.TheLargeCapCoreEquitycompositehasbeenexaminedfortheperiodsfromJanuary1,2000throughDecember31,2011.
Theverificationandperformanceexaminationreportsareavailableuponrequest.
PolicesWHV’spoliciesforvaluingportfolios,calculatingperformance,andpreparingcompliantpresentationsareavailableuponrequest.
Composite DescriptionThecompositewascreatedonOctober31,2004.Thecompositeincludesallnon-wrap,tax-exemptaccountsinvestedinthefirm’sLargeCapCoreEquitystrategy.TheLargeCapCoreEquitystrategyisahighquality,focusedportfolioofdomestic,largecap,GARP-oriented(growthatareasonableprice)stocksexpectedtogenerateabove-benchmarkreturnsoveramarketcycle.Alistofcompositedescriptionsisavailableuponrequest.
Minimum Account SizeCurrently,thereisnominimumassetlevelforinclusioninthecomposite.PriortoJanuary1,2012,theminimumassetlevelforinclusionwas$2,000,000.
BenchmarkThebenchmarkfortheLargeCapCoreEquitycompositeisS&P500®Index.Thereturnsofthebenchmarkareprovidedtorepresenttheinvestmentenvironmentthatexistedduringthetimeperiodshownandarenotcoveredbythereportoftheindependentverifiers.Forcomparisonpurposes,theindexincludesthereinvestmentofincomeandotherearningsbutdoesnotincludeanytradingexpenses,managementfeesorothercosts.Thevolatilityofthecompositeandthatofthebenchmarkmaybemateriallydifferentduetovaryingdegreesofdiversificationand/orotherfactors.
DispersionCompositedispersionismeasuredbythestandarddeviationacrossreturnsofallportfoliosrepresentedwithinthecompositeforthefullperiod.Standarddeviationiscalculatedonasset-weightedportfolioreturns.Compositedispersionisnotpresentedforquarterlyperiodsorforyearswherethecompositeconsistsoffiveorfeweraccountsasitisnotconsideredstatisticallymeaningful.Ex-poststandarddeviationistheannualizedstandarddeviationofmonthlyreturnsforthetrailing36monthsofboththecompositeandbenchmark.
Returns and FeesReturnsreflectthedeductionofalltradingexpensesandthereinvestmentofdividendsandotherearnings.Grossreturnsdonotreflectthedeductionofinvestmentadvisoryfeesoranyotherexpensesthatmaybeincurredinthemanagementoftheaccount.Netreturnsarenetofmodelinvestmentadvisoryfeesineffectfortherespectivetimeperiod.Actualfeesmayvarydependingon,amongotherthings,theapplicablefeescheduleandportfoliosize.Further,theimpactofmanagementfeesovertimemaybedifferentfromtheactualmanagementfeesusedinthecalculationduringperiodsofsignificantvolatility.WHV’sinvestmentadvisoryfeesaredescribedinFormADVPartII.ValuationsandreturnsarecomputedandstatedinU.S.dollars.Pastperformanceisnotaguaranteeoffutureresults.
The Management Fee Schedule is as follows:IncrementalAnnualFeeRateasaPercentageofMarketValue
[email protected]%|[email protected]%|[email protected]%|[email protected]%|[email protected]%
901 5th Avenue, Suite 3130Seattle, WA 98164-2008Tel: (800) 258-1388 Fax: (206) 219-2479
301 Battery Street, Suite 400 San Francisco, CA 94111-3203Tel: (800) 204-2650 Fax: (415) 288-6153
whv.com