Large Cap Core Equity Portfolio

Investment Objective

The portfolio seeks to provide long-term capital appreciation, with added emphasis on reducing portfolio volatility during uncertain market conditions.

Investment Philosophy

Derived from investing principles set forth by Warren Buffett and Benjamin Graham, we invest in some of the strongest companies in America for the long term. Through our disciplined selection process, we invest in businesses that possess a strong consistent ROE, demonstrate a sustainable competitive advantage in their field, face favorable growth prospects, and generate strong free cash flow. We base our stock selection criteria on the premise that over an extended period of time, a company's share price will rise at generally the same rate as its Return on Equity ("ROE"). Our portfolio construction and management philosophy rests upon a combination of two complimentary management strategies: a concentrated, fully-invested portfolio of Large Capitalization stocks, and a secondary risk management component which adds emphasis to reducing overall portfolio volatility.

Philosophical Tenets

• Over an extended period of time, a company's share price will rise at generally the same rate as its ROE.
• Companies with outstanding financial strength (strong ROE, low debt, solid management) tend to outperform in adverse economic conditions.
• Concentrated portfolios allow for greater total return potential.
• A quantitative approach to security selection eliminates emotional biases in decision making.
• Active risk management can reduce portfolio volatility during uncertain market conditions.