EAS Separate Account Presentation

INVESTMENT STRATEGISTS for
SUCCESSFUL ADVISORS

Asset Allocation in the 21st Century

“The Noah Rule: Predicting rain doesn’t count; building arks does.”
- Warren Buffet

VISION. EXPERIENCE. DEDICATION to our CLIENTS

Today’s Market Landscape

A serious retirement crisis looms for boomers, young and old:

• Investment climate Very different from the 1980’s and 1990’s

• Secular stock bear market Continues to derail retirement plans

• The return of inflation A serious threat to wealth and retirement

• High-Quality Bond investing Returns too limited to be a retirement savior
anymore
• Asset allocation Traditional “style boxing” has many flaws

“The problem is never to get new, innovative thoughts into your
mind, but how to get old ones out.” - Dee Ward Hock

1

The Danger of Market-dependent Investing

 History has shown that 1 or 2 down years can ruin a retirement plan.
– Few investors can afford a picture like this!

S&P 500 Returns (12/31/99 through 12/31/09)

2

The Cycle of Market Emotions

An investor should consider investment objectives, risks, charges and expenses of the Fund(s) carefully before investing. To obtain a prospectus, which contains this and other important
`
information about the Fund(s), please call 1-800-734-WEST (9378) or visit us online at www.westcore.com. Please read the prospectus carefully before investing. Westcore Funds distributed
by ALPS Distributors, Inc.

3

The Objective

1. PRESERVE WHAT YOU HAVE
– Produce a long-term return that is above inflation and taxes
– Markets often decline faster than they rise
2. GROW YOUR PORTFOLIO AS MUCH AS YOU CAN
– Consistent growth is the key
– Losing money has a bigger emotional impact than making money
3. RULE #1 IS MORE IMPORTANT THAN RULE #2!

4

Genesis of the Emerald Allocation Strategies

 From inception, Emerald has focused on constructing portfolios
using styles that go well beyond traditional “style box” strategies
 Currently offer three distinct strategies designed to provide an
effective alternative to what Wall Street typically offers advisors

1998 1999 2000 - 2002 2002
Discontent with Began using low
Developed
flaws of correlation
diversified Created dedicated
“conventional” strategies via
absolute return Hybrid Strategy
portfolio hedged mutual
portfolios
construction funds

2003 2004 2004 - 2005 2005

Expanded
Created dedicated Expanded Created dedicated
spectrum to alpha-
Concentrated spectrum to global Global Cycle
generating equity
Equity Strategy theme-based funds Strategy
managers

5

Asset Allocation is Changing…

EMERALD’S ALTERNATIVE APPROACH HAS GENERATED NOTEWORTHY ATTENTION

Publication: November 2006 Cover Story: Registered Rep, February 2007 Cover Story: Wealth Manager, March 2008

6

Our Mission
Fighting the good fight toward retirement

• Be flexible in our investment approach

• Be adaptive to changes in the global economy and markets

• Be opportunistic but not aggressive

• Avoid “style box” thinking in portfolio construction

• Find bull markets wherever they exist (via long or short investments)

• Capture as much of the market’s upside and as little of its downside as possible

• Keep losses short in duration and shallow in magnitude

PROVIDE AN ALTERNATIVE PATH TO
LONG-TERM CAPITAL PROTECTION AND GROWTH

7

Emerald’s Distinct Separate Account Strategies

CONCENTRATED GLOBAL
HYBRID
EQUITY CYCLE

Investment Horizon: 3+ Years 5+ Years 10+ Years

Investments Used: Hedged Mutual Funds Conc. Equity Mutual Funds Theme-based Mutual Funds

Number of funds: 10 - 15 5 - 10 8 - 12
Long/Short Equity Contrarian Value India Equity
Sample Investment Market Neutral High ROE Growth China Equity
Styles: Merger Arbitrage Sector Rotation Alternative Energy
Convertibles Multi-Cap Investing Global Infrastructure
Uses Short funds? YES YES YES
Benchmark Index: DJ US Conservative Allocation Russell 3000 MSCI World Free

8

Emerald’s Distinct Separate Account Strategies

INVESTMENT HORIZON: 10 years
INVESTMENTS USED:
Theme Based Mutual Funds + ETFs
NUMBER OF FUNDS/ETFS: 8-12

INVESTMENT HORIZON: 5 years GLOBAL
INVESTMENTS USED: Concentrated Equity CYCLE

Mutual Funds + ETFs USES SHORT FUNDS/ETFS: Yes
NUMBER OF FUNDS/ETFS: 5-10 BENCHMARK INDEX:
MSCI World Free
CONCENTRATED
EQUITY

USES SHORT FUNDS/ETFS: Yes
BENCHMARK INDEX:

INVESTMENT HORIZON: 3 years
Russell 3000 AGGRESSIVE
INVESTMENTS USED:
Hedged Mutual Funds + ETFs
NUMBER OF FUNDS/ETFS: 10-15
MODERATE

HYBRID

USES SHORT FUNDS/ETFS: Yes
BENCHMARK INDEX:
DJ US Conservative Allocation

CONSERVATIVE
9

Investment Philosophy
There is a bull in every market – our job is to find it
As an asset allocation strategist, we employ a flexible and adaptive investment approach to portfolio management.

Emerald’s BULL MARKET FORECASTER is a compilation of what we believe to be our investment committee’s best macro thinking. The
investment themes below and their ranking reflect our view of the relative risk-reward potential on world-wide investment themes over a 3-year
period.

The selection of these themes is the genesis of our portfolio construction process. We follow with how these themes are applied across our three
distinct investment strategies, the EMERALD ALLOCATION STRATEGIES.

EXCELLENT GOOD FAIR POOR

Contrarian Global Bank Loan Equity-Income Agricultural Large Cap Balanced
Funds India
Value Equity Infrastructure (Dividends) Commodities Relative Value Funds

Convertible Equity Market- Non-Japan Emerging Dedicated
Hedged Equity Brazil Equity Non-US Bonds
Arbitrage Neutral Asia Equity Market Bonds Short Equity

Environmental Merger “Busted” Financial ROI Growth High-Quality
Energy Stocks Oil
Equities Arbitrage Convertibles Stocks Equity Bond Funds

Equity L/S Natural Gas Small-Midcap S&P 500 Index
China Global REITs Europe Equity US Dollar
Stocks

Frontier Convertible Tactical Asset Healthcare US T-bills (90-
Markets Gold Utility Stocks
Securities Allocation Stocks day)

Dedicated High Yield
US REITs Japan Equity “Vice” Equity
Short Treasury Bonds

Emerging Homebuilding Large Cap
Pharma Stocks Stocks Growth

The above illustration is not a complete analysis and should not be considered investment advice. The positioning of the investment themes and styles highlighted above reflect the Advisor’s outlook as of 12/31/09
and may change at any time. Projections are not guaranteed and may vary significantly. Any statements nonfactual in nature constitute current opinions, which are subject to change.
10

Application of Themes
Reward - Environmental - Energy Stocks
Equities - Healthcare Stocks
- Frontier Markets - Japan Equity
CONCENTRATED EQUITY STRATEGY OVERVIEW - Global - Non-US Bonds
Moderate: 5-year horizon Infrastructure - Oil
- Natural Gas
• Concentrated equity portfolios GLOBAL
• Long equity-biased CYCLE
• Periodic hedge overlay
- China
- Emerging Pharma - Dedicated Short
- Europe Equity Stocks
- Contrarian Value Equity
- Large Cap Growth - Global REITs
Equity - Gold - US Dollar
HYBRID STRATEGY OVERVIEW - S&P 500 Index - India
Conservative: 3-year horizon
• Absolute return focus GLOBAL CYCLE STRATEGY OVERVIEW
• Low net equity exposure CONCENTRATED
EQUITY Aggressive: 10-year horizon
• Hedged strategies • Global portfolio
- Equity-Income
• Primarily net long
- Convertible (Dividends) • Opportunistic short positions
Arbitrage - ROI Growth Equity - Dedicated Short
- Equity L/S Equity
- Small-Midcap
- Hedged Equity Stocks
- Merger Arbitrage

HYBRID
- Convertible
Securities
- Equity Market- Risk/Reward EXCELLENT
Neutral
- High Yield Bonds - Dedicated Short Assessment: GOOD
Equity
- Tactical Asset FAIR
Allocation
POOR
Risk
The above illustration is not a complete analysis and should not be considered investment advice. The positioning of the investment themes and styles highlighted above reflect the Advisor’s outlook as of 12/31/09
and may change at any time. Projections are not guaranteed and may vary significantly. Any statements nonfactual in nature constitute current opinions, which are subject to change.
11

EAS Hybrid

 Exhibits low volatility and low correlation to the broad markets.
 Uses traditional, highly-liquid investment vehicles (mutual funds and ETFs) that employ
hedge fund-like strategies.
 Seeks to deliver bond-like volatility with higher long-term return.
 The desired result is an absolute return alternative to fixed income strategies.

Risk/Reward (1) Allocation

6%
Annualized Return

Market-Neutral Currency
Inverse Bond REITs
5%
Global Macro Long-Short

4%
Dedicated Short High Yield
3% 5% 7% 9% 11% 13% 15%
Equity Convertibles Arbitrage
Annualized Standard Deviation

EAS Hybrid Strategy--Net
Dow Jones - Conservative U.S. Relative Risk Portfolio Index
S&P 500 TR

(1) Reflects net performance from 11/02 through 12/09. Please see full performance disclosure in the Appendix for the Hybrid Composite.

12

EAS Concentrated Equity

 Seeks long-term growth of capital using equity managers who pursue superior long-
term returns through portfolios with limited number of holdings (typically 30 or less).
 Attempts to lower portfolio volatility by diversifying among a group of managers.
 May also buy short-index securities as a hedge in perceived periods of high market risk.
 The result is a diversified equity portfolio exhibiting attractive risk/reward
characteristics.

8%
Annualized Return

7% Contrarian
6%
Dedicated Short Value
5%

4%
Concentrated
3% Sector Rotation
Equity
2%

1% Multi-Cap High ROE
12% 13% 14% 15% 16% Investing Growth
EAS Concentrated Equity Strategy--Net
Russell 3000 Index (DRI)
S&P 500 TR

(1) Reflects net performance from 05/04 through 12/09. Please see full performance disclosure in the Appendix for the Concentrated Equity Composite.

13

EAS Global Cycle

 Seeks to capitalize on long-term global themes identified by Emerald's research team.
 Often involves investing in areas of the markets that exhibit high short-term volatility.
 Trends are expected to occur over a long period of time, but position sizing is made
along the way.
 May also buy short-index securities as a hedge in perceived periods of high market risk.

Anualized Return

8% Dedicated
India Equity
6%
Short
Global China Equity
4% Infrastructure
2%

0% Frontier Alternative
Global REITs Energy
-2%
Markets
13% 14% 15% 16% 17% 18% 19%


EAS Global Cycle Strategy--Net MSCI The World Index - Net S&P 500 TR

(1) Reflects net performance from 10/05 through 12/09. Please see full performance disclosure in the Appendix for the Global Cycle Composite.

14

Complementary Models Across All Markets

Aggressive: 10-year horizon
GLOBAL • Global portfolio
CYCLE • Primarily net long
• Opportunistic short positions

Moderate: 5-year horizon
CONCENTRATED • Concentrated equity portfolios
Reward

EQUITY • Long equity-biased
• Periodic hedge overlay

Conservative: 3-year horizon
HYBRID • Absolute return focus
• Low net equity exposure
• Hedged strategies

• Treasury Bills
CASH • Bank CDs

Risk

15

EAS Growth of $1,000 Chart

EAS NET RETURNS VS. THE S&P 500 TR
(10/1/05 – 12/31/09)

Performance shown is for the period 10/01/2005 through 12/31/2009 and is net of fees. The performance data shown for the EAS Composites vs. the S&P 500 TR is not presented for point-by-point comparison
purposes, but to demonstrate the overall return characteristics of the Emerald Allocation Strategies when contrasted with more traditional familiar styles. The appropriate EAS composite benchmarks, statistical
comparisons and other important information are located on the full disclosure presentations pages in the Appendix. Past performance is not indicative of future results.

16

EAS Separate Account Composites:
Risk/Reward Summary (as of 12/31/09)

CONCENTRATED GLOBAL
HYBRID
EQUITY CYCLE
Inception Date for Strategy 11/01/02 05/01/04 10/01/05
Annualized Return since inception (Net of fees) 5.3% 7.9% 7.8%
Cumulative Return since inception (Net of fees) 45.0% 54.1% 37.4%
Annualized Std. Deviation since inception 5.0% 13.5% 14.2%
Strategy’s Worst 12 months since its inception -14.8% -34.4% -27.9%
S&P 500 S&P 500 S&P 500
S&P Annualized Return since strategy inception 5.3% 2.2% -0.2%
S&P Cumulative Return since strategy inception 45.2% 13.1% -0.6%
S&P Annualized Std. Deviation since strategy inception 14.8% 15.3% 17.1%
S&P Worst 12 months since strategy inception -43.3% -43.3% -43.3%
Annualized 3.8% 6.1% 7.8%
EAS Alpha

STATISTICS Beta 0.26 0.79 0.69
R-Squared 0.58 0.81 0.69
VS.
Up Capture 21.3% 101.4% 85.9%
S&P 500 Down Capture 27.6% 80.8% 66.7%
Performance shown is through 12/31/09 and is net of fees. The performance data shown for the EAS Composites vs. the S&P 500 is not presented for point-by-point comparison purposes, but to demonstrate the
overall return characteristics of the Emerald Allocation Strategies when contrasted with more traditional familiar styles. The appropriate EAS composite benchmarks, statistical comparisons and other important
information are located on the full disclosure presentations pages in the Appendix. 17

Conclusions

 The investment climate has changed – relying on traditional asset
allocation may be insufficient.

 Alternative strategies that can enhance return and reduce overall
risk are important to capital preservation and growth.

 Investing aggressively and/or beyond your risk tolerance is not
necessary to produce solid long-term returns.

 Employing a flexible and adaptive approach with the comfort of
daily liquidity, transparency, diversification and tax-sensitivity are
key ingredients of the Emerald Allocation Strategies, a 21st Century
asset allocation plan.

“A lot of times, people don’t know what they want until you show it to them.”
- Steve Jobs

18

APPENDIX

Additional background information:
 Composite Information
 Investment Structure
 Investment Team
 Investment Process
 Historical Market Analysis
 Definitions (Hybrid mutual fund styles and Statistical Measures)

19

Hybrid Composite information
Total Firm Composite Assets Performance Results
Emerald Asset Advisors, LLC
Year Assets USD Number of Composite Composite DJ US Composite
HYBRID COMPOSITE End (millions) (millions) Accounts Net Gross Cons. Alloc Dispersion
2009 274 52 86 13.9% 14.8% 11.0% 0.8%
Disclosure Presentation 2008 224 48 88 -11.2% -10.5% -1.9% 0.5%
2007 284 46 86 7.4% 8.1% 5.7% 0.4%
2006 242 15 26 6.3% 6.9% 6.2% 0.4%
2005 212 18 46 5.6% 6.2% 3.5% 1.3%
2004 190 18 56 3.5% 4.1% 5.9% 1.5%
2003 180 19 57 12.8% 13.6% 10.9% 4.3%
Five o r Fewer
*2002 119 <1 1.9% 1.9% 2.2%
*Performance starts on November 1, 2002.
The Hybrid Composite contains all discretionary, fee paying, Hybrid accounts that invest primarily in Hybrid mutual funds with a minimum of at least three Hybrid mutual funds and
$35,000 minimum account value. Hybrid holdings typically come from the 11 sub-sectors/styles we have defined in the alternative mutual fund universe through our own research (such as
equity long-short, market-neutral, arbitrage, commodities, high-yield and bond hedge.) Accounts may contain 10% or less non-Hybrid assets and may be included or excluded based on the
potential of those assets to materially affect the ability to invest to the mandate or the account performance. For comparison purposes the composite is measured against the Dow Jones US
Conservative Allocation Index.

Emerald Asset Advisors, LLC is a SEC Registered Investment Advisor providing wealth management services for high net worth individuals and institutions. The firm maintains a complete
list and description of composites which is available upon request. Emerald Asset Advisors, LLC has prepared and presented this report in compliance with the Global Investment
Performance Standards (GIPS®).

Net of fee performance was calculated using actual management fees. Gross performance results do not reflect the deduction of investment advisory fees and are calculated after the
deduction of actual trading expenses. Your return will be reduced by the advisory fees and other expenses that may be incurred in the management of your account. Net and gross of fees
performance includes the reinvestment of all income including realized and unrealized gains and losses. The management fee schedule is as follows: 1.25% for the first $2 Million; 1.00%
for the next $3 Million and 0.75% for over $5 Million. Actual investment advisory fees incurred by clients may vary.

Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. The U.S. Dollar is the currency used to express performance. The
annual composite dispersion is an asset-weighted standard deviation calculated for the accounts in the composite the entire year. Additional information regarding the policies for calculating
and reporting returns is available upon request. Past performance is not indicative of future results.

The Hybrid Composite was created April 1, 2006. Emerald Asset Advisors, LLC's compliance with the GIPS standards has been verified by Ashland Partners from 1/01/2002 to 9/30/2008
and by Beacon Verification Services from 9/30/2008 to 9/30/2009. In addition, a performance examination was conducted on the Hybrid Composite for the period 10/31/2002 through
9/30/2009. A copy of the verification report is available upon request.

Important information for Investors: The performance shown is for separate accounts managed by Emerald Asset Advisors, LLC using the Hybrid strategy. It is important to note that
Emerald may use securities such as ETF’s, mutual funds or other completion strategies within their separate accounts that are not available through other programs. Therefore, the results
obtained through Emerald’s separate account management program should not be viewed as indicative of the results of the Hybrid Model Portfolio available through Adhesion, FTJ
FundChoice, FOLIOfn, SummitAlliance/WE2, World Equity Group or other broker/dealer platforms and TAMPS where our models are offered.

20

Concentrated Equity Composite information
Total Composite Assets Performance Results
Emerald Asset Advisors, LLC
Year Firm
Assets USD Number of Composite Composite Russell Composite
CONCENTRATED EQUITY End (millions) (millions) Accounts Net Gross 3000 Dispersion
2009 274 32 84 22.7% 24.1% 28.3% 11.1%
COMPOSITE
2008 224 33 106 -25.9% -24.9% -37.3% 7.9%
Disclosure Presentation 2007 284 50 129 12.6% 14.2% 5.1% 2.1%
2006 242 28 43 15.3% 16.9% 15.7% 2.4%
2005 212 13 24 15.5% 17.2% 6.1% 1.4%
*2004 190 4 8 13.1% 14.2% 11.8%
*Performance starts on May 1, 2004.
The Concentrated Equity Composite contains all discretionary, fee paying, concentrated equity accounts that invest primarily in concentrated equity managers. The accounts within this
composite are managed by sub-advisors that are reviewed and chosen (hired/fired) by Emerald Asset Advisors, LLC ("Emerald") using a concentrated equity strategy or by Emerald using a
mix of concentrated equity mutual funds and ETFs. Sub-advisors have been used since inception of the strategy to present date. We may also buy dedicated short funds as a portfolio hedge
in perceived periods of market risk. This strategy may contain both domestic and foreign securities. For comparison purposes the composite is measured against the Russell 3000 Index.
The Russell 3000 Index is comprised solely of domestic securities while the Concentrated Equity Strategy may invest in both domestic and foreign securities.

Emerald Asset Advisors, LLC has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®). Emerald Asset Advisors, LLC is a
registered investment advisor registered with the SEC. The firm maintains a complete list and description of composites, which is available upon request.
Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. The U.S. Dollar is the currency used to express performance. The
annual composite dispersion is an asset-weighted standard deviation calculated for the accounts in the composite the entire year. The $35,000 account minimum was removed on January 1,
2007. Additional information regarding the policies for calculating and reporting returns is available upon request. Past performance is not indicative of future performance.

Net and gross of fees performance includes the reinvestment of all income including realized and unrealized gains and losses. Net of fee performance was calculated using actual
management fees. If sub-advisors are used to manage all or a portion of your account, you may be charged management fees by the sub-advisor and by Emerald. Sub-advisor fees vary by
advisor and are available in their respective ADV Part II and Schedule F which is available upon request.

The gross performance results shown do not reflect the deduction of investment advisory fees and are calculated after the deduction of actual trading expenses. Your return will be reduced
by the advisory fees and other expenses that may be incurred in the management of your account. The management fee schedule is as follows: 1.25% for the first $2 Million; 1.00% for the
next $3 Million and 0.75% for over $5 Million. Actual investment advisory fees incurred by clients may vary.

The Concentrated Equity Composite was created April 1, 2006. Emerald Asset Advisors, LLC's compliance with the GIPS standards has been verified by Ashland Partners from 1/01/2002
to 9/30/2008 and by Beacon Verification Services from 9/30/2008 to 9/30/2009. In addition, a performance examination was conducted on the Concentrated Equity Composite for the
period 4/30/04 through 9/30/09. A copy of the verification report is available upon request.

Important information for Investors: The performance results shown are for separate accounts managed by Emerald Asset Advisors, LLC using the Concentrated Equity Strategy. It is
important to note that Emerald may use securities such as ETF’s, mutual funds or other completion strategies within their separate accounts that are not available through other programs.
Therefore, the results obtained through Emerald’s separate account management program should not be viewed as indicative of the results of the Concentrated Equity Model Portfolio
available through Adhesion, FTJ FundChoice, FOLIOfn, SummitAlliance/WE2, World Equity Group or other broker/dealer platforms and TAMPS where our models are offered.

21

Global Cycle Composite information
Total
Firm Composite Assets Performance Results
Emerald Asset Advisors, LLC Year Assets USD Number of Composite Composite MSCI Composite
End (millions) (millions) Accounts Net Gross World Index Dispersion ⁽²⁾
GLOBAL CYCLE COMPOSITE
2009 274 6 13 38.5% 39.6% 30.0% 3.0%

Disclosure Presentation 2008 224 3 12 -25.3% -24.8% -40.7% 0.3%
2007 ⁾
⁽ 284 4 14 12.0% 12.7% 9.0% N.A.
2006 242 1 F ive o r F e we r 20.6% 21.3% 20.1% N.A.
2005 ¹ 212 <1 F ive o r F e we r -1.7% -1.7% 2.7%
(1) Performance starts on October 1, 2005.
(2) N.A. - Information is not statistically meaningful due to an insufficient number of portfolios in
the composite for the entire year.

The Global Cycle Composite contains all discretionary, fee paying, accounts that invest primarily in long term business trends or "cycles" with a minimum of $50,000 account value. This
strategy uses mutual funds, ETFs, stocks, options and other completion strategies. The composite may contain both domestic and foreign securities. For comparison purposes the composite
is measured against the MSCI World Free (net) Index.
Emerald Asset Advisors, LLC has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®).

Emerald Asset Advisors, LLC (Emerald) is a registered investment advisor registered with the SEC. The firm maintains a complete list and description of composites, which is available upon
request.

Performance includes the reinvestment of all income including realized and unrealized gains and losses. Net of fee performance was calculated using actual management fees. Gross
performance results do not reflect the deduction of investment advisory fees and are calculated after deduction of actual trading expenses. Your return will be reduced by the advisory fees
and other expenses that may be incurred in the management of your account.

The management fee schedule is as follows: 1.25% for the first $2 Million; 1.00% for the next $3 Million and 0.75% for over $5 Million. Actual investment advisory fees incurred by clients
may vary.
Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. Composite performance is presented net of foreign withholdings taxes,
where applicable. The U.S. Dollar is the currency used to express performance. The annual composite dispersion is an asset-weighted standard deviation calculated for the accounts in the
composite the entire year. Additional information regarding the policies for calculating and reporting returns is available upon request. Past performance is not indicative of future
performance.

The Global Cycle Composite was created April 1, 2006. Emerald Asset Advisors, LLC's compliance with the GIPS standards has been verified by Ashland Partners from 1/1/2002 to
9/30/2008, and by Beacon Verification Services from 9/30/2008 to 9/30/2009. In addition, a performance examination was conducted on the Global Cycle Composite for the period
09/30/2005 through 9/30/2009. A copy of the verification report is available upon request. (The "Global Cycle" Composite was formerly known as the "Cycle" Composite).

Important information for Investors: The performance results shown are for separate accounts managed by Emerald Asset Advisors, LLC using the Global Cycle Strategy. It is important
to note that Emerald may use securities such as ETF’s, mutual funds or other completion strategies within their separate accounts that are not available through other programs. Therefore, the
results obtained through Emerald’s separate account management program should not be viewed as indicative of the results of the Global Cycle Model Portfolio available through Adhesion,
FTJ FundChoice, FOLIOfn, SummitAlliance/WE2, World Equity Group or other broker/dealer platforms and TAMPS where our models are offered.
22

Emerald’s Alternative Solution
The Best of all Worlds

 HEDGED STRATEGIES IN A DIVERSIFIED SEPARATE ACCOUNT
EMERALD SMA’S
• Absolute return focus
• Low market correlation
• Low relative volatility
• Tax aware

USING NO-LOAD MUTUAL FUNDS

• No lock-up period • Daily liquidity
• Full transparency • SEC-registered vehicles
• Cost effective

HEDGED INVESTMENT
STRATEGIES/STYLES
• Top manager talent
• Flexible investment styles
• Alpha generators

23

Investment Team

Seasoned professionals with 90+ years collective experience

Robert A. Isbitts Allan M. Budelman Mathew J. MacEachern
Chief Investment Officer Managing Partner Portfolio Manager
•Co-Founded Emerald in 1998 •Joined Emerald in 1999 •Joined Emerald in 2004
•20+ years in the investment field •15+ years in the investment field •16+ years in the investment field
•DLJ, Morgan Stanley, Fiduciary Trust •JP Morgan, Bankers Trust, Chase Manhattan •Fidelity Investments, Leerink Swann &
•CFS Designation, 1997 •MBA, University of Miami Company, Inc.
•MBA, Rutgers University •BA, University of Maryland •Suffolk University
•BS, SUNY Albany

Keith D. Stoloff Michael N. Kahn
Research Analyst Technical Analyst
•Joined Emerald in 2007 •Joined Emerald 2008
•20+ years in the investment field •20+ years in the investment field
•Stoloff Advisory, Raymond James, Citicorp, •Barron’s Online Columnist since 2001
Great Western Securities •CMT designation, 2008
® ® SM ® ®
•CIMA , CIMC , CPWA , CMFC , AAMS •MBA, New York University
•BS, University of South Florida •BA, Brandeis University

24

Multi-dimensional Portfolio Construction Process

Top-down Macroeconomic Assessment
Theme
Fundamental analysis of critical factors that drive markets and prices

Bottom-up Analysis
Investments
Identify the investment vehicles that best express the themes

Quantitative Analysis
Analyze all key metrics (trading turnover; expenses; risk stats and tax
Weightings
implications)

Technical Analysis
Trade
Determine entry / exit points through charting analysis

25

Ongoing Due Diligence Process

Review written Assess market
material & factors and their
interview impact on
managers manager’s strategy

Monitor any change Continuous Analyze valuation
in manager thinking Interactive ratios and economic
and style Process indicators
consistency

Identify change in Evaluate bond
macro rates and yield
environment curve

26

Sell Discipline

 Proactive portfolio monitoring and sell discipline

Price objective
is achieved
Firm becomes too Economic or
institutionalized market changes

Portfolio Manager Lagging performance
change/turnover for unexplained reasons

Fund changes its Our investment thesis is
objective or process A superior investment wrong; yes, it happens! 
is identified

“Avoiding trouble is more important than finding that next big winner.”
- Michael Kahn

27

DJIA: 1900 – December 31, 2009

The information and statistical data quoted herein were gathered from sources that we believe to be reliable; however, it is not warranted to be accurate. This information is intended to be general in nature and should
not be construed as investment advice or a recommendation of any specific security. Indexes are unmanaged portfolios and investors cannot invest directly in an index. As in any investment situation, past
performance is no guarantee of future results. Chart courtesy of StockCharts.com.
28

DJIA: 1980 - 2000 was the exception, not the rule!

29

DJIA: 1900 - 1920

30

DJIA: 1920 - 1940

performance is no guarantee of future results. Chart courtesy of StockCharts.com. 31

DJIA: 1940 - 1960

32

DJIA: 1960 - 1980

33

DJIA: 2000 – December 31, 2009

performance is no guarantee of future results. Chart courtesy of StockCharts.com. 34

Hybrid Mutual Fund Style Definitions
Equity Market Neutral: This investment strategy is designed to exploit equity market inefficiencies and usually involves being simultaneously long and short
matched equity portfolios of the same size within a country. Market neutral portfolios are designed to be either beta or currency neutral, or both. Well-designed
portfolios typically control for industry, sector, market capitalization, and other exposures.
Long/Short Equity and Hedged Equity: This directional strategy involves equity-oriented investing on both the long and short sides of the market. The
objective is not to be market neutral. Managers have the ability to shift from value to growth, from small to medium to large capitalization stocks, and from a net long
position to a net short position. In the Hybrid Strategy, we separate this category into “long-short” and “hedged equity.” The difference is the degree to which they
short. A long-short fund typically shorts more than a hedged equity fund.
Dedicated Short: The strategy is to maintain net short exposure. Short bias managers take short positions in mostly equities and derivatives.
Bond Hedge: Funds that short bonds. That is, as interest rates rise, bond prices fall and these funds appreciate in value.
High Yield Bonds: Often called junk bonds, this subset refers to investing in low-graded fixed-income securities of companies that show significant upside
potential. Managers generally buy and hold high yield debt.
Distressed Debt: Funds that invest in the debt, equity or trade claims of companies in financial distress and generally bankruptcy. The securities of companies in
need of legal action or restructuring to revive financial stability typically trade at substantial discounts to par value and thereby attract investments when managers
perceive a turn-around will materialize.
Convertibles: Funds that invest in bonds and preferred stock issues that are convertible into the stock of the same issuer if the stock reaches a certain price level.
The convertible therefore has stock and bond features. It is expected to increase in price as the issuer’s stock rises, while the bond structure of the convertible may
limit its losses when the stock’s price falls.
REITs: Funds that invest in publicly-traded Real Estate Investment Trusts, which are real estate companies that trade on the stock exchanges.
Merger Arbitrage: Specialists who invest simultaneously in long and short positions in both companies involved in a merger or acquisition. Risk arbitrageurs are
typically long the stock of the company being acquired and short the stock of the acquirer. The principal risk is deal risk, should the deal fail to close.
Asset Allocation: Managers of this style (aka as “Global Macro” styles) carry long and short positions in any of the world's major capital or derivative markets.
These positions reflect their views on overall market direction as influenced by major economic trends and/or events. The portfolios of these funds can include stocks,
bonds, currencies, and commodities in the form of cash or derivatives instruments.
Commodities: Funds that use derivatives or stocks to gain exposure to the performance of a basket of commodities such as energy, metals and grains.

Sources: Hedgeworld and Emerald Asset Advisors, LLC
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Statistical Definitions

Annualized Return: The increase in value of an investment, expressed as a percentage per year.

Standard Deviation: A statistical measure of the historical volatility of a portfolio’s returns. More generally, a measure of the extent to which numbers are spread
around their average.

Alpha: A measure of investment performance adjusted for risk taken. It indicates the portion of a manager’s return that can be attributed to the manager’s skill
rather than the movement of the overall market A positive alpha implies that a manager has added value over and above the performance of the market (also referred
to “excess return.”) Conversely, a negative alpha would indicate that the manager has reduced value by underperforming the market.

Beta: A measure of the manager’s systematic risk (i.e., - market risk). It compares the return volatility of the manager to the volatility of returns for a comparable
market index. The index has a beta of 1 by definition. A beta of 1.20 would imply a volatility level 20% higher than the overall market, and a beta of 0.80 would
indicate a volatility 20% lower than the market.

R-Squared: A measure of how closely the manager’s returns match the returns of the market index against which it is compared. This serves to indicate what
percentage of a portfolio’s performance had to do with what the market did. For example, an R-squared of 90% indicates that the manager correlates with the style or
benchmark index by a factor 90% over time. An R-squared of 40% would indicate very little correlation with the chosen benchmark.

Volatility: The relative rate at which the price of a security moves up and down. Volatility is found by calculating the annualized standard deviation of daily change
in price. If the price of a stock or portfolio moves up and down rapidly over short time periods, it has high volatility. If the price almost never changes, it has low
volatility.

Up Capture: The up-market capture ratio is a measure of a manager’s performance in up markets relative to the index during the same period. A ratio value of 115
indicates that the manager has outperformed the market index by 15% in periods when the index has risen.

Down Capture: This ratio is the direct opposite of the up-market capture ratio, gauging performance of the manager relative to the index in down markets. A ratio
value of 80 would indicate the manager has declined only 80% as much as the declining overall market, indicating relative outperformance.

Source: www.investopedia.com (a Forbes media company)
36

INVESTMENT STRATEGISTS for
SUCCESSFUL ADVISORS

Medon A. Michaelides Jack F. Gonzalez
Managing Partner Director of Business Development

Leana C. Alu
Sales & Marketing Assistant

Emerald Allocation Strategies, LLC
2843 Executive Park Drive
Weston, Florida 33331
Telephone: 954.385.9624
www.EmeraldAssetAdvisors.com

37


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