Score. Stifel CONQUEST Portfolios. Research-Driven Portfolios PORTFOLIO STRATEGY EXCHANGE TRADED FUNDS. Ease of Diversification

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1 Stifel CONQUEST Portfolios PORTFOLIO STRATEGY The Washington Crossing Advisors Stifel CONQUEST Portfolios seek to add value by actively allocating assets among U.S. equities, bonds, commodities, and foreign assets. CONQUEST does this using Exchange Traded Funds also known as ETFs. The approach is intended to reduce overall risk in three ways: by diversifying away the majority of risk associated with individual companies, improving liquidity through the use of highly marketable ETFs, and by maintaining a diversified portfolio across many asset classes and throughout a variety of market conditions. CONQUEST further pursues additional returns by tilting portfolio weights to those assets expected to outperform in the coming months while reducing exposure to those assets expected to underperform. This process is commonly referred to as tactical asset allocation. Managed accounts are structured based on investor requirements, including aggressive growth, growth, balanced, and conservative-oriented strategies. The portfolio typically owns 8-16 ETFs allocated based upon their outlook for the next months. EXCHANGE TRADED FUNDS An ETF is a basket of securities that can be bought and sold on an exchange just like an individual stock. Most ETFs seek to track a specific market index, which may include large-, mid- and small-capitalization U.S. equities, foreign equities, style indices (growth or value), and fixed income investments, as well as industry-specific, global, and country-specific indices. ETFs have the ability to regularly issue or redeem new shares through a unique creation and redemption process. Unlike open-end funds, however, ETFs trade on exchanges, such as the American and New York Stock Exchanges, with prices set in real-time as the underlying value of the fund s securities portfolio changes. These two features the ability to create new shares coupled with continuous pricing make ETFs unique investment vehicles. Ease of Diversification Today s broad array of ETFs makes it possible for both individual and institutional investors to implement sophisticated asset allocation strategies in a quick, simple, and cost-effective manner. By using ETFs as a vehicle to achieve diversification across asset classes (stocks vs. bonds) and within subcategories of the same asset classes (growth vs. value), investors can combine asset classes to strive for enhanced returns while reducing risk. Score Research-Driven Portfolios Stifel, Nicolaus & Company, Incorporated Home Office: One Financial Plaza 501 North Broadway St. Louis, Missouri MEMBER SIPC AND NYSE

2 EXCHANGE TRADED FUNDS Minimized Company-Specific Risk The risk inherent in owning any one security is significantly reduced by buying entire market sectors, without impeding potential returns. ETFs allow the investor a simple way to achieve and maintain a diversified portfolio and minimize company-specific risk through a relatively small number of highly liquid funds. Tax Efficiency Because many ETFs are based on passively managed indices, the turnover in the underlying stock positions is very low. Also, due to their unique structure of in-kind redemptions, ETFs may possess a tax advantage. Dividends Investors have the right to receive potential cash dividend distributions. Transparency ETFs disclose the securities underlying each basket daily, so you always know what you own. Flexibility ETFs trade throughout the day, like a stock, which provides the opportunity to watch price fluctuations and decide the best price at which to buy or sell. THE CONQUEST ADVANTAGE Are you taking advantage of the fullest spectrum of assets possible to achieve better and more consistent portfolio performance? Or are there areas included in the Decision Tree on the next page that need to be addressed or added? Are you aware of the breadth of offerings available in the world of Exchange Traded Funds and how to use them effectively to drive your portfolio s performance? If not, Washington Crossing Advisors CONQUEST separately managed portfolio program might be an ideal solution. CONQUEST rounds out a portfolio strategy by: Making the most of the benefits offered by multiple asset, global coverage; Simplifying portfolio construction via the evolution of a robust Exchange Traded Fund marketplace; Utilizing time-honored principles of diversification; and Offering greater flexibility, control, and tax benefits that come with a separately managed portfolio. Understanding markets by asking pertinent questions, identifying risks, quantifying value in markets, and taking timely action are central to the process of tactical asset allocation, which is the basic framework for managing your CONQUEST portfolio. Portfolio questions addressed through CONQUEST How might anticipated changes in the economy or interest rates impact your portfolio? What does a change in the value of the dollar mean to your overseas investments? How is your bond portfolio affected by changes in inflation and inflation expectations? When to own Treasury Inflation Protected Securities (TIPS) in a bond portfolio. What role might real estate investment trusts (REITs) play in enhancing returns? How to use commodities for defensive hedging or absolute return. How much should be invested in growth or value stocks? How to incorporate sector and industry trends into a well constructed portfolio. When to focus on large, mid, small, or micro capitalization stocks. Can a portfolio be enhanced by focusing on seasonal factors? How to measure attractiveness of one market (i.e., bonds) to that of another (i.e., equities). 2

3 THE CONQUEST ADVANTAGE The portfolio management team at Washington Crossing Advisors, together with your Financial Advisor, stand ready to assist you with taking your first step to institutional quality, private and professional management in your own separately managed account through the Washington Crossing Advisors Stifel CONQUEST Portfolio. Your Financial Advisor can provide you with additional details about having your portfolio managed under Stifel s team at Washington Crossing Advisors. INVESTMENT PROCESS A disciplined investment process is essential to successful money management. Each client s goals, investment style, and risk tolerance is different; and our process seeks to develop the strategy that best addresses those unique objectives and characteristics. Financial Profile Understanding your investment goals is the first step to helping you achieve them. Your Financial Advisor will work closely with you to define your objectives, time horizon, liquidity needs, and risk tolerance. Only then can we tailor a portfolio strategy that appropriately addresses your needs. Asset Allocation Asset allocation is one of the most crucial aspects of the investment process. Through your Financial Advisor, we will work with you to critically analyze your assets to create an allocation that best suits your available resources. We carefully study how each potential holding in your portfolio will interact with the others. In this way, we seek to determine potential performance and, most importantly, develop an asset allocation strategy that will serve as the foundation for the portfolio s management. Portfolio Selection We will help you select the portfolio that is most compatible with your investment profile and objectives. Our expertise encompasses the benefits of the traditional brokerage relationship and strategic portfolio management. Ongoing Monitoring The performance of the markets can impact the value of the assets in a portfolio over time. Our thorough reporting and evaluation process allows us to assess market shifts and make changes as necessary. Performance Updates You will be kept informed of your portfolio s performance through monthly account statements, quarterly performance reports, and a year-end summary report. In addition, you can also have access to your account online to review account values, positions, transactions, and gains/losses. 3

4 INVESTMENT PROCESS Recommended Portfolios and Investment Discipline Although diversification does not ensure against loss, diversifying a portfolio among assets having different correlations reduces risk and increases potential return over time. The tendency for different asset classes to behave differently under varying economic circumstances creates a benefit not only for average portfolios, but also for extremely conservative or aggressive portfolios. CONQUEST portfolios are actively managed and rebalanced at least annually or as needed to ensure that exposure to individual securities remains consistent with the overall portfolio strategy. We have constructed a series of portfolios to suit the needs of different investor types, based upon risk tolerance. These portfolios range from a conservative portfolio with a primary emphasis on stability of principal to an aggressive growth portfolio that places a greater emphasis on total return with commensurately more risk. Working together with your Financial Advisor, we can help guide you toward an ETF strategy that provides a growth potential level that fits with your tolerance for risk. The Aggressive Growth Portfolio The Aggressive Growth Portfolio invests in the same areas as the Growth Portfolio but does not include exposure to bonds. It is appropriate for investors looking for an equity complement to a broader wealth management strategy or for those with a high tolerance for risk. The Growth Portfolio The Growth Portfolio primarily invests in equity funds. It is appropriate for investors with a long investment time horizon and a high tolerance for risk. A Tax-Free Growth Portfolio is available.* The Balanced Portfolio The Balanced Portfolio provides a mix of equity and fixed-income investments. It is most appropriate for investors with a long to medium investment time horizon and moderate risk tolerance. A Tax-Free Balanced Portfolio is available.* The Conservative Portfolio The Conservative Portfolio offers a more conservative mix of equity, bond, and shorter-term Treasury instruments. Investors with a short to medium time horizon and lower risk tolerance who desire some modest growth may prefer this option. A Tax-Free Conservative Portfolio is available.* * Investments in tax-free portfolios may be subject to state and alternative minimum taxes as well as possible capital gains tax. 4

5 TARGET ASSET ALLOCATION AGGRESSIVE GROWTH GROWTH BALANCED CONSERVATIVE % Equities % Equities 25-75% Equities 0-50% Equities 10% 25% 25% 90% 75% 50% 50% 75% n Common Stocks n Bonds, Cash, & Other Assets HIGHLIGHTS Institutional Quality Management Diversification Global and Multi-Market Reach Exchange Traded Funds Control Tax-efficiency OUR TEAM Phone: (973) Fax: (212) Kevin R. Caron Portfolio Manager Chad A. Morganlander Portfolio Manager 5

6 DISCLOSURES ETFs represent a share of all the stocks in their respective index held in a trust. Therefore, ETFs are subject to market risk. The investment return and principal value of such an investment will fluctuate, and your shares, when redeemed, may be worth more or less than their original cost. Investors should consider carefully the investment objective, risks, charges, and expenses before investing in an ETF. The prospectus, which contains this and other important information, is available from an investment professional and should be read carefully before investing. There are special considerations associated with international investing, including the risk of currency fluctuations and political and economic events. Investing in emerging markets may involve greater risk and volatility than investing in more developed countries. Due to their narrow focus, sector-based investments typically exhibit greater volatility. Small company stocks are typically more volatile and carry additional risks, since smaller companies generally are not as well established as larger companies. When investing in bonds, it is important to note that as interest rates rise, bond prices will fall. The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage that is often obtainable in commodity trading can work against you as well as for you. The use of leverage can lead to large losses as well as gains. The Washington Crossing Advisors Stifel CONQUEST Portfolio requires a $50,000 minimum investment. Strategies in the Stifel Score Program are proprietary products developed by Stifel Nicolaus. More information on the Score Program is included in the Stifel Consulting Services Disclosure Brochure and Part II of the Manager s Form ADV, which may be obtained from your Financial Advisor and which further outlines the fees, services, exclusions, and disclosures associated with this program. The information contained herein is believed to be reliable and representative of the portfolios available through Stifel; however, the accuracy of this information cannot be guaranteed. Investors should consider all terms and conditions before deciding whether the Score Program is appropriate for their needs. 6 SV4/11