Merrill Lynch Mutual Fund Advisor INVESTMENTS

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1 Merrill Lynch Mutual Fund Advisor INVESTMENTS

2 Merrill Lynch Mutual Fund Advisor (MFA) a discretionary investment advisory service managed by a dedicated portfolio management team offers investors customized portfolios of mutual funds to help meet a range of investment objectives. Merrill Lynch Wealth Management makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S) and other subsidiaries of Bank of America Corporation. Investment products: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value MLPF&S makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of Bank of America Corporation or in which Bank of America Corporation has a substantial economic interest, including BofA TM Global Capital Management, BlackRock and Nuveen Investments. MLPF&S is a registered broker-dealer, Member SIPC and a wholly owned subsidiary of Bank of America Corporation.

3 Merrill Lynch Mutual Fund Advisor: A diversified, dynamically managed program MFA offers you the ability to work with your Merrill Lynch Financial Advisor to select specific mutual fund strategies while freeing you from the day-to-day management of your investments within the parameters you set. With a minimum investment of $5,000, you can start investing in MFA and delegate the management of your mutual fund assets to the MFA Portfolio Management Team. You ll be able to choose from a diversified mutual fund portfolio that is dynamically managed and supported by the manager research and due diligence of Merrill Lynch s Investment Management & Guidance Team (IMG). Your Merrill Lynch Financial Advisor is your link to the MFA Portfolio Management Team. As your investment needs and circumstances change, you can work with your Financial Advisor to change investment strategies to meet your new financial objectives. You will also benefit from clear and comprehensive reporting in monthly account statements; quarterly performance reviews, which include your portfolio s current value, individual holdings and asset allocation as well as performance; and an annual tax-reporting statement.* Is MFA right for you? MFA provides access to flexible investment solutions designed to meet a wide array of client needs and is especially suited to clients who want to: Delegate the selection and day-to-day management of their mutual fund assets to a professional management team, with ongoing advice and guidance available from their Financial Advisor Benefit from actively managed portfolios that have the flexibility to take advantage of market opportunities and economic conditions Have access to a diversified mutual fund portfolio backed by the manager research and due diligence of IMG *Taxable accounts only. 3

4 A disciplined mutual fund investment strategy MFA incorporates an investment management process that is critical to your portfolio s overall performance. Your Financial Advisor works with you using this powerful four-step process to: Step 1 Determine your Investor Profile by identifying your goals, investment objectives and tolerance for risk using the MFA Profiling Questionnaire. Step 2 Select an investment strategy with appropriate asset allocation and diversification features for your Investor Profile. MFA offers strategies that are implemented by drawing from as many as 4,000 funds and 180 fund companies, which helps to limit potential loss from a concentrated position. Step 3 Identify and invest in solutions consistent with your asset allocation. This takes into account your preferences for taxable or tax-exempt fixed income. Step 4 Review and monitor the performance of your MFA portfolio. The MFA Portfolio Management Team assesses how well portfolio decisions continue to meet your investment needs, as stated in your MFA Profiling Questionnaire, and, when appropriate, will reallocate your MFA portfolio to help you take advantage of market opportunities and economic conditions. 4

5 Rigorous fund analysis Our MFA Portfolio Management Team includes seasoned investment professionals with an average of 17 years of financial services industry experience. They use sophisticated quantitative and qualitative research techniques so that each fund undergoes rigorous analysis before being selected for a portfolio.* Having worked as asset managers, traders, and buy- and sell-side security analysts, our portfolio managers are in a unique position to effectively build and monitor portfolios. The Team s research analysis includes an extensive review of the fund s investment style and objective, long-term performance, and overall organization. The analysis that each fund goes through focuses on fund classification, risk measurement and performance analysis. By interviewing each fund management team, our analysts gain insights into the management company, evaluate each manager s securities selection process and learn how the fund is currently positioned. These qualitative factors can help determine which of the screened funds may be positioned to remain top performers. In addition to building total portfolios comprising multiple asset classes, our portfolio managers also manage portfolio modules that focus on a particular asset class or style. This specialization enables the team to gain focused asset-class expertise and have a comprehensive understanding of the available individual investment offerings, which can lead to better investment manager selection, portfolio construction and other investment decisions. * If you choose a BlackRock Strategy, BlackRock Advisors, LLC, or its affiliates will provide investment advice to the MFA Portfolio Management Team to assist in the management of your portfolio. BlackRock strategies are limited to the universe of BlackRock mutual funds available through Merrill Lynch. Merrill Lynch makes available to its clients mutual funds and other investment products sponsored, managed and/or distributed by affiliates of Bank of America Corporation ( BAC ), including BofA TM Global Capital Management Group ( BofA funds ), LLC; BlackRock Inc. (collectively BlackRock ); and Nuveen Investments Inc. (collectively Nuveen ). BofA funds, BlackRock and Nuveen are indirect wholly owned subsidiaries of BAC. BAC, the parent company of Merrill Lynch, indirectly owns a substantial equity interest in the parent and/or holding companies of BlackRock and Nuveen. 5

6 The Four-Step Portfolio Construction and Management Process The hallmark of Merrill Lynch s portfolio construction and management process is its modular approach. These portfolio modules are the building blocks of our diversified portfolios and give you access to a range of solutions to complement your investment goals. 1 2 Define the macroeconomic environment and set investment objectives Monitor, manage and rebalance Develop a strategy buy list Assemble multi-manager portfolios with desired risk characteristics 4 3 The portfolio construction and management process includes four steps: 6 Step 1: Define the macroeconomic environment and set investment objectives To define and evaluate the broad capital market and macroeconomic environments, the MFA portfolio managers draw upon IMG, BofA Merrill Lynch Global Research and external sources. On an ongoing basis, the portfolio managers seek to improve the returns of the portfolio by positioning them in light of broader market and economic trends. Step 2: Develop a strategy buy list Leveraging the qualitative analysis conducted on the investment offerings by the due diligence team, the MFA portfolio managers develop a list of potential investment offerings that would fit with the investment objectives and goals of the portfolio. The ability to combine these offerings gives the portfolio construction process additional flexibility, as each has advantages and disadvantages in transparency, tax management, fees, consistency and liquidity. Step 3: Assemble multi-manager portfolios with desired risk characteristics When the risk analysis of the individual investment managers is complete, the team places the investment offerings into various combinations and tests the risk at the portfolio level. The portfolios are analyzed according to their exposure to certain risk factors to ensure that they are in line with their objectives. Step 4: Monitor, manage and rebalance After the portfolio is launched, the MFA Portfolio Management Team continuously monitors the risk and return profile both at the investment offering and portfolio levels while also accounting for broader market and economic trends. As needed, portfolio managers can alter the risk and performance profile of individual investment offerings. When this occurs, the module may be adjusted through weights or by substituting new offerings. Robust governance process The decision-making process for the portfolios is subject to a robust multilevel governance process. In order to launch a new portfolio or make a change to an existing portfolio, the portfolio manager must receive approval from various governing committees. This approach to governance helps to ensure that the portfolio solutions are managed efficiently and effectively.

7 To learn how MFA can help you realize your investment goals, contact your Merrill Lynch Financial Advisor at MERRILL.

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