Quarterly Report CIBC 41(k) Consulting Group Presentation to: Kanebridge 41(k) Plan March 22 Presented by: Richard Devine Howard Franzblau
T a b l e o f C o n t e n t s I. Notes to Investment Options II. Investment Options Description of Asset Category Performance Comparison of Funds Suggested within Asset Class Peer Group Comparison and Performance vs. Risk Total Return Percentile Rank to Peer Group Performance vs. Risk: 3 Years Style Analysis Historical Style Exposure Average Equity Style - Rolling Modern Portfolio Theory Statistics R-Squared Beta Alpha Sharpe Ratio Individual Fund Descriptions - Performance and Statistics
I. Notes to Investment Options The following is a glossary of indices used throughout the proposal. These indices are used to compare and measure the performance of the selected funds to their respective asset categories. 3 Month T-Bill - A benchmark used to show the growth of money. Dow Jones Utility - A benchmark that consists of 15 geographically representative gas and electric utility companies. This index is price-weighted. LB 1-3 Year Government Bond - A benchmark comprised of both the Treasury Bond Index and the Agency Bond Index. LB Aggregate Bond - A combination of the Government/Corporate Index, the Mortgage-Backed Securities Index and the Asset-Backed Securities Index, maintained by Lehman Brothers. LB Aggregate / S&P 5 Mix - A combination of the LB Aggregate and the S&P 5, used to measure funds that invest in both fixed instruments and common stocks. LB Credit Bond - A benchmark which tracks all publicly issued non-convertible investment grade corporate debt, maintained by Lehman Brothers. LB Credit Long Bond - A benchmark which tracks all public-issued nonconvertible investment-grade corporate debts that have a maturity of 1 years or more. LB GNMA - This index covers the mortgage-backed pass-through securities of the Government National Mortgage Association (GNMA). LB Government Bond - A benchmark which tracks obligations of the US Government and its agencies, maintained by Lehman Brothers. LB Government Long Bond - A benchmark that tracks those indexes found in the LB Government index which have a maturity of ten years or more. 1
Notes to Investment Options The following is a glossary of indices used throughout the proposal. These indices are used to compare and measure the performance of the selected funds to their respective asset categories. LB High Yield Bond - A benchmark that covers the universe of fixed-rate, noninvestment grade debt. LB Intermediate Government Bond - A benchmark which includes those indices in the LB Government which have a maturity of one to three years. Morningstar Average - Represents the average performance of all funds in the asset category of the named fund as reported by Morningstar, a mutual fund rating service. MSCI Emerging Markets ID - This index serves as a benchmark for each emerging country. The average size of these companies is (U.S.) $4 million, as compared with $3 billion for those companies in the World index. MSCI Europe ND - This index measures the performance of stock markets in Austria, Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Spain, Sweden, Switzerland, Ireland, Portugal and the United Kingdom. MSCI Pacific ND - An index that measures the performance of stock markets in Australia, Hong Kong, Japan, New Zealand, Singapore and Malaysia. MSCI World ND - An index of the stock markets in the US, Europe, Canada, Australia, New Zealand, the Far East, and 13 Emerging Markets, maintained by Morgan Stanley Capital International (MSCI). MSCI World ex US ND - An index that measures the performance of the stock market in the following countries: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Malaysia, Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland and the UK. of the plan 2
Notes to Investment Options The following is a glossary of indices used throughout the proposal. These indices are used to compare and measure the performance of the selected funds to their respective asset categories. NASDAQ Composite - An index measuring the performance of all issues listed in the NASDAQ Stock Market, except for rights, warrants, units and convertible debentures. PSE Tech 1 - A price-weighted index that measures 1 exchange-listed and over the counter stocks. Russell 1 - An index consisting of the 1 largest companies within the Russell 3 index. Russell 1 Growth - A market-capitalization weighted index of those firms in the Russell 1 with higher price-to-book ratios and higher forecasted growth values. The Russell 1 includes the largest 1 firms in the Russell 3. Russell 1 Value - A market-capitalization weighted index of those firms in the Russell 1 with lower price-to-book ratios and lower forecasted growth values. The Russell 1 includes the largest 1 firms in the Russell 3. Russell 2 - An index of the smallest 2 companies in the Russell 3 index. Russell 2 Growth- A market-weighted total return index that measures the performance of companies within the Russell 2 Index having higher price-to-book ratios and higher forecasted growth values. of the plan 3
Notes to Investment Options The following is a glossary of indices used throughout the proposal. These indices are used to compare and measure the performance of the selected funds to their respective asset categories. Russell 2 Value- A market-weighted total return index that measures the performance of companies within the Russell 2 Index having lower price-to-book ratios and lower forecasted growth values. Russell Midcap Growth - A market-weighted total return index that measures the performance of companies within the Russell Midcap Index having higher price-to-book ratios and higher forecasted growth values. Russell Midcap Value- A market-weighted total return index that measures the performance of companies within the Russell Midcap Index having lower price-to-book ratios and lower forecasted growth values. S&P 4 - An index consisting of 4 middle capitalization, domestic stocks chosen for market size, liquidity, and industry group representation. S&P 5 - An index of 5 widely held stocks, often used as a proxy for the stock market. It measures the movement of the largest issues. Included are the stocks of 4 industrial companies, 4 financial companies, 4 public utility companies, and 2 transportation companies. 4
Investment Options "Our cutting edge technology and our academic discipline will ensure a menu of investment options that remain the "better of the better"...
Money Market Funds in this asset class invest in short-term high quality financial instruments like certificates of deposit and commercial paper (short-term loans to individual corporations). Money market accounts typically have a very low amount of risk.
Oppenheimer Cash Reserves Performance as of March 29, 22 Investment Review The Oppenheimer Cash Reserves seeks safety of principal, liquidity, and maximum current income. 7 6 Tot Ret YTD Tot Ret 1 Yr Tot Ret 3 Yr Tot Ret 5 Yr Tot Ret 1 Yr Tot Ret Since Incep 5 The fund maintains a diversified portfolio of high quality money market securities, which at the time of investment have remaining maturities of thirteen months or less. The types of money market securities include: 1) marketable obligations of, or guaranteed by, the United States Government, or its instrumentalities, 2) U.S. dollar-denominated CDs and bankers' acceptances, 3) domestic or foreign commercial paper, and 4) repurchase agreements that are collateralized in full each day by U.S. Government Securities. 4 3 2 1 Oppenheimer Cash Reserves Annual Return % Tot Ret YTD Tot Ret 1 Yr 3 Month T-Bill Tot Ret 3 Yr Tot Ret 5 Yr Tot Ret 1 Yr Tot Ret Since Incep Oppenheimer Cash Reserves.22 2.22 4.13 4.27 3.91 4.66 3 Month T-Bill.44 2.8 4.71 4.86 4.68 5.45 Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar Average are used as benchmarks in comparing the relative performance of mutual funds. Sources: Morningstar, Inc., CDA Wiesenberger and Bloomberg.
Stable Value Funds in this asset class invest primarily in investment contracts issued by insurance companies and banks. This asset class has a higher degree of risk than money market funds with a corresponding expectation of greater return, and a lesser degree of risk than other asset classes (except Government Bond Treasury) with a corresponding expectation of lesser performance.
Morley Capital Stable Value Performance as of March 29, 22 Investment Review The Morley Capital Stable Value Fund seeks a consistent rate of return while preserving capital and minimizing risk. 7 6 Tot Ret YTD Tot Ret 1 Yr Tot Ret 3 Yr Tot Ret 5 Yr Tot Ret 1 Yr Tot Ret Since Incep 5 4 The fund is a portfolio of contracts purchased from leading life insurance agencies. These companies have well-diversified portfolios with very low exposure to below-investment grade bonds and problem mortgages. The fund seeks only high-quality investments that carry less market risk than stocks and bonds. These instruments include guaranteed investments contracts (GICs) issued by insurance companies, and bank investment contracts (BICs), issued by banks. Your return is a blend of all the rates of various investments purchased by the fund. 3 2 1 Gartmore Morley Stable Value Annual Return % Tot Ret YTD Tot Ret 1 Yr 3 Month T-Bill Tot Ret 3 Yr Tot Ret 5 Yr Tot Ret 1 Yr Tot Ret Since Incep Gartmore Morley Stable Value 1.44 6.24 6.28 6.31 6.46 6.33 3 Month T-Bill.44 2.8 4.71 4.86 4.68 5.45 Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar Average are used as benchmarks in comparing the relative performance of mutual funds. Sources: Morningstar, Inc., CDA Wiesenberger and Bloomberg.
Intermediate-Term Bond Intermediate-term bond funds have average durations that are greater than 3.5 years and less than six years. Most of the funds rotate among a variety of sectors in the bond market, based upon which appear to offer better values. Whatever types of bonds they hold, these funds are less sensitive to interest rates, and therefore less volatile, than funds that have longer durations.
Intermediate-Term Bond Performance as of March 29, 22 Morningstar Intermediate Bond Universe Average Oppenheimer Bond A LB Aggregate Bond 8 7 6 Total Annualized Return, % 5 4 3 2 1-1 Annual Return % YTD 1 Year 3 Years 5 Years 1 Years Oppenheimer Bond A -.42 2.54 3.67 5.26 6.16 LB Aggregate Bond.9 5.35 6.49 7.57 7.38 Morningstar Intermediate Bond Universe Average -.18 4.28 5.53 6.64 6.85 Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar
Intermediate-Term Bond Performance as of March 29, 22 Total Return Percentile Rank to Peer Group The chart to the right illustrates a fund's total return percentile rank relative to all fund's that have the same objective in Morningstar's Intermediate-Term Bond universe of funds. The highest percentile rank is 1 and the lowest is 1. When considering a fund's percentile ranking within its peer group, check to make sure the fund invests in the same kinds of issues as most of its peers. An Intermediate-Term Bond fund that has drifted from its style or focuses on a particular sector may perform differently than its peers. 1 25 5 75 69.5 25.5 15.6 15.4 1.2 84.9 16.5 85.7 12.7 Oppenheimer Bond A LB Aggregate Bond 9.8 95.8 96.9 1 YTD 1 Year 3 Years 5 Years 1 Years Since Inception Performance vs. Risk: 3 Years The Performance vs. Risk chart evaluates portfolio returns by taking into account the associated risk. It is computed as the ratio of the fund's return to the fund's standard deviation. Standard deviation is a non-relative measure of volatility. 1 It doesn't depend on any relationship to another variable, such as an arbitrarily chosen market index. 2 It offers a probable range within which a fund's realized return is likely to deviate from its expected return. When a fund has a high standard deviation, the predicted range of performance is wide, implying greater volatility. 1 Total Annualized Return, % 9 8 7 6 5 4 3 2 1-1 Apr-99 - Mar-2 Morningstar Intermediate Bond Universe Oppenheimer Bond A LB Aggregate Bond -2 1 2 3 4 5 6 Total Annualized StdDev, % Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar Average are used as benchmarks in comparing the relative performance of mutual funds. Sources: MPI Stylus, 1 Morningstar, Inc., CDA Wiesenberger and Bloomberg. 2 Albert J. Friedman and Russ Wiles, How Mutual Funds Work (New York Institute of Finance: Simon & Schuster, 1993) 65.
Intermediate-Term Bond Performance as of March 29, 22 Investors need a way to estimate the market exposure of portfolios in order to successfully allocate assets and manage risk. Exposure to asset classes can be qualitatively defined as a proportion of the portfolio assets invested in each asset class. A real portfolio containing hundreds or thousands of securities can be described (or modeled) by an "ideal" portfolio -- a combination of a relatively small number of indices. This combination is called the portfolio's asset mix and its main function is to describe portfolio exposure to asset classes. 3 On the Historical Style Exposure chart to the right, each fund's market exposure over the past 5 years is expressed in terms of asset classes represented by the Lehman Brothers Fixed Income Indices. Weight, % 11 1 9 8 7 6 5 4 3 2 1 Historical Style Exposure Apr-97 Nov-97 Mar-98 Jul-98 Nov-98 Mar-99 Jul-99 Nov-99 Mar- Jul- Nov- Mar-1 Jul-1 Nov-1 Mar-2 Cash Lehman Aggregate Bond Int'l Equity LB Gov Long Bond LB Gov Int Bond LB Corp Long Bond LB Corporate Int Bond The chart to the right displays the changes in investment style of each fund that have taken place over the last 5 years, from corporate debt to government debt, intermediate-term to long-term, or vice versa. Style Analysis allows an investor to examine the consistency of a fund manager's investment policy. No investment policy has to be 1% consistent. However, the inconsistencies must be identified and the investor must evaluate potential consequences. 3 When studying a style analysis, please be aware that current market conditions may provoke a style drift rather than an individual fund manager's decree. Corp. - Govt. LB Gov Int Bond 1-1 LB Corporate Int Bond Average Equity Style - Rolling 6 Month moving average, Nov-96 - Mar-2 LB Gov Long Bond LB Corp Long Bond LB Fixed Income Style Indices Morningstar Intermediate Bond Universe Oppenheimer Bond A LB Aggregate Bond -1 1 Interm. - Long Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar Average are used
Intermediate-Term Bond Performance as of March 29, 22 R-squared reflects the percentage of a fund's movements that can be explained by movements in its benchmark index. R-squared ranges between percent and 1 percent. An R-squared of 1 indicates that 1% of a fund's fluctuations can be explained by movements in its benchmark index. Conversely, a low R-squared, such as 35, indicates that only 35% of the fund's fluctuations can be explained by movements in the benchmark index. R-squared can be used to ascertain the significance of a particular beta (see below). Generally, a higher R-squared will indicate a more reliable beta figure. If the R-squared is lower, the beta is less relevant to the fund's performance. 1 Benchmark R-Squared, % 1 9 8 7 6 5 4 3 2 1 83.2 R-Squared Apr-97 - Mar-2 1. Benchmark R-Squared Oppenheimer Bond A LB Aggregate Bond Beta risk refers to that portion of the price variation of a fund attributable to the price movements of the stock market as a whole. The beta of the market is 1. by definition. Therefore, a fund with a beta of 1. will tend to rise and fall with its benchmark index. A fund with a beta of 1.5 will tend to rise 5% more than its index when the market is rising and to decline 5% more than its index when the market is declining. Conversely, a fund with a beta of.5 will tend to rise 5% less than its index when the market is rising and to decline 5% less than its index when the market is declining. Since beta risk by definition represents the degree to which each security reacts in the same way as all other securities, it is impossible to reduce beta risk through diversification without reducing the returns of the portfolio. 4 Beta 2. 1.5 1..5. 1.9 Beta May-88 - Mar-2 1.4 1. 1. 1.2 1..97 1. 1 Year 3 Years 5 Years Inception Oppenheimer Bond A LB Aggregate Bond Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar Average
Intermediate-Term Bond Performance as of March 29, 22 Alpha risk is a measure of the difference between a fund's actual returns and its expected performance, given its level of risk as measured by beta. A positive alpha figure indicates the fund has performed better than its beta would predict. In contrast, a negative alpha indicates the fund's underperformance, given the expectations established by the fund's beta. Please be aware that a negative alpha can sometimes result from the expenses that are present in a fund's returns, but not in the returns of the comparison index. Alpha depends on the strength of the fund's R-squared and the assumption that market risk, as measured by beta, is the only risk measure necessary. 1 Since alpha risk by definition is not correlated to the price movements of other securities, it can be eliminated through perfect diversification of a securities portfolio without reducing returns. 4 Alpha, % 2 1-1 -2-3 -4 Alpha May-88 - Mar-2-1.1-2.22-2.75-2.91 1 Year 3 Years 5 Years Inception Sharpe Ratio Alpha May-88 - Mar-2 Sharpe Ratio is a risk-adjusted measure developed by Nobel Laureate William Sharpe. 1 It is calculated by using excess return, or the difference between a fund's average return and the average return on a riskless Treasury bill over the same period. The excess return can be positive or negative depending on how the fund performed. The Sharpe Ratio divides the excess return by the fund's standard deviation. Higher values are favorable as they indicate more return per unit of risk. 2 Sharpe Ratio 1..5. -.5 -.3.6 -.25.52.11.78.4.72 Oppenheimer Bond A LB Aggregate Bond -1. 1 Year 3 years 5 Years Inception Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar Average are used as benchmarks in comparing the relative performance of mutual funds. Sources: MPI Stylus, 1 Morningstar, Inc., CDA Wiesenberger and Bloomberg. 2 Albert J. Friedman and Russ Wiles, How Mutual Funds Work (New York Institute of Finance: Simon & Schuster, 1993) 67. 4
Oppenheimer Bond A Performance as of March 29, 22 9 Investment Review The Oppenheimer Bond Fund seeks income consistent with stability of capital. Fund Family Manager Name OppenheimerFunds Negri/Kowalik Manager Tenure 6 Fund Incept Date 4/15/1988 Phone Number 8-525-748 Total Annualized Return, % 8 7 6 5 4 3 2 1 Std Dev 3 Yr 3.93-1 3 Mos. 1 Year 3 Years 5 Years 1 years Since Inception Std Dev 5 Yr 3.89 P/E Ratio. Morningstar Intermediate Bond Universe Average 12b-1 Current.25 Oppenheimer Bond A LB Aggregate Bond Expense Ratio 1.31 Annual Return % The fund invests in publicly-issued investment-grade debt securities, U.S. government securities, and money-market instruments. The average weighted maturity generally ranges between five and 1 years. Net Assets $MM 285.9 % Cash 7.95 % US Stocks.4 % Bonds 89.99 % Assets in Top 1 Holdings 47.21 Total Number of Holdings 314. Med Mkt Cap $MM. 3 Mos. 1 Year 3 Years 5 Years 1 Years Since Inception Oppenheimer Bond A -.42 2.54 3.67 5.26 6.16 7.5 LB Aggregate Bond.9 5.35 6.49 7.57 7.38 8.33 Morningstar Intermediate Bond Universe Average -.18 4.28 5.53 6.64 6.85 7.71 % Other.2 % Utilities. % Energy. % Financials. % Industrial Cyclicals. % Consumer Durables. % Consumer Staples. % Services. % Retail. % Health. % Technology. Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar Average are used as benchmarks in comparing the relative performance of mutual funds. Sources: Morningstar, Inc., CDA Wiesenberger and Bloomberg.
Large Cap Value Large Cap Value Funds focus on big companies that are less expensive than the market as a whole. These firms may be out-of-favor with investors due to recent business problems or -- more often -- they re simply growing slower than other companies. These slow-growers, which usually fall in the utilities, energy, financials and cyclical sectors, also have their virtues. Such companies tend to pay relatively high dividends and have more stable stock prices.
Large Cap Value Performance as of March 29, 22 Morningstar Large Value Universe Average Oppenheimer Quest Opport A Oppenheimer Quest Value A Davis NY Venture A Russell 1 Value Index 16 14 12 1 Total Annualized Return, % 8 6 4 2-2 -4 Annual Return % YTD 1 Year 3 Years 5 Years 1 Years Oppenheimer Quest Opport A.41-2.36 4.16 8.25 12.63 Oppenheimer Quest Value A.75-3.12 1.78 7.53 11.8 Davis NY Venture A -.67-2.1 3.3 11.34 15.43 Russell 1 Value Index 4.9 4.39 3.63 11.46 14.49 Morningstar Large Value Universe Average 2.13 2.93 3.53 9.45 12.23 Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar
Large Cap Value Performance as of March 29, 22 Total Return Percentile Rank to Peer Group The chart to the right illustrates a fund's total return percentile rank relative to all fund's that have the same objective in Morningstar's Large Cap Value universe of funds. The highest percentile rank is 1 and the lowest is 1. When considering a fund's percentile ranking within its peer group, check to make sure the fund invests in the same kinds of issues as most of its peers. A Large Cap Value fund that has drifted from its style or focuses on a particular sector may perform differently than its peers. 1 25 5 75 19.7 74.2 78.8 9.2 36. 84.3 86.9 91.2 41.2 46.7 5.7 61.8 25.3 23.4 65.1 75.1 47. 55.7 6.7 13.2 63.4 3.7 16.6 Oppenheimer Quest Opport A Oppenheimer Quest Value A Davis NY Venture A Russell 1 Value Index 1 YTD 1 Year 3 Years 5 Years 1 Years Since Inception Performance vs. Risk: 3 Years The Performance vs. Risk chart evaluates portfolio returns by taking into account the associated risk. It is computed as the ratio of the fund's return to the fund's standard deviation. Standard deviation is a non-relative measure of volatility. 1 It doesn't depend on any relationship to another variable, such as an arbitrarily chosen market index. 2 It offers a probable range within which a fund's realized return is likely to deviate from its expected return. When a fund has a high standard deviation, the predicted range of performance is wide, implying greater volatility. 1 Total Annualized Return, % 25 2 15 1 5-5 Apr-99 - Mar-2 Morningstar Large Value Universe Oppenheimer Quest Opport A Oppenheimer Quest Value A Davis NY Venture A Russell 1 Value Index -1 5 1 15 2 25 3 35 Total Annualized StdDev, % Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar Average are used as benchmarks in comparing the relative performance of mutual funds. Sources: MPI Stylus, 1 Morningstar, Inc., CDA Wiesenberger and Bloomberg. 2 Albert J. Friedman and Russ Wiles, How Mutual Funds Work (New York Institute of Finance: Simon & Schuster, 1993) 65.
Large Cap Value Performance as of March 29, 22 Investors need a way to estimate the market exposure of portfolios in order to successfully allocate assets and manage risk. Exposure to asset classes can be qualitatively defined as a proportion of the portfolio assets invested in each asset class. A real portfolio containing hundreds or thousands of securities can be described (or modeled) by an "ideal" portfolio -- a combination of a relatively small number of indices. This combination is called the portfolio's asset mix and its main function is to describe portfolio exposure to asset classes. 3 On the Historical Style Exposure chart to the right, each fund's market exposure over the past 5 years is expressed in terms of asset classes represented by the Russell Indices. Weight, % Oppenheimer Quest Opport A 1 8 6 4 2 Oppenheimer Quest Value A 1 8 6 4 2 Davis NY Venture A 1 8 6 4 2 Historical Style Exposure Apr-97 Nov-97 Mar-98 Jul-98 Nov-98 Mar-99 Jul-99 Nov-99 Mar- Jul- Nov- Mar-1 Jul-1 Nov-1 Mar-2 Cash Lehman Aggregate Bond Int'l Equity Russ Top 2 Value Russ Top 2 Growth Russ Midcap Value Russ Midcap Growth Russ 2 Value Russ 2 Growth Average Equity Style - Rolling The chart to the right displays the changes in investment style of each fund that have taken place over the last 5 years, from value to growth, small cap to large cap, or vice versa. Style Analysis allows an investor to examine the consistency of a fund manager's investment policy. No investment policy has to be 1% consistent. However, the inconsistencies must be identified and the investor must evaluate potential consequences. 3 When studying a style analysis, please be aware that current market conditions may provoke a style drift rather than an individual fund manager's decree. Small - Large Russ Top 2 Value 1 Russ Midcap Value -1 Russ 2 Value 6 Month moving average, Nov-96 - Mar-2 Russ Top 2 Growth Russ Midcap Growth Russ 2 Growth Russell Style Indices Morningstar Large Value Universe Oppenheimer Quest Opport A Oppenheimer Quest Value A Davis NY Venture A Russell 1 Value Index -1 1 Value - Growth Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar Average are used
Large Cap Value Performance as of March 29, 22 R-squared reflects the percentage of a fund's movements that can be explained by movements in its benchmark index. R-squared ranges between percent and 1 percent. An R-squared of 1 indicates that 1% of a fund's fluctuations can be explained by movements in its benchmark index. Conversely, a low R-squared, such as 35, indicates that only 35% of the fund's fluctuations can be explained by movements in the benchmark index. R-squared can be used to ascertain the significance of a particular beta (see below). Generally, a higher R-squared will indicate a more reliable beta figure. If the R-squared is lower, the beta is less relevant to the fund's performance. 1 Benchmark R-Squared, % 1 9 8 7 6 5 4 3 2 1 88.1 89.4 R-Squared Apr-97 - Mar-2 8.1 1. Benchmark R-Squared Oppenheimer Quest Opport A Oppenheimer Quest Value A Davis NY Venture A Russell 1 Value Index Beta risk refers to that portion of the price variation of a fund attributable to the price movements of the stock market as a whole. The beta of the market is 1. by definition. Therefore, a fund with a beta of 1. will tend to rise and fall with its benchmark index. A fund with a beta of 1.5 will tend to rise 5% more than its index when the market is rising and to decline 5% more than its index when the market is declining. Conversely, a fund with a beta of.5 will tend to rise 5% less than its index when the market is rising and to decline 5% less than its index when the market is declining. Since beta risk by definition represents the degree to which each security reacts in the same way as all other securities, it is impossible to reduce beta risk through diversification without reducing the returns of the portfolio. 4 Beta 2. 1.5 1..5..62 Beta Jan-86 - Mar-2 1.15 1. 1..99 1. 1. 1..95.92.87.88.9.78.72 1 Year 3 Years 5 Years Inception Oppenheimer Quest Opport A Oppenheimer Quest Value A Davis NY Venture A Russell 1 Value Index Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar Average
Large Cap Value Performance as of March 29, 22 Alpha risk is a measure of the difference between a fund's actual returns and its expected performance, given its level of risk as measured by beta. A positive alpha figure indicates the fund has performed better than its beta would predict. In contrast, a negative alpha indicates the fund's underperformance, given the expectations established by the fund's beta. Please be aware that a negative alpha can sometimes result from the expenses that are present in a fund's returns, but not in the returns of the comparison index. Alpha depends on the strength of the fund's R-squared and the assumption that market risk, as measured by beta, is the only risk measure necessary. 1 Since alpha risk by definition is not correlated to the price movements of other securities, it can be eliminated through perfect diversification of a securities portfolio without reducing returns. 4 Alpha, % 8 6 4 2-2 -4-6 -8-1 -6.26 Alpha Jan-86 - Mar-2 1.69.1.27 -.17-1.7-1.76-1.71-3.1-6.33-7.28 1 Year 3 Years 5 Years Inception Sharpe Ratio Oppenheimer Quest Opport A Oppenheimer Quest Value A Davis NY Venture A Jan-86 - Mar-2 Sharpe Ratio is a risk-adjusted measure developed by Nobel Laureate William Sharpe. 1 It is calculated by using excess return, or the difference between a fund's average return and the average return on a riskless Treasury bill over the same period. The excess return can be positive or negative depending on how the fund performed. The Sharpe Ratio divides the excess return by the fund's standard deviation. Higher values are favorable as they indicate more return per unit of risk. 2 Sharpe Ratio 1..5. -.5.18 -.23 -.43 -.55.1 -.1 -.11.67.61.43.46.49.3.24 Oppenheimer Quest Opport A Oppenheimer Quest Value A Davis NY Venture A Russell 1 Value Index -1. 1 Year 3 years 5 Years Inception Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar Average are used as benchmarks in comparing the relative performance of mutual funds. Sources: MPI Stylus, 1 Morningstar, Inc., CDA Wiesenberger and Bloomberg. 2 Albert J. Friedman and Russ Wiles, How Mutual Funds Work (New York Institute of Finance: Simon & Schuster, 1993) 67. 4
Oppenheimer Quest Opportunity A Performance as of March 29, 22 16 Investment Review Oppenheimer Quest Opportunity Fund - Class A seeks growth capital. Fund Family OppenheimerFunds Manager Name Glasebrook II, Richard J. Manager Tenure 11 Fund Incept Date 1/3/1989 Phone Number 8-525-748 Total Annualized Return, % 14 12 1 8 6 4 2-2 Std Dev 3 Yr 12.21-4 3 Mos. 1 Year 3 Years 5 Years 1 years Since Inception Std Dev 5 Yr 14.36 P/E Ratio 22.6 Morningstar Large Value Universe Average 12b-1 Current.5 Oppenheimer Quest Opport A Russell 1 Value Index Expense Ratio 1.53 Annual Return % The fund allocates assets among stocks, bonds, and cash. Common stocks and convertible securities normally constitute the majority of investments, though it may invest more than 5% of assets in fixed-income securities. The fund may invest without limit in foreign securities. 3 Mos. Net Assets $MM 1389.16 % Cash 14.76 % US Stocks 66.13 % Bonds 15.45 % Assets in Top 1 Holdings 53.14 Total Number of Holdings 42. Med Mkt Cap $MM 35151.49 1 Year 3 Years 5 Years 1 Years Since Inception Oppenheimer Quest Opport A.41-2.36 4.16 8.25 12.63 14.14 Russell 1 Value Index 4.9 4.39 3.63 11.46 14.49 13.9 Morningstar Large Value Universe Average 2.13 2.93 3.53 9.45 12.23 12.44 % Other. % Utilities 3.98 % Energy 9.69 % Financials 36.93 % Industrial Cyclicals 13.66 % Consumer Durables 2.89 % Consumer Staples. % Services 14.65 % Retail 5.6 % Health 5.1 % Technology 8.5 Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar Average are used as benchmarks in comparing the relative performance of mutual funds. Sources: Morningstar, Inc., CDA Wiesenberger and Bloomberg.
Oppenheimer Quest Value A Performance as of March 29, 22 16 Investment Review The Fund seeks capital appreciation through investment in securities of companies believed by the Manager to be undervalued in the marketplace in relation to to the companies assets, earnings, growth potential and cash flow. Fund Family OppenheimerFunds Manager Name Lindenthal, John G. Manager Tenure 1 Fund Incept Date 4/3/198 Phone Number 8-525-748 Total Annualized Return, % 14 12 1 8 6 4 2-2 Std Dev 3 Yr 15.65-4 3 Mos. 1 Year 3 Years 5 Years 1 years Since Inception Std Dev 5 Yr 16.79 P/E Ratio 25.8 Morningstar Large Value Universe Average 12b-1 Current.5 Oppenheimer Quest Value A Russell 1 Value Index Expense Ratio 1.56 Annual Return % The equity securities in which the Fund invests are common stocks and preferred stocks; bonds, debentures and notes convertible into common stocks; and depository receipts for such securities. To provide liquidity for the purchase of new instruments and to effect redemptions of shares, the Fund typically invests a part of its assets in various types of U.S. government securities and high quality short-term debt securities with remaining maturities of one year or less. For temporary defensive purposes, the Fund may invest up to 1% of its assets in such securities. 3 Mos. Net Assets $MM 628.41 % Cash 12.4 % US Stocks 85.12 % Bonds. % Assets in Top 1 Holdings 37.56 Total Number of Holdings 4. Med Mkt Cap $MM 32917.24 1 Year 3 Years 5 Years 1 Years Since Inception Oppenheimer Quest Value A.75-3.12 1.78 7.53 11.8 11.86 Russell 1 Value Index 4.9 4.39 3.63 11.46 14.49 13.94 Morningstar Large Value Universe Average 2.13 2.93 3.53 9.45 12.23 12.31 % Other. % Utilities 1.99 % Energy 5.69 % Financials 37.5 % Industrial Cyclicals 1.97 % Consumer Durables. % Consumer Staples 1.47 % Services 23.2 % Retail 8.48 % Health 7.96 % Technology 2.73 Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar Average are used as benchmarks in comparing the relative performance of mutual funds. Sources: Morningstar, Inc., CDA Wiesenberger and Bloomberg.
Davis NY Venture A Performance as of March 29, 22 18 Investment Review Davis New York Venture Fund seeks growth of capital. Fund Family Manager Name Davis Funds Davis/Feinberg Manager Tenure 6 Fund Incept Date 2/17/1969 Phone Number 8-279-279 Total Annualized Return, % 16 14 12 1 8 6 4 2-2 Std Dev 3 Yr 16.52-4 3 Mos. 1 Year 3 Years 5 Years Since Inception Std Dev 5 Yr 19.74 P/E Ratio 28.36 Morningstar Large Value Universe Average 12b-1 Current.25 Davis NY Venture A Russell 1 Value Index Expense Ratio.89 Annual Return % The fund invests predominantly in equity securities of companies with market capitalizations of at least $25 million. It will also invest in issues with smaller capitalizations. Investments will consist of issues which have capital growth potential due to factors such as undervalued assets or earnings potential, product development and demand and other similar reasons. Net Assets $MM 1541.56 % Cash 5.52 % US Stocks 9.1 % Bonds. % Assets in Top 1 Holdings 41.47 Total Number of Holdings 72. Med Mkt Cap $MM 42563.2 3 Mos. 1 Year 3 Years 5 Years Since Inception Davis NY Venture A -.67-2.1 3.3 11.34 16.5 Russell 1 Value Index 4.9 4.39 3.63 11.46 15.34 Morningstar Large Value Universe Average 2.13 2.93 3.53 9.45 12.94 % Other.25 % Utilities. % Energy 6. % Financials 39.56 % Industrial Cyclicals 17.17 % Consumer Durables.42 % Consumer Staples 5.86 % Services 8.26 % Retail 5. % Health 9.46 % Technology 8.27 Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar Average are used as benchmarks in comparing the relative performance of mutual funds. Sources: Morningstar, Inc., CDA Wiesenberger and Bloomberg.
Large Cap Blend Large Cap Blend Funds focus on big companies that are fairly representative of the overall stock market in both size and price. These funds tend to invest evenly across the spectrum of U.S. industries. They hold significant assets in easily recognized stocks, cyclicals, consumer staples and services. Typical major holdings for these funds are Citicorp, General Motors, AT&T and Pepsico.
Large Cap Blend Performance as of March 29, 22 Morningstar Large Blend Universe Average Federated Max-Cap Index InSv S&P 5 Index 12 1 8 Total Annualized Return, % 6 4 2-2 -4 Annual Return % YTD 1 Year 3 Years 5 Years Federated Max-Cap Index InSv.11 -.4-3.27 9.36 S&P 5 Index.28.24-2.53 1.18 Morningstar Large Blend Universe Average -.13-1.1-1.88 8.89 Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar
Large Cap Blend Performance as of March 29, 22 Total Return Percentile Rank to Peer Group The chart to the right illustrates a fund's total return percentile rank relative to all fund's that have the same objective in Morningstar's Large Cap Blend universe of funds. The highest percentile rank is 1 and the lowest is 1. When considering a fund's percentile ranking within its peer group, check to make sure the fund invests in the same kinds of issues as most of its peers. A Large Cap Blend fund that has drifted from its style or focuses on a particular sector may perform differently than its peers. 1 25 5 75 48. 35.6 51.1 33.2 3.7 36.4 49.2 5.5 68.5 13.5 Federated Max-Cap Index InSv S&P 5 Index 1 YTD 1 Year 3 Years 5 Years Since Inception Performance vs. Risk: 3 Years The Performance vs. Risk chart evaluates portfolio returns by taking into account the associated risk. It is computed as the ratio of the fund's return to the fund's standard deviation. Standard deviation is a non-relative measure of volatility. 1 It doesn't depend on any relationship to another variable, such as an arbitrarily chosen market index. 2 It offers a probable range within which a fund's realized return is likely to deviate from its expected return. When a fund has a high standard deviation, the predicted range of performance is wide, implying greater volatility. 1 Total Annualized Return, % 2 1-1 -2-3 Apr-99 - Mar-2 Morningstar Large Blend Universe Federated Max-Cap Index InSv S&P 5 Index -4 1 2 3 4 5 6 7 8 9 1 Total Annualized StdDev, % Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar Average are used as benchmarks in comparing the relative performance of mutual funds. Sources: MPI Stylus, 1 Morningstar, Inc., CDA Wiesenberger and Bloomberg. 2 Albert J. Friedman and Russ Wiles, How Mutual Funds Work (New York Institute of Finance: Simon & Schuster, 1993) 65.
Large Cap Blend Performance as of March 29, 22 Investors need a way to estimate the market exposure of portfolios in order to successfully allocate assets and manage risk. Exposure to asset classes can be qualitatively defined as a proportion of the portfolio assets invested in each asset class. A real portfolio containing hundreds or thousands of securities can be described (or modeled) by an "ideal" portfolio -- a combination of a relatively small number of indices. This combination is called the portfolio's asset mix and its main function is to describe portfolio exposure to asset classes. 3 On the Historical Style Exposure chart to the right, each fund's market exposure over the past 5 years is expressed in terms of asset classes represented by the Russell Indices. Weight, % 1 9 8 7 6 5 4 3 2 1 Historical Style Exposure Apr-97 Nov-97 Mar-98 Jul-98 Nov-98 Mar-99 Jul-99 Nov-99 Mar- Jul- Nov- Mar-1 Jul-1 Nov-1 Mar-2 Cash Lehman Aggregate Bond Int'l Equity S&P/BARRA SmCap Growth S&P/BARRA SmCap Value S&P/BARRA Value S&P/BARRA MidCap Growth S&P/BARRA MidCap Value S&P/BARRA Growth The chart to the right displays the changes in investment style of each fund that have taken place over the last 5 years, from value to growth, small cap to large cap, or vice versa. Style Analysis allows an investor to examine the consistency of a fund manager's investment policy. No investment policy has to be 1% consistent. However, the inconsistencies must be identified and the investor must evaluate potential consequences. 3 When studying a style analysis, please be aware that current market conditions may provoke a style drift rather than an individual fund manager's decree. Small - Large Average Equity Style - Rolling 6 Month moving average, Nov-96 - Mar-2 S&P/BARRA Value S&P/BARRA Growth 1 S&P/BARRA MidCap Value S&P/BARRA MidCap Growth -1 S&P/BARRA SmCap Value S&P/BARRA SmCap Growth S&P/BARRA Style Indices Morningstar Large Blend Universe Federated Max-Cap Index InSv S&P 5 Index -1 1 Value - Growth Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar Average are used
Large Cap Blend Performance as of March 29, 22 R-squared reflects the percentage of a fund's movements that can be explained by movements in its benchmark index. R-squared ranges between percent and 1 percent. An R-squared of 1 indicates that 1% of a fund's fluctuations can be explained by movements in its benchmark index. Conversely, a low R-squared, such as 35, indicates that only 35% of the fund's fluctuations can be explained by movements in the benchmark index. R-squared can be used to ascertain the significance of a particular beta (see below). Generally, a higher R-squared will indicate a more reliable beta figure. If the R-squared is lower, the beta is less relevant to the fund's performance. 1 Benchmark R-Squared, % 1 9 8 7 6 5 4 3 2 1 R-Squared Apr-97 - Mar-2 1. 1. Benchmark R-Squared Federated Max-Cap Index InSv S&P 5 Index Beta risk refers to that portion of the price variation of a fund attributable to the price movements of the stock market as a whole. The beta of the market is 1. by definition. Therefore, a fund with a beta of 1. will tend to rise and fall with its benchmark index. A fund with a beta of 1.5 will tend to rise 5% more than its index when the market is rising and to decline 5% more than its index when the market is declining. Conversely, a fund with a beta of.5 will tend to rise 5% less than its index when the market is rising and to decline 5% less than its index when the market is declining. Since beta risk by definition represents the degree to which each security reacts in the same way as all other securities, it is impossible to reduce beta risk through diversification without reducing the returns of the portfolio. 4 Beta 2. 1.5 1..5. Beta Jan-94 - Mar-2 1. 1. 1. 1. 1. 1. 1. 1. 1 Year 3 Years 5 Years Inception Federated Max-Cap Index InSv S&P 5 Index Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar Average
Large Cap Blend Performance as of March 29, 22 Alpha risk is a measure of the difference between a fund's actual returns and its expected performance, given its level of risk as measured by beta. A positive alpha figure indicates the fund has performed better than its beta would predict. In contrast, a negative alpha indicates the fund's underperformance, given the expectations established by the fund's beta. Please be aware that a negative alpha can sometimes result from the expenses that are present in a fund's returns, but not in the returns of the comparison index. Alpha depends on the strength of the fund's R-squared and the assumption that market risk, as measured by beta, is the only risk measure necessary. 1 Since alpha risk by definition is not correlated to the price movements of other securities, it can be eliminated through perfect diversification of a securities portfolio without reducing returns. 4 Alpha, % 1 8 6 4 2-2 -4-6 -8-1 Alpha Jan-94 - Mar-2 -.64 -.78 -.75 -.69 1 Year 3 Years 5 Years Inception Sharpe Ratio Alpha Jan-94 - Mar-2 Sharpe Ratio is a risk-adjusted measure developed by Nobel Laureate William Sharpe. 1 It is calculated by using excess return, or the difference between a fund's average return and the average return on a riskless Treasury bill over the same period. The excess return can be positive or negative depending on how the fund performed. The Sharpe Ratio divides the excess return by the fund's standard deviation. Higher values are favorable as they indicate more return per unit of risk. 2 Sharpe Ratio 1..5. -.5 -.11 -.7 -.4 -.35.32.37.55.6 Federated Max-Cap Index InSv S&P 5 Index -1. 1 Year 3 years 5 Years Inception Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar Average are used as benchmarks in comparing the relative performance of mutual funds. Sources: MPI Stylus, 1 Morningstar, Inc., CDA Wiesenberger and Bloomberg. 2 Albert J. Friedman and Russ Wiles, How Mutual Funds Work (New York Institute of Finance: Simon & Schuster, 1993) 67. 4
Federated Max Cap Instl Svc Performance as of March 29, 22 Investment Review Federated Max-Cap Instl seeks investment results that correspond to the aggregate price and dividend performance of publicly-traded common stocks, by duplicating the composition of the S&P 5 Index. Fund Family Manager Name Federated Funds Management Team Manager Tenure 3 Fund Incept Date 9/6/1993 Phone Number 8-341-74 Total Annualized Return, % 6 55 5 45 4 35 3 25 2 15 1 5-5 -1-15 -2-25 -3-35 Std Dev 3 Yr 16.24-4 3 Mos. 1 Year 3 Years 5 Years Since Inception Std Dev 5 Yr 19.45 P/E Ratio 31.93 Morningstar Large Blend Universe Average 12b-1 Current.3 Federated Max-Cap Instl Svc S&P 5 Index Expense Ratio.64 Annual Return % The fund will attempt to achieve a correlation between the performance of its portfolio and that of the Index of at least.95 of 1% or better; a figure of 1. would represent perfect correlation. It will normally be invested in substantially all of the stocks that comprise the Index. Although the fund normally invests at least 8% in stocks represented in the Index, it is not required to sell securities if the 8% investment level changes due to increases or decreases in the market value of portfolio securities. Net Assets $MM 616.3 % Cash 4.28 % US Stocks 89.2 % Bonds. % Assets in Top 1 Holdings 23.62 Total Number of Holdings 54. Med Mkt Cap $MM 58462.23 3 Mos. 1 Year 3 Years 5 Years Since Inception Federated Max-Cap Instl Svc.11 -.4-3.27 9.36 12.78 S&P 5 Index.28.24-2.53 1.18 13.57 Morningstar Large Blend Universe Average -.13-1.1-1.88 8.89 11.49 % Other 4.78 % Utilities 2.96 % Energy 6.51 % Financials 18.22 % Industrial Cyclicals 11.67 % Consumer Durables 1.64 % Consumer Staples 7.29 % Services 11.32 % Retail 7.29 % Health 13.86 % Technology 19.25 Performance is historical and is not representative of future results. Investment return and principal value of an investment will fluctuate so that if shares are redeemed, they may be worth more or less than their original cost. The index and Morningstar Average are used as benchmarks in comparing the relative performance of mutual funds. Sources: Morningstar, Inc., CDA Wiesenberger and Bloomberg.
Large Cap Growth Large Cap Growth Funds invest in big companies that are projected to grow faster than the overall stock market. Most of these funds focus on companies in rapidly expanding industries, such as technology and health care, or multinational companies with a high percentage of earnings coming from sales in foreign markets. A typical holding for one of these funds would be Microsoft or Johnson & Johnson.