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EQUITY MANAGEMENT PHILOSOPHY AND APPROACH Traditional active equity management has proven to be inconsistent in delivering broad market, index-like returns. However, the favorable attributes of a passive index-based approach remove performance uncertainty and provide long-term consistency of returns. Advantages of an index-based approach include large investment capacity, low fees and expenses, diversification, and a broad array of major market exposures. The introduction of Exchange-Traded Funds (ETFs) has provided the opportunity for investment portfolios to efficiently obtain stock market exposure with securities that trade like stocks and are designed to track the performance of an index or select basket of stocks. Removing the inconsistency inherent in traditional active equity portfolio management and achieving consistent index-based results provides the basis for building and maintaining wealth. Median equity manager underperformance relative to many of the market’s most common benchmarks is widespread. According to a March 2007 research report by DiMeo Schneider & Associates, LLC, approximately 90% of top quartile mutual funds across 17 categories spend at least one 3-year period in the bottom half of their peer groups while about 51% of the same funds spent at least one 5-year period in the bottom half. This research supports the case for an index-based approach that removes performance anxiety. Effectively Manage Equity Risk and Cost – Invest with Precision – Meet Performance Expectations
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