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Equity Portfolio

Portfolio Objective
Our equity portfolio seeks long-term capital appreciation by investing in the common stocks of well established U.S. companies. The portfolio’s risk and return characteristics are designed to be consistent with those of the Standard & Poor’s 500 Index.

Investment Philosophy
We believe the key to a successful portfolio lies not in its individual securities, but in how they interact as a group. Our quantitative based approach utilizes proven mathematical models to create a well balanced portfolio that maximizes the risk and return relationship. In addition, it creates a framework for future risk control, portfolio monitoring, and performance analysis.

Investment Process
We employ an optimization model to construct mean-variance efficient portfolios. Optimization is a mathematical process that can be used to solve many types of problems. But regardless of its particular application, the goal is always to maximize or minimize a value, given a set of constraints.

In portfolio optimization, we can either maximize the portfolio’s return or minimize its risk.

To reduce risk, we identify securities by analyzing historical returns that act as complements. These are combined to form portfolios with the desired characteristics including maximum security weights and industry exposures.

Click here to view key statistics.

The Human Element
Ultimately, humans not computers, make the final decisions. We add value because we possess both information and important analytical skills that a computer does not.

The advantage of using a computer model is that it limits emotions from overly influencing the investment decision making process. Using the “gut model” can lead to irrational decisions and give poor results. Having a model in place creates a systematic, definable, and transparent process.

 
Security Name Weight
Apartment Investment & Mgmt Co. (AIV) 2.03%
Auto Data Processing (ADP) 1.95%
Sandisk Corp. (SNDK) 1.94%
Genuine Parts Company (GPC) 1.86%
Stericycle, Inc. (SRCL) 1.53%
Cuervo Resources, Inc. (CRVNF) 1.46%
Johnson & Johnson (JNJ) 1.45%
General Mills, Inc. (GIS) 1.44%
Family Dollar Stores, Inc. (FDO) 1.41%
Exxon Mobil Corporation (XOM) 1.33%



*The Longbow Equity Composite is comprised of actual client accounts and is calculated net of fees and commissions while the Standard & Poor’s 500 Index, the benchmark that we compare our performance against, does not include any charges. Past performance is no guarantee of future results. All data, charts, and tables for the Longbow Equity Composite and S&P 500 are as of the period ended September 30, 2011.


© 2011 Longbow Asset Management. All rights reserved.

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