!!! 5 Institutional/Sub-Advisory

Mid Cap Value Strategy

Objective

We look to remain consistent in our investment style and protect capital by using the time-tested contrarian value approach. The performance target for the Mid Cap Value portfolio is to exceed the Russell Midcap® Value Index over a full market cycle.

Strategy

Our Mid Cap Value strategy is based on a disciplined, low P/E approach to stock selection. We invest in mid cap companies that our research concludes to be undervalued and prove to exhibit strong fundamentals and historic earnings.

The Mid Cap team led by Mark Roach, Portfolio Manager, invests in companies with market capitalizations between $2 billion and $15 billion. The team focuses on eliminating stocks with above-market valuations by comparing financial ratios such as the price-to-earnings, price-to-book and price-to-cash flow.

Through extensive bottom-up research and rigorous fundamental analysis, we form our Mid Cap Value portfolio, which is well diversified across 60-70 companies with the goal of achieving superior long-term performance results while managing volatility and risk.

Mark Roach (Managing Director and Lead Portfolio Manager), David Dreman (Founder and Chief Investment Officer), Mario Tufano, CFA (Associate Portfolio Manager)

Inception Date: 12/2003

Performance Summary

Mid Cap Value Composite

Benchmark: Russell Midcap® Value Index

Asset-Weighted Returns as of 3/31/2015
  Last 3 Months YTD 1 Year 3 Years 5 Years 7 Years Inception
12/13/2013*
Gross Total Return 1.41% 1.41% 8.30% - - - 6.83%
Total Return Net of Fees 1.16% 1.16% 7.23% - - - 5.77%
Index Total Return 2.42% 2.42% 11.70% - - - 13.79%
*See Note No. 2 below

Compliance Statement

Dreman Value Management claims compliance with the Global Investment Performance Standards (GIPS®).

  1. DVM is a division of Dreman Value Management, L.L.C. ("Dreman"), an independent investment management firm and registered advisor established on July 1, 1997. DVM manages a variety of assets, including equities and fixed income among others. For the period from 1991 through June 30, 1997, David Dreman was the Chief Investment Officer of Dreman's predecessor firm and was responsible for executing all investment management decisions. Performance returns for periods prior to July 1, 1997 is from accounts maintained by DVM's predecessor firm. Effective January 1, 2006, Dreman's wrap-fee SMA/UMA assets were re-defined as a separate division under the name Dreman Asset Management ("DAM"). Prior to January 1, 2006, total firm assets included assets managed by Dreman. Effective January 1, 2006, total firm assets include only the assets of DVM. Additional information regarding polices for calculating and reporting returns is available upon request. Effective July 1, 2009, the methodology used to determine total composite assets, number of portfolios and percent of firm assets has changed. The new method of calculation is based on end of period assets whereas the previous method used beginning of next period assets. This change has been made due to an upgrade in the program used to calculated composite performance. This change effects time periods beginning July 1, 2009.
  2. DVM's Mid Capitalization Value Composite began in December of 2003. The Composite was terminated on 7/31/2013 with the closing of the last account and re-opened on 12/31/2013 with the opening of a new account. This Composite includes all of the Firm's accounts or portfolios that are in excess of $800,000 in market value, that are managed by the Firm on a fully discretionary basis in a mid-capitalization trading style without regard to tax sensitivity. Fully discretionary accounts include accounts that have investment restrictions, where the restriction accounts for less than 5% of the total portfolio value. Portfolios in the composite generally invest in securities with below market P/E ratios and market capitalizations between $2 and $15 billion.
  3. The Mid Cap Value composite’s primary benchmark is the Russell Midcap® Value Index. The Russell Midcap® Value Index measures the performance of the mid-cap value segment of the U.S. equity universe. It includes those Russell Midcap Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell Midcap® Value Index is constructed to provide a comprehensive and unbiased barometer of the mid-cap value market. The Index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true mid-cap value market. The market index used herein has been included for purposes of comparison of an investment in the relevant strategy to an investment in a certain well-known, broad-based equity benchmark. The statistical data regarding such index has been obtained from Factset and returns are calculated assuming all dividends and income are reinvested. The volatility of this index may be materially different from that of funds and accounts of DVM.  This index is unmanaged, with no fees, expenses or taxes. It is not possible to invest directly in an unmanaged index; however, an individual can invest in exchange traded funds or other investment vehicles that attempt to track the performance of an unmanaged index.
  4. Valuations are computed and performance is reported in U.S. Dollars.
  5. Returns are presented gross and net of management fees and include the reinvestment of all dividends and income. Gross-of-fees performance returns are presented before management and custodial fees but after all trading expenses. Returns are presented net of non-reclaimable withholding taxes. Net-of-fees performance returns are calculated by deducting the highest annual fee of 1.00% which is applied on a monthly basis. Prior to July 1, 2009, the net-of-fees performance returns were calculated by deducting the highest annual fee which was applied on a quarterly basis. The annual fee schedule is as follows: 0.90% on the first $20,000,000, 0.70% on the next $30,000,000 and 0.65% on assets greater than $50,000,000. Please refer to the ADV Part II for all composite fee schedules. Actual investment advisory fees incurred by clients may vary.
  6. DVM's Mid Cap Value composite was incepted and created on December 31, 2003. The firm maintains a complete list and description of all composites, which is available upon request.

Verification

Dreman Value Management has been independently verified for the periods July 1, 1997- December 31, 2014. Beginning July 1, 2005 Dreman has been verified by Ashland Partners & Company LLP.

Past performance does not guarantee future results, and periodically, current performance may be lower or higher than the performance data quoted. There is no assurance that any securities discussed herein remain in any fund or account of DVM at the time that you receive this or that securities sold have not been repurchased. All investments involve risk including the potential loss of all principal invested. The investment return and principal value of an account will fluctuate so that a client’s account may be worth more or less than its original value. Actual account performance may differ due to; among other things, the timing of investments and withdrawals, individual account restrictions and limitations and differing tax treatment. To request a fully GIPS® compliant performance presentation and/or a list and description of all firm composites please contact us at rfi@dreman.com or 1.800.952.6667. This material has been prepared for investors and investment professionals, including broker-dealers and investment advisers.