Additional Explanatory Notes and Disclosures:
1. This presentation is neither an offer to sell nor a solicitation of an offer to buy any securities.
2. Past performance is not indicative of future returns and the value of investments and the income derived from them can go down as well as up. Future returns are not guaranteed and a loss of principal may occur.
3. The material in this presentation is based on information from a variety of sources we consider reliable, but we do not represent that the information is accurate or complete. The material provided herein is for informational purposes only.
4. DISCLAIMER FOR HYPOTHETICAL RETURNS. All returns presented are hypothetical and back-tested. Hypothetical returns are net of estimated advisory fees and transaction costs; all dividends are assumed to be reinvested annually. Actual Strategy returns from live portfolios may differ materially from hypothetical returns. There is no substitute for actual returns from a live portfolio. Back-testing is done by retroactively applying a hypothesis to the historical data to obtain returns (scientific method) or finding variables in historical data that correlate to returns and developing a hypothesis from the historical data (data mining) or applying any hypothesis to different time periods until favorable returns are discovered (data mining). Back-tested models are developed with the benefit of hindsight but might not have foresight of the future. Hypothetical returns do not reflect the macroeconomic risks of using the Strategy in a different time period or the financial risk of executing trades in a live portfolio which include the potential market impact on stock prices caused by buying or selling that could cause the model’s buy or sell prices to differ from the frictionless trades of the back-tested model. Although the information in the table gives you some idea of the historic risks involved in investing in the Strategy, PAST HYPOTHETICAL PERFORMANCE IS NOT A GUARANTEE OF FUTURE RETURNS.
5. Opinions expressed are current opinions as of the date appearing in this material only.
6. References to market or composite indices, benchmarks or other measures of relative market performance over a specified period of time are provided for your information only. Reference to an index does not imply that the Boston Harbor Investment Management, LLC (‘Boston Harbor’) portfolio will achieve returns, volatility or other results similar to the index. The composition of a benchmark index may not reflect the manner in which a Boston Harbor portfolio is constructed in relation to expected or achieved returns, investment holdings, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which are subject to change over time.
7. Criteria for choosing the benchmarks for each Boston Harbor strategy are as follows:
Select 40TR -The S&P 500 Total Return Index was chosen as the benchmark for the Select 40 Total Return strategy based on the approximate equivalent risk between the benchmark and the strategy and because clients will generally use the Select 40TR portfolio as a substitute for or a complement to an all-equity portfolio.
8. The volatility of a benchmark index may be materially different from the individual performance attained by a specific investor. In addition, strategy holdings may differ significantly from the securities that comprise the index. The index has not been selected to represent an appropriate benchmark with which to compare an investor’s performance, but rather is disclosed to allow for comparison of the investor’s performance to that of certain well-known and widely recognized index. You cannot invest directly in an index.
9. The Boston Harbor Select 40TR Strategy was derived from the Boston Harbor Select Large-Cap TR Strategy.
10. Performance results for the Boston Harbor strategies referred to herein and their respective benchmarks reflect total return figures. This means their performance includes the reinvestment of dividends, interest and other earnings. Performance results for all periods are time-weighted based on monthly portfolio valuations.
11. Performance of each of the Boston Harbor strategies relative to its respective performance benchmark may have been impacted positively or negatively by economic and market conditions which affect either the benchmark or the Boston Harbor strategy to a greater degree. For example, in2002 and 2008, the S&P 500 Total Return Index declined over 20%. Since Boston Harbor’s Select 40TR strategy does not invest to the same extent as their benchmark in U.S. stocks, the impact of this decline on these strategies was less than on the benchmark. See note #6 on strategy benchmarks and their selection criteria.
12. Boston Harbor’s strategies may invest more heavily in stocks than their benchmarks so their performance relative to the benchmarks may be impacted by this difference.
13. Additional notes from the Performance webpage: -
We chose the period from April 2000 to December 2012 as an example of a period in which equities performed very poorly. The purpose is to show that while equities in general declined, certain classes of low beta equities increased in value. We do not mean to suggest that when equities decline these assets will always increase in value or that they will do so by the same percentages as shown. There are some time periods when nearly all classes of equity decline simultaneously.
The selection of 1/1/72 as a start date for the time period of the bottom bar chart corresponds with the timing of the U.S. abandoning the gold standard, allowing its currency to float freely. We view this as the beginning of the modern investment environment in which we presently operate. The purpose of the bottom chart is to show that for long-term investors one could have made returns like the U.S. equity markets by owning a broadly diversified portfolio of asset classes since many asset classes did as well as U.S. stocks. We are suggesting that over the long term, investors do not have to take on the volatility of an all-equity portfolio to make “equity-like” returns. The top and bottom charts combined are meant to suggest that broad diversification will generally help investors experience less volatility in the short term, without giving up the opportunity to make solid returns over the long term. This notion is consistent with Modern Portfolio Theory.[Dennis for your interest – plan to delete]
14. Boston Harbor’s fundamental analysis and selection of low beta stocks is an effort to identify stocks that have sustainable earnings in a variety of different market conditions and while concurrently having low market volatility, but should not be confused with and does not imply low risk or the ability to control risk.
15. Portfolio rebalancing occurs approximately annually, but no specific rebalancing date is guaranteed.
16. Boston Harbor does not provide tax advice to its clients. All investors are strongly urged to consult with their tax advisors regarding any potential investment.
17. This material is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and makes no implied or express recommendations concerning the manner in which any client’s account should or would be handled, as appropriate strategies depend upon the client’s specific circumstances and investment objectives.
18. Investments in foreign assets may incur greater risks than domestic investments. Investing in emerging markets may accentuate these risks.
19. Risks of REIT’s are similar to those associated with direct ownership of real estate, such as changes in real estate values and property taxes, interest rates, cash flow of underlying real estate assets, supply and demand, and the management skill and credit worthiness or the issuer.
20. Boston Harbor Investment Management, LLC is registered with the Massachusetts Securities Division. However, please note that in no way has the Massachusetts Securities Division approved or endorsed Boston Harbor, its strategies or any of its marketing materials. Any representation to the contrary is a criminal offense.
21. Please refer to Boston Harbor’s ADV Part 2 for more information.