Founded in 1993 by Dr. James Breech, utilizing the discipline of - - PowerPoint PPT Presentation

Founded in 1993 by Dr. James Breech, utilizing the

discipline of downside risk management.

The degree of risk involved in any financial decision depends

• n the rate of return that must be earned at a minimum to

accomplish one’s goal. Returns below the goal (“Minimal Acceptable Compound Return” or MAR) incur the risk of not accomplishing the goal.

This approach has strong applicability to the needs of

• rdinary investors who require a specific rate of return in
• rder to accomplish their financial objectives.

Cougar Global is experienced in global tactical asset

allocation.

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The goal of investing is to generate compound annualized

returns to fulfill the client’s investment needs.

The primary means of achieving compound annual growth rates

is to avoid losing money.

Cougar Global strives to participate in bull markets and to

mitigate loss in bear markets.

Global Capital Market Outlook is updated monthly using a one‐

year forecast horizon.

The asset mix will go to cash/bonds if dictated by Cougar

Global’s Outlook.

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Investment Theme Risk Mandate Investment Objective Model Positioning Risk Aware MAR 6 Income with Moderate Growth Growth with Income Clients who want to make regular withdrawals & want to protect against downside risk. Capital Appreciation MAR 8 Growth with Income Income with Moderate Growth Client require less frequent withdrawals, but willing to accept more risk in order to attempt to achieve moderate investment returns. Capital Appreciation MAR 10 Growth Aggressive Growth Clients who have a longer time horizon who want to accumulate and grow. Opportunistic MAR 12 Aggressive Growth Growth More aggressive investors, with a long time horizon and making

• ngoing contributions.

*A “MAR” is a goal. It is used to define risk. Returns are not guaranteed. See slide 13 for a description of the Investment Objectives.

Cougar Global’s proprietary process uses “Multiple

macro­Economic Scenario analysis” (“MES”) to model capital market behavior.

The MES keys off the U.S. economy, the world’s largest and

most influential on capital market behavior.

MES evaluates the probability of the world’s economies

experiencing growth, inflation, recession, stagnation or chaos (“black swans”).

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The five macroeconomic scenarios are:

1.

GROWTH ‐ US Real GDP greater to or equal to 2.7% with low inflation;

2.

RECESSION ‐ Defined as negative US GDP quarter over quarter, annualized;

3.

STAGNATION ‐ Defined as US GDP less than 2.7%

4.

INFLATION ‐ Greater than 2.7% as measured by the Consumer Price Index;

5.

CHAOS ‐ A high impact, low probability event (“Black Swans”).

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The first step in the process is to assess the probabilities

that the consensus (popular belief) attaches to each scenario.

Next, Cougar Global establishes its own probabilities for

each scenario, based on independent research, obtained from global macro‐economic and geopolitical research services.

The third step is to use data on the quarterly returns of

global asset classes and “bootstrap” – where the computer randomly samples – the data for each scenario.

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In running the models, the randomly sampled data is weighted

according to Cougar Global’s Multiple Economic Scenario

• Analysis. This provides Cougar Global with a measure for how

these asset classes could behave under the forecast scenarios.

Random data is used, because the future does not repeat the

past.

Using portfolio optimizing software, the results of the analysis

are used to generate the optimal asset mix for each mandate, for that month.

Portfolios are rebalanced* monthly if the expected returns and

downside risk for the current mix have shifted.

*Rebalancing may involve tax consequences

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Each mandate is constrained to have exposure at a

specific level of downside risk.

The higher the MAR, the more the constraint on downside

risk is relaxed.

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Portfolio Constraint MAR 6 95% probability of positive returns MAR 8 90% probability of positive returns MAR 10 85% probability of positive returns MAR 12 80% probability of positive returns

Returns are not guaranteed. Past performance is no guarantee of future results. These portfolios may change at any time

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Asset Classes subject to change.

Please see slide 14 for performance disclosures.

The cash portion of this portfolio is represented by money market instruments.

Asset Class

Symbol MAR 6

(IMG/GWI) Previous Allocation

MAR 8

(IMG/GWI) Previous Allocation

MAR 10

(AG/G) Previous Allocation

MAR 12

(G/AG) Previous Allocation Russell 2000

IWM

0.00 0.00 5.00 0.00 5.00 5.00 10.00 10.00 Canadian Equities

EWC

0.00 0.00 0.00 5.00 5.00 5.00 8.00 8.00 Australia, HK, Singapore

EPP

0.00 0.00 6.00 5.00 11.00 8.00 11.00 9.00

• Emg. Market Equities

VWO

0.00 0.00 5.00 0.00 7.00 7.00 13.00 13.00 Russell 1000

IWB

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 European Equities

VGK

0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.00 TOTAL EQUITIES 0.00 0.00 16.00 10.00 28.00 25.00 42.00 45.00 US 1­3 year Treasury

SHY

15.00 15.00 0.00 0.00 0.00 0.00 0.00 0.00 US Treasury 7­10 yr

IEF

10.00 10.00 14.00 5.00 8.00 8.00 5.00 5.00 US Treasury 20+

TLT

0.00 0.00 0.00 0.00 5.00 5.00 5.00 5.00

• Inv. Corp. Grade

LQD

10.00 10.00 14.00 25.00 5.00 8.00 5.00 5.00 US High Yield Corp.

HYG

10.00 10.00 20.00 20.00 17.00 17.00 11.00 10.00 JP Morgan EMBI Global

EMB

0.00 0.00 0.00 0.00 7.00 7.00 6.00 5.00 Cash

CASH

48.00 48.00 11.00 15.00 3.00 3.00 3.00 3.00 TOTAL FIXED INCOME 93.00 93.00 59.00 65.00 45.00 48.00 35.00 33.00 TOTAL COMMODITIES

GLD

7.00 7.00 25.00 25.00 27.00 27.00 23.00 22.00

MAR 6

Inception Date – 12/31/1999

MAR 8

Inception Date – 10/31/2001

MAR 10

Inception Date 11/30/2000 End Date 7/31/2010

BENCHMARK

Gross of Fees

Net of Maximum LPL MWP Program Fees1

Gross of Fees

Net of Maximum LPL MWP Program Fees1

Gross of Fees

Net of Maximum LPL MWP Program Fees1

40% Citigroup Gov’t/Corp Bond Index 50% S&P 500, 10% MSCI All Country World Equities ex U.S.

1­year

3.5% 0.9% 4.4% 1.8% 2.5% 0.3%

4.7% 3­year

5.6% 3.0% 4.7% 2.1% 1.6% ‐0.7% ‐1.3%

5­year

7.0% 4.4% 7.4% 4.7% 6.4% 3.9% 3.0% 10­year 10.1% 7.3% N/A N/A N/A N/A 6.8% Since Inception 8.1% 5.4% 11.0% 8.3% 6.5% 3.9% See note below

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1 Assumes maximum LPL Model Wealth Portfolio Advisory fee of 2.5%.

NOTE: Compound Benchmark returns since inception are 2.9% for MAR 6, 4.6% for MAR 8 and 2.2% for MAR 10.

The volatility of the index benchmark used to compare performance is materially different from that of the

• portfolio. Past performance is no guarantee of future results.

For performance disclosures, please see slide 14

MAR 6

Inception Date – 12/31/1999

MAR 8

Inception Date – 10/31/2001

MAR 10

Inception Date 11/30/2000 End Date 07/31/2010

BENCHMARK

Gross of Fees

Net of Maximum LPL MWP Program Fees1

Gross of Fees

Net of Maximum LPL MWP Program Fees1

Gross of Fees

Net of Maximum LPL MWP Program Fees1

40% Citigroup Gov’t/Corp Bond Index 50% S&P 500, 10% MSCI All Country World Equities ex U.S.

2000

‐9.9% ‐12.1% ‐ ‐ ‐ ‐ ‐1.8%

2001

‐6.3% ‐8.6% ‐ ‐ ‐9.4% ‐11.7% ‐4.7%

2002

6.6% 4.0% ‐2.0% ‐4.4% ‐4.9% ‐7.3% ‐9.0%

2003

27.0% 23.9% 26.3% 23.3% 28.8% 25.7% 19.4%

2004

17.0% 14.2% 15.6% 12.8% 15.2% 12.4% 9.0%

2005

25.1% 22.1% 27.0% 23.9% 28.5% 25.4% 4.9%

2006

8.5% 5.9% 11.9% 9.0% 11.7% 9.0% 11.7%

2007

9.7% 7.0% 11.1% 8.4% 9.1% 6.4% 7.2%

2008

2.8% 0.3% ‐1.7% ‐4.2% ‐0.5% ‐3.0% ‐23.0%

2009

9.7% 7.0% 9.7% 7.0% 9.7% 7.0% 18.7%

YTD 2010

3.5% 0.9% 4.4% 1.8% 1.1% ‐0.4% 4.7%

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1 Assumes maximum LPL Model Wealth Portfolios Advisory fee of 2.5%.

The volatility of the index benchmark used to compare performance is materially different from that of the portfolio. Past performance is no guarantee of future results. For performance disclosures, please see slide 14.

Aggressive Growth Aggressive Growth will essentially be fully invested in equity assets at all times (with the exception of a 5% cash position). Investors in this portfolio should have a long time horizon of 10 years or more, an understanding of the volatile history of equity investments, and a propensity to add money to the account on a systematic basis. This por tfolio is very aggressive by nature and should not be considered by anyone unwilling to take on significant risk. Growth Growth will be targeted to an allocation of 80% in equity assets and 20% in fixed income assets (including a 5% cash position). Investors in this portfolio should have a long time horizon, an understanding of the volatile history of equity investments, and a propensity to add money to the account on a systematic basis. This portfolio is aggressive by nature and should not be considered by anyone unwilling to take on significant risk. Growth w/ Income Investors in this portfolio should have a long time horizon, and an understanding of the volatile history of equity investments. The primary investment objective of this portfolio is growth of principal. Fixed income assets are included to generate income and reduce overall volatility. Income w/ Moderate Growth Income with Moderate Growth will be targeted to a normal allocation of 40% in equity assets and 60% in fixed income assets (including a 7% cash position). Investors in this portfolio should have a time horizon of more that five years, and be comfortable with the volatile history of equity investments. The primary investment objective of this portfolio is income, with growth of principal an important consideration. Fixed income assets form the core of the portfolio, generating income and lowering the portfolio’s overall volatility. Equity assets provide the

• pportunity for long‐term growth of principal.

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For MWP accounts, Cougar Global Investments will provide investment models to LPL Financial. LPL Financial will then have full discretion to invest the MWP account in accordance with the model and to select other

• investments. LPL Financial may deviate

from the model provided. The composites shown aggregates accounts for which Cougar Global has

• discretion. In MWP, LPL

Financial (and not Cougar Global) has discretion. These and

• ther factors will result in MWP

account performance being different than that of the composite. The performance information for the composite is presented solely to provide information about investment models that will be provided by Cougar Global according to the same fundamental strategies shown. The Cougar Global composites are comprised of all client accounts optimized in $US. Excluded from the composite are any accounts with assets of less than $50,000 or for which there are asset allocation

• constraints. From

November 1997 to November 2002 the MAR 6 composite was made up of a single account. Between June 30, 2010, and July 31, 2010, the MAR 10 composite was made up of a single account. As of July 31, 2010, the MAR 10 composite does not contain any accounts Prior to February 29, 2008, the asset classes used were portfolios of individual securities managed by sub‐advisors. After that date, Exchange Traded Funds were used to represent asset classes. Past performance is not an indicator

• f

future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information quoted. To

• btain

current month­end exchange traded fund performance information please contact your financial advisor. The net performance quoted reflects the reinvestment of dividends, earnings and capital gains, is net of expenses and the maximum advisory fee

• f

2.5%. The volatility

• f

the benchmark used to compare performance is materially different from that of the composite. The potential for profit is accompanied with the possibility of loss.

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The information contained in this presentation is as of September 30, 2010, and was collected from sources considered to be reliable. It is intended only for one‐on‐one presentations to prospective or existing LPL Financial clients. All indices are unmanaged and can’t be invested into directly. Neither LPL Financial nor Cougar Global Investments nor any of its affiliates engage in investment banking services nor has LPL Financial nor Cougar Global Investments or its affiliates or the analyst(s) been compensated during the previous 12 months by any company mentioned in this report for any non‐investment banking securities‐related services and non‐securities services nor has any company mentioned been a client of LPL Financial or Cougar Global Investments or its affiliates within the past 12 months. An investment in Exchange Traded Funds (ETF), typically structured as a mutual fund or unit investment trust, involves the risk of losing money and should be considered as part

• f an overall program, not a complete investment program. An investment

in ETFs involves additional risks: not diversified, the risks of price volatility, competitive industry pressure, international political and economic developments, possible trading halts, and index tracking error. Although many ETFs are registered under the Investment Company Act like traditional mutual funds, some ETFs, in particular those that invest in commodities, are not registered as an investment company under the Investment Company Act. These types of ETFs may be formed as limited partnerships or grantor trusts and may have unique tax consequences. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and are subject to availability and change in price. High yield/junk bonds are not investment grade securities, involve substantial risks and generally should be part of the diversified portfolio of sophisticated investors. Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity and redemption features. The fast price swings of commodities will result in significant volatility of an investor’s holdings. Investing in alternative investments may not be suitable for all investors and involve special risks such as risk associated with leveraging the investment, potential adverse market forces, regulatory changes, potential illiquidity. There is no assurance that the investment objective will be attained. International and Emerging Markets investing involve special risks such as currency fluctuation and political instability and may not be suitable for all investors. Mid capitalization companies are subject to higher volatility than those of larger capitalized companies. The fund’s concentrated holdings will subject it to greater volatility than a fund that invest more broadly. BENCHMARK SELECTION: The selected benchmark (40% Citigroup Gov’t/Corp Bond Index, 50% S&P 500, 10% MSCI All Country ex U.S.) was selected to represent a conservative U.S. investor wanting global exposure. It reflects Cougar Global’s mandate as a global tactical asset allocation manager. INDEX DEFINITIONS: The indices that are used for performance comparisons in this factsheet, which are unmanaged and can’t be invested in directly are: the Standard & Poor’s 500 Index with is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value

• f the 500 stocks representing all

major industries; the MSCI All Country World Index ex USA is a free float‐adjusted, market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. As of May 27, 2010 the index consisted of 44 country indices comprising 23 developed and 21 emerging market countries. The index is rebalanced quarterly; the Citigroup Gov’t /Corp Bond index is a market value‐weighted index

• f

fixed income securities intended to represent the investment grade universe of US‐listed bonds. As of July 1, 2010, Treasury & Gov’t Sponsored bonds made up 68% of the index, US Corporate credit made up 27% and non‐US corporate credit made up 5%. The weighted average rating of the index is AA+. The index is rebalanced monthly. To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial is not an affiliate of and make no representation with respect to such entity. This research material has been prepared by Cougar Global Investments LP. Cougar Global and LPL Financial are not affiliated.

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Tracking number 664570 expiration date 12‐11