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Portfolios

An important element of Stolper Asset Management’s business is our managed programs,
both the Equity and Strategic Income programs, under which the firm manages investments
on a discretionary basis.

Equity

The firm currently manages two equity only programs: The Equity Value Portfolio and The Equity Income Portfolio. In choosing stocks for both portfolios, the firm employs a value-based approach, applying rigorous, independent research. A specific criteria for the Equity Income Portfolio is that the companies selected must demonstrate a track record of returning value to shareholders through a sustainable dividend policy and the company stock must be trading at a price that offers an above average current dividend yield.

Equity Investment Philosophy – Stolper Asset Management aims to identify and invest in undervalued stocks. Our strategy is founded on a highly disciplined approach based on long term investment results. We adhere to a philosophy advocated by Benjamin Graham, a value investor, and well known author on the subject. The firm invests using a “margin of safety” approach whereby our goal is to purchase stocks in companies that are trading at prices below their intrinsic value. The firm seeks to own equity in durable businesses with identifiable competitive advantages. Such companies often exhibit high returns on capital, solid balance sheets with judicious use of debt, and shareholder friendly management focused on generating excess cash. Stolper Asset Management is not concerned by being “out of step” with popular short-term trends and we do not follow investment fads.

Investment Decision Making Process – Stolper Asset Management only invests in those businesses we clearly understand and can evaluate with a reasonable degree of confidence. The firm does not define risk solely in terms of the conventional measure of stock or portfolio volatility; we characterize risk as overpaying or failing to understand a business. The firm prefers to own a diversified group of businesses, but will not initiate purchases solely for the sake of diversification. Stolper Asset Management typically selects large, publicly traded companies with long and successful histories, but may also consider smaller companies, or stocks in out of favor industries available at attractive price/value ratios (trading below intrinsic value). The firm strives to invest in businesses where a long-term investment horizon represents an advantage.

Portfolio Construction – If a company fits within the firm’s investment rationale and exhibits attractive valuation parameters it will be considered for inclusion in the appropriate portfolio. At any one time, each portfolio typically includes 25 – 30 stocks.

Strategic Income

In November 2012, Stolper Asset Management added a third portfolio, the Strategic Income
Portfolio, to its managed program. The primary objective of this recently launched program is
to provide clients with a managed investment product that generates an attractive yield on capital invested, while successfully managing risk within reasonable parameters.

The Portfolio has the mandate to make selective investments in a variety of funds and
instruments including Exchange Traded Funds (ETFs), Closed End Funds, individual securities
(both equities and bonds), preferred securities, Real Estate Investment Trusts (REITs), and
Master Limited Partnerships (MLPs).

The Portfolio will aim to mitigate risk through careful selection and diversification, but in order
to achieve an attractive income stream, the Portfolio may be subject to a level of volatility
commensurate with the level of risk.

ETF shareholders should be aware that the general level of stock or bond prices may decline,
thus affecting the value of an exchange-traded fund. Investors should carefully consider the
investment objectives, risks, charges and expenses of an ETF before investing. To obtain a
prospectus containing this and other important information, please call our office. Read the
prospectus carefully before you invest. There are risks involved with investing including the
possible loss of principal.

Fixed Income

Due to the diversified liquidity needs and risk tolerance profiles of our clients, Stolper Asset Management does not offer a uniform fixed managed fixed income program. Instead, our clients’ fixed income portfolios are customized with the goal of meeting their individual long-term goals within the framework of our risk management strategies.

Portfolio Construction – We invest in a broad range of domestic investment grade securities, including Treasuries and CDs, as well as municipal, corporate and U.S. Government agency debt. Once a sector has been identified as attractive, a fundamental review is conducted. We only invest in sectors and maturities when the spread indicates adequate risk adjusted returns, preferring both higher grade instruments and those with shorter durations.

Interest Rate Strategy – We employ a buy and hold approach, with staggered maturities, so a portion of the portfolio generally matures every year during a specified period. To maintain the ladder, maturing bonds are typically reinvested in instruments with longer maturities within the range of the bond ladder. By doing so, we aim to provide clients with a more stable stream of income and limit interest rate risk. Our approach is designed to perform defensively in times of rising rates and to potentially achieve above-average returns in falling rate cycles.

Performance

 

Equity Value Portfolio
Stolper Asset Management
(net of fees)
Standard & Poor’s 500
Index
Quarter ending 09/30/17 5.91% 4.49%
 Nine months ending 09/30/17  9.71% 14.25%
One Year ending 09/30/17 21.35% 18.63%
Three years ended 09/30/17⁽¹⁾ 9.51% 10.83%
Five years ended 09/30/17⁽¹⁾ 14.48% 14.24%
Ten years ended 09/30/17⁽¹⁾ 8.46% 7.44%
10/31/02 thru 09/30/17
(Inception to Date)⁽¹⁾
10.44% 9.48%
⁽¹⁾ Annualized returns
The Standard & Poor’s 500 Index is an unmanaged index of 500 widely held companies and over 80% of the U.S. equities market. Index performance does not include any fees or expenses which will affect actual investment performance. Stolper Asset Management’s performance data includes reinvestment of all income and capital gains and reflects the deduction of all management fees and expenses. Because it normally will hold a core portfolio of stocks of fewer companies than many other diversified portfolios, the increase or decrease of the value of a single stock may have a greater impact on the total return. The performance since inception has been the sole responsibility of Stolper Asset Management and the accounts have been managed in a substantially similar style.  Portfolios are individually managed, so no inference should be drawn by present or prospective clients that managed accounts will achieve similar investment performance in the future.  These consolidated performance figures include all of Stolper Asset Management’s equity value accounts and are depicted on a time-weighted basis for the entire period ended 09/30/17.  Past performance may not be indicative of future results. Dividends are not guaranteed and must be authorized by the company’s board of directors. 
 
 
Equity Income Portfolio
Stolper Asset Management
(net of fees)
Dow Jones Select Dividend
Index
Quarter ending 09/30/17 4.41% 2.47%
Nine months ending 09/30/17  8.89% 8.71%
One Year ending 09/30/17 12.67% 13.21%
Three years ended 09/30/17⁽¹⁾ 8.69% 12.26%
Five years ended 09/30/17⁽¹⁾ 10.81% 14.27%
09/30/10 thru 09/30/17
(Inception to Date)⁽¹⁾
12.26% 14.62%
⁽¹⁾ Annualized returns
The Dow Jones Select Dividend Index is an unmanaged index comprised of 100 of the highest dividend-paying companies in the United States. Index performance does not include any fees or expenses which will affect actual investment performance. Stolper Asset Management’s performance data includes reinvestment of all income and capital gains and reflects the deduction of all management fees and expenses. Because it normally will hold a core portfolio of stocks of fewer companies than many other diversified portfolios, the increase or decrease of the value of a single stock may have a greater impact on the total return. The performance since inception has been the sole responsibility of Stolper Asset Management and the accounts have been managed in a substantially similar style.  Portfolios are individually managed, so no inference should be drawn by present or prospective clients that managed accounts will achieve similar investment performance in the future.  These consolidated performance figures include all of Stolper Asset Management’s equity value accounts and are depicted on a time-weighted basis for the entire period ended 09/30/17.  Past performance may not be indicative of future results. Dividends are not guaranteed and must be authorized by the company’s board of directors.
 
 
Strategic Income Portfolio
Stolper Asset Management
(net of fees)
Balanced Index
Quarter ending 09/30/17 3.19% 2.82%
 Nine months ending 09/30/17  11.35% 9.03%
One Year ending 09/30/17 11.62% 10.55%
Three years ended 09/30/17⁽¹⁾ 5.34% 7.20%
11/30/12 thru 09/30/17
(Inception to Date)⁽¹⁾
7.22% 9.37%
⁽¹⁾ Annualized returns
The Balanced Index is an unmanaged index comprised of 40% Barclay’s Intermediate Term Treasury Index and 60% Standard and Poor’s 500 Index. The Barclay’s Intermediate Term Treasury Index is an index designed to measure the performance of public obligations of the U. S. Treasury that have a remaining maturity of greater than or equal to 1 year and less than 10 years. The Standard and Poor’s 500 Index is an unmanaged index of 500 widely held companies and over 80% of the U. S. equities market. Index performance does not include any fees or expenses which will affect actual investment performance. Stolper Asset Management’s performance data includes reinvestment of all income and capital gains and reflects the deduction of all management fees and expenses. The performance since inception has been the sole responsibility of Stolper Asset Management and the accounts have been managed in a substantially similar style.  Portfolios are individually managed, so no inference should be drawn by present or prospective clients that managed accounts will achieve similar investment performance in the future.  These consolidated performance figures include all of Stolper Asset Management’s Strategic Income Portfolios and are depicted on a time-weighted basis for the entire period ended 09/30/17.  Past performance may not be indicative of future results. Dividends are not guaranteed and must be authorized by the company’s board of directors.