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Disclosures
A. Lansing State Journal Reprint: The enclosed
article is a reprint of an article published in the
Lansing State Journal on June 11, 2003. While inherently
accurate, certain statements appearing in the article
require clarification.
1. The article states that SIA ranked second in the
world for three-year returns in a U.S.-based fund category
listed by Thomson Financial in its ‘World’s Best Money
Managers’ rankings. “World’s Best Money Mangers” is
presented in the Nelson Investment Manager Database
and published by Thomson Financial. “World's Best Money
Managers” presents the latest investment performance
results compiled from 6,500 investment products or composites
from over 1,500 investment management firms. All investment
managers who participate in the Nelson Investment Manager
Database and whose performance results meet certain
minimum criteria are eligible. To be precise SIA was
ranked second in the US Tactical Asset Allocation category
for the period ending March 31, 2003. Inclusion in “World's
Best Money Managers” does not imply or guarantee any
degree of investment management ability. The returns
have been calculated net of fees and include the reinvestment
of dividends and income.
2. The article states that Morningstar ranked Schultz
Investment second in domestic growth funds, with an
average annual return of 10.05 percent. This statement
is inaccurate as SIA does not manage “funds.” The term
“funds” implies that SIA manages pooled investment vehicles
that are registered or exempt from registration under
the Investment Company Act of 1940. SIA only manages
“separate accounts” for clients. In addition, to be
precise SIA was ranked second in the Domestic Hybrid
category for the period ending March 30, 2003. The returns
have been calculated net of fees and include the reinvestment
of dividends and income. Morningstar believes that its
renowned star ratings help investors evaluate how a
fund has balanced risk and return, while its style boxes
and investment categories let investors look past the
surface of a fund (or sub-account) to understand a manager’s
true approach. The five-star ratings provided to SIA
by Morningstar for its strategies reflect Morningstar’s
independent determination and do not imply or guarantee
any degree of investment management ability.
3. The article states that USA Today rated Schultz’s
mid-cap growth fund its top performer in the nation
with a 17 percent return from September 1999 through
September 2002. This statement is inaccurate as SIA
does not manage “funds.” The term “funds” implies that
SIA manages pooled investment vehicles that are registered
or exempt from registration under the Investment Company
Act of 1940. SIA only manages “separate accounts” for
clients. In addition, to be precise SIA’s mid cap growth
strategy was ranked first in the separate accounts that
have the best three-year performance among those with
minimum investments of $100,000 or less for the period
September 30, 2002. The returns have been calculated
net of fees and include the reinvestment of dividends
and income.
4. The article states that SIA has garnered top ranking
worldwide for its three-year average return on investments.
While SIA deems Morningstar, Nelson’s Investment Manager
Database, and USA Today to be bona fide, independent,
and reputable sources, they do not constitute any measure
of “worldwide” ranking. It is SIA’s belief that no such
ranking mechanism exists.
5. To provide a complete representation of SIA’s performance
history, please find within this packet a copy of the
current composite returns and disclosures for each of
SIA’s composites referenced in the article as audited
by Ashland Partners. Past performance is not indicative
of future results. Investments in closed-end funds incur
risks that may be greater than investments in other
types of securities. Inherent in any investment is the
risk of loss, including the loss of principal.
B. USA Today Reprint: The enclosed article from USA
Today is a reprint of an article published on December
13, 2002. While inherently accurate, certain statements
appearing in the article require clarification.
1. The article states that SIA’s top-performing stock
account is up 59% the past three years. This statement
is inaccurate as SIA does not manage “stock accounts.”
The term “stock” implies that SIA manages individual
equities. SIA only manages portfolios of closed-end
funds for clients. In addition, the 59% return attributed
to SIA’s top-performing account is not representative
of the performance of the majority of SIA’s accounts
over the three-year period discussed in the article.
The returns have been calculated net of fees and include
the reinvestment of dividends and income. Prospective
clients should also be aware that double-digit returns
are generally unsustainable. The returns have been calculated
net of fees and include the reinvestment of dividends
and income. To provide a complete representation of
SIA’s performance history, please find attached a copy
of the current composite returns and disclosures for
the SIA as audited by Ashland Partners. Past performance
is not indicative of future results. Investments in
closed-end funds incur risks that may be greater than
investments in other types of securities. Inherent in
any investment is the risk of loss, including the loss
of principal.
2. The article ranks SIA first in top performing funds
over three years, with an average annual return of 17
percent. This statement is inaccurate as SIA does not
manage “funds.” The term “funds” implies that SIA manages
pooled investment vehicles that are registered or exempt
from registration under the Investment Company Act of
1940. SIA only manages “separate accounts” for clients.
C. SIA provides to prospective clients excerpts from
Morningstar Principia for Separate Accounts and PSN
Enterprise. While these entities publish performance
data as both gross and net of fees, it should be noted
that SIA only presents its performance data NET of all
management fees. Where numbers are presented by these
entities as “Gross” of management fees, SIA’s numbers
are presented as Net of fees.
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