Clark Capital Management Group

1. Clark Capital Management Group Sean Clark, CFA Chief Investment Officer Clark Capital Management Group

2. About Clark Capital • Philadelphia Based RIA • $2.0 Billion in AUM • Family and Employee Owned • Institutional Asset Management Firm • 11 Investment Professionals • 5 CFAs on Staff • Average 20+ Years Experience

3. Modern Portfolio Theory Dr. Harry Markowiz published “Portfolio Selection: The Efficient Diversification of Investments” in the Journal of Finance in 1952. Markowtiz postulated that an “efficient frontier” shows that securities can be blended within portfolios to minimize risk at various levels of (expected) return. Based upon 3 assumptions: Normally distributed variability of returns (Normal Distribution) Markets follow a random walk pattern Diversification can be properly quantified by correlation

4. Problems with Efficient Frontier • Efficient Frontier Is Based upon Historical Inputs That Are by Definition Not Stable: • Returns Change • Standard Deviations (risk) Change • Correlation Change • You Need Stable Inputs to Create A Future Efficient Frontier to Manage Risk!

5. “Any plan conceived in moderation, must fail when circumstances are set in extremes.” Prince Metternick

6. Commute-Time Model Based on Normal (Bell Shaped) Distribution 90 80 70 60 50 40 30 Commute Time Minutes Example for illustrative purposes only. The presenter did not track commute times.

7. 909 Commutesfrom 1/1/2006 to 12/31/2009 Nice Weather Model Works Theoretical (Normal Distribution) Actual Experience Frequency Snow Model breaks down Commute Time Example for illustrative purposes only. The presenter did not track commute times.

8. S&P 500 Tail Risk

9. Snow for Asset Classes Monthly Returns for Asset Classes 1/98 to 3/09 Source: PSN/Informa Investment Solutions

10. Snow for Asset Classes Monthly Returns for Asset Classes 1/98 to 3/09 Source: PSN/Informa Investment Solutions

11. Snow Today/Snow Tomorrow S&P 500 Index 1/98 to 12/09 Serial Correlation Monthly Return (Snow Today) Snow Today Snow Tomorrow Monthly Return + Next Month (Snow Tomorrow) Source: PSN/Informa Investment Solutions

12. Snow Today/Snow Tomorrow Negative Annual S&P Returns Source: PSN/Informa Investment Solutions

13. The Frequency of Market Declines Source: Ned Davis Research, Inc – The Anatomy of Standard & Poor’s 500 Stock Index Declines 1/03/1928 to 6/29/2005

14. Normal vs. Extreme Conditions Source: PSN/Informa Investment Solutions

15. Normal vs. Extreme Conditions Percentage Increase in Correlation 1/1998 to 10/2007 compared to 10/2007 to 3/2009 Source: PSN/Informa Investment Solutions

16. Correlation of the S&P 500 vs. Other Asset Classes Past performance is not a guarantee of future results. Source: Ned Davis Research

17. Modern Portfolio Theory’sCruel Joke “Any plan conceived in moderation, must fail when circumstances are set in extremes.” Prince Metternick

18. What Is Your Plan?

19. Investment Philosophy Provide Superior Risk Adjusted Returns through a Disciplined Process Focused on Meaningful Diversification, Risk Management and Opportunistic Asset Allocation.

20. Traditional Risk Management Tools • Fixed Income • Alternative Asset Classes • Tactical Management (forecasting)

21. Innovative Risk Management Tools • Meaningful Diversification • Significant alternative asset class exposure through target allocations to specific commodities, currencies, precious metals and hedge strategies. • Opportunistic Core & Explore Asset Allocation • Core allocation for targeted beta exposure complimented by Explore allocations for targeted alpha opportunities. • Navigator Sentry Option • Innovative institutional-level strategy for portfolio protection that utilizes put options in an effort to prevent considerable portfolio losses due to severe market setbacks.

22. Expanding the Efficient Frontier with Alternative Asset Classes Alternative Asset Classes serve as a powerful diversification agents in a portfolio and tend to result in lower portfolio volatility and improved risk-adjusted returns.

23. Meaningful Diversification through Alternative Asset Classes Targeted Alternative Exposure • Commodities • Currencies • Real Estate • Hedge/Absolute Return Strategies • Long/Short Opportunities • Inverse Strategies • Equity and Fixed Income Special Opportunities • Sentry Strategy

24. Innovative Risk Management Tools • Meaningful Diversification • Significant alternative asset class exposure through target allocations to specific commodities, currencies, precious metals and hedge strategies. • Opportunistic Core & Explore Asset Allocation • Core allocation for targeted beta exposure complimented by Explore allocations for targeted alpha opportunities. • Navigator Sentry Option • Innovative institutional-level strategy for portfolio protection that utilizes put options in an effort to prevent considerable portfolio losses due to severe market setbacks.

25. Core & Explore

26. What Is Core Structure? • Goal to Provide Stability in The Portfolio (Beta Exposure) • Utilizes: • Institutional Separate Account Managers • Institutional Mutual Funds • Exchange Traded Funds • Customization • Active Core • Passive Core

27. What Is Explore Structure? • Goal to Provide Alpha - Excess Return • Consists of ETFs • Style ETFs – value/growth, small/mid/large cap • Sector ETFs – Energy, financials, healthcare, technology, etc • International ETFs – Europe, Asia, Latin America • Fixed income – US, international, municipal tax free, government securities, high yield, etc. • Alternative – commodities, real estate, currencies, options, hedge funds Explore Allocations

28. Why Explore Structure? • Dynamic Quantitative Disciplined Process • Major Emphasis on Proven Relative Strength Methodology • Unemotional • Actively Managed Strategy • Flexibility is the key to Alpha • Market Direction Does Not Matter • Avoid Areas of Disaster • Financials, Home Builders, etc..

29. Navigator Unified SolutionExplore Components Net of Fees. As of 12/31/2009 Navigator Unified Solutions results combine actual and hypothetical and do not represent individual client accounts. See important disclosure at the end of presentation.

30. Why Core and Explore? • Multiple Methodologies to Work through All Market Environments • Flexibility • Built in Opportunistic Allocations • Tax-Aware Structure • Lower Tracking Error Possibility • Less Unexpected Consequences

31. How They Work Together

32. Innovative Risk Management Tools • Meaningful Diversification • Significant alternative asset class exposure through target allocations to specific commodities, currencies, precious metals and hedge strategies. • Opportunistic Core & Explore Asset Allocation • Core allocation for targeted beta exposure complimented by Explore allocations for targeted alpha opportunities. • Navigator Sentry Option • Innovative institutional-level strategy for portfolio protection that utilizes put options in an effort to prevent considerable portfolio losses due to severe market setbacks.

33. Protective Put Hedge Strategy Down Market Up Market S&P 500 Put Option S&P 500 Put Option S&P 500 S&P 500 Consistent Negative Correlation

34. Protective Put Strategy

35. Navigator Sentry Objectives • Reduce equity volatility • Prevent large portfolio losses through systematic portfolio put option protection • Provide consistent negative correlation in all market environments • Provide systematic risk management without forecasting or market timing influence • Provide confidence in the expected outcome in all market environments • Provide continuous protection from event driven declines (i.e. natural disaster, terrorist attacks)

36. Navigator Sentry Implementation • S&P 500 index puts • 9 to 18 months in duration • 5 to 10% out of the money • Consistently applied to cover 100% of equity exposure in a portfolio • Targeting 3 to 7% allocation over market cycle

37. Sentry Put Trades

38. Level 5 with Sentry vs. 60/40 Composite Active Core Portfolios. Net of Fees. As of 3/31/2010 What’s the cost of 40% in Bonds compared to 10% in Sentry? Navigator Unified Solutions results combine actual and hypothetical and do not represent individual client accounts. See important disclosure at the end of presentation. *Inception Date 10/1/2000.

39. Navigator Unified SolutionPortfolio Performance Composite Active Core Portfolios. Net of Fees. As of 12/31/2009 Navigator Unified Solutions results combine actual and hypothetical and do not represent individual client accounts. See important disclosure at the end of presentation. *Inception Date 10/1/2000.

40. Navigator Unified SolutionPortfolio Performance Composite Active Core Portfolios. Net of Fees. As of 3/31/2010 Navigator Unified Solutions results combine actual and hypothetical and do not represent individual client accounts. See important disclosure at the end of presentation. *Inception Date 10/1/2000.

41. Navigator Unified SolutionPortfolio Performance Composite Active Core Portfolios. Net of Fees. As of 3/31/2010 Navigator Unified Solutions results combine actual and hypothetical and do not represent individual client accounts. See important disclosure at the end of presentation. *Inception Date 10/1/2000.

42. Navigator Unified SolutionPortfolio Performance Composite Active Core Portfolios. Net of Fees. As of 3/31/2010 Navigator Unified Solutions results combine actual and hypothetical and do not represent individual client accounts. See important disclosure at the end of presentation. *Inception Date 10/1/2000.

43. Winning by Not Losing 10/9/2007 to 3/31/2010 Navigator Unified Solutions results combine actual and hypothetical and do not represent individual client accounts. See important disclosure at the end of presentation. Net of fees. Actual Performance results. See important disclosures at end of presentation. Source: Morningstar for Funds. See Disclosure for CCMG Portfolios

44. Navigator Unified SolutionsAccumulation Phase Composite Active Core Portfolios. Net of Fees. As of 3/31/2010 Navigator Unified Solutions results combine actual and hypothetical and do not represent individual client accounts. See important disclosure at the end of presentation. *Inception Date 10/1/2000.

45. Navigator Unified SolutionsDistribution Phase Composite Active Core Portfolios. Net of Fees. As of 3/31/2010 $535,755 Withdrawn $330,573 Withdrawn Navigator Unified Solutions results combine actual and hypothetical and do not represent individual client accounts. See important disclosure at the end of presentation. *Inception Date 10/1/2000.

46. Prospect Questions What are you or your current advisor doing to manage risk? How has that worked for you?

47. What Are Clients Thinking? How can you help me prevent this from happening again? How can I recapture some of these losses without taking the full risk of equity exposure?

48. What Are Advisors Thinking? How can I get my clients/ prospects off the sidelines? How can I protect my revenue stream against future market downturns?

49. Disclosure The performance for the above Navigator Unified Solution Portfolios combines actual composite results with hypothetical results as described below. Actual Navigator Unified Solutions Portfolio performance is calculated using an asset weighted average performance of all actual, fully discretionary accounts under management within a specified Level, including those accounts no longer with the firm. All dividends and interest income is re-invested. Within the specified Level, account performance is calculated according to industry standards using the daily valuation methodology. A complete list and description of assets comprising the composites will be furnished upon request. The hypothetical performance was calculated by compiling the actual performance of a static group of sub-advisors, mutual funds, and exchange traded funds in a target allocation for the period of 10/1/2000 through the below inception dates. Portfolio allocations were rebalanced annually to target allocation. In certain cases the advisor’s performance is both model and hypothetical. The time period commencing 10/01/00 has been selected by Clark Capital in its sole discretion as it is the earliest common date that data is available for the sub-advisors, mutual funds, exchange traded funds and which coincides with the advisor’s models. Performance results will vary for other periods. The inception dates of Navigator Unified Portfolios Portfolio composites are as follows: 10/1/07 - Level III, Level III with Sentry, Level IV, Level IV with Sentry, and Level V; 12/31/07 - Level II and Level V with Sentry; 4/1/08 - Level I ; 7/1/08 - Level II Sentry Hypothetical results do not represent actual trading in client accounts nor do they reflect client-specific activities such as contributions, withdrawals or restrictions. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, such results may not reflect the impact that material economic and market factors might have had if accounts had actually been managed by Clark Capital during the entire period portrayed. Neither past actual nor hypothetical performance guarantees future results. Clients should not rely solely on this performance or any other performance illustrations when making investment decisions. The Sentry Strategy allocation cannot guarantee against market loss, but has the potential to limit risk. It is possible that your investment, when redeemed, may be less than the original amount invested. Actual client results may differ materially. S&P 500 index performance was obtained from Bloomberg. It is not possible to make a direct investment in any particular index. Index returns do not reflect any fee deductions and include the re-investment of dividends. The S&P 500 is an unmanaged market capitalization weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance. It represents approximately 75% of the U.S. equities market. Performance data for the portfolios reflect the maximum Investment Advisory Fee from the below table and the maximum Referring Investment Consultant Fee of 1.25%, debited quarterly. Actual client fees may be lower than fees used in this presentation. All dividends and interest income is re-invested. The Referring Investment Consultant can charge between 0% and 1.25%. If a lower Referring Investment Consultant Fee were reflected in the performance data, returns would be higher. Actual fees also may differ from the fees used in this presentation depending upon account size, investments and agreement with client. See Clark Capital’s Schedule H for Navigator Unified Solutions for a full description of management fees. See Clark Capital's ADV Schedule H for additional information about management fees.