Target Manager Allocation: 20%

Size of Company: All sizes, but mostly large- and mid-sized

Stock-Picking Style: Value

McGregor employs Harris' value investment philosophy and process. This investment philosophy is based upon the belief that, over time, a company's stock price converges with the company's intrinsic or true business value. By "true business value," Harris means an estimate of the price a knowledgeable buyer would pay to acquire the entire business. In making its investment decisions, Harris uses a "bottom-up" approach focused on individual companies, rather than focusing on specific economic factors or specific industries.

The chief consideration in the selection of stocks is the size of the discount of a company's stock price compared to the company's perceived true business value. In addition, Harris looks for companies with the following characteristics, although not all companies will have all of these attributes: free cash flows and intelligent investment of excess cash, earnings that are growing and are reasonably predictable, and a high level of management ownership in the company. Once Harris determines that a stock is selling at a significant discount and that the company has some of the aforementioned attributes, Harris generally will consider buying that stock for a strategy. Harris usually sells a stock when the price approaches its estimated worth. This means Harris sets specific "buy" and "sell" targets for each stock held in its clients' discretionary accounts. Harris also monitors each holding and adjusts those price targets as warranted to reflect changes in a company's fundamentals. Harris attempts to manage some of the risks of investing in stocks of companies by purchasing stocks whose prices it considers low relative to the companies' intrinsic value. In addition, Harris seeks companies with solid finances and proven records and continuously monitors each portfolio holding. Manager bio.

Target Manager Allocation: 10%

Size of Company: All sizes, but mostly small and mid-sized companies

Stock-Picking Style: Growth

D'Alonzo invests in stocks of well-financed issuers that have proven records of profitability and strong earnings momentum. Emphasis is placed on companies with market capitalization of less than $5 billion. These companies are likely to be lesser-known companies moving from a lower to higher market share position within their industry groups, rather than the largest and best-known companies in these groups.

D'Alonzo may, however, purchase common stocks of well-known, highly researched mid- and large-sized companies if his team believes that their common stocks offer particular opportunity for long-term capital growth.

In selecting investments, D'Alonzo considers financial characteristics of an issuer, including historical sales and net income, debt/equity and price/earnings ratios, and book value. D'Alonzo may also review research reports of broker-dealers and trade publications and, in appropriate situations, meet with management. Greater weight is given to internal factors, such as product or service development, than to external factors, such as interest rate changes, commodity price fluctuations, general stock market trends, and foreign-currency exchange values. A particular issuer's dividend history is not considered important.Manager bio.

Christopher Davis

Kenneth Feinberg

Target Manager Allocation: 20%

Size of Company: Mostly large companies

Stock-Picking Style: Blend

Davis Advisors manages equity funds using the "Davis Investment Discipline." Davis Advisors conducts extensive research to try to identify businesses that possess characteristics it believes foster the creation of long-term value, such as proven management, a durable franchise and business model, and sustainable competitive advantages. Davis Advisors aims to invest in such businesses when they are trading at a discount to their intrinsic worth. Davis Advisors emphasizes individual stock selection and believes that the ability to evaluate management is critical. Davis Advisors routinely visits management teams at their places of business in order to gain insight into the relative value of different businesses. Such research, however rigorous, involves predictions and forecasts that are inherently uncertain.

Over the years, Davis Advisors has developed a list of characteristics that it believes help companies to create shareholder value over the long term and manage risk. While few companies possess all of these characteristics at any given time, Davis Advisors searches for companies that demonstrate a majority or an appropriate mix of the following characteristics: first-class management (proven track record, significant alignment of interests in business, intelligent allocation of capital); strong financial condition and satisfactory profitability (strong balance sheet, low cost structure, high returns on capital); and strong competitive positioning (non-obsolescent products/services, dominant or growing market share, global presence and brand names).

After determining which companies it wishes to invest in, Davis Advisors then turns its analysis to determining the intrinsic value of those companies' common stocks. Davis Advisors seeks common stocks that can be purchased at attractive valuations relative to their intrinsic value. Davis Advisors' goal is to invest in companies for the long term. Davis Advisors considers selling a company if it believes the stock's market price exceeds the Advisor's estimates of intrinsic value, or if the ratio of the risks and rewards of continuing to invest in the company is no longer attractive. Manager bio.

Target Manager Allocation: 20%

Size of Company: All sizes, but mostly large- and mid-sized

Stock-Picking Style: Value and global; may invest up to 50% in foreign securities

Southeastern focuses on securities of companies believed to have unrecognized intrinsic value and the potential to grow their economic worth. Southeastern believes that superior long-term performance can be achieved when positions in financially strong, well-managed companies are acquired at prices significantly below their business value and are sold when they approach their corporate worth. Corporate intrinsic value is determined through careful securities analysis and the use of established disciplines consistently applied over long periods of time. Securities that can be identified and purchased at a price significantly discounted from their intrinsic worth not only protect investment capital from significant loss but also facilitate major rewards when the true business value is ultimately recognized. Seeking the largest margin of safety possible, Southeastern requires at least a 40% market value discount from its appraisal of an issuer's intrinsic value before purchasing a security.

To determine intrinsic value, current publicly available financial statements are carefully scrutinized, and two primary methods of appraisal are applied. The first assesses what Hawkins believes to be the real economic value of an issuer's net assets; the second examines an issuer's ability to generate free cash flow after required or maintenance capital expenditures. After free cash flow is determined, conservative projections about its rate of future growth are made. The present value of that stream of cash flow plus its terminal value are then calculated using a discount rate based on expected interest rates. If the calculations are accurate, the present value would be the price at which buyers and sellers negotiating at arm's length would accept for the whole company. In a concluding analysis, the asset value determination and/or the discounted free cash flow value are compared with business transactions of comparable corporations. Other considerations used in selecting potential investments include indications of shareholder-oriented management, evidence of financial strength, and potential earnings improvement.Manager bio.

Target Manager Allocation: 10%

Size of Company: All sizes, but mostly small and mid-sized companies

Stock-Picking Style: Blend

Weiss invests in stocks of small- and mid-sized companies that are undervalued either because they are not broadly recognized, are in transition, or are out of favor based on short-term factors. Weiss also has the flexibility to invest in the stocks of larger companies if in his opinion they offer the potential for better returns. In seeking attractively valued companies, Weiss focuses on companies with above-average growth potential that also exhibit some or all of the following: low institutional investor ownership and low analyst coverage, high-quality management, sustainable competitive advantage.

Weiss evaluates the degree of undervaluation relative to his estimate of each company's private market value. This private market value approach is based on an assessment of what a private buyer would be willing to pay for the future cash flow stream of the target company. Based on his experience, Weiss believes that, except for technology and other high-growth stocks, most stocks trade at between 50% and 80% of the private market value. When trading at the low end of this range, companies take steps to prevent takeover, or they are taken over. The private market value estimate is applied flexibly, based on the outlook for the industry and the company's fundamentals. Manager bio.

Frank Sands Jr.

Michael Sramek

Target Manager Allocation: 10%

Size of Company: All sizes, but mostly large- and mid-sized

Stock-Picking Style: Growth

The team believes that over longer periods of time, stock prices track earnings growth. The investment objective is to identify companies that can sustain above-average earnings growth relative to the broader market, typically over the next three to five years. The team believes great investment ideas are rare and runs a concentrated portfolio of high-quality, seasoned, growing businesses across an array of attractive and growing business spaces. Grassroots research—bottom-up and company focused—is the cornerstone of the team's investment process. All research analyses and conclusions are internally generated using a variety of internal and external data sources.

The team seeks to identify the potential leaders in attractive business spaces. To identify such companies, the team evaluates six key factors:

• Sustainable above-average earnings growth. The goal is to identify the key drivers of revenue and earnings growth that will allow a company to grow faster than the broad market for at least the next several years. The team generally invests in companies that have at least 15% to 16% annualized growth.
• Leadership position in a promising business space. The team looks for companies with large and preferably growing market share. These companies typically achieve greater profitability than their peers.
• Significant competitive advantage/unique business franchise. The team looks for companies with pricing power and significant barriers to entry. Simply put, the team seeks to identify companies with moats to protect the business franchise.
• Clear mission and value-added focus. The team examines management's historical ability to execute business plans and evaluate customer feedback. The team prefers companies with an independent board of directors, a low percentage of stock options going to top management, the CEO's salary aligned with shareholders' interests (not excessive), and conservative accounting practices.
• Financial strength. The team prefers companies with little or no debt, prudent use of leverage and rising levels of cash. The team frequently expects to see increasing return on invested capital over the period of time Sands Capital invests in a business.
• Rational valuation relative to market and business prospects. While the team focuses its work on the business aspect of potential portfolio companies, it also pays attention to valuation. When adding new companies to the portfolio, the team is willing to pay a rational price, often a perceived premium. Over time the team tends to ignore short-term stock price movements and rarely, if ever, sells an investment in a company based on valuation alone.

To determine whether a company meets these criteria, one or more members of the team build the investment case. The investment case includes a proprietary detailed earnings model, an explanation as to exactly how the company meets the six criteria listed above, the key metrics by which the company can be measured, the outstanding/unresolved issues relating to the company, and the hypothetical sell case for the company. This information is shared with the rest of the team, and a vetting process ensues. The vetting process can last from several weeks to several months, during which additional questions are asked and answered, and additional information is gathered. After all outstanding issues are resolved, and with significant input from the team, the final investment decision is made.  Manager bio.

Robert Turner

Frank Sustersic

Jason Schrotberger

Target Manager Allocation: 10%

Size of Company: All sizes

Stock-Picking Style: Growth

Turner Investments takes a team approach to investment management. Each member of the U.S. Growth Equity Investment Team at Turner Investments has responsibility for the analysis of and purchase/sale recommendations for stocks within a specific market sector. Some team members have additional responsibility as lead or back-up managers for Turner Investments' various equity strategies (e.g., small-cap growth, mid-cap growth, large-cap growth). Turner Investments believes the best investment decisions result from informed collaboration between the senior portfolio manager and a team of experienced analysts. Analysts are expected to be experts in their sectors, and portfolio managers are relied upon to implement Turner Investments' investment discipline for their particular strategy.

Turner Investments' investment philosophy is that earnings expectations drive stock prices. Turner Investments seeks to invest in companies whose growth is accelerating faster than the market consensus expects, and seeks to avoid companies whose growth is slowing down. Turner Investments applies the same investment process to all of its equity portfolios, which combines quantitative, fundamental, and technical analysis. Turner Investments' proprietary quantitative model ranks companies by sector and market capitalization based on numerous factors that Turner Investments has determined to have the best predictive value in terms of future performance. Turner Investments' portfolio managers and sector analysts focus on the screen's top-ranked companies (or companies moving up in the screen) in each sector for their fundamental research. Fundamental analysis centers on identifying companies with accelerating revenue and earnings growth, large potential market opportunity, and expanding margins, among other growth characteristics that will lead to better-than-expected earnings. This process can involve meeting with company management, talking to industry experts and competitors, and attending trade shows/conferences in an effort to anticipate changes in the outlook for corporate earnings. Once a stock is targeted for purchase (or sale in the case of a current holding), technical analysis is used to identify attractive entry (or exit) price points, although Turner Investments may sell quickly if a company misses earnings. Valuations are not a critical element of the buy or sell decision.

A current holding becomes a candidate for sale based upon evaluation of Turner Investments' three elements of investment criteria: model ranking, fundamental analysis, and technical analysis. If any one of these three elements turns negative, Turner Investments carefully evaluates the fundamentals. Sell candidates are reviewed jointly by portfolio managers and sector analysts. However, the lead portfolio manager has final decision-making authority. Manager bio.