pamria pacific asset fall 2011 client portfolio selection

Pacific Asset Management

Pacific Asset Management Pamria

Overview

Shawn A. Mesaros, Principal

Pacific Asset Management, LLC

Two Union Square

601 Union Street, Suite #4200

Seattle, WA 98101

(206 933-1600 Voice(206) 600-3175 Fax(877) 637-2767 Toll Free182-2156-3221

182-2156-3221


Table of Contents

Section 1 Partnership

Section 2 Relationship Overview

Section 3 Pre-IPO or M&A and Estate Planning Considerations

Section 4 Our Approach to Investing


Section 1

Partnership


Mission, Value Proposition, Capabilities

Value Proposition

Leveraging PAMRIA’s global resources and our team’s network, we are uniquely positioned to

provide your Family more sophisticated and precise investment advice. We focus our education,

training and experience on select clients so we can develop intimate and comprehensive

understanding of your needs, goals and overall relationship expectations.

Mission Statement

We seek to be the Strategic Chief Investment Officer for families and select institutions with

significant financial resources. For those unique families and individuals, we commit to provide

highly customized advice and investment solutions with a standard-setting level of service and

investment expertise.

Capabilities

Financial Advice for Complex Situations Direct Core Asset Management

Asset Allocation & Risk Management Access to Third Party Specialty Managers

Proprietary Investment Ideas Alternative Investment Consulting & Access

On-Line Access Institutional access to Pacific Asset Management

When we design a wealth management, investment and lifestyle management solution that helps families achieve what’s important to them-- safety, simplicity, security and support-- we believe that’s

the basis for working together in partnership.

Mission Statement:

To become the “Strategic Investment Officer” for our clients, providing highly customized advice and investment solutions with a standard-setting level of service and investment expertise.


Partnership at a Glance

• Multiple Professionals: Investment Advisors, Client Representatives, Local Analysts,

and Full-time Trading Capability

• Pacific Northwest Based Team

• Focus on Providing Asset Management and Investment Advisory Services

• Tax-Efficient Equity and Fixed Income Portfolio Management

• Extensive Pacific Asset Management Relationships:

– Research: Equity, Fixed Income, Foreign Exchange and Global Economics/Strategy

– Investment Banking and Alternative Investment Groups e.g. MSREF

– Sales & Trading: Equity, Fixed Income, Derivatives, etc.

• Extensive External Relationships:

– Entrepreneurs and Family Business Owners

– Hedge Fund and Traditional Investment Managers

– Securities Research (Multiple Sources)

– Private Equity Investors and Venture Capitalists

• Other Pacific Asset Management Resources Employed

– Tax and Estate Planning Group

– Global Asset Allocation Team

Mission Statement:


Dual Shore USA and Asia Pacific Advisory Services


Section 2

Relationship Overview

Pacific Asset Management Relationship Overview

Client Experience

• Optimize risk/reward trade-off

• Tailor asset allocation

• Diversification strategy

• Optimize global Risk adjusted returns

• Risk tolerance and investment experience

• Cash flow needs

• Tax & estate planning needs

• Performance objectives

• Time horizon

• Real assets

• Financial assets

• Liquid assets

• Liabilities

• Unrealized gains

• Concentrated/ restricted positions

• Investment manager selection

• Opportunistic investment

• Allocation of funds

• Custody

• Tracking and reporting

• Performance attribution

• Portfolio rebalancing

• On-going review of objectives and strategies

• Altered client circumstances

• Altered financial market conditions

• Strategic and tactical adjustments

Understand

your

Balance Sheet

Determine

Investment

Parameters

Define

Investment

Strategy

Implement

Investment

Allocation

Performance

Measurement

Continuous

Monitoring

& Adjustment

These materials are solely informational, based upon publicly available information believed to be reliable, and may change without notice. Pacific Asset Management shall not in any way beliable for claims relating to them, and makes no express or implied representations or warranties as to their accuracy or completeness or for statements or errors contained in, or omissions

from, them. Legal, accounting and tax restrictions, transaction costs and changes to any assumptions may significantly affect the economics of any transaction. The information and analysescontained herein are not intended as tax, legal or investment advice and may not be suitable for your specific circumstances; accordingly, you should consult your own tax, legal, investmentor other advisors, at both the outset of any transaction and on an ongoing basis, to determine such suitability. Any investment returns, past, hypothetical or otherwise, are not indicative offuture performance. These materials do not constitute an offer to buy or sell any financial instrument or participate in any trading strategy.

© Pacific Asset Management & Co. Incorporated

Our team will provide seamless integration and delivery of a

comprehensive Wealth Management Service.

• Our focus includes:

– Institutional level of insight,

access and service

– Highly tailored solutions to

complex situations

– Trust and Estate Planning

– Dynamic oversight,

monitoring and reporting

– Complete confidentiality

Pacific Asset Management Relationship Overview

Ongoing Client Experience

• Pamria has set the standard

for ongoing personal service.

• Beyond frequent meetings

with clients to discuss

performance, market

developments and stay

abreast of any changes in

personal or financial

circumstances, our client

coverage teams provide a

broad range of

administrative and other

services to help meet our

clients’ wealth management

needs.

Outsourced Family

Office Services (2)

Administrative services (e.g., bookkeeping, bill payment, tax return preparation)

Basic lifestyle management and concierge services (e.g., travel planning)

Provide referrals for outsourced advisory services (e.g., attorneys, family governance counseling)

Setting up a new family office (e.g., consulting help)

Trust Services Recommendations of trustees in connection with trust and estate planning, including Pacific Asset

Management Trust Company and third party providers

Trust tax preparation, record-keeping, check disbursements

Access to Estate Planning Services Group for functional, objective expertise

Custody Services SIPC and excess SIPC protection (1)

Securities safekeeping and client protection

Collection of income—interest and dividends

Fund wires and transfers

Gifts and distribution of cash or securities

Foreign exchange services

Short-term investments for cash reserves

Internet Access Online account access via ClientLink web application

Access to research reports, video broadcasts and other resources

Aggregate portfolio information and account details (updated daily)

Ability to export account details into Microsoft Excel or Quicken

Reporting Services Comprehensive, customized portfolio statements for certain eligible investors

Timely written confirmation of transactions executed for each account

Comprehensive monthly statement detailing all activity and investment values

Upon request, duplicate statements and/or confirmations sent to designated parties

Dedicated Team Service tailored to each family’s needs

Performance measurement and analysis

Assistance with tactical adjustments to structures or investments to meet changing aspirations

Review of risk parameters and profile

Careful attention to special situations and strategies driven by tax, market and other factors

Notes1. Coverage may change at any time. The asset protection does not protect against losses of value due to market fluctuations. Multiple

accounts with a single beneficiary are treated as a single account for purposes of coverage. Additional information regarding SIPC may be obtained through the SIPC website at www.sipc.org. Excess coverage is provided by Customer Asset Protection Company (CAPCO). Information regarding CAPCO may be obtained through CAPCO’s website at www.capcoexcess.com.

2. Smart will provide contact names and arrange for information sharing with the goal of ensuring seamless representation. This is a referral service only. Smart does not provide any of these services. These services are offered by third parties over which we have no control. Therefore, we take no responsibility for whether the services will be provided in accordance with your needs or expectations. Additionally, we do not receive any compensation from the service providers we may recommend.

Please see important disclosures at the end of this material.

http://www.sipc.org/

http://www.capcoexcess.com/


Section 3

Pre-IPO/M&A Overview

Pacific Asset Management Pre-IPO/M&A Overview

Personal Wealth Management Timeline

• Security Safe Keeping

• Record Keeping

• Insurance

• Splitting/Gifting

• Online Access Via ClientLink

Custody

Services

• Stock Option Exercise

– NQSO

– ISO

• Outright Gifts

– Tax Free

– Taxable

• Leveraged Gifts

– GRAT

– CLAT

– Sale to Grantor Trust

• Control

Tax Issues &

Estate Planning

Restricted Stock

• Regulatory

– Rule 144

– Section 16

• Corporate

– Blackout Period

• Contractual

– Lock Up

• Cleaning/ Processing

• Administrative Support

Risk Analysis &

Solutions

• Type of Risk

– Market

– Industry

– Company Specific

• Sales

– Open Market

– Block

– Private Placement

– Secondary

• Hedging

– Protective Put

– Collar

– Prepaid Forward

• Exchange Fund

Monetization &

Diversification

• Monetization

– Sales

– Margin Loan

– Covered Call

Writing

– Collar Plus Loan

– Prepaid Forward

• Diversification

– Asset Class

– Investment Style

– Implementation Vehicles

Estate Planning

& Tax Issues

• Estate Planning

– Outright Gifts

– Leveraged Gifts

• Philanthropy

– Manner of Gift

· Outright

· Split Interest

– Recipient of Gift

· Public Charity

· Private

Foundation

· Hybrid

• Control

Ongoing Service

& Monitoring

• Performance Measurement & Analysis

– Assistance with asset allocation rebalancing and tactical adjustments to structures or investment

• Technology & Reporting

– Online Access

– ConsolidatedReporting

– Performance Measurement

– Risk Measurement

Post – IPO/M&APre – IPO/M&A

FOCUS FOR

TODAY’S DISCUSSION


Tax/Estate Planning Overview

• Important tax savings

strategies can be

implemented prior to the

IPO/M&A

• While certain contingencies

arising after (or in

connection with) the

transaction may produce

some tax advantages, such

savings may not put the

business owner in the same

position as if the owner acted

prior to the transaction

• Upon exercise, spread is not taxed but treated as an adjustment item for

alternative minimum tax (AMT) purposes, possibly triggering AMT.

• After exercise, if stock is held for one year from the exercise date and two

years from option grant date, all appreciation over the strike price will be

considered capital gain when stock is sold.

• Exercise of an ISO prior to IPO/M&A (assuming price increases) can

minimize or even eliminate AMT exposure and starts executive’s holding

period.

Incentive Stock Options

• Upon exercise, the difference between the fair market value of the stock and

the exercise price (the spread) is taxed as compensation.

• After exercise, all future appreciation in the stock is taxed as capital gain.

• Exercise of an NQSO prior to IPO/M&A can save an executive the difference

between the maximum ordinary income tax rate and the preferential long term

capital gains tax rate on all future appreciation if stock is held longer than one

year at time of sale.

Non-Qualified Stock Options

• A number of tools allow the individual rather than

the state to control his or her person and property

when he or she is unable to do so because of death

or incapacity, e.g., will, revocable living trust,

power of attorney, health care proxy and living

will.

Estate Planning: Gifting

Estate Planning: Leveraged Gifting

Income Tax Planning: Executive Stock Options

Control

Estate Planning: Necessities

• Assets can be sold to a trust for the

benefit of one’s family. The trust can

purchase the property by giving the

donor a note bearing a market interest

rate.

• When the trust terminates, the

property will pass to the

remaindermen of the trust with all

appreciation over the interest rate on

the note, in effect, passing free of

additional gift tax.

Sale to Defective Grantor Trust

• Asset placed in trust with donor

retaining an annuity and making a gift

of the remainder to family members.

• Remainder is valued using an IRS

benchmark rate.

• Upon termination of trust, the



appreciation over the benchmark rate,

in effect, passing free of additional

gift tax.

Grantor Retained Annuity Trust

(GRAT)

• Asset placed in trust with donor

making tax-free gift of an income

interest to a charity and a taxable gift

of the remainder to family.

• Upon termination of trust, the



appreciation over the benchmark rate,

in effect, passing free of additional

gift tax.

Charitable Lead Annuity Trust

(CLAT)

• An individual interested in keeping

control of the gifted property away

from the donee can gift in trust.

• Individuals interested in keeping

control of the assets themselves can

transfer assets to an FLP or LLC and

make gifts of non-controlling

interests outright or in trust.

• Individuals can give property away,

change the title of property or

change the character of property to

possibly protect assets from

creditors.

• In 2007 and 2008, $2.0M (increasing to $3.5M in

2009) can be passed free of estate tax and $1M

can be passed free of gift tax.

Applicable Credit/Exempt Amounts

• Each person can make gifts of a

present interest in property worth

$12,000 per year, per donee, tax free

(married couples can gift $24,000 per

year, per donee).

Annual Exclusion

Asset Protection


Custody Services and Benefits

Security Safe Keeping

• Private/Public stock certificates housed in

Pacific Asset Management’s vault

• Avoid risk of loss and fees/deposits required

to replace certificates

Record Keeping

• Property registered and reported in

shareholder’s name

• Positions included on monthly statements

Insured

• SIPC Insurance protection

• Unlimited coverage through Pacific Asset

Management

Splitting/Gifting

• Process and record all splits

• Handle gifting and other transfers

Prepare Restricted Share Transactions

• Interface with issuer’s counsel to review

proposed transactions and help ensure

compliance with regulatory or contractual

restrictions

Cleaning/Processing

• Work behind scenes with Transfer Agent

and legal counsel

• Clean restricted shares as per SEC

regulations to settle restricted trades

Administrative Support

• Preparation and processing of required

documentation:

–Form 144

–Broker’s Rep letters

–Seller’s Rep letters, etc.

Hedging/Borrow

• Securities must be custodied at Pacific

Asset Management in order to borrow,

pledge, hedge or monetize

Pre-IPO/M&A

Online Access (Client Link)

• Track positions

• Access MS resources

• Transacting in restricted

shares can be a complicated

legal and regulatory process.

• Pamria offers a team of

experienced specialists in

this area to guide you

through this complex and

time consuming procedure.

Post-IPO/M&A


Section 4

Our Approach to Investing

Pacific Asset Management Our Approach to Investing

Our Fundamental Philosophy

Eliminate Debt

Asset “Rich” Families rarely should borrow funds, and instead become lenders. Leverage can be used to

increase the risk/return of an investment, but is not optimally used for tax efficiency, long term liquidity,

or to fund expenses. Leverage provides for short term liquidity, but dramatically increases the chances of

wealth destruction.

Insure Lifestyle with Income Producing Asset

Our experience is that families who have financed their lifestyle with income producing assets (bonds,

income real estate, etc) are able to weather volatility and illiquidity in other investments. By

“segmenting” risk, we are able to create a more efficient risk/return profile. We believe this allocation

should be a dollar allocation as opposed to a percentage allocation, for historically income producing

assets do not outpace inflation, and the returns are meant for consumption.

Invest the Balance of Assets for Growth

With your primary residences and income stream provided for, the balance of your assets should be

invested in growth assets with returns in the form of capital gains. Investors have been compensated

through history for tolerating volatility and illiquidity with superior after-tax compounding returns.

Mission Statement:



Needs Drive Investment Parameters

Level One

Level Two

Level Three

WealthLevel

Time

HigherWealthLevel

LowerWealthLevel

Wealth Seeding Phase Wealth Building Phase Wealth Realization Phase

Basic Needs1. Housing2. Healthcare3. Sustenance

Intermediate Needs1. Education2. Retirement3. Lifestyle enhancement

Advanced Needs1. Philanthropy2. Multiple estates3. Capital intensive pursuits Venture Capital

Absolute Return Investments

Private Equity

Private Real Estate

International Equities

International Fixed Income

Real Estate and REITS

Commodities

Domestic Fixed Income

Domestic Equities

Mutual Funds

Cash Equivalents

Asset ClassesWith Generally Greater Liquidity and Pricing Frequency, and Lesser

Complexity

Asset ClassesWith Generally Lesser Liquidity and Pricing

Frequency, and Greater Complexity

Matching Asset Classes with Wealth Levels and Investor Needs

We believe these two words –

asset allocation - are the most

overused and abused words in

our business. We have four

general statements concerning

asset allocation:

1. The more equity (stocks

and related assets)

exposure you choose, the

more risk you accept and

the more return you should

expect.

2. Emotions will not be your

friend.

3. Long term actions should

produce better results than

short term reactions.

4. There are no investment

short cuts.


Asset Allocation Over Time

U.S. Stocks

60%

U.S. Bonds

30%

Cash

10%

Historical Strategy: Cash, Stocks, and Bonds

%

Traditionally, most U.S. private clients'

portfolios were invested almost

completely in domestic stocks, bonds,

and cash, with an asset mix that

averaged about 60% in stocks, 30% in

bonds, and 10% in cash over time.

U.S. Stocks

30%

EM

Debt

2%

EM

Equity

10%Int'l Debt

(Developed)

5%

Int'l Equity

(Developed)

18%

Private Equity

(VC, LBOs, O&G)

5%

Real Estate

5%

Cash

10%

U.S. Bonds

15%

1980s:

Alternative and International Assets

%

Beginning in the mid- to late 1980s,

some institutional and a smaller

proportion of private client investors

began to shift some assets into venture

capital, real estate, LBOs, oil and gas

investments, and, more recently, into

international and emerging markets

equity and debt.

In the 1990s and after the turn of the

Millennium, institutional and private

client investors have pursued various

market-neutral strategies based on

equities (including warrant and

convertible arbitrage, hedged closed-

end fund strategies, hedged balance

sheet or cross ownership arbitrage,

paired shares arbitrage, synthetic

security arbitrage, and other techniques

involving derivative instruments)

and/or fixed-income securities

(including futures, swap arrangements,

and mispricings of credit risk, yield

curve shape, and embedded and

explicit option features).

U.S. Stocks

26%

Absolute

Return

8%

EM

Debt

2%EM

Equity

10%

Int'l Debt

(Developed)

5%

Int'l Equity

(Developed)

18%

Private Equity

(VC, LBOs,

O&G) 5%

Real

Estate

5%

Cash

9%

U.S. Bonds

12%

1990s and post-2000: Absolute Return Strategy

%

See attached disclaimer

• Understanding investment

alternatives is paramount to

making prudent allocation

decisions

• Different asset classes

present very different

risk/reward characteristics

• Our clients input, in

conjunction with our

investment outlook, ultimate

drives the allocation decision


Open Architecture Approach

Our team’s clients can select from a range of investment vehicles and managers from within or outside of Pacific Asset

Management. The appropriately timed funding of investments is critical and depends on many factors, such as market

environment and tax considerations.

Traditional Investments:

Equity, Cash, Fixed Income

(Fee Based)

Pacific Asset

Management

Third-Party

Separate Account

• Smart Investment

Representative

Managed

• Smart Investment

Group

• Pacific Asset

Management

Investments

• Structured Products

Separate Account

• Investment

Consulting Services

Funds

• Investment

Consulting Services

• Exchange Funds

Opportunistic Strategies:

Representative Ideas

(Brokerage Based)

Equity

Related

Fixed Income

Related

Other

• Research calls

• Underwriting

calendar

• Yield

enhancement

(covered call

writing)

• Exchange

traded funds

• Research calls

• Bond credit

swaps

• Underwriting

calendar

• Leveraged

strategies

• Exchange

traded funds

• Commodities

• Foreign

exchange

• Structured

credit-linked or

equity-linked

notes

“Open Architecture”

Alternative Investments

(Fee Based)

Pacific Asset

Management

Third-Party

Funds

• Private Equity

• Venture Capital

• Real Estate

• Managed Futures

• Commodities

Funds of Funds

• Hedge Funds (AIP)

Funds

• Hedge Funds

• Private Equity

Fund of Funds

• Hedge Funds

• Private Equity

These materials are solely informational, based upon publicly available information believed to be reliable, and may change without notice. Pacific Asset Management shall not in any way beliable for claims relating to them, and makes no express or implied representations or warranties as to their accuracy or completeness or for statements or errors contained in, or omissions

from, them. Legal, accounting and tax restrictions, transaction costs and changes to any assumptions may significantly affect the economics of any transaction. The information and analysescontained herein are not intended as tax, legal or investment advice and may not be suitable for your specific circumstances; accordingly, you should consult your own tax, legal, investmentor other advisors, at both the outset of any transaction and on an ongoing basis, to determine such suitability. Any investment returns, past, hypothetical or otherwise, are not indicative offuture performance. These materials do not constitute an offer to buy or sell any financial instrument or participate in any trading strategy.

© Pacific Asset Management & Co.

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(19.9) (13.1) (12.0) (14.3)

8.8 7.8 6.9 5.9

(60.7) (53.9) (47.1) (40.3) (33.5)(26.7)

11.3 10.7 10.0 9.4 8.8 8.2 5.76.36.97.5

48.146.455.0

146.6 131.4116.1

100.885.6

70.349.7

5.0 4.311.7 10.8 10.4 9.7

(80)

(40)

0

40

80

120

160Worst One-Year Return

Average of One-Year Returns

Best One-Year Return

Median One-Year Return

January 1926–March 2011

Returns Expressed in Percentage Terms

Note: (1) Rolling one-year returns data are calculated using 1011 sample time periods. (2) Indexes used for this analysis include: (i) Stocks: S&P 500 Index Total Return; (ii) Bonds: Ibbotson U.S. Long-Term 20-Year Government Index Total Return; and (iii) Cash: U.S. 30-Day T-Bill Index Total Return. (3) Historical data shown represent past performance and do not guarantee comparable future results. The indexes are unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment. Index returns do not include any expenses, fees or sales charges, which would lower performance.

Source: Morgan Stanley Smith Barney LLC

Portfolio Mix

90%

0%

10%

Stocks

Bonds

Cash

80%

10%

10%

Stocks

Bonds

Cash

70%

20%

10%

Stocks

Bonds

Cash

60%

30%

10%

Stocks

Bonds

Cash

50%

40%

10%

Stocks

Bonds

Cash

40%

50%

10%

Stocks

Bonds

Cash

30%

60%

10%

Stocks

Bonds

Cash

20%

70%

10%

Stocks

Bonds

Cash

10%

80%

10%

Stocks

Bonds

Cash

0%

90%

10%

Stocks

Bonds

Cash

Year Ending March 2011

Worst One-Year Return

Average of One-Year Losses



Average of One-Year Gains


% One-Year Negative Returns

% One-Year Positive Returns

18.8 %

(60.7)

(12.8)

11.3

(53.9)

(11.2)

10.7

73.8

11.7

19.8

146.6

26.2 24.3

74.7

16.2 %

(47.1)

(9.6)

10.8

18.1

131.4

25.3

17.5 %

10.0

10.4

16.3

116.1

15.0 %

(40.3)

(7.9)

9.4

9.7

14.8

100.8

23.7

76.3

13.7 %

(33.5)

(6.4)

8.8

8.8

13.2

85.6

22.5

77.5

12.4 %

75.7

(26.7)

(5.2)

8.2

7.8

11.6

70.3

20.4

79.6

11.1 %

(19.9)

(4.2)

7.5

6.9

10.0

55.0

17.5

82.5

9.8 %

(13.1)

(3.5)

6.9

5.9

8.8

46.4

15.7

84.3

8.5 %

(12.0)

(3.1)

6.3

5.0

8.1

48.1

16.6

83.4

7.2 %

(14.3)

(3.3)

5.7

4.3

7.9

49.7

20.4

79.6

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(15.5) (13.2) (11.5) (9.2) (7.2) (5.2) (3.2) (1.7) (2.1) (2.4)

6.7 6.3 5.8 5.4

22.0 22.4 22.7 23.1

8.2 7.8 7.1 6.4 5.7 5.3 4.7 4.47.27.68.18.19.09.4

22.122.723.926.4

29.532.5

9.39.9

(20)

(10)

0

10

20

30

40

Worst Five-Year Return

Average Five-Year Return

Best Five-Year Return

Median Five-Year Return



Note: (1) Rolling five-year returns data are calculated using 963 sample time periods. (2) Indexes used for this analysis include: (i) Stocks: S&P 500 Index Total Return; (ii) Bonds: Ibbotson U.S. Long-Term 20-Year Government Index Total Return; and (iii) Cash: U.S. 30-Day T-Bill Index Total Return. (3) Historical data shown represent past performance and do not guarantee comparable future results. The indexes are unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment. Index returns do not include any expenses, fees or sales charges, which would lower performance.


Portfolio Mix

90%

0%

10%

Stocks

Bonds

Cash

80%

10%

10%

Stocks

Bonds

Cash

70%

20%

10%

Stocks

Bonds

Cash

60%

30%

10%

Stocks

Bonds

Cash

50%

40%

10%

Stocks

Bonds

Cash

40%

50%

10%

Stocks

Bonds

Cash

30%

60%

10%

Stocks

Bonds

Cash

20%

70%

10%

Stocks

Bonds

Cash

10%

80%

10%

Stocks

Bonds

Cash

0%

90%

10%

Stocks

Bonds

Cash



Average of Five-Year Losses

Average of Five-Year Returns


Average of Five-Year Gains


% Five-Year Negative Returns

% Five-Year Positive Returns

3.4 % 3.7 % 3.8 % 4.4 % 4.7 % 5.0 % 5.3 % 5.6 % 6.0 % 6.3 %

(15.5) (13.2) (11.5) (9.2) (7.2) (5.2) (3.2) (1.7) (2.1) (2.4)

(5.2) (4.8) (4.4) (3.9) (3.2) (1.8) (0.9) (0.7) (0.7) (0.8)

9.4 9.0 8.1 8.1 7.6 7.2 6.7 6.3 5.8 5.4

9.9 9.3 8.2 7.8 7.1 6.4 5.7 5.3 4.7 4.4

11.5 10.6 9.4 9.0 8.3 7.7 7.1 6.4 5.9 5.6

32.5

12.3

26.4

9.0

22.7

6.1

22.0

4.3

87.7

29.5

10.5

89.5 91.0

23.9

7.4

92.6 93.9

22.1

6.0

94.0 95.7

22.4

1.3

98.7

22.7

1.6

98.4

23.1

3.9

96.1

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15.8 15.7 15.6 15.5

(4.4) (3.4) (2.3) (1.3) (0.3)

0.6

10.0 9.5 8.9 8.4 7.9 7.4

19.517.6 17.1 16.7 16.2 15.9

4.24.85.76.87.68.38.9

4.2

9.410.1

(10)

(5)

0

5

10

15

20

25Worst Ten-Year Return

Average Ten-Year Return

Best Ten-Year Return

Median Ten-Year Return



N/A = Not Applicable. For these rolling ten-year time periods during January 1926-March 2011, there were no periods of negative returns.

Note: (1) Rolling ten-year returns data are calculated using 903 sample time periods. (2) Indexes used for this analysis include: (i) Stocks: S&P 500 Index Total Return; (ii) Bonds: Ibbotson U.S. Long-Term 20-Year Government Index Total Return; and (iii) Cash: U.S. 30-Day T-Bill Index Total Return. (3) Historical data shown represent past performance and do not guarantee comparable future results. The indexes are unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment. Index returns do not include any expenses, fees or sales charges, which would lower performance.


Portfolio Mix

90%

0%

10%

Stocks

Bonds

Cash

80%

10%

10%

Stocks

Bonds

Cash

70%

20%

10%

Stocks

Bonds

Cash

60%

30%

10%

Stocks

Bonds

Cash

50%

40%

10%

Stocks

Bonds

Cash

40%

50%

10%

Stocks

Bonds

Cash

30%

60%

10%

Stocks

Bonds

Cash

20%

70%

10%

Stocks

Bonds

Cash

10%

80%

10%

Stocks

Bonds

Cash

0%

90%

10%

Stocks

Bonds

Cash


Worst Ten-Year Return

Average of Ten-Year Losses

Average of Ten-Year Returns


Average of Ten-Year Gains


% Ten-Year Negative Returns

% Ten-Year Positive Returns

3.6 %

(4.4)

(1.4)

10.0

10.1

10.6

19.5

5.2

94.8

3.9 %

(3.4)

(1.2)

9.5

9.4

9.8

17.6

3.4

96.6

4.2 %

(2.3)

(0.7)

8.9

8.9

9.2

17.1

2.3

97.7

4.4 %

(1.3)

(0.6)

8.4

8.3

8.5

16.7

0.9

99.1

4.7 %

(0.3)

(0.3)

7.9

7.6

7.9

16.2

0.2

99.8

5.0 %

0.6

N/A

7.4

6.8

7.4

15.9

0.0

100.0

5.3 %

1.5

N/A

6.9

5.7

6.9

15.8

0.0

100.0

5.6 %

1.6

N/A

6.4

4.8

6.4

15.7

0.0

100.0

5.9 %

1.4

N/A

5.9

4.2

5.9

15.6

0.0

100.0

6.2 %

0.1

N/A

5.4

4.2

5.4

15.5

0.0

100.0

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S&P 500 Index (January 1926 – March 2011)Rolling 1-Year, 5-Year, 10-Year, 20-Year Compounded Annual Growth Rates (%)

Distribution of S&P 500 Index Rolling 3 Year ReturnsS&P 500 Index 3-Year Compound Annual Growth Rate Distribution January 1926 – December 2010

Number of Observations

Note: The indexes are unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment. All returns are total returns in U.S. Dollars. Past performance does not guarantee future results. Index returns do not include any expenses, fees or sales charges, which would lower performance.

Source: Ibbotson Associates, Morgan Stanley Smith Barney LLC. Data as of March 2011.

Note: The indexes are unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment. All returns are total returns in U.S. Dollars. Past performance does not guarantee future

results. Index returns do not include any expenses, fees or sales charges, which would lower performance. The Compound Annual Growth Rate is the year-over-year growth rate of an investment over a specified period of time. Please note no 10-Year CAGR is available for the period after 3Q2001 and 2Q2002.

Source: Ibbotson Associates; Morgan Stanley Smith Barney LLC. Data as of December 2010.

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(60)

(40)

(20)

0

20

40

60Worst One-Year Return

Average One-Year

Return


Median One-Year

Returns



Note: (1) Rolling one-year returns data are calculated using 243 sample time periods. (2) Indexes used for this analysis include: (i) U.S. Stocks: S&P 500 Index Total Return; (ii) Non-U.S. Stocks: MSCI All Country World ex US Index Total Return ($US); (iii) U.S. Bonds: Ibbotson U.S. Long-Term 20-Year Government Index; (iv) Non-U.S. Bonds: JPMorgan Global ex-U.S. Government Bond Index Total Return ($US); and (v) Cash: U.S. 30-Day T-Bill Index Total Return. (3) Historical data shown represent past performance and do not guarantee comparable future results. The indexes are unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment. Index returns do not include any expenses, fees or sales charges, which would lower performance.

Source: Morgan Stanley Smith Barney LLC.

Portfolio Mix

50%

40%

0%

0%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

45%

35%

8%

2%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

40%

30%

17%

3%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

35%

25%

27%

3%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

30%

20%

36%

4%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

25%

15%

45%

5%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

20%

10%

54%

6%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

15%

5%

63%

7%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

6%

4%

72%

8%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

0%

0%

80%

10%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash


Worst One-Year Return

Average of One-Year Losses



Average of One-Year Gains


% One-Year Negative Returns

% One-Year Positive Returns

0.5 %

(42.1)

(15.3)

8.7

12.5

15.7

51.9

22.6

77.4

1.6 %

(36.8)

(13.8)

8.6

11.8

14.4

46.6

20.6

79.4

2.9 %

(31.3)

(11.6)

8.6

11.1

13.5

41.1

19.3

80.7

4.4 %

(25.7)

(9.1)

8.6

10.3

12.6

35.4

18.1

81.9

5.7 %

(20.2)

(6.3)

8.6

9.5

11.9

29.9

17.7

82.3

7.0 %

(14.7)

(4.0)

8.6

9.1

11.0

26.9

15.6

84.4

8.3 %

(9.2)

(3.2)

8.6

8.8

9.9

27.6

9.9

90.1

9.6 %

(5.5)

(2.3)

8.6

8.6

9.7

28.2

8.6

91.4

10.4 %

(7.0)

(3.1)

8.5

8.2

9.6

27.8

8.6

91.4

11.4 %

(10.9)

(4.7)

8.5

8.7

10.0

28.0

10.3

89.7

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7.9 7.9 7.8 7.8

12.9 12.7 12.3 12.2

(4.0)(2.8) (1.7)

(0.6)

0.5 1.6

8.0 7.9 7.97.9 7.9 7.9

20.018.8

17.616.5

15.314.1

8.78.3 7.87.57.37.5

8.09.09.09.1

(10)

(5)

0

5

10

15

20

25

Worst Five-Year Rtn

Average Five-Year Rtn

Best Five-Year Rtn

Median Five-Year Rtn



N/A = Not Applicable. For these rolling five-year time periods during January 1990-March 2011, there were no periods of negative returns.

Note: (1) Rolling five-year returns data are calculated using 195 sample time periods. (2) Indexes used for this analysis include: (i) U.S. Stocks: S&P 500 Index Total Return; (ii) Non-U.S. Stocks: MSCI All Country World ex US Index Total Return ($US); (iii) U.S. Bonds: Ibbotson U.S. Long-Term 20-Year Government Index Total Return; (iv) Non-U.S. Bonds: JPMorgan Global ex-U.S. Government Bond Index Total Return ($US); and (v) Cash: U.S. 30-Day T-Bill Index Total Return. (3) Historical data shown represent past performance and do not guarantee comparable future results. The indexes are unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment. Index returns do not include any expenses, fees or sales charges, which would lower performance.


Portfolio Mix

50%

40%

0%

0%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

45%

35%

8%

2%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

40%

30%

17%

3%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

35%

25%

27%

3%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

30%

20%

36%

4%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

25%

15%

45%

5%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

20%

10%

54%

6%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

15%

5%

63%

7%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

6%

4%

72%

8%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

0%

0%

80%

10%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash



Average of Five-Year Losses

Average of Five-Year Returns


Average of Five-Year Gains


% Five-Year Negative Returns

% Five-Year Positive Returns

1.1 %

(4.0)

(1.2)

8.0

9.1

9.6

20.0

14.9

85.1

1.6 % 2.2 % 2.7 %

(1.7)

(0.9)

7.9

9.0

8.2

17.6

3.3 % 3.8 % 4.4 % 4.9 % 5.5 % 6.1 %

4.0

N/A

4.7

N/A

7.8

7.8

7.8

12.2

0.0

100.0

(2.8)

(1.2)

7.9

9.0

8.5

18.8

6.2

93.8

8.0

16.5

0.5

99.5

(0.6)

(0.6)

7.9

8.7

0.5

N/A

7.9

8.3

7.9

15.3

0.0

100.0

1.6

N/A

7.9

8.0

7.9

14.1

0.0

100.0

2.7

N/A

7.9

7.5

7.9

12.9

0.0

100.0

3.8

N/A

7.9

7.3

7.9

12.7

0.0

100.0

7.8

7.5

7.8

12.3

0.0

100.0

2.6

97.4

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7.5 7.6 7.7 7.7

11.4 11.010.2 9.7

7.7 7.6 7.6 7.7 7.6 7.6 7.6 7.6 7.5 7.5

(1.3) (0.4)

0.41.3

2.2 3.1

6.7 6.8 7.07.1 7.2 7.4

14.1 13.6 13.2 12.7 12.3 11.8

(4)

0

4

8

12

16

Worst Ten-Year Rtn

Average Ten-Year Rtn

Best Ten-Year Rtn

Median Ten-Year Rtn



N/A = Not Applicable. For these rolling ten-year time periods during January 1990-March 2011, there were no periods of negative returns.

Note: (1) Rolling ten-year returns data are calculated using 135 sample time periods. (2) Indexes used for this analysis include: (i) U.S. Stocks: S&P 500 Index Total Return; (ii) Non-U.S. Stocks: MSCI All Country World ex US Index Total Return ($US); (iii) U.S. Bonds: Ibbotson U.S. Long-Term 20-Year Government Index Total Return; (iv) Non-U.S. Bonds: JPMorgan Global ex-U.S. Government Bond Index Total Return ($US); and (v) Cash: U.S. 30-Day T-Bill Index Total Return. (3) Historical data shown represent past performance and do not guarantee comparable future results. The indexes are unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment. Index returns do not include any expenses, fees or sales charges, which would lower performance.


Portfolio Mix

50%

40%

0%

0%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

45%

35%

8%

2%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

40%

30%

17%

3%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

35%

25%

27%

3%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

30%

20%

36%

4%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

25%

15%

45%

5%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

20%

10%

54%

6%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

15%

5%

63%

7%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

6%

4%

72%

8%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash

0%

0%

80%

10%

10%

U.S. Stocks

Non-U.S. Stocks

U.S. Bonds

Non-U.S. Bonds

Cash


Worst Ten-Year Return

Average of Ten-Year Losses

Average of Ten-Year Returns


Average of Ten-Year Gains


% Ten-Year Negative Returns

% Ten-Year Positive Returns

2.0 %

(1.3)

3.9 %

2.2

6.0 %

5.1

(0.8)

6.7

7.7

7.0

14.1

3.0

97.0

2.5 %

(0.4)

(0.3)

6.8

7.6

6.9

13.6

1.5

98.5

3.0 %

0.4

N/A

7.0

7.6

7.0

13.2

0.0

100.0

3.5 %

1.3

N/A

7.1

7.6

7.1

12.7

0.0

100.0

N/A

7.2

7.6

7.2

12.3

0.0

100.0

4.4 %

3.1

N/A

7.4

7.6

7.4

11.8

0.0

100.0

4.9 %

3.9

N/A

7.5

7.6

7.5

11.4

0.0

100.0

5.4 %

4.6

N/A

7.6

7.6

7.6

11.0

0.0

100.0

7.5

7.7

9.7

N/A

7.7

7.5

7.7

6.5 %

5.5

N/A

7.7

0.0

100.0

10.2

0.0

100.0

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20%

40%

60%

80%

100%

1 Month 1 Year 5 Year 10 Year 20 Year

Nominal Real

S&P 500 Frequency of Positive Returns (%)

(1926 – Present)

Source: Standard & Poor’s, Morgan Stanley Smith Barney LLC, Ibbotson Associates. Data as of October 2010.

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10/90 20/80 30/70 40/60 50/50 60/40 70/30 80/20 90/10 10/90 20/80 30/70 40/60 50/50 60/40 70/30 80/20 90/10

Average Annualized Return 6.56% 2.16% 2.79% 2.77% 3.34% 3.87% 4.37% 4.83% 5.25% 5.64% 5.99% 6.30% 3.33% 3.83% 4.30% 4.74% 5.13% 5.50% 5.82% 6.11% 6.35%

Rolling 1 Year

% of Returns > 0% 67.7% 63.7% 65.3% 71.2% 71.5% 70.7% 68.9% 68.0% 67.5% 67.0% 67.6% 67.6% 68.4% 70.0% 69.2% 67.6% 66.8% 66.3% 66.1% 66.6% 67.2%

% of Returns > 3% 61.0% 39.5% 47.7% 45.8% 51.6% 53.4% 55.9% 57.8% 59.0% 59.7% 59.6% 60.2% 53.3% 55.7% 56.2% 56.3% 57.9% 59.5% 59.9% 60.0% 60.1%

% of Returns > 5% 56.6% 29.0% 37.7% 31.3% 35.0% 41.9% 46.8% 50.2% 53.7% 54.5% 55.8% 56.3% 39.3% 44.1% 46.6% 49.0% 51.4% 53.3% 54.9% 56.3% 56.4%

Rolling 3 Year

% of Returns > 0% 73.8% 67.7% 67.1% 77.2% 81.4% 80.6% 77.7% 77.0% 76.2% 76.3% 75.7% 74.4% 70.8% 74.1% 76.0% 75.8% 75.2% 75.4% 75.7% 75.1% 73.9%

% of Returns > 3% 66.3% 41.5% 50.2% 49.0% 53.4% 55.4% 58.9% 61.5% 63.5% 64.3% 65.6% 65.8% 55.2% 58.1% 59.4% 60.2% 61.3% 62.5% 63.2% 63.9% 64.8%

% of Returns > 5% 59.3% 22.8% 33.7% 27.0% 31.0% 38.9% 45.0% 50.2% 52.5% 53.3% 56.2% 57.9% 37.5% 40.9% 45.5% 50.9% 51.4% 54.1% 55.0% 56.2% 57.7%

Rolling 5 Year

% of Returns > 0% 75.7% 71.0% 60.8% 76.4% 77.7% 79.5% 80.8% 81.1% 80.3% 78.6% 77.9% 77.1% 68.4% 74.0% 76.8% 78.7% 81.4% 81.3% 78.7% 77.1% 76.6%

% of Returns > 3% 65.3% 38.3% 45.0% 43.1% 50.8% 55.3% 59.2% 60.6% 61.2% 61.5% 62.3% 63.6% 47.9% 53.7% 57.5% 58.2% 61.2% 61.0% 61.1% 62.6% 63.9%

% of Returns > 5% 57.1% 21.2% 34.5% 24.8% 31.8% 39.1% 44.7% 48.2% 52.1% 54.9% 56.0% 56.7% 35.4% 37.1% 42.8% 46.9% 48.8% 50.7% 53.6% 55.8% 56.9%

Rolling 10 Year

% of Returns > 0% 85.0% 71.4% 61.6% 77.2% 79.9% 83.7% 85.8% 86.7% 86.8% 87.2% 87.2% 86.6% 69.7% 77.6% 82.4% 84.8% 86.5% 87.1% 86.6% 86.6% 86.5%

% of Returns > 3% 74.6% 39.0% 40.2% 39.6% 51.2% 59.2% 65.2% 71.6% 74.7% 75.6% 75.4% 74.9% 42.1% 51.2% 60.0% 66.0% 70.5% 73.0% 75.2% 75.1% 75.1%

% of Returns > 5% 65.7% 17.3% 32.8% 25.6% 31.0% 37.5% 47.1% 50.2% 56.4% 59.3% 62.4% 64.5% 33.4% 35.2% 39.3% 49.8% 54.6% 59.5% 61.4% 61.9% 64.8%

Rolling 20 Year

% of Returns > 0% 100.0% 73.1% 59.7% 85.3% 98.1% 99.4% 99.9% 100.0% 100.0% 100.0% 100.0% 100.0% 80.9% 91.2% 92.4% 95.9% 97.4% 98.7% 99.5% 100.0% 100.0%

% of Returns > 3% 83.3% 28.9% 33.9% 33.1% 37.2% 53.6% 68.0% 77.3% 79.2% 81.7% 83.2% 84.1% 38.6% 41.9% 58.9% 72.9% 76.6% 77.8% 78.9% 81.5% 83.1%

% of Returns > 5% 65.6% 9.9% 19.5% 12.4% 16.9% 22.9% 28.2% 43.9% 56.3% 61.0% 64.2% 65.0% 23.3% 25.6% 26.9% 30.6% 45.1% 59.6% 63.4% 65.1% 65.5%

Source: FactSet, Standard & Poor's, Ibbotson Associates, Morgan Stanley Smith Barney LLC. Data as of October 2010.

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Cash 1.00 0.08 -0.01 0.09 0.16 -0.08 -0.12 0.18 0.23 -0.04 0.04 0.11

USD Investment-Grade Bonds 0.08 1.00 0.08 0.75 -0.07 -0.09 -0.27 0.04 -0.10 0.45 -0.16 -0.18

USD High-Yield Bonds -0.01 0.08 1.00 0.07 0.66 0.52 0.59 0.81 0.62 0.16 0.31 0.05

Non-US Bonds (ccy-hedged to USD) 0.09 0.75 0.07 1.00 0.04 -0.05 -0.15 0.02 -0.03 0.33 -0.33 -0.36

US Large-cap Stocks 0.16 -0.07 0.66 0.04 1.00 0.80 0.64 0.71 0.78 0.14 0.09 -0.08

Developed non-US Stocks -0.08 -0.09 0.52 -0.05 0.80 1.00 0.66 0.64 0.67 0.20 0.28 -0.00

Emerging Market Stocks -0.12 -0.27 0.59 -0.15 0.64 0.66 1.00 0.62 0.70 0.20 0.23 0.02

Relative Value & Event Driven 0.18 0.04 0.81 0.02 0.71 0.64 0.62 1.00 0.78 0.24 0.36 0.09

Equity Long/Short 0.23 -0.10 0.62 -0.03 0.78 0.67 0.70 0.78 1.00 0.30 0.23 0.14

Global Macro & Managed Futures -0.04 0.45 0.16 0.33 0.14 0.20 0.20 0.24 0.30 1.00 0.04 -0.03

Commodities (DJ-AIG Index) 0.04 -0.16 0.31 -0.33 0.09 0.28 0.23 0.36 0.23 0.04 1.00 0.93

Commodities (GSCI Index) 0.11 -0.18 0.05 -0.36 -0.08 -0.00 0.02 0.09 0.14 -0.03 0.93 1.00

Source: CIRA, Morgan Stanley Smith Barney LLC. Bloomberg, Barclays, Hedge Fund Research, Inc. Data as of October 2010.


Important Disclosures

The information and opinions contained herein were prepared by Pacific Asset Management & Co. Incorporated which is registered with the

State of Washington and (pend) SEC registration. (“Pacific Asset Management”). Pacific Asset Management has no obligation to tell you

when opinions or information in these materials change. Pacific Asset Management and its affiliates are involved in many businesses that

may relate to companies mentioned herein and may lead to conflicts of interest. These businesses may include market making and

specialized trading, risk arbitrage and other proprietary trading, fund management, prime brokerage activities, investment services and

investment banking.

This report is based on public information. Pacific Asset Management makes every effort to use reliable, comprehensive information, but we

make no representation that it is accurate or complete. We are not offering to buy or sell the securities mentioned or soliciting an offer to buy

or sell them.

Pacific Asset Management & Co. Incorporated and/or its affiliate companies, and/or their employees may have an investment in securities

and derivatives of securities mentioned herein. The securities/investment strategies discussed herein may not be suitable for all investors.

Investors must make their own investment decisions based on their own investment objectives and financial position. Pacific Asset

Management recommends that investors independently evaluate each issuer, security, instrument, or strategy discussed, and use any

independent advisers they believe necessary. The value of and income from your investment may vary because of changes in interest rates or

foreign exchange rates, changes in the price of securities or other indexes in the securities markets, changes in operational or financial

conditions of companies and other factors. Past performance is not necessarily a guide to future performance. This may refer to a research

analyst/research report. For additional information, research reports and important disclosures, contact me or see https://www.pamria.com.

Unless indicated, these views are the author’s and may differ from those of Pacific Asset Management research or others in the Firm.

Pacific Asset Management does not render advice on tax and tax accounting matters to clients. This material was not intended or written to

be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer under U.S. federal

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