Statement of Performance Results
For The Concentrated Equity Alpha Composite
| Years | Before Deducting Management Fees | After Deducting Management Fees | Standard & Poor's S&P 500 Index (1) | Russell 3000 (1) | Number of Portfolios in the Composite | Total Composite Assets (USD - $ Millions) | Total Firm Assets (U.S. Dollars - $ Millions) |
|---|---|---|---|---|---|---|---|
| 2011 | -1.5% | -2.2% | +2.1% | +1.0% | 113 | 67.1 | 258.5 |
| 2010 | +21.5% | +20.7% | +15.1% | +16.9% | 89 | 52.0 | 184.5 |
| 2009 | +41.6% | +40.5% | +26.5% | +28.3% | 60 | 33.8 | 152.3 |
| 2008 | -37.2% | -37.7% | -37.0% | -37.3% | 80 | 15.6 | 52.6 |
| 2007 | +15.7% | +14.7% | +5.5% | +5.1% | 125 | 40.1 | 73.9 |
| 2006 | +10.4% | +9.4% | +15.8% | +15.7% | 132 | 39.0 | 66.3 |
| 2005 | +2.4% | +1.5% | +4.9% | +6.1% | 136 | 35.4 | 63.1 |
| 2004* | +10.3% | +9.4% | +7.4% | +8.2% | 76 | 20.9 | 44.8 |
2004 Dates: 3/1/04-12/31/04 |
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Past performance is not a guarantee of future performance. Individual investor results will vary. Performance results may be materially affected by market and economic conditions.
(1) Sandhill Investment Management has presented this index for comparative purposes. This index was selected since the Concentrated Equity Alpha Composite contains accounts that hold equity securities with characteristics similar to those in this index.
NOTE A: BASIS OF PRESENTATION
Sandhill Capital Partners, LLC officially began doing business as Sandhill Investment Management (“Sandhill”) in June 2007. There was no change in ownership or management. Sandhill is defined as a registered investment advisor that is not affiliated with any parent company. The performance statistics disclosed in the accompanying statement are calculated on the rates of return from accounts managed by Sandhill, as defined below. The Concentrated Equity Alpha composite consists of a mixture of large, mid & small capitalization companies. An emphasis is placed on the mid cap sector. These accounts are managed by Sandhill on a discretionary basis and have no restriction in the manner in which the account can be invested. None of the Company’s balanced portfolio segments are included in any single composite for the Company and cash has been allocated evenly among asset segments. There are no non-fee paying accounts included in the Concentrated Equity Alpha Composite. The U.S. Dollar is the currency used to express performance. The Concentrated Equity Alpha Composite includes accounts under management from the first full month at which the account’s capital is fully invested in Sandhill. Closed accounts are included in the Concentrated Equity Alpha Composite through the completion of the last full month under management and are not removed from the historical rates of return. There is no minimum asset requirement for the inclusion in the Concentrated Equity Alpha Composite.
Sandhill claims compliance with the Global Investment Performance Standards (GIPS ®) and has prepared and presented this report in compliance with the GIPS standards. Sandhill has been independently verified for the periods March 1, 2004 through December 31, 2010. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The Concentrated Equity Alpha Composite has been examined for the periods March 1, 2004 through December 31, 2010. The verification and performance examination reports are available upon request.
The effective date of firm compliance with the GIPS Standards is March 1, 2004.
The Concentrated Equity Alpha Composite was created in March 1, 2004. A complete list and description of firm composites and policies for valuing portfolios, calculating performance and preparing compliant presentations are available upon request.
Effective September 30, 2010, Sandhill changed the name of the All Equity Composite to Concentrated Equity Alpha Composite. Although the name of the Composite changed, the investment strategy remained the same.
The performance presentation utilizes the following criteria:
- The rates of return are compiled monthly by calculating the percentage change in the end of the period market values over beginning of the period market values with all cash flows time weighted. Cash flows consist principally of contributions, withdrawals and management fees. The monthly results are then geometrically linked to derive the rates of return for the yearly rates of return. Geometric linking is the method used to combine rates of return for multiple periods.
- The rates of return reflect realized and unrealized gains and losses and include dividend and ordinary income (interest).
- The calculations are weighted for the size of each client’s account as a relationship to the total Composite.
- The calculations are shown both net and gross of investment management fees.
- Additional information regarding policies for calculating and reporting returns is available upon request.
For purposes of determining market values, securities transactions are recorded on a trade date basis, interest is accrued to the end of the period, and dividends are recorded when received.
NOTE B: ANNUAL DISPERSION
Composite dispersion measure represents the consistency of the Company’s composite performance results with respect to the individual portfolio returns within the composite. Annual composite dispersion is calculated through the use of an asset weighted standard deviation for portfolios included in a composite for the entire year. Composite dispersion is not required to be presented when there are five or fewer accounts in a composite for the entire year.
Annual dispersion for the Concentrated Equity Alpha Composite using the asset weighted standard deviation described above on rates of return before deducting management fees and after deducting management fees is as follows:
| Dispersion | ||
|---|---|---|
| Years ended 12/31 | Before deducting management fees | After deducting management fees |
| 2011 | 1.06% | 1.17% |
| 2010 | 1.48% | 1.52% |
| 2009 | 2.51% | 2.58% |
| 2008 | 1.72% | 1.69% |
| 2007 | 3.19% | 3.26% |
| 2006 | 1.24% | 1.32% |
| 2005 | 1.67% | 1.80% |
NOTE C: EX-POST STANDARD DEVIATION
The three-year annualized standard deviation measures the variability of the composite and the benchmark returns over the preceding 36-month period. The standard deviation is not presented for 2002 through 2010 because monthly composite and benchmark returns were not available and is not required for periods prior to 2011.The three-year annualized ex-post standard deviation of the composite and benchmark as of each year end is as follows:
| Three-Year Ex-Post Standard Deviation | ||||
|---|---|---|---|---|
| Years ended 12/31 | Composite before deducting management fees | Composite after deducting management fees | S&P 500 Total Return | Russell 3000 Total Return |
| 2011 | 21.21% | 21.15% | 18.71% | 19.35% |
NOTE D: FEES
Performance results shown gross of fees do not reflect the deduction of advisory fees. Such fees and costs will reduce the return of the account.
Performance results shown net of investment management fees are based on actual investment advisory fees charged to the Composite accounts. Sandhill’s standard investment management fee for accounts in the Concentrated Equity Alpha Composite is 1.0%.