EAS SMA Strategy Booklet December 2009

INVESTMENT STRATEGISTS for SUCCESSFUL ADVISORS

INVESTMENT STRATEGISTS forSUCCESSFUL ADVISORS

VISION. EXPERIENCE. DEDICATION to our CLIENTS

STRATEGY DESCRIPTIONS

&PERFORMANCE PROFILES

December 2009

INVESTMENT STRATEGISTS for SUCCESSFUL ADVISORS1

OVERVIEW OF FIRM:

Founded in 1998, Emerald Asset Advisors, LLC is a Registered Investment Advisor and investmentmanagement firm based in Weston, FL. We take a refreshing and insightful approach to portfolio strategy -one that differs from what most investors experience in other asset allocation programs. Our AssetAllocation models have been created to meet the needs of investors and advisors who want an alternativeto traditional portfolio mixes of long-only stock and bond funds. Our goal since inception was to providea set of practical low correlation strategies for any portfolio, large or small.

All of our strategies have specific risk-control measures within them, in addition to the general riskreduction achieved by a diversified portfolio. We employ a flexible and adaptive investment approach,and our firm’s style and accomplishments have been highlighted in many national media outlets includingBloomberg, The Wall Street Transcript, Investment News, Registered Rep andWealth Manager Magazine. We havepresented our expertise and views at various industry conferences, and our Chief Investment Officer hasbeen recognized as one of Worth Magazine's "Top 100 US Wealth Advisors" from 2005 – 2007 and one ofWorth Magazine’s “Top 250 US Wealth Advisors” in 2008. Our firm is driven to be one of the industry’sspecialists in the design and management of alternative allocation portfolios, but using only selectivetraditional, SEC-Registered vehicles (mutual funds and ETFs) with full transparency and dailyliquidity.

• Top manager talent• Flexible investment styles• Alpha generators

EMERALD SMA’S

USING NO-LOAD MUTUAL

FUNDS

• No lock-up period • Daily liquidity• Full transparency • SEC-registered • Cost effective vehicles

• Absolute return focus• Low market correlation• Low relative volatility• Tax aware

HEDGED INVESTMENT

STRATEGIES/STYLES


GENERAL DESCRIPTION OF METHODOLOGY: Emerald’s three portfolios are created out of

the firm’s three core investment disciplines, as follows:

HYBRID DISCIPLINE (HY): Hybrid’s objective is to achieve real, absolute returns (i.e., positive net ofinflation) over any three-year period, regardless of market conditions, and without resorting to the use ofhigh-quality bond funds (which, despite their reputation as conservative investments, can produce largelosses in periods of rising interest rates and inflation). Our Hybrid holdings typically come from the 10sub-sectors/styles we have defined in the alternative mutual fund universe through our own research(such as equity long-short, market-neutral, arbitrage, high-yield and bond hedge). As a result, Hybridinvesting is similar to the approach employed by low volatility hedge fund-of-funds managers butwithout all the unfavorable characteristics of hedge funds or the limited partnership structure (e.g., –lock-up periods; illiquidity; lack of transparency; excessive leverage; high fees; high investmentminimums and tax inefficiency).

CONCENTRATED EQUITY DISCIPLINE (CE): Concentrated Equity seeks to generate investment “alpha”(excess return versus stock market benchmarks) through the purchase of a carefully selected group ofequity mutual funds, whose managers each confine their portfolios to a very limited number of holdings(typically under 30 stocks) and generate those returns using distinctly different methods. Thecombination of these funds seeks to combat the tendency for traditional “style-box” equity approaches(investing by growth vs. value, large cap vs. small cap) that often produce mediocre or negative levels ofalpha over longer periods of time. We may also buy dedicated short funds as a portfolio hedge inperceived periods of high market risk.

GLOBAL CYCLE DISCIPLINE (CY): Global Cycle is a true long-term approach to growing capital. Itinvolves the research and identification of global investment themes that are in the midst of a long,positive business cycle (e.g., alternative energy, potable water, India equity, China equity, etc). Some ofthese themes may take place, in our opinion, over many years, even decades. Others may start andfinish in periods as short as three years. This is a long-term strategy, and often involves investing inareas of the markets that exhibit high short-term volatility in their returns. Patience is required to besuccessful. We may also buy dedicated short funds as a portfolio hedge in perceived periods of highmarket risk or as a way to capture alpha in a certain sector that we feel may be in decline.

The three disciplines can be pursued individually or blended together in various allocationsto provide an extensive set of complementary low correlation strategies, each managed withdistinct risk/return characteristics and objectives. The portfolio team at Emerald applies anextensive and rigorous combination of top-down, bottom-up, fundamental, quantitative andtechnical analysis to construct the desired mix of funds for each portfolio. For moreinformation, please visit www.EmeraldAssetAdvisors.com and/or www.EASfunds.com.

2


From inception, Emerald has focused on constructing portfolios using

styles that go well beyond traditional “style box” strategies.

Discontent with flaws of

“conventional” portfolio

construction

Began using low correlation

strategies via hedged mutual

funds

Developed diversified

absolute return portfolios

Created dedicated Hybrid Strategy

1998 1999 2000 - 2002 2002

Expanded spectrum to alpha-generating equity

managers

Created dedicated Concentrated

Equity Strategy

Expanded spectrum to global theme-based funds

Created dedicated Global Cycle

Strategy

2003 2004 2004 - 2005 2005

3

THE GENESIS OF THE EMERALD

ALLOCATION STRATEGIES


EMERALD’S ALTERNATIVE APPROACH HAS GENERATED NOTEWORTHY ATTENTION

Publication: November 2006

Cover Story: Registered Rep, February 2007 Cover Story: Wealth Manager, March 2008

4

http://www.amazon.com/Wall-Streets-Bull-How-Bear/dp/0972925899/sr=1-1/qid=1166192468/ref=sr_1_1/102-6405826-9276926?ie=UTF8&s=books

http://www.emerald-eas.com/pdf/RegisteredRep.pdf

http://www.emerald-eas.com/pdf/WealthManager_AlternativelySpeaking-March08.pdf


EMERALD’s Multi-Dimensional PortfolioConstruction Process

Theme

Investments

Weightings

Trade

Top-down Macroeconomic Assessment

Fundamental analysis of critical factors that drive markets and prices

Bottom-up Analysis

Identify the investment vehicles that best express the themes

Quantitative Analysis

Analyze all key metrics (trading turnover; expenses; risk stats and tax implications)

Technical Analysis

Determine entry / exit points through charting analysis

5


As an asset allocation strategist, we employ a flexible and adaptive investment

approach to portfolio management.

Emerald’s BULL MARKET FORECASTER is a compilation of what we believe to

be our investment committee’s best macro thinking. The investment themes

below and their ranking reflect our view of the relative risk-reward potential on

world-wide investment themes over a 3-year period.

The selection of these themes is the genesis of our portfolio construction

process. We follow with how these themes are applied across our three distinct

investment strategies, the EMERALD ALLOCATION STRATEGIES.

Bull Market Forecaster1st Quarter 2010

The above illustration is not a complete analysis and should not be considered investment advice. The positioning of the investment themes and

styles highlighted above reflect the Advisor’s outlook as of 12/31/09 and may change at any time. Projections are not guaranteed and may vary

significantly. Any statements nonfactual in nature constitute current opinions, which are subject to change.

EXCELLENT GOOD FAIR POOR

Contrarian

Value Equity

Convertible

Arbitrage

Environmental

Equities

Equity L/S

Frontier

Markets

Global

Infrastructure

Hedged Equity

Merger

Arbitrage

Natural Gas

Bank Loan

FundsGlobal REITs

Brazil Equity

“Busted”

Convertibles

China

Convertible

Securities

Dedicated

Short Treasury

Emerging

Pharma Stocks

Equity-Income

(Dividends)

Equity Market-

Neutral

Financial

Stocks

Gold

High Yield

Bonds

Homebuilding

Stocks

India

Non-Japan

Asia Equity

ROI Growth

Equity

Small-Midcap

Stocks

Tactical Asset

Allocation

US REITs

Agricultural

Commodities

Large Cap

Relative Value

Emerging

Market Bonds

Energy Stocks

Europe Equity

Healthcare

Stocks

Japan Equity

Large Cap

Growth

Non-US Bonds

Oil

S&P 500 Index

Utility Stocks

“Vice” Equity

Balanced Funds

Dedicated Short

Equity

High-Quality

Bond Funds

US Dollar

US T-bills (90-

day)

6


Reward

Risk

- Environmental

Equities

- Frontier Markets

- Global Infrastructure

- Natural Gas

- Energy Stocks

- Healthcare Stocks

- Japan Equity

- Non-US Bonds

- Oil

- China- Emerging Pharma

Stocks- Global REITs- Gold- India

- Dedicated Short Equity

- US Dollar

GLOBAL CYCLE

- Contrarian Value Equity

- Europe Equity

- Large Cap Growth

- S&P 500 Index

- Equity-Income (Dividends)

- ROI Growth Equity

- Small-Midcap Stocks


CONCENTRATED EQUITY

- Convertible Arbitrage

- Equity L/S

- Hedged Equity

- Merger Arbitrage

- Convertible Securities

- Equity Market-Neutral

- High Yield Bonds

- Tactical Asset

Allocation


HYBRIDRisk/Reward Assessment:

EXCELLENT

GOOD

FAIR

POOR

Application of Themes

STRATEGY OVERVIEW

Conservative: 3-year horizon

• Absolute return focus

• Low net equity exposure

• Hedged strategies

STRATEGY OVERVIEW

Aggressive: 10-year horizon

• Global portfolio

• Primarily net long

• Opportunistic short positions

STRATEGY OVERVIEW

Moderate: 5-year horizon

• Concentrated equity

portfolios

• Long equity-biased

• Periodic hedge overlay

The above illustration is not a complete analysis and should not be considered investment advice. The positioning of the investment themes and

styles highlighted above reflect the Advisor’s outlook as of 12/31/09 and may change at any time. Projections are not guaranteed and may vary

significantly. Any statements nonfactual in nature constitute current opinions, which are subject to change.

7


Performance shown is for the period 10/1/2005 through 12/31/09 and is net of fees. The performance data shown for the EAS Composites

vs. the S&P 500 TR is not presented for point-by-point comparison purposes, but to demonstrate the overall return characteristics of the

Emerald Allocation Strategies when contrasted with more traditional familiar styles. The appropriate EAS composite benchmarks, statistical

comparisons and other important information are located on the attached full disclosure performance presentations for each EAS composite.

Past performance is not indicative of future results.

EAS Growth of $1,000 Chart

EAS NET RETURNS VS. THE S&P 500 TR(10/1/05 – 12/31/09)

8

Contact: Medon A. Michaelides

Phone: 954-385-9624 ext. 190

Fax: 954-385-6770

Email: [email protected]

Website: www.EmeraldAssetAdvisors.com

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year

2009 -1.1% -1.5% 1.6% 2.5% 3.8% -0.4% 3.0% 0.9% 2.3% 0.1% 2.2% 0.7% 14.8%

2008 -0.2% 1.7% -1.4% 0.7% 1.9% -0.4% -2.6% -1.6% -3.4% -4.7% -2.1% 1.4% -10.5%

2007 0.4% 0.9% 1.0% 0.8% 0.9% 0.7% 0.7% -0.9% 1.7% 0.9% -0.1% 0.8% 8.1%

2006 2.0% -0.8% 1.2% 1.9% -0.2% -0.1% 0.5% 0.0% -0.5% 1.2% 1.3% 0.3% 6.9%

2005 -0.6% 2.0% -0.4% -1.5% 0.9% 1.0% 1.7% 1.2% 1.6% -1.2% 0.3% 1.1% 6.2%

2004 0.9% 0.6% 0.5% -1.9% -0.2% 0.8% -0.8% 0.1% 1.4% 0.4% 1.8% 0.5% 4.1%

2003 -0.5% -0.4% 0.6% 3.1% 2.5% 0.8% 0.6% 1.4% 0.4% 2.2% 1.2% 1.0% 13.6%

2002 Gross of Fees 2.8% -1.0% 1.9%

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year2009 -1.3% -1.5% 1.6% 2.3% 3.8% -0.4% 2.8% 0.9% 2.3% -0.1% 2.2% 0.7% 13.9%2008 -0.4% 1.7% -1.4% 0.5% 1.9% -0.4% -2.8% -1.6% -3.4% -4.8% -2.1% 1.4% -11.2%2007 0.2% 0.9% 1.0% 0.6% 0.9% 0.7% 0.5% -0.9% 1.7% 0.8% -0.1% 0.8% 7.4%2006 1.8% -0.8% 1.2% 1.8% -0.2% -0.1% 0.4% 0.0% -0.5% 1.0% 1.3% 0.3% 6.3%2005 -0.8% 2.0% -0.4% -1.6% 0.9% 1.0% 1.5% 1.2% 1.6% -1.3% 0.3% 1.1% 5.6%2004 0.7% 0.6% 0.5% -2.0% -0.2% 0.8% -1.0% 0.1% 1.4% 0.3% 1.8% 0.5% 3.5%2003 -0.7% -0.4% 0.6% 2.9% 2.5% 0.8% 0.5% 1.3% 0.4% 2.1% 1.2% 1.0% 12.8%2002 Net of Fees 2.8% -1.0% 1.9%

15.5% -14.8% 66.3% 3.8% -4.8% -15.5%

Annualized Return 1 Year 5 Years 7 YearsEAS Hybrid Strategy - Net 13.9% 4.1% 5.2%DJ Conservative US Rel Risk Port 11.0% 4.8% 5.8%Barclays Aggregate Bond Index 5.9% 5.0% 4.8%

Correlation to Benchmarks BM1 BM2 Annualized Alpha 0.9% 4.4%Beta 0.74 0.21R-squared 0.41 0.03

Benchmark 1 (BM1): Dow Jones - Conservative U.S. Relative Risk Portfolio Index Up Capture 76.1% 52.1%Benchmark 2 (BM2): Barclays Aggregate Bond Index Down Capture 68.0% -15.4%

*Supplemental Information to Full Disclosure Presentation

Best 12 MonthsWorst 12 MonthsPercent Profitable MonthsBest MonthWorst MonthMax Drawdown

Benchmark Information

Cumulative Return

Strategy Description

12 Month Rolling Return Strategy Statistics

*Risk/Return Scatterplot

Investment Time Horizon - 3 Years or More

5.3%

5.0%

Annualized ReturnStandard Deviation

The Emerald Allocation Strategies (EAS) are a series of asset allocation portfolios focused on achieving long-term investment results with low market correlation (i.e.,

they aim to generate returns which are largely independent of market forces). They offer a refreshing alternative to traditional stock-bond investment approaches.

EAS Hybrid is similar to the multi-manager approach used by market-neutral and opportunistic hedge fund-of-funds. However, by using mutual funds and other

traditional, highly-liquid investment vehicles that employ hedge fund-like strategies, we expect to deliver to the investor a similar experience as a conservative hedge

fund-of-funds in terms of absolute return, but absent many of the uncomfortable features of hedge funds or the limited partnership structure.

3%

4%

5%

6%

2% 3% 4% 5%An

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Annualized Standard Deviation

EAS Hybrid Strategy--Net

Dow Jones - Conservative U.S. Relative Risk Portfolio Index

Barclays Aggregate Bond Index

-15%

-5%

5%

15%

25%

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-20%

0%

20%

40%

60%

Cu

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EAS HYBRID STRATEGY

CurrencyREITs

Long-Short

High YieldArbitrageConvertibles

Dedicated Short

Equity

Global Macro

Inverse Bond

Market-Neutral

PLEASE SEE IMPORTANT INFORMATION ON THE FOLLOWING PAGE9

mailto:[email protected]

http://www.emeraldassetadvisors.com/

EAS Hybrid Strategy

YearTotal Firm Assets Composite Assets Annual Performance Results

End (Millions)USD (million)AccountsComposite NetDJ Consv. AllocComp Dispersion

2006 242 14 24 6.2% 6.2% 0.4%

2005 212 17 43 5.6% 3.5% 1.4%

2004 190 18 55 3.4% 5.9% 1.5%

2003 180 19 55 12.8% 10.9% 4.3%

2002 119 <1 5 or Fewer

EMERALD ASSET ADVISORS, LLC HYBRID COMPOSITE

ANNUAL DISCLOSURE PRESENTATION

Disclosure

*Performance starts on November 1, 2002.

The Hybrid Composite contains all discretionary, fee paying, Hybrid accounts that invest primarily in Hybrid mutual funds with a minimum of at least three

Hybrid mutual funds and $35,000 minimum account value. Hybrid holdings typically come from the 11 sub-sectors/styles we have defined in the alternative

mutual fund universe through our own research (such as equity long-short, market-neutral, arbitrage, convertibles, high-yield and bond hedge). Accounts may

contain 10% or less non-Hybrid assets and may be included or excluded based on the potential of those assets to materially affect the ability to invest to the

mandate or the account performance. For comparison purposes the composite is measured against the Dow Jones US Conservative Allocation Index.

Emerald Asset Advisors, LLC has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®).

Emerald Asset Advisors, LLC is a SEC Registered Investment Advisor providing wealth management services for high net worth individuals and institutions.

The firm maintains a complete list and description of composites which is available upon request.

Net of fee performance was calculated using actual management fees. Gross performance results do not reflect the deduction of investment advisory fees and

are calculated after the deduction of actual trading expenses. Your return will be reduced by the advisory fees and other expenses that may be incurred in the

management of your account. Net and gross of fees performance includes the reinvestment of all income including realized and unrealized gains and losses.

The management fee schedule is as follows: 1.25% for the first $2 Million; 1.00% for the next $3 Million and 0.75% for over $5 Million. Actual investment

advisory fees incurred by clients may vary.

Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. The U.S. Dollar is the currency used to

express performance. The annual composite dispersion is an asset-weighted standard deviation calculated for the accounts in the composite the entire year.

Additional information regarding the policies for calculating and reporting returns is available upon request. Past performance is not indicative of future

results.

The Hybrid Composite was created April 1, 2006. Emerald Asset Advisors, LLC's compliance with the GIPS standards has been verified by Ashland Partners

from 1/01/2002 to 9/30/2008 and by Beacon Verification Services from 9/30/2008 to 9/30/09. In addition, a performance examination was conducted on the

Hybrid Composite for the period 10/31/2002 through 9/30/09. A copy of the verification report is available upon request.

Important information for Investors: The performance shown is for separate accounts managed by Emerald Asset Advisors, LLC using the Hybrid strategy. It

is important to note that Emerald may use securities such as ETF’s, mutual funds or other completion strategies within their separate accounts that are not

available through other programs. Therefore, the results obtained through Emerald’s separate account management program should not be viewed as

indicative of the results of the Hybrid Model Portfolio available through Adhesion, Eqis Capital, FTJ FundChoice, FOLIOfn, SummitAlliance, World Equity

Group, Next Financial or other broker/dealer platforms and TAMPS where our models are offered.

VISION. EXPERIENCE. DEDICATION to our CLIENTS 10

Total Firm

Year Assets USD Number of Composite Composite DJ US Composite

End (millions) (millions) Accounts Net Gross Cons. Alloc Dispersion

2009 274 52 86 13.9% 14.8% 11.0% 0.8%

2008 224 48 88 -11.2% -10.5% -1.9% 0.5%

2007 284 46 86 7.4% 8.1% 5.7% 0.4%

2006 242 15 26 6.3% 6.9% 6.2% 0.4%

2005 212 18 46 5.6% 6.2% 3.5% 1.3%

2004 190 18 56 3.5% 4.1% 5.9% 1.5%

2003 180 19 57 12.8% 13.6% 10.9% 4.3%

*2002 119 <1 Five or Fewer 1.9% 1.9% 2.2%

Composite Assets Performance Results


Phone: 954-385-9624 ext. 190

Fax: 954-385-6770




2009 -4.3% -9.4% 5.0% 10.2% 3.2% 1.2% 4.8% 2.9% 2.6% -1.7% 4.7% 3.8% 24.1%

2008 -2.5% 0.5% -2.8% 3.7% 2.7% -8.9% 0.3% 4.1% -4.5% -11.4% -10.7% 3.0% -24.9%

2007 1.6% -0.5% 1.7% 4.2% 6.1% -1.7% -2.1% 1.6% 4.1% 5.1% -6.0% -0.1% 14.2%

2006 4.5% -0.6% 3.1% 1.4% -1.0% 1.0% 0.4% 0.8% -0.4% 5.0% 1.9% -0.1% 16.9%

2005 -2.6% 4.3% 1.2% -0.6% 3.2% 2.1% 2.4% 2.5% -0.6% -1.3% 4.3% 1.4% 17.2%

2004 0.2% 0.1% 0.4% 2.2% 1.0% 1.3% 3.6% 4.6% 14.2%Gross of Fees

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year2009 -4.5% -9.4% 5.0% 10.0% 3.2% 1.2% 4.5% 2.9% 2.6% -1.9% 4.7% 3.8% 22.7%2008 -2.8% 0.4% -2.8% 3.4% 2.7% -9.0% 0.0% 4.1% -4.5% -11.6% -10.7% 3.0% -25.9%2007 1.3% -0.5% 1.7% 3.9% 6.1% -1.7% -2.4% 1.6% 4.1% 4.8% -6.1% -0.1% 12.6%2006 4.2% -0.6% 3.1% 1.2% -1.1% 1.0% 0.0% 0.8% -0.4% 4.7% 1.8% -0.1% 15.3%2005 -2.9% 4.3% 1.2% -0.9% 3.2% 2.1% 2.0% 2.4% -0.6% -1.6% 4.3% 1.4% 15.5%2004 0.0% 0.1% 0.0% 2.2% 1.0% 0.9% 3.6% 4.6% 13.1%

Net of Fees

23.9% -34.3% 64.7% 10.0% -11.6% -39.8%

Annualized Return 1 Year 3 Years 5 YearsEAS Concentrated Equity - Net 22.7% 0.8% 6.4%Russell 3000 Index (DRI) 28.3% -5.4% 0.8%S&P 500 TR 26.5% -5.6% 0.4%

Correlation to Benchmarks BM1 BM2Annualized Alpha 5.7% 6.1%Beta 0.77 0.79R-squared 0.82 0.81

Benchmark 1 (BM1): Russell 3000 Index (DRI) Up Capture 91.0% 101.4%Benchmark 2 (BM2): S&P 500 TR Down Capture 78.7% 80.8%


*Risk/Return ScatterplotCumulative Return

Percent Profitable MonthsBest MonthWorst MonthMax Drawdown



Annualized ReturnStandard Deviation Best 12 MonthsWorst 12 Months



13.5%7.9%

The Emerald Allocation Strategies (EAS) are a series of asset allocation portfolios focused on achieving long-term investment results with low market correlation

(i.e., they aim to generate returns which are largely independent of market forces). They offer a refreshing alternative to traditional stock-bond investment

approaches.

EAS Concentrated Equity pursues long-term growth of capital by selecting compelling equity managers who use a limited number of holdings (typically 30 or less),

compared to the average equity fund or managed account. We attempt to lower portfolio volatility by diversifying among a group of underlying managers, each

specializing in their own niche. We may also buy short-index securities as a hedge in perceived periods of high market risk.

Contrarian

Value

Sector Rotation

High ROE

GrowthMulti-Cap

Investing

Concentrated

Equity

Dedicated Short

EAS CONCENTRATED EQUITY STRATEGY

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

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EAS Concentrated Equity - Net Russell 3000 Index (DRI) S&P 500 TR

1%

2%

3%

4%

5%

6%

7%

8%

12% 13% 14% 15% 16%

An

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Annualized Standard DeviationEAS Concentrated Equity Strategy--NetRussell 3000 Index (DRI)S&P 500 TR

-40%

-20%

0%

20%

40%

60%

80%

100%

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EAS Concentrated Equity Strategy--NetRussell 3000 Index (DRI)S&P 500 TR




EAS Concentrated Equity Strategy

Disclosure

EMERALD ASSET ADVISORS, LLC

CONCENTRATED EQUITY COMPOSITE


*Performance starts on May 1, 2004.

The Concentrated Equity Composite contains all discretionary, fee paying, concentrated equity accounts that invest primarily in concentrated equity managers.

The accounts within this composite are managed by sub-advisors that are reviewed and chosen (hired/fired) by Emerald Asset Advisors, LLC ("Emerald") using a

concentrated equity strategy or by Emerald using a mix of concentrated equity mutual funds and ETFs. Sub-advisors have been used since inception of the

strategy to present date. We may also buy dedicated short funds as a portfolio hedge in perceived periods of high market risk. This strategy may contain both

domestic and foreign securities. For comparison purposes the composite is measured against the Russell 3000 Index. The Russell 3000 Index is comprised solely

of domestic securities while the Concentrated Equity Strategy may invest in both domestic and foreign securities.

Emerald Asset Advisors, LLC has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®). Emerald is a

SEC Registered Investment Advisor providing wealth management services for high net worth individuals and institutions. The firm maintains a complete list

and description of composites, which is available upon request.

Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. The U.S. Dollar is the currency used to

express performance.The annual composite dispersion is an asset-weighted standard deviation calculated for the accounts in the composite the entire year. The

$35,000 account minimum was removed on January 1, 2007. Additional information regarding the policies for calculating and reporting returns is available upon

request. Past performance is not indicative of future performance.

Net and gross of fees performance includes the reinvestment of all income including realized and unrealized gains and losses. Net of fee performance was

calculated using actual management fees. If sub-advisors are used to manage all or a portion of your account, you may be charged management fees by the sub-

advisor and by Emerald. Sub-advisor fees vary by advisor and are available in their respective ADV Part II and Schedule F which is available upon request.

The gross performance results shown do not reflect the deduction of investment advisory fees and are calculated after the deduction of actual trading expenses.

Your return will be reduced by the advisory fees and other expenses that may be incurred in the management of your account.

The management fee schedule is as follows: 1.25% for the first $2 Million; 1.00% for the next $3 Million and 0.75% for over $5 Million. Actual investment advisory

fees incurred by clients may vary.

The Concentrated Equity Composite was created April 1, 2006. Emerald Asset Advisors, LLC's compliance with the GIPS standards has been verified by Ashland

Partners from 1/01/2002 to 9/30/2008 and by Beacon Verification Services from 9/30/2008 to 9/30/2009. In addition, a performance examination was conducted on

the Concentrated Equity Composite for the period 4/30/04 through 9/30/09. A copy of the verification report is available upon request.

Important information for Investors: The performance results shown are for separate accounts managed by Emerald Asset Advisors, LLC using the

Concentrated Equity Strategy. It is important to note that Emerald may use securities such as ETF’s, mutual funds or other completion strategies within their

separate accounts that are not available through other programs. Therefore, the results obtained through Emerald’s separate account management program

should not be viewed as indicative of the results of the Concentrated Equity Model Portfolio available through Adhesion, Eqis Capital, FTJ FundChoice, FOLIOfn,

SummitAlliance, World Equity Group, Next Financial or other broker/dealer platforms and TAMPS where our models are offered.


Total

Firm Year Assets USD Number of Composite Composite Russell Composite End (millions) (millions) Accounts Net Gross 3000 Dispersion

2009 274 32 84 22.7% 24.1% 28.3% 11.1%

2008 224 33 106 -25.9% -24.9% -37.3% 7.9%

2007 284 50 129 12.6% 14.2% 5.1% 2.1%

2006 242 28 43 15.3% 16.9% 15.7% 2.4%

2005 212 13 24 15.5% 17.2% 6.1% 1.4%

*2004 190 4 8 13.1% 14.2% 11.8%



Phone: 954-385-9624 ext. 190

Fax: 954-385-6770




2009 -3.4% -3.7% 5.0% 8.2% 13.5% -1.1% 6.2% 0.5% 5.4% -0.8% 4.0% 1.3% 39.6%

2008 -2.3% -1.6% -2.4% 2.6% 0.7% -4.7% 0.3% -0.5% -6.3% -11.9% -2.7% 1.5% -24.8%

2007 1.5% -1.4% -0.2% 2.2% 2.9% 2.1% 1.5% -1.4% 5.4% 3.5% -1.9% -1.9% 12.7%

2006 7.9% 0.7% 1.3% 2.9% -1.0% -2.7% 1.2% 1.6% 1.9% 4.1% 1.4% 0.5% 21.3%

2005 -7.0% 3.9% 1.7% -1.7%

Gross of Fees


2009 -3.6% -3.7% 5.0% 8.0% 13.5% -1.1% 6.0% 0.5% 5.4% -1.0% 4.0% 1.3% 38.5%2008 -2.4% -1.6% -2.4% 2.4% 0.7% -4.7% 0.2% -0.5% -6.3% -12.0% -2.7% 1.5% -25.3%2007 1.3% -1.4% -0.2% 2.0% 2.9% 2.1% 1.3% -1.4% 5.4% 3.4% -1.9% -1.9% 12.0%2006 7.9% 0.7% 1.3% 2.7% -1.0% -2.7% 1.0% 1.6% 1.9% 4.0% 1.4% 0.5% 20.6%2005 -7.0% 3.9% 1.7% -1.7%

Net of Fees

Annualized ReturnStandard Deviation Best 12 Months 38.8%Worst 12 Months -27.9%Percent Profitable Months 60.8%Best Month 13.5%Worst Month -12.0%Max Drawdown -33.3%

Annualized Return 1 Year 3 YearsEAS Global Cycle Strategy - Net 38.5% 5.0%MSCI The World Index - Net 30.0% -5.6%S&P 500 TR 26.5% -5.6%

Correlation to Benchmarks BM1 BM2Annualized Alpha 6.9% 7.8%Beta 0.66 0.69 R-squared 0.77 0.69

Benchmark 1 (BM1): MSCI The World Index - Net Up Capture 78.6% 85.9%

Benchmark 2 (BM2): S&P 500 TR Down Capture 68.7% 66.7%



7.8%14.2%




Cumulative Return *Risk/Return Scatterplot

The Emerald Allocation Strategies (EAS) are a series of asset allocation portfolios focused on achieving long-term investment results with low market correlation

(i.e., they aim to generate returns which are largely independent of market forces). They offer a refreshing alternative to traditional stock-bond investment

approaches.

EAS Global Cycle seeks to capitalize on long-term trends identified by Emerald's research team. We believe that some of these themes will take place over many

years, even decades. This strategy often involves investing in areas of the markets that exhibit high short-term volatility. While the themes are expected to play out

over a long period, we do recognize that it may be helpful to increase or decrease our position in a particular theme over time. We may also buy short-index

securities as a hedge in perceived periods of high market risk.

-2%

0%

2%

4%

6%

8%

13% 14% 15% 16% 17% 18% 19%

An

ual

ized

Ret

urn

Annualized Standard Deviation

EAS Global Cycle Strategy--Net MSCI The World Index - Net

S&P 500 TR

-60%-50%-40%-30%-20%-10%

0%10%20%30%40%50%

An

nu

aliz

ed C

om

po

un

d R

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rn

EAS Global Cycle Strategy - Net MSCI The World Index - Net S&P 500 TR

-50%-40%-30%-20%-10%

0%10%20%30%40%50%

Cu

mu

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ve

Ret

urn

EAS Global Cycle Strategy--Net MSCI The World Index - Net S&P 500 TR

EAS GLOBAL CYCLE STRATEGY

India Equity

China Equity

Alternative

EnergyGlobal REITsFrontier

Markets

Global

Infrastructure

Dedicated

Short




EAS Global Cycle Strategy


Hybrid Composite

Annual Disclosure Presentation

YearTotal Firm Assets Composite Assets Annual Performance Results

End (Millions)USD (million)AccountsComposite NetDJ Consv. AllocComp Dispersion

2006 242 14 24 6.2% 6.2% 0.4%

2005 212 17 43 5.6% 3.5% 1.4%

2004 190 18 55 3.4% 5.9% 1.5%

2003 180 19 55 12.8% 10.9% 4.3%

2002 119 <1 5 or Fewer

Disclosure


GLOBAL CYCLE COMPOSITE


(1) Performance starts on October 1, 2005.

(2) N.A. - Information is not statistically meaningful due to an insufficient number of portoflios in the composite for the entire year.

The Global Cycle Composite contains all discretionary, fee paying, accounts that invest primarily in long term business trends or "cycles" with a minimum of

$50,000 account value. This strategy uses mutual funds, ETFs, stocks, options and other completion strategies. The composite may contain both domestic and

foreign securities. For comparison purposes the composite is measured against the MSCI World Free (net) Index.

Emerald Asset Advisors, LLC has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®).

Emerald Asset Advisors, LLC (Emerald) is a SEC Registered Investment Advisor providing wealth management services for high net worth individuals and

institutions. The firm maintains a complete list and description of composites, which is available upon request.

Performance includes the reinvestment of all income including realized and unrealized gains and losses. Net of fee performance was calculated using actual

management fees. Gross performance results do not reflect the deduction of investment advisory fees and are calculated after deduction of actual trading expenses.

Your return will be reduced by the advisory fees and other expenses that may be incurred in the management of your account.

The management fee schedule is as follows: 1.25% for the first $2 Million; 1.00% for the next $3 Million and 0.75% for over $5 Million. Actual investment advisory

fees incurred by clients may vary.

Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. Composite performance is presented net of

foreign withholdings taxes, where applicable. The U.S. Dollar is the currency used to express performance. The annual composite dispersion is an asset-weighted

standard deviation calculated for the accounts in the composite the entire year. Additional information regarding the policies for calculating and reporting returns

is available upon request. Past performance is not indicative of future performance.

The Global Cycle Composite was created April 1, 2006. Emerald Asset Advisors, LLC's compliance with the GIPS standards has been verified by Ashland Partners

from 1/1/2002 to 9/30/2008, and by Beacon Verification Services from 9/30/2008 to 9/30/09. In addition, a performance examination was conducted on the Global

Cycle Composite for the period 9/30/2005 through 9/30/09. A copy of the verification report is available upon request. (The "Global Cycle" Composite was formerly

known as the "Cycle" Composite).

Important information for Investors: The performance results shown are for separate accounts managed by Emerald Asset Advisors, LLC using the Global Cycle

Strategy. It is important to note that Emerald may use securities such as ETF’s, mutual funds or other completion strategies within their separate accounts that are

not available through other programs. Therefore, the results obtained through Emerald’s separate account management program should not be viewed as indicative

of the results of the Global Cycle Model Portfolio available through Adhesion, Eqis Capital, FTJ FundChoice, FOLIOfn, SummitAlliance, World Equity Group, Next

Financial or other broker/dealer platforms and TAMPS where our models are offered.


Total

Firm

Year Assets USD Number of Composite Composite MSCI Composite

End (millions) (millions) Accounts Net Gross World Index Dispersion⁽²⁾

2009 274 6 13 38.5% 39.6% 30.0% 3.0%

2008 224 3 12 -25.3% -24.8% -40.7% 0.3%

2007 284 4 14 12.0% 12.7% 9.0% N.A.

2006 242 1 Five or Fewer 20.6% 21.3% 20.1% N.A.

2005

⁽

¹

⁾

212 <1 Five or Fewer -1.7% -1.7% 2.7%


VISION. EXPERIENCE. DEDICATION to our CLIENTSVISION. EXPERIENCE. DEDICATION to our CLIENTS

2843 Executive Park Drive | Weston, FL 33331

-954-385-9624 |-www.EmeraldAssetAdvisors.com

INVESTMENT STRATEGISTS forSUCCESSFUL ADVISORS

EAS SMA Strategy Booklet December 2009

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