Investment Performance Summary

Advisor’s objective:
The objective of the advisor, AFC Asset Management Services, Inc. (AFC), is to preserve and prudently grow capital by investing in mutual funds and exchange traded funds (ETFs) containing stocks, bonds, and other financial instruments when in the sole opinion of the advisor it is felt that the potential return is justified by the risk. AFC may invest in mutual funds and ETFs that sell stocks short and as well as those that invest in market indices. AFC does not guarantee that it will be successful in implementing this strategy.

The "Conservative" Portfolio: This portfolio is most suitable for investors who consider conservation of capital as their primary goal, and either capital appreciation or income as their secondary goal.  AFC will utilize a portfolio of Mutual Funds and/or Exchange Traded Funds (ETFs) that, in our opinion, offer the best possible return while maintaining a conservative risk of loss.  The Conservative portfolio may include investments that move contrary to traditional investment vehicles, such as mutual funds and ETFs that “short” the market.  Depending on our view of market conditions, a conservative strategy could be invested anywhere from 100% in money market funds to, on very rare occasions, 100% in stock funds.

The "Moderate" Portfolio: This portfolio is most suitable for investors who consider growth of principle over the long term as their primary goal, and either conservation of capital or income as their secondary goal.  AFC will utilize a portfolio of Mutual Funds and/or ETFs that, in our opinion, offer the best possible return while maintaining a moderate risk of loss.  The Moderate portfolio may include investments that move contrary to traditional investment vehicles, such as mutual funds and ETFs that “short” the market.

The "Aggressive" Portfolio: This portfolio is most suitable for investors who seek to maximize gains and are willing to tolerate substantial volatility and risk of loss.  AFC will utilize a portfolio of Mutual Funds and/or ETFs that, in our opinion, offer the greatest potential for substantial gains in the near to intermediate term.  The Aggressive portfolio may include investments that move contrary to traditional investment vehicles, such as mutual funds and ETFs that “short” the market.  Due to the relationship between the increased potential for gains with the increased risk and volatility, clients should be aware that there is a greater chance for significant losses when selecting the Aggressive portfolio.

Data details:
Client Risk Tolerance is based on a scale with the lowest risk tolerance of “Conservative” and the highest risk tolerance of “Aggressive”. Before June 30, 2001, there was only one program and all clients were considered Moderate at level three (3). Prior to December 31, 1999, AFC returns were reported quarterly.

Performance details:
Upon approval of the President, some clients may be charged an asset management fee less than the published standard fee schedule on Part II of our ADV. The performances of AFC’s managed portfolios excluding all accounts that are under a discounted fee schedule through September 30, 2011 are as follows:

Our performance returns are computed using Advent’s Axys portfolio management software. Axys rounds the programs’ composite time weighted returns to two decimal places.  The 10 year returns are rounded up if 0.05% or greater and rounded down if less than 0.05%. After December 31, 2009, composite returns implemented by Advent’s Axys update for ‘significant cash flows’ per The CFA Institutes Global Performance Investment Performance Standards (GIPS) requirements. Supporting data in the form of specific monthly performance results since the programs’ inception is available from AFC upon request. For prospective and current investors, past performance is no guarantee of future results; all investors face the potential for loss with any investment.

Composite performance results represent the total return for the time period indicated net of all fees and commissions charged by AFC, mutual fund companies, and custodians.

Performance results for AFC include reinvestment of dividends, capital gains, and other distributions/earnings. Performance results do not reflect the actual results for any one investor. Performance results do represent all investors under each Client Risk Tolerance category. Although all investors in a given Client Risk Tolerance category may hold the same mutual funds, individual investors will likely experience returns that are slightly more or less than those reported.

Comparison clarifications:
Actual returns are not adjusted for dividends and capital gains of the S&P 500 for the periods corresponding to those reported. AFC cited returns are intended only to show how the S&P 500 performed over an equivalent time period. AFC portfolios hold mutual funds which, when aggregated, will likely result in a portfolio of stocks, bonds, and other financial instruments that differs from the S&P 500. The S&P 500 is an unmanaged index that is generally considered representative of the U.S. stock market. Index performance is provided for reference purposes only. The performance of an unmanaged index is not indicative of any particular investment. Individuals cannot invest directly in any index. The volatility of the Indices may or may not be representative of AFC portfolios due to differences in the composition of portfolios between the Indices and AFC.

AFC invites and encourages our current and prospective clients to discuss any of these details with us at any time.