9-30-14 Peak Resources & Energy Fund

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Leeb Capital Management, Inc.
501 Fifth Avenue Suite 802, New York, N.Y. 10017 • 800.524.LEEB (5332) • www.leebcapital.com
Peak Resources & Energy Portfolio
9.30.2014
Investment Philosophy and Approach
• Top-down macroeconomic overlay concentrates fundamen-
tal analytical efforts into outperforming economic sectors
and focuses the portfolio construction process.
• Disciplined security selection based on bottom-up fundamental
research with qualitative and quantitative techniques.
• Invests in dominant companies in rapidly growing industries
that are undervalued relative to their growth prospects.
Strategy Thesis
Energy and Materials
• The continued growth of the Developing World (China,
India, Brazil, etc.) is straining resource markets:
• Economic growth (esp. industrialization) is energy intensive –
driving global oil demand. Little meaningful production increase
to meet rising energy needs.
• Major infrastructure projects taking place around the world are
causing demand for base metals to outstrip supply. This includes
copper, iron ore, zinc, and many other minerals.
• Growing populations /rising income levels in developing nations
strain global food supplies, hastening demand for fertilizer.
• The Developed World is furthering the strain as new initia-
tives to combat higher energy prices affect other resource
markets:
• Solar energy technology requires vast quantities of silver.
• Hybrid cars require more copper than conventional vehicles.
• Wind energy technology requires rare earth elements.
Precious Metals
• Accommodative Fiscal and Monetary policy from
governments and central banks around the developed world
debase the value of paper currencies:
• Specifically, record debt and spending levels by the US Gov-
ernment (and its proxies) have raised questions about the US
dollar’s standing as the world reserve currency.
• Central banks have added to gold positions as real value hedge.
• Gold and other precious metals thrive in times of economic
turbulence, whether it be inflation, stagflation, or deflation.
• Rising material prices will find their way into finished goods,
stoking inflationary forces, further adding to devaluation of pa-
per currencies, and hastening the rise in precious metal prices.
Top Ten Equity Holdings
Magellan Midstream Partners 6.6%
Enterprise Products Partners 6.1%
Union Pacific 5.3%
Schlumberger 5.0%
National Oilwell Varco 4.7%
Franco Nevada 4.7%
Sempra Energy 4.4%
Exxon Mobil 4.2%
Canadian Pacific Railway 4.1%
Nextera Energy 4.0%
Portfolio characteristics and holdings are based on a model portfolio
and are supplemental information to the compliant presentation.
$2,600
$2,300
$2,000
$1,700
$1,400
$1,100
$800
7/05 9/06 9/07 9/08 9/09 9/10 9/11 9/12 9/13 9/14
* See reverse for benchmark composition
Blended Benchmark*
Leeb Peak Resources & Energy, Net
Leeb Peak Resources & Energy, Gross +125.8%
+58.8%
+32.2%
Growth of $1000 Since Inception (7/31/05 – 9/30/14)
Business Growth Quality Management
Analysis Analysis Analysis Analysis
• Dominant
market position
• Companies
largely immune
to competitive
threats
• Barriers to
entry
• Expectations for
sector
• Expectations
versus peers
• Visible growth
profile
• Sales growth by
market segments
• Balance sheet
and financial
strength
• Profitability
(when applicable)
• Operational
track record
• Reputation and
experience
• Strategic vision
• Stability
Portfolio Construction
LCM’s fundamental research process seeks to identify compa-
nies with the following characteristics and attractive valuation
Leeb Capital Management
• Has demonstrated “Thought Leadership” in the identification of critical mega-trends and translation into investment performance.
• Boasts a reputable Investment Committee with extensive experience and established methodologies.
• Offers attentive customer service with regular communication regarding our current market outlook and portfolio holdings.
20
15
10
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Jan-70 Jul-72 Jan-74 Jul-75 Jan-77 Jul-78 Jan-80
Oil
Gold
Dow Jones Industrial Average
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Oil 19.12x
Gold 16.09x
DJIA 1.15x
1970s
Dec-99 Dec-03 Dec-07 Dec-12
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S&P 500
Gold
Oil
Copper
6
5
4
3
2
1
0
2000s
• In the 1970s, sharply rising energy costs led to stagflation: high unemployment, high inflation, and economic recession. Both oil and
gold dramatically outperformed U.S. large-cap stocks.
• In the 2000s, we saw the beginnings of a similar phenomenon. However, now scarcity (rather than political forces) may cause resource
prices to rise dramatically, which would impact real economic growth and could make materials one of the last true wealth creators.
Decades of Turbulence: A Foreshadow of What’s to Come?
Leeb Capital Management (LCM) Performance Results: Peak Resources and Energy Composite
August 1, 2005 through September 30, 2014
Composite
Composite Benchmark Number Composite Total P.R.E.P. % of P.R.E.P. Assets Total
Total Return Total Return Benchmark 3-Yr St 3-Yr St of Composite Assets Assets Assets in as % of Firm Firm Assets
Year (Gross) (Net of Fees) Return4 Dev 14 Dev 14 Accounts Dispersion (US$ mil) (US$ mil) Composite assets (US$ mil)
2005
12
8.7% 7.8% 3.6% - - 17 - $4.6 $4.6 100.0% 3.1% $148.2
2006 12.3% 10.1% 24.2% - - 38 0.5% $7.7 $7.8 99.0% 5.2% $148.0
2007 45.6% 42.8% 34.4% - - 42 0.7% $11.6 $11.6 100.0% 7.4% $157.1
2008 -44.9% -46.1% -33.6% 28.9% 25.0% 33 0.6% $5.9 $8.0 73.8% 5.4% $110.4
2009 37.5% 34.8% 37.5% 31.5% 27.1% 39 0.4% $7.4 $8.3 90.0% 6.3% $117.3
2010 42.7% 39.9% 23.9% 33.0% 28.8% 34 0.4% $7.4 $8.1 90.9% 6.2% $119.4
2011 -17.5% -19.2% -7.4% 28.2% 26.3% 36 0.3% $8.3 $9.2 90.7% 8.2% $102.1
2012 -1.6% -3.5% 2.2% 25.3% 23.4% 28 0.5% $5.6 $6.3 89.7% 5.9% $95.2
2013 -3.5% -5.5% 16.5% 22.0% 20.5% 17 0.2% $3.4 $3.7 89.6% 3.7% $89.7
2014
12
5.6% 4.1% 4.6% - - 12 - $2.7 $5.5 48.4% 3.1% $85.9
Leeb Capital Management (“LCM”) claims compliance with the Global Investment Performance Standards (GIPS
®
) and has prepared this report in com-
pliance with the GIPS Standards. LCM has been independently verified for the periods 4/1/99 through 9/30/14. 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 P.R.E.P. Composite has been examined for the periods 8/1/05 -
9/30/14. The verification and performance examination reports are available upon request.
Notes:
1.) Leeb Capital Management (“LCM”) is a registered investment advisor with the Securities and Exchange Commission. Prior to 2001, the firm was doing
business as Money Growth Institute. Leeb Capital Management provides equity money management to retail and institutional investors. LCM’s Peak
Resources and Energy Composite (“Composite”) represents all fee-paying accounts with assets greater than $100,000 that are managed in accordance
with LCM’s Peak Resources and Energy Portfolio (P.R.E.P.). This strategy invests in securities and is managed with an emphasis on capital appreciation.
The P.R.E.P. strategy offers clients a diversified portfolio of energy-related companies and hedges. The portfolio will include investments in the following:
oil, natural gas, coal, shale/tar sands as well as alternative/renewable energies, i.e. wind, solar, and nuclear. Further, the portfolio aims to hedge against
both inflation and deflation through investment in precious metals, including: gold, silver, and platinum.
2.) The Composite was created as of July 31, 2005 which coincides with the inception of this strategy. A complete list and description of LCM’s composites
is available upon request. For the period of April 1, 1999 through September 30, 2007, results have been verified by Ashland Partners and Company
LLP. For the period October 1, 2007 through September 30, 2014. LCM has been verified by ACA Verification Services, LLC. A copy of the verification
report is available upon request. Additional information regarding the firm’s policies and procedures for valuing portfolios, calculating and reporting
performance results as well as preparing compliant presentations are available upon request.
3.) Prior to April 1, 2008 the Composite was known as the Global Power and Energy Composite. The change in name was due to the evolution of the strat-
egy, as precious metals are now part of the investable universe as of April 1, 2008.
4.) From inception through March 31, 2008, the composite returns are compared to the S&P 500 GICS Energy Sector, the volatility and holdings of which
may be materially different from that of the composite. The S&P 500 GICS Energy Sector is widely used as the representative benchmark for energy
strategies. The S&P 500 GICS Energy Sector is a subset of the S&P 500 and represents only those companies that meet S&P’s definition of energy
companies. For period April 1, 2008 through December 31, 2008, a static blended benchmark which consists of 80% the aforementioned S&P 500
GICS Energy Sector, and 20% the Philadelphia Stock Exchange Gold and Silver Index (XAU), is used. The XAU is a capitalization-weighted index which
includes leading companies involved in the mining of gold and silver. For periods after January 1, 2009, the portfolio became more balanced between
energy and materials (including precious metals). As such, the benchmark was changed to the S&P North American Natural Resources Sector Index,
a market-weighted index that includes energy, materials, and precious metals. The changes in benchmark coincide with an evolution of the strategy to
include precious metals.
5.) Valuations are computed and performance is reported in U.S. dollars.
6.) Composite returns are calculated using the aggregate method. This methodology has been applied consistently for all periods. Other methods may
produce different results.
7.) “Composite returns are presented gross and net. Gross returns are net of transaction fees and other expenses that may be incurred in the manage-
ment of the account but gross of all investment management fees. Net returns are net of all investment management fees, transaction fees, and other
expenses and include the reinvestment of all dividends and income. Net of fee performance was calculated using the highest management fee known,
which at this time is the 2% flat fee, which is stated below. Performance fees for clients that opt for this fee structure are accrued on a quarterly basis.
Final allocations for the performance fee will be calculated once per year. LCM’s clients have a choice between a flat fee or a performance based fee:
* Flat fee of 2% on all assets
* Flat fee of 1% on all assets plus a performance fee of 20% above a high water mark
8.) Quarterly and annual rates of return for the portfolio are computed by compounding the monthly rates of return over the applicable number of months.
9.) Total PREP Assets refers to all assets in the PREP strategy, including those which fall below the composite inclusion minimum of $100,000. This figure
is provided for comparison purposes.
10.) LCM utilizes neither leverage nor derivative instruments as a material component of its investment strategies.
11.) Composite dispersion is calculated using the asset-weighted standard deviation of all portfolios that were included in the composite for the entire year.
12.) Performance periods of less then 12 months are not annualized. 2005 results are for the period Aug. 1, 2005 through Dec. 31, 2005. Year 2014 results
are for the period of Jan. 1, 2014 through September 30, 2014.
13.) LCM defines a significant cash flow as an external flow of cash or securities (capital additions or withdrawals) that is client initiated. An external flow
of at least 10% of the portfolio market value is considered significant. This policy has been effective since the inception of the composite on July 31,
2005.
14.) The 3-year annualized standard deviation measures variability of the (gross) composite and the benchmark returns over the preceding 36-month period.
15.) Actual performance of client accounts may differ substantially.
16.) Past performance is not indicative of future results.
The content presented in this document is for informational purposes and should not be taken as a recommendation to purchase any individual securities.
Index returns shown in the performance comparisons where provided by Standard & Poor’s and Bloomberg. All of this information comes from sources
believed by LCM to be reliable. LCM, however, cannot guarantee the accuracy of the comparative returns and therefore shall not be held liable for inac-
curate information obtained from data providers.