Large Cap Growth Portfolio
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Leeb
Capital Management, Inc.
3.31.2012
LCM
13 15% 0.9 $101.9 bil
8 West 40th Street, 19th floor, New York, NY 10018 • 800.524.LEEB (5332) • www.leebcapital.com
Large Cap Growth Portfolio Leeb Capital Management
• Has managed money for high net worth individuals since 1999. • 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. • Provides individually-tailored service and regular communication of our investment outlook. Portfolio Characteristics
Forward P/E Ratio Projected Growth Rate PEG Wtd Average Market Cap
S&P 500
14 11% 1.2 $113.4 bil
Top Ten Portfolio Holdings
Apple TJX Companies Intel SPDR Gold Trust Qualcomm Wells Fargo CVS Caremark Dollar Tree American Express IBM 5.9% 3.9% 3.7% 3.7% 3.7% 3.4% 3.4% 3.3% 3.3% 3.2%
Investment Philosophy and Approach
• 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 Combines Top Down with Bottom Up
Macroeconomic analysis focuses fundamental research efforts and portfolio construction process; Industry/company earnings and growth estimates informed by top-down research.
$2,300 $2,100 $1,900 $1,700 $1,500 $1,300 $1,100 $900 $700 $500
Portfolio characteristics and holdings are based on a model portfolio and are supplemental information to the compliant presentation. Growth of $1000 Since Inception (3/31/99 – 3/31/12
Leeb LCG Composite, Gross Leeb LCG Composite, Net S&P 500 - Total Return Russell 1000 Growth Total Return
+109.5%
Macroeconomic Outlook
Interest Rates Resource Prices Country Growth Rates Inflation Demographics
+71.9%
+12.2%
Sector Expectations
Consumer Trends Energy Commodity Shortages Technology Proliferation Healthcare Spending
+38.6% 3/99 3/01 3/03 3/05 3/07 3/09 3/12
Annualized Returns as of 12/31/11
1 year 3 years 16.6% 14.9% 23.4% 25.3% 5 years 3.2% 1.6% 2.0% 5.1% 10 years 5.2% 3.6% 4.1% 4.2% Since Inception 5.9% 4.3% 2.5% 0.9%
Watchlist
Dominance Growth Quality Valuation
Leeb LCG Composite, Gross Leeb LCG Composite, Net S&P 500 Index Russell 1000 Growth
-3.9% -5.4% 8.5% 11.0%
Stock Selection
Portfolio of 30-40 stocks
Prudent Risk Management
• 80% of securities have market capitalization of > $3.5 billion • Limit sector weightings to 30% • Unsponsored ADRs may not exceed 10% of portfolio • Portfolio credit quality above S&P 500 average • 2-4% initial position size • Position limits of 8% per company Portfolio Managers adhere to strict sell discipline to protect the Fund. Positions are sold if: • Company undergoes fundamental business change • Stock becomes overpriced on relative valuation basis • Stock can be replaced with better risk/reward opportunity
Fundamental Research
LCM’s fundamental research process seeks to identify companies with the following characteristics and attractive valuation:
Business Analysis Growth Analysis Quality Analysis Management Analysis
• Dominant
market position largely immune to competitive threats
• Growth • •
• Companies • Barriers to
entry
expectations for sector Growth expectations versus peers Above average earnings/sales growth
• Overall financial
strength
• Profitability • Sales growth
by market segments
• Strategic vision • Stability • Reputation • Experience • Track record
Leeb Capital Management (LCM) Performance Results: Large Cap Growth Composite April 1, 1999 through March 31, 2012
Total Return Year (Gross) Total Return (Net of Fees) Russell 1000 Growth Index Composite 3-Yr St Dev 14 S&P 500 3-Yr St Dev 14 Russell Growth 3-Yr St Dev14 Number of Accounts Composite Dispersion % of Composite Assets (US$ mil) Composite Assets with Bundled Fee7 Total LCG Assets in (US$ mil) Composite % of LCG Assets in Composite Assets as Total % of Firm Firm Assets assets (US$ mil)
S&P 500
1999 12 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 12
24.5% 15.6% -8.2% -27.3% 34.4% 12.9% 13.5% 8.0% 23.3% -34.1% 20.8% 18.2% -10.3% 12.9%
23.2% 14.0% -9.6% -28.4% 32.6% 11.3% 11.8% 6.4% 21.5% -35.2% 19.1% 16.5% -11.7% 12.5%
15.3% -9.1% -11.9% -22.1% 28.7% 10.9% 4.9% 15.8% 5.5% -37.0% 26.5% 15.1% 2.1% 12.6%
25.2% -22.4% -20.4% -27.9% 29.7% 6.3% 5.3% 9.1% 11.8% -38.4% 37.2% 16.7% 2.6% 14.7%
17.2% 16.5% 14.6% 9.4% 7.8% 8.6% 15.7% 18.5% 20.2% 17.7% -
18.8% 18.3% 15.1% 9.2% 6.9% 7.8% 15.3% 19.9% 22.2% 19.0% -
25.6% 23.0% 15.8% 9.7% 8.5% 8.7% 16.6% 20.0% 22.4% 18.0% -
19 27 45 25 27 57 81 93 91 77 81 72 62 62
4.7% 4.3% 3.1% 4.0% 2.0% 1.8% 1.3% 1.7% 0.9% 1.2% 0.7% 0.7% -
$14.1 $20.3 $28.2 $15.7 $20.8 $56.1 $75.3 $83.4 $82.0 $56.3 $62.8 $62.1 $49.5 $51.7
14% 17% 7% 7% 6% -
$55.1 $73.1 $74.4 $52.0 $65.7 $79.0 $107.1 $96.7 $99.8 $72.7 $82.0 $81.3 $60.1 $67.2
25.6% 27.8% 37.9% 30.2% 31.7% 71.0% 70.3% 86.2% 82.2% 77.5% 76.6% 76.3% 82.3% 77.0%
21.0% 23.1% 29.7% 23.4% 24.8% 51.4% 50.8% 56.3% 52.2% 51.0% 53.6% 52.0% 48.5% 47.0%
$67.0 $87.8 $95.1 $67.1 $83.8 $109.1 $148.2 $148.0 $157.1 $110.4 $117.3 $119.4 $102.1 $110.1
Leeb Capital Management (“LCM”) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared this report in compliance with the GIPS Standards. LCM has been independently verified for the periods 4/1/99 through 3/31/122. 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 LCG Composite has been examined for the periods 4/1/99 - 3/31/12. The verification and performance examination reports are available upon request. 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 Large Cap Growth Composite (“Composite”) represents all fee-paying accounts with assets greater than $250,000 that are managed in accordance with LCM's Large Cap Growth ("LCG") investment strategy. This strategy invests in equities that are managed with a view towards capital appreciation. The two major tenets of LCM’s Growth investment strategy include the selection of stocks within sectors whose projected growth is higher relative to that of the market, and those stocks which are more cheaply valued than the market on a PEG basis. 2.) The Composite was created as of March 31, 1999 which coincides with the inception of this strategy. A complete list and description of LCM’s composites is available upon request. For the periods from April 1, 1999 through September 30, 2007, LCM has been verified by Ashland Partners and Company LLP. For the periods from October 1, 2007 through March 31, 2012, 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.) The composite returns are compared to the S&P 500 and the Russell 1000 Growth Indices, the volatility and holdings of which may be materially different from that of the composite. The S&P 500 Index is widely regarded as the best single gauge of the U.S. equities market; this index includes a representative sample of 500 leading companies in leading industries of the U.S economy. The Russell 1000 Growth Index is widely used by institutional investors as a gauge of the U.S. large-cap growth equity market. 4.) Valuations are computed and performance is reported in U.S. dollars. 5.) Composite returns are calculated using the aggregate method. This methodology has been applied consistently for all periods. Other methods may produce different results. 6.) Composite returns are presented gross and net of all management fees, transaction fees, and other expenses, and include the reinvestment of all dividends and income. Gross returns will be reduced by investment advisory fees and other expenses that may be incurred in the management of the account. Net of fee performance was calculated using the highest management fee charged to clients in accordance with LCM’s Growth strategy fee schedule which is stated below. LCM’s advisory fee schedule is the following: Retail Growth Accounts: Up to $750,000:1.5% , Over $750,000: 1.0% 7.) Prior to September 30, 2007, some accounts in the composite paid an all-inclusive fee based on a percentage of assets under management. Gross and net performance for these accounts has been reduced by the entire bundled fee. Other than brokerage commissions, this fee includes portfolio monitoring and consulting services (none of which are paid to LCM). Beginning July 1, 2002, in addition to a management fee, some accounts in the composite pay an all-inclusive fee based on a percentage of assets under management. As of September 30, 2007, the composite has been redefined to exclude these bundled fee accounts. 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 LCG Assets" refers to all assets in the LCG strategy, including those which fall below the composite inclusion minimum of $250,000. This figure is provided for comparison purposes. 10.) LCM utilizes neither leverage nor derivative investments 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 for periods of less then 12 months is not annualized. Year 1999 results are for the period of April 1, 1999 through Dec. 31, 1999. Year 2012 results are for the period of Jan. 1, 2012 through March 31, 2012. 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 became effective July 1, 2002. 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, Russell, 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 inaccurate information obtained from data providers.
Leeb
Capital Management, Inc.
3.31.2012
LCM
13 15% 0.9 $101.9 bil
8 West 40th Street, 19th floor, New York, NY 10018 • 800.524.LEEB (5332) • www.leebcapital.com
Large Cap Growth Portfolio Leeb Capital Management
• Has managed money for high net worth individuals since 1999. • 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. • Provides individually-tailored service and regular communication of our investment outlook. Portfolio Characteristics
Forward P/E Ratio Projected Growth Rate PEG Wtd Average Market Cap
S&P 500
14 11% 1.2 $113.4 bil
Top Ten Portfolio Holdings
Apple TJX Companies Intel SPDR Gold Trust Qualcomm Wells Fargo CVS Caremark Dollar Tree American Express IBM 5.9% 3.9% 3.7% 3.7% 3.7% 3.4% 3.4% 3.3% 3.3% 3.2%
Investment Philosophy and Approach
• 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 Combines Top Down with Bottom Up
Macroeconomic analysis focuses fundamental research efforts and portfolio construction process; Industry/company earnings and growth estimates informed by top-down research.
$2,300 $2,100 $1,900 $1,700 $1,500 $1,300 $1,100 $900 $700 $500
Portfolio characteristics and holdings are based on a model portfolio and are supplemental information to the compliant presentation. Growth of $1000 Since Inception (3/31/99 – 3/31/12
Leeb LCG Composite, Gross Leeb LCG Composite, Net S&P 500 - Total Return Russell 1000 Growth Total Return
+109.5%
Macroeconomic Outlook
Interest Rates Resource Prices Country Growth Rates Inflation Demographics
+71.9%
+12.2%
Sector Expectations
Consumer Trends Energy Commodity Shortages Technology Proliferation Healthcare Spending
+38.6% 3/99 3/01 3/03 3/05 3/07 3/09 3/12
Annualized Returns as of 12/31/11
1 year 3 years 16.6% 14.9% 23.4% 25.3% 5 years 3.2% 1.6% 2.0% 5.1% 10 years 5.2% 3.6% 4.1% 4.2% Since Inception 5.9% 4.3% 2.5% 0.9%
Watchlist
Dominance Growth Quality Valuation
Leeb LCG Composite, Gross Leeb LCG Composite, Net S&P 500 Index Russell 1000 Growth
-3.9% -5.4% 8.5% 11.0%
Stock Selection
Portfolio of 30-40 stocks
Prudent Risk Management
• 80% of securities have market capitalization of > $3.5 billion • Limit sector weightings to 30% • Unsponsored ADRs may not exceed 10% of portfolio • Portfolio credit quality above S&P 500 average • 2-4% initial position size • Position limits of 8% per company Portfolio Managers adhere to strict sell discipline to protect the Fund. Positions are sold if: • Company undergoes fundamental business change • Stock becomes overpriced on relative valuation basis • Stock can be replaced with better risk/reward opportunity
Fundamental Research
LCM’s fundamental research process seeks to identify companies with the following characteristics and attractive valuation:
Business Analysis Growth Analysis Quality Analysis Management Analysis
• Dominant
market position largely immune to competitive threats
• Growth • •
• Companies • Barriers to
entry
expectations for sector Growth expectations versus peers Above average earnings/sales growth
• Overall financial
strength
• Profitability • Sales growth
by market segments
• Strategic vision • Stability • Reputation • Experience • Track record
Leeb Capital Management (LCM) Performance Results: Large Cap Growth Composite April 1, 1999 through March 31, 2012
Total Return Year (Gross) Total Return (Net of Fees) Russell 1000 Growth Index Composite 3-Yr St Dev 14 S&P 500 3-Yr St Dev 14 Russell Growth 3-Yr St Dev14 Number of Accounts Composite Dispersion % of Composite Assets (US$ mil) Composite Assets with Bundled Fee7 Total LCG Assets in (US$ mil) Composite % of LCG Assets in Composite Assets as Total % of Firm Firm Assets assets (US$ mil)
S&P 500
1999 12 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 12
24.5% 15.6% -8.2% -27.3% 34.4% 12.9% 13.5% 8.0% 23.3% -34.1% 20.8% 18.2% -10.3% 12.9%
23.2% 14.0% -9.6% -28.4% 32.6% 11.3% 11.8% 6.4% 21.5% -35.2% 19.1% 16.5% -11.7% 12.5%
15.3% -9.1% -11.9% -22.1% 28.7% 10.9% 4.9% 15.8% 5.5% -37.0% 26.5% 15.1% 2.1% 12.6%
25.2% -22.4% -20.4% -27.9% 29.7% 6.3% 5.3% 9.1% 11.8% -38.4% 37.2% 16.7% 2.6% 14.7%
17.2% 16.5% 14.6% 9.4% 7.8% 8.6% 15.7% 18.5% 20.2% 17.7% -
18.8% 18.3% 15.1% 9.2% 6.9% 7.8% 15.3% 19.9% 22.2% 19.0% -
25.6% 23.0% 15.8% 9.7% 8.5% 8.7% 16.6% 20.0% 22.4% 18.0% -
19 27 45 25 27 57 81 93 91 77 81 72 62 62
4.7% 4.3% 3.1% 4.0% 2.0% 1.8% 1.3% 1.7% 0.9% 1.2% 0.7% 0.7% -
$14.1 $20.3 $28.2 $15.7 $20.8 $56.1 $75.3 $83.4 $82.0 $56.3 $62.8 $62.1 $49.5 $51.7
14% 17% 7% 7% 6% -
$55.1 $73.1 $74.4 $52.0 $65.7 $79.0 $107.1 $96.7 $99.8 $72.7 $82.0 $81.3 $60.1 $67.2
25.6% 27.8% 37.9% 30.2% 31.7% 71.0% 70.3% 86.2% 82.2% 77.5% 76.6% 76.3% 82.3% 77.0%
21.0% 23.1% 29.7% 23.4% 24.8% 51.4% 50.8% 56.3% 52.2% 51.0% 53.6% 52.0% 48.5% 47.0%
$67.0 $87.8 $95.1 $67.1 $83.8 $109.1 $148.2 $148.0 $157.1 $110.4 $117.3 $119.4 $102.1 $110.1
Leeb Capital Management (“LCM”) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared this report in compliance with the GIPS Standards. LCM has been independently verified for the periods 4/1/99 through 3/31/122. 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 LCG Composite has been examined for the periods 4/1/99 - 3/31/12. The verification and performance examination reports are available upon request. 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 Large Cap Growth Composite (“Composite”) represents all fee-paying accounts with assets greater than $250,000 that are managed in accordance with LCM's Large Cap Growth ("LCG") investment strategy. This strategy invests in equities that are managed with a view towards capital appreciation. The two major tenets of LCM’s Growth investment strategy include the selection of stocks within sectors whose projected growth is higher relative to that of the market, and those stocks which are more cheaply valued than the market on a PEG basis. 2.) The Composite was created as of March 31, 1999 which coincides with the inception of this strategy. A complete list and description of LCM’s composites is available upon request. For the periods from April 1, 1999 through September 30, 2007, LCM has been verified by Ashland Partners and Company LLP. For the periods from October 1, 2007 through March 31, 2012, 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.) The composite returns are compared to the S&P 500 and the Russell 1000 Growth Indices, the volatility and holdings of which may be materially different from that of the composite. The S&P 500 Index is widely regarded as the best single gauge of the U.S. equities market; this index includes a representative sample of 500 leading companies in leading industries of the U.S economy. The Russell 1000 Growth Index is widely used by institutional investors as a gauge of the U.S. large-cap growth equity market. 4.) Valuations are computed and performance is reported in U.S. dollars. 5.) Composite returns are calculated using the aggregate method. This methodology has been applied consistently for all periods. Other methods may produce different results. 6.) Composite returns are presented gross and net of all management fees, transaction fees, and other expenses, and include the reinvestment of all dividends and income. Gross returns will be reduced by investment advisory fees and other expenses that may be incurred in the management of the account. Net of fee performance was calculated using the highest management fee charged to clients in accordance with LCM’s Growth strategy fee schedule which is stated below. LCM’s advisory fee schedule is the following: Retail Growth Accounts: Up to $750,000:1.5% , Over $750,000: 1.0% 7.) Prior to September 30, 2007, some accounts in the composite paid an all-inclusive fee based on a percentage of assets under management. Gross and net performance for these accounts has been reduced by the entire bundled fee. Other than brokerage commissions, this fee includes portfolio monitoring and consulting services (none of which are paid to LCM). Beginning July 1, 2002, in addition to a management fee, some accounts in the composite pay an all-inclusive fee based on a percentage of assets under management. As of September 30, 2007, the composite has been redefined to exclude these bundled fee accounts. 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 LCG Assets" refers to all assets in the LCG strategy, including those which fall below the composite inclusion minimum of $250,000. This figure is provided for comparison purposes. 10.) LCM utilizes neither leverage nor derivative investments 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 for periods of less then 12 months is not annualized. Year 1999 results are for the period of April 1, 1999 through Dec. 31, 1999. Year 2012 results are for the period of Jan. 1, 2012 through March 31, 2012. 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 became effective July 1, 2002. 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, Russell, 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 inaccurate information obtained from data providers.