Real Return Strategy Security Selection

Basis for Allocations

• Studies have shown that commodities as an asset class can provide risk-adjusted benefits to a diversified portfolio of stocks and bonds.
• Tangible goods, such as agriculture or energy related commodities sometimes react to economic conditions differently than stocks or bonds.
• Typically, when inflation rises, the cost of producing goods or borrowing funds increases, negatively impacting many stock or bond investments.
• Commodities can sometimes benefit in this environment, as rising inflation may drive up prices for raw materials, including certain commodities.
• Commodities have also been shown to offer unique risk and return opportunities.

Structure of the Model

• Stephens Real Return Strategy invests in a broad spectrum of inflation sensitive securities including stocks, bonds and exchange traded funds.
• The portfolio concentrates its investments in securities related to commodities.
• The broad range of component investments provides a high level of diversification across the individual commodity markets.
• The weightings of each component of the portfolio may vary throughout the year.

Sector Allocation and Portfolio Changes

• The portfolio may include, but is not limited to the following sectors: Energy, Precious Metals, Bonds, Agriculture, Industrial Metals and Timber.
• The portfolio may include, but is not limited to the following sub-sectors: Oil, Exploration & Production Companies, Natural Gas, Gasoline, Gold, Gold Miners, Silver, Treasury Inflation Protected Securities, Short-Term Treasuries, Wheat, Corn, Sugar, Soybeans, Copper, Zinc, Aluminum and REITS.
• The portfolio components may change throughout the year and the portfolio will be rebalanced on an as need basis.