OBJECTIVE

The Tactical High Yield Strategy seeks above average total return consistent with preservation of capital.

PERFORMANCE OBJECTIVE

The performance objective of the Tactical High Yield Strategy is to reduce the risk of holding fixed income investments in declining markets.

INCEPTION DATE

March 15, 2001

CONCEPT

This is a relatively simple, mechanical strategy, relying upon daily price monitoring and rigorous discipline designed to take advantage of the trending tendencies of the High Yield income markets. When the share price of a High Yield investment bottoms and then rises by a predetermined amount, we consider buying it. When the share price of an investment we hold peaks and drops by a predetermined amount we sell it and move the investment into a stronger investment or into the relative safety of a money market fund until the next buying opportunity is identified.

Investments will be selected from high yield (junk) bond or high quality markets, both U.S. and foreign. Actual investments will be determined by our proprietary momentum analysis system as showing good performance leadership when a buying cycle is identified.

THE EDGE PROVIDED TO OUR INVESTORS

The high yield bond markets often trend up or down for significant periods of time. The Tactical High Yield Strategy adapts to changing markets®. This strategy is designed to detect a rising market early in the process, and direct investments into the strongest segments of the high yield market. By systematically moving out of segments early in a decline, we reduce the chances of getting caught in a severe market decline.

SUITABILITY

The Tactical High Yield Strategy is designed for investors seeking either above average income or the balance in a portfolio that fixed income investments can provide, and who also wish to avoid holding their investments during sharp or prolonged market downturns.

TAX CONSIDERATIONS

Gains from this strategy, if any, are expected to be taxable as ordinary income or short term capital gains. This strategy may be implemented in taxable accounts, but it is especially well suited to an IRA or other retirement plan accounts, or to use within a tax deferred annuity.

FEES AND ACCOUNT MINIMUMS

This service is offered on a fee-basis only, with fees calculated on a sliding scale that ranges from .75% to 2.5% annually, based upon account size. Account minimums are $100,000. Your financial advisor can provide you with an exact fee estimate. The Tactical High Yield Strategy is not available on all investment platforms.

OTHER CONSIDERATIONS

Implementation of the Tactical High Yield Strategy involves the use of mutual funds. Owning shares of mutual funds involve risk, including the possible loss of the principal amount invested. Investment returns and principal will fluctuate so that your shares, when redeemed may be worth more or less than their purchase price. Past performance of any investment or investment strategy is not a guarantee of future results.

Despite our efforts to capture and quantify these key financial and economic relationships, our knowledge about many of the important linkages is far from complete and in all likelihood will remain so. Every investment model, no matter how detailed or how well designed, conceptually and empirically, is a vastly simplified representation of the securities markets with all its intricacies and variables. Consequently, even with large advances in computational capabilities and greater comprehension of economic linkages, our knowledge base is barely able to keep pace to keep pace with the ever increasing complexity of our global markets.

The Tactical High Yield Strategy is a Fee-Based Program offered by William T. Hepburn, an Investment Advisor Representative with Hepburn Capital Management, LLC., a Registered Investment Advisor. Adapting to Changing Markets® is a registered trademark of William T. Hepburn.