C ASH M ANAGEMENT S OLUTIONS
Comprehensive Overview
August 2017
O VERVIEW
S ECTION O NE
A BOUT O UR F IRM
Organized for Institutional Success Overview
• Registered Investment Advisor based in Austin, Texas
• Founded in 1996 by Robert G. Smith III and Mark MacQueen
• 100% employee owned
• 49 employees, 21 Investment Professionals
• $12.1 Billion AUM/AUA as of 6/30/2017
Strategies and Services
• Taxable Fixed Income Strategies
• Tax-Exempt Fixed Income Strategies
• Global Tactical ETF Strategies
• Asset/Liability Services
Core Firm Beliefs
• Investment solutions must be crafted based on purpose
• Ensure that simplicity, liquidity and transparency permeate everything we do
• Evaluate what can go wrong before we determine what can go right
• Well-informed clients make better investment decisions
T OTAL F IRM A SSETS
B Y C LIENT T YPE (6/30/2017)
Public Funds 4%
Corporate 30%
Subadvisory 1%
Insurance 18%
Health Care 6%
Taft-Hartley 14%
High Net Worth 23%
Endowments &
Foundations 4%
4
A R EPRESENTATIVE C LIENT L IST *
Taft-Hartley Funds
Machinists Retiree Investment Trust, CA Resilient Floor Covering, CA
Plumbers & Pipefitters Union Local 74, DE Miami Ironworkers Local 272, FL
Peace Officers’ Annuity & Benefit Fund, GA I.B.E.W. Local 697, IN
United Steelworkers of America, KY I.U.O.E. Pipeline Employers H&W Fund, MD Flint Area Sheet Metal Workers Local 7-4, MI UAW GM Center Human Resources, MI
UAW Retirees of Mack Trucks Health Benefit Fund, MI Gulfport Steamship Companies ILA, MS
Elevator Constructors Local No. 1, NJ I.B.E.W. Local 400, NJ
Plumbers Local 14, NJ Metro – ILA, NJ
No. NJ Teamsters Local 723, NJ Teamsters Industrial Employees, NJ Teamsters Local 73, NJ
Trucking Employees of New Jersey, NJ WWEC Teamsters Local 863, NJ ATU Local 1342, NY
I.U.O.E. Local 15, NY
UAW Local 365 Pension Fund, NY Ohio Carpenters’ Health Plan, OH UAW Northwest Ohio Area Industries, OH
UAW Retirees of Daimler Trucks North America, OR Steamfitters Local Union No. 420, PA
Texas Iron Workers, TX Healthcare Institutions Kingman Hospital, Inc., AZ
Baptist Health Systems of South Florida, FL Tift Regional Medical Center, GA
King’s Daughters’ Hospital, IN Bryan Health, NE
Deborah Heart and Lung Center, NJ Asante Healthy System, OR Lancaster General Hospital, PA
The Princeton Community Hospital Assoc., WV
Insurance Institutions
American Longshore Mutual Association, AL State of Alabama DORM, AL
Development Insurance Group, Inc., AZ
Northwestern Arizona Regional Insurance Co., AZ Valley Schools Insurance Trust, AZ
Capstone Insurance Company, Ltd., Bermuda Seaview Insurance Company, CA
CPA Mutual Insurance Company, FL MCNA Insurance Company, FL Prepared Insurance Company, FL
Georgia Hospital Association Workers' Compensation, GA MagMutual Insurance Company, GA
3MP Insurance Company, Ltd., Grand Cayman Mississippi Windstorm Underwriting Association, MS CrossFit Risk Retention Group, MT
Pacific Re, Inc., MT
Preferred Contractors Insurance Company, MT Synergy Insurance Company, NC
Constitution Insurance Company, NE EmblemHealth, Inc., NY
Empire Bonding & Insurance Company, NY Independent Health Association, Inc., NY American Fidelity Corporation, OK Aegis Security Insurance Company, PA American Sentinel Insurance Company, PA Atlantic States Insurance Company, PA Lackawanna Insurance Group, PA
Multinational Insurance Company, Puerto Rico Titan Insurance Company, SC
Cronus Insurance Company, TX Ethos Group Incorporated, TX
Service Group Insurance & Financial Services, TX Texas Lawyers’ Insurance Exchange, TX Foundations & Endowments
SFSU Foundatio n Endowment, CA
National Association for Biomedical Research, DC NFL Players Association Endowment, DC Florida United Methodist Foundation, Inc., FL
H. Lee Moffitt Cancer Center & Research Institute Fdn., FL Allied Services Foundation, PA
Cancer Therapy and Research Foundation, TX Lutheran Foundation of Texas, TX
Public Funds
Tuscaloosa Police and Firefighters, AL Ojai Valley Sanitary District, CA City of Danbury, CT
City of Deerfield Beach, FL Albany Water Gas & Light, GA City of Albany, GA
City of Marietta, GA
Georgia Firefighters’ Pension Fund, GA St. Charles Fire Fighters Pension Fund, IL Metropolitan Library Systems, OK Texas State University, TX Retirement Plans
Bermuda Electric Light Company, Ltd., BM Holland & Hart LLP, CO
Steinman & Rodgers, LLP, DC DLA Piper LLP, IL
Hitachi High Technologies America, Inc., IL Scholle Corporation, IL
TrueValue Corporation, IL Edw. C. Levy Co., MI La-Z-Boy Incorporated, MI Tecumseh Products Company, MI
Paul, Weiss, Rifkind, Wharton & Garrison, NY Stroock & Stroock & Lavan, LLP, NY
Turley, Redmond, Rosasco & Rosasco, LLP, NY Baker Botts, LLP, TX
Brazos Electric Power Cooperative, TX Guadalupe Valley Telephone Cooperative, TX Mary Kay, Inc., TX
Overland Partners, Inc., TX The Fordyce Company, TX Urgent Surgery Associates, TX Foss Maritime Company, WA Nintendo of America, Inc, WA SEH America, Inc., WA
Alliance Laundry Systems LLC, WI
*This is a partial representative client list that shows some of Sage Advisory’s clients without regard to either performance-based criteria or type of investment strategy utilized. Inclusion on this list is not intended as an endorsement by any such client of Sage Advisory or the advisory services provided to such client. August 2017
Portfolio
Management
Robert G. Smith, III, AIF® & CIMC ■
P RESIDENT & CIO, P RINCIPAL
R ESEARCH & O PERATIONS
Portfolio Management
C LIENT S ERVICES
Robert D. Williams, CFA ■ Principal, Managing Director Robert C. Peck, Jr. ■ Principal, Investment Strategy Anthony J. Parish, CFA, CQF ■ Director of Quantitative Strategies Meghan P. Elwell, J.D., AIFA® Director of Strategy Development Samuel Hikspoors, Ph.D.
Vice President, Quantitative Strategies Komson Silapachai, CFA
Vice President, Research & Portfolio Strategy Doug A. Benning
Research Analyst Jae Y. Song Research Analyst Sean C. Krasan
Principal, Managing Director Eileen M. Joyce
Assistant Vice President, Portfolio Administration Erica G. Mass
Associate, Operations Allison C. Hartman Associate, Operations Mark J. Welp
Senior Portfolio & Operations Analyst Cameron R. Ladd
Vice President, Information Technology Mark C. MacQueen ■
Principal, Managing Director Thomas H. Urano, CFA ■ Principal, Managing Director Jeffery S. Timlin, CFA, CMT ■ Principal, Managing Director Zachary Q. Chavis
Vice President, Portfolio Management Ryan Charles O’Malley, CFA Fixed Income Portfolio Strategist Dustin G. Qualley, CFA
Assistant Vice President, Portfolio Management Seth B. Henry, CFA
Assistant Vice President, Portfolio Management Andrew K. Demand, CFA
Assistant Vice President, Portfolio Management Nicholas C. Erickson, CFA
Assistant Vice President, Portfolio Management Matthew L. Cleavenger
Associate, Portfolio Management
Gregory J. Figaro, AIF® Principal, Managing Director L. Dustin Finley
Vice President, Consultant & Client Relations Stephanie C. Sharp
Vice President, Consultant & Client Relations Arthur L. Cherches
Vice President, Consultant & Client Relations Kari K. Edgar
Associate, Consultant & Client Services Christopher H. Rich
Associate, Consultant & Client Services Jessica N. Hernandez
Associate, Consultant & Client Services Tracy L. Stewart
Associate, Consultant & Client Services John R. Slais
Principal, Managing Director Wade T. Uloth, IACCP Vice President, Compliance Annette S. Kennedy Office Administration Jacqueline M. Olvera Salesforce Administrator Tiasha M. Ullah Office Coordinator
B USINESS D EVELOPMENT
P ORTFOLIO M ANAGEMENT
Michael D. Walton, AIF® Principal, Managing Director Jeffrey L. Sims, CPA, CLU Executive Vice President,
Director of Insurance Investment Management Lily A. Atilano
Marketing
Bob W. Moser, CIMA®, CRPC, CFIP
Senior Vice President, Divisional Sales Director Zachary T. Sooter
Regional Director – Central Bradford G. Norford, CIMA®CMFC® Regional Director - Northeast Kim F. Sowers, CIMA® Regional Director - South Deborah D. Draeger Regional Director – Southeast Sophie G. Brooks-Ames
Regional Consultant – Central/West John A. Jochum
Regional Consultant – South/Southwest
O UR O RGANIZATION
6
I NVESTMENT C OMMITTEE P ROFESSIONALS
Robert G. Smith, III, AIF® & CIMC
President & CIO, Principal
Investment Experience – 45+ Years
• Executive VP, Smith Affiliated Capital, New York
• Managing Director, Merrill Lynch Capital Markets
• Resident Advisor, Saudi Arabian Monetary Agency (SAMA)
• Senior Analyst, Loeb, Rhoades & Co.
• Credit Analyst, Moodys Investors Services Education/Certifications
• Master of Business Administration in Finance - New York University Stern School of Business
• Bachelor of Arts in History - City University of New York
• Certified Investment Management Consultant (CIMC)
• Accredited Investment Fiduciary (AIF)
Robert C. Peck, Jr.Principal
Investment Experience – 45+ Years
• CIO, Scudder Kemper Investment Management
• CIO, Van Kampen American Capital
• VP, Merrill Lynch Asset Management
• VP, Merrill Lynch Capital Markets Education/Certifications
• Master of Business Administration in Economics - New York University Stern School of Business
• Bachelor of Science in Finance - Syracuse University
Mark C. MacQueen
Principal, Managing Director Investment Experience – 35+ Years
• Principal & Director of Fixed Income Trading and Research, Tejas Securities Group
• Executive Director, Merrill Lynch Capital Markets Education/Certifications
• Bachelor of Arts in Business Administration - University of Delaware
Thomas H. Urano, CFA
Principal, Managing Director Investment Experience – 20+ Years
• Vice President, Credit Suisse Asset Management
• Portfolio Accountant, Morgan Keegan Education/Certifications
• Bachelor of Arts in Economics - University of Texas
• Chartered Financial Analyst
I NVESTMENT C OMMITTEE P ROFESSIONALS
Robert D. Williams, CFA
Principal, Managing Director Investment Experience – 19+ Years
• Fixed Income Strategist, UBS Capital Markets
• Senior Strategist, MONY Wealth Management
• Research Analyst, Merrill Lynch & Co.
Education/Certifications
• Bachelor of Arts in Management – University of Colorado
• Chartered Financial Analyst
Jeffery S. Timlin, CFA, CMTPrincipal, Managing Director Investment Experience – 19+ Years
• Portfolio Trader, MFS Investment Management Education/Certifications
• Bachelor of Science in Business Administration - Villanova University
• Chartered Financial Analyst
• Chartered Market Technician
Anthony J. Parish, CFA, CQF
Director of Quantitative Strategies Investment Experience – 14+ Years
• VP, Investment Strategy Analyst, Deutsche Asset Management
• VP, Product Development & Management, Credit Suisse
• VP, Head of Product Analysis, OppenheimerFunds
• A Chartered Financial Analyst and member of the CFA Institute
Education/Certifications
• Master of Business Administration in Finance -
• Fordham University
• Bachelor of Arts – Concordia University
• Chartered Financial Analyst
C ASH M ANAGEMENT S OLUTIONS
S ECTION T WO
C ASH M ANAGEMENT S OLUTIONS
Investment Process
Risk Management
• Manage regulatory and client-specific risks including constraints and liquidity requirements
• Dedicated access to client service and investment team who provide ongoing reporting and monitoring
Investment Approach
• Top down focus on key risk decisions including duration/yield curve, overall spread allocation, sector exposure
• Bottom up focus on security selection with emphasis fundamental health, relative valuation, structure, and liquidity
Investment Team
• Determines broad macro view, duration
& curve positioning, spread allocation, and sector exposure
• Responsible for portfolio construction, sector and industry coverage, security analysis, and daily portfolio surveillance
Client Profile
• Evaluation to determine utility of the funds in the context of business planning and cash flow management effort
• Craft a holistic solution that incorporates
cash flow analysis, risk considerations and
Sage macro view
10
C ASH M ANAGEMENT S OLUTIONS
Overview Strategy Keys
• Purpose-Based: segment investment strategies to balance objectives
• Customization: separate account customized to policy guidelines and operating requirements
• Diversification: seek optimal portfolio of government bonds, securitized debt, and investment grade credit
• Risk Management: process built around actively manage interest rate risk, credit risk, and liquidity risk
Expected Risk
Ex p e ct e d R e tu rn
Liquidity
Characteristics:
- < 6 month investment horizon - Daily liquidity for operating needs - Structured portfolio with principal
preservation as top priority - Average maturity 6 months
Core
Characteristics:
- 6-18 month investment horizon - Segment of cash not required in
near term
- Laddered portfolio with focus on balancing principal preservation and yield
- Sensitivity to realized gains &
losses
- Average maturity 1 year
Strategic
Characteristics:
- > 18 month investment horizon - Segment of excess cash with low
probability of usage
- Develop risk budget with strong understanding of potential volatility
- Average maturity less than 2 years
C ASH M ANAGEMENT S OLUTIONS
Regulatory Changes Result in Dramatic Shift in Money Market Industry Money Market Reform
• New regulations adopted in October 2016 impact Institutional Prime and Municipal Money Market Funds
• Impose floating net asset value (NAV), and potential for liquidity fees and redemption gates
• Since the beginning of 2016, an estimated $1 Trillion has shifted from Institutional Prime to Government Funds
0 0.5 1 1.5 2 2.5
Yield %
Yield Environment
JPM Gov MM Fund Inst. JPM Prime MM Fund Inst. Sage Liquidity Strategy
12
C ASH M ANAGEMENT S OLUTIONS
Sector Diversification Offers Higher Yields and Potential for Increased Total Return
1.36%
1.56%
1.50%
1.88% 1.90% 1.91%
2.04%
2.34%
Treasury Agency Comm Paper ABS MBS Agency CMBS A-Rated Corps BBB Corps
Yield Environment: 1-3 Year Maturities
Source: Bloomberg, as of 6/30/2017
0 10 20 30 40 50 60 70
1 9 17 25 33 41 49 57 65 73 81 89 97 105 113 121 129 137 145 153 161 169 177
Basis Points
Days
Days to Recover from Principal Volatility with Portfolio Yield of 1.25%
C ASH M ANAGEMENT S OLUTIONS
Higher Yields Offset Principal Volatility Over Time
29 days to recover from 10 bps decline
73 days to recover from 25 bps decline
116 days to recover
from 40 bps decline
14
Benefits of SMA
• Optimize yield and returns through diversification into spread sectors while dictating terms of liquidity
• Avoid challenges of prime fund structure: liquidity fees, redemption gates, reporting
• Customize to portfolio duration, credit quality, sector constraints and ability to manage gains & losses
C ASH M ANAGEMENT S OLUTIONS
Customized Separately Managed Account
Characteristics Liquidity Core Strategic
Time Horizon < 6 Months 6-18 Months > 18 Months
Benchmark 90 Day T-Bill BarCap 1 Year Gov/Credit BarCap 1-3 Year Gov/Credit
Duration Profile < 6 Months 6-18 Months 1-3 Years
Minimum Credit Quality BBB BBB BBB
Investment Universe
Money market instruments, corporate bonds, government and agency debt, asset backed
securities
Money market instruments, corporate bonds, government and agency debt, asset backed
securities
Corporate bonds, government and agency debt, asset backed
securities, mortgage backed
securities
C ASH M ANAGEMENT S OLUTIONS
Composite Characteristics as of August 31, 2017
17%
1%
51%
2%
5%
4%
20%
Core
16%
4%
47%
5%
7%
3%
18%
Strategic
Characteristics Liquidity Core Strategic
Yield to Worst 1.62% 1.67% 1.73%
Average Quality A2 A1 Aa3
Effective Duration 0.42 Years 0.91 Years 1.87 Years
Average Maturity 1.0 Year 1.3 Years 2.1 Years
3-Year Standard Deviation 0.23% 0.38% 0.66%
17%
53%
4% 1%
4%
21%
Liquidity
Treasury Agency
Corporate Credit Non-Corporate Credit
MBS
16
C ASH M ANAGEMENT S OLUTIONS
Approach & Process
Continuous Monitoring & Service
• Holistic solution which incorporates cash flow analysis, risk considerations and Sage macro view
• Structure focuses first and foremost on ensuring adequate cash flow through dynamic analysis
• Interest rate sensitivity analysis is utilized to take advantage of cash outflow timing and market opportunities
• Incorporate regulatory constraints to ensure portfolios stay within regulatory confines
S ECTION T HREE
18
P ERFORMANCE *
L IQUIDITY T AXABLE
F IXED I NCOME
C OMPOSITE
90 D AY T-B ILL I NDEX
August 2017 0.11% 0.09%
Quarter to Date 0.29% 0.18%
Year to Date 1.04% 0.48%
1 Year 1.36% 0.62%
3 Year 0.98% 0.29%
5 Year 0.70% 0.20%
7 Year 0.58% 0.18%
10 Year 0.95% 0.50%
L IQUIDITY T AXABLE F IXED I NCOME C OMPOSITE
Portfolio Performance as of 8/31/2017
*Performance is gross of fees
S ECTORS
L IQUIDITY T AXABLE
F IXED I NCOME
C OMPOSITE
90 D AY T-B ILL I NDEX
Treasury 16.60% 100.00%
Agency 0.80% -
Corporate Credit 52.90% -
MBS 5.30% -
CMBS 2.70% -
ABS 20.80% -
Cash 0.90% -
C HARACTERISTICS
L IQUIDITY T AXABLE
F IXED I NCOME C OMPOSITE
90 D AY T-B ILL I NDEX
Effective Maturity 0.92 yrs. 0.25 yrs.
Duration 0.42 yrs. 0.25 yrs.
Yield to Maturity 1.63% 1.01%
Average Quality A2 Aaa
Q UALITY D ISTRIBUTION
L IQUIDITY T AXABLE F IXED I NCOME C OMPOSITE
Portfolio Characteristics as of 8/31/2017
Aaa 41%
Aa A 4%
18%
Baa 35%
<Baa 2%
Aaa 100%
L
IQUIDITYT
AXABLEF
IXEDI
NCOMEC
OMPOSITE20
L IQUIDITY T AXABLE F IXED I NCOME C OMPOSITE
Portfolio Holdings as of 8/31/2017
CUSIP Issuer Nam e Maturity
Date Ratings Yield to
Worst Price Portfolio
Weight Duration
Asset Backed Aaa 1.51 20.80 0.45
02587AAE4 American Express Credit Account Master Trust 2012-4 1.467% 15-may-2020 05/15/2020 Aaa 1.25 100.03 0.25 0.04 02582JGN4 American Express Credit Account Master Trust Series 201 1.597% 15-dec-2021 12/15/2021 Aaa 1.62 100.42 0.84 0.05 02582JGG9 American Express Credit Account Master Trust Series 201 1.647% 17-may-2021 05/17/2021 Aaa 1.49 100.40 1.11 0.04
05522RCQ9 Ba Credit Card Trust 2014-1 1.607% 15-jun-2021 06/15/2021 Aaa 1.50 100.41 0.44 0.04
05522RCU0 Ba Credit Card Trust 2015-2 1.36% 15-sep-2020 09/15/2020 Aaa 1.40 99.97 0.42 0.62
05522RCT3 Ba Credit Card Trust 2015-a1 1.557% 15-jun-2020 06/15/2020 Aaa 1.23 100.10 0.95 0.04 14041NFD8 Capital One Multi Asset Execution Trust 2016-1 1.857% 15-feb-2024 04/15/2021 Aaa 1.90 101.36 0.29 0.11 14041NDT5 Capital One Multi-asset Execution Trust (2007-5) 1.266% 15-jul-2020 09/15/2017 Aaa 1.27 100.00 0.66 0.04 14041NER8 Capital One Multi-asset Execution Trust 2014-3 1.607% 18-jan-2022 03/15/2019 Aaa 1.60 100.41 0.29 0.05 14041NET4 Capital One Multi-asset Execution Trust 2014-5 1.48% 15-jul-2020 09/15/2017 Aaa 1.48 100.00 0.57 0.04 14313XAH3 Carmax Auto Owner Trust 2015-4 1.512% 15-apr-2019 04/15/2019 Aaa 1.36 100.02 0.02 0.04 14314MAC7 Carmax Auto Owner Trust 2016-2 1.52% 16-feb-2021 02/15/2021 Aaa 2.04 99.85 0.29 0.29 14314EAC5 Carmax Auto Owner Trust 2016-3 1.39% 17-may-2021 05/15/2021 Aaa 1.75 99.67 0.65 0.92 161571GH1 Chase Issuance Trust 2013-9a 1.647% 16-nov-2020 11/15/2020 Aaa 1.53 100.39 0.29 0.04
161571GY4 Chase Issuance Trust 2015-4a 1.36% 15-apr-2020 04/15/2020 Aaa 1.40 99.97 0.17 0.62
161571HC1 Chase Issuance Trust 2016-2 1.37% 15-jun-2021 06/15/2021 Aaa 1.60 99.60 0.78 1.76
161571HJ6 Chase Issuance Trust 2017-1 1.527% 18-jan-2022 01/15/2020 Aaa 1.71 100.38 0.66 0.08
17305EFB6 Citibank Credit Card Issuance Trust 2013-a4 1.656% 24-jul-2020 07/24/2020 Aaa 1.37 100.29 0.36 0.08 17305EFU4 Citibank Credit Card Issuance Trust 2014-a8 1.73% 09-apr-2020 04/09/2020 Aaa 1.39 100.19 0.88 0.61 17305EGA7 Citibank Credit Card Issuance Trust 2017-a2 1.74% 19-jan-2021 01/19/2021 Aaa 1.52 100.28 0.61 1.27 254683AC9 Discover Card Execution Note Trust 2007-1 5.65% 16-mar-2020 03/15/2020 Aaa 1.84 100.14 0.07 0.04 254683BB0 Discover Card Execution Note Trust 2013-1 1.527% 17-aug-2020 08/15/2020 Aaa 1.23 100.13 0.85 0.04 254683BF1 Discover Card Execution Note Trust 2013-5 1.677% 15-apr-2021 04/15/2021 Aaa 1.45 100.42 0.61 0.04 254683BL8 Discover Card Execution Note Trust 2014-5 1.39% 15-apr-2020 04/15/2020 Aaa 1.36 100.00 0.36 0.12 34530HAF7 Ford Credit Auto Lease Trust 2014-a 1.9% 15-sep-2019 09/15/2019 Aaa 1.58 100.17 0.72 0.81 34531PAD3 Ford Credit Auto Owner Trust 2016-a 1.39% 15-jul-2020 07/15/2020 Aaa 1.53 99.88 0.25 0.80 43814HAC2 Honda Auto Receivables 2014-3 Owner Trust 0.88% 15-jun-2018 06/15/2018 Aaa 1.24 99.98 0.01 0.04 43814KAC5 Honda Auto Receivables 2015-1 Owner Trust 1.05% 15-oct-2018 10/15/2018 Aaa 1.43 99.92 0.48 0.19 43814RAC0 Honda Auto Receivables 2016-4 Owner Trust 1.21% 18-dec-2020 12/18/2020 Aaa 1.69 99.47 0.78 1.11
CUSIP Issuer Nam e Maturity
Date Ratings Yield to
Worst Price Portfolio
Weight Duration 65477UAC4 Nissan Auto Receivables 2015-a Owner Trust 1.05% 15-oct-2019 10/15/2019 Aaa 1.53 99.84 0.62 0.32 65475WAD0 Nissan Auto Receivables 2015-b Owner Trust 1.34% 16-mar-2020 03/15/2020 Aaa 1.51 99.90 0.51 0.55 65478AAB9 Nissan Auto Receivables 2015-c Owner Trust 0.87% 15-nov-2018 11/15/2018 Aaa 1.51 99.96 0.08 0.06 65478WAD7 Nissan Auto Receivables 2016-c Owner Trust 1.18% 15-jan-2021 01/15/2021 Aaa 1.62 99.42 0.69 1.32 87165LAK7 Synchrony Credit Card Master Note Trust 2015-2 1.6% 15-apr-2021 04/15/2021 Aaa 1.51 100.05 0.44 0.62 87165LAA9 Synchrony Credit Card Master Trust 2014-1 1.61% 15-nov-2020 11/20/2020 Aaa 1.45 100.03 0.32 0.21 89237KAB9 Toyota Auto Receivables 2016-a Owner Trust 1.03% 16-jul-2018 07/15/2018 Aaa 1.62 99.97 0.22 0.04 89237WAB3 Toyota Auto Receivables 2016-c Owner Trust 1.0% 15-jan-2019 01/15/2019 Aaa 1.54 99.91 0.51 0.16 89231LAD9 Toyota Auto Receivables 2016-d Owner Trust 1.23% 15-oct-2020 10/15/2020 Aaa 1.71 99.52 0.22 1.00
92347XAA4 Verizon Owner Trust 2016-1 1.42% 20-jan-2021 01/20/2021 Aaa 1.64 99.69 0.48 1.42
981464EN6 World Financial Network Credit Card Master Note Trust 2 1.54% 16-aug-2021 08/15/2021 Aaa 1.46 100.01 0.45 0.12
Com m ercial Mortgage Backed Aaa 1.96 2.68 0.51
12527DAP5 Cfcre Commercial Mortgage Trust 2011-c2 3.061% 15-dec-2047 12/15/2047 Aaa 2.92 99.91 0.00 0.24 12624XAB4 Comm 2013-ccre6 Mortgage Trust 2.122% 10-mar-2046 02/12/2018 Aaa 1.65 100.12 0.51 0.40 12626GAB9 Comm 2013-lc13 Mortgage Trust 3.009% 10-aug-2046 08/10/2046 Aaa 1.73 101.24 0.45 1.03
40422AAL7 HILT 2014-ORL C 07/15/2022 A3 3.66 98.64 0.42 -0.03
40422AAG8 HILT 2014-ORL XEXT 07/15/2029 Aaa -- 0.09 0.00 --
52109RBM2 Lb-ubs Commercial Mortgage Trust Series 2007-c7 5.866% 15-sep-2045 09/15/2045 Aaa 2.44 100.06 0.06 0.04 92890NAT6 Wfrbs Commercial Mortgage Trust 2012-c10 1.765% 15-dec-2045 12/15/2017 Aaa 1.56 99.94 0.03 0.04 92937EAB0 Wfrbs Commercial Mortgage Trust 2013-c11 2.029% 15-mar-2045 02/15/2018 Aaa 1.51 100.01 0.03 0.18 92937UAB4 Wfrbs Commercial Mortgage Trust 2013-c13 1.964% 15-may-2045 04/15/2018 Aaa 1.53 100.14 0.91 0.51 92890KAW5 Wfrbs Commercial Mortgage Trust 2014-c22 1.479% 15-sep-2057 09/15/2057 Aaa 1.68 99.76 0.26 0.94
Corporate Baa1 1.81 52.87 0.45
00287YAN9 Abbvie Inc. 1.8% 14-may-2018 05/14/2018 Baa2 1.65 100.10 0.90 0.70
00912XAP9 Air Lease Corporation 2.125% 15-jan-2018 01/15/2018 Baa3 1.72 100.14 0.45 0.37
00507UAM3 Allergan Funding Scs 2.35% 12-mar-2018 03/12/2018 Baa3 1.72 100.33 0.36 0.52
00507UAQ4 Allergan Funding Scs Frn 12-mar-2020 03/12/2020 Baa3 2.06 101.90 0.93 0.06
023135AH9 Amazon.com, Inc. 1.2% 29-nov-2017 11/29/2017 Baa1 1.37 99.95 0.14 0.25
025537AF8 American Electric Power Company, Inc. 1.65% 15-dec-2017 12/15/2017 Baa1 1.56 100.01 0.80 0.25
L IQUIDITY T AXABLE F IXED I NCOME C OMPOSITE
Portfolio Holdings as of 8/31/2017
22
CUSIP Issuer Nam e Maturity
Date Ratings Yield to
Worst Price Portfolio
Weight Duration
031162CL2 Amgen Inc. Frn 10-may-2019 05/10/2019 Baa1 1.76 100.24 0.51 0.20
035242AG1 Anheuser Busch Inbev Finance, Inc. 1.9% 01-feb-2019 02/01/2019 A3 1.72 100.24 0.61 1.39
037833CN8 Apple Inc. Frn 09-feb-2022 02/09/2022 Aa1 1.94 101.17 0.93 0.21
00206RAJ1 At&t Inc. 5.5% 01-feb-2018 02/01/2018 Baa1 1.80 101.52 0.60 0.42
00206REJ7 At&t Inc. Frn 14-feb-2023 02/14/2023 Baa1 2.71 99.85 0.57 0.18
00206RCK6 At&t Inc. Frn 30-jun-2020 06/30/2020 Baa1 2.06 101.30 0.59 0.10
06051GEX3 Bank Of America Corporation 2.6% 15-jan-2019 01/15/2019 Baa1 1.84 101.02 0.31 1.34
06051GFD6 Bank Of America Corporation 2.65% 01-apr-2019 04/01/2019 Baa1 1.88 101.19 0.90 1.53
06051GDX4 Bank Of America Corporation 5.65% 01-may-2018 05/01/2018 Baa1 1.83 102.51 0.15 0.65
06406HCU1 Bank Of New York Mellon Corporation 2.2% 15-may-2019 05/15/2019 A1 1.68 100.83 0.45 1.60
064159BE5 Bank Of Nova Scotia 1.375% 18-dec-2017 12/18/2017 A1 1.28 100.01 0.91 0.26
05531FAQ6 Bb&t Corporation 2.25% 01-feb-2019 02/01/2019 A2 1.64 100.80 0.21 1.39
05567L7E1 Bnp Paribas Sa 2.375% 14-sep-2017 09/14/2017 A1 1.61 100.02 1.01 0.04
05574LTX6 Bnp Paribas Sa 2.4% 12-dec-2018 12/12/2018 A1 1.68 100.91 0.33 1.26
05565QCE6 Bp Capital Markets Plc 1.375% 10-may-2018 05/10/2018 A1 1.49 99.92 0.65 0.69
07330NAP0 Branch Banking & Trust Co. Frn 15-jan-2020 01/15/2020 A1 1.86 100.33 0.53 0.12
12189TBA1 Burlington Northern Santa Fe Corp. 5.75% 15-mar-2018 03/15/2018 A3 1.62 102.20 0.17 0.52 50248WAC0 Caisse Centrale Desjardins Du Quebec 1.55% 12-sep-2017 09/12/2017 Aa2 1.25 100.01 0.63 0.03 14040HAR6 Capital One Financial Corporation 6.75% 15-sep-2017 09/15/2017 Baa1 3.13 100.13 0.76 0.04
14916RAE4 Catholic Health Initiatives 2.6% 01-aug-2018 08/01/2018 A2 1.89 100.63 0.25 0.90
166764AA8 Chevron Corporation 1.104% 05-dec-2017 12/05/2017 Aa2 1.40 99.92 1.06 0.25
172967JH5 Citigroup Inc. 1.8% 05-feb-2018 02/05/2018 Baa1 1.64 100.06 0.90 0.43
172967EM9 Citigroup Inc. 6.125% 21-nov-2017 11/21/2017 Baa1 1.79 100.95 0.29 0.22
14042RFJ5 City Of Mclean Frn 30-jan-2023 01/30/2023 Baa1 2.76 100.47 0.49 0.17
20030NAU5 Comcast Corporation 6.3% 15-nov-2017 11/15/2017 A3 1.68 100.93 0.18 0.21
20826FAB2 Conocophillips 1.05% 15-dec-2017 12/15/2017 Baa1 1.43 99.89 1.10 0.29
126650CH1 Cvs Health Corporation 1.9% 20-jul-2018 07/20/2018 Baa1 1.59 100.27 0.90 0.88
278062AB0 Eaton Corporation 1.5% 02-nov-2017 11/02/2017 Baa1 1.62 99.97 0.88 0.17
278642AP8 Ebay Inc. 2.5% 09-mar-2018 03/09/2018 Baa1 1.60 100.46 0.90 0.51
L IQUIDITY T AXABLE F IXED I NCOME C OMPOSITE
Portfolio Holdings as of 8/31/2017
CUSIP Issuer Nam e Maturity
Date Ratings Yield to
Worst Price Portfolio
Weight Duration
281020AF4 Edison International 3.75% 15-sep-2017 09/15/2017 A3 2.25 100.05 0.75 0.04
29250RAN6 Enbridge Energy Partners, L.p. 6.5% 15-apr-2018 04/15/2018 Baa3 2.01 102.75 0.45 0.60
29273RBH1 Energy Transfer L.p. 2.5% 15-jun-2018 06/15/2018 Baa3 1.88 100.48 0.82 0.78
345397WR0 Ford Motor Credit Company Llc 1.724% 06-dec-2017 12/06/2017 Baa2 1.47 100.06 0.95 0.26 345397XH1 Ford Motor Credit Company Llc 2.24% 15-jun-2018 06/15/2018 Baa2 1.74 100.38 0.89 0.78
369604BC6 General Electric Company 5.25% 06-dec-2017 12/06/2017 A1 2.37 100.74 0.29 0.26
37045VAD2 General Motors Company 3.5% 02-oct-2018 10/02/2018 Baa3 1.96 101.64 0.76 1.05
98417EAU4 Glencore Finance (canada) Ltd. 2.7% 25-oct-2017 10/25/2017 Baa2 2.05 100.09 0.62 0.15
38141GFG4 Goldman Sachs Group, Inc. 5.95% 18-jan-2018 01/18/2018 A3 1.79 101.56 0.31 0.38
38143U8G9 Goldman Sachs Group, Inc. Frn 25-feb-2021 02/25/2021 A3 2.36 103.63 1.29 0.28
41283LAE5 Harley-davidson Financial Services, Inc. 1.55% 17-nov-2017 11/17/2017 A3 1.52 100.00 0.25 0.21
458140AL4 Intel Corporation 1.35% 15-dec-2017 12/15/2017 A1 1.35 100.00 1.11 0.29
459745GP4 International Lease Finance Corporation 3.875% 15-apr-2018 04/15/2018 Baa3 2.02 101.13 0.73 0.61 459745GL3 International Lease Finance Corporation 5.875% 01-apr-2019 04/01/2019 Baa3 2.11 105.82 0.24 1.49
472319AK8 Jefferies Group Llc 5.125% 13-apr-2018 04/13/2018 Baa3 1.87 101.98 0.70 0.60
46625HQK9 Jpmorgan Chase & Co. Frn 01-mar-2021 03/01/2021 A3 2.19 103.13 0.82 0.05
501044DA6 Kroger Co. 2.0% 15-jan-2019 01/15/2019 Baa1 1.81 100.25 0.18 1.35
58013MEB6 Mcdonald's Corporation 5.8% 15-oct-2017 10/15/2017 Baa1 1.84 100.47 0.52 0.12
59156RBE7 Metlife, Inc. 1.756% 15-dec-2017 12/15/2017 A3 1.48 100.08 0.95 0.29
594918AP9 Microsoft Corporation 0.875% 15-nov-2017 11/15/2017 Aaa 1.39 99.89 0.90 0.21
59565AAB6 Midcontinent Express Pipeline Llc 6.7% 15-sep-2019 09/15/2019 Ba2 3.06 107.13 0.43 1.86
65535HAG4 Nomura Holdings, Inc. 2.75% 19-mar-2019 03/19/2019 Baa1 1.93 101.24 0.31 1.50
666807BF8 Northrop Grumman Corporation 1.75% 01-jun-2018 06/01/2018 Baa2 1.56 100.14 0.62 0.74
629491AB7 Nyse Euronext 2.0% 05-oct-2017 10/05/2017 A2 1.38 100.08 0.72 0.10
68389XAN5 Oracle Corporation 1.2% 15-oct-2017 10/15/2017 A1 1.28 99.98 0.30 0.12
69349LAC2 Pnc Bank Na 4.875% 21-sep-2017 09/21/2017 A3 2.19 100.14 0.54 0.06
756109AM6 Realty Income Corporation 2.0% 31-jan-2018 01/31/2018 Baa1 1.58 100.13 0.49 0.35
78008SVD5 Royal Bank Of Canada 1.5% 16-jan-2018 01/16/2018 A1 1.47 100.01 0.30 0.37
78012KFU6 Royal Bank Of Canada Holdings Uk Ltd. 1.8% 30-jul-2018 07/30/2018 A1 1.56 100.22 0.68 0.91
L IQUIDITY T AXABLE F IXED I NCOME C OMPOSITE
Portfolio Holdings as of 8/31/2017
24
CUSIP Issuer Nam e Maturity
Date Ratings Yield to
Worst Price Portfolio
Weight Duration
824348AP1 Sherwin-williams Company 1.35% 15-dec-2017 12/15/2017 Baa3 1.82 99.86 1.12 0.29
86562MAD2 Sumitomo Mitsui Financial Group, Inc. Frn 09-mar-2021 03/09/2021 A1 2.34 103.40 0.68 0.08
87612EAS5 Target Corporation 6.0% 15-jan-2018 01/15/2018 A2 1.48 101.66 0.58 0.37
88732JAL2 Time Warner Cable Inc. 6.75% 01-jul-2018 07/01/2018 Ba1 1.98 103.91 0.88 0.81
88947EAH3 Toll Brothers Finance Corp. 8.91% 15-oct-2017 10/15/2017 Ba1 2.55 100.75 0.60 0.12
902494BB8 Tyson Foods, Inc. Frn 02-jun-2020 06/02/2020 Baa2 1.96 100.49 0.64 0.01
91159HHQ6 U.s. Bancorp Frn 24-jan-2022 01/24/2022 A1 2.13 100.88 1.21 0.16
911312AH9 United Parcel Service, Inc. 5.5% 15-jan-2018 01/15/2018 A1 1.45 101.49 0.19 0.37
913017CK3 United Technologies Corporation Frn 01-nov-2019 11/01/2019 A3 1.64 100.53 0.30 0.17
92276MBA2 Ventas Realty Lp 2.0% 15-feb-2018 02/15/2018 Baa1 1.70 100.10 0.91 0.40
92343VBP8 Verizon Communications Inc. 3.65% 14-sep-2018 09/14/2018 Baa1 1.62 102.07 0.90 1.00
92826CAA0 Visa Inc. 1.2% 14-dec-2017 12/14/2017 A1 1.30 99.97 0.20 0.29
92857WBE9 Vodafone Group Plc 1.5% 19-feb-2018 02/19/2018 Baa1 1.49 100.00 0.90 0.47
929160AU3 Vulcan Materials Company Frn 15-jun-2020 06/15/2020 Baa3 2.21 99.95 0.47 0.04
931142DF7 Wal-mart Stores, Inc. 1.125% 11-apr-2018 04/11/2018 Aa2 1.37 99.85 0.15 0.61
94974BFU9 Wells Fargo & Company 2.125% 22-apr-2019 04/22/2019 A2 1.73 100.62 0.64 1.60
949746NX5 Wells Fargo & Company 5.625% 11-dec-2017 12/11/2017 A2 1.65 101.09 0.55 0.28
42217KAZ9 Welltower, Inc. 2.25% 15-mar-2018 03/15/2018 Baa1 1.92 100.17 0.11 0.53
42217KAT3 Welltower, Inc. 4.7% 15-sep-2017 09/15/2017 Baa1 2.47 100.08 0.67 0.04
963320AS5 Whirlpool Corporation 1.65% 01-nov-2017 11/01/2017 Baa1 1.59 100.00 0.91 0.17
Governm ent Related Aa2 1.82 0.67 0.49
302154BG3 Export-import Bank Of Korea 1.75% 27-feb-2018 02/27/2018 Aa2 1.82 99.96 0.67 0.49
Municipal A2 0.70 0.08 0.05
419722S53 Hawaii Cnty Hawaii 1.2% 01-sep-2017 09/01/2017 Aa2 -- 100.00 0.04 0.00
546279K66 Louisiana Loc Govt Environmental Facs & Cmnty Dev Auth 4.5% 01-oct-2029 10/01/2029 A3 1.27 100.26 0.04 0.09
Securitized / Covered Baa3 1.79 5.34 0.03
30711XAE4 CAS 2014-C02 1M1 05/25/2024 A1 1.89 100.34 0.37 -0.07
30711XAJ3 CAS 2014-C03 1M1 07/25/2024 Aa1 1.57 100.15 0.23 0.05
L IQUIDITY T AXABLE F IXED I NCOME C OMPOSITE
Portfolio Holdings as of 8/31/2017
CUSIP Issuer Nam e Maturity
Date Ratings Yield to
Worst Price Portfolio
Weight Duration
30711XAL8 CAS 2014-C03 2M1 07/25/2024 Aaa 1.33 100.11 0.07 0.07
30711XCZ5 CAS 2016-C04 1M1 01/25/2029 Baa2 1.17 101.10 1.32 -0.07
30711XDP6 CAS 2016-C06 1M1 04/25/2029 Baa2 1.89 101.12 1.31 0.01
30711XJS4 CAS 2017-C03 1M1 10/28/2029 Baa3 2.31 100.24 0.91 -0.06
30711XNS9 CAS 2017-C05 1M1 01/25/2030 Baa3 2.13 99.87 0.86 0.13
31398VEH5 FHR 3645 ED 12/15/2020 Aaa 1.61 100.60 0.27 0.85
Sovereign Aaa 1.11 16.62 0.42
912796MA4 Government Of The United States Of America 0.0% 02-nov-2017 11/02/2017 Aaa 0.97 99.83 0.07 0.17 912828H37 Government Of The United States Of America 0.875% 15-jan-2018 01/15/2018 Aaa 1.12 99.91 0.92 0.37 912828G20 Government Of The United States Of America 0.875% 15-nov-2017 11/15/2017 Aaa 1.07 99.96 3.20 0.21 912828F54 Government Of The United States Of America 0.875% 15-oct-2017 10/15/2017 Aaa 1.05 99.98 3.20 0.12 912828G79 Government Of The United States Of America 1.0% 15-dec-2017 12/15/2017 Aaa 1.10 99.97 2.11 0.29 912828D98 Government Of The United States Of America 1.0% 15-sep-2017 09/15/2017 Aaa 1.02 100.00 3.21 0.04 912828A34 Government Of The United States Of America 1.25% 30-nov-2018 11/30/2018 Aaa 1.28 99.96 3.92 1.23
Cash - - 1.32 0.93 0.25
CASH_USD U.S. Dollar 12/08/2017 NR 1.32 1.00 0.93 0.25
TOTAL A2 1.63 100.00 0.42
L IQUIDITY T AXABLE F IXED I NCOME C OMPOSITE
Portfolio Holdings as of 8/31/2017
26
L IQUIDITY T AXABLE F IXED I NCOME C OMPOSITE
Liquidity Taxable Composite
December 31, 2004 to December 31, 2016
Year Gross
Return (%)
Net Return (%)
Benchmark Return (%)
Number of Portfolios
3 Yr Composite Deviation (%)
3 Yr Benchmark Deviation (%)
Internal Dispersion
Total Composite Assets ($ millions)
Total Firm Assets (AUM) ($ millions)
Total Firm Assets (AUA)*
($ millions)
2005 2.69 2.49 3.07 3 N/A N/A N/A 41 3,913 3,913
2006 4.88 4.67 4.85 5 N/A N/A N/A 354 4,952 4,952
2007 5.30 5.10 5.00 3 N/A N/A N/A 63 5,155 5,170
2008 2.77 2.57 2.06 3 N/A N/A N/A 26 6,517 6,667
2009 0.64 0.44 0.21 1 N/A N/A N/A 6 8,093 8,362
2010 0.34 0.14 0.13 1 N/A N/A N/A 26 8,909 9,429
2011 0.36 0.16 0.10 3 0.10 0.03 N/A 30 8,931 9,923
2012 0.28 0.08 0.11 1 0.06 0.03 N/A 9 9,069 10,913
2013 0.19 -0.01 0.07 1 0.05 0.03 N/A 19 8,596 10,103
2014 0.21 0.01 0.03 3 0.06 0.02 N/A 100 9,236 10,604
2015 0.57 0.37 0.05 3 0.11 0.02 N/A 100 9,411 11,823
2016 1.35 1.15 0.33 3 0.22 0.05 N/A 139 10,183 11,994
* Supplemental Information: Assets under Advisement (AUA) includes the assets where Sage provides its advisory services in similar strategies and does not have discretionary trading authority.
Compliance Statement: Sage Advisory Services, Ltd. Co. ("Sage") claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Sage has been independently verified for the periods December 31, 2004 to December 31, 2016 by ACA Performance Services. The verification report is available upon request. 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. Verification does not ensure the accuracy of any specific composite presentation.
Supplemental Information: Assets under Advisement (AUA) includes the assets where Sage provides its advisory services in similar strategies and does not have discretionary trading authority.
Firm Information: Sage is a registered investment advisor based in Austin, Texas. Sage specializes in Fixed Income, Balanced and Exchange Traded Fund (“ETF”) investment management for insurance companies and other financial institutions, Taft-Hartley organizations, endowments, foundations, non-profit institutions, corporations, defined benefit plans, healthcare institutions, family offices and high net worth individuals. Sage does not utilize leverage, futures, or options in any portfolios included in the composites. A complete list and description of all firm composites is available upon request.
Composite Characteristics: The Liquidity Taxable Composite (the “Composite”) consists of all fully discretionary, fee-paying accounts over $1,000,000 that are managed for a full quarter according to this style. The Composite contains accounts investing primarily in fixed income securities. The Composite creation and inception date is March 31, 1997. Not every client’s account in the Composite will have the identical characteristics. The actual characteristics with respect to any particular client account may vary based on a number of factors, including but not limited to: (i) the size of the account; (ii) the investment restrictions applicable to the account, if any; and (iii) the market conditions at the time of investment.
Composite Fee: The gross investment results for the Composite presented herein represent historical gross performance with no deduction for investment management fees but net of all trading expenses. Net returns are calculated by using the highest investment management fee, pro-rated on a quarterly basis, and are net of all trading expenses. The fee schedule for the Composite is: 0.20%. Actual fees may vary depending on, among other things, the applicable fee schedule and portfolio size. Please see Sage's Form ADV Part 2A for a full disclosure of Sage’s fee schedules.
Composite Benchmark: Sage has reviewed the relevant universe of indices and has determined that the Merrill Lynch 90-Day Treasury Bill Index most closely resembles the Composite managed by Sage. The Merrill Lynch 90-Day Treasury Bill Index is an unmanaged market index of U.S. Treasury securities maturing in 90 days that assumes reinvestment of all income.
Calculation Methodology: All valuations, gross, and net returns are based in U.S. Dollars and are computed using a time-weighted total rate of return. Periodic returns have been geometrically linked and annualized for all time periods longer than one year. Portfolio performance results include, and reflect, as applicable, the reinvestment of all interest, accrued income, cash, cash equivalents, realized and unrealized gains and losses. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. The dispersion measure is the asset-weighted standard deviation of accounts in the Composite for the entire year. If there are years whereby there are 5 or fewer accounts, the dispersion is N/A. The 3 year ex-post standard deviation is shown as n/a prior to 2011 as it is not required for all periods prior to December 31, 2010.
Risk Disclosures: Actual performance results may differ from Composite returns, depending on the size of the account, investment guidelines and/or restrictions, inception date and other factors. Past performance is not indicative of future returns. As with any investment vehicle, there is always the potential for gains as well as the possibility of losses.
L IQUIDITY T AXABLE F IXED I NCOME C OMPOSITE
Additional Information
Additional Information Short Taxable Composite (Performance between March 31, 1997 – December 31, 2004): Since the returns for 1997 through 2004, while using Global Investment Performance Standards (GIPS®) methodology, have not been independently verified as being in compliance with GIPS, the returns for 1997 through 2004 are displayed as “Additional Information”. For the period March 31, 1997 to December 31, 2004, all fully discretionary, fee-paying accounts over
$1,000,000 that are managed for a full quarter according to this style were included in the Composite. The Composite contained accounts investing primarily in fixed income securities. The gross investment results for the Composite presented herein represent historical gross performance with no deduction for investment management fees but net of all trading expenses. Net returns are calculated by using the highest investment management fee, pro-rated on a quarterly basis, and are net of all trading expenses. As of December 31, 2004, the fee schedule for the Composite was as follows: 0.20% for account balances over $25 million. Actual fees may vary depending on, among other things, the applicable fee schedule and portfolio size. Please see Sage's Form ADV Part 2A for a full disclosure of Sage’s fee schedules.
Composite Benchmark: Sage has reviewed the relevant universe of indices and has determined that the Merrill Lynch 90-Day Treasury Bill Index most closely resembles the Composite managed by Sage. The Merrill Lynch 90-Day Treasury Bill Index is an unmanaged market index of U.S. Treasury securities maturing in 90 days that assumes reinvestment of all income.
Firm Information: Sage is a registered investment advisor based in Austin, Texas. Sage specializes in Fixed Income, Balanced and Exchange Traded Fund (“ETF”) investment management for insurance companies and other financial institutions, Taft-Hartley organizations, endowments, foundations, non-profit institutions, corporations, defined benefit plans, healthcare institutions, family offices and high net worth individuals. Sage does not utilize leverage, futures, or options in any portfolios included in the composites. A complete list and description of all firm composites is available upon request.
Risk Disclosures and Additional Information: Actual performance results may differ from Composite returns, depending on the size of the account, investment guidelines and/or restrictions, inception date and other factors. Past performance is not indicative of future returns. As with any investment vehicle, there is always the potential for gains as well as the possibility of losses. All valuations, gross, and net returns are based in U.S. Dollars and are computed using a time-weighted total rate of return. Periodic returns have been geometrically linked and annualized for all time periods longer than one year. Portfolio performance results include, and reflect, as applicable, the reinvestment of all interest, accrued income, cash, cash equivalents, realized and unrealized gains and losses. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.
Liquidity Taxable Composite
March 31, 1997 to December 31, 2004
Year Gross Return (%) Net Return (%) Benchmark Return (%)
1997* 5.29 5.11 4.45
1998 5.80 5.59 5.23
1999 5.22 5.01 4.85
2000 7.20 6.98 6.18
2001 6.24 6.03 4.42
2002 3.36 3.15 1.78
2003 1.33 1.13 1.15
2004 1.12 0.92 1.33
*1997 represents a partial year of performance.
28
This report is for informational purposes only and is not intended as investment advice or an offer or solicitation with respect to the purchase or sale of any security, strategy or investment product. Although the statements of fact, information, charts, analysis and data in this report have been obtained from, and are based upon, sources Sage believes to be reliable, we do not guarantee their accuracy, and the underlying information, data, figures and publicly available information has not been verified or audited for accuracy or completeness by Sage. Additionally, we do not represent that the information, data, analysis and charts are accurate or complete, and as such should not be relied upon as such. All results included in this report constitute Sage’s opinions as of the date of this report and are subject to change without notice due to various factors, such as market conditions. No part of this Material may be reproduced in any form, or referred to in any other publication, without our express written permission.
Investors should make their own decisions on investment strategies based on their specific investment objectives and financial circumstances. All investments contain risk and may lose value. Debt or fixed income securities are subject to market risk, credit risk, interest rate risk, call risk, tax risk, political and economic risk, derivatives risk, income risk, and other investment company risk. As interest rates rise, bond prices fall. Credit risk refers to an issuer’s ability to make interest payments when due. Below investment grade or high yield debt securities are subject to liquidity risk and heightened credit risk. Foreign investments involve additional risks as noted above. Investing involves substantial risk and high volatility, including possible loss of principal. Bonds and bond funds will decrease in value as interest rates rise. Our Tactical ETF strategy invests in ETPs, such as ETFs and ETNs. Investors should consider ETPs’ investment objectives, risks, charges, and expenses carefully before investing. The investment return and principal value of an ETP will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. ETPs trade like stocks and may trade for less than their net asset value. Investments in ETNs may be subject to the risk that their value is reduced because of a downgrade in the issuer’s credit rating, potentially resulting in default. Past performance is not a guarantee of future results.
Sage Advisory Services, Ltd. Co. is a registered investment adviser that provides investment management services for a variety of institutions and high net worth individuals. For additional information on Sage and its investment management services, please view our web site at www.sageadvisory.com, or refer to our Form ADV, which is available upon request by calling 512.327.5530.
