1 Clark Capital Management Group, Inc. Philadelphia FPA Clark Capital Management Group, Inc. Philadelphia FPA

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Clark Capital Management Group, Inc.Philadelphia FPA

Clark Capital Management Group, Inc.Philadelphia FPA

Embracing VolatilityManaging Risk in a Rising Rate Environment

Embracing VolatilityManaging Risk in a Rising Rate Environment

3

OverviewOverview

* As of 2/28/2011

$2.6 Billion* in AUM

Family and Employee Owned

Institutional Asset Management Firm (Institutional Solutions to Everyday Affluent)

52 dedicated and experienced employees

8 Investment Professionals

4 CFAs on Staff

Average 25+ Years Industry Experience

* As of 3/31/11

4

Investment PhilosophyInvestment Philosophy

* As of 2/28/2011

Provide superior risk adjusted returns through a disciplined process focused on

Meaningful diversification

Opportunistic asset allocation

Systematic risk management

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Investor’s & Advisor’s DilemmaInvestor’s & Advisor’s Dilemma

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Loss on InvestmentLoss on Investment

When do you begin to get nervous about your investment performance?

Source: Lippincott – Natixis June 2010

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Attitudes toward RiskAttitudes toward Risk

51%

54%

59%

61%

67%

70%

73%

74%

My portfolio is built around managing my risk

I try to measure the risk of my investments

The more risk I take, the more I can make

I pay more attenionto risk now than I have ever…

I seek a balance between risk and return when…

I pay attention to the overall risk of my portfolio

The more I risk I take, the more I could lose

Having different types of investments lowers my…

While risk appears to continue to play a strong role within investing, investors are paying more attention to risk than ever before.


8

The Meaning of RiskThe Meaning of Risk

0%

24%

48%

28%

Thrill

Opportunity

Uncertainty

Loss

Which of the following terms best describes “risk” for you?

How do you measure risk of your portfolio?

The relationship between risk and reward. “Risk Budgeting”


9


How do you measure the success of your portfolio?


10


…with stability and security in the forefront of the minds


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What Are Investors Searching for? What Are Investors Searching for?

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How Do You Manage Risk?How Do You Manage Risk?

What is Your Plan?What is Your Plan?

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How Do You Manage Risk?How Do You Manage Risk?

Asset Allocation

Fixed Income

Alternative Asset Classes

Tactical Asset Allocation (Market Timing)

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Problems with Efficient FrontierProblems with Efficient Frontier

Efficient Frontier Is Based upon Historical Inputs That Are by Definition Not Stable:

Returns Change

Standard Deviations (risk) Change

Correlation Change

You Need Stable Inputs to Create A Future Efficient Frontier to Manage Risk!

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CorrelationCorrelation

Source: Morningstar Direct

BullCorrelation

1990s

Bear Correlation

1990s

Bull Correlation

2000s

Bear Correlation

2000s

Correlation 2007-10-01 to

2009-02-28

S&P 500 1.00 1.00 1.00 1.00 1.00

Russell 1000 Value 0.80 0.92 0.86 0.85 0.98

Russell 2000 0.51 0.66 0.43 0.67 0.96

MSCI EAFE 0.37 0.55 0.63 0.83 0.91

MSCI World Ex US 0.38 0.57 0.65 0.83 0.91

MSCI Emerging Markets 0.31 0.68 0.47 0.66 0.80

DJ Credit Suisse Hedge Fund 0.09 0.41 0.58

S&P GS Commodity Index -0.14 -0.12 0.08 0.39 0.56

NAREIT US Real Estate 0.18 0.47 0.25 0.55 0.83

BC US Corporate High Yield 0.15 0.57 0.31 0.56 0.71

BC US Agg Bond TR USD 0.27 0.13 0.00 0.15 0.36

CBOE Market Volatility -0.11 -0.66 -0.32 -0.46 -0.71

16

CorrelationCorrelation

Source: Ned Davis Research

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Modern Portfolio Theory’s Cruel JokeModern Portfolio Theory’s Cruel Joke

Good Times Bad Times

Low Correlation High Correlations

Low Volatility High Volatility

High Returns Low Returns

“Any plan conceived in moderation, must fail when circumstances are set in extremes.”

“Any plan conceived in moderation, must fail when circumstances are set in extremes.”

Prince Metternick

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Is inflation keeping your clients up at night?Is inflation keeping your clients up at night?

19

For illustrative purposes only. The information is not intended to be a recommendation to purchase or sell a security. Past performance is no guarantee of future results. Returns reflect reinvestment of capital gains and dividends, if any. Indices are unmanaged and do not incur fees. It is not possible to invest in an index. Stocks are represented by the S&P 500 Index. Bonds are represented by the Ibbotson Associates U.S. Long Term Government Index. Inflation-adjusted returns are based on the average Consumer Price Index (CPI) through the referenced period (5% from 1954 to 1981 and 3% from 1981 to 2009).

Source: St. Louis Federal Reserve Bank, Morningstar

Changing Conditions May Call For a Broader ToolsetChanging Conditions May Call For a Broader Toolset

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S&P 500 vs. InflationS&P 500 vs. Inflation

S&P 500 Total Return Gain/Annum When:

When Yr/Yr Charge in CPI is:

Gain/Annum % of Time

Above 4 4.5 32.8

4 and Below 13.9 67..2

Source: Ned Davis Research – 1/1/1950 to 9/30/2010

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Managing Fixed Income in a Rising Rate Environment?Managing Fixed Income in a Rising Rate Environment?

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Fixed Income Total ReturnFixed Income Total Return

Fixed IncomeFixed IncomeTotal ReturnTotal ReturnFixed IncomeFixed IncomeTotal ReturnTotal Return

U.S. Short-Term Treasuries

U.S. Government/Corporate Bond

High-Yield Bond

Portfolio Objective: The Fixed Income Total Return strategy is designed to deliver excess alpha over a full market cycle measured against Barclays Capital U.S. High Yield Bond Index and Barclays Capital U.S. Aggregate Bond Index. The strategy seeks total return with a secondary goal of current income.

23

Portfolio Characteristics & Allocation History as of 3/31/11 Portfolio Characteristics & Allocation History as of 3/31/11

Portfolio Characteristics

Total Holdings Exposure 666

Estimated Current Yield 8.14%

Average Coupon 8.43%

Average Duration 4.36 Yrs.

Average Credit Quality B

Holdings Ticker % # of

Positions

CurrentYield

SPDR Barclays Capital High Yield

JNK 49% 220 8.28%

iShares iBoxx $ High Yield Corp Bond

HYG 48% 446 8.00%

Cash 3%


24Source: Morningstar Direct. Clark Capital Management Group claims compliance with the GIPS® Standards. See end of the presentation for full disclosure and net of fees presentation.

25Source: Morningstar Direct. Clark Capital Management Group claims compliance with the GIPS® Standards. See end of the presentation for full disclosure and net of fees presentation.

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Frequency of DeclinesFrequency of Declines

Source: Ned Davis Research – The Anatomy of Standard & Poor’s 500 Stock Index Declines 1/03/1928 to 6/29/2010

S&P 500Declines

OccurrencesPer Year

FrequencyAverage

Probability of Decline Moving to Next Stage

-5% or more 3.4 Every 14 weeks 34%

-10% or more 1.1 Every Year 44%

-15% or more 0.5 Every 2 years 61%

-20% or more 0.3 Every 3 years N/A

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Winning by Not LosingWinning by Not Losing

Initial Investment: $100,000Years Needed to Break Even

at These Rates of Return

If your portfolio is down…

Current value

Amount needed to

break even

Return needed to

break even 2.00% 6.00% 10.00% 12.00%

10% $90,000 $10,000 11.1% 5.32 1.81% 1.11 0.93

20% $80,000 $20,000 25.0% 11.27 3.83 2.34 1.97

30% $70,000 $30,000 42.9% 18.01 6.12 3.74 3.15

40% $60,000 $40,000 66.7% 25.80 8.77 5.36 4.51

50% $50,000 $50,000 100.0% 35.00 11.90 7.27 6.12

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20-Year Annualized Returns by Asset Class (1990-2009)20-Year Annualized Returns by Asset Class (1990-2009)

Source: JPMorgan. (1) Barclays Capital U.S. Aggregate Bond Index. (2) Calculated using Dalbar Funds Flow Information.

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Winning by Not LosingWinning by Not Losing

Saving Withdrawing Income

If investmentis down

Return neededto break even

(without withdrawals)

Return neededto break even(withdrawing 5%

at the end of each year)

5% 5.30% 11.10%

10% 11.10% 17.60%

15% 17.60% 25.00%

20% 25.00% 33.30%

25% 33.30% 42.90%

30% 42.90% 53.80%

35% 53.80% 66.70%

40% 66.70% 81.80%

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-50%

-50%

+100%

-55%

+100%

Source: Ned Davis Research

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Market Performance Off the Bottom

32

Source: Bloomberg

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Is there more risk today?Is there more risk today?

For Advisor Use Only.

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Current RisksCurrent Risks


the so-so U.S. recovery

U.S.’s deficit, debt ceiling impasse and dysfunctional political process

the economic impact of deleveraging and austerity;

the over-indebtedness of peripheral eurozone countries

the possibility of rekindled inflation and rising interest rates

the uncertain outlook for the dollar, euro and sterling

the instability in the Middle East and resulting uncertainty over the price of oil

35

So what is your plan?So what is your plan?


36

Why Embrace Volatility to Manage Risk? Why Embrace Volatility to Manage Risk?


37

30.00

10.00

15.005.00

35.00

5.00

Asset Allocation

S&P 500 - 30%

Russell 2000 - 10%

MSCI EAFE - 15%

MSCI Emerging Markets - 5%

BarCap US Agg Bond - 35%

BarCap High Yield Bond - 5%

40.00

20.00

10.00

20.00

10.00

Equity Allocation

S&P 500 - 40%

S&P MidCap 400 - 20%

Russell 2000 - 10%

MSCI EAFE - 20%

MSCI Emerging Markets -10%

Why Embrace Volatility?Why Embrace Volatility?

Hypothetical portfolio allocations. Not indicative of a actual Clark Capital client allocations.

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Why Embrace Volatility?Why Embrace Volatility?

As of 1/31/2011 Asset Allocation Asset Allocation with 5% Volatility

1 Year Return 15.61 14.20




1 Year Standard Deviation 11.42 8.37




1 Year Beta 0.61 0.42

3 Year Beta 0.67 0.49

5 Year Beta 0.67 0.47

10 Year Beta 0.62 0.45



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Embracing Volatility to Manage RiskEmbracing Volatility to Manage Risk

As of 1/31/2011 Equity Portfolio Equity Portfolio 5% Volatility









1 Year Beta 1.05 0.81

3 Year Beta 1.09 0.85

5 Year Beta 1.09 0.84

10 Year Beta 1.06 0.82Source: Morningstar Direct


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How Does Clark Capital Embrace Volatility? How Does Clark Capital Embrace Volatility?


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How Does Clark Capital Embrace Volatility How Does Clark Capital Embrace Volatility

Protective Put Option Hedge StrategyProtective Put Option Hedge Strategy

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How Does Clark Capital Embrace Volatility How Does Clark Capital Embrace Volatility

S&P 500

S&P 500 Put Option

Down Market

S&P 500

S&P 500 Put Option

Up Market

Protective Put Option Hedge StrategyProtective Put Option Hedge Strategy

Consistent Negative Correlation

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How Does Clark Capital Embrace Volatility? How Does Clark Capital Embrace Volatility?

PUT OVERLAY: Portfolio Managers customize an allocation to protective S&P 500 puts, which are continuously monitored and can change when market volatility spikes.

S&P 500 put options only

9 to 18 months of duration

5 to 10% out of the money

Consistently allocated to hedge 100% of equity portfolio

Targeting 3 to 7% allocation over market cycle

Opportunistically managed to reduce drag

Puts options are purchased with cash, margin is not utilized

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Hedge Strategy ObjectivesHedge Strategy Objectives

Reduce equity volatility

Prevent large portfolio losses through systematic portfolio put option protection

Provide consistent negative correlation in all market environments

Provide systematic risk management without forecasting or market timing influence

Provide confidence in the expected outcome in all market environments

Provide continuous protection from event driven declines (i.e. natural disaster, terrorist attacks)

45

Hedge Strategy Implementation – 1/1/2003 to 12/31/2010Hedge Strategy Implementation – 1/1/2003 to 12/31/2010

Index Source: Bloomberg

46

Historical ImplementationHistorical Implementation

Total Roll Trades

Gain/Loss % *

Average Portfolio

Allocation*

Average %Out of the Moneyof Put Allocation

2004 1 -2.27% 3.34% 4.52%

2005 3 -2.27% 2.56% 4.25%

2006 2 -4.77% 3.46% 2.33%

2007 2 -0.02% 4.33% 3.26%

2008 5 17.43% 9.57% -0.50%

2009 3 -2.45% 8.17% 4.49%

2010 4 -6.65% 6.19% 6.70%

Total 20 -0.40% ** 5.38% 3.58%

* Based upon actual trades of one S&P 500 index put option contact applied to a hypothetical $125,000 account value.

For illustrative purposes only and not necessarily indicative of actual client results.

* * Annualized

47Source : Morningstar Direct. Gross of fees. Clark Capital Management Group claims compliance with the GIPS® Standards. See end of the presentation for full disclosure and net of fees performance presentation.



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Embracing Volatility with Clark CapitalEmbracing Volatility with Clark Capital

Navigator Unified Solutions – TAMP

Direct Relationship – TAMP

Separate Accounts

Direct Relationship – TAMP

Various Platforms (sample)

401K Collective Trusts

Various Platforms (sample)

Navigator Equity Hedged Mutual Fund

51

Contact UsContact Us


Advisor Support800-766-2264

Joe Bell - [email protected]

www.ccmg.com

52For Advisor Use Only.

QQ&&AA

53

Net of Fees Results (Net of Maximum 1.10% Fee)Net of Fees Results (Net of Maximum 1.10% Fee)

Source : Morningstar Direct. Clark Capital Management Group claims compliance with the GIPS® Standards. See end of the presentation for full disclosure.

54

Disclosure – Navigator® Global Equity HedgedDisclosure – Navigator® Global Equity Hedged


Firm Information: Clark Capital Management Group, Inc. is an investment advisor registered with the Securities and Exchange Commission under the Investment Advisory Act of 1940. Clark Capital is a closely held, mostly employee owned C Corporation with all significant owners currently employed by the firm in key management capacities. The firm specializes in managing equity and fixed income portfolios for individuals and institutions.

Clark Capital Management Group claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with GIPS standards. Clark Capital has been independently verified for the period 12/31/2002 through 12/31/2009. Verification assess 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 Navigator® Global Equity ETF Hedged composite has been examined for the period 7/1/2004 through 12/31/2009. The verification report and performance examination reports are available upon request.

To receive a copy of the complete list and description of Clark Capital’s composites including the firm's policies for calculating and reporting returns and/or a presentation that adheres to the GIPS® standards, contact Joseph Bell, Executive Vice President, 215-569-2224, e-mail [email protected]. The composites are comprised of all fully discretionary accounts managed in the strategy for one full month, including those accounts no longer with the firm. Closed accounts are included through the completion of the last full month of eligibility.

Calculation Methodology: The composite is shown as total return, assumes reinvestment of dividends and capital gains as well as no reduction for taxes, is calculated in U.S. dollars, and is computed on an asset weighted rate of return basis. The results before 1/1/2007 reflect a time-weighted total rate of return, calculated using the modified Deitz method. Results after 1/1/2007 were calculated using a daily valuation method. Performance results have been presented both prior to the deduction of investment advisory fees (“gross-of-fees”) and after the deduction of investment advisory fees (“net-of-fees”). Performance results of Clark Capital clients will be reduced by Clark Capital’s investment advisory fees, and possibly fees retained by the wrap program sponsor and third party investment advisor. Actual client fees may be lower than the fees used in this presentation. Internal dispersion is calculated using the average deviation of all portfolios that were included in the composite for the entire year. Trade date accounting is used. Leverage is not used in the composite. The net of fees performance results may be reduced by fees retained by the wrap program sponsor and third party investment advisor.

Fee Summary:

Past performance does not guarantee future results. Client account values will fluctuate and may be worth more or less than the amount invested. Clients should not rely solely on this performance or any other performance illustrations when making investment decisions.

55

Disclosure – Navigator® Global Equity HedgedDisclosure – Navigator® Global Equity Hedged

Composite Description: The Navigator® Global Equity ETF Hedged composite is defined to include separately managed accounts invested in equity exchange traded funds of U.S. market capitalizations and styles, sectors and industry groups and international countries and regions. The Navigator ® Global Equity ETF Hedged utilizes S&P 500 Index puts to hedge the portfolio. The strategy seeks to provide capital appreciation with a secondary goal of capital preservation on a consistent basis by applying a disciplined quantitative investment approach. This composite was created July 1, 2004.

Pure gross-of-fees performance returns do not reflect the deduction of any trading costs, fees, or expenses, and are presented as supplemental information. Therefore, actual returns will be reduced by advisory and other expenses. Net-of-fees performance returns are calculated by deducting the highest monthly investment advisory fee of 0.0917% (1.10% annually) from the monthly pure gross composite.

The benchmarks are the S&P 500 and the MSCI World net Indexes. The S&P 500 measures the performance of the 500 leading companies in leading industries of the U.S. economy, capturing 75% of U.S. equities. The MSCI World Net Index is a free float-adjusted market capitalization index that is designed to measure global developed market equity performance net of dividend withholding tax to non-resident individuals. Index returns include the reinvestment of income and dividends. The returns for these unmanaged indexes do not include any transaction costs, management fees or other costs. It is not possible to make an investment directly in any index.

*Not meaningful

Navigator® GLOBAL EQUITY ETF HEDGED

Pure Gross Total Net

MSCI World Net Index

Dispersion Range Number of

Total Composite Assets as of Percent of Total Firm

Return Return Benchmark of Returns Portfolios End of Period Firm Assets Assets

7/1/2004 - 12/31/2004 6.65% 6.07% 10.82% * 55 $8,485,636 1.62% $525,400,000

2005 7.26% 6.10% 9.49% 0.27% 170 $27,089,406 3.44% $788,000,000

2006 8.61% 7.43% 20.07% 0.75% 425 $74,289,699 7.35% $1,011,200,000

2007 13.15% 11.92% 9.04% 0.17% 473 $90,692,409 8.18% $1,109,000,000

2008 -20.62% -21.51% -40.71% 2.16% 394 $56,240,893 5.45% $1,032,300,000

2009 24.10% 22.77% 29.99% 1.01% 420 $68,852,698 4.16% $1,655,630,000

2010 10.07% 8.87% 11.76% 1.38% 440 $75,551,561 3.28% $2,304,270,557

1/1/2011 to 3/31/2011 0.99% 0.72% 4.80% * 438 $75,175,270 3.04% $2,469,651,837

Cumulative 53.94% 42.98% 43.38%

Annualized 6.60% 5.44% 5.48%

3 Year Std. Dev. 12.61% 12.61% 23.75%

56

Disclosure – Navigator® Global EquityDisclosure – Navigator® Global Equity


Firm Information: Clark Capital Management Group, Inc. is an investment advisor registered with the Securities and Exchange Commission under the Investment Advisory Act of 1940. Clark Capital is a closely held, mostly employee owned C Corporation with all significant owners currently employed by the firm in key management capacities. The firm specializes in managing equity and fixed income portfolios for individuals and institutions.

Clark Capital Management Group claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with GIPS standards. Clark Capital has been independently verified for the period 12/31/2002 through 12/31/2009. Verification assess 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 Navigator® Global Equity ETF composite has been examined for the period 4/1/2004 through 12/31/2009. The verification report and performance examination reports are available upon request.

To receive a copy of the complete list and description of Clark Capital’s composites including the firm's policies for calculating and reporting returns and/or a presentation that adheres to the GIPS® standards, contact Joseph Bell, Executive Vice President, 215-569-2224, e-mail [email protected]. The composites are comprised of all fully discretionary accounts managed in the strategy for one full month, including those accounts no longer with the firm. Closed accounts are included through the completion of the last full month of eligibility.

Calculation Methodology: The composite is shown as total return, assumes reinvestment of dividends and capital gains as well as no reduction for taxes, is calculated in U.S. dollars, and is computed on an asset weighted rate of return basis. The results before 1/1/2007 reflect a time-weighted total rate of return, calculated using the modified Deitz method. Results after 1/1/2007 were calculated using a daily valuation method. Performance results have been presented both prior to the deduction of investment advisory fees (“gross-of-fees”) and after the deduction of investment advisory fees (“net-of-fees”). Performance results of Clark Capital clients will be reduced by Clark Capital’s investment advisory fees, and possibly fees retained by the wrap program sponsor and third party investment advisor. Actual client fees may be lower than the fees used in this presentation. Internal dispersion is calculated using the average deviation of all portfolios that were included in the composite for the entire year. Trade date accounting is used. Leverage is not used in the composite. The net of fees performance results may be reduced by fees retained by the wrap program sponsor and third party investment advisor.

Fee Summary:

Past performance does not guarantee future results. Client account values will fluctuate and may be worth more or less than the amount invested. Clients should not rely solely on this performance or any other performance illustrations when making investment decisions.

57

Disclosure – Navigator® Global EquityDisclosure – Navigator® Global Equity

Composite Description: The Navigator® Global Equity ETF composite is defined to include separately managed accounts invested in equity exchange traded funds of U.S. market capitalizations and styles, sectors and industry groups and international countries and regions. The strategy seeks to provide capital appreciation on a consistent basis by applying a disciplined quantitative investment approach. This composite was created April 1, 2004.

Pure gross-of-fees performance returns do not reflect the deduction of any trading costs, fees, or expenses, and are presented as supplemental information. Therefore, actual returns will be reduced by advisory and other expenses. Net-of-fees performance returns are calculated by deducting the highest monthly investment advisory fee of 0.0917% (1.10% annually) from the monthly pure gross composite.

The benchmarks are the S&P 500 and the MSCI World net Indexes. The S&P 500 measures the performance of the 500 leading companies in leading industries of the U.S. economy, capturing 75% of U.S. equities. The MSCI World Net Index is a free float-adjusted market capitalization index that is designed to measure global developed market equity performance net of dividend withholding tax to non-resident individuals. Index returns include the reinvestment of income and dividends. The returns for these unmanaged indexes do not include any transaction costs, management fees or other costs. It is not possible to make an investment directly in any index.

* Not meaningful

Navigator® GLOBAL EQUITY ETF

Pure Gross Total Net MSCI World

Dispersion Range Number of

Total Composite Assets as of Percent of Firm Total Firm

Return Return Index of Returns Portfolios End of Period Assets Assets

4/1/2004 to 12/31/2004 8.91% 8.02% 11.79% * 6 $304,216 0.06% $525,400,000

2005 8.54% 7.36% 9.49% * 5 $567,150 0.07% $788,000,000

2006 14.86% 13.62% 20.07% * 28 $2,829,210 0.28% $1,011,200,000

2007 13.10% 11.88% 9.04% 0.27% 100 $13,306,608 1.20% $1,109,000,000

2008 -36.08% -36.81% -40.71% 0.31% 144 $7,539,380 0.73% $1,032,300,000

2009 37.40% 35.93% 29.99% 0.53% 143 $9,104,397 0.55% $1,655,630,000

2010 17.85% 16.58% 11.76% 0.13% 230 $16,372,755 0.71% $2,304,270,557

1/1/2011 to 3/31/2011 3.40% 3.12% 4.80% * 230 $18,077,285 0.73% $2,469,651,837

Cumulative 64.35% 52.22% 44.63%

Annualized 7.36% 6.19% 5.41%

3 Year Std. Dev. 22.45% 22.45% 23.75%

Documents

1 Clark Capital Management Group, Inc. Philadelphia FPA Clark Capital Management Group, Inc. Philadelphia FPA