Introduction to HAHN. march 2013

HAHN ETF Managed Portfolios

A tactical, global macro approach to ETF investing

HAHN Investment Stewards: Overview

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Performance

Process

Portfolio Construction

People and Philosophy

Global Macro Experience

Wilfred J. Hahn, Chairman and Co-Chief Investment Officer

Over three decades of international investment industry experience as global strategist, portfolio

manager, business head. Former Head of Royal Bank Global Investment Group, managing

pension, mutual and private client portfolios with global assets > $13 Billion (CAD).

Mark Arthur, CFA, Chief Executive Officer and Director

Up until 2002, Mark was President, CIO and Director of RBC Global Investment Management

Inc., Vice President Investments and Director of Royal Mutual Funds and Chairman of RBC

Investments Global Investment Strategy Committee.

Tyler Mordy, CFA, Director of Research and Co-Chief Investment Officer

Recognized innovator in the design and application of ETF managed portfolios, and widely

interviewed by the financial media for his global strategy views as well as ETF trends. Recently,

IndexUniverse profiled Tyler as one of the “best and brightest” working in the ETF industry.

Formerly with Deutsche Asset Management in London, UK.

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HAHN Global Investment Strategy Committee

Our Investment Philosophy: A Solid Foundation

5 Pillars of Tactical Asset Allocation

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Outline

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Performance

Process



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Global Asset Class Universe

ETFs have colonized virtually every asset class across the globe

Cash Fixed Income Equity Opportunity

Short Term T-Bills

Credit

Foreign

Duration

Credit

Sector

Specialty

Sector

Size

Style

Specialty

Commodity

Real Estate

Thematic

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HAHN Global Asset Mix Decisions =

Country Country

www.hahninvest.com

Intelligent Portfolio Construction and Risk Parameters

Globalized, diversified and adaptive*

* The composite benchmark for this portfolio is comprised of the following indices and weights: CAD 90-day Treasury Bill index (5%), MSCI EAFE Index in $Cdn (14%), S&P 500 Index in $CDN (11%), S&P/TSX 60 Index (25%), Citigroup World

BIG Non-USD Bonds in $Cdn (13%), Barclays Capital U.S. Aggregate Bonds in $Cdn (9.5%), DEX Universe Bonds (22.5%).

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Opportunity

Investments

Traditional

Investments

Cash

Equivalents

Total Equity Canadian Equity US Equity International

Equity

Total Bonds Canadian Bonds US Bonds International

Bonds

Strategy Range Benchmark Current Strategy


Eleven Distinct Mandates with Different Risk Profiles

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Detailed Investment Guidelines Available

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9 “Core” Mandates

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2 “Income Focus” Mandates

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Quarterly Fact Sheets for Every Mandate

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Outline

13

Performance

Process



HAHN Investment Architecture

Overview: Secular and Tactical Views

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Long-Term Macro Outlook

(3 – 5 years)

Secular Trends

Macro Scenarios

Core Approaches

Short-Term Strategies

(12 months)

Tactical Strategies

Significant Events

Currencies: The Forgotten Asset Class

Active currency management can diversify portfolio risk factors

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* Chart is illustrative only and does not reflect any current strategy or policy.

HAHN Currency Barometer vs. USD

Cu

rre

nc

y/U

SD

Currency

Overvalued

Currency

Overvalued

Hedging lowers risk only

when over-valuation occurs

Active Hedging Range

Fundamental Value Range

Foreign Currency/$/USD

Monthly

A Repeatable Investment Process

“While the general investment consensus... is

more brazenly complacent and optimistic than

ever, we continue to identify ever-heightening

risks and deteriorating investment conditions.”

Investment Committee Minutes, June 2007

“World now in Stage 1 - Global

Purgatory…Nevertheless, a tradable equity market

rally is expected into Spring 2009…Risk

becoming cheaper … some sectors and asset

classes very inexpensive…We must now be

biased “opportunists” … although careful ones at

that.”

Investment Committee Minutes, Nov. 2008

Our Rigorous Process Identifies Risk and Opportunity

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Global Tactical Asset Allocation Matrix

Real world examples: “Pre-crisis” positioning (December 2007)

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Global Tactical Asset Allocation Matrix

Real world examples: “Post-crisis” positioning (March 2009)

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Tactical Weightings HAHN Global Balanced Benchmark Portfolio

Major Strategy Changes: June 2003 Inception – December 2012

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Why are ETFs Used?

1. Global diversification previously available only to large investors.

2. Access to non-traditional asset classes previously illiquid or difficult to access

3. Facilitation of active strategies such as tactical asset allocation.

“We can today build personalized $100,000 global portfolios that are better quality and less expensive than we could for a large pension fund in the multimillions twenty years ago.”

Wilfred Hahn, Founder and & CIO, HAHN Investment Stewards

ETFs have Revolutionized the Portfolio Management Industry

ETF Selection Criteria

Rigorous and Disciplined

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Filters

Strategy Mapping

Index Construction

Diversification

Low Tracking Error

Liquidity

Expenses

Unique Factors

Outline

22

Performance

Process



Conservative, “low drawdown” performance style

International Balanced

CITI World BIG

Annual Return: 2.26%

Standard Dev: 9.85%

MSCI Developed World


Std. Dev: 11.58%

HAHN Benchmark*


Std. Dev: 6.01%

HAHN Intl. Bal.**


Std. Dev: 6.69%

*Benchmark performances do not include the impact of any fees. The composite benchmark for this portfolio is comprised of the following indices and weights: CAD 90-day Treasury Bill index (5%), MSCI EAFE Index in $Cdn (5%), S&P 500 Index

in $CDN (7.5%), S&P/TSX 60 Index (12.5%), Citigroup World BIG Non-USD Bonds in $Cdn (19%), Barclays Capital U.S. Aggregate Bonds in $Cdn (16%), DEX Universe Bonds (35%).

**Performance statistics for Managed ETF Portfolios are calculated from documented actual investment strategies as set by HAHN’s Investment Committee and applied to its portfolios mandates, and are intended to provide an approximation of

composite results for client separately-managed accounts. Actual performance of individual separate accounts may vary with average gross “composite” performance statistics presented here due to client-specific portfolio differences with respect

to size, inflow/outflow history and inception dates, as well as intra-day market volatilities versus daily closing prices. Performance figures provided are net of total ETF expense ratios and custody fees, but before transaction costs, witholding taxes,

and other investment management and advisor fees. Past investment results provide no indication of future performance. Future returns are dependent on the general investment environment, the nature of the portfolio mandate and active

investment strategies and risks. Word Equity Index - MSCI Developed World Index TR (CAD). World Bond Index - Citi Group World Bond Index TR (CAD). Volatility measured as standard deviation.

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Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12

Conservative, “low drawdown” performance style

International Income Focus

HAHN Int. Inc. Focus.**


Std. Dev: 5.8%

HAHN Benchmark*

Annual Return 2.86%

Std. Dev: 0.15%

MSCI Developed World


Std. Dev: 13.36%

CITI World BIG


Std. Dev: 10.67%

* HAHN Benchmark is defined as 2% in excess of 90-day Canadian T-bill rate. A long-term time horizon of 4 to 5 years is contemplated which is equivalent to a typical business/credit cycle. Please note that due to time lag in the publishing of

monthly CPI statistics, the previous month’s value may be used for current performance reporting.

**Performance statistics for Managed ETF Portfolios are calculated from documented actual investment strategies as set by HAHN’s Investment Committee and applied to its portfolios mandates, and are intended to provide an approximation of

composite results for client separately-managed accounts. Actual performance of individual separate accounts may vary with average gross “composite” performance statistics presented here due to client-specific portfolio differences with respect

to size, inflow/outflow history and inception dates, as well as intra-day market volatilities versus daily closing prices. Performance figures provided are net of total ETF expense ratios and custody fees, but before transaction costs, witholding taxes,

and other investment management and advisor fees. Past investment results provide no indication of future performance. Future returns are dependent on the general investment environment, the nature of the portfolio mandate and active

investment strategies and risks. Word Equity Index - MSCI Developed World Index TR (CAD). World Bond Index - Citi Group World Bond Index TR (CAD). Volatility measured as standard deviation.

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Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12

www.hahninvest.com

Thematic. Opportunistic. Pragmatic.

Documents

Introduction to HAHN. march 2013