Bush O'Donnell Investment Advisors, Inc.

Low-Volatility Equity Strategy

We pursue a low-volatility, long-term investment philosophy for clients who seek to preserve and build assets over time. Pursuing a fundamental, bottom-up approach, we believe that stock prices follow earnings. Following an ownership approach to investing, we seek excellent, well managed business platforms capable of generating consistent and growing cash flows. We invest in companies that have a proven track record of growing earnings at a credible 9% to 11% per year.

The style is concentrated, with investments in 15 to 20 U.S. domiciled large-capitalization common stocks. We believe this is sufficient constituent diversification to eliminate most of the idiosyncratic risk (risk of over-concentration in a single security) in the portfolio, and serves to impose a strict discipline on portfolio management decisions.

Starting with the universe of large-capitalization domestic equities, we screen for earnings growth supported by revenue growth over three- to five-year horizons. The investment committee meets periodically to review the earnings and price performance of portfolio constituents, review news and developments from the companies, assess valuations, and discuss new investment ideas.

We do not make sector bets, and find that quality cash-flow generation business platforms are generally found in only about five of the ten S&P sectors. We seek to diversify among sectors in which credible investment ideas are found.

BOIA pays close attention to valuation of both existing investments and portfolio candidates. We are willing to pay higher than market multiples for growth platforms that are better than the average found in the index, and we pay close attention to relative price/earnings multiples.

We have no proprietary research effort. Most securities in the universe of potential investments are well covered by several research concerns. The firm has access to several outside research platforms, and uses the Telemet Orion database for intensive analysis of individual securities and for portfolio analytics.

BOIA imposes a sector maximum of 40% and an individual position maximum of 12%. These limits may be adjusted according to client investment guidelines.

We consider the sale of a position if it fails to achieve targeted earnings projections for multiple quarters. Sales are also considered for securities that achieve valuations that are significantly in excess of peers.

We have a long investment horizon; consequently portfolio turnover is low, averaging 15% per year. We do not attempt to time the market, and stay fully invested. Cash levels generally will not exceed five percent of portfolio value unless by agreement with a client.

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