A conservative growth equity strategy focusing on companies with sustainable
dividend policies and strong fundamentals for capital appreciation
Formerly known as Navigator® High Yield Equity
As of 12/31/2015
1
Founded in 1986, Clark Capital Management Group, Inc. is an
independent, mostly employee owned investment advisory firm,
managing over $3.3* billion in client assets and based in Philadelphia,
PA.
Clark Capital is focused on both long only and innovative risk
management strategies, with a goal of successful capital preservation.
Clark Capital tailors its Navigator Investment Solutions to the unique
requirements of high net worth individuals, corporations, trusts,
endowments, foundations, and retirement plans.
Clark Capital has a dedicated and experienced team.
*As of 12/31/2015 includes sub-advised assets
2
Harry Clark
Chairman & CEO
Years Experience: 46
Equity
Managers
K. Sean Clark, CFA
Chief Investment Officer
Years Experience: 22
Fixed Income
Managers
David J. Rights
Director of Research
Years Experience: 47
Maira Thompson
Senior Portfolio Manager
Years Experience: 34
Jamie Mullen
Senior Portfolio Manager
Years Experience: 30
Steven T. Grant
Senior Portfolio Manager
Years Experience: 40
Anthony W. Soslow, CFA
Senior Portfolio Manager
Years Experience: 29
John Clark, CFP
Portfolio Manager
Years Experience: 24
Robert Bennett
Portfolio Manager
Years Experience: 10
Kevin Bellis, CFA
Portfolio Manager
Years Experience: 4
Mason Wev, CFA, CMT
Portfolio Manager
Years Experience: 20
Elizabeth A. Schoenberg
Portfolio Manager
Years Experience: 28
Jim Phelan
Portfolio Manager
Years Experience: 26
Seasoned investment management team
with an average of 27 years of industry experience.
3
The members of the
investment team have
extensive experience
K. Sean Clark
Chief Investment
Officer & Lead
Portfolio Manager
Maira Thompson
Lead Portfolio
Manager
John Clark
Portfolio Manager
utilizing rigorous
research to develop
disciplined
investment
processes.
4
Our Investment Philosophy
Investing in companies with sustainable dividend policies and strong
fundamentals for capital appreciation is a factor in achieving attractive returns.
Dividend paying stocks offer periodic cash flow, which may mitigate the impact
of capital losses.
Companies we believe have superior business models have the potential for
sustainable dividend policies.
An actively managed portfolio that seeks companies that are growing dividend
payouts has the potential for higher long-term total return with lower standard
deviation.
Targeting dividend yield higher than the S&P 500 Index (favored sectors) can
raise performance.
Diversification across market sectors and industries curbs risk.
5
Our Investment Universe
Domestic common and preferred stocks (S&P 1500)
International ADRs and preferred stocks
Publicly traded real estate investment trusts (REITS)
Publicly traded master and limited partnerships (MLPs)
Exchange traded funds (ETFs)
6
Our Investment Process
The portfolio is managed using a disciplined, fundamental investment process that seeks a
balance between yield and growth over time. The investment process employs an initial
quantitative analysis of a robust universe of S&P 1500 companies. The top companies
demonstrating strong competitive market share and a viable business model are vetted for
sustainable earnings and dividend growth.
Individual fundamental security characteristics are a dominant factor in the selection
process such as:
Dividend History (stable and growing)
Debt Analysis (strong balance sheet with minimal debt service)
Dividend (dividend discount model is vetted)
Earnings Growth (variability measured vs. competitors and index)
Earnings (quality of reported ROE – scrubbing for financial outliers)
Value (relative to peers, industry group and index)
7
Portfolio Construction
Researched
Focus List of
100 - 125
Securities
Diversification
Constraints &
Risk Analysis
1
2
Final Portfolio
of 50-60
Securities
3
Diversification
 Maximum 10% issue at market value
 Maximum 5% issue at cost
 Start “probing” position of 1%, move in increments up to 5%
 Risk optimization tools limit sector/industry exposure
8
Monthly Data 12/31/1929 - 2/28/2015 (Log Scale)
206607
67543
22081
Gain /
Annu m
Inves tment
S&P 500 Tota l Retur n
(
)
9.7%
S&P 500 Withou t Dividend s
(
)
5.5%
7218
12/31/192 9 = $100
2360
771
252
82
GPA = Compound annualized rate of return (Gain Per Annum)
% From Divs = (Ending $ Value with Divs — $ Value w/o Divs) / $ Value with Divs
27
1930s
1940s
1950s
1960s
1970s
1980s
1990s
2000s
Past performance is not indicative of future results. Please see attached disclosures.
Source: Ned Davis Research
9
Full Date Range
12/31/1929 - 2/28/2015
With Divs
$257,933
%GPA
9. 7
Without Divs
$9,811
%GPA
5. 5
% From Divs
96. 2
12/31/1939 - 2/28/2015
$249,522
11. 0
$16,849
7. 1
93. 2
12/31/1949 - 2/28/2015
$105,994
11. 3
$12,557
7. 7
88. 2
12/31/1959 - 2/28/2015
$18,285
9. 9
$,3514
6. 7
80. 8
12/31/1969 - 2/28/2015
$8,688
10. 4
$,2286
7. 2
73. 7
12/31/1979 - 2/28/2015
$4,979
11. 7
$1,950
8. 8
60. 8
12/31/1989 - 2/28/2015
$,1004
9. 6
$596
7. 3
40. 7
12/31/1999 - 2/28/2015
$190
4. 3
$143
2. 4
24. 5
12/31/2009 - 2/28/2015
$209
15. 3
$189
13. 1
9. 6
12/31/1929 - 12/31/1939
$103
0. 3
$58
-5. 3
43. 7
12/31/1939 - 12/31/1949
$235
8. 9
$134
3. 0
43. 0
12/31/1949 - 12/31/1959
$580
19. 2
$357
13. 6
38. 4
12/31/1959 - 12/31/1969
$210
7. 7
$154
4. 4
27. 0
12/31/1969 - 12/31/1979
$175
5. 7
$117
1. 6
32. 8
12/31/1979 - 12/31/1989
$496
17. 4
$327
12. 6
34. 0
12/31/1989 - 12/31/1999
$529
18. 1
$416
15. 3
21. 5
12/31/1999 - 12/31/2009
$91
-1. 0
$76
-2. 7
16. 4
Periods Through Current:
By Decade
Source: Ned Davis Research. Past performance is not indicative of future results. Please see attached disclosures.
10
Monthly Data 1/31/1972 - 3/31/2015 (Log Scale
5984
3523
2074
1221
Dividen d Grower s & Initiator s
(
)
Gain Per Annum = 10.1% ($100 Grows To $6354
)
(
)
All Dividend-Payin g Stocks
Gain Per Annum = 9.3% ($100 Grows To $4645 )
)
Dividen d Payer s w/N o Chang e in Dividend s (
Gain Per Annum = 7.6% ($100 Grows To $2385 )
)
Dividend Cutter s or Eliminator s (
Gain Per Annum = -0.0% ($100 Grows To $99 )
)
(
Non Dividend-Payin g Stock s
Gain Per Annum = 2.7% ($100 Grows To $321 )
S& P 500 Geometri c Equal- Weigh ted Tota l Retur n Inde x (
Gain Per Annum = 7.7% ($100 Grows To $2496 )
)
718
423
249
147
86
51
Returns based on monthly equal-weighted geometric average of total returns
of S&P 500 component stocks, with components reconstituted monthly.
30
1975
1980
1985
1990
1995
2000
Source: Ned Davis Research. Past performance is not indicative of future results. Please see attached disclosures.
2005
2010
2015
11
UNIVERSE
FUNDAMENTAL
PORTFOLIO
PORTFOLIO REVIEW
S&P 1500
Qualitative Analysis
Security Selection
Ongoing Review
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Target Market Cap ≥ 2 Billion
Avg. Dividend Yield ≥ S&P 500
Yield
Qualified income focus
ETFs, REITs, and Preferred*
Stocks minority
• Up to 15% of
Portfolio
Initial Companies for
consideration 100-150
Key Metrics
•
•
•
•
•
Dividend Yield ≥ S&P 500
Yield
Dividend Growth
over 1, 3, 5 yrs.
Earnings Stability
over 1, 3, 5 yrs.
Earnings Growth
over 1, 3, 5 yrs.
Beta ≤ S&P 500 Index
Source: Clark Capital Research
Fundamentals
Business Model
Management Quality
Dividend Consistency
Competitive Edge
•
Financial Analysis
•
•
•
•
•
Strong Balance Sheet
Growth of Earnings Avg. 6-8%
Payout Ratios ≤ 50%
Return on Equity
Growth of Dividend Avg. 5-7%
Screen Universe
Management team Review
Portfolio Manager selection
Average Portfolio 45-60
Companies
Diversification
Dividend Growth
Earnings Review
Sector Weights
Position Weight
Yield > S&P 500
Beta < S&P 500
Holdings Period
•
Avg. Turnover
Since Inception: 83.47%
*The strategy can invest up to 15% in
publically traded REITs, preferred stock,
limited partnerships or master limited
partnerships, by way of exchange traded
funds (ETFs). These vehicles are
sometimes used to increase the overall
yield as well as possibly lower the overall
volatility in the portfolio.
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Full Date Range
12/31/1929 — 12/31/2013
Periods Through Current:
12/31/1939 — 12/31/2013
12/31/1949 — 12/31/2013
12/31/1959 — 12/31/2013
12/31/1969 — 12/31/2013
12/31/1979 — 12/31/2013
12/31/1989 — 12/31/2013
12/31/1999 — 12/31/2013
12/31/2009 — 12/31/2013
By Decade:
12/31/1929 — 12/31/1939
12/31/1939 — 12/31/1949
12/31/1949 — 12/31/1959
12/31/1959 — 12/31/1969
12/31/1969 — 12/31/1979
12/31/1979 — 12/31/1989
12/31/1989 — 12/31/1999
12/31/1999 — 12/31/2009
Total
Return
Income
Return
9.6
4.2
10.9
11.2
9.8
10.3
11.7
9.4
3.5
15.7
0.3
8.9
19.2
7.7
5.7
17.4
18.1
–1.0
Capital
Appreciation
Returns as a % of
Total Dividends
Return
Price
5.4
43.3
56.7
3.9
3.6
3.3
3.2
3.0
2.3
1.9
2.3
7.0
7.6
6.5
7.0
8.7
7.1
1.6
13.5
36.0
32.1
33.2
31.5
25.4
24.1
53.4
14.4
64.0
67.9
66.8
68.5
74.6
75.9
46.6
85.6
5.6
6.0
5.6
3.3
4.1
4.8
2.8
1.8
–5.3
3.0
13.6
4.4
1.6
12.6
15.3
–2.7
N/A
66.6
29.3
43.1
72.0
27.5
15.6
N/A
N/A
33.4
70.7
56.9
28.0
72.5
84.4
N/A
Source: Ned Davis Research, Inc. Past performance is not indicative of future results. Please see attached disclosures.
13
Tax Transition Strategies
Balanced Option

Custom allocations to fixed income
Covered Call Option Overlay

Potentially increase portfolio yield

Seeks to reduce portfolio volatility

Strives to reduce portfolio losses in down markets

Manages capital gains

Utilized to define exit points for portfolio holdings
Hedge Strategy
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Long-term total return potential from a growth-oriented investment
strategy
The benefits of a strategy that strives to provide an optimal combination
of capital appreciation, dividend income and attempts to mitigate
downside risk
Exposure to stocks with dividend paying potential
Customized equity solution
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Our People, Size, Style, and Flexibility
Customized Solutions to Meet Individual Needs
Access to the Portfolio Management Team
Prudent, Flexible and Highly Adaptable Approach
Enables Us to Constantly Balance Risk while
Pursuing Alpha
Excellence is
pursued through a
dedication to
continual
improvement.
Optional Custom Hedge Strategy to Defuse
Correlation Spikes
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*Pure gross returns do not include the deduction of transaction costs and are shown as supplemental information. **The net 3.00% performance is shown because it is the highest possible
industry standard platform fee. Returns greater than one year are annualized. Past performance is not indicative of future results. Please see attached disclosures.
Source: Morningstar Direct
17
*Pure gross returns do not include the deduction of transaction costs and are shown as supplemental information. **The net 3.00% performance is shown because it is the highest possible
industry standard platform fee. Returns greater than one year are annualized. Past performance is not indicative of future results. Please see attached disclosures.
Source: Morningstar Direct
18
*Pure gross returns do not include the deduction of transaction costs and are shown as supplemental information. **The net 3.00% performance is shown because it is the highest possible
industry standard platform fee. Returns greater than one year are annualized. Past performance is not indicative of future results. Please see attached disclosures.
Source: Morningstar Direct
19
*Pure gross returns do not include the deduction of transaction costs and are shown as supplemental information. **The net 3.00% performance is shown because it is the highest possible
industry standard platform fee. Returns greater than one year are annualized. Past performance is not indicative of future results. Please see attached disclosures.
Source: Morningstar Direct
20
*Pure gross returns do not include the deduction of transaction costs and are shown as supplemental information. **The net 3.00% performance is shown because it is the highest possible
industry standard platform fee. Returns greater than one year are annualized. Past performance is not indicative of future results. Please see attached disclosures.
Source: Morningstar Direct
21
*Pure gross returns do not include the deduction of transaction costs and are shown as supplemental information. **The net 3.00% performance is shown because it is the highest possible
industry standard platform fee. Returns greater than one year are annualized. Past performance is not indicative of future results. Please see attached disclosures.
Source: Morningstar Direct
22
The ranking shown above is not indicative of the adviser’s future performance and may not be representative of any one client’s experience because the ranking reflects an average of all, or a
sample of all, the experiences of the adviser’s clients.
*Pure gross returns do not include the deduction of transaction costs and are shown as supplemental information. **The net 3.00% performance is shown because it is the highest possible
industry standard platform fee. Returns greater than one year are annualized. Past performance is not indicative of future results. Please see attached disclosures.
Source: Morningstar Direct
23
Past performance is not indicative of future results. This material is not financial advice or an offer to sell any product. Not every client's account will have
these exact characteristics. The actual characteristics with respect to any particular client account will vary based on a number of factors including but not
limited to: (i) the size of the account; (ii) investment restrictions applicable to the account, if any; and (iii) market exigencies at the time of investment.
Clark Capital Management Group, Inc. reserves the right to modify its current investment strategies and techniques based on changing market dynamics
or client needs. The information provided in this report should not be considered a recommendation to purchase or sell any particular security. There is
no assurance that any securities discussed herein will remain in an account's portfolio at the time you receive this report or that securities sold have not
been repurchased. The securities discussed may not represent an account's entire portfolio and in the aggregate may represent only a small percentage
of an account's portfolio holdings. It should not be assumed that any of the securities transactions, holdings or sectors discussed were or will prove to be
profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of
the securities discussed herein.
Firm Information: Clark Capital Management Group, Inc. (Clark Capital) is an investment advisor registered with the United States Securities and
Exchange Commission under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. 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. More information about Clark Capital’s advisory
services and fees can be found in its Form ADV which is available upon request.
Calculation Methodology: Composite returns assume reinvestment of income and other earnings, are gross of withholding taxes, if any, and are reported
in US dollars. Returns prior to 1/1/07 were calculated using the Modified Dietz method. Beginning 1/1/07 returns are calculated daily. Internal dispersion
is calculated using the equal-weighted standard deviation of annual account returns for those accounts included in the composite for the entire year.
Trade date accounting is used. Leverage is not used in the composite. 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. A copy of the complete list and description of Clark Capital’s composites, verification and performance examination reports, and policies for
valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.
24
25
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.
Clark Capital Management Group claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in
compliance with the GIPS standards. Clark Capital Management Group has been independently verified for the periods January 1, 2002 through December 31, 2012.
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.
Composite Description: The Navigator High Dividend Equity composite was formerly known as Navigator Premier High Yield Equity. The Navigator High Dividend
Equity composite invests in high-quality domestic and international equities, REITs, preferred stocks, exchange-traded funds and closed end funds. The goal of the
strategy is to provide above average dividend income with capital appreciation. The focus is on reasonably priced, multi-capitalized stocks with strong valuation
characteristics. Only securities with strong and absolute relative values are considered for use in the composite and is diversified across several broad economic
sectors. Fundamental and quantitative analysis is used in determining the stocks to be included in the composite such as: revenue growth, price/cash flow,
price/book, P/E, ROE (return on equity), price/sales, dividend yield, PEG ratios and earnings momentum . Generally, 35 to 55 securities are held in the composite.
Preferred stocks, REITs, ETFs and closed end funds are also considered for the composite. The sell discipline considers dividend reductions, weakening earnings trends
and declining margins over 2-3 consecutive quarters. Relative performance to market peers is also a factor. The strategy seeks to provide capital appreciation with
current income on a consistent basis by applying a fundamental investment approach that is focused on securities with above average dividend yield.
The returns for the calendar year of 2011 that was previously reported have changed. The pure gross return changed from 7.36% to 6.59%.
In a Clark Capital sponsored wrap fee program, the net-of-fee returns reflect the maximum Investment Advisory Fee (including trading and custody expenses) of 1.1%
and the maximum Consultant Fee of 1.25%, debited monthly for an annual total of 2.35%. If a lower Consultant Fee were reflected in the performance data, returns
would be higher. In a non-Clark Capital wrap fee program, the net-of-fee returns reflect the highest maximum annual fee of 3%, (includes trading and custody
expenses) debited monthly. Actual fees may differ from the fees used in this presentation depending upon account size, investments and agreement with client.
Benchmark Description: The benchmark is the S&P 500 Index. The Dow Jones Industrial Average is a supplemental benchmark. 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 Dow Jones Industrial Average is a priceweighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ.
The benchmark for this composite is used because the S&P 500 is widely known and is generally representative of U.S. equities. Index returns reflect the reinvestment
of income and other earnings, are provided to represent the investment environment shown, and are not covered by the report of independent verifiers.
The volatility (beta) of the Composite may be greater or less than its respective benchmarks. It is not possible to invest in these indices.
26
Standard Deviation: A statistical measure of dispersion about an average which depicts
how widely the returns varied over a certain period of time.
3 Year Standard Deviation: The 3 year annualized standard deviation measures the
variability of the composite and the benchmark returns over the preceding 36-month
period.
Beta: A measure of systematic risk with respect to a benchmark. Systematic risk is the
tendency of the value of the composite and the value of the benchmark to move together.
Beta measures the sensitivity of the composite’s excess return (total return minus the riskfree return) with respect to the benchmark’s excess return that results from their
systematic co-movement. It is the ratio of what the excess return of the composite would
be to the excess return of the benchmark if there were no composite-specific sources of
return. If beta is greater than one, movements in value of the composite that are
associated with movements in the value of the benchmark tend to be amplified. If beta is
one, they tend to be the same, and if beta is less than one, they tend to be dampened. If
such movements tend to be in opposite directions, beta is negative. Beta is measured as
the slope of the regression of the excess return on the composite as the dependent
variable and the excess return on the benchmark as the independent variable.
The beta of the market is 1.00 by definition. Morningstar calculates beta by comparing a
portfolio's excess return over T-bills to the benchmark's excess return over T-bills, so a beta
of 1.10 shows that the portfolio has performed 10% better than its benchmark in up
markets and 10% worse in down markets, assuming all other factors remain constant.
Conversely, a beta of 0.85 indicates that the portfolio's excess return is expected to
perform 15% worse than the benchmark’s excess return during up markets and 15% better
during down markets.
Alpha: A measure of the difference between a portfolio’s actual returns and its expected
performance, given its level of risk as measured by beta. A positive alpha figure indicates
the portfolio has performed better than its beta would predict. In contrast, a negative
alpha indicates the portfolio has underperformed, given the expectations established by
beta. Alpha is calculated by taking the excess average monthly return of the investment
over the risk free rate and subtracting beta times the excess average monthly return of the
benchmark over the risk free rate.
Sharpe Ratio: A risk-adjusted measure developed by Nobel Laureate William Sharpe. It is
calculated by using standard deviation and excess return to determine reward per unit of
risk. The higher the Sharpe Ratio, the better the composite's historical risk-adjusted
performance. The Sharpe ratio is calculated for the past 36-month period by dividing a
composite's annualized excess returns by the standard deviation of a composite's
annualized excess returns. Since this ratio uses standard deviation as its risk measure, it is
most appropriately applied when analyzing a composite that is an investor's sole holding.
The Sharpe Ratio can be used to compare two composites directly on how much risk a
composite had to bear to earn excess return over the risk-free rate.
R-Squared: Reflects the percentage of a portfolio's movements that can be explained by
movements in its benchmark.
Downside Capture Ratio: Measures a manager's performance in down markets. A downmarket is defined as those periods (months or quarters) in which market return is less than
0. In essence, it tells you what percentage of the down-market was captured by the
manager. For example, if the ratio is 110%, the manager has captured 110% of the downmarket and therefore underperformed the market on the downside.
Upside Capture Ratio: Measures a manager's performance in up markets relative to the
market (benchmark) itself. It is calculated by taking the security’s upside capture return
and dividing it by the benchmark’s upside capture return.
Bull Beta: A measure of the sensitivity of a composite’s return to positive changes in its
benchmark’s return.
Bear Beta: A measure of the sensitivity of a composite’s return to negative changes in its
benchmark’s return.
Best Month: This is the highest monthly return of the investment since its inception or for
as long as data is available.
Worst Month: This is the lowest monthly return of the investment since its inception or for
as long as data is available.
Maximum Gain: The peak to trough incline during a specific record period of an investment
or composite. It is usually quoted as the percentage between the peak to the trough.
Maximum Drawdown: The peak to trough decline during a specific record period of an
investment or composite. It is usually quoted as the percentage between the peak to the
trough.
CCM-15
27