Empiric Core Equity Fund
December 31st, 2007
Mutual Fund Investing Involves Risk. Principal loss is possible. The Fund invests in smaller
companies, which involve additional risks such as limited liquidity and greater volatility. The
Fund invests in foreign securities which involve political, economic and currency risks, greater
volatility, and differences in accounting methods. The Fund is non-diversified, meaning it may
concentrate its assets in fewer individual holdings than a diversified fund. Therefore, the Fund is
more exposed to individual stock volatility than a diversified fund. The Fund’s use of derivative
instruments involves the risk that such instruments may not work as intended due to unanticipated
developments in market conditions or other causes. Derivatives often involve the risk that the other
party to the transaction will be unable to close out the position at any particular time or at an
acceptable price. When a Fund uses certain types of derivative instruments for investment purposes,
it could lose more than the original cost of the investment and its potential loss could be unlimited.
The presentation will speak about Growth and Value stocks in the presentation. Please keep in
mind that Growth stocks typically are more volatile than Value stocks; however, Value stocks have a
lower expected growth rate in earnings and sales.
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Agenda
•
•
Investment Performance Results (as of 12/31/07)
Empiric Core Equity Fund Information
 Overview
 Investment strategy and approach
 Strategic, Quantitative, Empirical (SQE) models market
outlook
 Portfolio Characteristics
•
•
Current Investment Themes
Questions
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Investment Performance Results – As of 12/31/07
. ..
Average Annual Performance
Core Equity
as of 12/31/07
Class A
S&P 5002
Russell 20002
Class A
Larger Stocks
Smaller Stocks
Core Equity
1
1
Load Waived
Last 3 months
0.93
1.76
-3.33
-4.58
Last 6 months
2.64
3.48
-1.37
-7.53
Last 1 Year
8.43
15.04
5.49
-1.57
Last 3 Years
10.53
12.74
8.62
6.80
Last 5 Years
22.29
23.75
12.83
16.25
Last 10 Years
9.08
9.73
5.91
7.08
Since Inception – Class A
shares (11/06/95)
12.88
13.43
11.72
9.36
Gross Expense Ratio 1.65
Performance data quoted represents past performance: past performance does not guarantee future results. The investment return
and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their
original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance data current to the
most recent month may be obtained by calling 800-880-0234. Performance data shown for the Class A Shares reflects the Class A
maximum sales charge of 5.75%. Performance data shown for the Class A Load Waived shares does not reflect the deduction of the
sales load or fee. If reflected, the load or fee would reduce the performance quoted.
[1] The returns shown do not reflect the deduction of taxes that a shareholder may pay on fund distributions or the redemption of
fund shares. [2] The Russell 2000 and S&P 500 are unmanaged indices widely recognized as representative of smaller and larger
companies, respectively. Neither index bears transaction costs, nor management fees, and cannot be actually bought or sold. Class
“C” Shares Available.
Shaded areas indicate highest relative performance.
3
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Empiric Core Equity Fund Overview
• Goal is to outperform broad-market
• Focused on absolute rather than relative returns
• Structured, Quantitative, & Empirical (SQE) process with a
valuation focus
• Global, multi-cap, total return fund
• Tenured portfolio manager with 10-year track record
• Not constrained by “style-box” dogma
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Investment Performance Results – Excellence
5
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Empiric Core Equity Fund may be suitable for investors
•
•
•
•
•
•
Seeking Core Equity
Wanting Global Equity exposure
Wanting to complement income-oriented portfolios
Seeking total return v. style box approach
Seeking a disciplined, repeatable investment approach
Wanting to balance an indexed-biased portfolio with active
management
• Who want their managers invested along with them
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Investment Strategy and Approach
•
•
Goal is growth with low volatility or fluctuation in terms of both return and
invested capital
SQE Process – Continued, Disciplined, and Repeatable
– Step 1 – “Find the Style Sweet Spot”
SV
SG
MV
MG
LV
LG
1 day
1.4
1.3
1.1
1.0
0.8
0.8
1 Wk
(1.2)
(1.5)
(1.2)
(1.8)
(3.0)
(3.1)
1 Mo
3.8
(0.9)
1.3
(2.3)
(1.1)
(6.4)
3 Mo
(7.6)
(9.4)
(8.7)
(9.8)
(7.8)
(10.8)
6 Mo
(10.8)
(10.7)
(9.8)
(7.9)
(11.0)
(10.4)
1 Yr
(15.0)
(6.7)
(11.0)
(2.6)
(9.3)
(6.2)
3 Yr
3.8
4.1
5.2
7.1
5.2
2.0
5 Yr
14.3
15.9
13.7
15.8
12.2
7.7
Sharp
(0.6)
(0.3)
(0.5)
(0.1)
(0.4)
(0.4)
YTD
(5.0)
(7.5)
(6.4)
(8.9)
(6.5)
(11.2)
QTD
(5.0)
(7.5)
(6.4)
(8.9)
(6.5)
(11.2)
MTD
(1.2)
(1.5)
(1.2)
(1.8)
(3.0)
(3.1)
Sharpe ratio indicates the
return of an investment above
the risk free rate divided by the
investment’s standard
deviation.
Source Data Thompson Baseline of
02/08/08, chart Empiric Advisors,
Inc.
7
Distributed by Quasar Distributors, LLC 02/08
Investment Strategy and Approach
• Step 2 –Indentify
the Quantitative
Sweet Spot
•
•
•
Worldwide stock
search=Higher
probability of alpha
Identify quantitative
models providing high
value-added
Utilize precise
methodology with no
emotion
1 DAY
1 WK
4
WKS
3 MOS
6
MOS
1 YR
Shar
pe
0.1
(3.3)
(10.4)
(19.9)
(0.3)
9.7
0.3
Model 1
(1.0)
0.2
(1.0)
14.4
15.8
11.1
0.4
Model 2
(1.3)
2.0
8.6
17.3
(2.5)
(9.7)
-0.4
Model 3
-
2.0
6.1
17.7
12.0
9.7
0.4
Model 4
(1.0)
0.3
(1.9)
14.0
16.1
12.6
0.5
Model 5
(1.0)
1.4
0.8
17.2
18.5
9.6
0.4
Model 6
(1.0)
1.5
(1.3)
16.4
19.8
7.2
0.3
Model 7
(1.1)
2.3
2.9
14.5
13.4
24.4
0.9
Model 8
1.4
0.5
(0.9)
(11.8)
(3.0)
3.2
0.1
Model 9
0.1
(0.5)
(8.0)
(20.2)
(5.9)
8.7
0.3
(1.0)
(0.3)
2.4
13.8
9.0
3.3
0.2
STRATEGY
% CONSISTENCY
Short Experiment Rk
The above is a “slice” of the many models Empiric Advisors
monitors for returns. Red text in the name indicates models for
shorts and “Short Experiment Rk” is also a short model. Few
models on the long side currently indicate positive returns.
Source: Empiric Advisors as of 2/08/09
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Investment Strategy and Approach
• Step 3 – “Integration”
•
Find the companies at the
intersection of the top-down and
bottom-up processes
Individually test companies for
potential contribution of reward and
risk
•
Ind Rk
t90
YLD
SCORE
STRATEGIES
EXP
EXP
OPTIONS
EXP RET
1
0.9
4
1
47
PHIL
16%
1
0.8
4
6
12
-
1
1.4
6
1
51
CBOE & PHIL
1
8
2
33
3.0
1
0.6
9
3
2.1
12
5
6
37
CBOE & AMEX
NET
5.1
19.1
0.0
(18.2)
Proforma Long + Short
6.7
13.0
0.2
(10.5)
SHORT BENEFIT
1.6
(6.1)
0.1
7.6
EMCAX
1.5
16.4
(0.2)
(19.1)
(7.8)
21.2
(0.6)
(26.3)
(1.0)
20.1
(0.3)
(33.2)
7.6
7.1
0.4
OEX
Premium
0.5%
SPARTAN STORES
SPTN
CnStp
462
FOODD
21.1
16%
1.4%
COCA-COLA FEMSA ADR
KOF
CnStp
1,416
BEVGS
52.3
15%
1.2%
MOLSON COORS BREWING
TAP
CnStp
8,083
BRWRS
45.0
1.9%
SYSCO
SYY
CnStp
18,014
FOODD
29.6
1.0%
BUNGE
BG
CnStp
13,625
AGPRD
112.7
2.0%
PEPSICO
PEP
CnStp
113,339
BEVGS
70.4
14%
EXP
MKT CAP
14.7
SECTOR
14%
CBOE & AMEX
SHARPE
Proforma Long
SPX
ALLOC
RISK
TICKER
15%
+
RET
COMPANY
CBOE & AMEX
1
4.22
IND
PRICE
Source: Empiric advisors as of 2/08/08
Fund holdings and/or sector allocations are subject to change at any time and are not
recommendations to buy or sell any security.
9
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Portfolio Construction Process
• Continuous, Disciplined, and Repeatable process
– Compare entire portfolio with universe of options daily
• Little emotional bias
• No attention bias
• No style-box limitations
– Buy based on:
• Expected return next 12 months
• Impact on return/risk profile of entire portfolio
• Perform quick qualitative overlay by using sound judgment
and experience to validate the models
– Sell based on:
• Price change of more than 20% in one day
• Availability of more attractive opportunities
• Perform quick qualitative overlay to validate the models
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Portfolio Characteristics (as of 12/31/07)
• Portfolio Allocation
– Common Stock:
• Long Positions:
• Short Positions:
86.7%
67.7%
32.3%
13.3%
4.14%
0.87
123%
136
$71.0M
– Cash Equivalent:
•
•
•
•
•
Alpha (10 year) (class A):
Beta (10 year) (class A) :
Turnover Ratio:
Number of Holdings:
Total Net Assets:
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Portfolio Characteristics- Allocation by Sector
(as of 12/31/07)
EMCAX
S&P 500
40%
30%
20%
10%
0%
-10%
-20%
-30%
-40%
Tech
Mat
Consumer
Disc
Health
Tele
Fin
12
Ind
Utilities
Energy
Staples
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Portfolio Characteristics- Allocation by Sector
(as of 2/08/08)
EMCAX
S&P 500
25%
20%
15%
10%
5%
0%
-5%
-10%
Tech
Mat
Consumer
Disc
Health
Tele
Fin
13
Ind
Utilities
Energy
Staples
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Allocation by Industry as of 12/31/07
Chemicals Agriculture/Fertilizer
8.9%
Wireless Telecom Services
6.2%
Oil & Gas Equipment Services
4.8%
Trucking
-4.8%
Homebuilding
-4.5%
Retail - Apparel
-3.8%
Aerospace & Defense
3.8%
Diverse Metal & Mining
3.8%
Integrated Telecom Services
3.7%
Softdrinks
3.0%
Asset allocation, fund holdings and portfolio industries are subject to change and are not recommendations to buy
or sell any security.
14
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Allocation by Industry as of 2/08/08
Wireless Telecom Services
5.7%
Chemicals-Agriculture/Fertilizer
5.4%
Health Care- Managed Care
5.3%
Soft Drinks
4.8%
Oil and Gas Integrated
4.6%
Diverse Metals/ Mining
4.0%
Railroads
3.4%
Pharmaceuticals
2.8%
Aerospace/ Defense
2.7%
Communications Equipment
2.6%
Asset allocation, fund holdings and portfolio industries are subject to change and are not recommendations to buy
or sell any security.
15
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Region/Country Allocations
Quarter ended 12/31/07
Americas
 United States
 Canada
 Brazil
 Chile
 Mexico
 Peru
 Bermuda
Pacific Basin
 South Korea
 Australia/New Zealand
Europe
 United Kingdom
 Netherlands
 Norway
 France
 Switzerland
 Spain
 Germany
 Portugal
 Italy
 Spain
37.9%
7.5%
3.5%
1.5%
1.9%
1.6%
0.1%
3.7%
2.5%
9.0%
4.6%
0.4%
3.4%
1.5%
2.1%
1.8%
0.4%
0.1%
1.4%
Various






Israel
China
Russia
Turkey
Philippines
South Africa
0.1%
0.1%
2.1%
0.1%
0.3%
0.6%
Asset Allocation, fund holdings and portfolio industries are subject to change and are not recommendations to
buy or sell any security.
16
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Portfolio Characteristics- Top Ten Holdings
with Percent of Assets (as of 12/31/07)
Cola-Cola Femsa ADR
KOF
2.3%
Mosaic Co
MOS
2.1%
Champion Enterprises Inc.
CHB
-2.1%
Veolia Environmental ADR
VE
2.0%
CF Industries Holdings
CF
1.8%
Diageo PLC ADR
DEO
1.8%
Posco ADR
POS
1.7%
Vodafone Group ADR
VOD
1.6%
UHAL
-1.6%
AGU
1.6%
Amerco
Agrium Inc.
Total
18.6%
Asset Allocation, fund holdings and portfolio industries are subject to change and are not
recommendations to buy or sell any security. Shorts are totaled as positives.
Negative holdings represent short positions
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Portfolio Characteristics- Top Ten Holdings with Percent
of Assets (as of 02/08/08)
Cola-Cola Femsa ADR
KOF
2.4%
Minas Buenaventa ADR
BVN
2.1%
VE
2.0%
Diageo ADR
DEO
1.9%
Vodafone Group ADR
VOD
1.8%
Syngenta ADR
SYT
1.7%
Lockheed Martin
LMT
1.7%
Wal-Mart Stores
WMT
1.7%
Posco ADR
PKX
1.7%
Norfolk Southern
NSC
1.7%
Veolia Environnement ADR
Total
18.7%
Asset Allocation, fund holdings and portfolio industries are subject to change and are not
recommendations to buy or sell any security. Shorts are totaled as positives.
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Portfolio Management
• Mark Coffelt, CFA
– Portfolio Manager, responsible for research & analytics
– Chairman of the Board of Directors and Chief Investment
Officer of Empiric Advisors
– Twenty-plus years investment experience
– BA Occidental College, MBA Wharton School of the
University of Pennsylvania
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Empiric Core Equity Fund – Fast Facts
•
Ticker
–
Class A – EMCAX
–
Class C – EMCCX
•
Cusip
–
Class A – 29215M101
–
Class C – 29215M200
•
Sales Charge
–
Class A – 5.75% front-end (also available load-waived)
–
Class C – 1.00% deferred
•
Expense Ratio
–
Class A – 1.66%
–
Class C – 2.41%
• The Fund’s investment objectives, risks, charges and expenses must be
considered carefully before investing. The prospectus contains this and
other important information about the investment company, and it may
be obtained by calling 800-880-0324 or by visiting
www.EmpiricFunds.com. Read it carefully before investing.
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Empiric Core Equity Fund
Lipper disclosure:
Lipper ratings for Total Return reflect funds' historical total return performance relative to peers as of December 31, 2007. Lipper ratings for Tax Efficiency reflect funds’ historical success in postponing
taxable distributions relative to peers as of December 31, 2007. Tax Efficiency offers no benefit to investors in tax-sheltered accounts such as 401(k) plans. The Lipper ratings are subject to change every
month and are based on an equal-weighted average of percentile ranks for the Total Return, Consistent Return, and Tax Efficiency metrics over three-, five-, and ten-year periods (if applicable). The
highest 20% of funds in each peer group are named Lipper Leader or a score of 1, the next 20% receive a score of 2, the middle 20% receive are scored 3, the next 20% are scored 4, and the lowest 20%
are scored 5. Empiric Core Equity Fund, in Lipper's Multi-Cap Value classification, received the following ratings for the overall, 3-, 5-, and 10-year periods, respectively: Total Return; Leader (332 funds),
Leader (332), Leader (267 funds), and Leader (95 funds): Tax Efficiency (in the Multi-Cap Value class) 4 (332 funds), 3 (332), 4 (267 funds), and Leader (95 funds): Consistent Returns;4 (327), Leader
(322), Leader (262), and 1 (93), Lipper ratings are not intended to predict future results, and Lipper does not guarantee the accuracy of this information. More information is available at
www.lipperweb.com. Lipper Leader Copyright 2007.
Morningstar disclosure:
The prospectus contains information on which investors are eligible for the load waiver.
For each fund with at least a three-year history, Morningstar calculates a Morningstar RatingTM (based on a Morningstar risk-adjusted return measure that accounts for variation in a fund's monthly
performance, (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each
category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one
fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) The load waived rating differs from an Overall Morningstar Rating as it does not include the
effects of sales charges, loads, and redemption fees. For the period ended 12/31/2007, Morningstar rated the Empiric Core Equity Fund's Class A (load waived) shares among Mid-Cap Blend Funds,4, 4,
5, and 3 stars among 420, 420, 336, and 143 for the overall, three-, five-, and 10-year periods, respectively. Morningstar rated the Empiric Core Equity Fund Class A (with load) shares among Mid-Cap
Blend Funds,3, 4, 5, and 2 stars among 420, 420, 336, 143 funds for overall, three-, five-, and ten-year periods, respectively. Past performance is no guarantee of future results. © 2007 Morningstar, Inc.
All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete
or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past Performance is no guarantee of future results.
Definitions
Alpha: A statistic that measures the difference between the fund’s actual returns and its expected performance, given its level of risk as measured by beta. The difference is expressed as an annual
percentage.
Basis Points: One one-hundredth of a percent, used in measuring yield differences among bonds.
Beta: A statistic that measures the volatility of the fund, as compared to that of the overall market.
Sharpe Ratio: A ratio developed by Nobel laureate William F. Sharpe to measure risk-adjusted performance. It is calculated by subtracting the risk-free rate - such as that of the 90 day U.S.
treasury bill - from the rate of return for a portfolio and dividing the result by the standard deviation of the portfolio returns.
Risk-Free Rate of Return: The theoretical rate of return of an investment with zero risk. The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment
over a specified period of time.
Source: Investopedia.
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