Investment Objective

To provide long-term capital growth, with a goal of meeting the long-term needs of the portfolio. A secondary objective is to exceed the rate of inflation over the long-term. A third objective, much lower in priority than the other two, is moderation of volatility.

Investment Team

The Core Team is responsible for evaluating bottom-up stock recommendations based on strategy fit and valuation measures as well as incorporating the firm’s market & economic views into total portfolio asset allocation decisions. The Fixed Income Group is responsible for the active management of the portfolio’s fixed income segment.

Composition

The majority of the portfolio will be in equity securities.

50% - 90% Equities

Investment Process

Active Asset Allocation
Manning & Napier uses an active asset allocation process because we recognize that no single asset mix is likely to be appropriate in all market environments. The firm's Investment Policy Group issues broad guidance for asset allocation within multi-asset class portfolios based on the firm's market & economic outlook. From there, equity selection is the primary driver of the portfolio’s asset allocation and the Global Core Team determines day-to-day equity exposure. The level of fixed income allocation results from the bottom-up stock selections made by the Global Core Team. An active approach to asset allocation allows us the flexibility to take advantage of opportunities that arise in the marketplace, and adjust the portfolio to fundamental changes in the economic environment. We have more than 50 years of experience managing risk through this active approach.

Equity Investment Process
For more than 50 years, the same proprietary bottom-up driven investment process has been used to build diversified portfolios of individual securities. Manning & Napier’s equity analysts first search the global investment universe using both bottom-up (company-specific) and top-down (macro) research to reduce the initial universe to a workable list of potential portfolio candidates. Next, companies are evaluated using fundamental analysis to generate a formal list of portfolio candidates based on three selection strategies - Strategic Profile, Hurdle Rate, and Bankable Deal. If a company is a strategy fit, strict pricing disciplines are used to establish buy and sell targets based on fair market value. Within this process, the company is subjected to peer review within the recommending analyst's sector group. As part of this peer review, every analyst in the sector group has a financial stake in the stock - not just the recommending analyst. When the security is formally recommended, it is presented to the Global Core Team, which determines whether to accept the security recommendation, put it on the “firedrill” list, or reject it. Each holding is continuously monitored based on our strategy fit and valuation criteria, and the portfolio's overall risk exposures are regularly evaluated by the team.

Fixed Income Investment Process
Our approach to fixed income investing is based on a multi-step process with an emphasis on actively managing risk. The team establishes an economic overview that is used to determine duration and yield curve positioning. Security-specific analysis is then conducted based on which sectors are deemed to be most attractive given current market conditions. Purchased securities are continuously monitored and additional purchases or sales are evaluated based on security selection criteria and relative value.

The Manning & Napier Equity-Focused Blend Composite is a weighted average of discretionary separately managed accounts with an Equity-Focused Blend objective. Accounts in this composite must have a market value greater than $500,000 and tenure of at least one year under our management. Equity-Focused Blend is a blended investment objective that invests in equities, primarily U.S. with some non-U.S., and fixed income securities. The investment objective of accounts in this composite is primarily to seek long-term capital growth, with the moderation of volatility a minor consideration. Equity exposure for accounts in this composite typically ranges from 50% to 90% with situational adjustments within this range at our discretion. Net-of-fee returns are based off of actual fees. They are after brokerage commissions, reinvested income, advisory fees, and if applicable, the fees of the Investor’s Personal Financial Advisor, but before custodian costs. Also, accounts subject to solicitation fees may incur as much as 0.15% in additional expenses. Fees will vary with size and circumstances and these fee differentials would impact returns accordingly. Fees used for calculations are firmwide rates prior to 2001 and specific to this composite for 2001 onward. Past performance does not guarantee future results. This composite includes separately managed accounts that may have a portion of their assets invested in proprietary asset class mutual funds, which may be declined or may not be permitted through the selection of some custodial programs. All data are subject to revision. Performance for periods greater than one year is annualized.