Institutional Growth Program

Institutional Large Cap Growth Program ("ILCG") Investment Strategy

Objectives: Long-term capital appreciation and preservation of capital.

Portfolio Characteristics

• Diversified large cap growth-style equity portfolio.

June 30, 2010 Composite:
Weighted Average Market Capitalization: $23.9 billion
Median Market Capitalization: $6.9 billion
 

Top Ten Positions: 26.62% of portfolio

APPLE INC
CREE INC
SANDISK CORP
VALEANT PHARMACEUTICALS INTL
COGNIZANT TECHNOLOGY SOLUTIO (CL A)
LUBRIZOL CORP
COACH INC
EXPRESS SCRIPTS INC
ROVI CORP
CSX CORP
 

• Fully invested philosophy with no option to raise a reserve for defensive purposes.  Maximum 5% in cash equivalents incidental to investment process.
• Limited exposure to ADR/ADS and dual listed foreign stocks trading on U.S exchanges as set by account specific restrictions (e.g., 10% maximum ADR/ADS exposure).
• Separate account typically with 60 to 75 equity positions.
• Moderate Turnover: 75.19% annualized sales turnover from inception through June 30, 2010.
• Not tax efficient.

Estimated Product Capacity: $8 Billion in Assets (combined with Growth Program)

Strategy

• The ILCG is an application for the Growth Program investment process with sectors set relative to those of the Russell 1000® Growth Index and standard institutional restrictions (e.g., corporate governance, social).
• Top-down economic and sector analysis to determine sector exposures relative to sole benchmark, the Russell 1000® Growth Index.  Tracking error target guideline of under 8% versus benchmark.
• Value added by systematic prudent overweighting and underweighting of sectors relative to benchmark rather than making large, potentially risky sector bets.
• Bottom-up stock picking to populate sector targets.
• Stocks are selected using the Growth Program investment process favoring stocks in the Russell 1000 Growth Index benchmark.
• Dual Identification -- value added via especially effective bottom-up stock picking using both advanced modern quantitative and traditional analysis.
• Holdings weighted to achieve diversification, desired sector exposures and targeted aggregate portfolio characteristics.

Comparison Between ILCG and Growth Program

Customary Periods Performance

Ending with June 30, 2010

LEGAL

New Century Investment Management, Incorporated (the “Firm” or “New Century”) claims compliance with the Global Investment Performance Standards (GIPS®). New Century has been independently verified for the periods July 1, 1998 through June 30, 2010.

Verification assesses whether (1) the firm has complied with all the composite construction requirements for 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. The Institutional Large Cap Growth Program composite has been examined for the periods from inception, November 1, 2007, through June 30, 2010. The verification and performance examination reports are available upon request.

The Firm is an independent investment adviser registered with the United States Securities and Exchange Commission under the Investment Advisers Act of 1940. The accounts are fully invested in a diversified portfolio of domestically traded growth-style equity securities (including potential exposure to ADR/ADS and dual-listed foreign stocks trading on U.S. exchanges as restricted by contract), primarily large capitalization with a bias towards companies included in the Russell 1000 Growth Index, selected and weighted pursuant to an application of the Firm's Growth Program investment process. Sector weightings are set relative to those of the Russell 1000 Growth Index. The composite is comprised of all fee-paying discretionary tax-exempt accounts managed within the defined investment style during the periods presented, and will include terminated accounts for the periods during which they were included in the composite. Composite returns are exclusive of custodial fees, and gross or net of investment advisory fees, respectively, as indicated by “gross” or “net.” Valuations are computed and performance is reported in U.S. dollars. Investment performance has been presented herein as of the stated date, and may vary materially thereafter.  The performance of accounts within a composite may vary. However, new accounts are invested homogeneously in the existing portfolio (subject to client restrictions).  Composite performance includes the reinvestment of all income.

The designated benchmark for the Institutional Large Cap Growth Program is the total return on the Russell 1000 Growth Index. The Russell 1000 Growth Index measures the performance of those of the 1,000 largest companies in the Russell 3000® Index that have higher price-to-book ratios and higher forecasted growth values. The Russell 1000 Growth is an index that is not actively managed and may differ materially in volatility from an Institutional Large Cap Growth Program portfolio.

Past performance is not indicative of future results.

To receive a GIPS compliant presentation and/or the Firm’s list of composite descriptions, contact Karen G. Modell, Esq., Managing Director, at telephone (248) 262-3140 or send a written request to New Century Investment Management, Inc., 1 Towne Square Suite 1690, Southfield, Michigan 48076.  Please see the Legal section of this web-site for additional disclosures and information.