All Cap Growth/Technology and Science Equity Strategy - Investing in companies at the forefront of innovation and value creation - Bailard
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QUARTERLY UPDATE All Cap Growth/Technology and Science Equity Strategy Investing in companies at the forefront of innovation and value creation
Performance as of December 31, 2021
Q4 2021 PERFORMANCE1 TOTAL RETURN NET OF FEE1
The Bailard Technology & Science Composite 3 Months YTD 1 Year 3 Years 5 Years 10 Years
(the “Composite”) posted a fourth quarter 2021 Bailard Composite 6.50% 19.16% 19.16% 36.17% 27.80% 21.99%
total return of 6.5% net of fees, ahead of the
Morningstar U.S. Open End Technology (“OE Morningstar US OE Tech 4.41% 13.80% 13.80% 34.32% 26.26% 20.39%
Tech”) return of 4.4% and the Lipper Science
Lipper Sci & Tech 6.30% 18.50% 18.50% 35.59% 27.14% 20.99%
and Technology Fund Index (“Lipper Sci &
Tech”) return of 6.4%. The Composite trailed S&P NA Tech 9.05% 26.40% 26.40% 37.82% 29.98% 23.53%
the large-capitalization-heavy S&P North
American Technology Index (“NA Tech”) as
large capitalization stocks significantly ACTIVE RETURN NET OF FEE1,2
outperformed small. For the full year, the
3 Months YTD 1 Year 3 Years 5 Years 10 Years
Composite returned 19.2% net of fee, outpacing Vs. Morningstar US OE
its competitor peer groups and behind the NA 2.09% 5.36% 5.36% 1.85% 1.54% 1.61%
Tech
Tech Index.
Vs. Lipper Sci & Tech 0.20% 0.67% 0.67% 0.58% 0.66% 1.01%
Relative to competing strategies, the
Composite’s notable contributors were in Vs. S&P NA Tech -2.55% -7.24% -7.24% -1.65% -2.18% -1.53%
Semiconductors, Electronics, and Software.
1
Positions in IT Services were a drag on Past performance is no indication of future results. The “Bailard Composite” is the Bailard, Inc. Technology &
Science Composite. The Bailard Technology & Science Composite (“the Composite”) includes all Bailard
performance where shifting reopening Institutional portfolios primarily invested in U.S. equities with growth characteristics and large capitalizations
expectations have impacted payment with a bias toward technology-focused sectors. These portfolios also have a bias toward technology-focused
sectors. “Morningstar U.S. OE Tech Category” is the Morningstar U.S. Open End Technology category average.
companies and consumer communication The “S&P NA Tech” is the S&P North American Technology Index. “Lipper Sci & Tech” is the Lipper Science and
platforms. Biotechnology holdings were a solid Technology Fund Index. The Bailard Composite, Morningstar U.S. OE Tech Category and Lipper Tech & Sci are
tailwind to relative returns for the quarter. presented net of fee; S&P NA Tech does not have fees. Please see additional performance on pages 4 and 7,
and pages 13 and 14 for important disclosures. Sources: Morningstar, Bloomberg, Thomson Reuters (Refinitiv)
Eikon.
2Active return is the difference between the return of the strategy and the return of the index. Performance
statistics are annualized for periods greater than one year.
All Cap Growth/Technology and Science Equity Strategy FOR INVESTMENT PROFESSIONAL/ADVISOR USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC | 2
Strategy and Sector Commentary
Q4 2021 UPDATE Exogenous factors, such as the Federal Reserve Bank recalibrating
its monetary policy, stoke uncertainty and investors scramble to
The price action in the technology sector during the fourth
assess asset valuations in a potentially higher interest rate
quarter gave investors fits but if history is a guide, we believe
environment. We have rapidly shifted from euphoria to panic
compelling opportunities will be created. The issue at hand is not
within high growth.
the long- or medium-term returns of technology stocks failing to
keep pace with the market; indeed, the NA Tech Index broadly Interest rates, inflation data, and the Fed’s hawkish commentary
kept pace with the S&P 500 Index in 2021 and continues to exhibit were a big part of the price action in 2021, but it certainly was not
superior long-term returns over the three-, five-, and ten-year the whole story behind the tech sector’s performance. While
time horizons. The challenging environment for investors instead demand trends remain solid across the sector broadly, we are
stemmed from the dramatic performance differential between the clearly seeing subindustries within technology that are finding it
largest technology companies and their SMID cap peers. Market increasingly challenging to maintain the business momentum
cap weighted broad index returns obfuscated substantial intra- built during the pandemic. This deceleration is occurring across
sector volatility. Despite the strategy level positive results, the industries, from consumer technology products (e.g., PTON), to
fourth quarter correction in many technology stocks was swift fin-tech products (e.g., HOOD), to enterprise cloud software (e.g.,
and substantial, particularly in the high-growth, higher valuation DOCU). On the other hand, there are several areas of tech where
technology space. Small cap growth peaked in early 2021 and select companies are demonstrating “durable franchises”
significantly underperformed other equity strategies for the full particularly in cybersecurity, enterprise management, sales
year. As we have seen over history, investor focus can shift from productivity, and social-entertainment platforms. Not
the fundamentals of products, services, and available markets to surprisingly, stock price performance has also bifurcated with the
asset allocations models and rapidly changing discount rate “durable” group’s shares benefitting from continued operating
assumptions, resulting in substantial volatility within tech. momentum and strong guidance supporting current valuations.
Past performance is no indication of future results. This performance is not indicative of the past or future performance of the Bailard All Cap Growth/Technology and Science Equity
Strategy or any other Bailard product. Please see end of document for index definitions.
All Cap Growth/Technology and Science Equity Strategy FOR INVESTMENT PROFESSIONAL/ADVISOR USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC | 3Strategy and Sector Commentary (continued)
One result of the fourth quarter tumult in the high-growth Q4 2021 COMPOSITE TOP CONTRIBUTORS AND DETRACTORS1
technology segment of the sector was a flight to “quality” as
larger, less economically sensitive, and lower volatility equities CONTRIBUTORS AVG. WEIGHT CONTRIBUTION
(and alternative assets) outperformed. Technology companies
MICROSOFT CORP 10.08 1.78
now have significant representation in the flight-to-quality trade
as investors recognize how broad, durable, and integrated their NVIDIA CORP 5.35 1.74
products and services are in daily life. The business models QUALCOMM INC 3.52 1.19
deployed by the largest tech companies today are generating
APPLE INC 4.12 0.96
superior profit margins, cash flows, and balance sheets. We
anticipate that even in a more uncertain global economy, LAM RESEARCH CORP 3.29 0.81
technology leaders like Apple, Inc. Microsoft, Inc., Amazon, Inc.,
and other tech-dominant “core” companies will remain favored DETRACTORS AVG. WEIGHT DETRACTION
by investors. We continue to be concerned about crowding and PAYPAL HOLDINGS INC 2.42 -0.80
rich valuations within the cohort, but the earnings power and
BLOCK INC 1.60 -0.61
exceptional market positioning of these companies is
undeniable. Despite this, it’s also worth noting that this stalwart SEA LTD-ADR 1.85 -0.58
group is not invulnerable from an ESG perspective, and we have TWILIO INC - A 2.53 -0.47
seen across technology that ESG laggards can contain risks that
PAYCOM SOFTWARE INC 1.63 -0.27
may be underappreciated by investors.
1Sources: Bailard, Bloomberg. For more information on the calculation methodology and a complete list of each holding’s contribution to the overall account’s performance during the time
period, please contact our Performance Analyst at Bailard, Inc., 950 Tower Lane Suite 1900, Foster City, CA 94404, (650) 571-5800. The holdings identified do not represent all of the
securities purchased, sold, or recommended for clients. Past performance does not guarantee future results. Please see additional performance on pages 2 and 6, and pages 13 and 14 for
important disclosures.
All Cap Growth/Technology and Science Equity Strategy FOR INVESTMENT PROFESSIONAL/ADVISOR USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC | 4Technology & Science Sector Outlook
OUR OUTLOOK
History can help guide near- and investors hit the brakes on growth tech.
Notably, both periods created exceptional
term opportunities. Our work buying opportunities for investors, as the NA
indicates that broad volatility in Software Index went on to recover its losses
tech sector often sets up in 70 days in 2016 and in just 60 days in 2018.
meaningful opportunities for The NA Software index fell nearly 14% from “Notably, both periods
better prices and valuations in early November through December 20th, [2016 and 2018] created
recovered modestly into the end of the year
select companies. and has resumed selling off in early 2022. exceptional buying
We have seen a number of tech drawdowns Like 2016, we've seen several notable misses opportunities for
in bellwether stocks, with DOCU among the
over the last two decades that can help investors, as the NA
inform our opinion on the 2021/2022 reset. In most prominent, falling more than 40% after
both 2016 and 2018, the broad S&P North warning of slowing growth. But ZM (-15%), Software Index went on
American Expanded Technology Software ASAN (-28%), PTON (-35%), and CRM (-12%) to recover its losses in
are other notable names that were punished
Index (“NA Software”) had resets of near or
post earnings. Similar to 2018, investor
70 days in 2016 and in
above 20% over a period of several months.
Sell offs in 2016 were driven primarily by sentiment has sharply turned following a just 60 days in 2018.”
concerns of weakness in enterprise hawkish pivot by the Fed, and high growth
technology spend, highlighted by notable tech has been particularly punished. Yet,
misses in bellwethers LinkedIn and Splunk, while parallels are certainly relevant, it’s also
Inc. The drawdown in 2018 was different and worth noting that valuations were rich in
was primarily driven by a sharp turn in both 2016 and 2018 but were even more
investor sentiment as Federal Reserve Bank elevated at the beginning of 2021.
policy turned hawkish, interest rates rose,
All investments involve the risk of loss. Please see important disclosures on pages 13 and 14. References to specific stocks are for illustrative purposes only.
All Cap Growth/Technology and Science Strategy FOR INVESTMENT PROFESSIONAL/ADVISOR USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC | 5Technology & Science Sector Outlook
OUR OUTLOOK
Interest rates can impact technology returns many of the richest names down more than
at various points in a rate cycle and thus we 50% from their all-time highs. However, our
do watch Treasury rates and listen to what work has shown that after the initial
the Federal Reserve Bank is saying. Our dislocations in the markets, many long-
research suggests that technology stocks are term opportunities in high-growth, high-
most sensitive to the change in interest quality technology franchises surface. We
rates, rather than the absolute level of are watching price action as well as our
interest rates. While a ten-year treasury note proprietary valuation methodology closely “While a ten-year
yield going from 1.5% to 2% could be for buying signals. treasury note yield
uncomfortable for tech investors,
particularly in the higher growth segments
Since the pandemic has been so impactful going from 1.5% to 2%
to the technology sector, among many
of tech, once rates stabilize, fundamentals
others, it is something we do actively
could be uncomfortable
should again drive share prices. We are also for tech investors,
monitor, particularly for its potential
keenly aware of the threat of a policy mistake
and evaluating the potential for the Fed to
impact on technology supply chains. The particularly in the
most recent data indicate that while the
overtighten, sending the economy into a
Omicron variant is exhibiting rapid higher growth segments
recession and impacting valuations and the
technology demand environment. While
transmission but considerably less severity of tech, once rates
when measured against Delta. Regardless of
near-term recession indicators (2/10yr stabilize fundamentals
severity, however, global government actions
spread , e.g.) remain benign, the broad flight
and consumer behavior in response to the should again drive share
to quality in treasuries and equities may
signal that future economic growth will
virus spread can have detrimental impact on prices.”
the technology sector by disrupting demand,
disappoint, a risk that remains on our radar.
further stressing the supply chain and labor
No doubt, rising interest rate expectations pools, and creating uncertainty around
took a toll on the long-duration, more future capital spending and investment, as
speculative end of the equity markets, with well as potential inflationary pressures.
All investments involve the risk of loss. Please see important disclosures on pages 13 and 14.
All Cap Growth/Technology and Science Strategy FOR INVESTMENT PROFESSIONAL/ADVISOR USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC | 6Performance: Portfolio Risk
ANNUALIZED ACTIVE RETURNS RELATIVE TO MORNINGSTAR US OE TECH1,2 12/31/12 – 12/31/21 (net of fees)
3-Year Trailing 5-Year Trailing
5.0% PERCENTAGE OF ROLLING PERIODS BAILARD COMPOSITE
TOTAL NET OF FEES RETURN EXCEEDED MORNINGSTAR
4.0%
3.0% Calculated Calculated Calculated
2.0% Annually Quarterly Monthly
1.0% Rolling 3-Year Periods 89% 89% 90%
0.0%
Rolling 5-Year Periods 100% 97% 98%
-1.0%
-2.0%
-3.0%
PERFORMANCE SUMMARY1,3 for periods ending 12/31/2021 (net of fees)
Upside/Downside Capture vs.
Sharpe Ratio Standard Deviation
Broad Benchmarks
3 Years 5 Years 3 Years 5 Years
3 Years 5 Years 10 Years 3 Years 5 Years 10 Years Upside Upside Downside Downside
Bailard Composite 1.78 1.46 1.31 19.77% 18.27% 16.35%
Morningstar US OE Tech 1.64 1.41 1.23 20.32% 17.87% 16.07% 100% 103% 91% 99%
Lipper Sci & Tech 1.77 1.45 1.27 19.59% 17.90% 16.04% 102% 102% 103% 103%
S&P NA Tech 1.90 1.60 1.43 19.38% 18.06% 16.00% 97% 96% 100% 102%
1 Please see pages 2 and 6 for more returns and pages 12 – 13 for important disclosures. Sources: Morningstar, Bloomberg, Thomson Reuters (Refinitiv) Eikon. 2 Bar graph calculated
monthly; table calculated annually, quarterly, and monthly 3 Performance statistics are annualized. Upside/downside capture shows whether the Composite has outperformed–gained
more or lost less than–the above benchmarks during periods of market strength and weakness, and if so, by how much.
All Cap Growth/Technology and Science Equity Strategy FOR INVESTMENT PROFESSIONAL/ADVISOR USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC | 7Portfolio Characteristics as of December 31, 2021
TOP 10 HOLDINGS BY PORTFOLIO WEIGHT (%)1 TOP 10 ACTIVE BETS (%)3
MICROSOFT CORP 10.1 Relevant
Composite Peers3 +/(-)
NVIDIA CORP 5.5
MICROSOFT CORP 10.1 5.7 4.4
ALPHABET INC CL A (GOOGLE) 5.4
ALPHABET INC-CL A 5.4 1.8 3.6
FACEBOOK INC 4.5
QUALCOMM INC 4.4 1.2 3.2
QUALCOMM INC. 4.4
KLA CORP 3.8 0.8 3.0
APPLE INC 4.4
INSIGHT ENTERPRISES INC 2.8 0.0 2.8
LAM RESEARCH 4.1
ADOBE SYSTEMS INC 4.0 SONY GROUP CORP - SP ADR 2.8 2.8
KLA-TENCOR CORP 3.8 ADOBE INC 4.0 1.4 2.6
NXP SEMICONDUCTORS NV 3.6 TE CONNECTIVITY LTD 2.5 0.1 2.5
TOTAL 49.9 NXP SEMICONDUCTORS NV 3.6 1.2 2.4
LAM RESEARCH CORP 4.1 1.8 2.3
PORTFOLIO STATISTICS1
Total Holdings 43 INDUSTRY EXPOSURE >5% (%)1
Technology2 Holdings 38
Software 27.7
Healthcare Holdings 5
Semiconductors & Semiconductor Equipment 24.2
Technology2 Weight 94.2%
IT Services 10.7
Healthcare Weight 5.5%
Interactive Media & Services 10.0
Cash Equivalents Weight 0.3%
Electronic Equipment, Instruments & Components 5.3
Weighted Avg. Market Cap $736.9B
Price/Book 10.0x
Wtd. Avg. P/E Ratio (trailing 12 mo.) 34.6x
1Sources: Bloomberg, Bailard Research, Thomson Reuters (Refinitiv) Eikon. This information, while representative of the current Bailard Institutional All Cap Growth/Technology and
Science Equity Strategy, should not be solely relied on as it may differ from client to client and may vary over time. 2 Technology includes information technology, communication services,
and internet retail stocks. 3 Relevant Peers is a group developed by Bailard for comparison of the Composite’s holdings to its most similar peers. Our Relevant Peers group includes funds
within the universe of the Lipper Sci & Tech Fund Index that pursue a broad technology and science mandate and excludes those funds within the universe that significantly concentrate
holdings in a specific subsector of either technology or health care. Holdings of Relevant Peers are reflective as of the last mutual fund public disclosure and may be delayed.
All Cap Growth/Technology and Science Equity Strategy FOR INVESTMENT PROFESSIONAL/ADVISOR USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC | 8Technology and Science Investment Team
All Cap Growth/Technology and Science Equity Strategy Team
20-year strategy
with continual
enhancements
12-year average DAVE HARRISON SMITH, CFA SONYA THADHANI MUGHAL, CFA
portfolio 13 years’ investment experience 28 years’ investment experience
Portfolio Manager since 2012 Portfolio Manager since 2006
management
strategy tenure
19-year average
investment
experience across
team CHRIS MOSHY ERIC GRECO
28 years’ investment experience 7 years’ investment experience
Data as of December 31, 2021.
All Cap Growth/Technology and Science Equity Strategy FOR INVESTMENT PROFESSIONAL/ADVISOR USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC | 9Bailard Intelligence Engine
Chief Investment Officer
Eric P. Leve, CFA
BA, UC Berkeley
35 years
Portfolio Management Team
Dave Harrison Smith, CFA Sonya Thadhani Mughal, CFA
MBA, UC Berkeley BA, Randolph-Macon Woman's College
13 years 28 years
Quantitative Fundamental
Peter M. Hill Thomas J. Mudge III, CFA Osman Akgun, PhD, CFA Christopher Moshy Jon Manchester, CFA Linda M. Beck, CFA
BA, Leeds University BA, Northern Michigan PhD, UC Berkeley MBA, Cornell University BA, Stanford University MBA, University of Chicago
45 years University 10 years 28 years 20 years 28 years
34 years
Daniel McKellar, CFA Amit Valia, CFA Anthony R. Craddock Joanne Howard, CFA Frank Marcoux, CFA Blaine Townsend, CIMC®,
MS, Stanford University MS, Syracuse University MA, UC San Diego MBA, University of BA, Sacramento State CIMA®
12 years 16 years 24 years Wisconsin 24 years BA, UC Berkeley
50+ years 27 years
Raj Dutta
Eric Greco Elijah Reeder
MCS, Illinois Institute of
BS, University of BA, Pepperdine University
Technology
San Francisco 6 years
3 years
7 years
Years represent investment industry experience. Education represents credentials/industry designations held and highest level of education achieved. Data as of December 31, 2021.
All Cap Growth/Technology and Science Equity Strategy FOR INVESTMENT PROFESSIONAL/ADVISOR USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC | 10Investment Philosophy and Approach
We invest in high growth
Technology and Science
companies at the forefront of Science Leaders
(5-15%)
innovation and value creation.
We apply fundamental research
and systematic methodologies to Core Technology
(60-90%)
invest in opportunities across
three key segments: core Rising Tech Stars
technology, science leaders, and (5-25%)
rising technology stars.
All Cap Growth/Technology and Science Equity Strategy FOR INVESTMENT PROFESSIONAL/ADVISOR USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC | 11About Bailard, Inc.1
1969 Founded in 1969
Independent, established and stable
60% Employee owned and controlled
Current and former employees own 60% and 15%, respectively
52% Women and minority owned
68 68 employees
• Average investment professional tenure of 15 years
• 78% of professionals hold advanced degrees and/or industry
designations
• 46% of employees are female
1
$5.6B
Data as of December 31, 2021.
Assets Under Management2
2Bailard Institutional, a division within Bailard, Inc. that offers single asset class strategies, had an estimated $2.6 billion in assets under management as of December 31, 2021. This
estimate was based on data availability as of January 11, 2022 and is subject to change.
All Cap Growth/Technology and Science Equity Strategy FOR INVESTMENT PROFESSIONAL/ADVISOR USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC | 12Disclosures and Key Risks This presentation is confidential and may only be used by investment professionals. It may not be reproduced in whole or in part or distributed to anyone else without the permission of Bailard. It is not for retail use. It does not constitute a recommendation of, or an offer to sell or a solicitation of an offer to buy any particular security or investment product. It does not take into consideration the particular investment objectives, financial situations, or needs of individual clients. The information is current as of the date indicated and Bailard undertakes no duty to update any of the information contained in this presentation. The presentation contains some forward-looking statements, which involve a number of risks and uncertainties, and actual results may differ materially from these forward looking statements. Any references to specific securities are included solely as general market commentary and were selected on criteria unrelated to Bailard’s portfolio recommendations or the past performance of any security held in any Bailard account or fund. There is no guarantee Bailard or this strategy will achieve their performance or investment objectives. Past performance is no indication of future results. All investments have the risk of loss. Key Risks The All Cap Growth/Technology and Science Equity Strategy is not by itself a complete investment program and is best suited for investors who can accept the above average risk generally associated with growth stocks, technology stocks and health care stocks (including emerging life sciences stocks). The strategy is primarily subject to the risk that the market value of investments will fluctuate as stock markets fluctuate, and the style and sector risks associated with a heavy weighting in the technology and health care sectors, which may be more volatile than the overall stock market. The strategy may invest in American Depository Receipts (ADRs) and Global Depository Receipts (GDRs) which are subject to the same risks as the foreign securities that they evidence or into which they may be converted (including political or economic instability, the impact of currency rate fluctuations and different accounting standards). There can be no assurance that Bailard will achieve its investment objectives. All investments have the risk of loss. Other Disclosures The information in this presentation is for informational purposes only and is not an offer to provide investment advice, an offer to sell securities or the solicitation of any offer to buy securities. Before making any investment decision, you should review Bailard, Inc.’s Form ADV Part 1A and Bailard Institutional’s Form ADV Part 2A (available on the SEC’s website at www.sec.gov), as well as Part 2B of Bailard’s Form ADV (available from Bailard) and all other information that Bailard provides to you. You should also discuss all matters concerning any prospective investment that you desire with Bailard. The information provided herein is meant to demonstrate Bailard's general investment process. The outline of processes and steps taken is general in nature, and Bailard from time to time will deviate from the specific investment steps, limitations, screens, controls and overall process described. All Cap Growth/Technology and Science Equity Strategy FOR INVESTMENT PROFESSIONAL/ADVISOR USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC | 13
Performance Disclosures
Composite Definition: The Bailard Technology & Science Composite (“the Composite”) includes a Bailard Institutional portfolio primarily invested in U.S.
equities with growth characteristics and large capitalizations with a bias toward technology-focused sectors. As of December 31, 2021, the Composite consisted
of a single mutual fund that has been managed in an advisory or sub-advisory capacity since 2001 with a market value of $181.6M, which represented an
estimated 7.0% of the total assets under Bailard Institutional’s management. This estimate is based on data availability as of January 11, 2022 and is subject to
change. The Composite’s returns are total returns presented net of management fees (“net of fees”) and assume reinvestment of dividends and other earnings.
The returns do not reflect a fiduciary fulfilment fee payable to Bailard (where applicable), or custody and other account expenses not payable to Bailard. The
return of this Composite is not the NAV return of the mutual fund.
Through September 2009, gross of fee performance was calculated by grossing up the NAV performance by the annual expense ratio. Through March 2006, net
of fee performance was calculated by netting down the gross return by a model fee of 0.75% (applied by reducing monthly returns by 1/12 of 0.75%). From April
2006 through September 2009, net of fee performance was calculated by netting down the gross return by a model fee of 0.375% (applied by reducing monthly
returns by 1/12 of 0.375%). This model fee represents the highest management fee for the composite. From October 2009, both gross of fee and net of fee returns
are taken directly from Bailard’s portfolio accounting system, and net of fee performance was calculated by netting down the gross return by actual management
fee as of the date paid from each account. As of June 30, 2019, the firm's annual fee schedule for new accounts is as follows: 0.75% of the first $100 million and
0.7% above $100 million. Prior to February 3, 2014, the Composite’s benchmark was the NASDAQ 100 index (a modified capitalization-weighted index comprised
of 100 of the largest non-financial domestic and foreign companies listed on the National Market tier of the NASDAQ Stock Market, Inc.). The Composite’s
complete return history and a list of Bailard’s composites are available upon request.
Individual account management and construction will vary depending on each client’s investment needs and objectives, including liquidity needs, tax situation,
risk tolerance, and investment restrictions. Individual accounts may not have the same management fees, expenses, diversification, distributions, and cash
flows as the Composite account. As a result, an account’s actual performance may differ from the performance presented above due to, among other things,
timing of investment, contributions and withdrawals, and the client’s restrictions such as restrictions on eligibility to participate in initial public offerings. In
addition, performance does not reflect the effects of taxation, which result in lower returns to taxable investors. An investment in the All Cap
Growth/Technology and Science Equity Strategy involves a risk of loss, and the value of an investment in this Strategy may decrease as well as increase. No
representation is made that any account will obtain similar results to those shown above.
Market Index and Category Definitions:
The S&P North American Technology Sector Index (“NA Tech Index”) provides investors with a benchmark that represents U.S. equity securities classified under
the GICS® technology sector and internet retail sub-industry categories. The S&P Biotechnology Select Industry Index represents the biotechnology sub-industry
portion of the S&P Total Markets Index (S&P TMI). The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and
NASDAQ Small Cap exchanges. These indices are presented on a total return basis with dividends reinvested, and are uninvestable, unmanaged and do not
reflect transaction costs. The Morningstar US Open End Tech category (“Universe”) is composed of open-end mutual funds that buy technology and health care
businesses in the U.S. or outside of the U.S. The Lipper Science and Technology Fund Index (“Lipper Sci & Tech”) measures the performance of mutual funds that
invest primarily in the equity securities of domestic companies engaged in science and technology and constructs its fund index from an average of other funds
in the peer group. The Universe and Lipper Sci & Tech are unmanaged and uninvestable. The NA Tech Index, the Universe, and Lipper Sci & Tech are presented
on a total return basis with dividends reinvested. Unlike the NA Tech Index, the Composite may hold cash equivalents, exchange-traded funds, ADRs and GDRs
(U.S. dollar denominated foreign securities) and health care stocks. Unlike the S&P Biotechnology Select Industry Index, the Composite holds technology stocks
and may hold cash equivalents, exchange-traded funds, ADRs and GDRs (U.S. dollar denominated foreign securities). Unlike the Composite, the funds in the
Universe and Lipper Sci & Tech may have different investment restrictions and invest in different categories of securities than the Composite account. Unlike
the Composite returns, the returns of the funds in the Universe and Lipper Sci & Tech are net of all expenses. The Composite’s stock holdings can differ
materially from that of the NA Tech Index, the S&P Biotechnology Select Industry Index, the Universe, and Lipper Sci & Tech. At times, the Composite’s market
cap weighting may differ materially from the NA Tech Index, the S&P Biotechnology Select Industry Index, the Universe, and Lipper Sci & Tech.
Past
All Capperformance is noand
Growth/Technology indication of future
Science Equity results. All investments have
Strategy the risk of PROFESSIONAL/ADVISOR
FOR INVESTMENT loss. USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC | 14Performance Disclosures (continued) Russell 1000 Growth: The Russell 1000 Growth Index measures the performance of the large cap growth segment of the US equity universe. It includes those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. Russell 1000 Value: The Russell 1000® Value Index measures the performance of the large cap value segment of the US equity universe. It includes those Russell 1000 companies with lower price-to-book ratios and lower expected growth values Russell 2000 Growth: The Russell 2000 Growth Index measures the performance of the small cap growth segment of the US equity universe. It includes those Russell 2000 companies with higher price-to-value ratios and higher forecasted growth values. Russell 2000 Value Index: The Russell 2000 Value Index is a commonly used index that measures the performance of the small-cap value segment of the U.S. equity universe. It includes those Russell 2000 Index companies with lower price-to-book ratios and lower forecasted growth values. All Cap Growth/Technology and Science Equity Strategy FOR INVESTMENT PROFESSIONAL/ADVISOR USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC | 15
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