Building a winning portfolio is similar to building an all-star sports team. To build the all-star team, you want the best player from all the teams for each position. You also want players who are good at offense and defense.

We use the same concept for building an all-star team of high-quality money managers. We select the very best managers from our extensive mutual fund and private money manager universe, and we select managers that are good at offense (up markets) and defense (down markets). Our goal is to find the very best money managers in each distinctive style and investment class. We analyze our universe of over 15,000 mutual funds and money managers to find those managers that have distinguished themselves in large-cap, mid-cap, small-cap, and international stock selection in both growth and value styles. Generally, we do not select two managers from the same firm because most firms have only a few real stars. And you may be surprised to see no managers from some of the major fund families – if they don’t have a star player, we don’t choose one of their managers.

Our investment management program is built upon the same investment process used by the country’s largest institutional money managers. The service includes an investment strategy designed for you, investment objectives based on your risk and return requirements, appropriate asset allocations, and the selection of quality mutual funds for implementation of your portfolio’s strategy and objectives.

Investment Strategy Development

We begin the consulting process by helping you develop a strategy that acts as the policy for the investment of your assets by third parties. Your policy includes your financial goals, liquidity requirements, risk tolerance, return objectives, income requirements, restrictions, if any, and other financial criteria for the management of your assets.

Asset Allocation

We can provide various asset allocation models designed to maximize returns and minimize risk. This “efficient frontier” is considered by many to be the most important component of future performance. Your exposure to common stocks, bonds, and foreign securities is controlled by the asset allocation decision. Allocation also determines the types of managers that will be hired to manage your assets.

The foundation of the investment management processis investments in no-load mutual funds with no front-end loads, no back-end loads, and no penalties for withdrawal. Our universe of more than 15,000 funds consists of virtually all no-load families. To enhance the investment opportunities of your Bakos Investment Managementportfolio, we expand our no-load mutual fund universe to include load funds we can purchase commission-free, that is, without paying what are typically 3% to 5% up-front sales charges. In addition, through Bakos Investment Management,we give you access to low-cost institutional funds without requiring institutional asset minimums, which can range from $250,000 to $5 million.

Our expanded universe of funds enables us to select from many of the highest quality funds to tailor a Bakos Investment Managementportfolio that helps to achieve your personal investment goals. Our multiple fund approach draws from a number of highly regarded fund families including Janus, Vanguard, Loomis Sayles, Franklin/Templeton, MAS, PIMCo, and Oakmark.

Higher net worth clients have access to over 4,000 of the best private money managers in the world, in many cases at significantly reduced fees and minimums. With a private money manager, your assets are not pooled with those of other investors as they are with mutual funds. Instead you own all the underlying securities within your portfolio. This provides a number of advantages over mutual funds including reduced expenses, and greater tax efficiency.

Manager Due Diligence

We help you select the best managers for your needs. To screen managers, we use ten primary investment criteria, including track record, asset size, asset growth rate, fees, style of management, tenure of portfolio managers, tax sensitivity, and various risk measurements. For those managers who make it through the screens, we conduct our own comprehensive due diligence so we can be assured the information we give you is accurate and up to date.

Monitoring of Investments

Once we select our fund managers we monitor their investment decisions for you. If we identify a problem that could impact future performance, we notify you immediately. A performance problem could mean you are experiencing underperformance with your portfolio and are missing out on the performance of other managers. There are numerous reasons why a manager may underperform. Some are within the manager’s control while others are not. Our monitoring systems have been designed to identify problems in their initial stages before they become major problems.

Performance Measurement Reports

We continuously monitor your investments to ensure they perform in a manner consistent with your objectives and our benchmarks. We monitor portfolios daily and reviews them weekly for relative performance and any significant deviations from expected returns. And we send you the most concise, comprehensive, easy-to-understand performance measurement reports in the industry.

On a quarterly basis, we provide performance reports filled with information that make it easy to see at a glance the status of your investments. They also contain:

A comprehensive analysis of the market environment for the current reporting period:

• Information about level of risk
• A complete performance history of each individual holding
• A complete performance history of your accounts

When you invest your assets with us, you always know your portfolio results and how they were achieved.

Accessible — Informative — Personal

You can depend on Bakos Investment Management to give you high-quality, personalized service. Through us you now have access to the same disciplined investment process used by professional institutional money managers.