Performance

Disclosure

Chelsea Management Company claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Chelsea Management Company has been independently verified for the periods January 1, 1993 through December 31, 2016 by Ashland Partners & Company, LLP and for the periods January 1, 2018 through December 31, 2018 by ACA Performance Services, LLC.  A copy of the verification report is available upon request.

Verification assesses whether (1) the firm has complied with all the composite construction requirements of 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. Verification does not ensure the accuracy of any specific composite presentation. Chelsea Management Company is a registered investment adviser.  The firm maintains a complete list and description of composites, which is available upon request. Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. Past performance is not indicative of future results.

The U.S. Dollar is the currency used to express performance. Returns are presented gross of management fees, include the reinvestment of all income, and are calculated net of foreign withholding taxes on dividends, interest, and capital gains. Actual returns will be reduced by investment advisory fees and other expenses that may be incurred in the management of the account. The collection of fees produces a compounding effect on the total rate of return net of management fees. As an example, the effect of investment management fees on the total value of a client’s portfolio assuming (a) quarterly fee assessment, (b) $2,000,000 investment, (c) portfolio return of 8% a year, and (d) 1.00% annual investment advisory fee would be $20,832 in the first year, and cumulative effects of $119,632 over five years and $286,860 over ten years. Effective April 1, 2006, the accounting method for dividend income was changed from cash to accrual basis. The annual composite dispersion presented is an asset-weighted standard deviation calculated for the accounts in the composite the entire year. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.

The management fee schedule is as follows: 1.50% on the first $1 million, 1.00% on the next $2 million, 0.75% on the next $2 million, 0.50% on the next $5 million, and excess over $10 million is negotiable. Actual investment advisory fees incurred by clients may vary.

Equity Management Composite contains fully discretionary accounts investing in domestic equities and ADR’s with a style focused on large–cap value stocks. Some accounts may hold up to 35% in fixed income.  For comparison purposes this composite is measured against the S&P 500 with Dividends Reinvested Index.  Performance results in presentations prior to third quarter 2003 were measured against the Dow Jones Industrial Average with Dividends Reinvested Index. The index was changed to be more representative of the composite strategy. Additional information regarding the Dow Jones Industrial Average is available upon request. Beginning January 1, 1997, the minimum account size for this composite is $100,000. The Equity Management Composite was created in 1971.

Information is obtained from publicly available sources which Chelsea Management Company believes to be reliable. Chelsea Management Company makes no warranties or representations as to the accuracy or completeness of the information contained in this commentary and shall not be liable for any errors or inaccuracies herein. Likewise, information contained on third party websites that Chelsea Management Company may link to is not reviewed in its entirety for accuracy and Chelsea Management Company assumes no liability for the information contained on these websites.

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