Large Cap Intrinsic Value Performance

This was primarily because the market came back to the higher beta, more volatile stocks during the quarter. As the economic recovery has been maturing, we have gone through periods where investors are comfortable the recovery will continue like this most recent quarter. In those periods, valuation will be an important determinant of which sectors and stocks perform the best. There have also been periods like the fourth quarter of 2009, when investors fear a double dip. During those periods, the companies with the most visibility in fundamentals will take the lead. As the recovery continues, we expect valuation measures to help performance the most, which should help our performance.

The best performing sectors during the quarter were the Industrials, Consumer Discretionary, and Financials. We have higher than market weights for our accounts in the Industrials and Consumer Discretionary stocks. We continue to believe that the economic recovery should drive good fundamentals for those groups, and the stocks are reflecting that. We are below the market weight in Financials. We have been concerned that more problem loans would surface and did not expect the rebound the stocks have experienced.

The worst performing groups have been the Telecommunication, Utility, and Energy stocks. We are underweighted versus the S&P 500 Index in all of these groups. The Telecomms and Utilities are good spots to be when investors are concerned about the economy. Investors tend to sell them as economic recoveries mature. We believe that is the case currently and intend to be light on these groups. We recently underweighted the Energy group after selling our position in XTO Energy, a company that was acquired at a premium. Energy stocks do not seem to be following oil and gas prices higher, which is puzzling.

*Sources: TVAM, SunGard, Standard & Poor's, Frank Russell Company

Historical performance provides no guarantee of future success.¹ Additional information is shown on our Large Cap Intrinsic Value Flyer.

Annualized Performance as of 3/31/10

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¹Past performance is not indicative of future results. A full performance disclosure is an integral part of this presentation. Returns are presented gross and net of management fees and include the reinvestment of all income. Net of fee performance was calculated using the highest management fee of 0.60% applied monthly. Prior to September 2001, the highest management fee applied to the composite was 0.50%.

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