Office (918) 582-6864

233 S Detroit Ave #100 Tulsa, OK 74120

Blue Chip Strategy

Investment Goal

Pinnacle’s Blue Chip Portfolio seeks to provide performance similar to the Dow Jones Industrials. The Dow has consistently produced the best returns among major market indices. This strategy has very low turnover and low transaction costs.

Investor Profile

The Blue Chip Portfolio is for the investor that is seeking returns consistent with the long-term historical average of large capitalization stocks. This passively managed strategy should provide higher after tax returns than an actively managed growth and income fund due to low turnover and low transaction costs.

Performance Data

Updated March 31, 2017
Portfolio QTD YTD 1 Yr 3 Yr 5 Yr Since Incept. Annualized
Blue Chip Strategy 5.08% 5.08% 19.59% 10.41% 11.88% 408.64% 8.40%
Net of Fees 4.99% 4.99% 19.16% 9.98% 11.41% 366.78% 7.94%
S&P 500 6.06% 6.06% 17.15% 10.35% 13.28% 336.20% 7.58%

Portfolio Strategy

Pinnacle’s Blue Chip Portfolio is structured to provide performance similar to the Dow Industrials. It is a passively managed strategy in which turnover is expected to average less than 5% annually. The low turnover allows capital gains to compound for a longer time period, resulting in higher after tax returns.

Management Fee

0.50% (one-half percent) annually of the market value of assets in the portfolio. The average growth and income mutual fund expense ratio is 0.95%.

Convertible/ High-Yield Strategy

Investment Goal

Pinnacle’s Convertible/High Yield Portfolio seeks to provide high total returns from income producing securities with the potential for capital appreciation. The Strategy invests in convertible corporate bonds and convertible preferred stocks of publicly traded companies. Convertible securities typically pay higher interest or dividends than common stocks and are exchangeable into the common stock of the issuing company. If the price of the common stock rises, the convertible security will increase in value also. If the price of the common stock falls, the convertible investor receives the higher income of a bond or preferred stock.

Investor Profile

The Convertible/High Yield Portfolio is for the investor who desires high levels of income from their portfolio with the added potential for capital appreciation. Convertible securities, as an asset class, display more risk than bonds yet less risk than stocks. The returns associated with convertible securities, when adjusted for risk (as measured by price volatility) were higher than large capitalization stocks during the past fifteen years.

Performance Data

Updated 03/31/2016
Portfolio QTD YTD 1 Yr 3 Yr 5 Yr Since Incept. Annualized
Convertible/High Yield -1.71% -1.71% -20.16% -0.52% 1.18% 206.15% 6.12%
Net of Fees -1.74% -1.74% -20.41% -0.94% 0.73% 179.00% 5.60%
Merrill Lynch Convertibles -2.42% -2.42% -7.97% 9.89% 7.96% 270.40% 7.20%
Merrill Lynch High Yield 3.23% 3.23% -3.90% 1.64% 4.84% 230.55% 6.55%

Portfolio Strategy

Pinnacle’s Convertible/High Yield Strategy invests in a diversified portfolio of convertible securities. The portfolio manager seeks companies that are trading at a discount to book value, a low price to earnings multiple, or a low price ratio to projected cash flow. This approach lowers the risk of a diversified portfolio while retaining the potential high returns of the underlying equities.

Management Fee

0.75% (three-quarters of one percent) annually of the market value of assets in the portfolio. The average convertible securities mutual fund expense ratio is 1.30%.

Intermediate Bond Strategy

Investment Goal

Pinnacle’s Intermediate Bond Portfolio seeks higher yields and total returns than are available with short-term bonds. The Portfolio invests in investment grade corporate bonds in addition to a core holding of bonds issued by the U.S. Treasury or Federal Agencies.

Investor Profile

The Intermediate Bond Portfolio is for the investor who is looking for greater taxable income from a bond portfolio without taking the risk of low credit quality “junk bonds” or the price volatility risk of long-term bonds. The Portfolio has more price risk than a short-term bond portfolio but the fluctuation in the value of the Portfolio is expected to be lower than long-term bonds and stocks.

Performance Data

Updated 03/31/2016
Portfolio QTD YTD 1 Yr 3 Yr 5 Yr Since Incept. Annualized
Intermediate Bond 1.55% 1.55% 1.61% 1.94% 2.84% 183.07% 5.14%
Net of Fees 1.45% 1.45% 1.20% 1.49% 2.37% 164.30% 4.79%
Citigroup 1-10 Yr. Gov. Index 2.07% 2.07% 1.70% 1.74% 2.98% 184.13% 5.16%

Portfolio Strategy

Pinnacle’s Intermediate Bond Portfolio invests in securities that are issued by the U.S. Government and its Agencies. These securities have the highest rating of bonds available in the market. Also, the portfolio managers seek to enhance the Portfolio’s return through the purchase of investment grade corporate bonds that offer yield advantages over government bonds. The average maturity of Pinnacle’s Intermediate Bond Portfolio is typically between 3-7 years.

Management Fee

0.50% (one-half percent) annually of the market value of assets in the portfolio. The average corporate bond mutual fund expense ratio is 0.88%.

MLP (Master Limited Partnership) Strategy

Investment Goal

Pinnacle’s MLP Strategy seeks to provide high levels of tax sheltered income and the potential for capital appreciation through investing in publicly traded master limited partnerships.

Investor Profile

The Master Limited Partnership Strategy is for the investor who desires high levels of income from their portfolio with the added potential for capital appreciation, while accepting the increased income tax preparation activities from partnership tax reporting.

Performance Data

Updated 03/31/2016
Portfolio QTD YTD 1 Yr 3 Yr 5 Yr Since Incept. Annualized
MLP Strategy -8.22% -8.22% -43.25% -14.44% -2.72% 345.82% 10.30%
Net of Fees -8.32% -8.32% -43.46% -14.80% -3.13% 309.90% 11.72%
Alerian MLP Index -4.17% -4.17% -31.83% -10.31% -0.55% 442.19% 11.72%

Portfolio Strategy

Pinnacle’s MLP Strategy invests in MLPs that have the ability to increase their distributions on a consistent basis. “Growth” MLPs offer the best potential for capital appreciation and protection against rising interest rates. The fund holds positions in various types of MLPs in order to diversify its asset base.

Master Limited Partnerships (MLPs)

Master Limited Partnerships are similar in structure to traditional limited partnerships. The primary difference is that MLPs qualify to trade on public stock exchanges or over-the-counter. For tax purposes, MLPs are considered by the IRS to be pass-through entities so their operating results are passed through to the limited partners, called unit holders. The Revenue Act of 1987 required publicly traded MLPs to receive at least 90% of their income from specific sources, particularly mineral or natural resource activities including exploration, development, production, mining, refining, marketing, and transportation of oil, gas, minerals, geothermal energy, or timber.

Most publicly traded MLPs generate stable cash flows from operations which lead to a relatively stable distribution, similar to a dividend. They are involved in businesses that are considered mature with moderate growth prospects and substantial cash flow generation. The majority of MLPs do not take commodity price risk but act as transporters or distributors and take a fee for service, similar to a utility. Some of the more aggressively managed MLPs have used their cost of capital advantage to make numerous acquisitions that are financed through debt and issuance of new equity units. This strategy has led to significant increases in distributable cash flow and price appreciation for “growth MLPs” employing this strategy.

Management Fee

0.75% (three-quarters of one percent) annually of the market value of assets in the portfolio.

Tax Exempt Bond Strategy

Investment Goal

Pinnacle’s Intermediate Tax Exempt Bond Portfolio seeks a high level of income that is exempt from regular federal income tax available from municipal bonds. The Portfolio invests in high quality investment grade municipal bonds.

Investor Profile

The Intermediate Tax Exempt Bond Portfolio is for the investor who is looking for greater after-tax income than is available from taxable bonds. In addition, the Portfolio will seek to purchase bonds that are exempt from state income taxes depending on the investor’s state income tax rate. The Portfolio has less price risk than municipal bond funds that invest in long-term bonds.

Performance Data

Updated 03/31/2016
Portfolio QTD YTD 1 Yr 3 Yr 5 Yr Since Incept. Annualized
Tax Exempt Bonds 0.91% 0.91% 2.10% 1.95% 3.15% 110.42% 3.79%
Net of Fees 0.79% 0.79% 1.60% 1.44% 2.62% 93.12% 3.35%
Merrill Lynch 3-7 Yr. Muni Index 1.10% 1.10% 2.70% 2.21% 3.19% 141.64% 4.51%

Portfolio Strategy

Pinnacle’s Intermediate Tax Exempt Bond Portfolio invests in investment grade municipal bonds. The portfolio manager will purchase bonds that pass a stringent test for credit quality. High after-tax total return will be the objective of Pinnacle’s Intermediate Tax Exempt Bond Portfolio given an average maturity typically between three and ten years.

Management Fee

0.50% (one-half percent) annually of the market value of assets in the portfolio. The average municipal bond mutual fund expense ratio is 0.96%.

Small Cap Value Strategy

Investment Goal

Pinnacle’s Small Cap Value Portfolio seeks to provide returns consistent with the long-term historical average of small company stocks. Since 1926, small company stocks have outperformed large company stocks by approximately 2.0%.

Investor Profile

The Small Cap Value Portfolio is for the investor who understands the relationship between risk and reward. Small company stocks as an asset class have more risk than large company stocks. However, this higher risk has produced higher long-term returns.

Performance Data

Updated 03/31/2016
Portfolio QTD YTD 1 Yr 3 Yr 5 Yr Since Incept. Annualized
Small Cap Value 4.42% 4.42% -12.89% 9.75% 7.88% 521.12% 8.98%
Net of Fees 4.27% 4.27% -13.37% 9.16% 7.32% 465.93% 8.50%
Russell 2000 Small Cap Index -1.52% -1.52% -9.76% 6.84% 7.20% 492.54% 8.73%

Portfolio Strategy

Pinnacle’s Small Cap Value Portfolio invests in a diversified portfolio of small company stocks. The portfolio manager seeks companies that are trading at a discount to book value, a low price to earnings multiple, or a low ratio to projected cash flow. This approach lowers the risk of a diversified portfolio while retaining the potential high returns of small company stocks.

Management Fee

1.00% (one percent) annually of the market value of assets in the portfolio. The average small cap stock mutual fund expense ratio is 1.40%