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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 6, 2009
WESTWOOD HOLDINGS GROUP, INC.
(Exact name of registrant as specified in charter)
| Delaware | 001-31234 | 75-2969997 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
200 Crescent Court, Suite 1200
Dallas, Texas 75201
(Address of principal executive offices)
(214) 756-6900
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| ITEM 7.01: | REGULATION FD DISCLOSURE |
On October 6, 2009, Westwood Holdings Group, Inc. (“the Company”) will provide an update on the Company’s business at the William Blair & Company Emerging Growth Stock Conference.
The slides accompanying the presentation are attached as Exhibit 99.1 and will be available on the Company’s website at www.westwoodgroup.com under “Investor Relations.”
The information in this report, including exhibits, is being furnished pursuant to Item 7.01 and shall not be deemed “filed” within the meaning of section 18 of the Securities Act of 1934, or otherwise subject to the liabilities under that Section.
| ITEM 9.01: | FINANCIAL STATEMENTS AND EXHIBITS |
| (d) | Exhibits: The following exhibit is furnished with this report: |
| Exhibit |
Description | |
| 99.1 | Slides accompanying Company’s conference presentation on October 6, 2009. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: October 6, 2009
| WESTWOOD HOLDINGS GROUP, INC. | ||
| By: | /s/ WILLIAM R. HARDCASTLE, JR. | |
| William R. Hardcastle, Jr., | ||
| Chief Financial Officer | ||
EXHIBIT INDEX
| Exhibit |
Description | |
| 99.1 | Slides accompanying Company’s conference presentation on October 6, 2009. |
 Westwood Holdings Group, Inc. William Blair & Co. Emerging Growth Stock Conference October 6, 2009 Brian O. Casey President, Chief Executive Officer Susan M. Byrne Chairman, Chief Investment Officer Exhibit 99.1 |
 Forward – Looking Statements Statements in this presentation that are not purely historical facts, including statements
about our expected future financial position, preliminary estimates, results
of operations or cash flows, as well as other statements including words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “should,” “could,” “goal,” “target,” “designed,” “on track,” “comfortable with,” “optimistic” and other similar expressions, constitute forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Actual results and the timing of some events could differ materially from those projected in or contemplated by the
forward-looking statements due to a number of factors, including, without
limitation, those set forth below: • our ability to identify and successfully market services that appeal to our
customers; • the significant concentration of our revenues in four of our customers; • our relationships with investment consulting firms; • our relationships with current and potential customers; • our ability to retain qualified personnel; • our ability to successfully develop and market new asset classes; • our ability to maintain our fee structure in light of competitive fee pressures;
• competition in the marketplace; • downturn in the financial markets; • the passage of legislation adversely affecting the financial services industries;
• interest rates; • changes in our effective tax rate; • our ability to maintain an effective system of internal controls; and • the other risks detailed from time to time in our SEC reports. Additional factors that could cause our actual results to differ materially from our expectations are discussed under the section entitled “Risk Factors” in our Form 10-K for the year ended December 31, 2008, which together with our other
filings can be viewed at www.sec.gov. You should not unduly rely on these
forward-looking statements. Except as required by law, we are not obligated to publicly release any revisions to these forward-looking statements.
|
 Agenda I. Firm Overview II. Investment Process & Products III. Growth Opportunities IV. Financial Highlights V. Summary |
 Firm Overview |
 Firm Overview • Well-established asset management firm • Clear focus on investment management and client service since 1983 • Strong long-term performance • Strict adherence to our process has resulted in strong risk-adjusted returns for
our clients • Growing asset base • $9.5 billion in assets under management as of September 30, 2009* • Four-year compound annual growth rate of 20%, compared to -4% for the S&P
500 • Solid financial condition • No debt; strong cash generation; currently maintain over one year’s cash expenses
in T-Bills • Independent with equity-based incentives • Publicly traded company (NYSE: WHG) since 2002 • 35% of company stock held by senior management, employees and directors • Effective tool to attract and retain talented professionals • Strong and committed team of professionals • Senior members of the firm have worked together for over a decade • Client-centered culture • Culture of integrity, ethics, solid corporate governance and internal controls
Page 1 * Preliminary AUM estimate |
 Westwood History Westwood Funds Westwood Management Corp. Acquired by Southwest Securities (SWS) Westwood Trust Westwood Holdings Group, Inc. • Registered Investment Advisor • Institutional focus 1983 1993 1994 1996 2002 SWS Provided: • Capital • Autonomy • Technology • Distribution • Distributed by Gabelli • Sub-advised by Westwood • Commingled funds • New product platform • Spin-off • Independent public company WHG Funds 2005 • Targeted to institutional, defined contribution market • Advised by Westwood; administration by SEI Page 2 2008 • Targeted to major institutional plan sponsors • Advised by Westwood; administration by SEI WHG Commingled Funds |
 Westwood Value Proposition Page 3 At our spin-off in July 2002 we said we would: • Build out our research team • Expand our product offerings • Deliver excellent performance for our clients • Operate the firm in a stockholder-friendly manner • Increase shareholder value • Energize our employees |
 Westwood Results Page 4 Since our spin-off in July 2002 we have achieved these results: • Built out our research team Developed a talented, team-based research process, adding 22 professionals including 10 CFAs • Expanded our product offerings Launched six additional products • Delivered excellent performance for our clients • Operated the firm in a stockholder-friendly manner Declared over $50 million in dividends to stockholders • Increased shareholder value Westwood’s market value increased from $75 million at June 2002 to $248 million at September 30, 2009 – a total return of 274% compared to 48% for the Russell 2000 Index over the same period. • Energized our employees Experienced very low employee turnover LargeCap, SMidCap, SmallCap, AllCap and Balanced ranked in the top quartile in their peer group for the five-year trailing period as of June 30, 2009 |
 Product Distribution • Separately managed portfolios • Subadvisory • Collective funds • Targeted consultant relationships • Plan sponsor direct marketing • Enhanced Balanced TM asset allocation model • Commingled funds • Separately managed portfolios • Client referrals • Third party referral sources • Local community involvement • Capped expense ratios • Institutional share class • Defined contribution plans • Other institutions • A share class • Mutual fund supermarkets • DC consultants • Private Wealth Advisors • Media Page 5 Distribution Channels Institutional Private Wealth Mutual Funds |
 Investment Process & Products |
 Overview of Investment Process Qualities that Westwood analysts look for in securities: • Strong free cash flow characteristics • Stable to improving return on equity • Improving balance sheet • Upside earnings surprise without corresponding change in consensus estimates Portfolio Teams Research Analysts • Idea generation • Proprietary fundamental research • Make buy & sell recommendations 4 Research Groups • Led by senior analysts • Weekly due diligence meetings to review analyst recommendations • Approved securities move to list of portfolio candidates • At least one member from each Research Group • Weekly meetings to review portfolio and new names • Makes buy and sell decisions and manages portfolio risk Page 6 |
 Peer Group Performance Comparison Source: eVestment Alliance Page 7 Returns for 1 Year Trailing Returns for 3 Years Trailing Returns for 5 Years Trailing Returns for 10 Years Trailing Returns for 20 Years Trailing LargeCap 76 27 7 33 10 SMidCap 23 1 1 3 N/A SmallCap 75 41 19 N/A N/A AllCap 73 50 25 N/A N/A Balanced 58 30 12 21 12 Percentile Ranking as of June 30, 2009 The eVestment Alliance Universes contain the following number of return sets: LargeCap Value Equity (404),
Small-MidCap Value Equity (81), SmallCap Value Equity (230), AllCap Value Equity (119), and
US Balanced/TAA (121). Past performance does not guarantee future results. Stock market conditions vary from year to year and can result in a decline in market value. This is not an offer or recommendation to buy or sell a security or an economic
sector. Universe rankings and data set is subject to change. |
 Past performance is
not a guarantee of future returns. Actual account performance attribution may differ from the representative portfolio. Benchmark Data Source: © 2009 Mellon Analytical Solutions, LLC. All Rights Reserved.
S&P Quality Ratings Russell 1000 Value Index Total Returns 2008 2009 Thru Sept 30 High Quality led in 2008, Low Quality has led in 2009. A+ A A- B+ B B- C A+ A A- B+ B B- C Page 8 |
 Companies without earnings and the most expensive stocks have outperformed since the market bottomed. Index: Russell 1000 Value Benchmark Data Source: © 2009 Mellon Analytical Solutions, LLC. All Rights Reserved. Westwood portfolios consist of low P/E, high quality companies Performance by Price/Earnings Ratio March 9 through Sept 30, 2009 Page 9 |
 2003 Calendar Year Performance Westwood LargeCap lagged in the last low quality rally as well... Page 10 Performance provided is gross of management fees. Please see appendix for full
performance disclosures. The disclosures provided are considered an
integral part of this presentation. Past performance is not a guarantee of
future returns. |
 LargeCap Value Portfolio Statistics Five Years ended December 31, 2007 But Westwood outperformed substantially over the next four years as the recovery matured and risk appetites fell. Page 11 Performance provided is gross of management fees. Please see appendix for full performance disclosures. The disclosures provided are considered an integral part of this presentation. Past performance is not a guarantee of future returns. |
 • As interest rates go up, risk appetites decline and capital flows into higher quality
securities. • Fed Funds rate currently at 0% and likely to rise as Fed moves away from quantitative
easing. • Such an environment has historically led to relative outperformance for Westwood.
Data thru 9/30/2009. Benchmark Data Source: © 2009 Mellon Analytical Solutions, LLC. All Rights Reserved. Westwood Has Historically Outperformed in a Rising Rate Environment Page 12 |
 Growth Opportunities |
 Growth Opportunities • Significant capacity remains in seasoned products • Subadvisory mandates o Access to broad distribution infrastructure o Global market access o Support partner distribution network vs. building proprietary distribution
network • WHG Funds o Three-year track record achieved in four of five funds o Organic growth has been strong o Asset acquisition opportunities • Westwood Trust o Product development and asset gathering platform o Leverage referral sources • Collective Funds o Increasingly popular choice for large defined contribution plan sponsors o Select audience, high minimums Page 13 |
 Significant Product Capacity Remains Page 14 Seasoned Products (>3 year track record & >$100 Million in assets) Assets Under Management As of 9/30/09* Estimated Maximum Capacity AUM Asset Growth Potential Product Inception LargeCap Value $4.9 billion $25 billion $20.1 billion 1987 SMidCap Value $2.4 billion $3 billion $600 million 1997 SmallCap Value $250 million $1.5 billion $1.3 billion 2004 AllCap Value $160 million $10 billion $9.8 billion 2002 Income Opportunity $275 million $2 billion $1.7 billion 2003 MLP $190 million $1.5 billion $1.3 billion 2003 Total Seasoned $8.2 billion $43 billion $34.8 billion Unseasoned (R&D) Products (<3 year track record & <$100 Million in assets) MidCap Value $25 million $10 billion $10 billion 2007 LargeCap Enhanced 130/30 $9 million $10 billion $10 billion 2007 Total Unseasoned $34 million $20 billion $20 billion Total Seasoned & Unseasoned $8.2 billion $63 billion $55 billion Legacy Products Balanced / Fixed Income / REIT $510 million N/A N/A 1987 / 1985 / 1995 Note: Table reflects Westwood Management AUM as of 9/30/09 (including Westwood Trust
commingled funds); excludes approximately $800 million in Westwood Trust
separately managed accounts, agency assets and subadvised commingled funds *Preliminary AUM estimate |
 Seasoned Products & Capacity Available Estimated Capacity – as of September 30, 2009 ($ millions) Page 15 20% $25,000 80% $3,000 17% $1,500 2% $10,000 14% $2,000 13% $1,500 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% LargeCap Value SMidCap Value SmallCap Value AllCap Value Income Opportunity MLP Current AUM Remaining Capacity |
 Subadvisory Page 16 • Subadvisory opportunities – attractive means for enhanced distribution of scalable products • Access to established distribution channels • Generally lower average fee, but high profitability due to low incremental costs
• Current Westwood subadvisory mandates • UBS Pace • Wilmington Trust Co. • Principal Financial • State Farm • Goodman Institutional Investors • RBC Asset Management • Phoenix Insurance Company • Pictet Funds • Delaware Investments – Optimum Funds • Timothy Plan • Callan Diversified Alpha • GAMCO Westwood Funds • Westwood Trust |
 WHG Funds Page 17 WHG SMidCap (WHGMX) WHG Income Opportunity (WHGIX) WHG LargeCap Value (WHGLX) WHG Balanced (WHGBX) To be rated Q3 2009 WHG SmallCap Value (WHGSX) To be rated Q2 2010 WHG Funds • Five funds advised by Westwood Management • Strong asset growth – assets have grown to over $450 million from initial two fund launch in December
2005 • Targeted primarily to institutional and defined contribution markets Morningstar Ratings Growth in WHG Funds Assets Source: Morningstar as of September 29, 2009 |
 Westwood Trust • Consistent asset growth – 15% compound annual growth rate of assets over the last five years • Enhanced Balanced™ – Asset allocation model – 7 asset classes managed by Westwood Management 4 asset classes managed by subadvisors – Consultative approach – Low cost, efficient solution – Asset gathering platform – Private Client – “Best Ideas” • Subadvisors: Page 18 International Growth High Yield International Value Domestic Growth |
 Collective Funds • Designed to accommodate large defined contribution plan sponsors • Westwood launched a SMidCap collective fund in Q3 2008 for a Fortune 100 client
• Westwood has registered a LargeCap collective fund • Barriers to entry higher due to cost and administrative complexity • Less crowded market compared to mutual funds • Cost and administrative complexity of changing managers or funds may result in longer duration client relationships Page 19 |
 Financial Highlights |
 Growth in Assets Under Management Page 20 Quarterly AUM Growth • From Q1 2004 – Q3 2009, Westwood’s AUM has increased by 145%, or a compound annual growth rate of 18% • Over this same period, the level of the S&P 500 index has declined by 6% • Westwood achieved the highest level of net asset inflows in its history in 2008; strong
inflows have continued in 2009 AUM Growth in a Challenging Environment
|
 AUM Organic Growth Rate* • Average organic growth rate for the period 2007 – 2009 (annualized through Q2 2009) over 24% vs. peer group average growth rate of 5%** Page 21 * Net flows for the period divided by beginning of period assets under management ** Peer group consists of AB, AMG, BEN, BLK, CLMS, CNS, DHIL, EPHC, EV, GBL, IVZ, JNS,
PZN, TROW, WDR |
 Revenue, Earnings and Dividend Growth Page 22 Revenue Growth Dividend Growth Cash Earnings Growth • Compound annual growth rate from Q1 2004 – Q2 2009 • Revenue 14% • Cash earnings 22% • Performance-based fees • 2007 $3.0 million • 2008 $8.7 million • Dividend yield of 3.5% as of October 1, 2009 |
 Quarterly Revenue Growth Page 23 Note: excludes performance fees of $3.0 million, $80,000 and $8.6 million in Q4 2007, Q2
2008 and Q4 2008, respectively • Excluding performance-based fees, compound annual growth rate of fee revenues
from Q1 2004 to Q2 2009 of 14% |
 Top Performer 23.2% Bottom Performer -77.4% Top Performer 51.8 Bottom Performer -86.1% Top Performer 145.1% Bottom Performer -86.8% WHG Stock Performance vs. NYSE Listed Companies as of 6/30/09 1-Year
Percentile 3-Year
Percentile 5-Year Percentile
WHG 8.7%
10 157.75%
1 201.76%
4 Russell 2000 (25.03)%
45 (26.83)%
50 (8.10)%
53 Data excludes 5% tails Benchmark Data Source: © 2009 Mellon Analytical Solutions, LLC. All Rights Reserved. Page 24 |
 DeMarche 100 Best Companies in the United States DeMarche Associates Names Westwood Holdings Group, Inc. Among “100 Best” Companies August 26, 2009 Westwood Holdings Group, Inc. has been named one of the “100 Best Companies in the United States” by DeMarche Associates, Inc., a leading U.S. investment research firm. The award is based on DeMarche’s proprietary research and fundamental analysis of more than 3,000 U.S. corporations in terms of managing growth and risk factors while maintaining shareholder value. Page 25 |
 Summary |
 Summary of Strategic Objectives Ongoing Objectives • Serve clients attentively • Generate competitive investment performance • Service consultant relationships • Leverage referral sources at Westwood Trust • Increase visibility of WHG stock Near Term Objectives • Match manufacturing capability with distribution partners through subadvisory
opportunities • Develop collective fund offerings across multiple products to serve the large defined
contribution plan market • Expand awareness of WHG Funds with Private Wealth Advisory firms and Defined
Contribution Consultants • Cultivate new “R&D” products Page 26 |
 Cash Earnings Reconciliation Cash Earnings Reconciliation ($ thousands) Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 GAAP net income $ 1,117 $ 988 $ 685 $ 896 $ 875 $ 937 $ 814 $ 1,010 $ 1,296 $ 986 $ 921 $ 1,305 Add: Restricted stock expense 202 203 426 419 385 415 657 657 639 1,126 1,387 1,348 Add: Stock option expense 62 62 63 62 63 62 63 62 61 61 - 4 Less: Cumulative effect of change in accounting principle - - - - - - - - (39) - - - Non-GAAP cash earnings $ 1,381 $ 1,253 $ 1,174 $ 1,377 $ 1,323 $ 1,414 $ 1,534 $ 1,729 $ 1,957 $ 2,173 $ 2,308 $ 2,657 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 GAAP net income $ 1,507 $ 1,473 $ 1,682 $ 3,282 $ 1,955 $ 1,731 $ 1,736 $ 5,121 $ 1,230 $ 1,630 Add: Restricted stock expense 898 1,362 1,537 1,519 1,209 1,942 1,775 1,808 1,483 2,239 Add: Stock option expense - - - - - - - - - - Less: Cumulative effect of change in accounting principle - - - - - - - - - - Non-GAAP cash earnings $ 2,405 $ 2,835 $ 3,219 $ 4,801 $ 3,164 $ 3,673 $ 3,511 $ 6,929 $ 2,713 $ 3,869 Page 27 |
 LargeCap Disclosure Information Benchmark Data Source: © 2009 Mellon Analytical Solutions, LLC. All Rights Reserved. Year Gross- of-Fees Return Net-of- Fees Return Russell 1000 Value S&P 500 Number of Portfolios Dispersion Total Assets at End of Period Percentage of Firm Assets Percentage of Non-Fee Paying Portfolios Total Firm Assets 2Q09 12.7% 12.6% 16.7% 15.9% 40 0.2 $3,468.7 46.4% 0.0% $7,480.2 2008 -32.4% -32.7% -36.9% -37.0% 36 0.3 $3,142.0 48.1% 0.0% $6,538.0 2007 13.3% 12.9% -0.2% 5.5% 34 0.3 $2,921.7 41.1% 0.0% $7,113.2 2006 19.9% 19.5% 22.3% 15.8% 32 0.1 $2,368.8 43.4% 0.0% $5,455.9 2005 15.8% 15.3% 7.1% 4.9% 32 0.3 $2,656.2 57.7% 0.0% $4,606.5 2004 14.2% 13.7% 16.5% 10.9% 39 0.3 $2,572.6 67.7% 0.0% $3,797.6 2003 24.8% 24.3% 30.0% 28.7% 42 0.5 $2,341.3 61.4% 0.0% $3,815.3 2002 -15.7% -16.1% -15.5% -22.1% 38 0.5 $1,822.5 45.4% 0.0% $4,014.6 2001 -8.2% -8.6% -5.6% -11.9% 35 0.4 $1,880.7 46.8% 0.0% $4,022.9 2000 13.5% 13.0% 7.0% -9.2% 33 0.6 $1,637.3 46.1% 0.0% $3,551.7 1999 13.8% 13.3% 7.4% 21.1% 26 1.6 $1,111.4 48.0% 0.0% $2,314.8 PERFORMANCE RESULTS: LARGECAP EQUITY COMPOSITE January 1, 1999 through June 30, 2009 Reporting Currency: USD Creation Date: January 1994 The LargeCap composite includes all taxable and tax-exempt,
fee-paying fully discretionary accounts invested primarily in equity securities with market capitalizations above $7.5
billion and having comparable objectives. The minimum portfolio size for inclusion in the LargeCap Composite is $5
million beginning 1/1/06. The standard fee schedule for LargeCap Equity is 0.75% on the first $25
million, negotiable thereafter. Westwood Management Corp. has been verified for the periods January 1, 1995
through December 31, 2008 by Pricewaterhouse Coopers LLP.
A copy of the verification report is available upon request. LARGECAP EQUITY LARGECAP EQUITY COMPOSITE RETURNS COMPOSITE RETURNS Gross of Fees Net of Fees S&P 500 Gross of Fees Net of Fees S&P 500 ANNUALIZED RETURNS CALENDAR YEAR RETURNS 1 Year -29.1 % -29.3 % -29.0 % -26.2 % 2008 (32.4) % (32.7) % -36.9 % -37.0 % 2 Years -18.2 % -18.4 % -24.1 % -19.9 % 2007 13.3 % 12.9 % -0.2 % 5.5 % 3 Years -6.4 % -6.7 % -11.1 % -8.2 % 2006 19.9 % 19.5 % 22.3 % 15.8 % 4 Years -0.7 % -1.1 % -5.8 % -4.3 % 2005 15.8 % 15.3 % 7.1 % 4.9 % 5 Years 2.4 % 2.0 % -2.1 % -2.2 % 2004 14.2 % 13.7 % 16.5 % 10.9 % 6 Years 5.2 % 4.7 % 1.4 % 1.0 % 2003 24.8 % 24.3 % 30.0 % 28.7 % 7 Years 3.6 % 3.2 % 1.1 % 0.9 % 2002 (15.7) % (16.1) % -15.5 % -22.1 % 8 Years 2.0 % 1.6 % -0.3 % -1.7 % 2001 (8.2) % (8.7) % -5.6 % -11.9 % 9 Years 2.2 % 1.7 % 0.9 % -3.2 % 2000 13.5 % 13.1 % 7.0 % -9.1 % 10 Years 2.5 % 2.1 % -0.2 % -2.2 % 1999 13.8 % 13.3 % 7.4 % 21.0 % 11 Years 4.4 % 3.9 % 1.3 % -0.2 % 1998 21.5 % 20.6 % 15.6 % 28.6 % 12 Years 5.8 % 5.3 % 3.3 % 2.1 % 1997 33.6 % 32.7 % 35.2 % 33.4 % 13 Years 7.9 % 7.4 % 5.3 % 4.3 % 1996 27.8 % 26.9 % 21.6 % 23.0 % 14 Years 9.6 % 9.1 % 6.6 % 5.7 % 1995 40.5 % 39.3 % 38.4 % 37.6 % 15 Years 10.5 % 9.9 % 7.5 % 6.9 % 1994 4.2 % 3.5 % -2.0 % 1.3 % 16 Years 10.7 % 10.1 % 7.1 % 6.6 % 1993 19.2 % 18.5 % 18.1 % 10.1 % 17 Years 11.2 % 10.5 % 7.9 % 7.0 % 1992 9.0 % 8.3 % 13.8 % 7.6 % 18 Years 10.9 % 10.3 % 8.4 % 7.3 % 1991 24.7 % 23.9 % 24.6 % 30.5 % 19 Years 10.4 % 9.7 % 8.2 % 7.3 % 1990 (9.2) % (10.0) % -8.1 % -3.1 % 20 Years 10.5 % 9.9 % 8.1 % 7.8 % 1989 32.5 % 31.7 % 25.2 % 31.7 % 21 Years 10.8 % 10.1 % 8.7 % 8.3 % 1988 16.6 % 15.7 % 23.2 % 16.6 % 22 Years 10.3 % 9.6 % 8.2 % 7.6 % 1987 7.8 % 6.9 % 0.5 % 5.3 % Since Inception (1/1/87) 11.1 % 10.4 % 8.9 % 8.6 % Russell 1000 Value Russell 1000 Value |
 SMidCap Disclosure Information Benchmark Data Source: © 2009 Mellon Analytical Solutions, LLC. All Rights Reserved. SMIDCAP EQUITY COMPOSITE RETURNS Gross of Fees Net of Fees Russell 2500 Russell 2500 Value ANNUALIZED RETURNS 1 Year (19.4) % (19.9) % (26.7) % (26.2) % 2 Years (12.4) % (12.9) % (20.7) % (23.1) % 3 Years 0.4 % (0.2) % (9.3) % (11.2) % 4 Years 4.5 % 3.9 % (4.1) % (5.8) % 5 Years 9.3 % 8.7 % (0.9) % (1.6) % 6 Years 12.5 % 11.9 % 4.0 % 3.6 % 7 Years 10.6 % 10.1 % 3.6 % 3.0 % 8 Years 9.7 % 9.2 % 2.1 % 3.5 % 9 Years 9.5 % 9.0 % 2.2 % 5.7 % 10 Years 10.4 % 9.9 % 3.7 % 5.0 % 11 Years 10.0 % 9.5 % 3.8 % 4.4 % 12 Years 11.9 % 11.4 % 4.9 % 5.8 % Since Inception (7/1/97) 11.9 % 11.4 % 4.9 % 5.8 % CALENDAR YEARS 2008 (26.4) % (26.7) % (36.8) % (32.0) % 2007 12.3 % 11.7 % 1.4 % (7.3) % 2006 22.2 % 21.6 % 16.2 % 20.2 % 2005 20.8 % 20.5 % 8.1 % 7.7 % 2004 28.1 % 27.6 % 18.3 % 21.6 % 2003 34.1 % 33.6 % 45.5 % 44.9 % 2002 1.2 % 0.7 % (17.8) % (9.9) % 2001 (10.8) % (11.1) % 1.2 % 9.7 % 2000 7.4 % 7.0 % 4.3 % 20.8 % 1999 30.1 % 29.7 % 24.2 % 1.5 % 1998 13.7 % 13.0 % 0.4 % (1.9) % Year Gross of Fees Return Net of Fees Return Russell 2500 Russell 2500 Value Number of Portfolios Dispersion Total Assets at End of Period Percentage of Firm Assets Percentage of Non-Fee Paying Portfolios Total Firm Assets 2Q09 17.2% 17.1% 20.3% 18.8% 17 0.1 $1,085.4 14.5% 0.0% $7,480.2 2008 -26.4% -26.7% -36.8% -32.0% 16 0.2 $917.4 14.0% 0.0% $6,538.0 2007 12.3% 11.7% 1.4% -7.3% 14 0.3 $1,091.2 15.3% 0.0% $7,113.2 2006 22.2% 21.6% 16.2% 20.2% 9 0.2 $784.5 14.4% 0.0% $5,455.9 2005 20.8% 20.5% 8.1% 7.7% 4 0.1 $554.9 12.0% 0.0% $4,606.5 2004 28.1% 27.6% 18.3% 21.6% 2 0.1 $77.9 2.1% 0.0% $3,797.6 2003 34.1% 33.6% 45.5% 44.9% 2 0.3 $50.5 1.3% 0.0% $3,815.3 2002 1.2% 0.7% -17.8% -9.9% 2 0.1 $32.7 0.8% 0.0% $4,014.6 2001 -10.8% -11.1% 1.2% 9.7% 2 1.4 $31.8 0.8% 0.0% $4,022.9 2000 7.4% 7.0% 4.3% 20.8% 2 0.2 $35.9 1.0% 0.0% $3,551.7 1999 30.1% 29.7% 24.2% 1.5% 2 0.5 $37.3 1.6% 0.0% $2,314.8 PERFORMANCE RESULTS: SMIDCAP COMPOSITE January 1, 1998 through June 30, 2009 Reporting Currency: USD Creation Date: July 1997 The SMidCap Composite consists of tax-exempt and taxable, fee-paying fully discretionary accounts
invested primarily in equity securities with market capitalizations between $500 million and
$8.0 billion and having comparable objectives. The minimum portfolio size for inclusion in the SMidCap Composite is $5 million beginning 1/1/06.
The standard fee schedule for the SMidCap product is 0.85% on the first $25 million, negotiable thereafter.
Westwood Management has been verified for the periods January 1, 1995 through December 31, 2008 Pricewaterhouse Coopers LLP. A copy of the verification report is available upon request.
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 SmallCap Value Disclosure Information Benchmark Data Source: © 2009 Mellon Analytical Solutions, LLC. All Rights Reserved. Year Gross of Fees Return Net of Fees Return Russell 2000 Value Number of Portfolios Dispersion Total Assets Percentage at End of Period of Firm Assets Percentage of Non-Fee Paying Portfolios Total Firm Assets 2Q09 14.6% 14.4% 18.0% 10 0.4 $205.4 2.7% 0.0% $7,480.2 2008 -31.0% -31.4% -28.9% 9 0.4 $177.2 2.7% 0.0% $6,538.0 2007 3.6% 3.2% -9.8% 5 0.9 $134.5 1.9% 0.0% $7,113.2 2006 24.1% 23.7% 23.5% 4 0.2 $125.7 2.3% 0.0% $5,455.9 2005 10.5% 10.1% 4.7% 3 0.5 $38.0 0.8% 0.0% $4,606.5 2004 28.4% 28.1% 22.3% 3 0.3 $37.7 1.0% 0.0% $3,797.6 PERFORMANCE RESULTS: SMALLCAP VALUE COMPOSITE January 1, 2004 through June 30, 2009 Reporting Currency: USD Creation Date: January 2004 SMALLCAP VALUE COMPOSITE RETURNS Gross of Fees Net of Fees Russell 2000 Value ANNUALIZED RETURNS 1 Year (28.0) % (28.5) % (25.2) 2 Years (20.4) % (20.9) % (23.5) 3 Years (7.8) % (8.3) % (12.1) 4 Years (0.9) % (1.4) % (6.1) 5 Years 2.6 % 2.2 % (2.3) Since Inception (1/1/04) 4.1 % 3.7 % (0.7) CALENDAR YEARS 2008 (31.0) % (31.4) % (28.9) 2007 3.6 % 3.2 % (9.8) 2006 24.1 % 23.7 % 23.5 2005 10.5 % 10.1 % 4.7 2004 28.4 % 28.1 % 22.3 The SmallCap Value composite consists of taxable and tax-exempt, fee-paying fully discretionary
accounts whose main objective is to invest primarily in equity securities with market
capitalizations between $100 million and $2.5 billion and having comparable
objectives. The minimum portfolio size for inclusion in the SmallCap Value Composite is $5
million beginning 1/1/06. The standard fee schedule for the SmallCap Value product is
1.00% on the first $10 million, negotiable thereafter. Westwood Management Corp. has been
verified for the periods January 1, 1995 through December 31, 2008 by Pricewaterhouse Coopers
LLP. A copy of the verification report is available upon request. |
 AllCap Value Disclosure Information Benchmark Data Source: © 2009 Mellon Analytical Solutions, LLC. All Rights Reserved. Year Gross of Fees Return Net of Fees Return Russell 3000 Number of Portfolios Dispersion Total Assets at End of Period Percentage of Firm Assets Total Firm Assets 2Q09 14.0% 14.0% 16.8% 2 0.00 $32.0 0.4% $7,480.2 2008 -34.4% -34.9% -37.3% 1 0.00 $16.8 0.3% $6,538.0 2007 11.5% 11.0% 5.1% 3 0.00 $39.0 0.5% $7,113.2 2006 20.0% 19.5% 15.7% 1 0.00 $18.5 0.3% $5,455.9 2005 16.0% 15.7% 6.1% 1 0.00 $12.5 0.3% $4,606.5 2004 19.5% 19.3% 12.0% 1 0.00 $2.5 0.1% $3,797.6 2003 28.6% 28.4% 31.1% 1 0.00 $96.8 2.5% $3,815.3 2002¹ -12.9% -13.0% -10.6% 1 0.00 $63.3 1.6% $4,014.6 PERFORMANCE RESULTS: ALLCAP VALUE COMPOSITE July 1, 2002 through June 30, 2009 Reporting Currency: USD Creation Date: August 2002 ALLCAP VALUE COMPOSITE RETURNS Gross of Fees Net of Fees Russell 3000 ANNUALIZED RETURNS 1 Year (28.2) % (28.7) % (26.6) % 2 Years (18.9) % (19.3) % (19.9) % 3 Years (6.6) % (7.1) % (8.4) % 4 Years (0.9) % (1.3) % (4.2) % 5 Years 3.0 % 2.6 % (1.8) % 6 Years 6.0 % 5.6 % 1.6 % 7 Years 4.7 % 4.3 % 1.5 % Since Inception (7/1/02) 4.7 % 4.3 % 1.5 % CALENDAR YEARS 2008 (34.4) % (34.9) % (37.3) % 2007 11.5 % 11.0 % 5.1 % 2006 20.0 % 19.5 % 15.7 % 2005 16.0 % 15.7 % 6.1 % 2004 19.5 % 19.3 % 12.0 % 2003 28.6 % 28.4 % 31.1 % 2002¹ (12.9) % (13.0) % (10.6) % The AllCap Value Composite includes all taxable and tax-exempt, fee-paying fully discretionary
accounts generally invested in equity securities with market capitalizations greater than
$100 million at time of purchase and having comparable objectives. The minimum portfolio size for inclusion in the AllCap Value Composite is $5 million beginning 1/1/06.
The standard AllCap Value fee schedule is 0.80% on the first $10 million, negotiable thereafter. Westwood Management has been verified for the periods January 1, 1995 through December 31, 2008 by
Pricewaterhouse Coopers LLP. A copy of the verification report is available upon request.
Inception Date 7/1/02 Inception Date 7/1/02 1. 1. |
 Balanced Disclosure Information Benchmark Data Source: © 2009 Mellon Analytical Solutions, LLC. All Rights Reserved. Year Gross of Fees Return Net of Fees Return 60% S&P 500/40% BCG/C Number of Portfolios Dispersion Total Assets at End of Period Percentage of Firm Assets Total Firm Assets 2Q09 8.4% 8.3% 10.2% 2 0.0 $28.1 0.4% $7,480.2 2008 -18.5% -19.0% -21.9% 2 0.1 $28.9 0.4% $6,538.0 2007 10.8% 10.1% 6.3% 3 0.2 $65.0 0.9% $7,113.2 2006 13.4% 12.7% 10.9% 3 0.2 $57.6 1.1% $5,455.9 2005 10.9% 10.2% 4.0% 3 0.2 $49.5 1.1% $4,606.5 2004 9.4% 8.8% 8.2% 4 0.1 $73.5 1.9% $3,797.6 2003 16.1% 15.3% 18.8% 3 0.2 $48.5 1.3% $3,815.3 2002 -4.8% -5.4% -9.5% 5 0.5 $87.0 2.2% $4,014.6 2001 -1.1% -1.7% -3.7% 6 0.3 $164.1 4.1% $4,022.9 2000 13.3% 12.4% -1.0% 5 0.2 $100.8 2.8% $3,551.7 1999 7.6% 7.0% 11.5% 6 0.5 $96.8 4.2% $2,314.8 Creation Date: January 1994 Reporting Currency: USD PERFORMANCE RESULTS: BALANCED COMPOSITE January 1, 1999 through June 30, 2009 BALANCED BALANCED COMPOSITE RETURNS COMPOSITE RETURNS Gross of Fees Net of Fees 60% S&P500 / 40% BCG/C Gross of Fees Net of Fees 60% S&P500 / ANNUALIZED RETURNS CALENDAR YEARS 1 Year -16.1 % -16.6 % -14.2 % 2008 -18.5 % -19.0 % -21.9 % 2 Years -8.3 % -8.8 % -9.8 % 2007 10.8 % 10.1 % 6.3 % 3 Years -1.2 % -1.8 % -2.3 % 2006 13.4 % 12.7 % 10.9 % 4 Years 1.8 % 1.2 % -0.6 % 2005 10.9 % 10.2 % 4.0 % 5 Years 3.8 % 3.2 % 0.8 % 2004 9.4 % 8.8 % 8.3 % 6 Years 4.9 % 4.3 % 2.4 % 2003 16.1 % 15.3 % 18.8 % 7 Years 4.5 % 3.9 % 2.9 % 2002 -4.8 % -5.4 % -9.5 % 8 Years 3.8 % 3.2 % 1.5 % 2001 -1.1 % -1.7 % -3.7 % 9 Years 4.1 % 3.5 % 0.8 % 2000 13.3 % 12.4 % -0.9 % 10 Years 4.3 % 3.7 % 1.3 % 1999 7.6 % 7.0 % 11.4 % 11 Years 5.2 % 4.6 % 2.5 % 1998 14.0 % 13.2 % 21.4 % 12 Years 6.1 % 5.5 % 4.0 % 1997 23.6 % 22.8 % 23.7 % 13 Years 7.4 % 6.7 % 5.4 % 1996 17.5 % 16.8 % 14.7 % 14 Years 8.4 % 7.7 % 6.2 % 1995 30.5 % 29.4 % 30.0 % 15 Years 9.0 % 8.4 % 7.1 % 1994 0.3 % -0.2 % -0.6 % 16 Years 8.8 % 8.2 % 6.7 % 1993 15.7 % 14.8 % 10.5 % 17 Years 9.2 % 8.6 % 7.1 % 1992 8.0 % 7.5 % 7.7 % 18 Years 9.4 % 8.7 % 7.4 % 1991 23.2 % 22.6 % 24.8 % 19 Years 9.3 % 8.7 % 7.5 % 1990 1.1 % 0.5 % 1.6 % 20 Years 9.3 % 8.7 % 7.8 % 1989 24.7 % 24.1 % 24.6 % 21 Years 9.7 % 9.0 % 8.2 % 1988 15.9 % 15.2 % 13.0 % 22 Years 9.4 % 8.7 % 7.8 % 1987 8.0 % 7.5 % 5.5 % Since Inception (1/1/87) 10.0 % 9.4 % 8.3 % The SmallCap Value composite consists of taxable and tax-exempt, fee-paying fully discretionary accounts whose main objective is to invest primarily in equity securities with market capitalizations between $100 million and $2.5 billion and having comparable objectives. The minimum portfolio size for inclusion in the SmallCap Value Composite is $5 million beginning 1/1/06. The standard fee schedule for the SmallCap Value product is 1.00% on the first $10 million,
negotiable thereafter. Westwood Management Corp. has been verified for the periods January 1, 1995 through December 31, 2008 by Pricewaterhouse Coopers LLP. A copy of the verification report is available upon request. |
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(1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising
from any use of this information. Past performance is no guarantee of
future results. For each fund with at least a three year history, Morningstar calculates a Morningstar Rating based on a Morningstar Risk-Adjusted Return measure that accounts for
variation in a fund’s monthly performance (including the effects of
sales charges, loads and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year Morningstar Ratings metric. As of 8/31/2009, WHGMX was rated among 383 Mid Cap Blend funds in the last three years and received an overall Morningstar
Rating of 5 stars; WHGLX was rated among 1148 Large Cap Value funds in the
last three years and received an overall Morningstar Rating of 5 stars; WHGIX was rated among 492 Conservative Allocation funds in the last three years and received an overall Morningstar Rating of 4 stars. |
 www.westwoodgroup.com 200 Crescent Court Suite 1200 Dallas, Texas 75201 (214)756-6900 |