Historically, to achieve superior performance in the stock market, investments have been concentrated in rapidly growing companies' stocks. These stocks often show volatility in share price because of rapid technological changes in products, limited product offerings, small R&D budgets and unseasoned management. However, on average, growth stocks have exhibited the highest rate of return. Taking into account investors' differing tolerance for volatility, we try to balance varying degrees of volatility with overall return in our four styles.

The Intelligent Growth style combines small companies with some fast growing, yet more established mid-sized companies. The opening of world markets have allowed some of these medium-sized firms to grow at rates above their historical growth rates. These trends have increased profit margins for many medium-sized companies, making them excellent candidates for Intelligent Growth portfolios. Since Intelligent Growth uses primarily small companies, we expect it to exhibit the highest long-term return, but volatility is experienced in this style.

Intelligent Blend portfolios intend to reduce volatility by combining fast-growing small stocks with stocks of mid-sized and large companies. While stocks of large companies do not grow as fast as small companies, the portfolios do benefit from the established reputation and proven track record of the large companies, adding a measure of stability less prevalent in a purely small-cap approach. By blending small and larger stocks, strong performance can be achieved while reducing some market risk. Intelligent Blend has been one of our most popular styles since its inception.

The Defensive Growth style aims to blend the growth potential of larger company stocks with the income and capital preservation of corporate debt securities. Essentially, we balance a core equity growth strategy with above-market yielding corporate bonds. By blending mid-sized and larger stocks with corporate debt, solid performance can be achieved while reducing some market risk.