Investment Packages - Capital Management Group, Inc.

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CMG Capital Management Group, Inc. Strategy Blend Disclosure Statement

CMG Capital Management Group, Inc. (“CMG”) is an SEC registered investment adviser located in the Commonwealth of Pennsylvania. CMG serves as an investment advisor and determines all asset allocations within the portfolio and is responsible for initial and ongoing suitability, determination and client communication. It is important to note that inclusive with this presentation are the accompanying individual performance tear sheets with additional disclosure on each underlying investment strategy. This presentation represents a hypothetical back test of an allocation to CMG’s managed account strategies. The hypothetical performance results reflect quarterly portfolio rebalancing. It assumes the initial sub-strategy percentage allocations were made on day one and rebalanced at the end of each calendar quarter.

CMG portfolio results reflect hypothetical performance that was achieved by means of the retroactive application of an allocation back test and, as such, the corresponding results have inherent limitations, including: (1) the portfolio results do not reflect the results of an actual account allocated in this current portfolio of investment strategies, but were achieved by means of the retroactive allocation to each of the referenced CMG investment strategies, certain aspects of which may have been designed with the benefit of hindsight; (2) back-tested performance may not reflect the impact that any material market or economic factors might have had on the adviser’s use of the portfolio if the portfolio had been invested during the period to actually mange client assets; (3) for various reasons (including the reasons indicated above), CMG’s clients may have experienced investment results during the corresponding time periods that were materially different from those portrayed in the model.

Please Note: The hypothetical performance results reflect the deduction of CMG's 2.25% investment management fee that would have been charged quarterly in arrears by CMG during the corresponding time periods.

Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that future performance will be profitable, or equal to either the hypothetical CMG performance results reflected or any corresponding historical index. The composition/percentage weighting of each corresponding CMG index (i.e. S&P Total Return, Lehman Aggregate Bond) is also disclosed. For example, the S&P 500 Total Return Composite Index (the “S&P”) is a market capitalization-weighted index of 500 widely held stocks often used as a proxy for the stock market. Standard & Poor’s chooses the member companies for the S&P based on market size, liquidity, and industry group representation. Included are the common stocks of industrial, financial, utility, and transportation companies. The historical performance results of the S&P (and those of all other indices) do not reflect the deduction of transaction and custodial charges, nor the deduction of an investment management fee, the incurrence of which would have the effect of decreasing indicated historical performance results. The S&P is not an index into which an investor can directly invest. The historical S&P performance results (and those of all other indices) are provided exclusively for comparison purposes only, so as to provide general comparative information to assist an individual client or prospective client in determining whether the performance of a CMG portfolio performance meets, or continues to meet, his/her investment objective(s). A corresponding description of the other comparative index, the Lehman Brothers Aggregate Bond Index (i.e., a fixed income index) is available from CMG upon request. It should not be assumed that CMG program holdings will correspond directly to any such comparative index. The CMG performance results do not reflect the impact of taxes.

In the event that there has been a change in a client's investment objectives or financial situation, he/she/it is encouraged to advise CMG immediately. Different types of investments and/or investment strategies involve varying levels of risk, and there can be no assurance that any specific investment or investment strategy (including the investment strategies devised or undertaken by CMG) will be profitable for a client's or prospective client's portfolio. All performance results have been compiled solely by CMG and have not been independently verified. Information pertaining to CMG's advisory operations, services, and fees is set forth in CMG's current disclosure statement, a copy of which is available from CMG upon request.

Description of the Technical Terms Used in These Reports

Returns:
Compounded Annual Return: The rate of return that has been compounded for the running year.
Standard Deviation: A measure of the degree to which an individual probability value varies from the distribution mean. The higher the number, the greater the risk.
Down Deviation (3.00%): A value representing the potential loss that may arise from risk as measured against a minimum acceptable return. Downside deviation aims to isolate the negative portion of volatility.
Sharpe Ratio (3.00%): A reward of a portfolio's excess return relative to the total variability of the portfolio.
Cumulative Return (since inception): A rate of return that has been compounded for more than one year.
Cumulative VAMI (growth of $1000): The Value Added Monthly Index reflects the growth of a hypothetical $1,000 in a given investment over time.
Benchmarks: The benchmarks used in this report are the S&P 500 Total Return Index (S&P) and the Lehman Aggregate Bond Index (Lehman).

Correlation To Benchmark(s):
Alpha: The premium an investment portfolio earns above a certain benchmark. A positive alpha indicates that the investor earned a premium over that index.
Beta: The measurement of a dependent variable's (fund's) volatility relative to an independent variable (benchmark). Beta is the percent change in the price of the dependent variable given a 1% change in the independent variable. This reveals if the dependent variable moves in step with the independent variable; where a beta of 1 indicates perfect alignment.
Correlation: The degree to which the fluctuations of one variable are similar to those of another.
R-Squared: A correlation term describing the variance in the dependent variable that can be explained by the independent or explanatory variable. The coefficient of determination (R-Squared) is a pure number ranging 0 to 1, with 1 giving perfect correlation and 0 giving perfect non-correlation. It is often used to describe the amount of investment risk in portfolios that can be associated with market risk.