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1201 Main Street Suite 1910 Columbia, SC 29201 (803) 254-9500 www.ccminc.com

Publica on Version: WP‐081617 All Rights Reserved 2017  CCM Investment Advisers, LLC 

 

1


CCM ‐ Manager Profile 

 

2

BACKGROUND

BACKGROUND


CCM Investment Manager Profile

FIRM PROFILE

owned investment counseling firm located in Columbia, South Carolina. CCM provides asset management services for individuals, corporations, municipalities and institutions. Assets under management total over $2.2 billion.

CCM's only business is the active management of investment portfolios. Clients include endowments, foundations, pension and profit sharing plans, insurance companies, trusts and individuals.

CCM was founded on the philosophy that quality investment advice requires individual attention to the investment objectives of each client. The organizational structure is designed to attract and retain both experienced investment managers and talented business school graduates.

Through shared ownership in the profitability of the firm, CCM Investment Advisers’ investment professionals have a clear vested interest in the longterm success of our clients. CCM's portfolio managers

understand

each

client's

investment objectives. This permits the portfolio manager to integrate our disciplined, conservative approach with an appreciation of each client's individual circumstances.

 

3

BACKGROUND

CCM Investment Advisers is a privately


CCM Investment Manager Profile

KEY EMPLOYEES President

Mr. Cary is a forty year veteran of the investment industry. After he began his career at Wachovia Bank as an equity research analyst, Mr. Cary participated in a research project headed by Professor Sid Cottle at Stanford University. While at Stanford, Mr. Cary gained exposure through Dr Bill Sharpe to the theory and importance of asset allocation, which later was the foundation for his investment discipline at Bankers Trust of South Carolina where he served as Chief Investment Officer. In 1986 Mr. Cary founded Companion Capital Management (now CCM Investment Advisers) and has served as President and Chief Investment Officer since that time. Mr. Cary was graduated from Wofford College and received his Master of Business Administration degree from the University of South Carolina. His primary responsibilities at CCM include asset allocation, oversight of the equity and fixed income research process, fundamental research in the energy and health care sectors as well as management of client portfolios. Mr. Cary is active in the community and has served on numerous Boards of Directors. Proficient in investment policy, Mr. Cary has assisted numerous organizations in the development and implementation of investment programs.

Robert F. Key, CFA

Senior Vice President

Mr. Key began his career at the South Carolina National Bank as a Corporate Banker and later moved to First Union Bank where he started and managed the Private Banking Group in Columbia, South Carolina. He subsequently served as Treasurer of The Seibels Bruce Group, a property and casualty insurance company, where his responsibilities included management of the fixed income investment portfolio, short term cash management, debt management as well as investor relations. Mr. Key joined CCM Investment Advisers in 1998 and his responsibilities include management of client portfolios, marketing and fundamental research in the finance and REIT sectors. In addition, he serves as the Fixed Income Strategist for the firm. Mr. Key was graduated from Furman University and received his MBA from the University of South Carolina in 1982. He is a CFA Charterholder, a former Certified Cash Manager, has served as an adjunct professor of finance at the University of South Carolina and has provided expert consultation on legal matters involving lending and securities. Mr. Key is a past President of the CFA Society of South Carolina.

Chris W. Antley

Senior Vice President

Mr. Antley joined CCM after graduating from the Honors College of the University of South Carolina in 1988 and then receiving his Master of Business Administration Degree from the University of South Carolina in 1990. While at CCM, Mr. Antley has worked in all areas of investment management including corporate accounting, portfolio accounting, quantitative modeling, asset allocation, macro-economic research, equity and fixed income fundamental research, and portfolio management. Mr. Antley serves as Chief Equity Strategist for CCM and is responsible for development of the CCM Equity Model. His individual areas of fundamental research include the information technology sector. Mr. Antley has responsibility for the management of client portfolios, marketing support, and oversight of information technology, portfolio accounting and administration for CCM. Mr. Antley is a guest lecturer at the University of South Carolina's Moore School of Business and has been featured on the Dow Jones and Bloomberg newswires.

Michael A. Burkett, CFA

Vice President

Mr. Burkett joined CCM Investment Advisers after receiving his Bachelor of Science degree, Magna Cum Laude, from the University of South Carolina. His responsibilities at CCM include portfolio trading and management, information systems, performance composite, research on fixed income products as well as the consumer discretionary and consumer staples equity sectors. Prior to his college studies, Mr. Burkett served in the United States Army 82nd Airborne Division, with a later posting to the Defense Language Institute. Mr. Burkett is a CFA Charterholder and a past President of the CFA Society of South Carolina. Mr. Burkett is a guest lecturer at the University of South Carolina's Moore School of Business.

 

4

BACKGROUND

Fowler W. Cary, Jr.


CCM Investment Manager Profile

KEY EMPLOYEES Regional Marketing Director

Ms. Rhodes was graduated from the University of South Carolina in 1995. She began her career as Staffing Director for Priority One Staffing Services. Prior to joining CCM, she served as Training Coordinator for IJL/Wachovia’s Investment Consulting Services division. Her responsibili es at CCM are marketing products and services to clients in the Southeastern region.

John D. Leaphart

Vice President/Chief Compliance Officer

Mr. Leaphart earned a Master of Business Administration from the Goizueta Business School at Emory University in 2014 and a B.S. in Business Management from Clemson University in 1992. He began his career with CCM in 1994 as the firm’s first fulltime trader, where he developed and implemented standardized trading procedures and practices. Mr. Leaphart currently serves as CCM’s Chief Compliance Officer, overseeing the implementation and application of securi es regulations to CCM’s daily processes. Additional responsibilities include portfolio management, equity analysis, and information technology implementation. Mr. Leaphart is active in the community having served as an officer on numerous civic, religious and charitable organizations.

Joe H. Giltner II, CFA

Vice President

Mr. Giltner joined CCM in 2011, after graduating from the Darla Moore School of Business at the University of South Carolina. He received his Bachelors of Science in business administration majoring in Corporate Finance and Investments. While pursuing his degree Mr. Giltner served as research intern for CCM and joined the firm full time after graduation. He currently serves as a research analyst for equities and the macroeconomic environment. He is a CFA Charterholder.

Austin S. Fulmer

Assistant Vice President

Mr. Fulmer joined CCM Investment Advisers in 2011 after graduating from the University of South Carolina, Moore School of Business with a Bachelor of Science Degree in Business Administration with an emphasis in Finance. Prior to graduating Mr. Fulmer served as a research analyst intern for CCM. His responsibilities at CCM include equity research and analysis, fundamental research on the raw material sector, and information technology development for the firm.

Glenn E. Bell, C P A , CFP ®

CPA/Financial Planner

Bell was graduated from the Lee University and received an MBA in Finance from the University of Eastern New Mexico. Mr. Bell was a combat crewmember in the United States Air Force. After retiring from service, he joined the firm of Burkett, Burkett & Burkett CPAs P.A. as a Certified Public Accountant. Prior to joining CCM, he served in the finance department of Companion Property and Casualty, a subsidiary of BlueCross BlueShield of SC. Mr. Bell’s responsibilities at CCM are assis ng clients with their financial planning needs, as well as accounting responsibilities for the firm. He is a member of the S.C. Association of Certified Public Accountants, and the American Institute of Certified Public Accountants.

 

5

BACKGROUND

Rebecca F. Rhodes


CCM Investment Manager Profile

REPRESENTATIVE CLIENTS

South Carolina Golf Association City of Aiken S.C. Epworth Children’s Home

Representative clients are chosen based on portfolio size and conformity to CCM investment styles. They are clients who have agreed to serve as references for CCM Investment Advisers, LLC. Past performance of these accounts should not be considered a guarantee of future performance.

 

6

BACKGROUND

Blue Cross/Blue Shield of S.C.


CCM ‐ Manager Profile 

 

7

BALANCED PORTFOLIO

BALANCED PORTFOLIO


CCM Investment Manager Profile

At CCM Investment Advisers, we believe a disciplined total portfolio management system that identifies relative value among asset classes, as well as individual securities, will provide consistently superior investment performance. Our philosophy dictates that we manage risk first. Through the management of risk we ascertain value, which ultimately drives performance. Our investment philosophy is based on the active management of the three basic decisions of portfolio management: asset allocation, security selection and timing.

Traditionally, other portfolio

managers actively manage only the second two parts of the investment process: selection and timing. However, at CCM, we believe in order to minimize risk and maximize the total return of a portfolio consistent with each client's investment objectives, it is necessary to actively manage all three aspects of the investment process.

In a dynamic and disciplined portfolio management system, the decision making process is a sequence of events that begins with the asset allocation decision (asset mix). For most asset managers the decision making process ends with selection and timing. If considered at all, asset allocation is performed in a static and absolute context where a typical growth portfolio maintains a constant 60% stock/ 40% bond asset mix. In summary, our portfolio management system constantly compares the relative value of stocks, bonds and money market alternatives. Our system disciplines the portfolio manager to shift funds from overvalued assets to undervalued assets within a timely, logical and unbiased framework.

The fallacy of the “traditional” approach of maintaining a fixed asset mix has been that regardless of the selection skills of managers and how well they managed a particular class of assets, they were all at the mercy of the performance of that particular market alternative. Therefore, with a significant fixed percentage of portfolio assets invested in a poorly performing asset class, portfolio performance suffered greatly. The market “crash” of 1987 dramatically illustrated this point.

The performance we have achieved using our portfolio management system has convinced us that the “traditional” approach to asset management is outdated and far less than optimal in volatile and unpredictable financial markets. The asset management alternative we offer is a system of proven value with the capability and flexibility to position portfolio assets among stocks, bonds and money market investments in a disciplined and timely manner. Designed to optimize portfolio return consistent with each client’s risk tolerance, CCM’s investment management system is a balanced approach to the maximization of a client’s wealth.

 

8

BALANCED PORTFOLIO

INVESTMENT PHILOSOPHY


CCM Investment Manager Profile

CCM’s asset allocation system is driven by the expected returns for the stock and bond markets. As the high-risk asset class, investors demand higher returns for stocks, and as such, their expected return generally exceeds that of bonds. The difference between the two returns is known as the expected return spread. Since 1973, the actual return spread has averaged 282 basis points. Over the course of the economic cycle, however, inefficient behavior on the behalf of investors creates opportunities to take advantage of relative mispricing between the two asset classes. Accordingly, CCM makes gradual shifts in our clients’ asset allocations based on our ongoing assessment of prevailing market conditions. The chart (left) presents historical expected returns from our asset allocation system. The model is very effective at directing the manager towards undervalued asset classes during periods of significant divergence from the norm (+/- one standard deviation). From an historical perspective, note the signals provided by the model prior to the market “crash” in 1987, the tech bubble in 1999, and the buying opportunity in 2002.

EXPECTED RETURN: STOCKS VERSUS BONDS

Since 1973 there have been thirty-nine quarters where the expected return spread has diverged from the average by greater than one standard deviation. These periods of “high confidence” were typically validated by the corresponding actual return RELATIVE PERFORMANCE: STOCKS MINUS BONDS spread from the stock and bond markets. As can be seen in the chart (right), stocks outperformed bonds by an average of 8.3% in the year following a period of stock undervaluation. Stocks outperformed bonds by an average of 10.5% over the following two years as well. When stocks were overvalued, they only outperformed bonds by an average of 1.6%. CCM’s proprietary asset allocation system is a time-tested, proven framework for deriving the proper asset mix consistent with each client’s tolerance for risk. CCM investment managers are disciplined in the asset allocation decision process, and clients are protected from the dysfunctional and costly “market timing” approach of many managers.

 

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BALANCED PORTFOLIO

ASSET ALLOCATION SYSTEM


CCM Investment Manager Profile

CCM Investment Advisers manages every client account as a separate portfolio based on that client’s investment objectives. Most clients’ objectives place them into one of the three broadly defined balanced portfolio categories. However, we also manage equity, fixed income and money market portfolios. Since each portfolio is tailored to the client’s specific objectives, some portfolios may be a combination of approaches.

ASSET MIX RANGES

CCM BALANCED PORTFOLIO

STOCKS

BONDS

MARKETS

Core Balanced Plus

20% - 80%

20% - 80%

0% - 20%

Core Balanced

20% - 80%

20% - 80%

0% - 20%

Moderate Risk

10% - 60%

30% - 90%

0% - 30%

Low Risk

0% - 30%

30% - 100%

0% - 50%

MONEY

Core Balanced Portfolio: This balanced approach is designed to generate returns significantly in excess of the rate of inflation over the longer term, but will conversely incur substantial short term risk to invested capital. Investment performance should be judged over a three to five year time horizon versus a typical conservative balanced (50% stocks/50% bonds) portfolio. A Core Balanced Plus option is also available which offers greater stock exposure. Investment performance should be judged versus a typical balanced (60% stocks/40% bonds) portfolio. Moderate Risk Balanced Portfolio: This balanced approach to investing is designed to generate returns over an intermediate time period that exceed the rate of inflation, but will conversely incur some short term risk to invested capital. Investment performance should be judged over a two to three year time horizon versus a balanced portfolio of 40% stocks/40% bonds/20% money markets. Low Risk Balanced Portfolio: This portfolio is designed to generate stabilized rates of return on an annualized basis with low risk to invested capital. Returns over a one to two year period should exceed available money market returns, and provide some offset to inflation. Time horizon is one to two years. Performance should be compared to a portfolio of 20% stocks/40% bonds/40% money markets.

 

10

BALANCED PORTFOLIO

BALANCED ACCOUNT STYLES


CCM Investment Manager Profile

A sample Core Balanced Portfolio is displayed on the following pages. The sample is an actual portfolio managed by CCM Investment Advisers. CCM Balanced portfolios employ the same equity and fixed income selection processes as our single asset class portfolios. Additionally, our time-tested asset allocation model re-computes each portfolio’s optimal asset mix at least monthly.

Fowler Cary, President of CCM, developed the proprietary asset allocation model in the late 1970’s and has been using it in the management of balanced portfolios since 1981. The model is designed to maximize return and minimize risk for each client, subject to their investment objectives, risk tolerances and the expected returns and volatility of the capital markets. Preservation of principal is a major objective of our process. Our balanced portfolios can be customized to individual client parameters within our process.

Representative clients are chosen based on portfolio size and conformity to CCM investment styles. They are clients who have agreed to serve as references for CCM Investment Advisers, LLC. Past performance of these accounts should not be considered a guarantee of future performance. Sample portfolio is provided as supplemental information.

 

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BALANCED PORTFOLIO

SAMPLE CORE BALANCED PORTFOLIO


CCM Investment Manager Profile

     Quan ty    Security   

 

 

Unit Cost 

Total Cost 

  Price 

   

   

   

   

   

   

   

CASH EQUIVALENTS 

 

    Money Market Fund     

 

  100,000   FHLB 

 1.000% Due 06‐21‐17 

 

 4.500% Due 04‐01‐18  100,000   U.S. Treasury 

 3.625% Due 08‐15‐19  75,000   FNMA 

 1.625% Due 01‐21‐20  100,000   FHLB 

 2.375% Due 06‐10‐22  100,000   FFCB 

 2.670% Due 12‐20‐23    Accrued Interest          

  

  40,000   Georgia Power Co. 

 5.700% Due 06‐01‐17 

 

89,642

2.2

0.3

304

0.3  

   

   

   

   

   

     

100.57

100,576

100.15

100,150

2.5

1.0

1,000

0.9  

112.82

112,828

104.18

104,185

2.6

4.5

4,500

103.75

103,750

105.85

105,859

2.6

3.6

3,625

101.73

76,298

100.29

75,222

1.8

1.6

1,218

102.05

102,050

101.39

101,395

2.5

2.4

2,375

99.60

99,600

99.93

99,938

2.5

2.7

2,670

 

 

3,284

0.0   

 

 

 2.375% Due 07‐23‐19  50,000   Sara Lee Corp. 

 4.100% Due 09‐15‐20  75,000   Exelon Genera on Co. 

 4.000% Due 10‐01‐20  75,000   Lincoln Na onal Corp 

 4.850% Due 06‐24‐21  75,000   Ohio Power Co 

 5.375% Due 10‐01‐21  75,000   Wells Fargo  

 4.125% Due 08‐15‐23  100,000   Ebay Inc 

 3.450% Due 08‐01‐24  100,000   AT&T Inc 

 3.400% Due 05‐15‐25    Accrued Interest      

  

3.4   

1.6   

2.3   

2.6   

 

590,036

14.8

15,388

2.6  

   

   

   

   

   

   

   

     

108.18

43,274

101.81

40,725

1.0

5.7

2,280

5.5  

112.91

84,688

102.18

76,642

1.9

6.1

4,593

106.39

106,396

103.30

103,301

2.5

3.7

3,650

 3.650% Due 09‐14‐18  75,000   Morgan Stanley 

4.3   

595,102

75,000  JP Morgan Chase 

 6.125% Due 06‐27‐17  100,000   Verizon Communica ons 

   

 

CORPORATE BONDS 

   

89,642

100,000  Tennessee Valley Authority 

Annual Cur.    Income  Yield   

   

GOVERNMENT BONDS 

Market Pct.  Unit  Value  Assets  Income 

99.42

74,571

100.28

75,213

1.8

2.4

1,781

102.00

51,000

104.76

52,382

1.3

4.1

2,050

105.52

79,140

103.92

77,945

1.9

4.0

3,000

111.15

83,364

108.31

81,239

2.0

4.9

3,637

117.64

88,236

111.71

83,785

2.1

5.4

4,031

104.85

78,643

103.47

77,603

1.9

4.1

3,093

95.75

95,751

98.44

98,440

2.4

3.5

3,450

103.90

103,900

96.38

96,382

2.4

3.4

3,400

 

 

7,580

0.1   

 

 

888,965

 

12

871,243

21.9

34,967

5.9   

3.5   

2.3   

3.9   

3.8   

4.4   

4.8   

3.9   

3.5   

3.5   

  4.0   

BALANCED PORTFOLIO

SAMPLE CORE BALANCED PORTFOLIO DECEMBER 31, 2016


CCM Investment Manager Profile

     Quan ty    Security   

 

 

Unit Cost 

Total Cost 

  Price 

     

     

     

     

     

     

     

     

27,628 134.08  33,836  1669.00  42,778  85.11  35,293  1466.06  40,423  72.23  18,522  104.22 

53,632 66,760  42,555  36,651  36,115  46,899 

1.3 1.6  1.0  0.9  0.9  1.1 

2.8 0.0  2.2  0.0  2.4  1.6 

1,104 0  1,100  0  1,200  702 

2.0 0.0  2.5  0.0  3.3  1.4 

COMMON STOCK 

 

CONSUMER DISCRETIONARY:  400   Home Depot Inc.  40   NVR Inc.  500   Omnicom Group Inc.  25   Priceline Group Inc.  500   Target Corp.  450   Walt Disney Co. 

      CONSUMER STAPLES:  800   CVS Health Corp  750   Procter & Gamble  900   Tyson Foods, Inc. 

         

ENERGY: 200  425  500  1,200  400  350 

69.07 845.91  85.55      1,412.72  80.84  41.16 

 Allstate   Berkshire Hathaway Inc. Cl B   J. P. Morgan   PNC Financial Services Group   U.S. Bancorp   Wells Fargo & Co. 

      HEALTH CARE:   800   AbbVie Inc.  275   Amgen  550   Cardinal Health Inc.  400   Johnson & Johnson  650   Medtronic PLC  1,200   Pfizer Inc.  300   UnitedHealth Group Inc. 

 

Annual Cur.    Income  Yield   

         

   

198,484

282,612

7.1

4,106

1.4  

 

 

 

 

 

 

   

58.96 87.31  24.07 

47,171 65,484  21,663 

78.91 84.08  61.68 

63,128 63,060  55,512 

1.5 1.5  1.3 

2.0 2.7  0.9 

1,600 2,008  810 

2.5   3.1    1.4   

   

134,319

181,700

4.5

4,418

2.4  

 

 

 

 

 

 

   

152.30 100.65  82.09  38.64  81.68  98.58 

30,460 42,778  41,047  46,376  32,674  34,505 

123.96 117.70  90.26  54.09  86.41  83.95 

24,792 50,022  45,130  64,908  34,564  29,382 

0.6 1.2  1.1  1.6  0.8  0.7 

4.3 4.3  3.0  0.7  2.5  2.0 

850 1,836  1,500  864  1,008  700 

3.4 3.6  3.3  1.3  2.9  2.3 

   

227,843

248,799

6.2

6,758

2.7  

 

 

 

 

 

 

   

63.93 140.91  66.20  110.94  29.19  34.39 

44,753 21,136  39,722  44,376  29,197  27,518 

74.12 162.98  86.29  116.96  51.37  55.11 

51,884 24,447  51,774  46,784  51,370  44,088 

1.3 0.6  1.3  1.1  1.2  1.1 

1.3 0.0  1.8  2.0  1.1  1.5 

924 0  1,056  816  1,120  1,216 

1.7 0.0  2.0  1.7  2.1  2.7 

   

206,705

270,347

6.8

5,132

1.8  

 

 

 

 

 

 

   

33.91 80.61  53.00  115.78  52.95  34.91  142.74 

27,130 22,170  29,152  46,315  34,423  41,902  42,823 

62.62 146.21  71.97  115.21  71.23  32.48  160.04 

50,096 40,207  39,583  46,084  46,299  38,976  48,012 

1.2 1.0  0.9  1.1  1.1  0.9  1.2 

2.6 4.6  1.8  3.2  1.7  1.3  2.5 

2,048 1,265  987  1,280  1,118  1,536  750 

4.0 3.1  2.4  2.7  2.4  3.9  1.5 

243,918

309,258

7.7

8,984

2.9  

   

   

CNOOC Limited ADR   Chevron Corp   Exxon Mobil Corp.   Halliburton Co.   Phillips 66   Schlumberger Limited 

      FINANCIALS:  700  150  600  400  1,000  800 

Market Pct.  Unit  Value  Assets  Income 

   

   

 

13

         

         

           

BALANCED PORTFOLIO

SAMPLE CORE BALANCED PORTFOLIO DECEMBER 31, 2016


CCM Investment Manager Profile

     Quan ty    Security   

 

INDUSTRIALS:   150   3M Company  500   Caterpillar Inc Del  325   FedEx Corp  400   General Dynamics  700   Textron Inc. 

      INFORMATION TECHNOLOGY:  1,200   Ac vision Blizzard Inc.  75   Alphabet Inc. Class A  700   Apple Inc.  1,900   Cisco Systems  700   Computer Sciences Corp.  500   Fiserv Inc.  300   Lam Research  1,100   Microso  Corp.  900   Qualcomm Inc.  600   Visa Inc.  1,000   Western Digital Corp. 

      MATERIALS:    500   Dow Chemical Co.  900   Interna onal Paper 

      TELECOM SERVICE:  800   AT&T Corp.  1,000   Verizon Communica ons 

         

UTILITIES: 1,600   Exelon Corp 

      REAL ESTATE:    1,600   Host Hotels and Resorts  150   Public Storage Inc. 

     

   COMMON STOCK Total   

 

Unit Cost 

Total Cost 

  Price 

 

 

 

 

 

 

 

 

 

159.65 75.00  175.01  108.71  32.53 

23,948 37,503  56,878  43,486  22,776 

178.57 92.74  186.20  172.66  48.56 

26,785 46,370  60,515  69,064  33,992 

0.6 1.1  1.5  1.7  0.8 

4.4 3.1  1.6  3.0  0.1 

666 1,540  520  1,216  56 

2.4 3.3  0.8  1.7  0.1 

   

184,593

236,726

5.9

3,998

1.6  

 

 

 

 

 

 

   

36.97 650.31  62.28  21.43  35.36  88.02  80.15  43.37  51.08  20.47  52.08 

44,364 48,773  43,599  40,727  24,752  44,014  24,047  47,711  45,975  12,283  52,081 

36.11 792.45  115.82  30.22  59.42  106.28  105.73  62.14  65.20  78.02  67.95 

43,332 59,433  81,074  57,418  41,594  53,140  31,719  68,354  58,680  46,812  67,950 

1.0 1.4  2.0  1.4  1.0  1.3  0.7  1.7  1.4  1.1  1.7 

0.3 0.0  2.3  1.0  0.6  0.0  1.8  1.6  2.1  0.7  2.0 

312 0  1,596  1,976  392  0  540  1,716  1,908  396  2,000 

   

428,332

609,506

15.3

10,836

1.7  

 

 

 

 

 

 

   

46.60 42.68 

23,304 38,416 

57.22 53.06 

28,610 47,754 

0.7 1.2 

1.8 1.9 

920 1,665 

3.2   3.4   

   

61,720

76,364

1.9

2,585

3.3  

 

 

 

 

 

 

   

43.44 43.91 

34,759 43,916 

42.53 53.38 

34,024 53,380 

0.8 1.3 

2.0 2.3 

1,568 2,310 

4.6   4.3   

   

78,676

87,404

2.1

3,878

4.4  

 

 

 

 

 

 

   

34.45

55,124

35.49

56,784

1.4

1.3

2,035

3.5  

   

55,124

56,784

1.4

2,035

3.5  

 

 

 

 

 

 

   

18.36 250.36 

29,391 37,554 

18.84 223.50 

30,144 33,525 

0.7 0.8 

0.8 8.0 

1,280 1,200 

4.2   3.5   

 

66,946

63,669

1.6

2,480

3.8  

  2.2   

   

   

   

         

   

TOTAL PORTFOLIO 

 

Market Pct.  Unit  Value  Assets  Income 

Annual Cur.    Income  Yield   

1,886,664

2,423,171

60.9

55,211

 

3,460,374

 

14

3,974,093 100.0 

  105,872 

0.7 0.0  1.9  3.4  0.9  0.0  1.7  2.5  3.2  0.8  2.9 

       

                   

  2.6   

BALANCED PORTFOLIO

SAMPLE CORE BALANCED PORTFOLIO DECEMBER 31, 2016


CCM ‐ Manager Profile 

 

15

FIXED INCOME PORTFOLIO

FIXED INCOME PORTFOLIO


CCM Investment Manager Profile

Our fixed income selection process is an extension of the relative value philosophy of our investment management system. Our philosophy dictates that we manage risk first. Through the management of risk we ascertain value, which ultimately drives performance. We measure the potential return (both income and change in market value) of a fixed income investment against the market and credit risks associated with this type of investment. Our objective is to produce superior returns over the long term, consistent with our philosophy of preservation of principal.

Since interest rates are a reflection of business cycle conditions and inflation expectations, fixed income selection begins with the formulation of our macro-economic forecast. The economic forecast includes our expectations for changes in interest rates and the yield curve. The portfolio’s target duration (a measure of bond volatility) is then determined based on these expectations and the client’s investment policy statement. Unlike most managers, however, our forecasts are updated at least monthly. This provides us the flexibility to make mid-course corrections in duration, rather than dramatic shifts in maturities or between bonds and cash.

Once target duration has been established for each fixed income approach, the maturity structure appropriate for each client’s risk tolerance is determined to maximize returns within those risk parameters. Based on anticipated shifts in the yield curve, we implement active bond management strategies to appropriately weight the maturities in the portfolio. Maturity configurations can take the form of laddered, bell or barbell shaped maturity schedules.

Having determined portfolio duration and maturity targets, the individual security selection process begins with relative value analysis. This involves the evaluation of current market sector spreads, quality spreads, and specific security factors. Sector and quality spreads are monitored versus long term averages after considering business cycle and specific industry conditions. Default and maturity premiums are tracked and analyzed on an ongoing basis. The credit analysis process in the corporate and municipal sectors consists of fundamental research utilizing public filings with the SEC and is supplemented by credit research from Standard and Poor’s, Moody’s and other traditional bond rating firms.

We actively manage our fixed income portfolios to take advantage of inefficiencies within the different sectors of the fixed income markets. Implementation of these strategies in identifying undervalued bonds adds incremental return to the original portfolio duration decision. Emphasis is placed on quality, diversification, liquidity and call protection.

 

16

FIXED INCOME PORTFOLIO

FIXED INCOME INVESTMENT PHILOSOPHY


CCM Investment Manager Profile

The following pages describe a sample Fixed Income Portfolio. The sample is an actual portfolio managed by CCM Investment Advisers.

The actual composition of a fixed income portfolio managed by CCM is quite dynamic over time. Sector allocations between Government and Corporate bonds are changed based upon the prevailing yield spread. More importantly, the duration and convexity of the portfolio are actively managed to take advantage of a constantly changing interest rate environment.

Representative clients are chosen based on portfolio size and conformity to CCM investment styles. They are clients who have agreed to serve as references for CCM Investment Advisers, LLC. Past performance of these accounts should not be considered a guarantee of future performance. sample portfolio is provided as supplemental information.

 

17

FIXED INCOME PORTFOLIO

SAMPLE FIXED INCOME PORTFOLIO


CCM Investment Manager Profile

     Quan ty    Security   

 

 

Unit Cost 

Total Cost 

  Price 

   

   

   

   

   

   

   

CASH EQUIVALENTS 

 

    Money Market Fund     

 

400,000  FFCB 

 4.875% Due 01‐17‐17 

 

 0.625% Due 08‐31‐17  15,000   U.S. Treasury 

 3.500% Due 02‐15‐18  175,000   FHLMC 

 0.875% Due 03‐07‐18  200,000   FHLMC 

 3.750% Due 03‐27‐19  200,000   FNMA 

 1.625% Due 01‐21‐20  200,000   U.S Treasury 

 1.250% Due 01‐31‐20  300,000   U.S. Treasury 

 2.625% Due 08‐15‐20  300,000   FHLB 

 1.375% Due 02‐18‐21  75,000   FHLB 

 3.625% Due 03‐12‐21  300,000   FHLB 

 2.875% Due 12‐10‐21  300,000   FHLMC 

 2.375% Due 01‐13‐22  250,000   FFCB 

 1.830% Due 06‐15‐22  150,000   FHLB 

 2.125% Due 03‐10‐23  300,000   FHLB 

 4.750% Due 03‐10‐23  200,000   FHLB 

 2.220% Due 03‐28‐23  400,000   FHLB 

 1.830% Due 09‐22‐23  250,000   FHLB 

 2.375% Due 03‐14‐25  200,000   FNMA 

 2.125% Due 04‐24‐26  300,000   FFCB 

 2.650% Due 05‐04‐26    Accrued Interest      

Annual Cur.    Income  Yield   

   

87,328

87,328

1.0

0.3

296

0.3  

   

   

   

   

   

   

     

108.69

434,766

100.17

400,709

4.6

4.9

19,500

4.8  

98.74

444,339

99.92

449,648

5.2

0.6

2,812

450,000  U.S. Treasury 

Market Pct.  Unit  Value  Assets  Income 

   

GOVERNMENT BONDS 

 

DECEMBER 31, 2016

104.48

15,673

102.80

15,420

0.1

3.5

525

99.66

174,414

99.87

174,773

2.0

0.9

1,531

98.84

197,698

105.34

210,688

2.4

3.8

7,500

100.24

200,480

100.29

200,592

2.3

1.6

3,250

100.44

200,882

99.26

198,531

2.3

1.3

2,500

100.35

301,054

103.39

310,195

3.6

2.6

7,875

100.10

300,318

98.10

294,318

3.4

1.4

4,125

109.39

82,047

106.48

79,865

0.9

3.6

2,718

105.31

315,957

103.80

311,403

3.6

2.9

8,625

105.81

317,447

101.64

304,922

3.5

2.4

7,125

100.26

250,650

97.83

244,589

2.8

1.8

4,575

102.65

153,985

98.89

148,336

1.7

2.1

3,187

116.27

348,836

113.46

340,405

3.9

4.8

14,250

99.99

199,984

98.97

197,958

2.3

2.2

4,440

99.92

399,700

95.05

380,218

4.4

1.8

7,320

101.90

254,750

98.08

245,201

2.8

2.4

5,937

102.03

204,076

94.56

189,138

2.2

2.1

4,250

99.98

299,940

100.04

300,130

3.5

2.7

7,950

 

 

 

 

5,033,700

 

36,653

5,097,002

 

18

0.4    59.0 

119,997 

0.6   

3.4   

0.8   

3.5   

1.6   

1.2   

2.5   

1.4   

3.4   

2.7   

2.3   

1.8   

2.1   

4.1   

2.2   

1.9   

2.4   

2.2   

2.6   

  2.4   

FIXED INCOME PORTFOLIO

SAMPLE FIXED INCOME PORTFOLIO


CCM Investment Manager Profile

     Quan ty    Security    GNMA 

         

 

Unit Cost 

Total Cost 

  Price 

   

   

   

   

   

   

   

   

103.34

16,987

102.62

16,868

0.1

5.5

904

99.42

2,678

100.38

2,703

0.0

8.0

215

93

0.0   

 

 

16,437  GNJO Pool #627271 

 5.500% Due 04‐15‐19 

2,693  GNSF Pool #353282 

 

 8.000% Due 05‐15‐23    Accrued Interest          

 

 

 

 

CORPORATE BONDS 

  400,000   Walt Disney Corp 

 5.875% Due 12‐15‐17     5.750% Due 02‐01‐18  300,000   Occidental Petroleum 

 1.500% Due 02‐15‐18  150,000   Oracle Corp. 

 5.750% Due 04‐15‐18  175,000   Merrill Lynch 

 6.500% Due 07‐15‐18  300,000   Barclays Bank 

 2.500% Due 02‐20‐19  100,000   Union Electric Co. 

 5.100% Due 10‐01‐19  250,000   Blackrock Inc 

 5.000% Due 12‐10‐19  100,000   General Electric Cap Corp 

 5.500% Due 01‐08‐20  200,000   JP Morgan 

 4.625% Due 05‐10‐21  175,000   Berkshire Hathaway 

 3.400% Due 01‐31‐22  100,000   PPL Electric U li es 

 2.500% Due 09‐01‐22  100,000   NStar Electric Co 

 2.375% Due 10‐15‐22  200,000   Goldman Sachs 

 4.000% Due 03‐03‐24  200,000   American Express 

 3.625% Due 12‐05‐24  300,000   Abbo  Laboratories 

 2.950% Due 03‐15‐25    Accrued Interest          

  

Market Pct.  Unit  Value  Assets  Income 

Annual Cur.    Income  Yield   

    5.3   

7.9   

 

19,665

19,665

0.2

1,119

5.7  

   

   

   

   

   

   

   

     

103.21

412,844

104.35

417,407

4.8

5.9

23,500

5.6  

100.22

200,440

104.25

208,519

2.4

5.8

11,500

200,000  Wachovia Corp. 

 

DECEMBER 31, 2016

100.35

301,056

100.09

300,272

3.5

1.5

4,500

105.00

157,500

105.64

158,468

1.8

5.8

8,625

119.52

209,160

106.66

186,665

2.1

6.5

11,375

101.45

304,350

100.27

300,834

3.5

2.5

7,500

111.66

111,663

107.98

107,987

1.2

5.1

5,100

119.32

298,322

108.60

271,512

3.1

5.0

12,500

102.82

102,827

109.56

109,569

1.2

5.5

5,500

112.45

224,916

107.67

215,346

2.5

4.6

9,250

106.10

185,685

104.37

182,649

2.1

3.4

5,950

103.33

103,335

98.39

98,392

1.1

2.5

2,500

102.62

102,622

98.20

98,207

1.1

2.4

2,375

103.38

206,774

103.74

207,483

2.4

4.0

8,000

103.49

206,986

100.41

200,829

2.3

3.6

7,250

99.63

298,890

96.34

289,025

3.3

3.0

8,850

 

 

32,854

0.3   

 

 

 

3,427,371

TOTAL PORTFOLIO 

 

 

8,631,368

 

19

3,386,025

39.7

8,526,721 100.0 

134,275 

  255,688 

5.5   

1.4   

5.4   

6.0   

2.4   

4.7   

4.6   

5.0   

4.2   

3.2   

2.5   

2.4   

3.8   

3.6   

3.0   

  4.0   

  3.0   

FIXED INCOME PORTFOLIO

SAMPLE FIXED INCOME PORTFOLIO


CCM ‐ Manager Profile 

 

20

EQUITY PORTFOLIO

EQUITY PORTFOLIO


CCM Investment Manager Profile

The CCM stock selection process is an extension of the relative value philosophy prevalent in our investment management system. The stock market is rife with numerous inefficiencies caused by the inability of investors to rationally and systematically process relevant information. CCM exploits this potential by utilizing a relative value philosophy based on quantitative and qualitative processes to develop an equity portfolio that is designed to provide relative out-performance with less risk than the relevant benchmark, the Standard and Poors’ 500 stock index.

Investment managers are generally characterized as either “growth” or “value” oriented.

CCM EQUITY STYLE

Growth

managers typically pursue stocks characterized by high earnings growth or a high price to book ratio while value managers are often attracted to more stable securities with low price to earnings ratios and/or healthy dividend yields. Focusing on value in the absolute sense can have the effect of leading investors to areas of the market that are inexpensive, but which are so for good reason. The CCM process is concerned with valuation in a relative sense, that is, how securities compare to stocks of similar characteristics. Stocks are held

Data is from CCM’s 12/31/16 model equity portfolio. Capitalization points are based on each security’s relative market cap. Value/Core/Growth based on relative price/book ratio. CCM baseline is 75% large-cap/15% mid/10% small,

because they are inexpensive relative to their peers.

At CCM, we seek long-term relative value.

CCM EQUITY PORTFOLIO

We are not short term traders or

Investment Style 

Rela ve Value 

Investment Approach 

Bo om‐Up

Average Capitaliza on 

Large

Average Number of Holdings 

50

Appropriate Benchmark 

S&P 500 

Risk Managed 

Yes

Tax Efficient 

Yes

 

speculators. Our approach searches for opportunities to profit in client portfolios over an extended time horizon and only assumes risk consistent with proportional expected return.

21

EQUITY PORTFOLIO

EQUITY INVESTMENT PHILOSOPHY


CCM Investment Manager Profile

The security selection process begins with CCM’s proprietary Securities Valuation Model (SVM), a quantitative screen of the 1,500 securities in CCM’s research database. The SVM is a multi-factor model utilizing both “growth” and “value” inputs. Key inputs include: Normalized P/E:

the security’s price/earnings multiple adjusted for its historic price/earnings “channel”

Mispricing:

the difference between a stock’s expected return and its appropriate position on the Security Market Plane

Present Value Ratio: the present value of current or implied dividends Earnings Strength:

the consensus forecast earnings growth rate

Earnings Surprise:

the time-weighted change in consensus earnings forecasts

All rankings are computed relative to the security’s peers and compiled based on CCM’s proven formula to derive the security’s final SVM score. Those companies ranked in the upper three quintiles (top 60%) are considered to be buy or hold candidates, while those in the lowest two quintiles are sell candidates.

After a stock passes the screening process, it is analyzed on a fundamental basis by a member of the analyst team. Each analyst is responsible for the fundamental research of stocks in specific economic market sectors. The weekly Investment Policy Meeting is the primary forum for new information on stocks that are currently held, or are potential buy or sell candidates. Research tools include public information such as regular SEC financial reports, Wall Street firms’ research and reporting, and reports from third-party financial analysis services such as Applied Finance Group, Argus Research, and Morningstar.

Fundamental research is augmented with CCM’s Economic Forecast and Sector Studies, a monthly compilation and analysis of current economic conditions, as well as valuation divergences among the various industrial, valuation and capitalization sectors within the market. While the investment process is typically described as “bottom-up”, a more accurate depiction is a bottom-up approach with a clear view of the top. Without question, the economic cycle and prevailing interest rates have a profound effect on the equity market, and ignoring this critical input will have a profound effect on a portfolio’s risk and return characteristics.

 

22

EQUITY PORTFOLIO

SECURITY SELECTION PROCESS


CCM Investment Manager Profile

Ultimately, the equity selection process results in the structuring of broadly diversified stock portfolios (35 to 65 positions) across eleven distinct industry groups. The strategy is primarily large-cap, as defined by average market capitalization, although the investment policy does allow for up to approximately 30% of the portfolio to be invested in mid-cap ($1 to $5 billion) and small-cap positions (under $1 billion) under favorable market conditions.

12/31/16 Data

CCM Model Portfolio

S&P 500 Index

Number of Holdings

51

500

Average Market Cap ($B)

125.0

40.1

Weighted Market Cap ($B)

132.7

140.7

Trailing Price/Earnings

24.5

22.6

Forecast Price/Earnings

17.7

18.7

Price/Book

4.3

5.3

Yield

2.2%

2.1%

Beta

1.02

1.00

R-Squared

.96

1.00

CCM strives to provide excess absolute return while maintaining a risk profile that is less than the S&P 500. Portfolio risk is measured both in terms of volatility as compared to the equity market as well as correlation. Security-specific risk is managed with a 5% limit on an individual security’s representation in the portfolio. The strategy also controls for industry risk—large industry groups are over or underweighted by no more than 50% of their S&P 500 weighting. Smaller industry groups comprising less than 8% of the S&P 500 may be overweighted up to two times the S&P exposure, and may have no exposure under certain circumstances.

As long-term investors, portfolio turnover is relatively low, averaging 40% in most circumstances. Because all CCM portfolios are managed individually, the impact of taxation at the portfolio level can be considered. Although turnover is low, incidences will occur when prudent investment management will indicate that a short-term gain should be realized. CCM makes every effort to “wash” both short-term and long-term gains with corresponding losses when economically feasible.

 

23

EQUITY PORTFOLIO

CCM EQUITY PORTFOLIO


CCM Investment Manager Profile

A sample Equity Portfolio is displayed on the following pages. The sample is an actual portfolio managed by CCM Investment Advisers. Please note the broad diversification across economic sectors, as well as among the individual securities. Portfolios of $1 million or less typically will have 35 to 50 positions, whereas portfolios larger than $1 million may have as many as 65 positions. Regardless of the portfolio size, the industry weightings will be very similar. Maximum weightings for each issuer are limited to 5% of portfolio value. Should securities appreciate above the maximum level, positions are re-balanced to meet portfolio standards. Sector allocations cannot deviate more than 50% from the corresponding sector weightings in the S&P 500 index. CCM equity portfolios are structured to have undervalued stocks with higher growth characteristics than the market, yet similar or lower volatility measures than the market.

Representative clients are chosen based on portfolio size and conformity to CCM investment styles. They are clients who have agreed to serve as references for CCM Investment Advisers, LLC. Past performance of these accounts should not be considered a guarantee of future performance Sample portfolio is provided as supplemental information.

 

24

EQUITY PORTFOLIO

SAMPLE EQUITY PORTFOLIO


CCM Investment Manager Profile

SAMPLE EQUITY PORTFOLIO

 

 

Unit Cost 

Total Cost 

  Price 

   

   

   

   

   

   

   

40,046

40,046

1.0

0.3

136

0.3  

     

     

     

     

     

     

       

50,726 134.08  45,776  1669.00  72,602  85.11  56,440  1466.06  73,985  72.23  36,158  104.22 

93,856 83,450  76,599  58,642  65,007  72,954 

2.4 2.1  1.9  1.5  1.6  1.8 

2.8 0.0  2.2  0.0  2.4  1.6 

1,932 0  1,980  0  2,160  1,092 

2.0 0.0  2.5  0.0  3.3  1.4 

CASH EQUIVALENTS 

 

    Money Market Fund     

COMMON STOCK 

 

CONSUMER DISCRETIONARY:  700   Home Depot Inc.  50   NVR Inc.  900   Omnicom Group Inc.  40   Priceline Group Inc.  900   Target Corp.  700   Walt Disney Co. 

      CONSUMER STAPLES:  1,200   CVS Health Corp  1,000   Procter & Gamble  1,400   Tyson Foods, Inc. 

         

ENERGY: 300  700  800  1,400  700  700 

FINANCIALS: 1,000  400  500  600  1,800  1,500 

72.46 915.52  80.66  1,411.00  82.20  51.65 

 Allstate   Berkshire Hathaway Inc. Cl B   J. P. Morgan   PNC Financial Services Group   U.S. Bancorp   Wells Fargo & Co. 

      HEALTH CARE:   1,200   AbbVie Inc.  500   Amgen  800   Cardinal Health Inc.  600   Johnson & Johnson  1,000   Medtronic PLC  2,000   Pfizer Inc.  400   UnitedHealth Group Inc. 

 

Annual Cur.    Income  Yield   

   

         

   

335,688

450,508

11.5

7,164

1.5  

 

 

 

 

 

 

   

63.88 87.32  37.90 

76,659 87,324  53,064 

78.91 84.08  61.68 

94,692 84,080  86,352 

2.4 2.1  2.2 

2.0 2.7  0.9 

2,400 2,678  1,260 

2.5   3.1    1.4   

   

217,048

265,124

6.8

6,338

2.3  

 

 

 

 

 

 

   

137.08 99.48  79.03  41.92  78.67  93.17 

41,126 69,642  63,226  58,691  55,072  65,223 

123.96 117.70  90.26  54.09  86.41  83.95 

37,188 82,390  72,208  75,726  60,487  58,765 

0.9 2.1  1.8  1.9  1.5  1.5 

4.3 4.3  3.0  0.7  2.5  2.0 

1,275 3,024  2,400  1,008  1,764  1,400 

   

352,982

386,764

9.9

10,871

2.8  

 

 

 

 

 

 

   

64.95 141.62  66.17  114.22  30.37  30.66 

64,959 56,651  33,089  68,536  54,683  45,999 

74.12 162.98  86.29  116.96  51.37  55.11 

74,120 65,192  43,145  70,176  92,466  82,665 

1.9 1.6  1.1  1.8  2.3  2.1 

1.3 0.0  1.8  2.0  1.1  1.5 

1,320 0  880  1,224  2,016  2,280 

1.7 0.0  2.0  1.7  2.1  2.7 

   

323,920

427,764

11.0

7,720

1.8  

 

 

 

 

 

 

   

44.72 68.24  56.47  115.66  46.98  34.34  142.64 

53,670 34,124  45,176  69,397  46,985  68,697  57,059 

62.62 146.21  71.97  115.21  71.23  32.48  160.04 

75,144 73,105  57,576  69,126  71,230  64,960  64,016 

1.9 1.8  1.4  1.7  1.8  1.6  1.6 

2.6 4.6  1.8  3.2  1.7  1.3  2.5 

3,072 2,300  1,436  1,920  1,720  2,560  1,000 

375,112

475,157

12.2

14,008

   

   

CNOOC Limited ADR   Chevron Corp   Exxon Mobil Corp.   Halliburton Co.   Phillips 66   Schlumberger Limited 

     

     

Market Pct.  Unit  Value  Assets  Income 

EQUITY PORTFOLIO

     Quan ty    Security 

DECEMBER 31, 2016

   

   

 

25

3.4 3.6  3.3  1.3  2.9  2.3 

4.0 3.1  2.4  2.7  2.4  3.9  1.5 

         

         

           

2.9  


CCM Investment Manager Profile

     Quan ty    Security   

 

INDUSTRIALS:   400   3M Company  1,000   Caterpillar Inc Del  500   FedEx Corp  400   General Dynamics  2,000   Textron Inc. 

      INFORMATION TECHNOLOGY:  2,000   Ac vision Blizzard Inc.  150   Alphabet Inc. Class A  1,000   Apple Inc.  2,500   Cisco Systems  1,500   Computer Sciences Corp.  750   Fiserv Inc.  800   Lam Research  1,200   Microso  Corp.  1,400   Qualcomm Inc.  1,000   Visa Inc.  1,500   Western Digital Corp. 

      MATERIALS:    800   Dow Chemical Co.  1,400   Interna onal Paper 

      TELECOM SERVICE:  1,500   AT&T Corp.  1,500   Verizon Communica ons 

 

Unit Cost 

Total Cost 

  Price 

 

 

 

 

 

 

 

 

 

162.59 68.74  170.06  103.02  34.80 

65,039 68,740  85,034  41,211  69,610 

178.57 92.74  186.20  172.66  48.56 

71,428 92,740  93,100  69,064  97,120 

1.8 2.3  2.3  1.7  2.4 

4.4 3.1  1.6  3.0  0.1 

1,776 3,080  800  1,216  160 

2.4 3.3  0.8  1.7  0.1 

   

329,636

423,452

10.8

7,032

1.6  

 

 

 

 

 

 

   

32.05 667.57  46.94  22.17  33.06  88.43  91.51  45.80  51.59  21.51  45.36 

64,116 100,135  46,949  55,434  49,593  66,325  73,215  54,964  72,233  21,519  68,053 

36.11 792.45  115.82  30.22  59.42  106.28  105.73  62.14  65.20  78.02  67.95 

72,220 118,867  115,820  75,550  89,130  79,710  84,584  74,568  91,280  78,020  101,925 

1.8 3.0  2.9  1.9  2.2  2.0  2.1  1.9  2.3  2.0  2.6 

0.3 0.0  2.3  1.0  0.6  0.0  1.8  1.6  2.1  0.7  2.0 

520 0  2,280  2,600  840  0  1,440  1,872  2,968  660  3,000 

   

672,540

981,674

25.2

16,180

1.6  

 

 

 

 

 

 

   

44.39 42.66 

35,517 59,736 

57.22 53.06 

45,776 74,284 

1.1 1.9 

1.8 1.9 

1,472 2,590 

3.2   3.4   

   

95,254

120,060

3.0

4,062

3.3  

 

 

 

 

 

 

   

43.21 50.24 

64,825 75,373 

42.53 53.38 

63,795 80,070 

1.6 2.0 

2.0 2.3 

2,940 3,465 

4.6   4.3   

   

140,199

143,865

3.7

6,405

4.4  

 

 

 

 

 

 

   

33.90

84,757

35.49

88,725

2.2

1.3

3,180

3.5  

   

84,757

88,725

2.2

3,180

3.5  

 

 

 

 

 

 

   

15.99 251.69 

31,980 50,339 

18.84 223.50 

37,680 44,700 

0.9 1.1 

0.8 8.0 

1,600 1,600 

4.2   3.5   

 

82,319

82,380

2.1

3,200

3.8  

  2.2   

   

   

   

         

   

     

   

UTILITIES: 2,500   Exelon Corp 

REAL ESTATE:    2,000   Host Hotels and Resorts  200   Public Storage Inc. 

     

   COMMON STOCK Total   

DECEMBER 31, 2016

   

TOTAL PORTFOLIO 

 

Market Pct.  Unit  Value  Assets  Income 

Annual Cur.    Income  Yield   

3,009,461

3,845,473

98.9

86,161

 

3,049,507

 

3,885,519 100.0 

 

86,297

26

0.7 0.0  1.9  3.4  0.9  0.0  1.7  2.5  3.2  0.8  2.9 

       

                   

  2.2   

EQUITY PORTFOLIO

SAMPLE EQUITY PORTFOLIO


CCM ‐ Manager Profile 

 

27

PERFORMANCE COMPOSITE

PERFORMANCE COMPOSITE


28

3.8% 2.2%       6.1% 

3.9% 1.9%      5.9% 

 

  3.1% 

  4.7% 

 

2.0% 1.0% 

3.1% 1.5% 

 

Equity / Fixed Income 

‐19.2% 29.5%  15.5%  11.9%  10.6%  11.8%  ‐36.2%  35.5%  13.0%  2.4%  14.5%  31.5%  15.2%  ‐0.7%  9.5%  7.8%  11.4%  13.5%  11.7%  11.8%  10.5%  7.8%  19.7%    6.1%  3.2%        9.5% 

 

0.8% 1.0%      1.8% 

8.1% 3.6%  2.4%  1.8%  4.5%  6.8%  4.0%  5.4%  4.0%  4.4%  3.6%  ‐1.0%  2.8%  1.5%  1.7%  2.0%  1.8%  1.7%  1.7%  2.4%  1.9%  3.3%  2.2%   

 

2.4%

 

1.2% 1.2% 

7.0% 2.9%  2.0%  1.3%  3.4%  5.1%  4.5%  5.0%  2.3%  5.3%  2.5%  ‐0.3%  3.1%  2.4%  0.8%  2.1%  1.9%  1.7%  1.4%  2.3%  1.8%  3.0%  1.9%   

 

50%   Stock    50%  Bonds 

5.3% 2.5%        8.0% 

 

0.5% 0.6%      1.1% 

 

0.8% 0.8%        1.7% 

 

 

3.5% 2.4%      6.0% 

‐21.5% 6.6%  5.5%  ‐5.9%  26.1%  2.2%  1.4%  16.5%  12.4%  1.0%  0.6%  7.6%  8.9%  0.4%  ‐0.1%  3.7%  7.7%  3.0%  2.0%  9.7%  8.8%  5.4%  3.7%  6.5%  ‐38.2%  2.6%  3.0%  ‐17.1%  32.0%  3.9%  3.5%  15.6%  9.9%  2.6%  0.9%  11.3%  ‐0.4%  2.9%  3.8%  5.7%  11.3%  2.2%  1.1%  10.5%  27.9%  ‐2.4%  ‐1.7%  13.9%  12.1%  1.4%  1.7%  9.9%  ‐3.4%  0.1%  1.0%  1.0%  6.5%  0.3%  ‐0.6%  7.6%  4.8%  0.6%  0.7%  6.1%  11.4%  1.8%  1.9%  5.4%  10.4%  0.3%  0.3%  8.5%  11.4%  1.7%  1.4%  4.8%  8.7%  1.0%  0.9%  8.5%  10.2%  1.8%  1.7%  4.2%  4.8%  1.9%  1.6%  6.1%  19.2%  2.2%  1.9%  9.3%         

Fixed Muni  Fixed  Muni  Equity  Equity  Income  Bond  Income  Bond  Wrap  Wrap  Wrap  Wrap  Wrap  Wrap 

2017 Quarterly Performance 

2.7% 1.7%        4.5% 

* Pure gross returns are supplemental data.   † 3‐year ex‐post Standard Devia on    

4.7% 2.6%        7.4% 

1st Qtr  2nd Qtr  3rd Qtr  4th Qtr  YTD 

‐5.5% 0.2%  ‐12.8%  ‐8.2%  ‐2.6%  16.1%  9.9%  17.8%  13.0%  7.0%  9.6%  7.5%  9.1%  6.7%  4.6%  7.6%  6.4%  6.4%  4.7%  3.5%  8.1%  7.4%  5.9%  5.1%  4.5%  9.1%  7.3%  7.4%  6.2%  4.4%  ‐22.8%  ‐12.8%  ‐29.7%  ‐25.1%  ‐15.3%  21.2%  15.1%  22.4%  18.0%  12.1%  9.5%  7.5%  7.4%  6.5%  4.6%  2.6%  2.2%  ‐0.1%  ‐0.2%  ‐0.6%  9.4%  6.8%  8.1%  6.4%  3.8%  17.1%  11.9%  18.3%  13.9%  8.8%  9.3%  7.1%  8.9%  6.3%  4.2%  0.4%  0.4%  ‐3.1%  ‐2.3%  ‐2.3%  5.4%  3.9%  3.9%  2.5%  1.1%  5.0%  3.8%  3.1%  2.1%  0.9%  6.1%  4.3%  8.2%  6.1%  4.3%  8.2%  6.0%  7.0%  5.2%  3.0%  6.1%  4.2%  7.8%  6.0%  4.1%  7.6%  5.6%  6.0%  4.6%  2.7%  5.5%  3.8%  6.9%  5.4%  3.7%  5.5%  4.7%  3.4%  2.5%  1.8%  11.9%  7.6%  14.2%  11.6%  7.4%           

Core Moderate  Low  Core  Moderate  Low    Balanced  Risk     Risk  Balanced  Risk    Risk  Wrap  Wrap  Wrap  Wrap  Wrap  Wrap 

‐10.3% 21.0%  12.1%  9.3%  8.8%  10.4%  ‐27.5%  25.7%  10.4%  2.7%  11.1%  21.6%  11.9%  ‐0.3%  6.8%  6.0%  8.2%  10.0%  8.0%  9.0%  7.1%  6.3%  14.5%   

Pure Gross of Fees Returns*  Net of Maximum Wrap Fee 

 

2002 2003  2004  2005  2006  2007  2008  2009  2010  2011  2012  2013  2014  2015  2016  3 Year  Std Dev †  5 Year  Std Dev  7 Year  Std Dev  10 Year  Std Dev   

     

0.5% 7.9%  4.4%  3.2%  6.6%  6.0%  ‐5.3%  7.5%  5.9%  4.1%  5.1%  4.9%  5.1%  0.5%  3.7%  3.1%  2.4%  3.9%  2.0%  4.2%  1.8%  3.7%  3.7%   

‐22.1% 28.7%  10.9%  4.9%  15.8%  5.5%  ‐37.0%  26.5%  15.1%  2.1%  16.0%  32.4%  13.7%  1.4%  12.0%  8.9%  10.6%  14.7%  11.2%  12.8%  10.4%  6.9%  18.9%   

11.0% 4.7%  4.2%  2.4%  3.8%  7.2%  6.0%  4.5%  6.6%  8.7%  4.8%  ‐2.4%  6.0%  0.1%  3.0%  3.0%  3.5%  2.3%  3.4%  3.8%  3.9%  4.4%  3.4%   

4.8%

 

2.8% 1.9% 

 

1.6% 1.4%        3.0% 

 

6.1% 3.1%        9.3% 

 

1.0% 1.7%      2.7% 

 

1.4% 1.3%        2.7% 

10.4% 4.8%  3.4%  1.9%  3.8%  5.0%  4.6%  7.2%  3.0%  7.6%  3.4%  ‐0.1%  3.1%  2.3%  0.019%  1.8%  2.3%  1.7%  1.7%  2.7%  2.6%  3.6%  2.6%   

BofA     Barclays  Merrill  Gov't/  Lynch 1‐12  Credit  Year      Bonds  Municipal 

Fixed Income 

Index Quarterly Performance 

‐4.3% 13.3%  6.4%  3.5%  8.7%  6.1%  ‐13.5%  12.7%  9.1%  4.6%  8.3%  11.0%  7.8%  0.8%  6.1%  4.9%  4.3%  6.8%  3.8%  6.8%  3.3%  5.1%  7.4%   

40%    20%    Stock    Stock    S&P  500  40%   40%   Bonds   Bonds   Stocks  20% Cash  40% Cash 

Low             Equity  Risk 

Comparable Indices 

Pure Gross of Fees       Net of Maximum Wrap  Core   Moderate  Returns*  Fee  Balanced  Risk 

CCM INVESTMENT ADVISERS PERFORMANCE COMPOSITE FOR WRAP ACCOUNTS

PERFORMANCE COMPOSITE

Balanced

CCM Investment Manager Profile


CCM Investment Manager Profile

CCM Investment Advisers, LLC claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS® standards. CCM Investment Advisers, LLC has been independently verified for the periods January 1, 2000 – December 31, 2015. The verification reports is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS® standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. 1. CCM Investment Advisers, LLC (CCM) is an independent investment advisory firm established in 1986. CCM manages a variety of equity, fixed income and balanced accounts for institutional and individual investors. 2. All accounts over which CCM has full investment discretion are included in the performance composite relevant to its strategy. Portfolios constrained by Investment Policies that differ materially from the investment strategy of CCM Investment Advisers are not included in a composite. Accounts less than $100,000 are not included in a composite with the exception of CCM Tech Select, where there is no minimum. A complete list and description of all of the firm’s composites is available upon request. 3. CCM's performance composites were created on 1/1/93. 4. Trade date valuation is utilized. 5. Valuations and returns are computed and expressed in US dollars. 6. Results are presented both net of all fees as well as gross of all fees including transaction fees. 7. Results assume reinvestment of dividends and interest, unless withdrawn from the portfolio by the client. 8. Prior to 1/1/2010, the CCM Equity Composite and Fixed Income Composite contain portfolios that are subsets of Balanced Portfolios. Cash is allocated to the Equity and Fixed Income portfolios based on the percentage weighting of equities or fixed income in the balanced portfolios. 9. Past performance is no guarantee of future results and the possibility of loss exists. 10. CCM Investment Advisers’ standard fee schedule for Balanced and Equity accounts is .75% of the first $7.5MM in assets, .65% for the next $7.5MM assets, .50% for the next $15MM assets, and .15% for assets over $30MM. For Fixed Income accounts, .50% of the first $10MM in assets, .35% for the next $10MM assets, and .25% for assets over $20MM. 11. A copy of CCM’s SEC Form ADV Part 1 and 2 is available upon request. 12. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. 13. All of the accounts in the composites are bundled fee accounts. The bundled fee includes trading, administrative and custodial charges. 14. The Barclay's Government/Credit Index is the non-securitized component of the U.S. Aggregate Index. The index includes US Treasuries, government-related issues and corporates. 15. The S&P 500 Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. 16. The BofA Merrill Lynch 1-12 Year US Municipal Securities Index is a subset of The BofA Merrill Lynch US Municipal Securities Index including all securities with a remaining term to final maturity less than 12 years. 17. All blended benchmarks are static blends.

 

29

PERFORMANCE COMPOSITE

COMPOSITE FOOTNOTES


CCM Investment Manager Profile

CCM Composite 

Core Balanced  Wrap 

Moderate Risk  Wrap 

Low Risk Wrap 

Equity Wrap 

Fixed Income  Wrap 

Composite Profile  2002  2003  2004  2005  2006 

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

# of Por olios  Dispersion*  Std Dev † CCM 

91 3.8%    

123 2.7%    

145 1.2%    

144 1.0%    

143 1.0%    

137 1.6%    

133 2.4%    

127 3.9%    

126 1.3%    

109 0.8%  13.3% 

165 1.0%  11.4% 

162 1.9%  8.9% 

176 1.2%  6.7% 

224 0.9%  7.8% 

235 1.1%  8.2% 

Std Dev † Benchmark  Total Assets  % of Firm Assets  # of Por olios  Dispersion*  Std Dev † CCM 

  30.2  3.8%  21  2.7%    

  40.9  3.6%  41  2.6%    

  40.9  3.5%  37  1.6%    

  48.6  4.0%  30  0.5%    

  58.3  3.7%  27  0.9%    

  62.8  3.2%  34  1.3%    

  64.8  3.4%  25  2.0%    

  57.4  2.7%  27  2.9%    

  57.2  2.5%  32  1.0%    

9.5% 58.7  2.3%  23  0.8%  10.6% 

6.9% 81.2  3.2%  26  1.3%  9.2% 

5.8% 96.5  3.4%  23  1.4%  7.2% 

4.7% 119.3  4.2%  21  0.9%  5.4% 

5.5% 135.8  4.9%  18  0.9%  6.1% 

5.4% 155.8  6.8%  18  0.4%  6.1% 

Std Dev † Benchmark  Total Assets  % of Firm Assets  # of Por olios  Dispersion*  Std Dev † CCM 

  10.9  1.4%  2  0.6%    

  10.4  0.9%  4  1.0%    

  9.5  0.7%  5  2.1%    

  10.7  0.7%  6  4.5%    

  9.4  0.5%  10  1.9%    

  13.1  0.7%  9  1.2%    

  7.6  0.4%  8  1.7%    

  7.6  0.4%  7  2.5%    

  10.0  0.4%  13  1.0%    

7.5% 7.7  0.3%  12  0.8%  6.8% 

5.6% 9.4  0.4%  11  1.2%  5.9% 

4.6% 9.7  0.3%  12  2.0%  5.0% 

3.7% 10.2  0.4%  12  1.0%  3.9% 

4.4% 8.8  0.3%  9  0.8%  4.3% 

4.3% 8.7  0.4%  7  0.6%  4.3% 

Std Dev † Benchmark  Total Assets  % of Firm Assets  # of Por olios  Dispersion*  Std Dev † CCM 

  1.3  0.2%  72  2.5%    

  1.7  0.1%  111  1.6%    

  2.2  0.2%  150  1.3%    

  2.5  0.2%  180  1.1%    

  4.3  0.3%  183  1.3%    

  3.8  0.2%  199  1.6%    

  3.2  0.2%  155  2.3%    

  2.7  0.1%  147  4.6%    

  4.8  0.2%  49  2.2%    

4.0% 4.7  0.2%  48  1.0%  19.2% 

2.7% 4.6  0.2%  49  1.1%  16.7% 

2.4% 5.1  0.2%  49  1.1%  12.9% 

2.1% 4.9  0.2%  62  1.4%  9.7% 

2.4% 3.2  0.1%  92  1.6%  11.0% 

2.4% 2.6  0.1%  82  1.7%  11.4% 

Std Dev † Benchmark  Total Assets  % of Firm Assets  % Carve Out**  # of Por olios  Dispersion*  Std Dev † CCM 

  18.4  2.6%     45  2.8%    

  30.2  2.9%     45  1.1%    

  42.1  3.2%     44  0.5%    

  58.4  4.1%     39  0.4%    

  61.1  3.8%  68.0%  51  0.4%    

  71.5  3.6%  65.0%  40  1.0%    

  55.6  3.3%  71.5%  40  3.7%    

  50.1  2.4%  76.0%  47  2.8%    

  13.0  0.6%     13  0.8%    

18.7% 57.9  2.3%     12  1.1%  1.9% 

15.1% 61.0  2.4%     9  1.1%  1.6% 

11.9% 78.9  2.8%     7  0.9%  1.7% 

9.0% 100.7  3.5%     7  0.9%  1.6% 

10.5% 105.4  3.8%     10  0.2%  1.8% 

10.6% 102.3  4.5%     11  0.5%  1.8% 

Std Dev † Benchmark  Total Assets  % of Firm Assets  % Carve Out** 

  22.7  3.3%    

  27.0  2.7%    

  23.4  2.0%    

  20.7  1.8%    

  22.7  1.7%  59.0% 

  22.3  1.1%  51.0% 

  19.7  1.2%  45.1% 

  24.0  1.2%  50.0% 

  18.8  0.8%    

3.4% 16.4  0.6%    

3.0% 13.1  0.5%    

3.2% 11.2  0.4%    

3.0% 11.2  0.4%    

3.2% 44.0  1.6%    

3.5% 43.9  1.9%    

CCM Assets under Management (Millions)  $788  $1,135  $1,385  $1,450  $1,732   $  1,997    $  1,719    $  2,139    $  2,331    $  2,534    $  2,544    $  2,822    $  2,852    $  2,757    $  2,289   * Equal weighted standard deviation of annual return of accounts in composite for the full year. **Carve Outs are disallowed by GIPS® after 2010 unless cash for the carve out is managed separately. † 3-year ex-post Standard Deviation. Required by GIPS beginning in 2011

COMPOSITE DECRIPTIONS Composite

Descrip on

Benchmark

Core           CCM wrap fee accounts that employ a Core Balanced or Core Balanced   Balanced      Plus strategy with >$100,000 market value as of the start of the quarter.  Wrap  The fixed income alloca on must be all taxable bonds. 

50% S&P 500 /                     50% Barclays Govt/ Credit 

Moderate   CCM wrap fee accounts that employ a Moderate Risk strategy with  Risk           >$100,000 market value as of the start of the quarter. The fixed income  Wrap  alloca on must be all taxable bonds. 

40% S&P 500 /                     40% Barclays Govt/ Credit / 20% US T‐Bills 

CCM wrap fee accounts that employ a Low Risk strategy with >$100,000        20% S&P 500 /                     Low Risk      market value as of the start of the quarter. The fixed income alloca on  40% Barclays Govt/ Wrap  must be all taxable bonds.  Credit / 40% US T‐Bills  CCM wrap fee accounts that employ an all equity strategy with >$100,000  Equity        market value as of the start of the quarter. CCM’s equity strategy is         Wrap  rela ve value. We hold domes c and ADR’s in the small mid and large      cap valua on sectors. 

S&P 500 

Fixed          CCM wrap fee accounts that employ an all fixed strategy with >$100,000       Income       market value as of the start of the quarter. Bonds may be taxable or          Barclays Govt/Credit  Wrap  tax‐free.    

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PERFORMANCE COMPOSITE

COMPOSITE STATISTICS


CCM Investment Manager Profile

PERFORMANCE COMPOSITE

VERIFICATION REPORT FROM ACA PERFORMANCE SERVICES

 

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CCM Investment Advisers' Profile  

Investment manager profile of CCM Investment Advisers.

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