BTS Bond Asset Allocation vs. Investment Benchmarks

$100,000 investment without withdrawals

  BTS Bond Asset Allocation ProgramBarCap Aggregate Bond Index S&P 500 TR
YTD Return: 3/31/2010 -0.15% 1.78% 5.39%
1-Year Return 7.26% 7.70% 49.77%
3-Year Return 4.26% 6.14% -4.17%
5-Year Return 5.70% 5.44% 1.92%
10-Year Return 6.88% 6.29% -0.65%
CAGR 7.44% 6.42% 6.24%
Standard Deviation 4.60% 3.71% 16.48%
9/11/1996 Investment$100,000 Annual Return$100,000 Annual Return$100,000 Annual Return
Value as of: 12/31/1996 $104,698  $104,793   $114,433  
Value as of: 12/31/1997 $113,183 8.10% $114,942 9.68% $152,612 33.36%
Value as of: 12/31/1998 $126,799 12.03% $124,911 8.67% $196,223 28.58%
Value as of: 12/31/1999 $134,050 5.72% $123,874 -0.83% $237,517 21.04%
Value as of: 12/31/2000 $144,705 7.95% $138,282 11.63% $215,891 -9.11%
Value as of: 12/31/2001 $158,110 9.26% $149,930 8.42% $190,240-11.88%
Value as of: 12/31/2002 $166,683 5.42% $165,326 10.27% $148,197-22.10%
Value as of: 12/31/2003 $193,388 16.02% $172,117 4.11% $190,707 28.68%
Value as of: 12/31/2004 $202,536 4.73% $179,585 4.34% $211,456 10.88%
Value as of: 12/31/2005 $210,659 4.01% $183,951 2.43% $221,842 4.91%
Value as of: 12/31/2006 $227,482 7.99% $191,917 4.33% $256,882 15.79%
Value as of: 12/31/2007 $242,758 6.72% $205,276 6.96% $270,995 5.49%
Value as of: 12/31/2008 $267,369 10.14% $216,040 5.24% $170,733-37.00%
Value as of: 12/31/2009 $265,605 -0.66% $228,861 5.93% $215,917 26.46%
Value as of: 3/31/2010 $265,201   $232,942   $227,547  
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS

The BTS portfolio returns illustrated are net of an initial 2.75% annual fee for Bond Asset Allocation, which includes a representative fee of 1.5%. This hypothetical uses the current BTS fee schedule, with the fee reducing as the size of the investment increases. Please refer to BTS's ADV Part II for complete fee schedule.

BTS Bond Asset Allocation Performance represents hypothetical returns from the program’s inception on 9/11/96 through 6/30/06 (“BAA”) and actual returns since 7/1/06 (the “Select BAA”). The hypothetical performance of the BAA consists of actual buy/sell signals applied to a composite of five high yield mutual funds, five high yield government bond funds and T-bills. For performance purposes, T-bills are used as a surrogate for money market funds. The five high yield mutual funds were selected from Morningstar’s universe of approximately twenty high yield mutual funds that have been in existence since the program’s inception. These five high yield mutual funds were selected because they are well-established and have been used with the program. The five government bond mutual funds are the 5 largest by total assets as of 12/31/07. These funds were selected with the benefit of hindsight. Since BTS was not selecting particular mutual funds for BAA, there are no assurances that these funds would have been used. Performance shown may be better or worse depending on the particular mutual funds selected.
The hypothetical returns presented reflect hypothetical performance an investor would have obtained had it invested in the manner shown and does not represent performance that any investor actually attained. Certain of the assumptions have been made for modeling purposes and are unlikely to be realized. No representation or warranty is made as to the reasonableness of the assumptions made or that all assumptions used in achieving the returns have been stated or fully considered. Changes in the assumptions may have a material impact on the hypothetical returns presented. Hypothetical returns have many inherent limitations. Unlike actual performance, hypothetical returns do not represent actual trading in the underlying composite, but show how the composite would have performed upon the application of the program’s actual signals. Mutual funds within the composite were selecte with the benefit of hindsight. Other periods selected may have different results, including losses. There can be no assurance that BTS will achieve profits or avoid incurring substantial losses.
Mutual funds have their own fund expenses, which costs are borne by Client. Results include the reinvestment of dividends and capital gains. Name of funds furnished upon request. All recommendations for the past year furnished upon request. The BTS portfolio returns illustrated are net of the maximum fee based on the size of the investment. Existing or prior clients may have paid high er or lower fees based on the size of their account and previous management fee levels that are not available to new clients. As with any investment, loss of capital is possible.

Investing directly in the BarCap Aggregate Bond Index and S&P 500 is not possible. Broad-based securities indices are unmanaged and are not subject to fees and expenses typically associated with managed accounts or investment funds and that are typically be invested in substantially fewer securities. Performance will vary depending on the particular funds selected and there is no guarantee that funds used in the program will closely match the above indexes. The volatility of the index is materially different from that of the portfolio. The S&P 500 includes 500 leading companies in leading industries of the U.S. economy and is a proxy for the total stock market. The Barclays Capital Aggregate Bond Index is comprised of government securities, mortgage-backed securities, asset-backed securities and corporate securities with maturities of one year or more to simulate the universe of bonds in the market.

Inception = beginning of BTS Bond Asset Allocation Program: 9/11/1996

Standard Deviation measures the degree of variation of returns around the average return; the higher the volatility, the higher the standard deviation.
CAGR stands for Compounded Annual Growth Rate. It measures since portfolio inception.

BTS Asset Management is affiliated with BTS Securities Corporation. Securities offered through BTS Securities Corporation and other FINRA member firms. Advisory services offered through BTS Asset Management.