Advisor Services: Model Portfolio Program

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Income Portfolio

Primarily income with capital growth a secondary objective.

Portfolio Composition:
This portfolio is currently structured around a core of fixed income (60%). It also includes one small-cap (5%) and two mid-cap equity funds (15%), a large-cap growth fund (5%), an S&P 500 Index i-Share (5%) and a money market fund (10%). The bond component includes a floating rate bond fund and an intermediate bond fund emphasizing corporate bonds. Though the asset mix is periodically rebalanced to maintain desired weightings, the types of funds within each category may change as relative values in each market change.

Portfolio Manager Comments:
Performance has exceeded its performance benchmark over the past three years due to the value and smaller market cap orientation of the equity funds, and the sector weightings of the bond funds. Due to a more cautious equity market outlook, equity funds were reduced to 30% from 35%, and the money market fund was increased to 10% in 2006. The market upswing in the second half of 2006 contributed to underperformance last year.

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