Dana's Limited Volatility II investment strategy and securities mix is unique. We use government and government agency backed, high yield, variable or floating rate securities as an integral part of the portfolios. These securities have coupon rates often in excess of other government and most corporate high-grade bonds. The automatic adjustment features of these unique bonds soften interest rate volatility. This strategy requires less emphasis on interest rate anticipation than most traditional styles of fixed income management. We believe that utilizing these high-quality, variable rate bonds in conjunction with shorter maturity, high quality, fixed rate bonds will allow us to achieve our clients' investment objectives with little of the normal credit and interest rate risk.

First, through yield curve analysis, your portfolio's optimal target duration is determined. Then, sector analysis is applied to locate value in terms of positive price adjusted spreads over the yield curve. Dana blends the identified sector value with positions in fixed rate government, agency or corporate bonds to maintain credit quality, enhance yields, and adjust to the portfolio's optimal duration target.

Security selection is made on fundamental credit analysis to identify the issuer's credit worthiness and relative value within its sector as well as to the portfolio. Based on market value, asset allocation to specific issuers (non-governmental) are limited a maximum 5% of the portfolio's assets. The focus is to create a well-diversified portfolio by selecting securities that offer the opportunity for incremental yield as well as price appreciation without the concentration of issuer credit risk.

Dana's Limited Volatility II strategy has performed similarly to indices with durations as long as the Merrill Lynch 1 - 3 year Treasury Index, with significantly less risk. This type of exceptional performance has earned this strategy national recognition in Pension and Investments magazine as being one of the top ten performing Limited Volatility strategies for the past 5 years.

This strategy is ideal for those seeking high current income with limited price volatility. It is an excellent strategy for cash reserves, operating assets, and funded depreciation accounts. It is also excellent for protecting Balanced Equity portfolios against rising interest rates.