Brinker Capital: Destinations Portfiolio Changes: 6/13
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Brinker Capital will make changes to its Destinations mutual fund program, increasing risk exposure across portfolios by 30-50 basis points. Specifically, it will slightly increase US equity allocations and reduce international equity and real estate allocations. It will also add Avenue Credit Strategies to all portfolios and remove several underperforming funds. These changes aim to better position portfolios for improved macroeconomic conditions while still maintaining appropriate risk levels across strategies.
Brinker Capital: Destinations Portfiolio Changes: 6/13
- 1. Destinations News Flash June 2013 Important Information Regarding Brinker Capital’s Mutual Fund Program Executive Summary Brinker Capital will make changes to its mutual fund program, Destinations. For use by clients and Financial Advisors with clients currently invested in the Brinker Capital Destinations Mutual Fund Program. Not for redistribution. Holdings are subject to change. Not all asset classes or funds are held in all models within the Destinations program. Past performance does not guarantee future results. Brinker Capital Inc. a Registered Investment Advisor. Jeffrey Raupp, CFA Senior Investment Manager Amy Magnotta, CFA Senior Investment Manager U.S.equitiesareofftoastrongstartin2013whilefixedincomemarketshave beengenerallyweak.Thesemovementsinbothmarketshaveshiftedour portfoliostoamoreaggressivetiltsinceourlastreallocation. Continued monetarypolicyaccommodationandsomeresolutionofU.S.fiscalpolicyrisks haveledtoimprovedinvestorsentiment,drivingriskassetshigher. Whilethere aresignsofimprovementinthemacrobackdrop,risksremain. Fundamentally, theU.S.lookstobethemostattractiveofthedevelopedmarkets. Becausewehaveamorepositiveviewonriskassetsoverthemediumterm,we willaddbetween30-50basispointstoouroverallriskpositioning,primarilyin ourmoreconservativeandmoderateportfolios. Forsometime,wehadplaced greateremphasisontherisksforourmoreconservativeinvestors,positioning portfolioswithalargerunderweighttorisk;however,wenowfeelwecanease thatbias. TheConservativeportfoliowillremainslightlyunderweighttooverall risk,whileModeratelyConservativeispositionedrelativelyneutralandModerate toAggressivestrategieshaveanoverweighttorisk. Ourkeyinvestmentthemesof(i)FinancialRepression,(ii)EmergingMarkets Bias,(iii)FocusonIncome,and(iv)Inefficientand/orUndiscoveredMarkets remainintact. Wewillmakeanumberofmanagerchanges: AddAvenueCreditStrategiestoallportfolioswithafixedincomeallocation RemoveMorganStanleyGlobalRealEstate RemoveFederatedIntermediateCorporateBond RemoveMerkHardCurrency RemoveJPMorganInflationManagedBond(qualifiedportfolios)andJPMorgan TaxAwareRealReturn(taxableportfolios) RemoveJPMorganHighYield(heldonlyinBalancedIncome) ThesechangeswillbeimplementedinclientportfoliosbeginningJune4,2013.
- 2. Page 2 Macro View: Improved but Risks Remain U.S.equitiesareofftoastrongstartin2013whilefixedincomemarketshavebeengenerallyweak.These movementsinbothmarketshaveshiftedourportfoliostoamoreaggressivetiltsinceourlastreallocation.in February. ContinuedmonetarypolicyaccommodationandsomeresolutionofU.S.fiscalpolicyriskshaveledtoimproved investorsentiment,drivingriskassetshigher. Anumberoftailwindsexisttofurthersupportmarkets. TheFederal Reserveremainsaccommodativeandifassetpurchasesaretapered,orevenended,itwillbeinthecontextofan improvingeconomy. Muchofthefiscalcliffwasaverted,andtheimpactofotherpressingfiscalissues(sequester, debtceiling)hasbeenbetterthanexpected. Theimprovementinthehousingmarketshouldbeaboostforconsumer networthandconfidence. Equitymutualfundflowsturnedpositivein2013,andwhilemutedcomparedtoflowsinto fixedincomefunds,remainatailwindafterseveralyearsofoutflows. Whiletherearesignsofimprovementinthemacrobackdrop,risksremain. WhileEuropehasremainedrelatively quietasoflate,theriskofpolicyerrorstillexists. WhiletheECBiswillingtoactasalenderoflastresort,theregion hasstillnotaddresseditsdebtandgrowthproblems. GlobalgrowthissluggishwithEuropeinrecession,butChinais alsoshowingsignsofslowingfurther. Inaddition,whileweachievedsomecertaintyonanumberoffiscalissuesin theU.S.,fiscaldragfromhighertaxesandthesequesterwillcontinuetoweighonpersonalincomesthisyear. Becausewefeelthebackdrophasshiftedinfavorofthepositivetailwinds,wehaveamorefavorableviewonrisk assetsoverthemediumterm. Asaresult,wewilladdbetween30-50basispointstoouroverallriskpositioning, primarilyinourmoreconservativeandmoderateportfolios. Forsometimewehadplacedgreateremphasisonthemacrorisksforourmoreconservativeinvestors,positioning portfolioswithalargerunderweighttorisktofurtherprotectonthedownside. However,wenowfeelwecanease thatbias. TheConservativeportfoliowillremainslightlyunderweighttooverallrisk,whileModeratelyConservative ispositionedrelativelyneutral,andModeratetoAggressivestrategieshaveanoverweighttorisk. For use by clients and Financial Advisors with clients currently invested in the Brinker Capital Destinations Mutual Fund Program. Not for redistribution. Holdings are subject to change. Not all asset classes or funds are held in all models within the Destinations program. Past performance does not guarantee future results. Brinker Capital Inc. a Registered Investment Advisor. YTDReturn(through5/31) S&P500 +15.4% BarclaysAggregate -0.9%
- 3. Page 3 Portfolio Changes Global Equity Aspartofourdecisiontoincreaseouroverallriskexposureandourreductionofexposuretorealassets(seebelow), wewilladdtoourU.S.equityallocationacrossallportfolios. Wewillslightlyreduceourinternationalequityallocation, bringingportfoliostoaslightoverweightpositionintheU.S.markets. WestillseereasonablevaluationsintheU.S.and moreattractivefundamentals. U.S.companiesarestillinsolidshapewithhighlevelsofcorporateprofits,resilient marginsandstrongbalancesheets. Inaddition,economicgrowthintheU.S.,whilestillbelowtrend,ismoreattractive thaninotherdevelopedeconomies. Withtheadditionalcapitalbeingallocatedtodomesticequity,wewilladdtospecifichighconvictionopportunities includingTCWDividendFocus,RidgeWorthMidCapValueandClearBridgeSmallCapGrowth. Whileincomeacrossassetclassesisstillakeytheme,wewillreduceourpositioninColumbiaDividendOpportunityby 50basispointsinourConservativeandModeratelyConservativeportfolioswherethepositionrepresentsagreater portionoftotalequity. Thestrategystillrepresentsbetween2.7%(Conservative)and5.1%(AggressiveEquity)ofour portfolios. Withininternationalequity,westillfavoremergingmarkets,butouroverweightisconcentratedinsmaller-cap companiesandfrontiermarkets. Wewillslightlyreduceouroverweighttoemergingmarkets,butremainataweight almost20percentagepointshigherthanourbenchmark(MSCIAllCountryWorldexUSA). Wewillshiftourexposurewithinemergingmarkets,trimmingourexposuretoWasatchEmergingMarketsSmallCap infavorofWasatchFrontierEmergingSmallCountries. IntheConservativeportfolio,wewillswapourpositionin WasatchEmergingMarketsSmallCapentirelyforWasatchFrontierEmergingSmallCountries. Whiletheemerging marketssmallcapassetclasshasbecomemoreefficientsinceweinitiatedourallocationinJune2010,wefeelthat frontiermarketsremainundiscoveredwiththepotentialtocontinuetogenerateoutsizedreturnsovertime. Our positioninWasatchFrontierEmergingSmallCountriesnowrangesfrom2.0%(Conservative)to3.5%(AggressiveEquity). Wewillalsoshiftourallocationwithindevelopedinternationalmarkets. WewilladdtoourpositioninMFS InternationalValueattheexpenseofT.RowePriceInternationalStock. MFShasanoverweightallocationtoJapanthat wefindattractiveinthecurrentenvironment. Real Assets Withinrealassets,wewilleliminateourpositioninglobalREITs(MorganStanleyGlobalRealEstate). GlobalREITs havehadanimpressiverunoverthelast18months,andvaluations,especiallyintheU.S.,lookstretched. Inaddition, theassetclassissensitivetohigherinterestrates. WehadtrimmedourallocationtoglobalREITsinourFebruary reallocationandwereataminimalweightof1.0%. WewillalsotrimourallocationtoRSGlobalNaturalResourcesby50-80basispoints,bringingourweighttobetween 1.0%(Conservative)and2.3%(AggressiveEquity). Westillfeelnaturalresourceequitiesareanattractivelong-term opportunity,especiallythosecompaniesthatcantakeadvantageofNorthAmericashalegas;however,overthenear term,theassetclassisfacingheadwindsofslowerglobalgrowthandlowercommodityprices. Overall Risk Positioning* Previous Reallocation Conservative (30/70) -1.65% -1.25% Moderately Conservative (40/60) -0.30% +0.20% Moderate (60/40) +1.46% +1.75% Moderately Aggressive (70/30) +1.57% +2.00% Aggressive (80/20) +2.49% +2.50% Strategy *Over/underweighttoequityandequity-like alternativesversusneutralweightingeighting For use by clients and Financial Advisors with clients currently invested in the Brinker Capital Destinations Mutual Fund Program. Not for redistribution. Holdings are subject to change. Not all asset classes or funds are held in all models within the Destinations program. Past performance does not guarantee future results. Brinker Capital Inc. a Registered Investment Advisor.
- 4. Page 4 Private Equity Wewilladd30-40basispointstoourpositioninRedRocksGlobalListedPrivateEquity,whichisheldintheModerate toAggressiveEquityportfolios. WhilediscountstoNAVfortheassetclasshavecomeinfromrecentwidelevels,we believethereisstillmoreroomforfurthernarrowing. Netassetvaluesaresteadilyimprovingandthemarketismore receptivetoexitopportunities. Fixed Income and Low Volatility Absolute Return Ourfixedincomeallocationcontinuestobepositionedwithlessinterestrateriskandayieldpremiumthantheindex. Whilewefeelinterestrateswillremainrange-boundatrelativelylowlevels,wefeelthereisagreaterriskthatinterest ratesmovehigher,andarepositionedaccordingly. Ourshiftsinthecurrentreallocationbuildonourcurrentthemes. Focusonspreadsectorswithayieldcushion;favoringcreditriskoverinterestraterisk WewillincreaseourallocationtoDoubleLineTotalReturnacrossallportfolios,withlargerincreasesinthe ConservativetoModeratestrategies. OurpositioninDoubleLineTotalReturnrangesfrom15.0%(Conservative)to 3.8%(Aggressive)inqualifiedportfoliosand7.0%(Conservative)to3.5%(Aggressive)intaxableportfolios. DoubleLineTotalReturnofferslessinterestratesensitivitythancoremanagers,anattractiveyieldandthepotential forfurthercapitalappreciationfromitspositioninnon-Agencymortgage-backedsecurities. Inqualifiedportfolios,wewilltrim100-200basispointsofexposurefromDreyfusBondMarketIndexandaddittoour activecorefixedincomemanager,PIMCOTotalReturn. Inthecurrentinterestrateenvironment,wepreferthe greaterflexibilityofactivefixedincomemanagers. Inqualifiedportfolios,wewilleliminateFederatedIntermediateCorporateBond,takingadvantageofthesignificant spreadtighteningininvestmentgradecorporatebondswe’veexperiencedsinceinitiatingthepositioninMarch2009. Investmentgradecorporatebondsnolongerofferameaningfulyieldcushionandwillbemoresensitivetochangesin interestrates. WewillincreaseourallocationtoForwardEMCorporateDebtby50-60basispointstoaweightof2.3%. Emerging marketcorporatebondsareoneofthefewareaswithinfixedincomewherethereexiststhepotentialforcapital appreciationandthestrategyalsooffersacompellingyield. WewillinitiateapositioninAvenueCreditStrategiestotakeadvantageofglobalhighyieldcreditanddistressed opportunities. Qualifiedportfolioswillhaveaweightofbetween2.5%(Conservative)and1.5%(Aggressive),while taxableportfolioswillownbetween1.5%(Conservative)and1.0%(Aggressive). Duetothehighervolatilityofthis strategy,halfoftheallocationcountstowardsourbudgetforequityorientedassets. AvenueCreditStrategies(ACSAX)seekstogeneratetotalreturn. Thestrategywillinvestopportunisticallyacross capitalstructure(bankloans,highyield,convertibles),companytype(performing,stressed,distressed),and geography(U.S.,Europe,Asia). Thestrategyisevent-driven,requiringacatalysttodrivevaluehigher. Thefundwillbe afocusedbestideasportfolio,targetingbetween50-80names.ThefundismanagedbyJeffGarywhojoinedAvenue CapitalGroupin2011afterpreviouslymanagingotherhighyieldmutualfunds. Mr.Garyleveragestheresourcesof Avenue’s55-personinvestmentteamthatspecializesindistressed,specialsituationsandothercreditinvestments. Theteamofportfoliomanagersandanalystsemployarigorousduediligenceprocessandfocusononlyasmall numberofactivenames. Thefundcaninvestupto20%ofitsassetsinthesamedistressedopportunitiesasAvenue’s distressedprivateequitypartnerships. Maintainshorterdurationthanthebroadmarket Inqualifiedportfolioswewilladd50basispointsofexposuretoDoubleLineLowDurationandmaintainourallocation toRiverParkShort-TermHighYield. Bothstrategiesnotonlyhelptoshortentheoveralldurationoftheportfolios,but alsoofferameaningfulyieldpremiumovertheBarclaysAggregateIndex. For use by clients and Financial Advisors with clients currently invested in the Brinker Capital Destinations Mutual Fund Program. Not for redistribution. Holdings are subject to change. Not all asset classes or funds are held in all models within the Destinations program. Past performance does not guarantee future results. Brinker Capital Inc. a Registered Investment Advisor.
- 5. Page 5 Emphasizeopportunisticlowvolatilityabsolutereturnstrategiesinlieuofpurefixedincome WewillincreaseourallocationtoJPMorganStrategicIncomeby20-70basispointsinthequalifiedportfoliosandby 80-125basispointsinthetaxableportfolioswherewestartedwithalowerallocation. Wewillalsoincrementally addtoDriehausActiveIncomeinthemoreconservativeportfolios. Bothstrategiescantakeadvantageofrelative valueopportunitiesacrossfixedincomesectors,thecreditmarketsinparticular,andareattractivealternativesto purefixedincomeinthisenvironment. Alsowithinfixedincome,wewillremoveourinflationprotectionallocationinbothqualified(JPMorganInflationManaged Bond)andtaxable(JPMorganTaxAwareRealReturn). Withcurrentinflationatlowlevelsandinflationexpectations receding,wefindlessvalueininflationprotectionandseemoreattractiveopportunitieselsewhereinfixedincome. AndbecauseofourmorepositiveviewontheU.S.andtheanticipationofamorestabledollar,wedonotfeelapositionina directionalcurrencyfundisappropriateatthistimeandwilleliminateourpositioninMerkHardCurrencyacrossallportfolios. Key Themes Ourkeyinvestmentthemesof(i)FinancialRepression,(ii)EmergingMarketsBias,(iii)FocusonIncome,and(iv) Inefficientand/orUndiscoveredMarketsremainintact. InthisreallocationwehaveexpandedonourInefficientand/or UndiscoveredMarketsthemewiththeadditionalofAvenueCreditStrategiesasdescribedaboveandthelargershiftto WasatchFrontierEmergingSmallCountries. Asummaryofourkeythemesisincludedinthetablebelow: Portfolio Positioning Summary PortfoliospositionedwithanoverweighttooverallriskwiththeexceptionofConservative,whichmaintainsaslight underweight. Withindomesticequityneutralpositioningwithrespecttomarketcapitalizationandstyle. GlobalequityallocationemphasizesU.S.equitiesandemergingmarketsattheexpenseofdevelopedinternational markets. Ouremergingmarketsoverweightisconcentratedinsmallcapandfrontiermarkets. Emphasisonmortgage-backedsecurities,shortdurationandhighyieldcreditwithinfixedincomeallocation. Absolutereturnallocationemphasizescredit-orientedstrategies. Smallallocationtorealassetsthroughglobalnaturalresourceequities. Allocationtolistedprivateequityinmoderatetoaggressivestrategies. For use by clients and Financial Advisors with clients currently invested in the Brinker Capital Destinations Mutual Fund Program. Not for redistribution. Holdings are subject to change. Not all asset classes or funds are held in all models within the Destinations program. Past performance does not guarantee future results. Brinker Capital Inc. a Registered Investment Advisor. Theme PrimaryImplementation Rationale Financial Repression Fixedincomewithaspreadcushion Opportunisticfixedincome Absolutereturnstrategies Lowornegativereal(inflationadjusted)interestratesforanextended periodoftimethatwillallowistoworkthroughourdebtburdenovertime Actsasastealth“tax”oninvestors Seekpreservationofpurchasingpower Favorcreditriskoverinterestraterisk Emerging MarketsBias Emergingmarketequityoverweight Emergingmarketsmallcap Emergingmarketcorporatedebt FrontierMarkets Emergingmarketsofferbetterrelativegrowthprospectsandhavebetter fundamentalsthandevelopedmarkets Emergingeconomieshaveflexibilitytoeasepolicyinthefaceofslowergrowth Smallcapcompaniescantakeadvantageofthegrowthintheemerging middleclasswithinEM Focuson Income MBS(non-Agency) HighYieldcorporates Highdividendequity Inalownominalyieldenvironmentinvestorswillcontinuetoplacea premiumonyieldproducingassets Inefficient and/or Undiscovered Markets Closed-endfunds Internationalmicrocap FrontierMarkets Short-termhighyield Opportunisticglobalcredit Strategieswhereactivemanagementcanaddsignificantvalueduetothe inefficiencyoftheassetclass Nascentassetclassesorthosewithoutadedicatedinvestorbase Wellestablishedassetclassinperiodofshort-terminefficiencyordislocation
- 6. Page 6 Destinations Defensive Changes IntheDefensivestrategy,wewillmaintainourcurrent11.3%allocationinequity-orientedstrategies. Ourdomestic equityallocationremainsinlowerbetastrategies,andwedonotcurrentlyhaveanallocationtointernationalequities. Wewillmakeanumberofchangeswithinourfixedincomeallocation: WewillinitiateapositionintheAvenueCreditStrategiesfund(3.5%inqualifiedportfolios;2.0%intaxableportfolios)| totakeadvantageofglobalhighyieldcreditanddistressedopportunities.Duetothehighervolatilityofthisstrategy, halfoftheallocationcountstowardsourbudgetforequity-orientedassets. WewillincreaseourallocationtoDoubleLineTotalReturnby1.8%acrossallportfolios,bringingthetotalallocationto 20.0%inqualifiedportfoliosand12.0%intaxableportfolios. DoubleLineTotalReturnofferslessinterestrate sensitivitythancoremanagers,anattractiveyieldandthepotentialforfurthercapitalappreciationfromitsposition innon-Agencymortgage-backedsecurities. Wewillremoveourinflationprotectionallocationinbothqualified(JPMorganInflationManagedBond)andtaxable (JPMorganTaxAwareRealReturn). Withcurrentinflationatlowlevelsandinflationexpectationsreceding,wefind lessvalueininflationprotectionandseemoreattractiveopportunitieselsewhereinfixedincome. Inqualifiedportfolios,wewilleliminateFederatedIntermediateCorporateBond,takingadvantageofthesignificant spreadtighteningininvestmentgradecorporatebondswe’veexperiencedsinceinitiatingthepositioninOctober2009. WewillincreaseourallocationtoForwardEMCorporateDebtby50basispointsto2.0%asemergingmarket corporatebondsareoneofthefewareaswithinfixedincomewherethereexiststhepotentialforcapitalappreciation. Wewilladdtoourshortdurationstrategies–RiverParkShort-TermHighYieldandDoubleLineLowDuration–inboth qualifiedandtaxablestrategies. Thesestrategiesnotonlyhelptoshortentheoveralldurationoftheportfolios,but alsoofferameaningfulyieldpremiumovertheBarclaysAggregateIndex. Inqualifiedportfolios,wewilltrim200basispointsofexposurefromDreyfusBondMarketIndexandaddittoour activecorefixedincomemanager,PIMCOTotalReturn. Inthecurrentinterestrateenvironmentwepreferthe greaterflexibilityofactivefixedincomemanagers. Withinourabsolutereturnallocation,wewillincrementallyaddtobothDriehausActiveIncomeandJPMorganStrategic IncomeOpportunities. Bothstrategiescantakeadvantageofrelativevalueopportunitiesacrossfixedincomesectors, thecreditmarketsinparticular,andareattractivealternativestopurefixedincomeinthisenvironment. Withinrealassets,wewilleliminateoursmallpositioninRSGlobalNaturalResourcesastheassetclassfacesnear termheadwindsofslowerglobalgrowthandlowercommodityprices. Destinations Balanced Income Changes IntheBalancedIncomestrategy,wemaintainouroverallriskpositioning,whichisslightlyabove(+1.7%)our55/45 target. Ourdomesticequitypositioningwillremainlargelyunchanged. Withininternationalequitywewillswapour positioninWasatchEmergingMarketsSmallCapfora3.0%positioninWasatchFrontierEmergingSmallCountries, whichoffersayieldadvantageandattractivegrowthprospects. Wewillmakeanumberofchangeswithinourfixedincomeallocation: WewillinitiateapositionintheAvenueCreditStrategiesfund(4.5%inqualifiedportfolios;2.5%intaxableportfolios) totakeadvantageofglobalhighyieldcreditanddistressedopportunities. TofundtheAvenuepositionwewill eliminateourpositioninJPMorganHighYield. WewillincreaseourallocationtoDoubleLineTotalReturnby2.4%inqualifiedportfoliosand1.0%intaxableportfolios, bringingtotalallocationsto15.5%and9.5%respectively. DoubleLineTotalReturnoffersanattractiveyieldandthe potentialforfurthercapitalappreciationfromitspositioninnon-Agencymortgage-backedsecurities. For use by clients and Financial Advisors with clients currently invested in the Brinker Capital Destinations Mutual Fund Program. Not for redistribution. Holdings are subject to change. Not all asset classes or funds are held in all models within the Destinations program. Past performance does not guarantee future results. Brinker Capital Inc. a Registered Investment Advisor.
- 7. Destinations Balanced Income Changes (continued) Wewillremoveourinflationprotectionallocationinbothqualified(JPMorganInflationManagedBond)andtaxable (JPMorganTaxAwareRealReturn). Withcurrentinflationatlowlevelsandinflationexpectationsreceding,wefind lessvalueininflationprotectionandseemoreattractiveopportunitieselsewhereinfixedincome. Inqualifiedportfolios,wewilleliminateFederatedIntermediateCorporateBond,takingadvantageofthesignificant spreadtighteningininvestmentgradecorporatebondswe’veexperiencedsinceinitiatingthepositioninMarch2009. WewillincreaseourallocationtoForwardEMCorporateDebtby65basispointsto3.5%asemergingmarket corporatebondsareoneofthefewareaswithinfixedincomewherethereexiststhepotentialforcapital appreciation. Forwardalsooffersameaningfulyield. Inqualifiedportfolios,wewillinitiatea5.0%positioninRiverParkShort-TermHighYield. RiverParkhasadurationof lessthanoneyearbutstilloffersayieldthatis1.5timesthatoftheBarclaysAggregateIndex. WithinabsolutereturnwewillincrementallyaddtoourpositioninJPMorganStrategicIncomeOpportunitiesin qualifiedportfoliosandinitiatea2.5%positioninthestrategyintaxableportfolios. Thestrategycantakeadvantage ofrelativevalueopportunitiesacrossfixedincomesectorsandisanattractivealternativetopurefixedincomeinthis environment. Destinations Conservative Government Focused Changes IntheConservativeGovernmentFocusedStrategywemaintainourmaximumallocation(15%)tonon-USTreasury investments. WithinourU.S.government-backedallocation,wewillfurtherreduceourinterestraterisk. Wewill increaseourallocationtoFidelitySpartanShort-TermTreasuryIndexandtheFidelityGovernmentMoneyMarket. We willreduceourexposuretoFidelityGNMAfrom19.5%to10.0%asweareconcernedaboutthebehaviorofagency mortgage-backedsecuritiesshouldinterestratesrisefurther. WewillalsoreduceourexposuretoBlackRockInflation ProtectedBondfrom5.8%to4.0%asweseedonotseeasignificantriseininflationasanear-termthreat. TheseportfoliochangeswillbeimplementedinDestinationsaccountsbeginningJune4. Ifyouhaveanyquestions regardingchangesinourmutualfundprogram,pleasecallamemberofyourBrinkerCapitalClientServiceTeamat 800-333-4573. ThankyouforyourcontinuedconfidenceinBrinkerCapital. Sincerely, Jeffrey Raupp, CFA Amy Magnotta, CFA Senior Investment Manager Senior Investment Manager Page 7 For use by clients and Financial Advisors with clients currently invested in the Brinker Capital Destinations Mutual Fund Program. Not for redistribution. Holdings are subject to change. Not all asset classes or funds are held in all models within the Destinations program. Past performance does not guarantee future results. Brinker Capital Inc. a Registered Investment Advisor.