Additional Information

 The information contained in this report has been taken from statistical and other sources which we deem reliable, however we do not represent that it is accurate or complete and it should not be relied upon as such. Any information provided herein shall not form the primary basis of any investment decision. It is the user’s responsibility to independently confirm the information contained in this material and obtain any other information deemed relevant to any investment decision.

The information on this website is not a solicitation to invest in any investment product, nor is it intended to provide investment advice. It is intended for information purposes only and should only be used by sophisticated investors who are knowledgeable of the risks involved. Information contained within this document is from sources we believe to be reliable but cannot guarantee. The information contained herein is confidential and proprietary.

This information and its contents are proprietary information of the Registered Investment Advisor (RIA) and any reproduction of this information, in whole or in part, without the prior written consent of the RIA is prohibited. Additional information is available from the RIA upon request. Neither the RIA nor its affiliates are acting as your ad visor or agent. Past performance is not indicative of future results. There can be no assurance that investment objectives will be achieved. Clients must be prepared to bear the risk of a total loss of their investment. Please remember that different types of investments involve varying degrees of risk, including the loss of money invested and that past performance may not be indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy, including the investments or investment strategies recommended or proposed by RIA will be profitable. The information contained in this website has been taken from sources which we deem reliable, however we do not represent that it is accurate or complete, and it should not be relied upon as such. Any information provided herein shall not form the primary basis of any investment decision. It is the user’s responsibility to independently confirm the information contained in this material and obtain any other information deemed relevant to any investment decision.

This website is intended for information purposes only and should only be used by sophisticated investors who are knowledgeable of the risks involved.

Please note: the results portrayed in this presentation represent those accounts in the Growth and Aggressive Growth Composites from 1991-2013, which are not inclusive of all accounts that Abernathy managed during the time period. These composites were selected because they represent the primary strategies employed by Abernathy, but clients and prospective clients should note that they are not inclusive of all client accounts managed by the firm.

The performance results displayed in this presentation were obtained from other investment advisers and managers during certain time periods displayed and are not all actual returns achieved by Abernathy. From January 1991 to June 1996, the performance results displayed were obtained through Cowen & Co., for which Steven Abernathy was a primary portfolio manager of the Growth and Aggressive Growth strategies. From June 1996 to December 2001, the performance results displayed were obtained through APB Financial Group, for which Mr. Abernathy was also a primary portfolio manager of the Growth and Aggressive Growth strategies. From January 2002 to December 2013, the performance results displayed were obtained through the existing Abernathy firm under different business names it was using at the time (Steven Abernathy Group, The Abernathy Group, Abernathy Group, Abernathy Financial Services and, its current name, Abernathy Group II LLC). Steven Abernathy has remained a principal decision maker of the firm since its inception.

You should not assume that any part of this presentation services as the receipt of, or as a substitute for, personalized investment advice from The Abernathy Group II Family Office. All performance information displayed is net of investment management fees as well as brokerage fees and commissions, and reflects the reinvestment of dividends and other earnings during the time period.

Abernathy Group II LLC (“Abernathy”) submitted performance information of varying strategies and accounts from 1995 to 2012 for consideration in Nelson Publications’ list of “World’s Best Money Managers” using various business names. This submission did not require a fee of any kind and is not representative of all Abernathy accounts at any given time. Readers should not assume that the performance information used is indicative of the future performance of any of Abernathy’s investment strategies. From 1995 to 2005, Abernathy was ranked within the top 20 money managers on various lists. The details of these rankings are as follows:

1995: Steven Abernathy Group ranked #1 on Nelson’s list “US Growth Equity” based on the performance of its Aggressive Growth Composite over a 3 year period ending on 12/31/94. Per Nelson, 315 composites/funds submitted for consideration.

1995: Steven Abernathy Group ranked #1 on Nelson’s list “US Mid-cap Growth Equity” based on the performance of its Aggressive Growth Composite over a 3 year period ending on 12/31/94. Per Nelson, 56 composites/funds submitted for consideration.

1995: Steven Abernathy Group ranked #2 on Nelson’s list “US Equity (All Styles)” based on the performance of its Aggressive Growth Composite over a 3 year period ending on 12/31/94. Per Nelson, 853 composites/funds submitted for consideration.

1995: Steven Abernathy Group ranked #1 on Nelson’s list “US Mid-cap Equity” based on the performance of its Aggressive Growth Composite over a 3 year period ending on 12/31/94. Per Nelson, 133 composites/funds submitted for consideration.

1996: Steven Abernathy Group ranked #2 on Nelson’s list “US Growth Equity” based on the performance of its Aggressive Growth Composite over a 5 year period ending on 12/31/95. Per Nelson, 299 composites/funds submitted for consideration.

1997: The Abernathy Group ranked #2 on Nelson’s list “US Equity (All Styles)” based on the performance of its Aggressive Growth Composite over a 5 year period ending on 12/31/97. Per Nelson, 1002 composites/funds submitted for consideration.

1997: The Abernathy Group ranked #1 on Nelson’s list “US Growth Equity” based on the performance of its Aggressive Growth Composite over a 5 year period ending on 12/31/97. Per Nelson, 346 composites/funds submitted for consideration.

1997: The Abernathy Group ranked #10 on Nelson’s list “US Mid-cap Growth Equity” based on the performance of its Moderate Growth Composite over a 1 year period ending on 12/31/97. Per Nelson, 92 composites/funds submitted for consideration.

1998: The Abernathy Group ranked #1 on Nelson’s list “US Equity (All Styles)” based on the performance of its Aggressive Growth Composite over a 5 year period ending on 3/31/98. Per Nelson, 967 composites/funds submitted for consideration.

1998: The Abernathy Group ranked #1 on Nelson’s list “US Growth Equity” based on the performance of its Aggressive Growth Composite over a 5 year period ending on 3/31/98. Per Nelson, 348 composites/funds submitted for consideration.

1998: The Abernathy Group ranked #1 on Nelson’s list “US Growth Equity” based on the performance of its Aggressive Growth Composite over a 1 year period ending on 3/31/98. Per Nelson, 450 composites/funds submitted for consideration.

1999: The Abernathy Group ranked #3 on Nelson’s list “US Balanced/Multi-Asset (All Styles)” based on the performance of its Conservative Growth Composite over a 3 year period ending on 12/31/99. Per Nelson, 257 composites/funds submitted for consideration.

1999: The Abernathy Group ranked #3 on Nelson’s list “US Balanced/Multi-Asset (All Styles)” based on the performance of its Conservative Growth Composite over a 5 year period ending on 12/31/99. Per Nelson, 235 composites/funds submitted for consideration.

1999: The Abernathy Group ranked #3 on Nelson’s list “US Balanced/Multi-Asset (All Styles)” based on the performance of its Conservative Growth Composite over a 1 quarter period ending on 12/31/99. Per Nelson, 313 composites/funds submitted for consideration.

2000: The Abernathy Group ranked #1 on Nelson’s list “US Equity (All Styles)” based on the performance of its Aggressive Growth Composite (A2 100) over a 10 year period ending on 12/31/00. Per Nelson, 548 composites/funds submitted for consideration.

2000: The Abernathy Group ranked #1 on Nelson’s list “US Growth Equity” based on the performance of its Aggressive Growth Composite (A2 100) over a 10 year period ending on 12/31/00. Per Nelson, 201 composites/funds submitted for consideration.

2001: The Abernathy Group ranked #1 on Nelson’s list “US Growth Equity” based on the performance of its Aggressive Appreciation 100 (A2 100) Composite over a 10 year period ending on 3/31/01. Per Nelson, 204 composites/funds submitted for consideration.

2001: The Abernathy Group ranked #1 on Nelson’s list “US Equity (All Styles)” based on the performance of its Aggressive Appreciation 100 (A2 100) Composite over a 10 year period ending on 3/31/01. Per Nelson, 568 composites/funds submitted for consideration.

2001: The Abernathy Group ranked #6 on Nelson’s list “US Balanced/Multi-Asset (All Styles)” based on the performance of its Conservative Capital (C2) Strategy Composite over a 5 year period ending on 3/31/01. Per Nelson, 253 composites/funds submitted for consideration.

2002: Abernathy Group ranked #1 on Nelson’s list “US Balanced/Multi-Asset (All Styles)” based on the performance of its Conservative Capital (C2) Strategy Composite over a 10 year period ending on 12/31/02. Per Nelson, 169 composites/funds submitted for consideration.

2002: Abernathy Group ranked #2 on Nelson’s list “US Mid-cap Growth Equity” based on the performance of its Pref. Performance 60(P2-60) Strategy Composite over a 1 year period ending on 12/31/02. Per Nelson, 81 composites/funds submitted for consideration.

2002: Abernathy Group ranked #4 on Nelson’s list “US Growth Equity” based on the performance of its Aggressive Appreciation 100(A2-100) Composite over a 10 year period ending on 12/31/02. Per Nelson, 248 composites/funds submitted for consideration.

2003: Abernathy Financial Services ranked #1 on Nelson’s list “US Equity (All Styles)” based on the performance of its Aggressive Appreciation 100 Strategy Composite over a 1 quarter period ending on 9/30/03. Per Nelson, 1640 composites/funds submitted for consideration.

2003: Abernathy Financial Services ranked #1 on Nelson’s list “US Balanced/Multi-Asset (All Styles)” based on the performance of its Conservative Capital (C2) Strategy Composite over a 1 quarter period ending on 9/30/03. Per Nelson, 276 composites/funds submitted for consideration.

2003: Abernathy Financial Services ranked #1 on Nelson’s list “US Hedged Equity” based on the performance of its Aggressive Appreciation 100 Strategy Composite over a 1 quarter period ending on 9/30/03. Per Nelson, 149 composites/funds submitted for consideration.

2003: Abernathy Financial Services ranked #2 on Nelson’s list “US Hedged Equity” based on the performance of its Pref. Performance 60(P2-60) Strategy Composite over a 1 quarter period ending on 9/30/03. Per Nelson, 149 composites/funds submitted for consideration.

2004: Abernathy Financial Services ranked #3 on Nelson’s list “US Balanced/Multi-Asset (All Styles)” based on the performance of its Conservative Capital (C2) Strategy Composite over a 10 year period ending on 6/30/04. Per Nelson, 161 composites/funds submitted for consideration.

2004: Abernathy ranked #1 on Nelson’s list “US Hedged Equity” based on the performance of its Aggressive Appreciation 100 Strategy Composite over a 1 year period ending on 6/30/04. Per Nelson, 168 composites/funds submitted for consideration.

2004: Abernathy Financial Services ranked #3 on Nelson’s list “US Mid-cap Equity” based on the performance of its Pref. Performance 60(P2-60) Strategy Composite over a 1 year period ending on 6/30/04. Per Nelson, 239 composites/funds submitted for consideration.

2005: Abernathy Financial Services ranked #20 on Nelson’s list “US Hedged Equity” based on the performance of its Abernathy Group Value Trust Composite over a 10 year period ending on 9/30/05. Per Nelson, 54 composites/funds submitted for consideration.

2005: Abernathy Financial Services ranked #17 on Nelson’s list “US Hedged Equity” based on the performance of its Abernathy Group Value Trust Composite over a 10 year period ending on 6/30/05. Per Nelson, 63 composites/funds submitted for consideration.

It should be noted that from 2006 to 2012, Abernathy submitted performance information but did not rank among the top 20 money managers published by Nelson Publications. Readers should also note that Abernathy submitted to these various lists under different business names it was using at the time (Steven Abernathy Group, The Abernathy Group, Abernathy Group, and Abernathy Financial Services). Steven Abernathy has remained a principal decision maker of the firm since its inception.

Abernathy Group II LLC (“Abernathy”) submitted information regarding its advisory services in 2010, 2011, 2012, 2013, and 2014 to Medical Economics for consideration on its list of “Best Advisor for Medical Doctors”. In 2011 and 2012, Abernathy submitted information regarding its advisory services to Dental Practice Magazine for consideration on its list of the same name. This submission required a fee and was simply a title assigned to Abernathy, not a numerical ranking of any kind.

Definitions of Statistical Terms
Average Returns (arithmetic mean) is a measure of the “middle performance” of the fund, computed by adding up all the returns and dividing by the number of periods.

Standard Deviation measures how different the actual fund returns are from its average performance (see above). The closer the actual returns are to the average, the smaller the standard deviation. Standard deviation is a measure of volatility, generally associated with the risk of investments.

Correlation measures the degree to which the performance of two funds moves in tandem, and the direction of their association (one goes up, the other goes up as well – positive correlation). Correlation plays an important part in diversification.

Auto-correlation is a specific application of correlation (see above). In this case, the comparison is not between two different funds, but rather returns of the same fund between different periods. For example, an auto-correlation of two periods would show the correlation in returns two periods apart (March-January, April-February, May-March, etc).

Covariance measures the trend of common movement in returns between two funds. A positive covariance shows the fund’s returns moving in the same direction, whereas a negative covariance shows the funds moving in opposite direction (when one goes up, the other one goes down). Covariance plays a role in determining portfolio volatility.

Regression analysis examines the statistical connection between a variable of interest and one or more factors used to explain its variation. For example, if the variable of interest is student test scores, regression could be used to show the connection to factors such as time spent studying or IQ.

R-squared is used in regression analysis to determine to what degree the variation in the changing series of interest is explained by the factors used to explain it. R-squared ranges from 0 (no explanatory power), to 1 (virtually all variation is explained by the analysis). In the example above, if test scores is the variable of interest, while IQ and study time are the factors used to explain it, then an R-squared of .9 would indicate that 90% of the variation in test scores can be explained by these two factors.

Standard Error is a measure of precision when calculating various statistical terms. Generally, the higher the standard error, the lower the statistical strength of that estimation.

T-statistic examines the statistical precision of various estimations by comparing the value of the calculation to the standard error (see above). Generally, a t-stat value of 2 or higher shows enough statistical precision to have confidence in the estimate being different from zero.

Turnover is a measure of the fund’s trading activity, and loosely represents the portion of a fund’s holdings that have changed over a year. A lower turnover ratio indicates a more passive strategy.

Tracking Error shows how different are each period’s returns of a given fund from the returns of a reference “benchmark” (generally commercial indexes). For example, if fund A’s returns in two subsequent periods are 10% and 20%, while the benchmark’s returns are 5% and 25% for the same periods, the average is the same (15%), but there is tracking error since there was a difference in period by period returns (period 1: 10% versus 5%, period 2: 20% versus 25%).

Alpha measures the difference between the fund’s average performance and what would be expected based its compensating risk level, such as beta (see below). For example, if the fund’s average return was 10%, but the expectation based on its beta was 9%, then the alpha would show as 1%.

Beta measures the degree to which the returns of a fund change with the market movements. Generally, the higher the scale of fund movements (up or down) relative to the market, the greater the beta. This is considered to be compensating risk for investors, I.e. the more risk (higher beta), the higher the investors’ expected returns versus the market.

Three Factor Model explains the source of performance variation among investment portfolios, and it is an extension of previous Nobel Prize winning work. The model specifies that differences in portfolio returns can be attributed to (1) stocks/fixed income mix – riskier stocks have a higher potential return, (2) market capitalization of portfolio – smaller capitalization stocks are riskier and therefore have higher expected returns, and (3) market price relative to accounting measures of the firm, such as book value – stocks with higher book value to market ratios are riskier and have higher expected returns. This model was first published in major academic journals but has gained widespread acceptance among investment professionals.