INVESTMENT GRADE BOND STRATEGY   The portfolio management team employs a "Value" strategy.  We purchase bonds that are undervalued but poised to improve, over time, based on our fundamental credit analysis and financial projections.  Investment grade bonds tend to behave like their junior counterparts, common stocks.  Investors overreact to events which leads to an over- or under-valuation of a company's bonds.  We do not manage by interest rate anticipation or market timing, but focus on value in individual situations to achieve superior returns over time.  An investment grade (A3/A- minimum) average credit rating is maintained, and only bonds rated investment grade by at least one agency is considered for investment.  An average maturity in the intermediate range is maintained, generally in the 6-8 year range.  Portfolios are diversified and fully invested in only North American and U.S. dollar denominated corporate bonds.  The smallest accounts will have up to 20 equally weighted positions, and investments in any one industry group is limited to 30%.

 HIGH YIELD BOND STRATEGY  The key to our long-term over-performance is a more conservative strategy that focuses on total return and the minimization of downside in down markets.  CAM stresses asset quality and yield relationship-not just yield.  The same discipline is employed in our value style to high yield bond portfolio management as investment grade portfolio management (only North American bonds, industry exposure and portfolio diversification).   During the worst environment for High Yield bonds in recent years (in 1990, the Lehman High Yield Index fell 9.59%; the average high yield mutual fund fell 11.08%), our portfolios declined only 1.3%, which allowed us to take advantage of some exceptional values in that bear market.  At the end of 1991, our strategies had returned over 29%.  Similarly, for the three years ended 2002, the Lehman Index was off a cumulative 5%; our portfolios appreciated by almost 15%.  Only the long-term performance statistics can provide evidence of the down market cycle behavior.

BROAD MARKET STRATEGY   The third style benefits long term investors by further diversifying their bond portfolios.  Adding a high-yield bond strategy to an investment grade strategy has increased long-term returns while decreasing long term risk and has reduced the adjusted duration of an all investment grade portfolio.  Historically, the optimum mix (return vs. risk) was achieved at a 35% high yield, 65% investment grade mix.  However, the performance of the riskier and weaker credits in 2003 was an anomaly - at least a 2 standard deviation event - which impacted the performance of the index as a whole.  Including 2003 performance, the optimum mix shifted to a 45% / 55% balance.  Due to the low probability of reoccurrence of the high returns in the lowest quality/highest risk sectors and our constant exclusion of those lower quality credits, we are maintaining our historical 35%/65% weighting for our Broad Market Strategy.

The average rating of the Broad Market portfolio is BBB, while the average of all of Standard & Poor's rated industrial  bonds is BB+.  The Strategy offers excellent down-side protection; for example, the worst 4-quarter down market environment for investment grade bonds occurred during October, 1993 - September, 1994.  The Lipper A-rated Average Bond Fund was -5.19% and the average Lipper Government Bond Fund was -5.39%.  CAM's Broad Market Strategy was -1.66% during that period.  The worst 4- quarter down market environment for high yield bonds spanned October,1989 - September, 1990.  The Lipper High Yield Bond Fund average was   -11.54%, The S&P 500 was 9-24% and our Broad Market Strategy was + 3.11%.

SHORT DURATION BOND STRATEGY  This Strategy was initiated in the second quarter of 2004 to accommodate those investors seeking to shorten the duration of their portfolios.  The average duration target is 3 years; the average maturity target is 5 years; the average credit quality target is BBB.  (As is the case in the Broad Market Strategy, the addition of High Yield bonds reduces the adjusted duration of an all investment grade portfolio.) A portfolio of under $300,000 will have 20 positions, while portfolios over $300,000 will have 30 positions.     

 Sharpe Ratios

(Quarterly Returns, April 1, 1989 - March 31, 2009)

One measure of our conservative philosophy is the Sharpe Ratios that measure total return per unit of risk assumed.  The ratio for our Broad Market Strategy is greater than that of our Investment Grade Strategy and significantly higher than the High Yield Strategy. Both the High Yield and Investment Grade Strategies compare quite favorably with the Lehman Indices.

CAM Broad Market Strategy  .61

 ACCOUNT MANAGEMENT  Individual accounts as small as $100,000 ($300,000 for the Broad Market Strategy and $250,000 for the Short Duration Strategy)  can enjoy the benefits of professional management.  Each account is structured for the client based on the selected strategy, unlike the mutual fund, which combines every investor's assets.  The CAM client sees his portfolio on a monthly basis; there is no guessing as to what is or is not in the portfolio.  Individual attention is given to the individual investor.

 RECENT RETURNS NET OF CAM'S FEES ONLY

See Disclosure

(for the Periods Ended March 31, 2009)

 Past performance should not be taken as an indication of future results.

High yield bonds may not be suitable investments for all individuals.

Cincinnati Asset Management, Inc. 

4350 Glendale-Milford Road   Cincinnati, Ohio 45242-3700

513.554.8503  Ext. 106 or 105       513.554.8509  Fax         cam.marketing@cambonds.com