Investment Adviser

Island Light

Island Light Capital

Education Harvard University; Boston University
Qualifications BA Economics; Certificate in Financial Planning
Founded 2012

Income Portfolio

Exceptions
Sell Discipline
Allocation Discipline
Research
Approach
Summary

Enlightened Investing is a stable approach to portfolio management, emphasizing quantitative principles and proven investment practices, while accentuating asset allocation as the most important determinant of long term success in investment planning.

Island Light's Global ETF Income Portfolio is optimally diversified across major asset classes of fixed income, global equity and alternative assets. The Island Light Capital Income ETF Portfolio is designed for long term investors seeking current income and some potential for long term capital growth. The Portfolio is targeted to a benchmark allocation of 60% fixed income investments and 40% global equities.

Our portfolios capitalize on the fact that markets are relatively macro-inefficient, allowing value to be added at the asset class level using world-class investment technology, superior investment judgment and a disciplined investment process.

We select passive index Exchange Traded Funds (ETFs) that span the major asset classes suitable for US investors. We offer a mix of global equities (Large Cap US Value and Growth, US Small Cap, International Developed, Emerging Markets), fixed income (US Treasury, US Corporate, High Yield) and alternative asset classes (Gold, TIPS).

We use ETFs that follow well established benchmarks, selected based upon their seasoning, liquidity, low expense ratio, low tracking error and other qualitative factors. We develop capital market estimates using modern statistical techniques that combine our economic and investment views with observations of past market behavior. We then apply the scientifically-proven technique of resampled efficiency to construct a set of efficient portfolios that incorporate our understanding of market structure with the new capital market estimates. This patented approach mitigates the risks of uncertainty in information and outcomes, leading to greater diversification and stability of process.

Enlightened Investing ™ is a stable approach to portfolio management, emphasizing quantitative principles and proven investment practices. This disciplined approach guides overall allocation decision. The Portfolio is targeted to a benchmark allocation of 60% fixed income investments and 40% global equities. Systematic rebalancing incorporates recent market activity, economic factors and expected trading costs to benefit our focus of maximal returns at any given level of risk.

Enlightened Investing ™ is a stable approach to portfolio management, emphasizing quantitative principles and proven investment practices. This disciplined approach guides buy and sell decisions. From time to time, we will replace an ETF security with one which, we believe, may provide a more attractive security position. While we do not explicitly consider the effect of taxes in our buy and sell decisions, as a matter of investment philosophy, we try to keep turnover at or below 30% annually.

None.

Replicability

100.0%

Replicable

Top 5 Holdings View all

9.4%

9.2%

7.9%

7.7%

7.6%

Model commentary

The U.S. economy's virtuous circle

8 May 2013

My take on Boston, the markets and the economy.
Easy money should support global equities in 2013 23 April 2013
Enlightened investing for uncertain times 14 March 2013
Trends ahead: Low rates, energy boom, US slowdown, European recovery 16 January 2013
Our 2013 lineup: stocks, emerging market bonds, REITs and gold 21 December 2012

Performance detail

Manager
Dow Jones Moderate Conservative
S&P 500

30D 90D 365D SI

Performance

Inception December 29, 2011

as of May 16, 2013	Manager	Dow Jones Moderate Conservative	S&P 500	Average Subscriber
Past 30 days	1.8%	1.6%	4.8%	1.8%
Past 90 days	2.8%	2.8%	8.6%	2.7%
Past 365 days	10.6%	10.8%	24.6%	-
Since Inception (Annualized)	9.5%	9.7%	21.4%	-
2013 (YTD)	4.2%	4.5%	15.7%	4.1%
2012	8.9%	8.4%	13.4%	-

Risk Metrics

Last 365 days

as of May 16, 2013	Manager	Dow Jones Moderate Conservative	S&P 500
Best 30 days	3.6%	3.3%	7.5%
Worst 30 days	-1.9%	-2.3%	-7.0%
Volatility	4.9%	4.5%	12.8%
Sharpe Ratio	2.12	2.38	1.90
Sortino Ratio	3.13	3.67	2.75
Maximum Drawdown	-2.1%	-2.6%	-7.7%
Value-at-risk (95%, 1 week)	-1.1%	-1.0%	-3.0%

	vs. Dow Jones Moderate Conservative	vs. S&P 500
Information Ratio	-0.05	-1.60
Alpha	0.5%	2.4%
Beta	0.96	0.34
R-Squared	0.75	0.79

Island Light Capital's other strategies

Latest transactions view all

Average trades per month 6.0

Executed	Symbol	Security	Replicable	Type	Price
05/10/13	QAI	IQ HEDGE MULTI-STRAT TRACKER		Buy	$28.54
05/10/13	GLD	SPDR Gold Shares		Sell	$138.99
05/10/13	VWO	Vanguard Emerging Markets ETF		Sell	$44.23
05/10/13	VPL	Vanguard Pacific ETF		Sell	$60.99
05/10/13	IWM	iShares Russell 2000 Index Fund		Buy	$96.86
05/10/13	IWD	ISHARES RUSSELL 1000 VALUE		Buy	$83.93
05/10/13	EMB	iShares JPMorgan USD Emerging Markets Bond Fund		Sell	$120.51
05/10/13	JNK	SPDR Barclays Capital High Yield Bond ETF		Buy	$41.64

Important Information

1. Past performance is no guarantee of future results.

2. Performance of the model manager's account is calculated by Covestor on a daily time-weighted basis, including cash, dividends and earnings distributions, and broker commissions. Manager returns include trades that fail Covestor's trading rules, do not reflect any Covestor suitability or risk score restrictions and are exclusive of Covestor fees. More

3. Average subscription returns ("Avg Sub" or "Avg Client") are calculated by Covestor and are composed of the average, daily, time weighted returns of all active subscriptions to the underlying model. These daily average returns are then linked together for the timeframe requested. In addition, these returns include cash, dividends and earnings distributions, brokerage commissions, Covestor advisory fees, and reflect individual client suitability and risk score restrictions. More

4. All graph data is as of the end of day for the referenced period, unless otherwise specified. The subscription minimum is the minimum subscription required to follow a particular model. The minimum amount is determined by Covestor, based on the characteristics of the underlying model. It should not be considered as specific investment advice for your investment situation.

5. The performance charts are provided for informational purposes only, and should not be used as the basis for making an investment decision. Variables such as corporate actions or foreign exchange may affect daily performance displays. We rely on mathematical formulas, computer programs, and pricing information from third-party vendors to provide these returns. Neither Covestor nor any of its data or content providers shall be liable for any errors in this information or any actions taken by you in reliance upon this information.

6. Benchmark returns have been calculated by Covestor using a time-weighted calculation of daily index valuations and do not include cash, dividends and earnings distributions, or transaction costs. More

7. Leverage indicates the level of margin utilized and is calculated by dividing gross exposure by portfolio net liquidation value.

8. All Model Manager information including personal data, profiles, strategies, monthly investment reports, and historical results outside of Covestor has been provided by the Model Manager. Covestor makes no representation or warranty of its accuracy, completeness or relevance and it does not represent the opinions of Covestor. Transaction history is available upon request. Model classifications (Approach, Asset Class) are provided by Covestor, and are intended to serve as a general guide.

9. Top Replicable Holdings: These securities are currently held in the model manager's brokerage account. Those marked as "Replicable Holdings" currently pass Covestor's trading rules, subject to individual client constraints. Eligibility for replication may change over time. Actual client subscription holdings may vary.

10. Latest Transactions: These transactions were executed in the model manager's brokerage account. Those marked as "Replicable" () passed Covestor's trading rules and were eligible for replication at the time of execution, subject to individual client constraints. Eligibility for replication may change over time. Actual client subscription trade activity may vary.

11. S&P 500 Index is an unmanaged index compiled by Standard & Poor´s Corp. Index returns do not reflect any management fees, transaction costs or expenses. Individuals cannot invest directly in an Index. S&P 500 index data: S&P/Dow Jones Indices LLC, a subsidiary of The McGraw-Hill Companies Copyright © 2013.

Island Light