FINANCIAL MANAGEMENT ADVISORS, LLC

FMA Investment Philosophy

The main tenets of our philosophy state that strong fundamental research is the key to successful investment management. Superior returns are attainable on a consistent basis by applying a disciplined research methodology which anticipates long-term trends and identifies the most attractive relative value opportunities.

We employ fundamental, detailed research on a continuous basis to uncover under-priced, under-researched investment opportunities. This has lead to excess returns over any market cycle.

With our fundamental research focus, we seek to identify undervalued assets in the context of the foreseeable risks. We focus on the long-term. We are not market timers and, generally, remain fully invested; cash is a residual asset. Our analysis starts top-down looking at broad economic trends and state-specific factors. The analysis continues bottom-up by evaluating each credit based on its relative value versus the comparable universe of securities.

FMA Research Philosophy

Our fundamental research philosophy advocates a bottom-up approach where we analyze company financials, company-specific fundamentals, and industry & macro-economic trends. We also hold discussions with company management, sell-side analysts, industry analysts, and other industry and financial contacts. Additionally, our analysts attend conferences and hold internal research meetings. We continuously monitor and update our research ideas, both before and after purchase. We know our companies and their management intimately. Our comprehensive & thorough coverage allows us to identify opportunities for profitable investment.

Our portfolio investment actions rely heavily on the predictive value of the research team’s credit analysis skills. All of our analysts have had extensive credit analysis and valuation experience. In addition all members of the analytical team have advanced degrees and in aggregate have 25 years of high yield investment experience.

In the final analysis, our research-driven approach and the success we have obtained from following this philosophy in a disciplined fashion has separated us from our competitors. FMA’s high-yield & investment-grade fixed income strategies were both included in Pension & Investment’s annual ranking of the 10 top-performing fixed-income investment managers over the last five-year period (Pensions & Investments, February 20, 2006). This is yet further evidence that adherence to our credit-driven approach has provided the “alpha” difficult to achieve in most fixed-income strategies.

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