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IFG WEALTH MANAGEMENT FORUM THE PREMIER EVENT FOR NORTH AMERICAN FAMILY OFFICES

April 23-24, 2012, The Ritz-Carlton, Phoenix, Arizona

www.ifgwealthmanagement.com

SNW Asset Management on Growing

Assets through the Eurozone Crisis

In today’s globalized world, US investors could be just

as vulnerable to the Eurozone sovereign debt crisis as

European investors. Limiting exposure to European

assets is not enough – there could be underlying

counterparty risks. However, “Waiting for the

uncertainty to subside could result in missed

opportunities”, according to Eddie Bernhardt, Senior

Portfolio Manager and Managing Director of SNW

Asset Management.

Ahead of the IFG Wealth Management Forum 2012 in

Phoenix, Arizona, April 23-24, Eddie Bernhardt discusses

how private wealth managers can ensure investment

portfolios thrive despite the Eurozone uncertainties.

How can private wealth managers in North

America shield their clients’ assets from the

Eurozone debt crisis?

Eddie Bernhardt – Wealth managers need to look at

their clients’ overall exposure to the sovereign entities

and banks with a large exposure to the countries

experiencing a debt crisis. It is not simply about

considering their exposure to European or global equity

mutual funds, but also to the money market mutual

funds and the counterparty risks of US banks. Some of

the large US broker dealers have substantial European

counterparty risks.

The mutual fund disclosure or the financials of a large

brokerage firm will not give wealth managers all the

information they need. Some digging and interpretation

is essential. This means a lot more work for US wealth

managers.

What investment opportunities has the European

debt crisis brought about?

Eddie Bernhardt – We have seen the typical panicked

sell-off. Most finance companies bonds spreads have

widened, bond prices have declined, and yields are up. It

does not matter to the market if these entities have

exposure to Europe or not. The markets are throwing all

finance into the same bucket, including companies with

strong balance sheets and limited exposure to Europe, if

any. This means there are good bonds available right

now, but investors need to know where to look for them.

The opportunities are not necessarily in European banks

– there is still a lot of uncertainty and volatility – but the

sell-off has made healthy US banks and finance

companies cheaper.

What is your outlook on the fixed income market?

What are the opportunities in that space?

Eddie Bernhardt – Investors should prepare for volatility.

Treasury rates at such low levels and economic

uncertainty will lead to bond prices swinging around a

fair amount. Fixed income investors cannot assume that

bond markets will be stable and safe.

Corporate bonds with wide credit spreads are offering

some value today, but it is not as easy as picking an

index fund that has experienced a sell-off and riding it

out. There is value out there in specific municipal,

corporate and government backed securities, you just

have to know where to look. Sitting in cash and waiting

for rates to go up is not advisable. Earning zero versus

owning a short-term, low volatility portfolio of bonds

that will mature in less than five years would give at

least one or two per cent.

How could investors maximize returns on fixed

income assets?

Eddie Bernhardt – First, you have to know your client’s

risk tolerances and investment objectives. Every

portfolio we construct is client specific and can be

customized to meet their unique needs. Second, look for

the strongest credits and bond structures in today’s

market, which should include out of favor sectors. Third,

monitor portfolios daily to assure the holdings continue

to offer a good risk-reward trade-off for the client. Often

times the way to maximize returns is not to buy the

bond with the highest yield, but to look for bonds with

attractive yields relative to their credit quality. This can

give investors the added benefit of price appreciation.

Eddie Bernhardt, Senior

Portfolio Manager and

Managing Director of SNW

Asset Management, on how

the Eurozone debt is

affecting the US private

wealth management

industry. SNW Asset

Management will be present

at the upcoming IFG

Wealth Management

Forum 2012.

Interview with:

Eddie Bernhardt

Senior Portfolio Manager

and Managing Director

SNW Asset Management

FOR IMMEDIATE RELEASE

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IFG WEALTH MANAGEMENT FORUM THE PREMIER EVENT FOR NORTH AMERICAN FAMILY OFFICES

April 23-24, 2012, The Ritz-Carlton, Phoenix, Arizona

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What advice for making a fixed income portfolio tax-efficient could you share?

Eddie Bernhardt – Tax efficiency can come in the form of tax free municipal bonds or capital gains management. First, we make sure to know the

clients’ marginal income tax rate and how tolerant clients are to taking short or long term capital gains. If they are in the 25 to 28 per cent bracket,

corporate bonds after tax make a lot of sense. If the client wants to limit or maximize capital gains in the portfolio we manage, it is noted. In high

income tax states, state-tax free government agency bonds may make sense. Doing the tax math and moving clients in and out of investment grade

sectors would give them a higher effective return.

What is unique in your approach to finding value in the marketplace?

Eddie Bernhardt – We manage separate accounts to each client’s investment objectives and we open up the financials and dig in to the credits we

monitor. That is how we maximize returns for each client and that is how we find value. By having a clear understanding of the risks inherent in each

bond we purchase, we can find opportunities in undervalued securities while avoiding overvalued bonds. Investors should not depend on the credit

rating agencies, index funds, or generic fixed income strategies for their high net worth clients. Rating agency models are flawed and generic

products aren’t built to meet your client needs. By looking across the municipal, corporate, and government bond markets we are able to build

portfolios that fit a client’s unique needs. Investing is really about doing research, finding your own value in the marketplace, and executing a strategy

based on that for each client.

Salpi Balian, Press Manager – IFG, pressifg@ifgemea.com

The IFG Wealth Management Forum 2012

IFG’s Wealth Management Forum 2012 will take place at the Ritz-Carlton, in Phoenix, Arizona, April 23-24, and provides a unique platform for

investment decision makers from single and multi-family offices to engage in vibrant benchmarking sessions and gain practical solutions and best

practices to achieve optimal portfolio returns.

For more information please send an email to pressifg@ifgemea.com or visit the event website at www.ifgwealthmanagement.com

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SNW Asset Management

SNW Asset Management is a fixed-income investment management firm. Its sole focus is the active management of separate accounts that are

uniquely tailored for each client. They conduct in-depth credit research on each individual bond held, which eliminates dependency on rating agencies

and allows them to maximize yield while controlling risk.

www.snwam.com

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