The Fiduciary Capital
Preservation Plus Fund

With $10 million in committed assets, FCM has launched its new daily valued proprietary collective trust fund, the "Fiduciary Capital Preservation Plus Fund." The Fund has an initial crediting rate of 7.68% making it the highest yielding commingled stable value fund in the industry. FCM has selected Firstar Bank, N.A. as the trustee of the fund that can be utilized by smaller plans that qualify under Section 401(a), 414(d), or 457(b) of the Internal Revenue Code. Firstar has over a decade of experience in serving as the trustee and recordkeeper for stable value funds, and FCM, as the Investment Advisor, has over 13 years of stable value experience with one of the most distinguished records in the

industry. The Fund will be distributed through Ohio National Financial Services as part of its full service pension product. FCM is seeking to interest other institutions in becoming "Omnibus Holders" to add the Fund to their own full service offerings for their own clients. The fund can also be used by larger plans to invest a portion of their assets in order to enhance the yield on their portfolios as well as to achieve a measure of stable value style diversification. In addition, FCM expects to attract smaller retirement plans to invest on a direct investment basis.

FCM believes that smaller plans with approximately $10 million or less in stable value assets are better served by a pooled fund than by a separate account, primarily due to the ability to obtain a higher degree of investment diversification than would otherwise be possible. As the Fund grows, FCM expects to diversify into approximately 15 to 20 different issuers of GICs plus investments in both buy and hold synthetic GICs and actively managed, or "evergreen," synthetic GICs. Over time, FCM expects to employ multiple subadvisors for the actively managed synthetics to achieve diversification by style.

As the fund grows, FCM's average size GIC investment will grow to approximately $5 million, which FCM has found over its 13 year history is generally the optimal size GIC for both rate and diversification purposes. For example, as of this writing, the high GIC rate reflected in the FCM/BARRON'S Rate Desk Summary was 7.79% for a five year, $5 million, compound interest GIC while at the same time, the high $1 million GIC offered a yield of 7.74% and the high $25 million GIC offered a yield of only 7.63%! Moreover, there were 20 issuers interested in $5 million contracts, and only 12 offering illustrative quotes for GICs as large as $25 million.

Portfolio liquidity is important as well. With quarterly maturities initially, and monthly maturities as the Fund grows, there will be a substantial amount of internal liquidity without the need to hold large amounts of cash equivalents or to access contracts regularly for "benefit responsive" withdrawals. This degree of liquidity results in attracting higher rates on GICs and lower risk charges on synthetics. It also assists in improving diversification of the portfolio, spreading reinvestment risk, and enhancing "tracking efficiency" by keeping pace with the changes in prevailing interest rates over time.

The Fund objectives are to provide a low-risk, high-yielding investment for participating plans, consistent with and providing for the following:

1. Preservation of capital
2. Reasonable tracking of current interest rates
3. High credit quality
4. Investment and contract liquidity to pay all plan benefits at book value

The 11-1/2 year track record of the composite of FCM's managed accounts has outperformed comparable conventional bond portfolios while exhibiting less volatility than for cash equivalents, resulting in our #1 ranking both as a stable value manager and in the even broader PIPER Limited Duration Managed Fixed Income universe. Consequently, we expect that not only will defined contribution plans find our new Fiduciary Capital Preservation Plus Fund attractive, but defined benefit plans will as well, since Office of the Comptroller of Currency regulations permit participation by such plans in stable value pooled funds.

If you have interest in learning more about the Fiduciary Capital Preservation Plus Fund, please contact Peter Bowles at 203-266-0440.