The low single-digit returns achieved by the U.S. equity markets in 2011 might lead one to think it was an uneventful year.  Nothing could be further from the truth.  Investment markets across the globe experienced a torrent of volatility all year long.  Wild swings in currencies, commodities and stocks were a hallmark of 2011.  In fact, 35 trading days in 2011 saw the S&P 500® Index experience a two-percentage point swing either up or down, and 22 such days in 2010.  By comparison, the S&P 500® didn’t post a single move of more than 2% in 2005 and just two in 2006.  European sovereign debt issues, civil unrest throughout the Middle-East, gridlock in Washington D.C., a downgrade of the United States AAA debt rating, stubbornly high U.S. unemployment and the potential for a global growth slowdown all weighed heavily on equity markets. 

Despite these considerable headwinds, U.S. corporate earnings were reasonably strong.  Seventy percent of the companies in the S&P 500® Index reported earnings above analyst expectations in the third quarter.  This corporate earnings strength helped revive the market and lead to a strong performing fourth quarter.  The Russell 1000® Growth Index and the S&P 500® Index posted strong positive returns of 10.61% and 11.82%, respectively for the quarter.  For the year, the Russell 1000® Growth Index finished up 2.6%, although only five of twelve months saw positive returns.  For the first time since 2007, the large-cap Russell 1000® Index outperformed the small-cap Russell 2000® Index +1.5% vs. -4.2%. 

The best performing sectors in the Russell 1000® Growth for the period from October 31, 2011 through December 31, 2011 were consumer staples (+5%), telecommunications (+7%), and energy (+1%).  The possibility of lowered government spending, a decreasing unemployment number and corporations with strong balance sheets coupled with large amounts cash, gave investors reasons for optimism at year-end.  
 
Since its inception (11/1/11), the Mar Vista Strategic Growth portfolio was up 1.20%.  For this period, the strategy saw strong relative performance in consumer discretionary (+5%) and consumer staples (+6%) offsetting underperformance in health care (-8%), as short-term macroeconomic issues negatively impacted the stocks of medical device companies. 

While sometimes difficult to stomach, market environments like these provide the disciplined and patient investor with opportunities to buy world-class businesses at very attractive prices.  In fact, during the market sell-off in the third quarter, we were able to make select purchases of companies trading at valuations not seen since the 2008/2009 bear market.  These market disruptions often seem to be a maximum point of risk to some investors.  However, for us, we see them often as the best entry points as the market has already priced in overly pessimistic scenarios.  Today our client’s portfolios represent our commitment to invest only in those rare “wide-moat” businesses with what we believe are sustainable competitive advantages and abundant opportunities to grow and reinvest capital at high rates of return.  Over time, we believe this approach may lead to superior long-term risk-adjusted returns, in turn, preserving capital and increasing the wealth of our clients.

Very truly yours,

Silas A. Myers, CFA         Brian L. Massey, CFA
Portfolio Manager            Portfolio Manager

Strategic Growth Fund (RMSIX)
Since Inception (11/01/11):        1.20%

Performance quoted represents past performance and there is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost.  Current performance may be higher or lower than the performance data quoted above.  Please call 800-497-2960 to obtain current and the most recent month-end performance data.

A redemption fee of 0.75% of the total redemption amount (calculated at market value) may be imposed if shares are sold within 60 days of the purchase of such shares.  This fee will apply to redemptions processed for the purpose of receiving redemption proceeds or processing an exchange between the Funds.

Gross expense ratio:  0.90%
The fund invests in large capitalization companies and in growth companies which can be more sensitive to the company’s earnings and more volatile than the stock market in general.  The Fund may also invest up to 35% in securities of companies in other capitalization ranges, including small and mid-capitalization stocks, which can possess a greater risk of loss than large capitalization stocks. The fund may also invest in foreign securities including American Depositary Receipts, which are subject to risks including currency fluctuations, economic and political change and differing accounting standards.  Additional risk information may be found in the fund prospectus.