Portfolio Performance

The portfolio risk management process includes an effort to monitor and manage risk, but should not be confused with and does not imply low risk. Past performance is not a guide to future performance and the value of investments and the income derived from those investments can go down as well as up. Future returns are not guaranteed and a loss of principal may occur. Please refer to our Form ADV for additional information. Opinions expressed are current opinions as of the date appearing in this material only. No part of this material may be i) copied, photocopied or duplicated in any form, by any means, or ii) redistributed without Shepherd Kaplan LLC's prior written consent.

Margin and Line of Credit Debt Disclosure and Illustration

Shepherd Kaplan does not consider the source of funds in determining the value of assets under Shepherd Kaplan management and upon which investment performance and asset-based advisory fees are calculated. Accordingly, Shepherd Kaplan disregards margin and line of credit debt, including accrued interest on such debt, in reporting the value of assets under Shepherd Kaplan management and upon which performance and advisory fees are calculated. Thus, for a brokerage account with a margin debt balance, the broker will deduct the margin debt balance from the total asset value in the account to report a net account value, while Shepherd Kaplan will show an asset value for that account that disregards the margin debt balance. If a client maintains a margin debt balance, we recommend that the client compare the Shepherd Kaplan-reported asset value with the brokerage-reported account value, and address any questions about any differences with their Shepherd Kaplan client representative. Following is a simplified illustration of the market values reported by Shepherd Kaplan compared to the market values reported in a client’s brokerage account when margin is held and interest is paid from a client’s account.

12/31/16 Balances Shepherd Kaplan Account Brokerage Account
Investments $1,000,000 $1,000,000
Cash $0 $0
Margin Line NA $-300,000
Total Portfolio Value $1,000,000 $700,000
Margin Interest posted on 1/1/2017 NA $-8,500
1/1/17 Balances Shepherd Kaplan Account Brokerage Account
Investments $1,000,000 $1,000,000
Cash $0 $0
Margin Line NA $-308,500
Total Portfolio Value $1,000,000 $691,500