Local Office Blog

Press Release: Sherwood Forest 5-Year Anniversary

ALTERNATIVE TREND FOLLOWING STRATEGY PROPELLS SHERWOOD FOREST TO FIVE YEAR HIGHS Single Trend Following Strategy Responsible for Steady Gains Fueling Company’s Growth RICHMOND, VA. – May 1, 2012 —The recession hammered many investment advisory companies. Sherwood Forest Capital Management, wasn’t one of them. As it marks its fifth anniversary in 2012, Sherwood Forest, an investment advisory company based here, has prospered by successfully adopting elements of an alternative methodology, Trend Following, and making it its flagship investment program. Alternative investments are becoming more mainstream in investors’ portfolios. Trend Following is a strategy that takes advantage of long-term moves that play out in various markets. The strategy seeks to benefit from both sides of the market, and profit from the ups and downs of the stocks or futures market. Sherwood Forest was launched in 2007 by Mr. Douglas Stewart, who serves as Portfolio manager and Partner along with Mr. Joseph McDonald, who serves as the Co-Portfolio Manager and runs day-to-day operations. Mr. Stewart began focusing on stock market analysis over a decade ago while at Scott & Stringfellow in Richmond. Mr. Stewart modified his version of the Trend Following program by reducing the traditional level of portfolio draw down to fit the risk tolerance of the firm’s retail investor client base. The company’s objective, according to Mr. Stewart and Mr. McDonald. is to provide everyday investors with a strategy once reserved only for high net worth and institutional clients. Sherwood Forest’s alternative investment program proved highly successful for clients as the company’s composite performance was positive four consecutive years through the recession from 2007 to 2010. The firm’s Trend Following system returned over 41% from its inception to December 2008, and an additional 4% from that point through March 2012. This compares to the firm’s benchmark of the Dow Jones Credit Suisse Managed Futures Index, which returned over 31%, and 5%, respectively, for the same time periods. The S&P 500 index suffered a decline of -44% before rebounding 67%, respectively, for the same time period. Cumulatively, the total return for the Sherwood Trend Following strategy is +47.03% versus +10.51% for the S&P 500 Index since inception. On an annualized basis, the Sherwood Forest strategy is up 8.57% over the last five years, versus 2.01% for the S&P 500 Index. All performance data is as of 3/31/2012. “We believe we have proven our value over the past five years, offering investors an excellent tool that deserves a spot in any portfolio blend, which embraces risk management,” said Mr. McDonald. “We compliment fundamental mutual funds or investment managers that deploy a mainly long-bias investment strategy as we expect our program will build significant profits when those long-biased managers are losing money.” While most Trend Following strategies aim to profit from opportunities in a variety of asset classes often broadly represented in a portfolio, Sherwood Forest takes a slightly different approach. Sherwood Forest aims to allocate about 75% of the program to equity related trends. The other 25% of the portfolio seeks to profit from opportunities in Commodities, Fixed Income, and Currency markets. Sherwood Forest Capital Management, an SEC Registered Investment Advisor, offers its strategy without any performance fees and uses Exchange Traded Funds rather than Futures. In 2009, the company launched a mutual fund, the Sherwood Forest Alternative Fund to begin building a mutual fund track record for its Trend Following Program. In 2011, the firm added a volatility focused overlay to their strategy to seek profits from spikes in overall equity markets volatility. The strategy is designed to be used in conjunction with the management of the Trend Following program, offering an opportunity to generate profits even during times when Trend Following is offering unfavorable short-term results. Sherwood Forest believes this volatility specific strategy will allow the Trend Following program to outperform other managers, who employ similar Trend focused strategies. “Recognition of the current market environment is key to managing the risk in an investment portfolio,” said Mr. Stewart. “Markets either Trend or Consolidate. Thus a strategy that can dynamically change to fit either market environment offers a positive risk/reward at all times. We believe that our approach to both identifying and managing these constantly changing market conditions offers long-term value to our investors.” Co-Portfolio Manager, Joseph McDonald was selected as a 2012 Rising Star of Mutual Funds, for the 19^th Annual Mutual Fund Industry Awards by Fund Industry Intelligence, Institutional Investor Inc., and sponsored by Putnam Investments. Co-Portfolio Manager, Joseph McDonald will be a Panel Speaker for the 2012 Opal Financial Group Family Office & Private Wealth Management Forum, “The Race for Returns,” a private wealth series event in Rhode Island. About Sherwood Forest Sherwood Forest is an SEC Registered Investment Advisory firm with $15 million in assets under management. Sherwood Forest offers a mutual fund and direct investment programs in a managed account structure. We employ investment strategies which seek gains in bull markets and bear markets alike. Our strategy uses price and technical analysis rather than fundamental analysis. We are markedly different than many other investment products due to our lack of directional bias. The flagship investment program, Sherwood Alternative Program, is an ETF focused strategy that seeks to profit from positive and negative trends in equities, commodities, fixed-income and currency markets. For more information, visit http://www.sherwoodforest.us. How Sherwood Forest “Follows” Trends; the investment team monitors a basket of 30 to 50 ETFs including inverse ETFs that mainly cover equity based indices and sectors. We monitor these ETFs and watch for price characteristics that reveal trends. These characteristics are based on technical indicators such as Price Channels, Moving Averages, Momentum and Strength indications, and Overbought and Oversold conditions. When an ETF reveals a set of bullish trend indications, we purchase an initial position in that ETF with a pre-assigned stop-loss on the position. We review inverse ETFs in the same way we evaluate normal ETFs, and as a result, we do not have a directional bias. This strategy is designed to capture trends to seek profits in both up and down markets alike. Disclosure This information does not constitute a solicitation or an offer to buy or sell any investment security, nor provide investment advice. Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that the future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended by the adviser) will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals may materially alter the performance, strategy and results of your portfolio. Performance results reflect the reinvestment of dividends and capital gains. The Sherwood Forest Alternative Program reflects the performance of fully discretionary accounts and excluded all non-discretionary commission based accounts between March 31, 2007 and August 31, 2007. After August 31, 2007 all accounts where fee based discretionary accounts and are included in the composite. The composite applies a quantitative approach to investing in ETFs which may represent long or short market segments. For comparison purposes the composite is measured against the S&P 500 Index. The inception of the composite is April 1, 2007. The U.S. Dollar is the currency used to express performance. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client or prospective client‘s investment portfolio. An index such as the S&P 500 is a broad measure of the market performance of a specific group of securities in a particular market or sector. You cannot invest directly in an index. An index does not have an adviser, so its performance is not reduced by commissions or expenses. The Sherwood Forest Alternative Program performance (from 4/1/07 to 01/31/09) has been examined by Ashland Partners and Co. LLP.

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Press Release: Sherwood Forest See Volatility as the “New Normal”

SHERWOOD FOREST SEES VOLATILITY AS THE “NEW NORMAL” TODAY RICHMOND, VA. – May 1, 2012 — Sherwood Forest Capital Management sees today’s volatile stock market as the “New Normal,” and seeks to profit from it rather than trying to reduce volatility in its portfolios. Due to the market’s volatility over the last three years, the Managed Futures and Trend Following sphere has experienced difficulty generating decent returns. Indeed, the equity markets in particular have had extended periods of trend-less motions accompanied by significant intraday and daily price volatility. As a result, a raft of “low volatility” investment products –often termed “Managed Volatility Products” –have tumbled onto the market introduced by firms in an effort to satisfy the industry’s  increasing demand for low-beta products. Sherwood Forest, an investment advisory firm based in Richmond, takes a contrarian view. The firm sees volatility in an entirely different way –a trend likely to be more part of the market’s usual activity going forward, and has introduced a special program designed so they can profit from both the market’s ups and downs. “We observe volatility as the new normal, an environment borne out of the new complexities which exist in today’s financial market system that were less prevalent a decade ago,” said Mr. Joseph McDonald, a partner of Sherwood Forest Capital Management, and co-portfolio manager of the Sherwood Forest Alternative Fund.  “Rather than seek ways to reduce volatility in our portfolios, we look for ways to embrace it.” Sherwood Forest introduces Path Volatility program Reasoning investors can profit both ways from volatility –when the market is down as well as when it is up -- Sherwood Forest has introduced a “Path Volatility” program, designed especially to focus on short-term trends and opportunities during volatile periods. During these periods the firm aims to build profits from these opportunities, by taking positions primarily in S&P 500 Index linked ETFs, including the Dow Jones Industrial Average linked products, Real Estate, and the MSCI Emerging Markets Index. The Sherwood Forest program, Path Volatility, is used in the management of the Sherwood Forest offerings. (For more information, see www.PathVolatility.com) Sherwood Forest is also offering this strategy as a standalone investment solution for the managed account industry. “Either way in a volatile environment, a portfolio can aim to generate positive results with the Path Volatility program,” Mr. McDonald said. “Path Volatility can be considered an ideal investment solution for those looking to access a strategy which focuses on embracing volatility as a profit generator rather than a way to reduce one’s involvement in the financial market.   About Sherwood Forest Sherwood Forest is an SEC Registered Investment Advisory firm with $15 million in assets under management. Sherwood Forest offers a mutual fund and direct investment programs in a managed account structure. We employ investment strategies which seek gains in bull markets and bear markets alike. Our strategy uses price and technical analysis rather than fundamental analysis. We are markedly different than many other investment products due to our lack of directional bias. The flagship investment program, Sherwood Alternative Program, is an ETF focused strategy that seeks to profit from positive and negative trends in equities, commodities, fixed-income and currency markets. For more information, visit http://www.sherwoodforest.us. How Sherwood Forest “Follows” Trends; the investment team monitors a basket of 30 to 50 ETFs including inverse ETFs that mainly cover equity based indices and sectors. We monitor these ETFs and watch for price characteristics that reveal trends. These characteristics are based on technical indicators such as Price Channels, Moving Averages, Momentum and Strength indications, and Overbought and Oversold conditions. When an ETF reveals a set of bullish trend indications, we purchase an initial position in that ETF with a pre-assigned stop-loss on the position. We review inverse ETFs in the same way we evaluate normal ETFs, and as a result, we do not have a directional bias. This strategy is designed to capture trends to seek profits in both up and down markets alike. This information does not constitute a solicitation or an offer to buy or sell any investment security, nor provide investment advice. Disclosure Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that the future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended by the adviser) will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client or prospective client‘s investment portfolio. You cannot invest directly in an index. An index does not have an adviser, so its performance is not reduced by commissions or expenses.

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