Lakeshore Capital, LLC claims compliance with the Global Investment Performance Standards (GIPS®). Lakeshore Capital, LLC is a registered investment advisor.
Lakeshore Capital Value Composite contains fully discretionary accounts with similar value equity investment strategies and objectives. For comparison purposes the Lakeshore Value Composite is measured against the S&P 500 Index. In presentations shown prior to June 30, 2006, the composite was measured against the S&P 500 Index and the S&P 500 Index/Citigroup Value indices, excluding the reinvestment of dividends. The benchmarks were changed to more accurately reflect the strategy of the composite. Additional information regarding the prior benchmarks is available upon request. Beginning September 1, 2004, the minimum account size for this composite is $80 thousand.
The U.S. Dollar is the currency used to express performance. Past performance is not indicative of future results. Returns presented include the reinvestment of income.
Index Relative Statistics: Statistical risk/return measures
Up/Down Table: This table is a measure of managers’ performance in up and down markets
relative to the market itself. A down market is one in which the index’s quarterly return is less
than zero. To calculate down-market capture ratio, we link returns for the manager and the
market for all down-market quarters over the selected time frame, then divide the manager’s
return during down-market quarters by the index’s return during the same quarters. To calculate
up-market capture ratio, this same process is carried out using returns from periods when the
index’s return was greater than zero. The lower the manager’s down-market capture ratio, the
better the manager protected capital during a market decline. A value of 90 suggests that a
manager’s losses were only 90% of the market loss when the market was down.
Caution: The up/down table capture ratios can be deceiving if the nominal numbers involved are
small. For example, if a manager’s return during down market periods was 3%, while the index’s
return during those same periods was -1%, the manager’s down market capture ratio
would be 300.
Alpha measures nonsystematic return, or the return that cannot be attributed to the market. Thus, it can be thought of as how the manager performed if the market has had no gain or loss. In contrast, beta measures the return that is attributable to the market and is a measure of the portfolio’s overall volatility. If the market’s return as measured by an index was equal to the risk-free rate, the manager’s expected excess return would be alpha. A positive alpha implies that the manager has added value to the return of the portfolio over that of the market. Returns with a negative alpha do not reflect any positive contribution by the manager over the performance of the market. An alpha of zero implies that a manager has provided a return that is equivalent to the market return for the manager’s specific risk class.
Beta measures the risk level of the manager. Beta measures the systematic risk, or the return that is attributable to market movements. In contrast, alpha measures the nonsystematic return of the portfolio, and standard deviation measures the volatility of a portfolio’s returns compared to the average return of the portfolio. A beta equal to one indicates a risk level equivalent to the market. Higher betas are associated with higher risk levels, while lower betas are associated with lower risk levels.
Sharpe ratio is used to measure risk-adjusted performance. It is calculated by subtracting the risk-free rate from the rate of return for a portfolio and dividing the result by the standard deviation of the portfolio returns.
Lakeshore Capital, LLC Full Compliance Presentation
A full compliance presentation, including descriptions of all
composites, is available.
A printed version can also be obtained. Please contact:
Lakeshore Capital, LLC
3755 Corporate Woods Drive
Birmingham, AL 35242
Tel: 205-313-9000
Fax: 205-313-1221
Web: www.lakeshorecapitalllc.com