Disclaimer
"All references to performance in the text and data refer to an analysis of market indexes or hypothetical portfolios using historical data from July, 2005 to July, 2006, and not for any actual accounts, either past or present.
Survivor bias: Survivor bias automatically eliminates firms that failed during the studied period. We started our data collection and analysis efforts in 2005. We did not fully consider all the companies that were, in the past, part of the companies included in 2005 due to a lack of information about business failures, mergers and acquisitions. Thus, there is survivor bias.
Non tradable strategy: The methodology does not represent a feasible trading strategy because we could not have known what the component stocks were on July 25, 2005. Since the component stocks have changed, creating the initial portfolio in 2005 would have required more diversity related performance data than was generally available.
Static performance: An implicit assumption about the data is that the diversity related performance of the companies would have remained static from 2005 to 2006. In reality, this may or may not have been the case. The diversity related performance of a company will improve and deteriorate relative to peers over time. This type of bias may or may not be significant for the results of the portfolio, but it would definitely impact the selection of companies to be included in the portfolio.
The analysis in no way represents the results of actual trading using client assets, but rather involves hypothetical results obtained by means of the retroactive application of a theoretical study and analysis designed with the benefit of hindsight.
Expenses: No consideration was given to expenses, which would normally be included in a real-world scenario, including management fees, commissions, markups or markdowns, other trading costs, taxes, and other fees and costs of all types.
Dividends: The data does not include the receipt of dividends. For actual client portfolios, the receipt and investment of dividends could have a positive or negative effect of total return, depending upon actual market performance during the selected time period.
Hypothetical vs. actual stock and/or portfolio performance: There are frequently sharp differences between hypothetical and actual stock and/or portfolio performance and the actual results achieved by any particular investment program. Hypothetical investing does not involve financial risk and no hypothetical stock record can completely account for the impact of financial risk in actual investing. For example, the ability to withstand losses and the ability to stick to a particular investment program in spite of trading losses are material points which can also adversely affect actual investment results. There are numerous other factors related to the stock markets in general or to the implementation of any specific investment program which cannot be fully accounted for in the preparation of hypothetical performance results, all of which can affect actual results."
SOURCE FOR DISCLAIMER: Profitable socially responsible investing? An Institutional investor's guide. By Mark J. Lane, Esq., www.advocacyinvesting.com, Institutional Investor Books, 2006.
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