What is Diversity Investing? A diverse corporation has an inclusive work force, marketplace and business community (suppliers, partners and investors). To successfully compete in the United States and globally, companies must reflect the changing population within the ranks of their employees and managers. Increasingly, the faces of our work force, our suppliers and our investors are faces of color, faces of women, faces of people with disabilities, faces of gay, lesbian, bisexual and transgendered individuals, faces of older workers. By integrating diversity into the workplace, companies vigorously tailor their offerings to fit the needs of shifting cultural priorities. What Is the Diversity Edge? Successful firms have access to the broadest possible base of customers and suppliers, and multicultural marketing is a proven way to boost revenues. Diversity friendly companies may also have lower employee turnover and higher innovation and productivity, reflective of a culture of inclusion. Will the Portfolio aim for high returns? Yes. The Diversity criteria are the core focus of The Creative Investment Research, Inc. Diversity Portfolio, but they are not sufficient. We also have a fiduciary obligation to produce a good investment return for shareholders. The Creative Investment Research, Inc. Diversity Portfolio has all of the risk/reward characteristics of any equity investment, so returns are likely to exceed cash over a time horizon of ten years or more. In order to enhance security selection, the fund will use the standard tools of any value investor, which help build a portPortfolio of stocks that are likely to outperform the market. The portfolio managers will assess each company's profitability, cash flows, balance sheet, and potential growth. The fund will also evaluate the competence of management, corporate governance, and the company's historic record of achieving forecasted results. We may also consider other factors such as near-term catalysts, the volatility and trading history of the stock, insider buying and selling of shares, or any other criteria that we deem valuable in security selection. We will that look at the stock's valuation and investor expectations before we make a final decision. These are the range of factors that comprise our security selection process, and how we will choose stocks the universe of public traded U.S. stocks that meet our SRI criteria. What companies are in the Portfolio? Familiar companies such as ABBOTT LABS, ALLSTATE CORP., AMERICAN EXPRESS CO., AT&T, BANK OF AMERICA, BAUSCH & LOMB INC., COCA COLA, DAIMLERCHRYSLER, FORD MOTOR, HEWLETT PACKARD, KRAFT FOODS, MARRIOTT, SEMPRA ENERGY, SPRINT NEXTEL, STARBUCKS, TIME WARNER INC., TOYOTA MOTOR, VERIZON, and WACHOVIA, among others. All large capitalization companies. At first glance an investment fund that considers diversity might be considered divisive. In fact, this is exactly what some have said when we first mentioned The Creative Investment Research, Inc. Diversity Portfolio. "Aren't you just highlighting differences? How is that going to make things any better?" Our answer is simple: The pursuit of social justice is something that unites people, and it requires intentionality, not neutrality. Almost everyone agrees that equal opportunity is a laudable goal, and it has been codified in many laws in the U.S. Consequently, many people think the best way to achieve equal opportunity is a merit-based system that is completely colorblind. This is certainly the ideal, and one that we hope will be a viable solution in America someday. But it makes one fatal assumption: That the history of injustice is no longer relevant to today's society. Sadly, this is not true. Consequently, a colorblind outlook strikes us as hopelessly out of touch with the reality of life in the United States and the world. Nevertheless, we are not advocates of any particular group. We consider race only because some groups are treated unfairly. Fortunately, there are solutions, and we believe The Creative Investment Research, Inc. Diversity Portfolio can be a positive force for social change. First, by allowing open, objective discussion of diversity we can diffuse tensions that naturally arise. Second, we can highlight corporate role models by rewarding corporations for achieving equal opportunity and diversity at all levels. Why seek justice through the corporate world rather than in the political realm? It is clear to us that corporations today wield far more power and influence than ever before, so seeking positive change through them makes sense. We are also politically nonpartisan, and avoid becoming beholden to either liberal or conservative groups. Likewise we will work with people of various faith traditions, especially since race and religion are often inextricably intertwined. We seek justice, and this transcends political parties and specific religious groups. Finally, we do not claim to have the only solution. But we do claim to be seeking a solution. So we welcome constructive criticism that enhances our effectiveness in promoting justice for people of every class and caste, and every race and religion. CONTACT