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Avalos, Elizabeth

From: Van Wyk, Becky Sent: Tuesday, May 15, 2012 3:44 PM To: Brian Schafer; Avalos, Elizabeth Cc: FCERAwebmail Subject: PRA - Elizabeth Avalos I Vanguard Axis Managed Currency Series Dear Mr. Schafer:

Thank you for your interest in working with FCERA. Our Board works with an investment consultant to identify and vet potential investment opportunities. Wurts develops a list of potential investments based on parameter defined by the Board. After reviewing the initial list, the Board determines which managers to invite for a presentation and to visit. Please be sure to update the Evestment Alliance database that our consultant, John Wasnock, Director of Manager Research, Wurts & Associates, uses to perform their initial screening. If you have other questions, please contact Mr Wasnock at (206) 622 3700.

Please call me at 559.457.0681 if you have any questions. Thank you.

Becky Van Wyk Assistant Retirement Administrator FCERA - Stop 40 1111 H Street Fresno, CA 93721 Phone - 559.457.0681 Fax - 559.457,0318

From: Brian Schafer [mailto:bschafer@vanguardaxis,com] Sent: Tuesday, May 15, 2012 2:10 PM To: Avalos, Elizabeth Cc: FCERAwebmail; Van Wyk, Becky Subject: Elizabeth Avalos I Vanguard Axis Managed Currency Series

Ms. Avalos,

I hope that all is well with you and the Fresno County Employees’ Retirement Association. I would like to take this opportunity to introduce you to our firm, Vanguard Axis LLC, and our Managed Currency Series.

We are a discretionary absolute return manager that specializes in technical and fundamental strategies primarily encompassing 010 currencies. Operating in a segregated managed account structure with no lock-up periods, our investors have the utmost transparency and liquidity to their funds at theft FCM or Prime Broker of choice.

At Vanguard Axis, we take pride in our risk management above all else and our strategies have allowed us to consistently attain alpha while preserving low drawdowns during the most volatile of market conditions. For example, in 2011 we achieved a net annual return of 33.36% with a maximum monthly drawdown of -2.42%.

During the last several months, I am sure we can agree that the markets have been anything but calm. Risk management has been the center of focus and consequently one of the most important factors when choosing managers across asset classes.

5/21/2012

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With that said, I would like to speak with you further in regards to considering Vanguard Axis as a potential manager in your FX Asset Class Portfolio. Are you available on Thursday or Friday for a brief call?

Sincerely, Brian

Attachments: - Vanguard Axis Manager Performance Analysis - Vanguard Axis Due Diligence Questionnaire - Vanguard Axis Firm Overview - Vanguard Axis Core Staff Biographies - Opalesque Interview 20-10-2011

- Opalesque Interview 22-03-2012 http://www.opalesque.com/64 121 7/Vanguard Axis aims for absolute alpha withi 21 .html

Publications: - Technical A nalyst Magazine - Issue 40 (we are on page 22 of the PD]) Copy available upon request - FX Trader Magazine (Pages 45-48 "Which Direction for the EUR/USD?") Copy available upon request - .FX Trader Magazine (Pages 44-49 "Euromageddon", Cover Story/Article) Copy available upon request - KY Trader Magazine (Pages 22-23 "British Pound Outlook") Copy available upon request - Forex Journal Vol IV Issue 00, Copy available upon request

Brian E. Schafer

Vice President I Institutional Distribution 8484 Wilshire Blvd Suite 220 Beverly Hills, CA 90211 1.323.207.0077 Office

1.614.563.2639 Mobile www.vanguardaxis.com

van-guard noun \ ion-,gord also i’arj-\ a group of people leading the way in new developments or ideas; the position of greatest importance or advancement; the leading position in any movement or field

ax-is noun \’ak-sos\ o straight line through a body or figure that satisfies certain conditions; a straight central part in a structure to which other parts are connected

Risk Disclosures: Tradingforeign exchange on margin carries a high level of risk and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefull), consider your monetary objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all ofyour depos,Iedfunds and therefore you should not speculate with capital thai you cannot afford to lose. You maybe liable for losses that exceed the amount of margin that you post. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent advisor ifyou hire any doubts. Past performance is not necessarily indicative offluture results.

Material in this e-mail does not constitute investment advice or a recommendation. Vanguard Axis LLC and its affiliates assume no responsibility for errors, inaccuracies or omissions in these materials. They do not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials, Vanguard Axis LLC and its affiliates shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials. This email is not a solicitation to buy or sell currency

5/21/2012

FOR PROFESSIONAL CLIENTS ONLY.

NOT TO BE DISTRIBUTED TO RETAIL CLIENTS.

noun \’van-,gOrd also ’vatj-\

a group of people leading the way in

new developments or ideas; the

position of greatest importance or

advancement; the leading position in

any movement or field. noun Yak-s s\

a straight line through a body of figure that satisfies certain

conditions; a straight central part in a

structure to which other parts are

connected.

U3

currencies The FX market is the utmost heavily traded market in the world financial markets with

currencies being the single most liquid asset class available to traders. Investing and

speculating in currencies, it is one of the only asset classes, if not the only one, that does

not directly correlate to the standard benchmarks used by investment managers.

The market is driven by an array of fundamentals, both macro and micro, which

money managers are able to exploit the inefficiencies to produce absolute returns.

Given the great volumes of the FX market, this enables investors and speculators to

participate with lower transaction costs; as such this is much appropriate for any active

currency trading strategy that may participate in the FX markets.

One of the main advantages of the Vanguard Axis Managed Series’ discretionary strategy

is that the strategy itself has proven a lack of correlation with global indices, equities,

commodities, property as well as government treasuries, thus making it an admirable diversification tool to any investor’s portfolio strategy.

VANGUARD AXIS MANAGED SERIES

who we are

Vanguard Axis, a Delaware State LLC, headquartered in the Los

Angeles area with representative offices in the United Kingdom,

Italy and Qatar has been more than a decade in the making, finally

coming to realization with the vision and most importantly the

foundation its Founders have set forth for Vanguard Axis.

Vanguard Axis is a boutique absolute return manager specializing

in discretionary, technical and fundamental investment strategies

in Global Macro Managed Funds focused on currencies, both

emerging and major markets with superior risk-management being

the foundation of all strategies.

Vanguard Axis objective is to deliver attractive, positive absolute

returns in all market conditions through its discretionary

management. Vanguard Axis’ emphasis is to generate long term capital growth by maintaining a well-diversified

exposure to a wide range of global currencies, thus creating an

absolute return.

In an FX asset class that has been deemed volatile, impulsive and

capricious, Vanguard Axis has ensured that it learn and adapt how

to control risk and enhance returns by using diverse

discretionary strategies in all emerging and major markets across

various asset classes in conjunction to the FX asset class, Our

track record in managing currencies laterally with these other

asset classes supports our certainty that the expeclence of our

team along with technical and quantitative modeled strategies,

combined with the market intelligence and awareness gained

throughout the years, will continually provide a consistent and

superior risk-adjusted performance that can adapt to any

market environment.

VANGUARD AXIS MANAGED SERIES 3

managingmoney Vanguard Axis is a Money Management Finn that caters only to Institutional and Private Investors that are deemed as

Accredited Investors and / or Qualified Eligible Persons for its Managed Currency Series of Funds that has enabled

investors to access the absolute most transparent method of investing your monies the industry is now getting

accustomed to from the traditional funds". Vanguard Axis manages funds in a segregated Managed Accounts platform at

a top Brokerage House and is also able to manage client accounts at any top tier brokerage or Bank at which the client has

a relationship with. With no lock-in periods and restrictions placed on client funds, clients have 24/7 access to their funds

while consistenUy earning above average yields on their investment.

Vanguard Axis is a firm believer that proper risk management is the absolute most important influence in any

strategy, thus paving the way for an industry leading capital preservation guarantee.

ii Vanguard Axis aims for positive absolute returns over rolling 12 month periods

throughout all market conditions.

ttt A technically, fundamentally, yet macro-discretionary approach always looks to

exploit any short term tactical inefficiencies in a generally efficient market.

ttt Market intelligence along with technical and fundamental analysis used to recognize

trade ideas collectively with strong money management and risk management for the

execution of the trade ideas.

ti A solid performance track record since inception while exhibiting low volatility and

high risk-adjusted returns.

IS Dedicated FX team (trading, research, analysis, programming, administrative) with

continuous global coverage of all market hours.

tt Superior risk management process applied to all strategies implemented within

the Managed Series,

Please note that at this time, Vanguard Axis does not accept USA based clients.

Disclosure Documents will be made available upon request.

VANGUARD AXIS MANAGED SERIES

method-0 logy Vanguard Axis also implements an astute understanding of market

psychology as the market is made up of many different traders,

ranging from small retail traders to big institutional banks and

sovereign funds; this is also known as "crowd trading". This

is also the reason technical analysis has been so successful,

especially within a macro trading environment when macro forces

are the main components in moving price.

Throughout the years of experience, our analysts and traders have

Vanguard Axis uses the combination of diverse discretionary

trading strategies as well as money management techniques that

only experience and institutional level preparation can provide. It is

quite imperative to note ahead of time that we adapt each strategy

to existing and current market conditions since no strategy exists

that will be profitable during all market conditions at all times. In

addition to managing our strategic entry points, Vanguard Axis

also adapts itself to market conditions to ensure that its trading

decisions are based on factors that move the market at that

specific time. Adaptation to these environments is done through

the analysis of shorter time frames using a combination of

mathematical formulae that provide an indication of which

direction the market may head to next and as always,

mathematical algorithms and technical indicators can only be as

good as the analyst or trader that is interpreting them. The

research team under the direction of our analysts is a key

component of Vanguard Axis.

had the privilege of working with some of the most exceptional

traders, analysts, developers and executives which over the years

has expanded greatly and thus allowing our team to discuss on a

macro level as to what these large conglomerate banking

institutions and trade desks have in terms of ideas for an ever

changing market.

Superior money management is an absolute necessity when it

comes to Fund Management, as any good trade can turn

into a bad one within minutes. The Vanguard Axis team makes

certain that each trade is carefully monitored at all times as overall

posiflon and account risk management is overseen constantly by

a manifold of custom developed programs and algorithmic tools

that allows Vanguard Axis to examine open position risk and

historical performance metrics. Money management and risk

management are the utmost indispensable elements of the trading

methodologies that run Vanguard Axis.

VANGUARD AXIS MANAGED SERIES 5

Vanguard Axis has established a strong and cohesive risk management unit for the Vanguard Axis Managed Series. Complete

accountability and supervision of risk management lies with the Vanguard Axis Risk Committee (VARC),

overseen by Garen Ovsepyan, Fund Manager for Vanguard Axis along with Richard Campbell (Head of Trading), Richard

Sherman (Sr Portfolio Manager) and Alex Kazmarck (Chief Analyst).

Vanguard Axis Risk Committee - Complete accountability and

oversight of the Managed Series, sets internal investment

strategies and risk parameters.

The Vanguard Axis Risk Committee is responsible for the

implementation of risk and investment strategies. VARC meets

weekly to review performance, risk levels and strategy within

Vanguard Axis. VARC is accountable for ensuring compliance

with the appropriate risk parameters set forth and also to enforce

action in case these guidelines are breached as set forth by

Vanguard Axis.

Fund Manager - Managed Series’ managers make certain the

team adheres to the investment strategies and stop loss levels of

positions taken by trading team.

The Fund Managers for the Managed Series are individually

accountable for implementing their principal strategies within their

parameters as deemed necessary by Vanguard Axis Risk

Committee.

Research Strategist - Detailed risk analysis, monthly review of

performance with Managing Members.

The Research Strategists analyze the overall function of the

portfolio, risk absorptions and other fundamental and technical

factors given the market setting employing an extensive series of

analytical and quantitative methodologies.

to monitor risk.

VANGUARD AXIS MANAGED SERIES

Objective - Deliver attractive, positive absolute returns in all market conditions through its

discretionary management.

Asset Class - Global currencies, both major and emerging markets.

Investment Stretegy - A technically, fundamentally, yet macro-discretionary approach always looks

to exploit any short term tactical inefficiencies in a generally efficient market.

Decision-Making - Discretionary (100%)

Domicile - USA (Delaware LLC)

Benchmark� S&P 500

Inception Date - June 2010

Currency Denomination - USD and Euro

Subscriptions

Subscription Frequency - Daily

Redemption Frequency - Daily

Lock-up Period - None

Management Fee - 1% (Institutional), 2% (Private)

Performance Fee - 15% (Institutional), 25% (Private)

Mm. Investment - $150,000.00 / �100,000.00 (Private), $500,000.00! �350,000.00 (Institutional)

Platforms - ANY FX Prime Broker/Bank with FIX API compatibility.

VANGUARD AXIS MANAGED SERIES

FOR PROFESSIONAL CLIENTS ONLY.

NOT TO BE DISTRIBUTED TO RETAIL CLIENTS.

RISK WARNING: Past performance is not indicative of future results, as returns may vary according to market conditions. Trading info

exchange is speculative and may involve the loss of principal; therefore, funds placed under management should be risk capital funds that

if lost will not significantly affect one’s personal financial well being. This is not a solicitation to invest and you should carefully consider your

financial situation as to the suitabifty to your situation prior to making any investment or entering into any transaction. Nothing contained in

this document should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in

any other transaction. Not all products will be available to all investors. The products or services offered by Vanguard Axis LLC are only

offered to clients in those countries and regions in accordance with applicable laws and regulations. The information provided in herein is

not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary

to law or regulation. This document is not directed to any person in any jurisdiction where the publication or availability of our services is

prohibited, by reason of that persons nationality, residence or otherwise. Persons under these restrictions must net receive this document.

Some services may not be available to certain investors due to regulatory or other constraints either in the United States of America or

elsewhere. You are advised that most services are only available following completion of the Vanguard Axis Customer Agreement and/or

any other relevant documentation as required by the Company from time to time. Investments in financial instruments (including futures,

options, contracts for differences, spot and forward foreign exchange contracts) can fluctuate in value. Accordingly, you should be aware

that you might not realize the initial amount invested and indeed may incur additional liabilities as investments in financial instruments may

entail above average risk. You must therefore carefully consider whether your financial circumstances permit you to invest. Vanguard Axis

strongly suggests that you seek the advice of an independent financial advisor in this regard.

By Mail:

Attn: Vanguard ,Axis LLC

8484 Wilshire Blvd Suite 220

Beverly Hills, CA 90211

By Email:

nfo'vanguardaxis,com

By Phone / Fax:

+1-323-207-0077 (ph)

+1-648-801-0008 (ph)

+1-877-725-5536 (fax)

w40, 40 o OR

Manager Performance Analysis

April 2012 FOR PROFESSIONAL INVESTORS ONLY

8484 Wilshire Blvd Me 220

Beverly Hills, CA 90211

info@vanguardaxis.com

www.vanguardaxis.com

Fund Managed Currency Series MMXI

Benchmark S & P 500

Analysis Start June 2010

Company Vanguard Axis LLC

Phone 13232070077

Fax 18777255536

Email infoavanguardaxis.com

Website http://www.vanguardaxis.com

-

Manager Garen Ovsepyan

Manager Start June 2010

Spot Currencies 100.00

CFD 0.00

Metals 0.00

Asset Allocation as of -

Mgmt Charge Initial 0.0097.

Mgmf Charge per Annum 2.00% (1.00% Institutional)

Mgmt Charge Performance 25.00% (15.00% Institutional)

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTO CD 2012 0,55 7.09 0.67 0.79 7.22 -0.67 2077 2.45 5.76 8.34 -1.77 2.53 5.87 0.68 -2.42 9.40 -7.96 2.74 -0.50 33.36 -2.42 2070

a�

3.73 5.36 6.42 7.57 70.46 70.32 6.63 67.54 N/A

Domicile USA

Investment Type

Global Classification

Decision Making

Geographic Focus

Primary Fund

Closed

Minimum Investment

Launch Date

Local Currency

Total Net Asset Value

rx/CFD/Metals

Global Markets

Discretionary

Global

Yes, Managed Account Platform

N/A

$150,000.00 ($1,000,000.00 Institutional)

06/15/2010

Mai

$79,000,000.00 (05/01/2012)

MONTHLY

Vanguard Axis tIC is a boutique absolute return manager that specializes in systematic, technical and fundamental investment strategies in Global Macro Managed Funds focused on currencies, both emerging and major markets with superior risk-management being the foundation of all strategies.

---sn-

Vanguard Axis LLC uses the amalgamation of diverse trading strategies as well as money management techniques that only experience and institu-tional level preparation can provide. It is quite imperative to note ahead of time that we adapt each strategy to existing and current market condi-tions since no strategy exists that will be profitable during all market condi-tions at all times. In addition to managing our strategic entry points, Van-guard Axis LLC also adapts itself to market conditions to ensure that its trading decisions are based on factors that move the market at that specific time. Adaptation to these circumstances is done through the analysis of shorter time frames using a combination of mathematical formulae that provide an indication of which direction the market may head to next and as always, mathematical algorithms and technical indicators can only be as good as the analyst or trader that is interpreting them. The research team under the direction of our analysts is a key com-ponent of Vanguard Axis LIC, to which only the likes of large banking institutions can measure up to.

Vanguard Axis LLC also implements an astute understanding of market psychology as the market is made up of many different traders, ranging from small rctail traders to big institutional banks and sovereign funds; this is also known as ’crowd trading". This is also the reason technical analysis has been so successful, especially within a macro trading environment when macro forces are the main components in moving price. Through-out the years of experience, our analysts and traders have had the privi-lege of working wilh some of the most exceptional traders, analysis, developers and executives which over the years has expanded greatly and thus allowing our team to discuss on a macro level as to what these large conglomerate banking institutions and trade desks have in terms of ideas for an ever changing market,

Compound RoR: N/A 50.19%

Average RoR: 3.52% N/A

Max Gain: 10.46% 61.54%

Gain Frequency: 78,26% 100.00%

Average Gain: 51870

Gain Deviation:

-

3.44% 11.93%

Standard Deviation: 4.06% 14.03%

Worst Loss: 2.42% N/A

Loss Frequency: 21.74% 0.00%

Average Loss: - 1.44% N/A

Loss Deviation: 0.85% N/A

Sharpe Ratio: (RF=1%) . 0.85 2.94 Skewness: � 0.26

Kurtosis: -1.16

S&P 500 Index � � 0.20

Superior money management is on absolute necessity when it comes to Fund Management, as any good trade can turn Into a bad one within minutes. The Vanguard Axis team makes certain that each trade is care-fully monitored at all times as overall position and account risk manage-ment is overseen constantly by a manifold of custom developed programs and algorithmic tools that allows Vanguard Axis LLC to examine open position risk and historical performance metrics. Money manage-ment and risk management are the utmost indispensable elements of the trading methodologies that run Vanguard Axis LLC.

Past performance is not indicative of future results, as returns may vary according to market conditions. Trading in foreign

exchange is speculative and may involve the loss of principal; therefore, funds placed under management should be risk capi-

tal funds that if lost will not significantly affect one’s personal financial well being. This is not a solicitation to invest and you should

carefully consider your financial situation as to the suitability to your situation prior to making any investment or entering into any

transaction.

Nothing contained in this document should be construed as a solicitation or offer, or recommendation, to acquire or dispose of

any investment or to engage in any other transaction. Not all products will be available to all investors. The products or services

offered by Vanguard Axis LLC are only offered to clients in those countries and regions in accordance with applicable laws and

regulations. The information provided in herein is not intended for distribution to, or use by, any person or entity in any jurisdiction

or country where such distribution or use would be contrary to law or regulation. This document is not directed to any person in

any jurisdiction where the publication or availability of our services is prohibited, by reason of that person’s nationality, residence

or otherwise. Persons under these restrictions must not receive this document.

Some services may not be available to certain investors due to regulatory or other constraints either in the United States of

America or elsewhere. You are advised that most services are only available following completion of the Vanguard Axis Cus-

tomer Agreement and/or any other relevant documentation as required by the Company from time to time. Investments in

financial instruments (including futures, options, contracts for differences, spot and forward foreign exchange contracts) can

fluctuate in value. Accordingly, you should be aware that you might not realize the initial amount invested and indeed may

incur additional liabilities as investments in financial instruments may entail above average risk. You must therefore carefully

consider whether your financial circumstances permit you to invest. Vanguard Axis strongly suggests that you seek the advice of

an independent financial advisor in this regard.