Financial markets have always been cyclical. Asset classes move in and out of favor and trends continually shift, giving temporary advantages to different investment styles and approaches. In recognition of the market's cyclical and unpredictable nature, Orion diversifies among many different equity asset classes, styles and sectors. This eliminates the nearly impossible task of trying to predict where market leadership will emerge next.

Mutual Funds

Orion favors passively-managed mutual funds because of their low-cost structure, inherent tax advantages and superior long-term returns. While many believe that an "expert" professional should be able to "beat the market," numerous studies show, on average, actively-managed mutual funds under-perform their benchmark index.

When we select funds, we look for:

• Low expenses relative to other index funds
• Tax-efficiency
• Characteristics of the underlying asset class
• Proven ability to effectively track their designated asset class
• Reputation and experience of fund management

While we are highly skeptical of any fund manager's ability to consistently "outperform" an index, there are times when an index fund is not available. In such cases, we will consider an actively managed fund. The following is a list of some of the criteria we consider when selecting actively-managed mutual funds:

• Low expenses relative to category
• Manageable assets relative to category
• Exceptional long-term relative performance
• Low turnover