MidWestOne Trust Services

Our investment philosophy

Process drives investment success

Our portfolio development process is based on sound asset allocation research and combines multiple asset classes to develop a well-diversified, efficient core portfolio. We recognize that markets change, so our process allows for tactical shifts within each portfolio—within limits—to ensure short-termmarket views do not significantly alter a given risk level. Our security selection process focuses on companies that are selling at attractive valuations, and are also improving their economic margins, essentially ignoring market hype and quarterly noise. An investment process grounded in discipline keeps us focused on the keys to success and enables us to avoid chasing returns or trends.

Investment management is risk management

Diversification is the cornerstone of our portfolio management process, and it drives the decisions we make. Portfolios are built with exposure to multiple asset classes, many of which have low correlations with each other, thereby reducing the overall volatility of your portfolio. We believe in comparing our returns to the appropriate benchmarks which help us manage risk and make sure we are providing good value to our clients.

Investing is a long-term endeavor

Markets go up and down and investment styles go in and out of favor. Chasing the latest fad is a loser’s game. We believe that an investment process should be built on sound investment prin- ciples that can stand the test of time.

Active management can enhance returns and control risk

We believe that active management can be beneficial to reduce risk and potentially enhance re- turn versus a passive approach. As appropriate, we emphasize active managers for asset classes where efficient management is possible.

Costs matter

Though we emphasize active management, we do so with an eye on expenses. Over time, the cost of delivering an investment strategy matters. These include management costs, trading costs, and even the indirect cost of taxes paid on investment transactions. We utilize institutional funds and individual securities strategies to help control investment costs. We keep an eye on expense ratios, we don’t accept 12b1 fees, and we continuously look for ways to be cost efficient.