Welcome to the May issue of Condor Monthly!

In "From the Portfolio Manager" this month, we discuss the iShares S&P Global Healthcare Sector Index ETF, a recent addition to Condor's Large Cap Growth portfolios. In this month's "Financial Planning Corner," we review an SEC decision which will curtail the use of fee-based brokerage accounts.

What's New at Condor Capital

Now that summer is upon us, we would like to offer complimentary Somerset Patriots Baseball Luxury Suite tickets for the 2007 season to you and your family. We have dates available from June through September.

There are still some tickets remaining for the following games in June:

• Monday June 4, 2007 7:05pm
• Sunday June 10, 2007 1:35pm
• Sunday June 17, 2007 1:35pm
• Tuesday June 26, 2007 7:05pm

Of course, tickets will be offered on a first come, first served basis. If you are interested, please contact Yafit Miot in my office directly via e-mail (yafit@condorcapital.com) or by phone.


From the Portfolio Manager

iShares S&P Global Healthcare Sector Index ETF (IXJ)

Condor's Healthcare Stance

The healthcare industry has long represented one of the largest weightings in Condor's Large Cap Growth Strategy out of all the major industry groups due to favorable demographic trends and above-average long-term earnings growth. In recent years, we have taken care to largely avoid traditional pharmaceutical stocks due to our concern over generic competition, patent challenges & expirations, regulatory risks, and a dearth of new blockbuster drugs in the pipeline to replace falling revenue.

Pharmaceuticals Revisited

Condor recently decided to revisit pharmaceuticals and concluded that the sector currently looks appealing due to attractive earnings growth rates coupled with more reasonable valuations. Additionally, pharmaceutical stocks possess defensive characteristics that should act as a hedge against a slowing global economy. After carefully evaluating individual pharmaceutical stocks around the globe, Condor's investment committee determined that taking a position in the iShares S&P Global Healthcare Sector Index Exchange Traded Fund (IXJ) was the most prudent way to participate in this segment. This ETF seeks investment results that generally correspond to the price and yield performance of companies that Standard & Poor's deems part of the healthcare sector of the economy and important to global markets, as represented by the S&P Global Healthcare Sector Index.

Why Buy an ETF?

We decided to invest in an ETF because we prefer to avoid company-specific risk in the pharmaceutical arena due to the great difficulty in successfully navigating around the various risks (i.e. regulatory, generics) that are still present. In addition to gaining exposure to U.S. healthcare companies, which represent about two-thirds of this ETF, we also like the fact that the other one-third consists of international healthcare companies, which improves diversification.

Top 10 Holdings as of 5/30/07

Financial Planning Corner

SEC Decision Curtails Fee-Based Brokerage Accounts

Earlier this year, a federal court overturned an SEC rule that basically allowed brokers to give "incidental" advice without having to register under the Investment Advisors Act. The rule helped spawn fee-based accounts that have been heavily promoted by the brokerage industry. The SEC recently announced that it will not appeal the court's decision, which is expected to affect an estimated one million investors. In fact, many brokerage firms are now scrambling to retain these clients by offering alternative types of accounts, including pricier fee-based accounts or reverting back to commission-based accounts.

The Financial Planning Association has long objected to brokers giving advice while having to meet a lower standard of care for clients and applauded the court's decision. Brokers are only required to sell clients products that are "suitable," while investment advisors must meet a more rigorous standard as a fiduciary, meaning they must place the interests of their clients first. Although brokerage firms were required to disclose the fact that certain fee-based brokerage accounts weren't advisory accounts, the distinction was probably not noted by most investors.

Condor Capital is not affected by this ruling because we are a Registered Investment Advisor. If you know of any friends or family that are being asked to make a change to their brokerage account due to this ruling, please consider referring them to Condor Capital.

Stat Bank- Interesting Statistics