HomeMy WebLinkAboutDocumentation_Pension Public Safety_Tab_04_08/03/2009Village of Tequesta
Public Safety Officers'
Pension Plan
Quarterly Review
\Y'~'V(%.l3OG[):\HfYGROU['.CC)hM1
2nd Quarter 2009 THE
BOGI3AHN
GROUP
simplifyi~ag your iue~anne~u rrnil fduc•i.»_y decisions
Investment Market Summary
Dislocation Nation
The equity market advanced for most of the quarter; however, as June came
to a close investors were reminded that volatility is alive and well. While the
market experienced more than a 40% recovery off its March lows, it would be
a naive assumption to expect another 40% positive spike without the market
taking a breather. Much of the dislocated valuations that caused the market
to bounce rapidly off its low are also at the core of the recent equity market
pullback. It is logical for investors to take an inventory of risks as the prospect
for near-term earnings and economic growth is weak. Although the market's
decline at the end of quarter may have caused recent talk of "green shoots' to
wither on the vine, a variety of data points indicate that the broader economy
has at least slowed its pace of decline. Sometimes we just have to consider
less negative to be a positive.
The second quarter of 2009 posted some of the strongest equity performance
numbers in years and represented a welcome relief after more than a year of
negative results. The market rally, which began in mid-March, continued
unabated for most of the quarter despite rising unemployment and
disappointing economic statisitcs. The broad market Russell 3000 Index
posted a return of 16.8% for the quarter. While all ten economic sectors of
the Russell 3000 Index posted positive returns for the quarter, performance
was particularly strong in materials, industrials, consumer discretionary,
financials and information technology sectors, each of which posted returns in
excess of the broad index. While the index's other five sectors finished
behind the 16.8% return of the Russell 3000 index, only telecommunications
services (4.2%) returned less than 10% for the quarter. In the large cap
space, the S&P 500 and Russell 1000 Index posted returns of 15.9% and
16.5% respectively. Further down the capitalization spectrum, the Russell
MidCap Index returned 20.8% for the quarter and the small cap Russell 2000
Index returned a similar 20.7%. Due to the broad-based sector strength in the
various indices, particularly in financials, value style benchmarks outpaced
growth benchmarks by a narrow margin (<1%) in all but the small
capitalization space. The broad market Russell 3000 Value and Growth
indices both returned 16.8%. Large cap issues, as measured by Russell 1000
style benchmarks, returned 16.7% for value vs. 16.3% for growth. The
Russell MidCap Value Index returned 20.9% vs. 20.7% for the Russell
MidCap Growth Index. Unlike the larger capitalization ranges, growth
investments (23.4%) outpaced value investments (18.0%) by 5.4% for the
quarter within the Russell 2000 style indices. This outperformance by growth
in small cap was primarily due to performance in the growth-oriented
information technology sector (30.3%) vs. the value-oriented financials sector
(9.9%).
Equity market strength was not isolated to domestic markets during the
quarter as both developed and emerging international markets advanced.
Un-hedged international holdings got an additional boost from U.S. dollar
weakness, which was widespread during the second quarter. The developed
markets as measured by the MSCI-EAFE Index, increased in both U.S.
Second Quarter 2009
dollars (25.8%) and local currency (17.3%). Within the 21 country index, each
country posted positive results. Performance within the index was led by
Spain, Sweden, Hong Kong and Singapore, each of which returned more than
35% for the quarter in U.S. dollars. Unlike the narrow performance bands of
most of the domestic style indices, the international style distribution was
broader with the MSCI-EAFE Value Index returning 30.3% vs. the MSCI-
EAFE Growth Index return of 21.7%. Emerging markets posted strongest
equity index performance for the second quarter in a row with the MSCI-EM
index returning 34.8% in U.S. dollars and 24.6% in local currency. Much like
the developed index, each of the 22 countries represented by the emerging
markets index posted positive performance for the quarter.
The "risk" trade returned to the bond market with a vengeance during the
second quarter as investors sought the yield advantage of corporate
obligations. As spreads continued to narrow during the quarter, lower quality
debt got the largest boost with the Merrill Lynch High Yield Master II index
posting an "equity-like" return of 23.2%. Despite the Fed's best efforts to keep
interest rates low to fuel its numerous recovery programs and foster attractive
mortgage rates, the yield curve steepened measurably during the quarter for
maturities beyond one year. Although the Barclays Capital U.S. Aggregate
Index returned a seemingly mild 1.8% for the quarter, things were not as
smooth in the government, mortgage and credit sectors that make up the
broad index. The Barclays Government Index posted its second straight
quarterly loss with a return if -2.2%. The mortgage sector was not much
stronger but did manage to post a positive return of 0.7%. The narrowing
credit spreads previously mentioned also benefited higher-quality corporate
issues with the Barclays Corporate Investment Grade Index posting a strong
return of 10.4% for quarter.
When market dislocation causes investment "pillars" like strategic asset
allocation and prudent manager selection to break down, it can be harmful to
investor expectations. The loss of long-term focus can result in short-term
decision making and timing-based portfolio positioning. Unfortunately, such a
limited view toward achieving along-term term set of objectives can further
exacerbate the frustration and uncertainty associated with adverse market
conditions. It is important to remember that the long-term nature of
institutional investors is the "foundation' of what allows them to take
advantage of the structural and emotional conditions that negatively affect
investors with shorter time horizons. While we may be in a period of severe
market dislocation, the death of diversification and strategic asset allocation
as effective tools toward achieving long-term objectives is greatly
exaggerated.
~^ THE
` BOGDAHN
~°.~,,. GROUP
Page 2 of 23
The Market Environment
Major Market Index Performance
Period Ended: June 30, 2009
Quarter Performance ~ One Year Performance
MSCIEAFE
MSCI Emerg. Mkts.
S&P 500
Russell 3000
Russell 1000
Russell MidCap
Russell 2000
Barclays US Agg.
Barclays US Gov.
Barclays MBS Fixed
Barclays Corp IG
3mos. T-Bill
2s.a %
34.8
15.9
16.8
16.5
2o.a %
20.7 %
1.8
-2.2
0.7 %
1o.a^i
0.1 %
-10.0% 0.0% 10.0% 20.0% 30.0% 40.0%
i Five Year Annualized Performance
MSCIEAFE
MSCI Emerg. Mkts.
S&P 500
Russell 3000
Russell 1000
Russell MidCap
Russell 2000
Barclays US Agg.
Barclays US Gov.
Barclays MBS Fixed
Barclays Corp IG
MSCIEAFE
MSCI Emerg. Mkts.
S8P 500
Russell 3000
Russell 1000
Russell MidCap
Russell 2000
Barclays US Agg.
Barclays US Gov.
Barclays MBS Fixed
Barclays Corp IG
3mos. T-Bill
~ s.a %
3.8
0.8
-40.0% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0%
Ten Year Annualized Performance
MSCIEAFE
MSCI Emerg. Mkts.
S&P 500
Russell 3000
Russell 1000
Russell MidCap
Russell 2000
1.6
-s.z % ~
-1.5
-1,7
J 3.1
z.a%
Barclays US Agg.
Barclays US Gov.
Barclays MBS Fixed
Barclays Corp IG
3mos. T-Bill
6.0
6.1
] 6.3
5.6
3.1
-5.0% 0.0% 5.0% 10.0% 15.0% 20.0% -5.0%
Source: MSCI Capital Markets, Russell Investments, Barclays Capital & Bogdahn Consulting, LLC.
3mos. T-Bill
0.0% 5.0% 10.0% 15.0%
~~~~ BOGDAHN
`~ GROUP
Page 3 of 23
The Market Environment
Major Market Index Performance
Period Ended: June 30, 2009
Page 3 of 23
MSCI EAFE
MSCI Emerg. Mkts.
Quarter Performance
S8P 500
Russell 3000
Russell 1000
Russell MidCap
Russell 2000
Barclays US Agg.
Barclays US Gov.
Barclays MBS Fixed
Barclays Corp IG
MSCI EAFE
MSCI Emerg. Mkts.
S&P 500
Russell 3000
Russell 1000
Russell MidCap
Russell 2000
Barclays USAgg.
Barclays US Gov.
Barclays MBS Fixed
Barclays Corp IG
3mos. T-Bill
25.6°
34.8
15.9 %
16.8
16.5
2o.a % i
20.E i
1.6
-2.2
o.~ %
to.a %
0.1 %
-10.0% 0.0% 10.0% 20.0% 30.0% 40.0%
Five Year Annualized Performance
MSCI EAFE
MSCI Emerg. Mkts.
S8P 500
Russell 3000
Russell 1000
Russell MidCap
Russell 2000
Barclays USAgg.
Barclays US Gov.
Barclays MBS Fixed
Barclays Corp IG
3mos. T-Bill
One Year Pertormance
9A%
3.e %
0.8
-40.0% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0%
Ten Year Annualized Performance
MSCI EAFE
MSCI Emerg. Mkts.
S8P 500
Russell 3000
Russell 1000
Russell MidCap
Russe112000
Barclays USAgg.
Barclays US Gov.
Barclays MBS Fixed
Barclays Corp IG
3mos. T-Bill
1.6
9.0
-2.2
-0.5
-13
3.1
2.a %
6.0
6.1
6.3 %
s.s %
3.1
-5.0% 0.0% 5.0% 10.0% 15.0% 20.0% -5.0%
Source: MSCI Captal Markets, Russell Investments, Barclays Capital & Bogdahn Consulting, LLC.
3mos. T-Bill
0.0% 5.0% 10.0% 15.0%
~~ BOGDAHN
`~ GROUP
Investment Market Summary
Dislocation Nation
The equity market advanced for most of the quarter; however, as June came
to a close investors were reminded that volatility is alive and well. While the
market experienced more than a 40% recovery off its March lows, it would be
a naive assumption to expect another 40% positive spike without the market
taking a breather. Much of the dislocated valuations that caused the market
to bounce rapidly off its low are also at the core of the recent equity market
pullback. It is logical for investors to take an inventory of risks as the prospect
for near-term earnings and economic growth is weak. Although the market's
decline at the end of quarter may have caused recent talk of "green shoots" to
wither on the vine, a variety of data points indicate that the broader economy
has at least slowed its pace of decline. Sometimes we just have to consider
less negative to be a positive.
The second quarter of 2009 posted some of the strongest equity performance
numbers in years and represented a welcome relief after more than a year of
negative results. The market rally, which began in mid-March, continued
unabated for most of the quarter despite rising unemployment and
disappointing economic statisitcs. The broad market Russell 3000 Index
posted a return of 16.8% for the quarter. While all ten economic sectors of
the Russell 3000 Index posted positive returns for the quarter, performance
was particularly strong in materials, industrials, consumer discretionary,
financials and information technology sectors, each of which posted returns in
excess of the broad index. While the index's other five sectors finished
behind the 16.8% return of the Russell 3000 index, only telecommunications
services (4.2%) returned less than 10% for the quarter. In the large cap
space, the S&P 500 and Russell 1000 Index posted returns of 15.9% and
16.5% respectively. Further down the capitalization spectrum, the Russell
MidCap Index returned 20.8% for the quarter and the small cap Russell 2000
Index returned a similar 20.7%. Due to the broad-based sector strength in the
various indices, particularly in financials, value style benchmarks outpaced
growth benchmarks by a narrow margin (<1%) in all but the small
capitalization space. The broad market Russell 3000 Value and Growth
indices both returned 16.8%. Large cap issues, as measured by Russell 1000
style benchmarks, returned 16.7% for value vs. 16.3% for growth. The
Russell MidCap Value Index returned 20.9% vs. 20.7% for the Russell
MidCap Growth Index. Unlike the larger capitalization ranges, growth
investments (23.4%) outpaced value investments (18.0%) by 5.4% for the
quarter within the Russell 2000 style indices. This outperformance by growth
in small cap was primarily due to performance in the growth-oriented
information technology sector (30.3%) vs. the value-oriented financials sector
(9.9%).
• Equity market strength was not isolated to domestic markets during the
quarter as both developed and emerging international markets advanced.
Un-hedged international holdings got an additional boost from U.S. dollar
weakness, which was widespread during the second quarter. The developed
markets as measured by the MSCI-EAFE Index, increased in both U.S.
Second Quarter 2009
dollars (25.8%) and local currency (17.3%). Within the 21 country index, each
country posted positive results. Performance within the index was led by
Spain, Sweden, Hong Kong and Singapore, each of which returned more than
35% for the quarter in U.S. dollars. Unlike the narrow performance bands of
most of the domestic style indices, the international style distribution was
broader with the MSCI-EAFE Value Index returning 30.3% vs. the MSCI-
EAFE Growth Index return of 21.7%. Emerging markets posted strongest
equity index performance for the second quarter in a row v~ith the MSCI-EM
index returning 34.8% in U.S. dollars and 24.6% in local currency. Much like
the developed index, each of the 22 countries represented by the emerging
markets index posted positive performance for the quarter.
The "risk" trade returned to the bond market with a vengeance during the
second quarter as investors sought the yield advantage of corporate
obligations. As spreads continued to narrow during the quarter, lower quality
debt got the largest boost with the Merrill Lynch High Yield Master II index
posting an "equity-like" return of 23.2%. Despite the Fed's best efforts to keep
interest rates low to fuel its numerous recovery programs and foster attractive
mortgage rates, the yield curve steepened measurably during the quarter for
maturities beyond one year. Although the Barclays Capital U.S. Aggregate
Index returned a seemingly mild 1.8% for the quarter, things were not as
smooth in the government, mortgage and credit sectors that make up the
broad index. The Barclays Government Index posted its second straight
quarterly loss with a return if -2.2%. The mortgage sector was not much
stronger but did manage to post a positive return of 0.7%. The narrowing
credit spreads previously mentioned also benefited higher-quality corporate
issues with the Barclays Corporate Investment Grade Index posting a strong
return of 10.4% for quarter.
When market dislocation causes investment "pillars" like strategic asset
allocation and prudent manager selection to break down, it can be harmful to
investor expectations. The loss of long-term focus can result in short-term
decision making and timing-based portfolio positioning. Unfortunately, such a
limited view toward achieving along-term term set of objectives can further
exacerbate the frustration and uncertainty associated with adverse market
conditions. It is important to remember that the long-term nature of
institutional investors is the "foundation" of what allows them to take
advantage of the structural and emotional conditions that negatively affect
investors with shorter time horizons. While we may be in a period of severe
market dislocation, the death of diversification and strategic asset allocation
as effective tools toward achieving long-term objectives is greatly
exaggerated.
~~ THF.
BOGDAHN
`' GROUP
Page 2 of 23
The Market Environment
Long-Term Major Market Index Performance
Period Ended: June 30, 2009
Fifteen Year Annualized Performance ~ Twenty Year Annualized Performance
MSCIEAFE
MSCI Emerg. Mkts.
S&P 500
Russell 3000
Russell 1000
Russell MidCap
Russell 2000
Barclays US Agg.
Barclays US Gov.
Barclays MBS Fixed
Barclays Corp IG
3mos. T-Bill
6.9
zo %
] 7.1
8.8
6.5
6.6
6.6
] 6.8 % j
6,5 %
MSCI EAFE
MSCI Emerg. Mkts.
S&P 500
Russell 3000
Russell 1000
Russell MidCap
Russell 2000
io.~% I
Barclays US Agg.
Barclays US Gov.
Barclays MBS Fixed
Barclays Corp IG
3mos. T-Bill
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%
Twenty-Five Year Annualized Performance ~ Thirty Year Annualized Performance
MSCI EAFE
MSCI Emerg. Mkts.
S&P 500
Russell 3000
Russell 1000
Russell MidCap
Russel 12000
Barclays US Agg.
Barclays US Gov.
Barclays MBS Fixed
Barclays Corp IG
3mos. T-Bill
MSCIEAFE
MSCI Emerg. Mkts.
SB~P 500
Russell 3000
Russell 1000
Russell MidCap
Russel 12000
Barclays USAgg.
Barclays US Gov.
Barclays MBS Fixed
Barclays Corp IG
3mos. T-Bill
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%
Source: MSCI Capital Markets, Russell Investments, Barclays Capital & Bogdahn Consulting, LLC. ~~ THE
BOGDAHN
`~' GROUP
Page 4 of 23
The Market Environment
Russell Style Index Performance
Period Ended: June 30, 2009
QuarterPerformance ~ One Year Performance I
3000 Value
30001ndex
3000 Growth
1000 Value
10001ndex
1000 Growth
MidCap Value
MidCaplndex
MidCap Growth
2000 Value
20001ndex
2000 Growth
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%
Five Year Annualized Performance
3000 Value
30001ndex
3000 Growth
1000 Value
10001ndex
1000 Growth
MidCap Value
MidCaplndex
MidCap Growth
2000 Value
2000Index
2000 Growth
-2.S% -2.0%
Source: Russell Investments
3000 Value
30001ndex
3000 G rowth
1000 Value
10001ndex
1000 Growth
MidCap Value
MidCaplndex
MidCap Growth
2000 Value
20001ndex
2000 G rowth
-35.0% -30.0% -25.0% -20.0% -15.0% -10.0% -5.0% 0.0%
~ Ten Year Annualized Performance
3000 Value
30001ndex
3000 Growth
1000 Value
10001ndex
1000 Growth
MidCap Value
MidCaplndex
MidCap Growth
2000 Value
20001ndez
2000 Growth
o.z %
-1.5
-3.9
A.2
-1.8%
~.2
a.o %
3.2
o.o %
5.0
z.a %
-o.s%
L.V-/0 Y.V/O V.V i°
~~ THE
BOGDAHN
GROUP
Page 5 of 23
-1.5% -1.0% -0.5% 0.0%
The Market Environment
Russell Style Index Performance
Period Ended: June 30, 2009
QuarterPerformance I One Year Performance
3000 Value
30001ndex
3000 Growth
1000 Value
10001ndex
1000 Growth
MidCap Value
MidCaplndex
MidCap Growth
2000 Value
20001ndex
2000 Growth
0.0% 5.0% 10.0% 15.0% 20.0% 25.0%
Five Year Annualized Performance
3000 Value
30001ndex
3000 Growth
1000 Value
10001ndex
1000 Growth
MidCap Value
MidCaplndex
MidCap Growth
2000 Value
20001ndex
2000 Growth
-2.5% -2.0%
Source: Russell Investments
30.0%
3000 Value
30001ndex
3000 Growth
1000 Value
1000Index
1000 Growth
MidCap Value
MidCaplndex
MidCap Growth
2000 Value
20001ndex
2000 Growth
-35.0% -30.0% -25.0% -20.0% -15.0% -10.0% -5.0% 0.0%
Ten Year Annualized Performance
3000 Value
30001ndex
3000 Growth
1000 Value
10001ndex
1000 Growth
MidCap Value
MidCaplndex
MidCap Growth
2000 Value
20001ndex
2000 Growth
o.z %
-1.5
-3.9
A.2
-t9%
a.z %
a.o %
3.2
o.o %
5.0 %
2.a %
A.9
-6.0% -4.0% -2.0% 0.0%
2.0% 4.0% 6.0%
~~ THE
_ BOGDAHN
~'~~ GROUP
Page 5 of 23
-1.5% -1.0% -0.5% 0.0%
The Market Environment
Long-Term Major Market Index Performance
Period Ended: June 30, 2009
Fifteen Year Annualized Performance I Twenty Year Annualized Pertormance
MSCI EAFE
MSCI Emerg. Mkts.
S8P 500
Russell 3000
Russell 1000
Russell MidCap
Russell 2000
Barclays US Agg.
Barclays US Gov.
Barclays MBS Fixed
Barclays Corp IG
3mos. T-Bill
MSCI EAFE
MSCI Emerg. Mkts.
S&P 500
Russel 13000
Russel 11000
Russell MidCap
Russel 12000
Barclays US Agg.
Barclays US Gov.
Barclays MBS Fixed
Barclays Corp IG
6.9
~.o %
7.1
6.6
6.6
] 6.8
s.s %
8.8
0.0% 2.0% 4.0% 6.0% 8.0% 10.0%
Twenty-Five Year Annualized Performance I
MSCI EAFE
MSCI Emerg. Mkts.
SS~P 500
Russel 13000
Russel 11000
Russell MidCap
Russel 12000
Barclays US Agg.
Barclays US Gov.
Barclays MBS Fixed
Barclays Corp IG
3mos. T-Bill
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%
Thirty Year Annualized Performance I
MSCI EAFE
MSCI Emerg. Mkts.
S&P 500
Russell 3000
Russell 1000
Russell MidCap
Russell 2000
Barclays US Agg.
Barclays US Gov.
Barclays MBS Fixed
Barclays Corp IG
3mos. T-Bill
Page 4 of 23
3mos. T-Bill
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%
Source: MSCI Capital Markets, Russell Investments, Barclays Capdal & Bogdahn Consulting, LLC. ~~ THE
_ BOGDAHN
GROUP
The Market Environment
Quarter & 1-Year GICS Sector Performance & (Quarter-End Sector Weight)
Period Ended: June 30, 2009
Russell 3000 Russell 1000
^QTR Energy (11.3%)
01-Year
Materials (3.8%)
Industrials (10.4%)
Consumer Disc (9.9%)
Consumer Staples (10.8%)
Health Care (13.8%)
Financials (14.2%)
InfoTechnology (18.5%)
Telecom Services (3.2%)
Utilities (4.3%)
12.sbi
X4.5
~ 18.7 %
do.2
zo.a %
aa.7 %
20.0 %
-18.6
10.3
-90.4
10.3%d
-tos %
2s.o %
-35.2
20.8
-18.3
4.2
-21s%
11 A%
-27.3
-60.0% -40.0%
Rusell MidCap
~TR Energy (7.2%)
o1-Year
Materials (8.1%)
Industrials (12.9%)
Consumer Disc (14.8%)
Consumer Staples (7.2%)
Health Care (9.3%)
Financials (17.8%)
Info Technology (14.4%)
Telecom Services (1.9%)
Utilities (8.2%)
-20.0% 0.0% 20.0% 40.0%
-80.0% -60.0% -40.0% -20.0% 0.0% 20.0% 40.0%
Source: Thompson Financial
Page 6 of 23
^QTR Energy (11.8%)
01-Year
Materials (3.8%)
Industrials (10.0%)
Consumer Disc (9.7%)
Consumer Staples (11.2%)
Health Care (13.7%)
Financials (13.7%)
Info Technology (18.4%)
Telecom Services (3.4%)
Utilities (4.3%)
-60.0% -40.0%
Russel 12000
®QTR Energy (4.5%)
01-Year
Materials (3.8%)
Industrials (16.0%)
Consumer Disc (12.9%)
Consumer Staples (3.5%)
Health Care (15.1%)
Financials (19.5%)
Info Technology (19.7%)
Telecom Services (1.3%)
Utilities (3.6%)
-20.0% 0.0% 20.0% 40.0%
-80.0% -60.0% -40.0% -20.0% 0.0% 20.0% 40.0%
~~,~, BOGDAHN
~;._,~~n,~ GxouP
The Market Environment
Domestic Credit Sector & Broad Market Maturity Performance & Rate Comparison
Period Ended: June 30, 2009
Quarter Performance
AAA 1 s %
AA s.a %
A 10.0 %
_ ~
BBB - 14.3
Govt -2.a%
i
Mort os % ~
I
1-3yrG/M/C to%
1-5yrG/M/C t2%
G/M/C = Government I Mortgage /Corporate Ind$x
1-10yr G/MIC 1A %
10+yr G/M/C 2.3 %
-5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0%
2009 Market Rates
7.00
*~ Fed Funds Rate -TED Spread -3-Month Libor
6.00 ~ -i3AA/10yrSpread -10yrTreasury ----10yrTIPs
5.00 __ -
4.00
3.00
2.00 6__/`'~,,,-..•-,. ~.` _,,.. -.
1.00
0.00
Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09
Source: Merrill Lynch ,Mortgage X.com , US Department of Treasury & St. Louis Fed
One Year Performance
AAA
AA
A
BBB
<BBB
Govt
Mort
1-3yrG/MIC
1-5yrG/M/C
1-10yr G/M/C
10+yrGIM/C
o.o %
`1.7
A.4
4.9 %
J.6 %
6.7
9.3 %
i
5..~
16.8%
6.7
a.s %
-8.0% -3.0% 0.0%
Treasury Yield Curve
6.00
5.00
4.00
3.00
2.00
1.00
0.00
-X12/31/2007 112/31/2008 -X3/31/2009 0 6/3012009
~~
~ mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr
~~ .~ BOGDAHN
~~~~ GROUP
Page 7 of 23
The Market Environment
Domestic Credit Sector & Broad Market Maturity Performance & Rate Comparison
Period Ended: June 30, 2009
Quarter Performance
AAA 1 s %
AA ...~- --.. s.a% I
A 10.0 % ~ ~
i
BBB 14.3% i i
<BBB 23.~
Govt -z.a%
Mort o.e %
_ i
1-3y r G/M/C to %
1-Syr G/MIC 1.z %
G/M/C =Government /Mortgage /Corporate Index
1-10yr GIM/C 1.a%
10+yrG/M/C z.3 %
-5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0%
2009 Market Rates
7.00
~FedFundsRate -TED Spread -3-Month Libor
6.00 -B~`/10yrSpread -10yrTreasury --- 10yrTIPs
5.00 _ _
4.00
3.00
2.00
1.00
0.00
Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09
Source: Merrill Lynch ,Mortgage X.com , US Department of Treasury & St. Louis Fed
One Year Performance
AAA
AA
A
BBB
<BBB
Govt
Mort
1-3yrG/M/C
1-Syr G/M/C
1-10yr G/M/C
10+yrG/M/C
o.o°i
J e.~ %
- 9.3
i% I
5.8
^ e.~ %
-6.0% -3.0% 0.0% 3.0% 6.0% 9.0% 12.0%
~ Treasury Yield Curve
6.00
5.00
4.00
3.00
2.00
1.00
0.00
-X12/31/2007 112/31/2008 --a~-3/3112009 [~ 6130/2009
~~I
mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr
THE
`~,:~ BOGDAHN
GROUP
Page 7 of 23
The Market Environment
Quarter & 1-Year GICS Sector Performance & (Quarter-End Sector Weight)
Period Ended: June 30, 2009
Russell 3000
^QTR Energy (11.3%)
01-Year
Materials (3.8%)
Industrials (10.4%)
Consumer Disc (9.9%)
Consumer Staples (10.6%)
Health Care (13.8%)
Financials (14.2%)
InfoTechnology (18.5%)
Telecom Services (3.2%)
Utilities (4.3%)
12.5b/
-44.5
18.7 %
40.2 %
zo.a %
34.7
20.0%
-18.6
10.3
-ho.a%
10.3%
-to.e %
29.0
-35.2
20.8
-18.3 % '
4.2
-21.6
11.4%
-27.3
-60.0% -40.0%
Rusell MidCap
^QTR Energy (7.2%)
o1-Year
Materials (6.1%)
Industrials (12.9%)
Consumer Disc (14.8%)
Consumer Staples (7.2%)
Health Care (9.3%)
Financials (17.8%)
Into Technology (14.4%)
Telecom Services (1.9%)
Utilities (8.2%)
-20.0% 0.0% 20.0% 40.0%
-80.0% -60.0% -40.0% -20.0% 0.0% 20.0% 40.0%
Source: Thompson Financial
Page 6 of 23
^QTR Energy (11.8%)
o1-Year
Materials (3.8%)
Industrials (10.0%)
Consumer Disc (9.7%)
Consumer Staples (11.2%)
Health Care (13.7°h)
Financials (13.7%)
Info Technology (18.4%)
Telecom Services (3.4%)
Utilities (4.3%)
Russell 1000
12.0/,
43.5
17.9
40.7 %
20.3 %
35.0
19.1
-18.2
10.1
-tos%
9.6%
-1 o.s %
31.8%
36.3
20.0
-18.6
3.9
-21A%
11.6°
-28.5
-60.0% -40.0%
Russel 12000
GQTR Energy (4.5%)
O 1-Year
Materials (3.8%)
Industrials (16.0%)
Consumer Disc (12.9%)
Consumer Staples (3.5%)
Health Care (15.1%)
Financials (19.5%)
Info Technology (19.7%)
Telecom Services (1.3%)
Utilities (3.6%)
-20.0% 0.0% 20.0% 40.0%
-80.0% -60.0% -40.0% -20.0% 0.0% 20.0% 40.0%
~~ TtiE:
BOGDAHN
~~~ ~ GROUP
The Market Environment
A Visualization of Crisis and Globalization Over the Last 30 Years
3-year rolling correlations of Large Cap, Small Cap, International & Broad Market Fixed Income
Correlation
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
-0.1
-0.2
-0.3
-0.4
-0 5
------------------------------------------------------------------------------------------------------------------------------------------------ --------------------------- --v---- -- ----- -----
-International vs. Large Cap
---- -Small Cap vs. Large Cap ----------------------------------------------------------------------------------------------------------- ----------------- ---------------------- -------
-International vs. Small Cap
--- ---------------------
----------------------------------------------------------------------------------------- --- -------------------------------------
-Broad Fixed vs_ Large Cap
)JpO~ 00~ 00c 00~ 00G 00G 00~ 00~' 00G 00G 00~ 00C 00C 00° 00G p0G
Page 8 of 23
Source: Zephyr Associates
~~~ ~~°' GAO O~ Ceti C~^ OR ~Oh ~° X01 ~O`D~O°'
00 00 00 00 O~ 00 00 00 00 00 00 )J
~~ ~• BOGDAHN
`' ~~ ~ GROUP
Total Fund
June 30, 2009
Asset Allocation By Style as of Mar - 2009 Asset Allocation By Style -Current Quarter
March 31, 2009: $3,844,760
June 30, 2009: $4,126,116
Segments Market Value Allocation Segments Market Value Allocation
^ Equity 1,972,900 51.3 ^ Equity 2,454,887 59.5
^ Fixed Income 1,445,936 37.6 fly Fixed Income 1,513,376 36.7
^ Cash Equivalent 425,925 11.1 ^ Cash Equivalent 157,883 3.8
Page 9 of 23
~~ THE
_ BOGDAHN
GROUP
Total Fund
June 30, 2009
Asset Allocation By Style -Current Quarter
March 31, 2009: $3,844,760 June 30, 2009: $4,126,146
Segments Market Value Allocation Segments Market Value Allocation
^ Equity 1,972,900 51.3 ^ Equity 2,454,887 59.5
^ Fixed Income 1,445,936 37.6 ^ Fixed Income 1,513,376 36.7
^ Cash Equivalent 425,925 11.1 ^ Cash Equivalent 157,883 3.8
~~ THE
BOGDAHN
GROUP
Page 9 of 23
The Market Environment
A Visualization of Crisis and Globalization Over the Last 30 Years
3-year rolling correlations of Large Cap, Small Cap, International & Broad Market Fixed Income
Correlation
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
-0.1
-0.2
-0.3
-0.4
_n
Page 8 of 23
----------------------------------------------------------------------------------------------------------------------------------------------- --------------------------- --v---- -- ----- -----
-International vs. Large Cap
-- -- - ----- - - - ---- - - ------
----- ----------------- ---------------------- -------
--------- -
-Small Cap vs. Large Cap
-International vs. Small Cap
---------------------------------------- --- -------------------------------------
-Broad Fixed vs. Large Cap
oti °'~ o~ o° °h o~O o~ °° o° a° o'` oti o° o°` o`' ~ °~ a° o° o° o'` oti o`~ o°` o`' c~ o~ o° o°'
~~p0~ pmt peg p0~ p0C p0G p0G p0~ p0G p0G p0~ p0~ p0~ p0~ p0G p0o p0~ p0G p0G O@G p0G p0~ p0c p0c p0G Om~ p0G)~~
Source: Zephyr Associates
~~ BOGDAHN
~'' ~ GROUP
Total Fund
June 30, 2009
March 31, 2009: $3,844,760
Market Value Allocation
($~ (%~
^ Rockwood Capital Advisors Balanced Account 3,841,461 99.9
Receipt & Disbursement 3,299 0.1
Page 10 of 23
June 30, 2009: $4,126,146
Market Value Allocation
~$~ ~ %~
^ Rockwood Capital Advisors Balanced Account 4,108,133 99.6
^ Receipt & Disbursement 18,012 0.4
~~ Tt-iE
_ > BOGDAHN
~~ GROUP
Tequesta Public Safety Officers'
Total Fund
October 1, 2008 To June 30, 2009
~~:BOGDAHN
GROUP
Page 11 of 23
Tequesta Public Safety Officers'
Total Fund
October 1, 21108 To June 30, 2009
Page 11 of 23
~~~~- BOGDAHN
~~ GROUP
Total Fund
June 30, 2009
March 31, 2009: $3,844,760
Market Value Allocation
~$) ~%)
^ Rockwood. Capital Advisors Balanced Account 3,841,461 99.9
^ Receipt & Disbursement 3,299 0.1
Page 10 of 23
June 30, 2009: $4,126,146
Market Value Allocation
~$) ~%)
^ Rockwood Capital Advisors Balanced Account 4,108,133 99.6
Receipt & Disbursement 18,012 0.4
~~ ThfF,
BOGDAHN
.. GROUP
Tequesta Public Safety Officers'
Comparative Performance Trailing Returns
As of June 30, 2009
otal Fund (Net) 5.63 (98) -8.79 (64) -15.76 (59) -8.46 (27) -1.68 (25) 0.88 N/A OS/0
c~tal Rind I'~,lir~ 10.1 ~ (X~I -9.1~ 1~,?1 -I-l.l' I~l~) -`1.71 (38J -~?9 13;1 (1.1'_ A'~ .~
Difference -4.50 0.33 -1.64 1.28 0.61 0.76
fixed-Asset Target Alloc Moderate Funds (MF) Median 12.51 -7.78 -14.88 -10.52 -3.01 N/A
Total Fund (Gross) 5.63 -8.66 -15.53 -8.10 -1.25 1.34
Total Fund I'~,lic~ 10.13 -9.1 ' -14.1 ~ -9JT -3.''9 0.1
Difference -4.50 0.46 -1.41 1.64 1.04 1.22
Equity 915 (96) -20.42 (81) -30.83 (92) -18.87 (43) -7.36 (45) -2.00 N/A OS/Ol/~
SAP X00 1_>.9; 13R) -19.-17 (G') -_'6.'I (;;) -I~>_<) {70) -8._'~ (68) - ;~ N ~
Difference -6.78 -0.95 -4.62 1.06 0.86 1.35
US Core/Large Cap Equity (SA+CF) Median 15.39 -19.06 -26.08 -19.21 -7.66 N/A
ed Income 2.11 (68) 5.29 (88) 4.43 (83) 6.09 (72) 5.97 (74) 4.71 N/A d
ai1~ liitcrmcdiatc l .S. Government/Credit I.li7 176) (i_~4 i71) 3.~~ 171 6.3~ 1~,C;) (,.I ~ 1(itil 1.6G '~' .A
Terence 0.44 -1?5 -0.84 -0.23 -0.16 0.05
Intermediate Fixed Income (SA+CF) Median 2.G2 7.65 6.37 6.95 6.52 N/A
Returns for periods greater than one year are annualized.
Returns are expressed as percentages.
Page 12 of 23
~~_ ~ BOGDAHN
GROUP
Tequesta Public Safety Officers'
Comparative Performance Fiscal Year Returns
As of June 30, 2009
Total Fund (Net) -11.80 (22) 14.24 (15) 4.07 (95) N/A N/A
l~<,tall~undl'~~lic_~ -12.-4h 12~) I~.0~ (-},) 7.88 0101 N~,-~ N:1
Difference 0.66 2.22 -3.81 N/A N/A
Mixed-Asset Target Alloc Moderate Funds (MF) Median -14.54 11.49 7.26 9.49 9.40
Total Fund (Gross)
f~~inl 1 and Polio -l 1.34
-12.-1h 14.82
12.02 4.67
7.88 N/A
N.'A N/A
N:1
Difference 1.12 2.80 -3.21 N/A N/A
pity -21.39 (51) 21.99 (9) 5.38 (96) N/A N/A
'5011 -21.98 IG.~1 16.ad (58~ 10.79 1501 12."_'5 (811 I?.87 (59)
Ference 0.59 5.55 -5.41 N/A N/A
Core/Large Cap Equity (SA+CF) Median -21.38 16.67 10.78 14.35 14.27
ed Income 3.55 (37) 5.93 (8) 3.88 (46) N/A N/A
rla~s ('npita) l'.S. Government%('redit .'_.-41 1` ~1 ti.08 I(,I 1 ~.;~ 197) 2.SG (91) 3..~5 181 )
Ference 1.14 0.85 0.55 N/A N/A
Broad Market Core Fixed Income (SA+CF) Median 2.58 5.16 3.86 3.10 3.78
Returns for periods greater than one year are annualized. ~ THF,
Returns are expressed as percentages. ~ BO~~ A u1~T
Page 13 of 23 ~ L ~RIlOi~11Pr
Tequesta Public Safety Officers'
Comparative Performance Fiscal Year Returns
As of June 30, 2009
Fund (Net) -11.80 (22) 14.24 (15) 4.07 (95) N/A N/A
FUnd h~~~IC~ -~~.-lei (~~) ~~.~)~ (~~) 7.KA 1101 ~'.~ ~r~
•ence 0.66 2.22 -3.81 N/A N/A
~-Asset Target Alloc Moderate Funds (MF) Median -14.54 11.49 7.26 9.49 9.40
Fund (Gross) -11.34 14.82 4.67 N/A N/A
Fund P~~lic~ -1 ~.•1C, f _'.0? 7.88 N A N.'A
-ence 1.12 2.80 -3.21 N/A N/A
city -21.39 (51) 21.99 (9) 5.38 (96) N/A N/A
P 500 -~ 1 .98 1G.~ 1 I (i.-ta (581 10.79 (501 I ~_'S (81) 1 x.87 (59)
Ference 0.59 5.55 -5.41 N/A N/A
Core/Large Cap Equity (SA+CF) Median -21.38 16.67 10.78 14.35 14.27
ed Income 3.55 (37) 5.93 (8) 3.88 (46) N/A N/A
clays (_~a~~it;il l'~_ti. (~~,~crnmcnt(hcrlit x.41 (531 5.08 ~6I) 3.,3 (97) ?.5G 191 1 3. s5 lS I )
Ference 1.14 0.85 0.55 N/A N/A
Broad Market Core Fixed Income (SA+CFI Median 2.58 5.16 3.86 3.10 3.78
Returns for periods greater than one year arc annualized.
Returns are expressed as percentages.
Page 13 of 23
~~~ BOGDAHN
`~ ~ GROUP
Tequesta Public Safety Officers'
Comparative Performance Trailing Returns
As of June 30, 2009
otal Fund (Net) 5.63 (98) -8.79 (64) -15.76 (59) -8.46 (27) -1..68 (25) 0.88 N/A 05/01/2
~~tal 1~und P~~lic~~ 10.1 ~ (RS) -9.1? 1~~7) -14.1' (4~1 -9J4 (~gl -'.~~~ (~ ~) 0.1~ N :<\
iifference -4.50 0.33 -1.64 1.28 0.61 0.76
lixed-Asset Target Alloc Moderate Funds (MF) Median 12.51 -7.78 -14.88 -10.52 -3.01 N/A
'otal Fund (Gross) 5.63 -8.66 -15.53 -8.10 -1.25 1.34 05/01/2
otal Fund P~~lic~~ ]0.1 ~ -9.1~ -14.1 -9.74 -~.~9 0.1~
Difference -4.50 0.46 -1.41 1.64 1.04 1.22
quity 9.15 (96) -20.42 (81) -30.83 (92) -18.87 (43) -7.36 (45) -2.00 N/A OS/Ol/2
~~P500 15.9; (~8) -19.47 lG~) -?G'I l5-~i -19.9; (70) -8.~~' 16S) -. ;; N-~1
iifference -6.78 -0.95 -4.62 1.06 0.86 1.35
S Core/Large Cap Equity (SA+CF) Median 15.39 -19.06 -26.08 -19.21 -7.66 N/A
ed Income
C11 ~7 lnit'I'n1CdI.11C ~ .~. ~N~\Cl~llllh'nl ~ i'Cdlt 2.11 (68) 5.29 (88)
~.(i~ (~~>) 6.~~ 1~~ 0 4.43 (83)
~.~'~' (~`) 6.09 (72)
~~. ~' (~~~~) 5.97 (74)
~~.~.~ (~1 (~) 4.71 N/A
-~ (>~i ~';~
Ference 0.44 -1.25 -0.84 -0.23 -0.16 0.05
Intermediate Fixed Income (SA+CF) Median 2.62 7.65 6.37 6.95 6.52 N/A
Returns for periods greater than one year are annualized. ~ THE
Returns are expressed as percentages. • l ~OGDAHN
GROUP
Page 12 of 23
Tequesta Public Safety Officers'
Total Fund Portfolio (Net)
June 30, 2009
Market Value Market Value
As of Transfers Contributions Distributions Fees Expenses Income Apprec.PtDeprec. As of
3/31/2009 fi/30/2009
"Total Fund Portfolio (Net) 3,845 - 85 -21 - -I 26 192 4,126
Market Value Market Value
As of Net Contribntions Distributons Fees Expenses Income Capital As of
9/30/2008 Transfers Apprec./Deprec. (~/30/2W9
Total Fund Portfolio (Net) 4 Z45 - 33(1 -57 -(, -22 79 -444 4.126
Cumulative Performance
so.oo
20.00 -
® $IZOo
10.00
^
o.oo- ®®I s11o.o
z
-lo.oo
~ 100.0
-20.00
-30.00 ~ ~ _~ ~ ~ --- ~
$90.0
1 Oct-2008 1 2 3 4 5
Quarter To Year Years Years Years Years
Jun-2009
^ Total Fund Portfolio (Net) 5.G3 (98) -8.79 (G4) -15.76 (59) -8.46 (27) -1.68 (25) -0.28 (38) N/A
• Total Fund Policy 10.13 (85) -9.12 (67) -14.12 (42) -9.74 (38) -2.29 (33) -0.50 (42) N/A SR0.0
Median 12.51 -7.78 -14.88 -10.52 -3.01 -0.80 0.66 -Total Fund Portfolio (Net) ---Total Fund Policy
1 1 1
1
1
1
I 1
1
Quarter Quarter Quarter Quarter Quarter Quarter
Ending Ending Ending Ending Ending Ending
Mar-2009 Dec-2008 Sep-2008 .Inn-2008 Mar-2008 Dec-2007
Total Fund Portfolio (Net) -3.49 (16) -10.52 (21) -Zfi4 (42) 1.93 (2) -5.71 (fil) -0.64 (39)
Total Fund Policy -G.51 (781 -11.73 (2R) 5.50 (14) -2.12 (81) -4.56 (34) -0.84 (50)
Mixed-Asset Target Alloc Moderate Funds (MF) Median -5.13 -13.38 -8.04 -1.05 -5.41 -0.85
Page 14 of 23
~~ -- BOGDAHN
`~ ~~ GROUP
G/OS G/OG G/07 G/OR G/09
Tequesta Public Safety Officers'
Total Fund Portfolio (Net)
June 30, 2009
20.0
12.0
e
4.0
7
c
-4.0
0
o.-~~
Per'kirn>,vrcc
i -12.0
~" -20.0 /
A --T
`o X0.0 -120 -4.0 4.0
F
Total Fund Policy ('% )
f Under Performance f Over Performance -~ Mar-200R
5.00
Under
Performance
~--
12.0 20.0
$ Jun-2009
e -5 00
E
~ -10.00
a
-1.5.00
0.00
o.oo
C
25.00 -~
~ ^
~
a ~ ~
c 50.00- ^ ~"
a`
`
e 75.00
v
a
100.00 !-r r i r ~---- r-''
9/04 9/05 9/06 9/07 9/08 G/09
Total Period 5-29 25-M1ledian Median-75 7S-9S
Count Count Count Count
^ Total Fund Portfolio (Net) 6 3 (50%) 2 (33%) 1 (17%) 0 (0%)
• Total Fund Policv ~ 2 (40%) 3 (60%) 0 (0%) 0 (0%)
7.50
5.00
2.50
0.00
-2.50
e
-5.00
-7.50
5.00 10.00 15.00 20.00 25.00 2.90 5 00 7.50 10.00 12.50 15.00 17.50
Risk (Standard Deviation'%) Risk (Sta ndard Deviation '% )
Return Standard Deviafion Return Standard Deviation
^ Total Fund Portfolio (Net) -1.G8 9.91 ^ Total Fund Portfolio (Net) N%A N!.4
• Total Fund Policy -2.29 11.59 • Total Fund Policy N/A N/.A
- M1ledian -3.01 12.47 -Median O.GG IQ3G
t
Tracking
11P
Down
Sharpe
Downside
Error Market Market Alpha lR Ratio ReM Risk
Capture Capture
Total Fund Portfolio (Nell 4.G0 84.45 8330 O.OR 0.09 -0.44 0.79 8.34
Total Fund Police OAO 100.00 IU0.00 0.00 N/A -OA'_ 100 255
t
'1'rackin~
t P
Down
Sharpe
Downside
Error Market Market Alpha IR Ratio Beta Risk
Capture Capture
Total Fund Portfolio (Net) N/A N/A N/A N/A N/A N/A N/A N/A
Total Fund Policy N/A N/A N/A N/A N/A N/A N/A N/A
Page l5 of 23
~~,;a BOGDAHN
~'' GROUP
zo.o
12.0
4.0
7
-4.0
Over
Pe~fomnnce
0
a. -12.0
e
e
~ -20.0
A
Tequesta Public Safety Officers'
Total Fund Portfolio (Net)
June 30, 2009
., ~,
o.oo
Under
P erfo~mance
12.0 20.0
~ lun-2009
o -20.0 -12.0 -4 0 4.0
F
Total Fund Policy ('% )
-~-UnderPerfmm+nce -~OverPerfo~mance Mar-2008
5.00
-5.00
e
~ -10.00
C
-15.00
0.00
5.00 10.00 15.00 20.00 25,00
Risk(Standard Deviation '% )
Return Standard Deviation
^ Total Fund Portfolio (Net) -LG8 9.91
D l ~[al f and Policy -2.29 1 L59
V ed i m~ -3.01 12.47
e 25.00
C
e 50.00
u
a`
e '75.00
100.00
^ Total Fund Portfolio (Net)
• Total Fund Policv
7.50
5.00
2.50
0.00
,~, -2.50
0
-5.00
-7.50
2.50 S 00 7.50 10.00 12.50 ] 5.00 17.50
Risk (Standard Deviation '% )
Return Standard Deviation
^ Total Fund Portfolio (Neq N/A N/A
® T~~lul fund Policy NlA N/A
\kdian 0.66 10.36
Tracking ilp Down Sharpe Downside
Error Market Market .alpha IR Ratio Beta Risk
Capture Capture
Total Fiord Portfolio (Net) 4.G0 84.45 53.30 0.08 0.09 -0.44 0.79 8.34
Total Fund Policv 0.00 10000 100.00 0.00 N/A -0.42 L00 9.55
t '
Tracking t ~ p
Market Down
Market
Alpha
IR Sharpe
Beta Downside
Error Capture Capture Ratio Risk
Total Fund Portfolio (Net) N/A iA/A N/A N/A N/A N/A N/A N/A
Total Fund Policy N/A N/A N/A N/A N/A N/A N/A N/A
Page 15 of 23
~~_ :~ BOGDAHN
`' GROUP
9/04 9/05 9/OG 9/07 9/08 G/09
Total Period 5-25 25Median Mediae-75 7595
Count Count Count Count
6 3 (50%) 2 (33io) I (17%) 0 (0%)
5 2 (40%) 3 (60%) 0 (0%) 0 (0%)
Tequesta Public Safety Officers'
Total Fund Portfolio (Net)
June 30, 2009
Market Value Net Ca ttal Market Value
As of Transfers Contributions Distributions Fees Expenses lncome Apprec/ Deprec. As of
3/31/2009 6/30/2009
Total Fund Portfolio (Net) 3,845 - 85 -21 - -1 26 192 4,126
Market Value Nct Ca rtal Market Value
As of Transfers Contributions Distributions Fees Expenses Income ,4pprecJ Deprec. .4s of
9/30/200R 6/30/2009
Total Fund Portfolio (Net) 4.241 - 330 -57 -G -2Z 79 -444 4.126
30.00
20.00 -
10.(10-
^
0.00 ~,
v
ii
~ -10.00 ~'. -
-20 00 ~'
-30.00
1 Oct-2005
Quarter To
.Iun-2009
^ Total Fund Portfolio (Net) 5.63 (98) -R.79 (G4)
• Total Fund Policy 10.13 (RS) -9.12 (67)
Median
12.51 -7.78
1 2 3 4
Ycar fears Years Years
$130.0
$ 120.0
$110.0
$ 100.0
$90.0
1'cars
-15.76 (59) -R.4G (27) -1.68 (25) -0.2R (38) N/A
-14.12 (42) -9.74 (38) -2.29 (33) -0.50 (42) N/A $80.0
-14.88 -10.52 -3.01 -0.80 o rr>
1 I 1 1 1 1
Quarter Quarter Quarter Quarter Quarter Quarter
Ending Ending Ending Ending F,nding Ending
Mar-2009 Dec-2008 tiep-2008 .lun-2008 Mar-2008 Dec-2007
Total Fund Portfolio (Net) -3.49 (16) -10.52 121) -7.64 (42) 1.93 (2) -5.71 (61) -0.64 (39)
Total Fund Policy -6.51 (78) -11.73 (28) -5.50 (14) -2.12 (81) -4.5G (34) -O.R4 (50)
Mixed-Asset Target Alloc Moderate Funds (MF) Median -5.13 -13.38 -R.04 -I.OS -5,41 -0.85
Page 14 of 23
BOGDAHN
GROUP
G/OS 6/06 6/07 6/08 6/09
Total Fund Portfolio (Net) ~--~- Total Fund Policy
Tequesta Public Safety Officers'
Total Equity Portfolio
June 30, 2009
' t t ~
Market Value Market Value
As of Net Contributions Distributions Fees Fspenses Income Capital As of
Transfers Apprec.! Deprec. 0/30/2009
3/31/2009
Total Equity Portfolio 3,845 - RS -21 - -1 26 192 4,126
' t t t 1,
Market Value Vet Capital Market Value
:~s of Transfers Contributions Distributions Fees Expenses Income Apprec.! Deprec. As of
9/311/2008 6/30/2009
Total Equity Portfolio 4,245 - 330 -57 -G -22 79 -444 4.126
i 0.00 r
$ 160.0
g,}
-45.00 ~-.- -_ i i _ i i i t ___~
1 Oct-2008 1 2 3 4 S
Quarter To Year Years Years Vears fears $700
.lun-2009
^ Total Equity Portfolio 9.15 (961 -20.42 B1) -30.83 (92) -18.87 (43) -7.36 (45) -3.87 (57) N/A
• S&P 500 15 93 (381 -19.47 (62) -26.21 (53) -19.93 (70) -8.22 (GS) -4.27 (72) -2.24 (85) $55.0
3;05 3/OG 3/07 3/08 G/09
Median 1539 -19.06 -26.08 -19.21 -7GG -3.59 -L 13 -Total EquityPortfilio -~--SkP500
t t '' t
1 1 I 1 1 1
Quarter Quarter Quarter Quarter Quarter Quarter
Ending Ending Ending Ending Ending Ending
Mar-2009 Dec-2008 Seo-2008 .lun-2008 Mar-2008 Dec-2007
Total Equity Portfolio -6.96 (13) -21.63 (49) -13.08 (R9) 4.88 (4) -11.29 (87) -2.80 (49)
S&P 500 -11.01 (G8) -21.94 (59) -8.37 (39) -2.73 (82) -9.44 (48) -3.33 (G7)
US Core/Large Cap Equity (SA+CF) Median -10.49 -2E73 -9.00 -131 -9.47 -2.87
Page 16 of 23
~^ TH F.
~. BOGDAHN
`- -~ GROUP
Tequesta Public Safety Officers'
Total Equity Portfolio
June 30, 2009
20.0
I o.o
00
0
-lo.o
a,
•~ -20.0
w
'' -30.0
0
F -30.0
5.00
D.00
-5.00
e -10.00
-15.00
0
a -20.00
-zs.oo
f Under Performance f Over Perfi~mwnce $ Mar-2008
-p- Jttn-2009
2s.oo
z
•~ so.oo
a`
c 75 00
`o
C
100.00
o.oa
^ ~
^
~ • ~ •
9/04 9/05 9/OG 9/07 9/OR G/09
Total Period 5-25 25_Median Median-75 75-95
Count Count Count Count
2 (33%1 2 (33°0) 2 (33%1 0 (0°0)
20 0 (0°ro) 0 (0%) 13 (GS%) 7 (35%)
^ Total Equity Portfolio
~ S&P 500
15.00
10.00
5.00
~ 0.00
e
-5.00
a
-lo 00
5.00 10.00 15.00 20.00 25.00 3000 35.00 5.00 10.00 15.00 20.00 25.00 30.00
Risk (Standard Deviation'%) Risk (Standard Devia tion'% )
Return Sta ndard De viation Relurn Standard Deviafion
^ Total Equity Portfolio -7.3G 18.54 ^ Total Equity Portfolio N/A N/A
• S&P 500 -8.22 19.35 • S&P 500 -2.24 IG.04
- Median -ZGG 19.25 -Median -1.13 IG.00
Tracking SIP Down Sharpe Downside
Error Market M1larket Alpha IR Ratio Beta Risk
Capture Capture
'T'otal Equity Portfolio 7.IR 90.G3 902G -(1.17 0.10 -0.52 O.R7 15.20
S&P 500 0.00 100.0(1 100.0(1 0.00 7V/A -OS3 1.t10 15.81
I
Trackin
K ~~P Down Sh:vpe Downside
F,rror Market Market Alpha IR
Ratio Beta
Risk
Capture Capture
Total Equity Portfolio N/A N/.4 N/A N/A N/A N/A N/,q N/A
S&P 500 0.00 100.00 100.00 0.00 N/A -0.27 L00 1253
Page 17 of 23
~~ BOGDAHN
~» GROUP
-20.0 -10.0 0_0 10.0 20 0
Shc[P 500 (`% )
Tequesta Public Safety Officers'
Total Equity Portfolio
June 30, 2009
20.0
t o.o
o.o
0
- 10.0
i
•~ -20.0
-30.0
0
F- -30.0
5.00
0.00
-5.00
-10.00
-15.00
-20 00
-25,00
z
.G
a`
0
z
o.ot
2s.oo
^ ~
^
sa.oo -
75.00 7 ~ ~ ~ ~
~ ~ ~
~ ~ ~ + ~
i~ A
i •
~ s
,,
100.00 Lr- --~
9/04 9/OS 9/06 9/07 9/08 6/09
Total Period 5-25 25-Median Median-75 75-95
Count Count Count Count
^ Total Equity Pottfolio 6 2 (33 %) 2 (33 %) 2 (33%) 0 (0 % )
f Under Perforrrnnce f Over Performance ~ Mar-2008 $ Jun-2009 • S&P 800 20 0 (0%) 0 (0%) 13 (65%) 7 (35%)
5.00 1000 1.5.00 20.00 25.00 30.00 35.00
Risk(Standard Deviation'%.)
Return Standard Deviation
^ Total Equity Portfolio -7.36 1 R.54
• 5&P 500 -8.22 19.35
~ledian -7.66 19.25
15.00
10.00
5.00
e
~ 0.00 _
i -5.00
- 10.00
5.00
10.00 15 00 20.00 25.00
Risk(Standard Deviation % )
Return Standard De~ia6on
^ Total Equity Portfolio NiA N/A
• SRP 800 -2?d 16.04
- Medium -1.13 16.00
30 00
Tracking Up Down Sharpe Downside
Error Market 114arket Alpha IR Ratio Beta Risk
Capture Capture
Total Equity Portfolio 7.18 90.63 90?G -0.17 0.10 -0.52 0.87 15.20
S&P 500 0.00 10000 100.00 0.00 N/A -0.53 1.00 I S.R I
1
Tracking Up Down Sharpe Downside
F,rror Market Market Alpha IR Ratio Beta Risk
Capture Capture
"total Equity Portfolio N/A N/A N/A N/A N/A N/A N/A N/A
S&P 800 0.00 100.00 100.00 0.00 N/A -0.27 1.00 12.53
Page 17 of 23
~~.~ BOGDAHN
GROUP
-20.0 -10.0 0.0 10.0 20.0
S&P500(%)
Tequesta Public Safety Officers'
Total Equity Portfolio
June 30, 2009
.. t t •
Market Value Net Capital Market Value
As of Contributions Distributions Fees Expenses Income ~ rec./ De rec. As of
3/31/2009 Transfers PP P 6/30/2009
Total F..quity Portfolio 3,R45 - 85 -21 - -1 26 192 4,126
' t t t 1 ,
Market Value let Capitol Market Value
:1s of Transfers Contributons Distributions Fees Expenses Income Apprec./ Deprec. As of
9/30/2008 6/30/2009
Total Equity Portfolio 4.245 - 330 -57 -6 -22 79 -444 4.126
1 1 1 _ 1 1
$ 160.0
30.(10 i
$145.0
15.00
$130.0
o.on --
o
$115.0
E -15.00
z`
$100.0
-30.00
$R5.0
-45.00 i i i. __ i i~
1 Oct-2008 1 2 3 4 S
Quarter To fear Years ti'ears Years fears $70.0
Jun-2009
^ Total Equity Portfolio 9.15 196) -20.42 (81) -30.83 192) -18.87 (43) -Z3G (45) -3.87 (57) N/A
• SRP 500 15.93 (38) -19.47 (G2) -26.21 (53) -19.93 (70) -8.22 (68) -.1.27 (72) -2.?4 (85) $55.0
9:1
Median 1539
' -19.06 -26.08 -19.21 -7.6(, -3.59 -] 13 Total Equity Portfolio ----- SRcP 500
t t
' t
1
1
I
1
1
1
Quarter Quarter Quarter Quarter Quarter Quarter
Ending Ending Ending Ending Ending Ending
-2009
Mar-2009 Dec-2008
Dec-2008 Se~2008 .lun-2008
.1un-2008 Mar-2008
Mar-2008 Dec-2007
Dec-2007
Total Equity Portfolio -6.9fi (13) -21.63 (49) -13.08 (89) 4.88 (4) -11.29 (87) -2.80 (49)
S&P 500 -I 1.01 (GS) -21.94 (59) -R.37 (39) -2 73 (82) -9.44 (48) -3.33 (67)
US Core;l,arge Cap Equip (SA+CF) Median -10.49 -21.73 -9.00 -1.31 -9.47 -2.87
Page 16 of 23
~~ THE
BOGDAHN
~~ GROUP
3/05 3/06 3/07 3/08 6/09
Tequesta Public Safety Officers'
Total Fixed Portfolio
June 30, 2009
Market Value Net Ca ttal Market Value
As of Transfers Contributions Distribufions Fees Expenses Income Apprec.p/ Deprec As of
3/31/2009 fi/30/2009
Total Fixed Portfolio 3,845 - 85 -2l - -I 26 192 4,126
Market Valne Market Value
As of Net Contribufions Distributions Fees Expenses Income Capital As of
9/30/2008 Transfers Apprec./ Deprec. fi/30/2009
Total Fixed Portfolio 4,245 - 330 -57 -6 -22 79 -444 4,126
15.00
1 Q00
o_
5.00
E
e
z"
o.oo
-s.oo
^ Total Fixed Portfolio
• Barclays Capital US. Government/Credit
Median
1
Quarter
2II (72)
I.85 (78)
2.98
Oct-2008 1 2 3 4 5
To Year Years Years fears Years
.lun-2009
5.29 (R3) 4.43 (7G) 6.09 (66) 5.97 (6G) 4.62 (59) N/A
7.01 (GS) 5.2G (72) G.24 (65) 6.16 (65) 4.19 (71) 4.79 (G7)
Total Fixed Portfolio
7.97 7.00 7.08 6.71 4.81 5.25 ~-Barclays Capital IJ.S. Government/Credit
I 1 1 1 1 1
Quarter Quarter Quarter Quarter Quarter Quarter
Ending Ending Ending Ending Ending Ending
Mar-2009 Dec-2008 Sep-2008 .lun-2008 M11ar-200R Dec-2007
Total Fixed Portfolio -0.10 (75) 3.23 (59) -0.82 (38) -1.48 (87) 2.70 (21) 3.19 (21)
Barclays Capital U.S. Government/G~edit -127 (92) 6.42 (12) -L64 (56) -LSl (88) 2.53 (27) 3.10 (28)
US Broad Market Core Fixed Income (SA+CF) Median 0.53 3.84 -L39 -0.95 1.99 2.90
Page 18 of 23
~~ ~ BOGDAHN
`-~ GROUP
$95.0 .
G/OS 6/OG G/07 G/08 6/09
Tequesta Public Safety Officers'
Total Fixed Portfolio
June 30, 2009
R.0
., 6.0
e
0
~ 4.0
9
Over
P erfommnce
^®
e 2.0
F' 2.0
Uuder
P erfotmance
4.0 V 0
Barclays Capital U.S. Government/Credit) % )
-••-Over Perfo mrtnce (Under Performance Jun-200R
~f- Jun-2009
R.0
0.00
~
25.00
C
~ ~ • •
•
~ 50.00 i
v • '~
. ,~
i
~
~
' •
100.00 `~~_ - - r_
~_ . _.. ~.
9/04 9/05 9/06 9/07 9/08 G!09
Total Period 5_25 25-Median Median-75 75-95
Count Count Court[ Count
^ Total Fixed Portfolio 5 2 (40 %) L (20 %) 2 (40%) 0 (0%)
~ Barclays Capital U.S. Government/Credit 20 0 (0%) 7 (35"~0) 5 (25%) 8 (40%1
10.00
8.00
G.00
e 4.00
0 2 00
z o 00
-2.00 ,
2.00 4.00 6.00 R.00
Risk(StandardDeviation %~)
Return
^ To[al Fixed Portfolio 5.97
~ Barclays Capital U.S. Government/Credit G.16
- Median G.71
iooo 12.00
Standard Deviation
3.32
4.72
4.02
7.50
6.00
4.50 ~
~ 3.00
;, 1.50--
a
o.oo
14.00 I.50 3.00 4.50 G.00
RisklStandardDeviation % )
Return
^ Total Fixed Portfolio N/A
• Barclays Capital U.S. Government/Credit 4.79
- Median 5.25
7.50 9,00 10.50
Standard Deviafion
N/.A
4.34
3.G9
Tracking Up Down Sharpe Downside
Error Market Market .41pha 1R Ratio Beta Risk
Capture Capture
Total Fixed Portfolio 2.3G 87.01 7132 126 -Q09 0.64 0.7G 2.G1
Barclays Capital U.S GovemmendCredit 0.00 100.00 100.00 0.00 N/A OS9 1.00 2.49
t
"Fracking Lp Down Sharpe Downside
Error Market Market Alpha IR Ratio Beta Risk
Capture Capture
Total Fixed Portfolio N/.4 N/A N/A N/A N/A N/A N/A N/A
Barclays Capital U.S. Government/Credit 0.00 100.00 100.00 0.00 N/A 0.39 1.00 2.27
Page 19 of 23
T'1- BOGDAHN
~~~ GROUP
R.o
-- 6 A
e
~ a.o
9
Over
P erfomran ce
o.
0 2.0
F' 2 0
7.90
G.00
4.90
3.00
~ L90
C
0.00
2.00 4.00 6.00 8.00 10.00 12 00 14 00 1.90 3.00 4.90 G.00 7.90 9.00 10.90
Risk(Standa rdlk~~dation %~) Risk(StandardDer4ation'%)
Return Standard Deviation Return Standard Deviation
^ Total Fixed Portfolio 5.97 3.32 ^ Total Fised Portfolio N%A N..A
• Barclays Capital U.S. Govemm ent/Credit GJG 4.72 • Barclays Capital U.S. Govemment/Credit 4.79 4.34
- Median G.71 4.02 -Median 9.29 3.G9
t
Tracking
lip
Market
Down
Market
Alpha
IR
Sharpe
Downside
Beta
Error Ratio Risk
Capture Capture
Total F'ixcd Portfolio '_.3G R7.01 71.32 I?ti -0.09 O.G4 0.7G 2.G1
Barclays Capital 11. S. GovcmmenNCrcdit O.UO 100-00 100.00 0.(10 N/A 0.59 I.00 2.49
Tracking i
P
Down
Sharpe
Downside
Errar Market Market :Vpha IR Ratio Beta Risk
Capture C,aphve
Total Fixed Portfolio N/.4 N/A N/;~ NiA '~l/A N/A N/A N/A
6arclays Capital O.S. Govemment/Credit 0.00 100.00 100.0(1 0.00 N~'A 0.39 1.00 2.27
Page 19 of 23
4.0 G.0
Barclays Capital U.S.GovernmenUCredit(%.)
fOverPerfomnnce fllnderPeifmmance -f~Jun-200R
10.00
8.00
G.00
4 00
2 00
0.00
-2.00
Tequesta Public Safety Officers'
Total Fixed Portfolio
June 30, 2009
.t
o.oo -
~ c 29.00 ^
it ~ • ••~ • ~~
90 00
ii d ~• •• ~
7s.oo . , • ~
"-
•
Under tY * ~ ~ ~ ~ ~
Pe~io~mance 100 00 r --. - r - r_. --- ----_-~- - t -- ~
9'04 9:09 9i0G 9/07 9/08 G/09
80
Total Period 5-25 25-Median Median-75 75-95
Count Count Count Count
^ Total Fixed Portfolio 5 2 (40%) l (20%) 2 (40%) 0 (0°0)
~ Jun-2009 • Barclays Capital U.S. Government/Credit 20 0 (0 %) 7 (39 %) ~ (29"ro) R (40°/ )
~ t
~~ .~ BOGDAHN
`- 3 GROUP
Tequesta Public Safety Officers'
Total Fixed Portfolio
June 30, 2009
Market Value Net Ca rtal Market Value
As of Transfers Contributions Distributions Fees Expenses Income Apprec.p/ Deprec. As of
3/31 /2009 6/30/2009
Total Fixed Portfolio 3,845 _ RS -21 - -I 26 192 4,126
Market Value Net Ca ~tal Market Value
As of Transfers Contributions Distributions Fees Expenses Income ApprecJ Deprec. As of
9/30/2008 6/30/2009
Total Fixed Portfolio 4145 - 330 -57 -6 -22 79 -444 4.126
t Oct-2008 1 2 3 4 5
Quarter To Ycar Years Years fears Years
.lun-2009
^ Total Fixed Portfolio 2.11 (72) 5.29 (R3) 4.43 (7G) 6.09 (G6) 5.97 (GG) 4.62 (59) N/A $95.0
• Barclays Capital U.S. Governnrent/Credit 1.85 (78) 7.0] (GS) 5.2G (72) 624 (65) 6.16 (65) 4.19 (71) 4.79 (67) G/OS 6/06 6/07 G/OS G/09
-Total Fixed Portfolio
Median 2.98 7.97 7.00 7.OR G 71 4 R1 5.25 ---Barclays Capital U.S. Govemment/Credit
t t t
1
1
1
1
1
1
Quarter Quarter Quarter Quarter Quarter Quarter
Ending Ending Ending Ending Ending Ending
Mar-2009 Dec-2008 Sep-2008 .-un-200R Mar-2008 Dec-2007
Total Fixed Portfolio -0.10 (75) 3.23 (59) -0.82 (38) -1.4R (R7) 2.70 (21) 3.19 (21)
Barclays Capital U.S. Government/Crodit -1.27 (92) G.42 (12) -L64 (56) -1.51 (SR) 2.53 (27) 3.10 (28)
US Broad Market Core Fixed Income (SA+CF) Mcdian 0.53 3.84 -1.39 -0.95 1.99 2.90
Page 18 of 23
~~ > BOGDAHN
GROUP
Tequesta Public Safety Officers'
Total Fund
As of June 30, 2009
Page 20 of 23
~. ~~
Effective Date: Apr-2005
S&P 500 Index G0.00
Barclays Capital Intermediate U.S. Government/Credit 40.00
~~ ,~ BOGDAHN
`~ GROUP
Statistics Definitions
Statistics Description
Return -- Compounded rate of return for the period.
Standard Deviation - A statistical measure of the range of a portfolio's performance, the variability of a return around its average return over a
specified time period.
Sharpe Ratio -- Represents the excess rate of return over the risk free return divided by the standard deviation of the excess return. The result is
the absolute rate of return per unit of risk. The higher the value, the better the product's historical risk-adjusted performance.
Alpha -- A measure of the difference between a portfolio's actual returns and its expected performance, given its level of risk as measured
by beta. It is a measure of the portfolio's historical performance not explained by movements of the market, or a portfolio's
non-systematic return.
-- A measure of the sensitivity of a portfolio to the movements in the market. It is a measure of a portfolio's non-diversifiable or
systematic risk.
cared -- The percentage of a portfolio's performance explained by the behavior of the appropriate benchmark. High R-Square means a
higher correlation of the portfolio's performance to the appropriate benchmark.
or Ratio -- Similar to Sharpe ratio, but focuses on beta rather than excess risk (standard deviation). Represents the excess rate of return over
the risk free rate divided by the beta. The result is the absolute rate of rehtrn per unit of risk. The higher the value, the better the
product's historical risk-adjusted performance.
side Risk - A measure similar to standard deviation, but focuses only on the negative movements of the return series. It is calculated by
taking the standard deviation of the negative quarterly set of returns. The higher the factor, the riskier the product.
ing Error -- A measure of the standard deviation of a portfolio's performance relative to the performance of an appropriate market
benchmark.
cation Ratio -Measured by dividing the active rate of return by the tracking error. The higher the Information Ratio, the more value-added
contribution by the manager.
~tency -- The percentage of quarters that a product achieved a rate of return higher than that of its benchmark. The higher the consistency
figure, the more value a manager has contributed to the product's performance.
s Return -- Arithmetic difference between the managers return and the risk-free return over a specified time period.
Return -- Arithmetic difference between the managers return and the benchmark return over a specified time period.
> Risk -- A measure of the standard deviation of a portfolio's performance relative to the risk free return.
Page 21 of 23
Market Capture -- The ratio of average portfolio return over the benchmark during periods of positive benchmark return. Higher values indicate
better product perforn~ance.
wn Market Capture -- The ratio of average portfolio return over the benchmark during periods of negative benchmark return. Lower values indicate
better product performance.
Calculation based on monthly periodicity.
~... Tttr.
~ ~~ BOGDAHN
~' ~ GROUP
Statistics Definitions
Page 21 of 23
Statistics Description
Return -- Compounded rate of return for the period.
Standard Deviation -- A statistical measure of the range of a portfolio's performance, the variability of a return around its average return over a
specified time period.
Sharpe Ratio -- Represents the excess rate of return over the risk tree return divided by the standard deviation of the excess return. The result is
the absolute rate of return per unit of risk. The higher the value, the better the product's historical risk-adjusted performance.
Alpha - A measure of the difference between a portfolio's actual returns and its expected performance, given its level of risk as measured
by beta. It is a measure of the portfolio's historical performance not explained by movements of the market, or a portfolio's
non-systematic return.
Beta -- A measure of the sensitivity of a portfolio to the movements in the market. It is a measure of a portfolio's non-diversifiable or
systematic risk.
R-Squared -- The percentage of a portfolio's performance explained by the behavior of the appropriate benchmark. High R-Square means a
higher correlation of the portfolio's performance to the appropriate benchmark.
Treynor Ratio -- Similar to Sharpe ratio, but focuses on beta rather than excess risk (standard deviation). Represents the excess rate of return over
the risk free rate divided by the beta. The result is the absolute rate of return per unit of risk. The higher the value, the better the
product's historical risk-adjusted performance.
Downside Risk -- A measure similar to standard deviation, but focuses only on the negative movements of the return series. It is calculated by
taking the standard deviation of the negative quarterly set of returns. The higher the factor, the riskier the product.
Tracking Error -- A measure of the standard deviation of a portfolio's performance relative to the performance of an appropriate market
benchmark.
~rmation Ratio -- Measured by dividing the active rate of return by the tracking error. The higher the Information Ratio, the more value-added
contribution by the manager.
isistency -- The percentage of quarters that a product achieved a rate of return higher than that of its benchmark. The higher the consistency
figure, the more value a manager has contributed to the product's performance.
ess Return -- Arithmetic difference between the managers return and the risk-free return over a specified time period.
ive Return -- Arithmetic difference between the managers return and the benchmark return over a specified time period.
ess Risk -- A measure of the standard deviation of a portfolio's performance relative to the risk free return.
Market Capture -- The ratio of average portfolio return over the benchmark during periods of positive benchmark return. Higher values indicate
better product performance.
vn Market Capture -- The ratio of average portfolio return over the benchmark during periods of negative benchmark return. Lower values indicate
better product performance.
Calculation based on monthly periodicity.
THE
~_`,:~ BOGDAHN
GROUP
Tequesta Public Safety Officers'
Total Fund
As of June 30, 2009
Page 20 of 23
~. ~~
Effective Date: Apr-2005
S&P 500 Index 60.00
Barclays Capital Intermediate U.S. Government/Credit 40.00
~~ BOGDAHN
~.. GROUP
Village of Tequesta Public Safety Officers' Pension Fund
Compliance Checklist as of June 30, 2009
. .
1. The Total Plan return equaled or exceeded the 8% actuarial earnings assumption over the trailing three and five year periods. /
2. The Total Plan return equaled or exceeded the total plan benchmark over the trailing three and five year periods. /
3. The Total Plan return ranked within the top 40th percentile of its peer group over the trailing three and five year periods. /
4. The Total Plan standard deviation was equal to or less than 120% of the total plan benchmark over the trailing three and five year periods. /
1. Total equity returns meet or exceed the benchmark over the trailing three and five year periods. /
2. Total equity returns ranked within the top 40th percentile of its peer group over the trailing three and five year periods. /
3. The total equity allocation was less than 70% of the total plan assets at market. /
4. The total equity allocation was less than 60% of the total plan assets at cost. /
5. Total foreign equity was less than 10% of the total plan assets at cost. /
1. Total fixed income returns meet or exceed the benchmark over the trailing three and five year periods. /
2. Total fixed income returns ranked within the top 40th percentile of its peer group over the trailing three and five year periods. /
3. The average quality of the fixed portfolio was investment grade or better. /
1. Manager outperformed the index over the trailing three and five year periods. / / /
2. Manager ranked within the top 50th percentile over trailing three and five year periods. / / /
3. Less than four consecutive quarters of under performance relative to the benchmark. / / / 1
4. Three-year down-market capture ratio less than the index. / / /
5. Standard deviation <= 150% of the index over the trailing three and five year periods. / / /
~ rHE
~_ ~ BOGDAHN
GROUP
VILLAGE OF TEQUESTA PUBLIC SAFETY OFFICERS' PENSION
Investment Performance Attribution Supplement
Key elements of equity manager attribution are as follows:
Note to analysis: We used Thomson Portfolio Analytics,for• the holdings-based attribution analysis, which is based on monthly holdings obtained.from Salem
Trust. Holdings-based attribution can help to identify active elements of the investment manager. The analysis does not reflect the impact of cash flows or
management fees; actual portfolio returns may differ.
y Based on the holdings-based attribution we ran using Thomson Portfolio Analytics, the Rockwood portfolio (excluding the impact of cash) trailed the
S&P 500 Index during the quarter by 6.1 percentage points (9.8% vs. 15.9%).
At the end of Q2, there were 37 securities in Rockwood's total equity portfolio. Approximately 76% of the securities in the portfolio were constituents
in the S&P 500 Index. Based on average market cap, the portfolio was smaller than the index ($40.7 B vs. $70.9 B). The portfolio continues to exhibit
both growth and value characteristics, which is common for a core equity style. On the growth side, the dividend yield was less than the index (1.8%
vs. 2.4%), the price-to-book was greater than the index (3.3 vs. 2.0), and a higher pri. The growth bias is also highlighted in the relative style factors;
for the quarter, the portfolio's growth factor, which is based on the median long-term growth forecast, was greater than the S&P 500 Index (+0.35 vs. -
0.06). The portfolio's value characteristics included a significantly lower trailing twelve month price-to-earnings ratio than the index (18.5 vs. 47.5)
and a lower,forwar•d twelve-month EPS growth rate less than the index . Rockwood's focus on "quality'' companies is represented with a lower total
debt-to-equity ratio (0.7 vs. 1.7) and a higher return on equity (38.6 vs. 19.4) relative to the benchmark S&P 500 Index Another characteristic used to
describe a "quality" company is earnings consistency. Based on the EPS Instability Historical SY Score provide in the table on the right below, the
companies in the Rockwood equity portfolio have had more consistent earnings over the last five years relative to the companies in the index (]7.6 vs.
25.5). The top three holdings at the end of the quarter are in the Information Technology sector.
ORACLE CORP
QUALCOPJIM INC
HEWLETT PACKARD CO
ROSS STORES INC
STERICYCLE INC
31
Total: 16.12
Mkt Cap 40.695..910.466.94 70.882.471,635.
Market Cap -Median 15.274.966.980.00 6,842.429.200_
--- -
Div Yld 1 82 2.
EPS Gr Hst 12M -19.44 -72.
EPS Gr For 12M
--- _ _
2.74 _.__ _ _
6.
EPS Gr Hst 5Y
11.82 --
13.
Ret Eq 38.58 19.
PE Tr 12M 18.45 47.
PE For 12M 14.42 __
13.
PEG Far 12M _ __ 1.25 1.
Price tBook 3.26 -
1.
Relative Beta (GRM)
-0.41 _. __
-0.
Relative Growth (GRM} , 0.35 __
-0.
Relative Momentum (GRMI
~
-0.15 __..__
-0.
Relative Value (GRM) _ -0.
Ttl Dbt/ Eqty WS 0.
EPS Instb Hst 5Y Score 17.
VILLAGE OF TEQUESTA PUBLIC SAFETY OFFICERS' PENSION
Investment Performance Attribution Supplement
Key elements of equity manager attribution are as follows:
Note to analysis: We used Thomson Portfolio Analytics for the holdings-based attribution analysis, which is based o» monthly holdings obtained from Salem
Trust. Holdings-based attr•ibattion can help to identify active elements of the investment manager. The analysis does not reflect the impact of cash, flows or
ntanagement,fees; actual portfolio returns may differ.
y Based on the holdings-based attribution we ran using Thomson Portfolio Analytics, the Rockwood portfolio (excluding the impact of cash) trailed the
S&P 500 Index during the quarter by 6.1 percentage points (9.8% vs. 15.9%).
- At the end of Q2, there were 37 securities in Rockwood's total equity portfolio. Approximately 76% of the securities in the portfolio were constituents
in the S&P 500 Index. Based on average market cap, the portfolio was smaller than the index ($40.7 B vs. $70.9 B). The portfolio continues to exhibit
both growth and value characteristics, which is common for a core equity style. On the growth side, the dividend yield was less than the index (1.8%
vs. 2.4%), the price-to-book was greater than the index (3.3 vs. 2.0), and a higher pri. The growth bias is also highlighted in the relative style factors;
for the quarter, the portfolio's growth factor, which is based on the median long-term growth forecast, was greater than the S&P 500 Index (+0.35 vs. -
0.06). The portfolio's value characteristics included a significantly lower trailing twelve month price-to-earnings ratio than the index (18.5 vs. 47.5)
and a lower.forwar•d twelve-month EPS growth rate less than the index . Rockwood's focus on "quality" companies is represented with a lower total
debt-to-equity ratio (0.7 vs. 1.7) and a higher return on equity (38.6 vs. 19.4) relative to the benchmark S&P 500 Index Another characteristic used to
describe a "quality" company is earnings consistency. Based on the EPS Instability Historical SY Score provide in the table on the right below, the
companies in the Rockwood equity portfolio have had more consistent earnings over the last five years relative to the companies in the index (17.6 vs.
25.5). The top three holdings at the end of the quarter are in the Information Technology sector.
ORACLE CORP 3.4
QUALCOMM INC 3.2
HEWLETT PACKARD CO 3.2
ROSS STORES INC 3.1
STERICYCLE INC 3.0
Total: 16.12
Village of Tequesta Public Safety Officers' Pension Fund
Compliance Checklist as of June 30, 2009
1. The Total Plan return equaled or exceeded the 8% actuarial earnings assumption over the trailing three and five year periods.
2. The Total Plan return equaled or exceeded the total plan benchmark over the trailing three and five year periods.
3. The Total Plan return ranked within the top 40th percentile of its peer group over the trailing three and five year periods.
4. The Total Plan standard deviation was equal to or less than 120% of the total plan benchmark over the trailing three and five year periods.
1. Total equity returns meet or exceed the benchmark over the trailing three and five year periods.
2. Total equity returns ranked within the top 40th percentile of its peer group over the trailing three and five year periods.
3. The total equity allocation was less than 70% of the total plan assets at market.
4. The total equity allocation was less than 60% of the total plan assets at cost.
5. Total foreign equity was less than 10% of the total plan assets at cost.
1. Total fixed income returns meet or exceed the benchmark over the trailing three and five year periods.
2. Total fixed income returns ranked within the top 40th percentile of its peer group over the trailing three and five year periods.
3. The average quality of the fixed portfolio was investment grade or better.
1. Manager outperformed the index over the trailing three and five year periods. / / /
2. Manager ranked within the top 50th percentile over trailing three and five year periods. / / /
3. Less than four consecutive quarters of under performance relative to the benchmark. / / /
4. Three-year down-market capture ratio less than the index. / / /
5. Standard deviation <= 150% of the index over the trailing three and five year periods. / / /
- ~
~~ THE
BOGDAHN
~' ,-n GROUP
Attribution Results
Ayg Avg Port entrk Port Bntrk Alloc Select Total
Sector Name Port Wt Bmrk Wt Return Return Contrib Contrib Effect Effect Effect
Total Portfolio I 100.00 100.00 9.84 15.94 9.84 15.94 0.70 6.80 -6.09
Energy 2,48 12.88 -0.50 10.70 -0.01 1.41 -0.32 0.22
Materials 2.86 3.31 31.55 16.27 0.82 0.54 0.00 ~ 0.39
Industrials 8.84 10.21 10.64 18.89 0.95 1.88 0.00 -0.79 -0.78
Consumer Discretionary 22.35 9.04 6.87 18.20 1.69 1.64 ~ -2.24 -1.93
Consumer Staples 17.30 12.11 5.18 9.81 0.86 1.23 -0.34 -0.91 -1..25
Health Care 19.15 13.93 13.91 8.88 2.53 1.26 -0.34 0.58
Financials 8.91 12.83 9.62 35.71 0.98 3.89 -0..05 -2.68 -2.73
Information Technology 15.50 18.02 10.80 19.72 1.65 3.52 0.00 -1.31 -1.30
Telecomm Service 0,38 3.62 0.48 3.41 0.01 0.15 -0.05 0.48
Utilities 2.17 4.00 13.47 10.18 0.35 0.42 0.06 0.18 0.24
At the sector level, all of the relative underperformance was attributable to poor stock selection. Stock selection with the Consumer Discretionary, Consumer
Staples, Financials, and Information Technology detracted from the relative performance to the S&P 500 Index. On a positive note, the stock selections within
the Health Care and Materials sectors positively contributed to relative performance versus the index; the top contributor in the portfolio (Sigma Aldrich) is in
the Materials sector. Additionally, an underweight to Telecom and Energy benefited relative performance.
_
C~npany Name
R
ehirn _.
C ,.
ontrib
Company Flame
Rehirn Contrib
SIGMA ALDRICH CORP 31.55 0.82 BURGER KING HLDGS INC -28.93 -0.78
OWENS & MINOR INC NEW 33.08 0.68 CELGENE CORP -10.38 -0.27
ORACLE CORP 18.85 0.60 NETGEAR INC -7.63 -0.22
YUM BRANDS INC 22.13 0.59 WAL MART STORES INC -6.52 -0.18
TJX COS INC NEW 23.22 0.58 YAHOO INC -1.86 -0.05
Total: 3.28 Total: -1.50
Largest Holdings
Company Name
Avg Wt
Return Best Performers
Compa~ry Nana
Avg Wt
Return Worst Performers
Company Manx
Avg.NR
Return
ROSS STORES INC 3.44 7.88 OWENS & MINOR INC NEW 2.27 33.08 BURGER KING HLDGS INC 1.69 -26.93
STERICYCLE INC 3.30 7.96 SIGMA ALDRICH CORP 2.86 31.55 CELGENE CORP 1.06 -10.38
PROGRESSNE CORP OHIO 3.20 12.43 BOSTON SCIENTIFIC CORP 2.29 27.55 NETGEAR INC 0.42 -7.63
NIKE INC 3.20 10.91 TJX COS INC NEbV 2.75 23.22 1NAL MART STORES INC 2.44 -6.52
DRACLE CORP 3.14 18.85 YUM BRANDS INC 2.86 22.13 YAHOO INC 0.39 -1.88
- _• ~ • •
Avg
Port
Port
Avg
Bmrk
Bmrk Allot
Select
Total
Sector Name Port Wt Return Contrib Bmrk Wt Return Contnb Effect Effect Effect
ROCKWOOD EQUITY (TEQUESTA PUBLIC EM PLOYEES... 100 0(1
I 984 984 100 OO 15 44 15 94 9 14 6 U9
,.,.,.,...€
....................................................................................................................
MktGap less than $2Bil ........, .,.,., ....,
... ......... ..........
7.04 ., ,.. ... ....
12.32 .........,. .
0.91 ... ...,.,.,.,.
0.76 ...,... .,...
42.11 ,........ ..,...... ......,.. ,.,.,
0.40 ~ , ,.....,.,.,
-1.55 -0.42
MktCap btw $2B and $1UB 24,42 10.57 2.71 16.37 24.40 4.26 -3.71 -2.97
MktCap btw $lOB and $20B 27.12 14.05 3.78 17.01 18.11 3.18 -1.18 -0.96
MktCap btw $20B and $200B 41.06 6,61 2.56 60.75 13.48 7.89 ! -2.57 -2.U3
MktCap greater than $20U6 0.36 -4.18 -0.12 5.12 5.46 0.20 -0.13 0.28
The portfolio's market cap allocation benefited performance; the overall "allocation effect" was + 305 bps. A significant overweight to small capitalization
companies (less than $2 billion) contributed the most during the quarter (+l l3bps).
Avg Port Port Avg Bmrk Bmrk Alloc Select Total
Port Wt Return Contrib Bmrk Wt Return ContriG Effect Effect Effect
MktCap less than $26i1 7.04 12.32 0.91 0.76 42.11 0.40 r• -1.55 -0.42
MktCap btw $2B and $106 24.42 10.57 2.71 16.37 24.40 4.26 i -3.71 -2.97
MktCap btw $106 and $206 27.12 14.05 3.78 17.01 18.11 3.18 -1.18 -0.96
MktCap btw $206 and $2008 41.06 6.61 2.56 60.75 13.48 7.89 ~ -2.57 -2.03
MktCap greater than $2006 0.36 -4.18 -0.12 5.12 5.46 0.20 i -0.13 0.28
The portfolio's market cap allocation benefited performance; the overall "allocation effect" was + 305 bps. A significant overweight to small capitalization
companies (less than $2 billion) contributed the most during the quarter (+l 13bps).
Attribut~n Results
Avg Avg Port Bmrk Port emrk Alloc Select Total
Sector Name Port Wt Bntrk Wt_ _Return Return _Contrib_ Contrib Effect_ _ Eff_ect__ _ Effect
Total Portfolio I 100.00 100.00 9.84 15.94 9.84 15.94 0.70 -6.80 -6.09
Energy 2.48 12.88 -0.50 10.70 -0.01 1.41 -0.32 0.22
Materials 2.86 3.31 31.55 16.27 0.82 0.54 0.00 ! 0.39
Industrials 8.89 10.21 10.64 18.89 0.95 1.88 0.00 -0.79 -0.78
Consumer Discretionary 22.35 9,09 6.87 18.20 1.69 1.64 ~ -2.24 -1.93
Consumer Staples 17.30 12,11 5.18 9.81 0.88 1.23 -0.34 -0.91 -1..25
Health Care 19.15 13.93 13.91 8.88 2.53 1.26 -0.34 ~ 0.58
Fnancials 8.91 12.83 9.62 35.71 0.98 3.89 -0.05 -2.68 -2.73
Information Technology 15.50 18,02 10.80 19.72 1.65 3.52 0.00 -1.31 -1.30
Telecomm Service 0.38 3.62 0.48 3.41 0.01 0.15 -0.05 0.48
Utilities 2.17 4.00 13.47 10.18 0.35 0.42 0.06 0.18 0.24
At the sector level, all of the relative underperformance was attributable to poor stock selection. Stock selection with the Consumer Discretionary, Consumer
Staples, Financials, and Information Technology detracted from the relative performance to the S&P 500 Index. On a positive note, the stock selections within
the Health Care and Materials sectors positively contributed to relative performance versus the index; the top contributor in tt~e portfolio (Sigma Aldrich) is in
the Materials sector. Additionally, an underweight to Telecom and Energy benefited relative performance.
Top Gontribtrtors ~ ~ ~. ,' Bottom Contributors
Company Flame _ Reh~rn Contrib Con;rany Nanre Rehirn Contrib
SIGMA ALDRICH CORP 31.55 0.82 BURGER. KING HLDGS INC -28.93 -0.78
OWENS & MINOR INC NEW 33.08 O.bB CELGENE CORP -10.38 -0.27
ORACLE CORP 18.85 0.60 NETGEAR INC -7.63 -0.22
YUM BRANDS INC 22.13 0.59 tiVAL MART STORES INC -6.52 -0.18
TJX COS INC NEW 23.22 0.58 YAHOO INC -1.88 -0.05
Total: 3.28 Total: -1.50
=ompany flame Avg Wt Return Company Manx Avg Wft Return Company blame Avg Wt Return
ROSS STORES INC 3,44 7.88 OWENS & MINOR INC NEW 2.27 33,08 BURGER KING HLDGS INC 1.69 -28.93
STERICYCLE INC 3.30 7.96 SIGMA ALDRICH CORP 2.86 31.55 CELGENE CORP 1.06 -10.38
PROGRESSIVE CORP OHIO 3.20 12.43 BOSTON SCIENTIFIC CORP 2.29 27.55 NETGEAR INC 0.42 -7.63
NIKE INC 3.20 10.91 T]X COS INC NEW 2.75 23.22 WAL MART STORES INC 2.44 -b.52
ORACLE CORP 3.14 18.85 YUM BRANDS INC 2.86 22.13 YAHOO INC 0.39 -1.88
THE
BOGDAHN
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VILLAGE OF TEQUESTA
(PLAN SPONSOR)
PUBLIC SAFETY OFFICERS' PENSION FUND
Investment Policy Statement
I. PURPOSE OF INVESTMENT POLICY STATEMENT
The Pension Board of Trustees (Board) maintains that an important determinant of future
investment returns is the expression and periodic review of the Village of Tequesta Public Safety
Officers' Pension Fund (the Plan) investment objectives. To that end, the Board has adopted this
statement of Investment Policy and directs that it apply to all assets under their control.
In fulfilling their fiduciary responsibility, the Board recognizes that the retirement system is an
essential vehicle for providing income benefits to retired participants or their beneficiaries. The
Board also recognizes that the obligations of the Plan are long -term and that investment policy
should be made with a view toward performance and return over a number of years. The general
investment objective is to obtain a reasonable total rate of return - defined as interest and
dividend income plus realized and unrealized capital gains or losses - commensurate with the
Prudent Investor Rule and any other applicable ordinances and statutes.
Reasonable consistency of return and protection of assets against the inroads of inflation are
paramount. However, interest rate fluctuations and volatility of securities markets make it
necessary to judge results within the context of several years rather than over short periods of
five years or less.
The Board will employ investment professionals to oversee and invest the assets of the Plan.
Within the parameters allowed in this document and their agreements with the Board, the
investment management professionals shall have investment discretion over their mandates,
including security selection, sector weightings and investment style.
The Board, in performing their investment duties, shall comply with the fiduciary standards set
forth in Employee Retirement Income Security Act of 1974 (ERISA) at 29 U.S.C. s. 1104(a) (1)
(A) — (C). In case of conflict with other provisions of law authorizing investments, the
investment and fiduciary standards set forth in this section shall prevail.
April 2010 Page 1
II. TARGET ALLOCATIONS
In order to provide for a diversified portfolio, the Board has engaged investment professional(s)
to manage and administer the fund. The investment manager(s) are responsible for the assets and
allocation of their mandate only and may be provided an addendum to this policy with their
specific performance objectives and investment criteria. The Board has established the
following asset allocation targets for the total fund:
Asset Class Target Range Benchmark Index
Domestic Equity 50% 35% - 65% S &P 500
International Equity 10% 0% - 15% MSCI EAFE
Broad Market Fixed Income 40% 30% - 50% Barclays Intermediate
Aggregate
TIPS* 0% 0% - 10% Barclays TIPS
*Benchmark will default to "broad market fixed income" if these portfolios are not funded. Targets and
ranges above are based on market value of total Plan assets.
The Board will monitor the aggregate asset allocation of the portfolio, and will rebalance to the
target asset allocation based on market conditions. If at the end of any calendar quarter, the
allocation of an asset class falls outside of its allowable range, barring extenuating circumstances
such as pending cash flows or allocation levels viewed as temporary, the asset allocation will be
rebalanced into the allowable range. To the extent possible, contributions and withdrawals from
the portfolio will be executed proportionally based on the most current market values available.
The Board does not intend to exercise short-term changes to the target allocation.
III. INVESTMENT PERFORMANCE OBJECTIVES
The following performance measures will be used as objective criteria for evaluating the
effectiveness of the Investment Managers.
A. Total Portfolio Performance
1. The performance of the total portfolio will be measured for rolling three and five year
periods. The performance of the portfolio will be compared to the return of the policy
indexes comprised of 50% S &P 500, 10% MSCI EAFE, 40% Barclays Intermediate
Aggregate Bond Index.
2. On a relative basis, it is expected that the total portfolio performance will rank in the top
40 percentile of the appropriate peer universe over three and five -year time periods.
3. On an absolute basis, the objective is that the return of the total portfolio will equal or
exceed the actuarial earnings assumption (8 %), and provide inflation protection by
meeting Consumer Price Index plus 3 %.
April 2010 Page 2
B. Equity Performance
The combined equity portion of the portfolio, defined as common stocks and convertible
bonds, is expected to perform at a rate at least equal to the 83% S &P 500 and 17% MSCI
EAFE. Individual components of the equity portfolio will be compared to the specific
benchmarks defined in each Investment Manager addendum. All portfolios are expected to
rank in the top 40 percentile of the appropriate peer universe over three and five -year time
periods.
C. Fixed Income Performance
The overall objective of the fixed income portion of the portfolio is to add stability and
liquidity to the total portfolio. The fixed income portion of the portfolio is expected to
perform at a rate at least equal to the Barclays Capital U.S. Intermediate Aggregate Index.
All portfolios are expected to rank in the top 40 percentile of the appropriate peer universe
over three and five -year time periods.
D. Treasury Inflation Protection Security (TIPS) Performance
The overall objective of the TIPS portfolio, if utilized, is to provide inflation protection
while adding stability to the total portfolio. If TIPS are utilized the strategy is expected to
approximate the structure and performance of the Barclays Capital U.S Treasury TIPS
Index.
IV. INVESTMENT GUIDELINES
A. Authorized Investments
Pursuant to the investment powers of the Board of Trustees as set forth in the Florida Statutes and
local ordinances, the Board of Trustees sets forth the following investment guidelines and
limitations:
1. Equities:
a. Must be traded on a national exchange or electronic network; and
b. Not more than 5% of the Plan's assets, at the time of purchase, shall be invested in
the common stock, capital stock or convertible stock of any one issuing company,
nor shall the aggregate investment in any one issuing company exceed 5% of the
outstanding capital stock of the company; and
c. Convertible bonds of domestic corporations and traded in domestic dollars, and are
easily negotiable; and
d. Additional criteria may be outlined in the manager's addendum.
2. Fixed Income:
a. All fixed income investments shall have a minimum rating in one of the four
highest classifications by a major rating service; and
April 2010 Page 3
b. The value of bonds issued by any single corporation shall not exceed 5% of the
total fund; and
c. Preferred Stocks of domestic corporations, and are easily negotiable; and
d. Mortgage backed securities issued by non - government entities must be limited to
15% of the fixed income portfolio.
e. Collateralized Mortgage Obligations (CMOs) shall be limited to issues that are
currently paying interest, receiving principal pay -downs and do not contain
leverage.
f. Additional criteria may be outlined in the manager's addendum.
3. Money Market:
a. The money market fund or STIF options provided by the Plan's custodian; and
b. Have a minimum rating of Standard & Poor's Al or Moody's P1.
4. Pooled Funds:
Investments made by the Board may include pooled funds. For purposes of this policy
pooled funds may include, but are not limited to, mutual funds, commingled funds,
exchange- traded funds, limited partnerships and private equity. Pooled funds may be
governed by separate documents which may include investments not expressly
permitted in this Investment Policy Statement. In the event of investment by the Plan
into a pooled fund, the Board will adopt the prospectus or governing policy of that fund
as the stated addendum to this Investment Policy Statement, including section 5.
B. Trading Parameters
When feasible and appropriate, all securities shall be competitively bid. Except as otherwise
required by law, the most economically advantageous bid shall be selected. Commissions
paid for purchase of securities must meet the prevailing best - execution rates. The
responsibility of monitoring best price and execution of trades placed by each manager on
behalf of the Plan will be governed by the Portfolio Management Agreement between the
Plan and the Investment Managers.
C. Limitations
1. Investments in corporate common stock and convertible bonds shall not exceed
seventy (70 %) of the Plan assets at market.
2. Foreign securities shall not exceed fifteen percent (15 %) of Plan's market value.
3. All equity and fixed income securities must be readily marketable. Commingled funds
must be independently appraised at least annually.
April 2010 Page 4
D. Absolute Restrictions
No investments shall be permitted in;
1. Any investment not specifically allowed as part of this policy.
2. Illiquid investments, as described in Chapter 215.47, Florida Statutes.
3. Direct investment in `Scrutinized Companies' identified in the periodic publication by
the State Board of Administration ( "SBA list ", updated on their website
www.sbafla.com/fsb/ ), is prohibited. Any security identified as non - compliant on or
before January 1, 2010 must be divested by September 1, 2010. Securities identified
after January 1, 2010, are subject to the provisions of section V. (c) below. However, if
divestiture of business activities is accomplished and the company is subsequently
removed from the SBA list, the manager can continue to hold that security. Indirect
investment in `Scrutinized Companies' (through pooled funds) are governed by the
provisions of Section V(G) below.
V. COMMUNICATIONS
A. On a monthly basis, the custodian shall supply an accounting statement that will include a
summary of all receipts and disbursements and the cost and the market value of all assets.
B. On a quarterly basis, the Investment Managers shall provide a written report affirming
compliance with the security restrictions of Section IV (as well as any provisions outlined in
the Investment Manager's addendum). In addition, the Investment Managers shall deliver a
report each quarter detailing the Plan's performance, forecast of the market and economy,
portfolio analysis and current assets of the Plan. Written reports shall be delivered to the
Board within 30 days of the end of the quarter. A copy of the written report shall be
submitted to the person designated by the Village, and shall be available for public
inspection. The Investment Managers will provide immediate written and telephone notice
to the Board of any significant market related or non - market related event, specifically
including, but not limited to, any deviation from the standards set forth in Section IV or their
Investment Manager addendum.
C. If the Fund owns investments, that complied with section IV at the time of purchase, which
subsequently exceed the applicable limit or do not satisfy the applicable investment
standard, such excess or noncompliant investments may be continued until it is
economically feasible to dispose of such investment in accordance with the prudent man
standard of care, but no additional investment may be made unless authorized by law or
ordinance. An action plan outlining the investment `hold or sell' strategy shall be provided
to the Board immediately.
D. The Investment Consultant shall evaluate and report on a quarterly basis the rate of return
net of investment fees and relative performance of the Plan.
April 2010 Page 5
E. The Board will meet periodically to review the Investment Consultant performance report.
The Board will meet with the investment manager and appropriate outside consultants to
discuss performance results, economic outlook, investment strategy and tactics and other
pertinent matters affecting the Plan on a periodic basis.
F. At least annually, the Board shall provide the Investment Managers with projected
disbursement needs of the Plan so that the investment portfolio can be structured in such a
manner as to provide sufficient liquidity to pay obligations as they come due. To this end
the Investment Managers should, to the extent possible, attempt to match investment
maturities with known cash needs and anticipated cash -flow requirements.
G. The Investment Consultant, on behalf of the Plan, shall send a letter to any pooled fund
referring the investment manager to the listing of `Scrutinized Companies' by the State
Board of Administration ('SBA list'), on their website www.sbafla.com/fsb /. This letter
shall request that they consider removing such companies from the fund or create a similar
actively managed fund having indirect holdings devoid of such companies. If the manager
creates a similar fund, the Plan shall replace all applicable investments with investments in
the similar fund in an expedited timeframe consistent with prudent investing standards. For
the purposes of this section, a private equity fund is deemed to be an actively managed
investment fund. However, after sending the required correspondence, the Plan is not
required to sell the pooled fund.
VI. COMPLIANCE
A. It is the direction of the Board that the plan assets are held by a third party custodian, and that
all securities purchased by, and all collateral obtained by the plan shall be properly
designated as Plan assets. No withdrawal of assets, in whole or in part, shall be made from
safekeeping except by an authorized member of the Board or their designee. Securities
transactions between a broker - dealer and the custodian involving purchase or sale of
securities by transfer of money or securities must be made on a "delivery vs. payment" basis
to insure that the custodian will have the security or money in hand at conclusion of the
transaction.
B. The investment policy shall require all approved institutions and dealers transacting
repurchase agreements to execute and perform as stated in the Master Repurchase
Agreement. All repurchase agreement transactions shall adhere to the requirements of the
Master Repurchase Agreement.
C. At the direction of the Board operations of the Plan shall be reviewed by independent
certified public accountants as part of any financial audit periodically required. Compliance
with the Board's internal controls shall be verified. These controls have been designed to
prevent losses of assets that might arise from fraud, error, or misrepresentation by third
parties or imprudent actions by the Board or employees of the plan sponsor, to the extent
possible.
D. Each member of the Board shall participate in a continuing education program relating to
investments and the Board's responsibilities to the Plan. It is suggested that this education
process begin during each Trustee's first term.
April 2010 Page 6
•
E. With each actuarial valuation, the Board shall determine the total expected annual rate of
return for the current year, for each of the next several years and for the long term thereafter.
This determination shall be filed promptly with the Department of Management Services, the
plan's sponsor and the consulting actuary.
F. The proxy votes must be exercised for the exclusive benefit of the participants of the Plan.
Each Investment Manager shall provide the Board with a copy of their proxy voting policy
for approval. On a regular basis, at least annually, each manager shall report a record of their
proxy vote.
VII. CRITERIA FOR INVESTMENT MANAGER REVIEW
The Board wishes to adopt standards by which judgments of the ongoing performance of a
portfolio manager may be made. If, at any time, any three of the following is breached, the
portfolio manager may be warned of the Board's serious concern for the Plan's continued safety
and performance. If any five of these are violated the consultant may recommend a manager
search for that mandate.
• Four (4) consecutive quarters of relative under- performance verses the benchmark.
• Three (3) year trailing return below the top 40 percentile within the appropriate peer
group and under performance verses the benchmark.
• Five (5) year trailing return below the top 40 percentile and under performance
verses the benchmark.
• Three (3) year downside volatility greater than the index (greater than 100), as
measured by down market capture ratio.
• Five (5) year downside volatility greater than the index (greater than 100), as
measured by down market capture ratio.
• Style consistency or purity drift from the mandate.
• Management turnover in portfolio team or senior management.
• Investment process change, including varying the index or benchmark.
• Failure to adhere to the IPS or other compliance issues.
• Investigation of the firm by the Securities and Exchange Commission (SEC).
• Significant asset flows into or out of the company.
• Merger or sale of firm.
• Fee increases outside of the competitive range.
• Servicing issues — key personnel stop servicing the account without proper
notification.
• Failure to attain a 60% vote of confidence by the Board.
Nothing in this section shall limit or diminish the Board's right to terminate the manager at any
time for any reason.
April 2010 Page 7
VIII. APPLICABLE VILLAGE ORDINANCES
If at any time this document is found to be in conflict with the Village Ordinances or applicable
Florida Statutes, the Ordinances and Statutes shall prevail.
IX. REVIEW AND AMENDMENTS
It is the Board's intention to review this document at least annually subsequent to the actuarial
report and to amend this statement to reflect any changes in philosophy, objectives, or
guidelines. In this regard, the Investment Manager's interest in consistency in these matters is
recognized and will be taken into account when changes are being considered. If, at any time,
the Investment Manager feels that the specific objectives defined herein cannot be met, or the
guidelines constrict performance, the Board should be notified in writing. By initialing and
continuing acceptance of this Investment Policy Statement, the Investment Managers concur
with the provisions of this document. By signing this document, the Chairman attests that this
policy has been recommended by the Investment Consultant, reviewed by the plan's legal
counsel for compliance with applicable law, and approved by the Board of Trustees.
X. FILING OF THE INVESTMENT POLICY
Upon adoption by the Board, the investment policy shall be promptly filed with the Florida
Department of Management Services, the Village, and the plan's actuary. The effective date of
the Investment Policy shall be the 31 days following the filing date with the Village.
VILLAGE OF TEQUESTA PUBLIC SAFETY OFFICERS' PENSION PLAN
Chairman, Board of Trustees Date
April 2010 Page 8