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HomeMy WebLinkAboutPension General_Documentation_Tab 12_02/04/2008Tequesta General Employees' Pension Fund ~. i ~ L DANA INVESTMENT ADVISORS, INC. February 4, 2008 DANA INVESTMENT ADVISORS, INC. -.r ~~~ Account Profile ., ~.~ ~ ~~ ( Investment Objectives: Obtain a reasonable total rate of return, with reasonable consistency ~`~= while attempting to protect the assets against the inroads of inflation. .~ Performance over 3-5 year market cycle to be in excess of composite indices. Managers performance to be in the top 40% of Mobius Universe. Total Return to be equal to actuarial earnings assumption and equal or exceed CPI plus 3% over 3-5 year cycle. Comparative Indices: 60% S&P 500 40% Lehman Govt/Credit Intermediate Investment Restrictions: Not more than 5% of funds assets invested in any one issuing company or aggregate investment in one company exceed 5% of outstanding capital stock of the company. Equity: Investments in stock not to exceed 60% at cost or 70% at market. Listed on National Exchange Fixed: Standard & Poor's Investment Grade or Moody's Investment Grade. Value of bonds in single corporation shall not exceed 10% of the total fund. DANA INVESTMENT ADVISORS, INC. 2 Key Money Rates J ~ . ~. ~, Sources of Portfolio Growth Since Inception 10-3-OS to 12-31-07 Dana Beginning Market Value $ - Dana Contributions 1,287,781 Dana Withdrawals -388,563 Dana Investment Return 162, 5 3 8 Dana Investment Ending Market Value Custodian Ending Market Value Bogdahn Ending Market Value $1,061,756 $1,062,230 $1,062,078 Each entity above uses different sources for pricing securities and because bonds are a negotiated market each pricing source will have a slightly different prices. The minor differences above are within a tolerable range of ± .25%. DANA INVESTMENT ADVISORS, INC. 4 No Text No Text Worldwide equity markets started the fourth quarter of 2007 with positive momentum, but by late November, most domestic equity indices had cor- rected 5-7% from their starting points. Foreign markets fared slightly bet- ter, but also fell 1-2% during the same time frame. The markets experi- enced amodest rebound in late December, but this was not enough to prevent most U.S. and foreign equity indices from showing negative re- turns in Q4. The news is more positive when looking at annual returns for 2007, as the S&P 500 provided a positive total return (including dividends) of roughly 5.5%. Small cap stocks did not fare as well, as the Russell 2000 finished the year down almost 2%. From a style perspective, 2007 marked a significant inflection point in the performance of growth vs. value oriented shares. Growth indices such as the Russell ]000 Growth and Russell 2000 Growth returned +11.8% and +7.0% respectively in 2007. Meanwhile, value indices struggled, as the Russell 1000 Value and Russell 2000 Value had negative returns of (.2%) and (9.8%) in 2007. S&P 500 Laggards in 2007 Home Builders -59.6% Thrifts 8 Mortgage Finance -51.2% Real Estate Management -36.4% Department Stores -35.2% Motorcycle Manufacturers -33.7% Regional Banks -31.5% Apparel & Accessories -31.0% Home Improvement Retail -29.7% Consumer Finance -29.6% Diversified Financials -29.5% Source: Bloomberg The table at left helps illustrate why there was such a dramatic divergence in performance of growth vs. value shares. Almost all of the worst per- forming industry groups in 2007 have a higher representation within value-oriented vs. growth portfolios. Meanwhile, the best performing stocks were clustered within the Aerospace/Defense, Oilfield Service, Computer Software & Internet in- dustries, all of which have higher representation within in the growth indices. Consumer Discretionary and Finan- cials were the only sectors within the S&P 500 that experienced negative returns in 2007. Energy led the S&P 500 last year, up over 32%, and four other sectors produced positive returns of 15% or more. The divergence in the performance of the sectors within the S&P had a material impact on the overall composition of the index. Financials repre- sentation within the index has fallen by 5`% in just one year. Meanwhile, Energy has risen by almost 3%, and the Technology and Consumer Staples also grew their rcpresentatiou by 1% or more in 2007. Investors should be aware that the ScStP 500 has clearly become a "growthier" index in a rather short period of time. This will probably have positive implications for the near-term performance of the S&P 500, as the index now has higher weighting towards some of the sectors that are likely to post the strongest and most consistent earnings growth in 2008. S&P 500 Sector Breakdown Comparison of Beginning vs. End of Ye ar 2007 Sector Sector Change Weight % 2007 Weight % in Sector 12131106 Performance 12131107 Wei ht Energy 9.8% 32.38% 12.9% 3.1% Materials 3.0% 19.99% 3.3% 0.4% Utilities 3.4% 15.81% 3.4% 0.0% Information Technology 15.1% 15.53% 16.8% 1.6% Consumer Staples 9.3% 11.60% 10.3% 1.0% Industrials 10.9% 9.83% 11.5% 0.6% Telecommunications 3.5% 8.45% 3.6% 0.1% Health Care 12.0% 5.90% 12.0% 0.0% Consumer Discretionary 10.6% -14.32% 8.5% -2.1% Financials 22.3% -20.84% 17.7% -4.6% Total 100.0% 5.49% 100.0% Dana Equity Strategies Most of Dana's equity strategies navigated the volatile markets of 2007 fairly well, while a few had a more difficult time. Small caps did not join the party in 2007, and the small cap market also ex- perienced an escalation in volatility. Dana's Small Cap strategy mirrored these trends. The Small Cap portfolio's tilt towards value stocks also weighed on performance. The Russell 2000 Value index returned -9.8`% in 2007, while the Russell 2000 Growth index was up over 7%. Our team is presently focusing on companies with international exposure, attractive growth charac- teristics and a history of positive earnings surprises along with ap- pealing valuations and improving fundamentals. Dana's Large Value, Large Growth and Socially Responsible strategics generated strong absolute and relative returns for the year. Total Return through 12-31-07* Q4 YTD 3 Yrs 5 Yrs Dana Large Cap -3.35% 5.56% 11.00% 14.90% Duna Large Growth 0.87% 15.40% 13.12% 17.13% Dana Large Value -4.10% 4.87% 11.19% 16.51% Dana All Cap -4.79% 3.11 % 9.35% 15.19% Dana Small Cap -7.90% -5.66% 4.96% 14.91% Dana Socially Responsible -4.45% 7.64% 10.98% 18.15% Dana Int'I ADR 2.04% 10.70% rUA IsYA Preliminary as of 1-21-08 The Large Value and Social strategics derived their strongest rela- 15800 W. Bluemound Rd. Suite 250 Brookfield, WI 53005-6026 Correspondence: P.0. Box 1067 Brookfield, WI 53008-1067 (800)765-0157 www.danainvestment.com dia@danainvestment.com five performance contribution from holdings within the Financial sec- tor. Our team's quantitative and fundamental models began to flash caution signs on many financial stocks last summer. We responded by reducing our portfolios' exposure to those stocks deemed most vuhier- able if the U.S. residential housing market continued to deteriorate. For example, State Street Bank (STT), which derives most of its earn- ings from asset management and investment custody services, was added to a number of our equity strategies during the year. State Street appreciated over 20% in the fourth quarter of 2007. Several other financials added to portfolios in the latter half of the year also gener- ated positive returns. As a result, Dana's equity portfolios we were largely able to avoid the collapse in many of the financials that fared the worst from the collapse of the sub-prime mortgage market. Another factor that was accretive to the performance of many strate- gies was the recognition of the market's shift in preference from value towards growth-oriented companies. We were able to "tilt" many of the portfolios towards growth while still maintaining our strict relative valuation discipline. It also became clear that the continuation of the weak dollar would likely have a positive impact for many large U.S. multi-nationals and other export-related companies. As a result, we placed a higher priority on investing in companies with strong or rapidly growing foreign revenue streams. Companies with a high percentage of foreign sales, such as Halliburton, Intel, IBM, John- son Controls, Lockheed Martin, National Oilwell, Nike, Textron and United Technologies, all had a strong positive impact on overall portfo- lio performance for those equity strategics that held them in 2007. E3cr~n~ ~al~l~l ~4 tive performance was generated from Industrial and Financial sectors. Energy holdings within the Allcap strategy also returned 35.7% for the year. Investment Outlook Many of the problems that fueled the past year's worries have not sub- sided, especially weakness in the housing market, subprime mortgages, uncertainty over the direction of the economy, inflation and corporate earnings growth. It is hard to handicap whether the U.S. economy will enter a recession in 2008. We can say with more certliuty, however, that corporate earnings growth is facing a number of escalating pressures. Corporate profit margins arc being squeezed by a combination of lower revenue growth coupled with rising costs across a number of fronts, including raw materials, energy & utilities, wages & employee benefits and ship- ping costs. Uncertainty tends to fuel volatility, so it is likely equity investors will be forced to endure another volatile year. The good news is that worldwide growth remains solid, which should continue to help U.S. companies doing business overseas. The Federal Reserve has also sig- naled their resolve to support domestic economic growth, which bodes well for an eventual acceleration in economic activity sometime later this year. Large Corc our largest strategy in terms of assets udder management """a"~ ~"'''°° °°°°" ~°° "'"°"~ '~~~°° , f EPSGoelh Ralc Forecam Ulrld°°d rod ~ Mar let Car (Ater arc/Mcdivn) delivered returns slightly above the S&P 500 in 2007. ~~ ' izo nl.s 13.2°0 Energy, Materials, Telecom & Utilities returned in excess of ZO% for "" ~~.4v z°-, '"~' "'" 9r the year. Energy holdings were up almost 27%, but this was actually a ..1% ~ ~ " 580 Ix slight drag on relative performance as the S&P 500 Energy sector was ~°° '~~ ~ ' 5% up oVCr 32U/O. 311 19.6 - 13.4 Our Allcap strategy exceeded the returns for its benchmark, die S&P ~'"""~ ~''~°° °'°°" ~~ ~°° °•°°'~ 'x'"s"" 1.500 Composite, by roughly one percentage point. The strongest rela- ^°'°•"°~°~'°°"°'"°^°'°"°"°• °° °' "•°.m"°• "~'°°' Dana Investment Advisors, Inc. is an independent federally registered investment adviser providing equity and fixed income investment Management services to a broad range of clients. The returns pre- sented have been prepared and presented in accordance with the AIMR PPS Standards. AIMR has neither endorsed the presented performance, nor is AIMR affiliated with Dana Investment Advisors, Inc. in any way. All tee-paying accounts utilizing similar investment strategies to those discussed herein were included in the composite performance returns presented. Total firm assets for the period ending 12-31- 06 were $2,814,940,000. The number of portfolios contained in the Dana Large Cap Equity and Small Cap Equity Strategies were 296 and 51 respectively. The percentage of firm assets in 2006 represented in llle Dana Large Cap Equity Strategy was 21.7%; with an annual 2006 return dispersion of 0.82 % .The percentage of firm assets in 2006 represented in the Dana Small Cap Equity Strategy was 2.2%; with an annual 2D06 return dispersion of 0.75%. To receive a complete list and description of Dana Investment Advisor, Inc.'s composites and/or a presentation tllal adheres to the AIMR-PPS standards, contact Nick Berich at TeI. (262) 782-3631. All data is presented in U.S. Dollars. Portfolio characteristics reflect Dana equity strategy holdings as of market close on the date indicated. Returns presented are exclusive of investment management and custodial fees, and net of transaction casts. Investment management lees would reduce the returns presented, for example: on a ene-million dollar portfolio with an advisory tee of .75 % earning a 10 % return, the total compounded advisory fee aver a five year period would be $50,368. The resulting average annual return for the period would therefore he 9.17 % .All returns were calculated on a time weighted total return basis. Performance does include the accrual of income and the reinvestment of dividends and interest received. Indexes shown were selected because they demon- strated similar characteristics to the Dana straieyy to which they were compared. During various market cycles, the strategies discussed herein have demonstrated portfolio characteristics and returns that have been both more and less volatile than that of the comparable index. While data contained herein was gathered from sources deemed reliable, the accuracy of the data presented cannot be guaranteed. Past performance is net indicative of future returns. 4th Quarter Bond Review ``~ On a total return basis, Treasuries securities were the top performing asset class for the Lehman Brothers Aggregate Index for the fourth quarter of 2007. _ 2007 04 Last 12 Months Aggregate 3.00% 6.97% Treasury 3.96% 9.01 Agency 2.99% 7.76% Corporate 1.97% 4.56% Mortgage 3.06% 6.90% •Subprime mortgages and structured credit were the primary sources of financial stress in the markets. .Florida's state investment pool incurs liquidity crisis due to subprime investments. .Average risk premium on all non-treasury debt instruments catapulted from a decade low to levels last seen in November 2002. .The abrupt and pervasive repricing of risk between July and December completely erased all first-half excess returns in every corner of the global debt capital markets. .For the first time in the history of the Lehman Indices, every major spread sector asset class underperformed Treasuries and simultaneously recorded the worst relative returns ever. .The year-ended with lower yields, a steeper curve, higher implied volatility and a continuation of the flight-to-quality theme that began late in the second quarter. .The Fed lowered its target overnight rate 25 bps at each of its two scheduled meetings during the quarter to end the period at 4.25%. .The futures market is pricing in an addition 100 basis points of cuts by the end of the first quarter 2008. .The year-ended with lower yields, a steeper curve, higher implied volatility and a continuation of the flight-to-quality theme that began late in the second quarter. 9-30-07 12-31-07 2 yr 3.99% 3.05% 5 yr 4.24% 3.44% 10 yr 4.59% 4.02% 30 yr 4.84% 4.45% Sector Returns Treasuries -The yield on the benchmark 2-year note fe1194 basis points over the quarter to close the year at 3.05%, while the yield on the 10-year note declined 56 basis points to 4.02%. The long bond rallied 38 basis points to 4.45%. Overall, Treasuries outperformed all other components of the Lehman Aggregate for the quarter as well as for the calendar year 2007. Agencies -Underperformed Treasuries as foreign participants took profits. The agency curve steepened over the quarter, with demand focused on the front end. Mortgages -Underperformed duration-adjusted Treasuries by 21 basis points during the fourth quarter and by 177 basis points for the year. Weakness in the fourth quarter was primarily attributable to a resurgence ofcredit-related fears. Corporates -Investment grade credit had another poor quarter, as the sector generated -236 basis points ofduration-adjusted excess returns versus Treasuries. Most of the underperformance came in November, which was one of the worst performing months, with -270 basis points of excess returns. Returns were generated from the front-end of the yield curve as liquidity and credit events impacted the markets throughout the third quarter. DANA INVESTMENT ADVISORS, INC. 4th Quarter Bond Review Economic Data • Four quarter data suggests that some of the underlying growth momentum in the economy has slowed and the Federal Reserve will continue to ease monetary policy. oLower equity valuations oFaltering housing prices oModeration in consumer spending oLower job growth oHigher unemployment claims • Compounding the lower growth momentum is a reacceleration in inflation. An increasing concern over stagflation will cause the Fed to closely watch inflation pressures in the pipeline. oPersonal Consumption Expenditure Index rose to 2.1 %; above the Fed's 2% target. oCore Consumer Price Index averaged 2.25% during the fourth quarter. oHigher energy prices oLower dollar valuation The deteriorating growth fundamentals likely will prompt significant rate cuts from the Federal Reserve. However, weakness in consumption may not bring any lessening of inflationary pressure. Probable implications include a steeper yield curve and the persistent of volatility. Agency MBS should continue to enjoy demand due to investor preference for quality and liquidity. In regards to Corporates, financial performance is likely to worsen, but yield spreads in many cases provide adequate compensation. Issuance should remain healthy in light of decline in absolute yields, which we expect will provide an opportunity to build a less defensive portfolio. Over the immediate future, we prefer fixed income securities that trade significantly wider than fundamentals dictate owing to market technicals or because of investor perception about leveraging risk. In addition, throughout the fourth quarter, the bond portfolio has held a yield advantage to the benchmark and a slightly shorter duration. DANA INVESTMENT ADVISORS, INC. 1~ Treasury Yield Curve 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 ___________________________ ________________________ ______________________1 03 Months 06 Months 02 Years OS Years ~ Dec 31, 2006 5.04 5.06 4.79 4.68 --Dec 31, 2007 3.24 3.39 3.05 3.44 ~- Jan 18, 2008 2.99 2.97 2.43 2.92 DANA INVESTMENT ADVISORS, INC 10 Years 3 0 Years 4.68 4.79 4.02 4.45 3.67 4.30 11 Current Economic Environment - Housing slump is still in the early stages - no telling how deep. - Core inflation remains above the Fed comfort leve. - Overall CPI has reaccelerated. - Housing correction and tighter consumer credit will have an effect on consumer spending. - Rate cuts will soften economic landing. - Growth should remain positive, but will moderate. January 2008 DANA INVESTMENT ADVISORS, INC. 12 Outlook for 2008 - Domestic growth is slowing, but still positive. - Short term rates, including LGIP, will continue to move towards 3%. - Coupons above 6% in the portfolio will now drive performance. - Portfolio will probably return 1 % or more over short term alternatives. DANA INVESTMENT ADVISORS, INC. January 2008 13 Feder Bond Funds $25,536 2% CorpVLnL~ LV1lUJ $96,476 9% DANA INVESTMENT ADVISORS, INC. Asset Allocation as of 12-31-07 Dana lnternaYional - $83,150 8% "~...~..~..ge Cap $590,987 56% 14 Government Bonds Fixed Rate Mtg Pools Money Market Accrued & Receivables _-- _-- ~,~~ 9(15 Qc ins 24% 22% k 20% ~" 1S% `:F~',_ 5n. 16% ,':, ~. 14% ~;. ~` ~,- 12% 10% 8% 6% 4% 2°~ 0% Financials Information Energy Heahh Care Industrials Consumer Consumer Telecomm Utilities Materials Technology Staples Discretionary Services DANA INVESTMENT ADVISORS, INC. 15 Large Cap Sector Distribution as of 12-31-07 Dana Investment Advisors PORTFOLIO APPRAISAL Tequesta General Employees' Pension Fund December 31, 2007 Quantity Security _ CASH AND EQUIVALENTS Cash -Money Fund COMMON STOCK Dana Large Cap 191 102 94 42 101 71 132 107 236 338 61 31 307 141 113 151 213 149 258 213 27 106 421 95 61 233 61 280 31 94 92 AT&T Inc. Abbott Laboratories Airgas Inc. Alcon Inc. Allstate Corporation Altria Group Inc. American Capital Strategies American International Group Amphenol Corp Class A Annaly Mortgage Management Apache Corp Apple Computer Inc. Applied Materials Inc. BMC Software Inc Bank of America Corporation Becton Dickinson & Co Best Buy Inc. CVS Corporation Cadence Design Systems Charles Schwab Corp. Chevron Church & Dwight Co. Inc. Cisco Systems Coca-Cola Company Conocophillips Corning Ina Danaher Corp. Disney Walt Company Holding Company Eaton Corp. Ecolab Inc. Emerson Electric Co. Market Pct. Price Value Assets _ 23,904.64 2.3 23,904.64 2.3 41.56 56.15 52.11 143.04 52.23 75.58 32.96 58.30 46.37 18.18 107.54 198.08 17.76 35.64 41.26 83.58 52.65 39.75 17.01 25.55 93.33 54.07 27.07 61.37 88.30 23.99 87.74 32.28 96.95 51.21 56.66 7,937.96 5,727.30 4,898.34 6,007.68 5,275.23 5,366.18 4,350.72 6,238.10 10,943.32 6,144.84 6,559.94 6,140.48 5,452.32 5,025.24 4,662.38 12,620.58 11,214.45 5,922.75 4,388.58 5,442.15 2,519.91 5,731.42 11,396.43 5,830. ] 5 5,386.30 5,589.67 5,352.14 9,038.40 3,005.45 4, 813.74 5,212.72 0.7 0.5 0.5 0.6 0.5 0.5 0.4 0.6 1.0 0.6 0.6 0.6 0.5 0.5 0.4 1.2 1.1 0.6 0.4 0.5 0.2 0.5 1.1 0.5 0.5 0.5 0.5 0.9 0.3 0.5 0.5 16 Dana Investment Advisors PORTFOLIO APPRAISAL Tequesta General Employees' Pension Fund December 31, 2007 Quantity Security Price 136 Estee Lauder Companies 43.61 68 Exxon Mobil Corporation 93.69 61 FPL Group 67.78 42 Franklin Resources Inc. 114.43 80 Genentech Inc. 67.07 98 General Mills Inc. 57.00 78 Genzyme Corp. 74.44 8 Google Inc. Class A 691.48 320 Halliburton Co. 37.91 206 Harris Group 62.68 63 Hartford Financial Services 87.19 113 Hewlett Packard Company 50.48 92 Honeywell International Inc. 61.57 154 Hospitality Properties Trust 32.22 137 Infosys Technologies - SP ADR 45.36 499 Intel Corporation 26.66 55 International Business Machines Corp. 108.10 146 J. P. Morgan Chase & Company 43.65 92 Johnson & Johnson 66.70 344 Johnson Controls Inc. 36.04 83 Kimberly-Clark Corp. 69.34 61 Lockheed Martin Corporation 105.26 64 MEMC Electronic Materials Inc. 88.49 116 Marathon Oil Corp. 60.86 174 McKesson Corp. 65.51 92 MetLife Inc 61.62 261 Microsoft Corporation 35.60 234 Mylan Inc. 14.06 177 NVIDIA Corporation 34.02 83 National Oilwell Varco Inc 73.46 254 News Corp. Class A 20.49 142 Nike Inc. Class B 64.24 142 Nokia Corp-Sponsored ADR 38.39 111 Omnicom Group 47.53 283 Oracle Corporation 22.58 68 PPG Industries Inc. 70.23 111 PPL Corporation 52.09 Market Value 5,930.96 6,370.92 4,134.58 4,806.06 5,365.60 5,586.00 5,806.32 5,531.84 12,131.20 12,912.08 5,492.97 5,704.24 5,664.44 4,961.88 6,214.32 13,303.34 5,945.50 6,372.90 6,136.40 12,397.76 5,755.22 6,420.86 5,663.36 7,059.76 11,398.74 5,669.04 9,291.60 3,290.04 6,021.54 6,097.18 5,204.46 9,122.08 5,451.38 5,275.83 6,3 90.14 4,775.64 5,781.99 Pct. Assets 0.6 0.6 0.4 0.5 0.5 0.5 0.5 0.5 1.1 1.2 0.5 0.5 0.5 0.5 0.6 1.3 0.6 0.6 0.6 1.2 0.5 0.6 0.5 0.7 1.1 0.5 0.9 0.3 0.6 0.6 0.5 0.9 0.5 0.5 0.6 0.4 0.5 17 Dana Investment Advisors PORTFOLIO APPRAISAL Tequesta General Employees' Pension Fund December 31, 2007 Market Pct. Quantity Security Price Value Assets 92 Parker Hannifin Corp. 75.31 6,928.52 0.7 160 Pepsi Bottling Group Inc. 39.46 6,313.60 0.6 78 Pepsico Inc 75.90 5,920.20 0.6 61 Praxair Inc. 88.71 5,411.31 0.5 35 Precision Castparts Corp. 138.70 4,854.50 0.5 56 Prudential Financial Inc. 93.04 5,210.24 0.5 148 Saint Jude Medical 40.64 6,014.72 0.6 98 Sempra Energy 61.88 6,064.24 0.6 43 State Street Corp. 81.20 3,491.60 0.3 129 Supervalu Inc. 37.52 4,840.08 0.5 84 Terex Corp. 65.57 5,507.88 0.5 164 Textron Inc. 71.30 11,693.20 1.1 102 Thermo Fisher Scientific Inc. 57.68 5,883.36 0.6 43 Transocean Inc. 143.15 6,155.45 0.6 46 Union Pacific Corp. 125.62 5,778.52 0.5 149 United Technologies Corp 76.54 11,404.46 1.1 98 UnitedHealth 58.20 5,703.60 0.5 72 V F Corporation 68.66 4,943.52 0.5 80 Valero Energy Corp. 70.03 5,602.40 0.5 148 Verizon Communications 43.69 6,466.12 0.6 31 Wal-Mart Stores Inc. 47.53 1,473.43 0.1 80 Wellpoint Health Networks 87.73 7,018.40 0.7 92 Wyeth 44.19 4,065.48 0.4 100 XTO Energy Inc. 51.36 5,136.00 0.5 585,513.87 55.1 Dana Small Cap 115 Investment Technology Group 47.59 5,472.85 0.5 Mutual & Exchange Traded Funds 156 iShares MSCI SAFE Growth Index 77.71 12,122.76 1.1 Dana International ADR 195 Aegon NV ADR 17.53 3,418.35 0.3 125 Allianz SE ADR 21.25 2,656.25 0.3 51 BT Group PLC ADR 53.92 2,749.92 0.3 81 Canon ADR 45.83 3,712.23 0.3 3 Ig Dana Investment Advisors PORTFOLIO APPRAISAL Tequesta General Employees' Pension Fund December 31, 2007 Market Pct. Quantity Security Price Value Assets 148 Cemex ADR 25.85 3,825.80 0.4 182 Danske Bank A/S - Unspons ADR 19.65 3,576.30 0.3 59 E.ON AG ADR 70.35 4,150.65 0.4 86 Endurance Holdings ADR 41.73 3,588.78 0.3 142 KT Corporation ADR 25.80 3,663.60 0.3 36 Marks & Spencer Group PLC ADR 65.80 2,368.80 0.2 271 NTT DoCoMo ADR 16.40 4,444.40 0.4 60 Petrobras CL A ADR 96.22 5,773.20 0.5 88 Sanofi Aventis ADR 45.53 4,006.64 0.4 134 Telecom Italia S.P.A. CL A ADR 23.50 3,149.00 0.3 95 Telefonos de Mexico ADR 36.84 3,499.80 0.3 34 Toyota Motor Corp - Spon ADR 106.17 3,609.78 0.3 43 Woori Finance Holdings ADR 59.63 2,564.09 0.2 186 Woseley PLC ADR 14.51 2,698.86 0.3 110 Yara International ADR 46.30 5,093.00 0.5 85 Zurich Financial Svcs -ADR 29.15 2,477.75 0.2 71,027.20 6.7 674,136.68 63.5 CORPORATE BONDS 5,000.00 Cit Group Inc. 99.06 4,953.10 0.5 4.750% Due 08-15-08 5,000.00 CSX Corp 100.88 5,044.10 0.5 6.250% Due 10-15-08 6,000.00 Deutsche Bank Financial 103.61 6,216.66 0.6 7.500% Due 04-25-09 5,000.00 Target Corp. 101.26 5,062.94 0.5 5.375% Due 06-15-09 5,000.00 Intl Lease Finance Corp 100.13 5,006.58 0.5 5.000% Due 04-15-10 5,000.00 Capital One Bank 100.02 5,001.15 0.5 5.750% Due 09-15-10 5,000.00 Lehman Brothers Inc. 98.53 4,926.50 0.5 5.000% Due 01-14-I I 5,000.00 Kohls Corporation 103.31 5,165.41 0.5 6.300% Due 03-01-11 4 19 Dana Investment Advisors PORTFOLIO APPRAISAL Tequesta General Employees' Pension Fund December 31, 2007 Quantity Security Price Market Value Pct. Assets 5,000.00 Washington Mutual Inc. 90.16 4,508.23 0.4 5.500% Due 08-24-11 5,000.00 Bank One Corp 102.90 5,144.99 0.5 5.900% Due 11-15-11 5,000.00 Gannett Co Inc. 103.95 5,197.45 0.5 6.370%Due 04-01-12 5,000.00 Avon Products Inc. 98.72 4,936.07 0.5 4.620% Due OS-15-13 5,000.00 Goldman Sachs Group Inc. 100.77 5,038.34 0.5 5.250% Due 10-15-13 5,000.00 US Bank NA 106.37 5,318.45 0.5 6.300% Due 02-04-14 5,000.00 HSBC Finance Corp. 96.92 4,845.85 0.5 5.250% Due 04-15-15 5,000.00 Lowe's Companies Inc. 96.42 4,820.85 0.5 5.000% Due 10-15-15 5,000.00 Wachovia Bank NA 98.72 4,936.10 0.5 5.600% Due 03-15-16 5,000.00 Kimberly Clark 105.36 5,268.00 0.5 6.125% Due 08-01-17 5,000.00 J.P. Morgan & Co. Inc. 101.70 5,085.10 0.5 6.000% Due 10-01-17 96,475.88 9.1 FEDERAL AGENCY SECURITIES 10,000.00 Federal Home Loan Mortgage Corp. 100.42 10,042.20 0.9 5.750% Due 04-15-08 10,000.00 *Federal National Mortgage Association 101.42 10,142.20 1.0 5.250% Due 01-15-09 10,000.00 Federal Home Loan Mortgage Corp. 102.34 10,234.40 1.0 5.750% Due 03-15-09 10,000.00 Federal National Mortgage Association 102.78 10,278.10 1.0 5.375% Due 08-15-09 5,000.00 Federal National Mortgage Association 103.11 5,155.45 0.5 4.750% Due 12-15-10 7,000.00 Federal National Mortgage Association 105.34 7,374.08 0.7 5.500% Due 03-15-11 s 20 Dana Investment Advisors PORTFOLIO APPRAISAL Tequesta General Employees' Pension Fund December 31, 2007 Market Pct. Quantity Security Price Value Assets 10,000.00 Federal National Mortgage Association 104.12 10,412.50 1.0 5.000% Due 10-15-11 3,000.00 Federal Home Loan Mortgage Corp. 102.42 3,072.66 0.3 4.500% Due 01-15-13 5,000.00 Federal Home Loan Mortgage Corp. 104.28 5,214.05 0.5 4.875% Due 11-15-13 8,000.00 Federal National Mortgage Association 104.86 8,388.72 0.8 5.000% Due 04-15-15 80,314.36 7.6 GOVERNMENT BONDS 20,000.00 U.S. Treasury Notes 100.44 20,087.50 1.9 4.120% Due 08-15-08 10,000.00 U.S. Treasury Notes 103.27 10,326.56 1.0 5.500% Due OS-15-09 15,000.00 U.S. Treasury Notes 103.27 15,489.84 1.5 4.250% Due 10-15-10 10,000.00 U.S. Treasury Notes 104.81 10,481.25 1.0 4.625% Due 10-31-11 10,000.00 U.S. Treasury Notes 103.69 10,368.75 1.0 4.250% Due 08-15-13 5,000.00 US Treasury Notes 101.98 5,099.22 0.5 4.125% Due OS-15-15 5,000.00 U.S. Treasury Notes 102.67 5,133.59 0.5 4.250% Due 08-15-15 5,000.00 U.S. Treasury Notes 108.22 5,410.94 0.5 5.120% Due OS-15-16 15,000.00 U.S. Treasury Notes 104.56 15,684.37 1.5 4.625% Due 02-15-17 7,000.00 U.S. Treasury Notes 101.81 7,126.87 0.7 4.250% Due 11-15-17 105,208.91 9.9 6 21 Dana Investment Advisors PORTFOLIO APPRAISAL Tequesta General Employees' Pension Fund December 31, 2007 Market Pct. Quantity Security Price Value Assets ---- FIXED RATE MORTGAGE POOLS FNMA 12,522.60 FNMA 884093 5-1-06 101.40 12,697.92 1.2 6.000% Due OS-O1-36 FHLMC 11,960.30 FHLMC C90939 12-1-OS 100.06 11,967.48 1.1 5.500% Due 12-01-25 12,534.18 FHLMC GOLD C90978 7-1-06 101.59 12,733.47 1.2 6.000% Due 07-01-26 13,669.82 FHLMC C90983 8-1-06 100.03 13,673.92 1.3 5.500% Due 08-01-26 38,374.87 3.6 51,072.79 4.8 Bond Funds Mutual & Exchan ge Traded Funds 242 iShares Lehman 3-7 Year Treasury 105.52 25,535.84 2.4 25,535.84 2.4 Accrued Income 3,975.28 0.4 Dividends Receivable 1,054.74 0.1 Interest Receivable 76.52 0.0 TOTAL ACCRUED AND RECEIVABLE 5,106.55 0.5 TOTAL PORTFOLIO 1,061,755.64 100.0 The market prices shown on these pages represent the last reported sale on the valuation date as to listed securities or the bid price in the case ojover-the-counter quotations. Prices on bonds and some other investments are based on round lot price quotations and are for evaluation purposes only and may not represent actual market values. Bonds sold on an odd lot basis (less than $I million) may have a dollar price lower than the round lot quote. Where no regular market exists, prices shown are estimates by sources considered reliable by Dana Investment Advisors, Inc. While the prices are obtained from sources we consider reliable, we cannot guarantee them. 7 22