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HomeMy WebLinkAbout2009 07 28 Regular 601 Winter Springs General Quarterly Report Second Quarter-June 30, 2009lierinea tsenetit Tian & Trust for Employees of The City of Winter Springs !1`~'W.I3(,3~ [?AFIN~.It4)UI'.C;CTl~i 2nd Quarter 2009 y .~ .~' 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 markets 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°/a 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°/a) outpaced value investments (18.0%) by 5.4°/a 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. Page 2 of 39 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°/a 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°/a 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 The Market Environment Major Market Index Performance Period Ended: June 30, 2009 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 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 Quarter Performance 25.8% 34.8% 15.9% 16.8% 16.5% 2o.8°i° 20.7% 1.8% -2.2% 0.7% 10.4% 0.1 -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% Five Year Annualized 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 -40.0% -30.0% -20.0% -10.0% 0.0% Ten Year Annualized Performance MSCI EAFE MSCI Emerg. Mkts. S&P 500 Russe113000 Russe111000 Russell MidCap Russe112000 Barclays US Agg. Barclays US Gov. Barclays MBS Fixed Barclays Corp IG 3mos. T-Bill Page 3 of 39 3mos. T-Bill 1.6% 9.0% -2.2% -1.5% -1.7% 3.1 2.4% 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. 0.0% 5.0% 10.0% 15.0% ~~ BOGDAHN GROUP 10.0% 20.0% The Market Environment Long-Term Major Market Index Performance Period Ended: June 30, 2009 Fifteen 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 s.s~io MSCIEAFE MSCI Emerg. Mkts. S&P 500 Russel 13000 Russel 11000 Russell MidCap Russel 12000 Twen Year Annualized Performance 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% Thi Year Annualized Performance 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Twen -Five Year Annualized Performance MSCIEAFE 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 3mos. T-Bill 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 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 Page 4 of 39 /`_' BOGDAHN GROUP 10.0% 12.0% The Market Environment Russell Style Index Performance Period Ended: June 30, 2009 3000 Value 30001ndex 3000 G rowth 1000 Value 10001ndex 1000 G rowth MidCap Value MidCaplndex MidCap Growth 2000 Value 20001ndex 2000 G rowth 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Five Year Annualized Performance Page 5 of 39 3000 Value 30001ndex 3000 G rowth 1000 Value 10001ndex 1000 G rowth MidCap Value MidCaplndex MidCap Growth 2000 Value 20001ndex 2000 G rowth -0.4% -0.1 -0.4% 3000 Value 30001ndex 3000 G rowth 1000 Value 10001ndex 1000 G rowth 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 G rowth 1000 Value 10001ndex 1000 G rowth MidCap Value MidCaplndex MidCap Growth 2000 Value 20001ndex 2000 G rowth -2.5% -2.0% -1.5% -1.0% -0.5% 0.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% Source.' Russell Investments ` BOGDAHN GROUP Quarter Performance One Year Performance The Market Environment Quarter & 1-Year GICS Sector Performance & (Quarter-End Sector Weight) Period Ended: June 30, 2009 Russel 13000 ^QTR ° Energy (11.3 /°) a 1-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%) 12.5% 18.7% ^ 20.4% ^ 2o.o°i° 10.3% 10.3% - 29.0% 2o.8°i° 4.2% 11.4 ^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% -20.0% 0.0% 20.0% 40.0% -60.0% -40.0% -20.0% 0.0% 20.0% 40.0% Rusell MidCap Russe112000 ^QTR ° 28.5% Energy (7.2 /°) ° v 1-Year -56.4 /° ° 28.2% Materials (6.1 /°) ° -31.5 /o ° 24.1 Industrials (12.9/°) ° -35.2 /o ° 23.3% Consumer Disc (14.8 /°) ° -22.0 /° ° 17.1 Consumer Staples (7.2 /°) ° -13.5 /o ° 18.5% Health Care (9.3 /°) ° -11.5 /o ° 19.7% Financials (17.8 /°) ° X4.8 /o ° 19.8% Info Technology (14.4 /°) -25.4% ° 9.5% Telecom Services (1.9 /°) ° -27.6 /o ° 13.7% Utilities (8.2 /°) ° -29.1 /o -80.0% -60.0% -40.0% -20.0% 0.0% 20.0% 40.0% Source: Thom son Financial p Page 6 of 39 ~ QTR o Energy (4.5 /°) v 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%) Russell 1000 12.0% 17.9% ^ 20.3% 19.1% 10.1% 9.6% 31.8% 2o.o°i° 3.9% 11. -80.0% -60.0% -40.0% -20.0% 0.0% 20.0% 40.0% ~~ ~'I [I: - BOGDAHN CROUP The Market Environment Domestic Credit Sector & Broad Market Maturity Performance & Rate Comparison Period Ended: June 30, 2009 Quarter Performance One Year Performance AAA AA A BBB <BBB Govt Mort 1-3yrG/M/C 1-5yrG/M/C 1-10yr G/M/C 10+yrG/M/C AAA AA A BBB <BBB Govt Mort 1-3yr G/M/C 1-5yrG/M/C 1-10yr G/M/C 10+yrG/M/C o.o°i° 2.7% -0.4% 4.9% X3.5% 6.7% 9.3% 5.3% 5.8% 6.7% 4.9% -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 °g~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 Page 7 of 39 -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 -X12/31/2007 112/31/2008 X3/31/2009 ^ 6/30/2009 ^ i~ z.oo 1.00 'J 0.00 Imo 3mo 6mo 1yr 2yr Syr Syr Tyr 10yr 20yr 30yr BOGDAHN t+~ 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 ~orrelatian 1.4 D.9 D.8 D.7 O.fi D.5 0.4 Q.3 Q.2 0.1 a.a -0.1 -D.2 -0.3 -0.4 _n ~ i .... -International vs. Large Cap -------------------------------------------------------------------------------------------------------- -------------- --------------------- ----- -Small Cap vs. Large Cap -- - -- - - -- -International vs. Small Cap --- -------------------------------------------------------------------------------------------------------------- -Braad'Fixed us. Large Cap -v...+ ~~,~ '~ 4~~` '~`' ~~O 0~ ~~ 0°' ~° ~`` ~~' '~~ ~3~` g~ ~° ~`l ~~ ~°' o° o'` o~'~, o~ obi ~`' o~ ,~1 0~ o"' .~~ ¢r~' P,C' ¢,~' Fri' f~,~' P,~' P.~' P.~' 0~' P,c' C~,~' P,~' BSS' P,~' 0~' P,~' P.~' F,~' ¢r~' P,~' ¢,~' P,~' P,C' P,~' 6~' P,c' P.~' J~ ~ Q 4 a O Q 4 Q 4 ~ 4 O 4 4 4 O 4 4 4 O Q Q Q Q 4 O 4 Q Z Page 8 of 39 Source: Ze h r Associates pY THF. -BOGDAHN GROUP Total Fund Portfolio June 30, 2009 March 31, 2009: $13,358,262 June 30, 2009: $15,278,761 Segments Market Value Allocation Segments Market Value Allocation ^ Domestic Equity 5,299,899 39.7 ^ Domestic Equity 6,516,654 42.7 ^ International Equity 1,277,678 9.6 ^ International Equity 1,762,078 11.5 O Domestic Fixed Income 5,474,476 41.0 ~ Domestic Fixed Income 5,837,351 38.2 ^ Real Estate 778,845 5.8 ^ Real Estate 714,964 4.7 ^ Cash Equivalent 527,365 3.9 ^ Cash Equivalent 447,715 2.9 Page 9 of 39 THE BOGDAHN Gxour Total Fund Portfolio June 30, 2009 March 31, 2009: $13,358,262 June 30, 2009: $15,278,761 Market Value Allocation Market Value Allocation ^ Galliard Core Fixed Portfolio 4,481,961 33.6 ^ Galliard Core Fixed Portfolio 4,813,261 31.5 ^ Lateef Asset Mgmt.Equity 3,191,977 23.9 ^ Lateef Asset Mgmt.Equity 3,781,399 24.7 ~ Snow Capital Mgmt. Equity 2,336,270 17.5 ~ Dalton, Greiner, Hartman, Maher & Co. 2,985,975 19.5 ^ Voyageur Asset Mgmt. International 1,277,678 9.6 ^ Voyageur Asset Mgmt. International 1,762,078 11.5 ^ Galliard TIPS 1,050,975 7.9 ^ Galliard TIPS 1,080,442 7.1 ^ American Stable Value Fund REIT 785,600 5.9 ^ American Stable Value Fund REIT 714,964 4.7 ^ R&D Account Cash 233,801 1.8 ^ R&D Account Cash 140,641 0.9 ~~ , BQGDAHN Page 10 of 39 GROUP Defined Benefit Plan & Trust for Employees of the City of Winter Springs Asset Allocation As of June 30, 2009 Asset Allocation Domestic E uit Portfolio 9 Y Snow Ca ital M mt. E uit p g q Y Dalton Greiner Hartman Maher & Co. > > Lateef Asset M mt.E ui g q tY International E uit Portfolio q Y Vo a eur Asset M mt. International Yg g Total Fixed Portfolio Galliard Core Fixed Portfolio Galliard TIPS American Stable Value Fund REIT R&D Account Cash Total Fund Portfolio 6,767,374 44.29 2,985,975 19.54 3,781,399 24.75 1,762,078 11.53 1,762,078 11.53 5,893,704 38.57 4,813,261 31.50 1,080,442 7.07 714,964 4.68 140,641 0.92 15,278,761 100.00 5,528,248 41.38 2,336,270 17.49 3,191,977 23.90 1,277,678 9.56 1,277,678 9.56 5,532,936 41.42 4,481,961 33.55 1,050,975 7.87 785,600 5.88 233,801 1.75 13,358,262 100.00 5,822,074 42.75 2,519,390 18.50 3,302,683 24.25 1,353,407 9.94 1,353,407 9.94 5,296,491 38.89 4,304,428 31.60 992,062 7.28 904,042 6.64 244,265 1.79 13,620,278 100.00 7,422,820 47.70 3,423,440 22.00 3,999,380 25.70 1,745,816 11.22 1,745,816 11.22 5,248,864 33.73 4,242,774 27.27 1,006,091 6.47 988,399 6.35 154,683 0.99 15,560,582 100.00 7,565,670 46.46 3,658,666 22.47 3,907,004 23.99 2,224,548 13.66 2,224,548 13.66 5,284,665 32.46 4,271,670 26.23 1,012,994 6.22 1,001,256 6.15 206,871 1.27 16,283,010 100.00 Historica l Asset Allocation 100.0 80.0 .. e ~ 60.0 0 v 40.0 d 20.0 0.0 9/ 08 Dome stic Equity ent 10/08 11/08 12/08 1/09 2/09 3/09 4/09 5/09 6/09 International Equity ~ Domestic Fixed Income ~ Real Estate ^ Cash Equivalent Page 11 of 39 THE BOGDAHN Gxour Defined Benefit Plan & Trust for Employees of the City of Winter Springs Financial Reconciliation As of June 30, 2009 Financial Reconciliation Quarter Domestic Equity Portfolio 5,528,248 247,800 - - -7,979 -746 25,615 974,436 6,767,374 Lateef Asset Mgmt.Equity 3,191,977 123,900 - - -7,979 -424 9,979 463,946 3,781,399 Snow Capital Mgmt. Equity 2,336,270 -2,671,485 - - - -92 2,350 332,957 - Dalton, Greiner, Hartman, Maher & Co. - 2,795,385 - - - -230 13,287 177,534 2,985,975 International Equity Portfolio 1,277,678 77,353 - - -2,953 -125 4,431 405,694 1,762,078 Voyageur Asset Mgmt. Inteniational 1,277,678 77,353 - - -2,953 -125 4,431 405,694 1,762,078 Total Fixed Portfolio 5,532,936 138,900 2,786 - -2,786 -1,078 5,229 217,717 5,893,704 Galliard Core Fixed Portfolio 4,481,961 114,000 2,786 - -2,786 -555 5 217,851 4,813,261 Galliard TIPS 1,050,975 24,900 - - - -522 5,224 -134 1,080,442 American Stable Value Fund REIT 785,600 -6,755 - -6,000 -2,000 - - -55,881 714,964 R&D Account Cash 233,801 -457,298 543,827 -168,631 -3,909 -7,314 165 - 140,641 Total Fund Portfolio 13,358,262 - 546,613 -174,631 -19,627 -9,264 35,441 1,541,966 15,278,761 Financial Reconciliation Fiscal Year to Date 1 ~ ~ ~ ~ i 1 1 1 1 1 1 ,, 1 ~ ~ ~~ Domestic Equity Portfolio 7,422,820 625,600 - - -46,823 -2,127 83,935 -1,316,031 6,767,374 LateefAssetMgnt.Equity 3,999,380 312,800 - - -35,994 -1,200 33,727 -527,314 3,781,399 Snow Capital Mgmt. Equity 3,423,440 -2,482,585 - - -10,829 -697 36,922 -966,251 - Dalton, Greiner, Hartman, Maher & Co. - 2,795,385 - - - -230 13,287 177,534 2,985,975 International Equity Portfolio 1,745,816 162,444 36,100 - -10,744 -125 4,431 -175,844 1,762,078 Voyageur AssetMgmt.International 1,745,816 162,444 36,100 - -10,744 -125 4,431 -175,844 1,762,078 Total Fixed Portfolio 5,248,864 350,600 5,468 -5,363 -8,834 -2,375 16,448 288,896 5,893,704 Galliard Core Fixed Portfolio 4,242,774 287,800 2,786 -5,363 -5,402 -1,614 112 292,169 4,813,261 Galliard TIPS 1,006,091 62,800 2,682 - -3,431 -762 16,335 -3,272 1,080,442 American Stable Value Fund REIT 988,399 -6,755 - -13,445 -6,601 - - -246,634 714,964 R&D Account Cash 154,683 -1,131,889 1,614,514 -484,885 -3,909 -9,441 1,568 - 140,641 Total Fund Portfolio 15,560,582 - 1,656,082 -503,694 -76,910 -14,069 106,382 -1,449,613 15,278,761 Page 12 of 39 THE BOGDAHN Gxour Defined Benefit Plan & Trust for the Employees of the City of Winter Springs Comparative Performance As of June 30, 2009 Total Fund Portfolio (Net) 11.59 (63) -9.54 (72) -15.50 (56) -3.97 (68) -1.56 (69) 1.30 N/A 11/01/2000 Total Fund Policti 10.13 (8~) -9.24 (691 -13.8 (37} -2.13 (32) 0.19 (30) 0.72 N,iA Difference 1.46 -0.30 -1.65 -1.84 -1.75 0.58 Mixed-Asset Target Alloc Moderate Funds (MF) Median 12.51 -7.78 -14.88 -3.01 -0.80 N/A Total Fund Portfolio (Gross) 11.74 -9.04 -14.94 -3.35 -0.92 1.99 11/01/2000 Total Fund Policv 10.13 -9.24 -13.8 -2.13 0.19 0.72 Difference 1.61 0.20 -1.09 -1.22 -1.11 1.27 Total Fund Portfolio (Net) 11.59 (63) -9.54 (72) -15.50 (56) -3.97 (68) -1.56 (69) 1.30 N/A 11/01/2000 Total Fund Policy Target Allocations 11.88 (60) -10.44 (81) -16.99 (6~) -2.91 (49) -0.41 (40) 0.44 N/A Difference -0.29 0.90 1.49 -1.06 -1.15 0.86 Mixed-Asset Target Alloc Moderate Funds (MF) Median 12.51 -7.78 -14.88 -3.01 -0.80 N/A Total Fund Portfolio (Gross) 11.74 -9.04 -14.94 -3.35 -0.92 1.99 11/01/2000 Total Fund Policy Target Allocations 11.88 -10.44 -16.99 -2.91 -0.~1 0.44 Difference -0.14 1.40 2.05 -0.44 -0.51 1.55 Returns for periods greater than one year are annualized.Returns are expressed as percentages. THE Total Fund Policy Target Allocations = 50% S&P500, 15%MSCI EAFE, 30%LB Int. Aggregate, & 5%NCREIF ~~;: BQGDAHN Total Fund Policy = 60% S&P 500, and 40% LB Int. Aggregate { Page 13 of 39 ~~J GR~UP Defined Benefit Plan & Trust for the Employees of the City of Winter Springs Comparative Performance As of June 30, 2009 Total Fund Portfolio (Net) 11.59 (63) -9.54 (72) -15.50 (56) -15.00 N/A 10/01/2007 Total Fund Policy 10.13 (8~1 -9.24 (69) -13.8 (37) -12.12 N/A Difference 1.46 -0.30 -1.65 -2.88 Mixed-Asset Target Alloc Moderate Funds (MF) Median 12.51 -7.78 -14.88 N/A Total Fund Portfolio (Gross) 11.74 -9.04 -14.94 -14.52 10/01/2007 Total Fund Policti~ 10.].3 -9.24 -13.8 -12.12 Difference 1.61 0.20 -1.09 -2.40 Total Fund Portfolio (Net) 11.59 (63) -9.54 (72) -15.50 (56) -15.00 N/A 10/01/2007 Total Fund Polic} Target Allocations 11.88 (60) -10.44 (81) -16.99 (6~) -14.23 N/A Difference -0.29 0.90 1.49 -0.77 Mixed-Asset Target Alloc Moderate Funds (MF) Median 12.51 -7.78 -14.88 N/A Total Fund Portfolio (Gross) 11.74 -9.04 -14.94 -14.52 10/01/2007 Total Fund Policy Target Allocations 11.88 -10.44 -16.99 -14?3 Difference -0.14 1.40 2.05 -0.29 Returns for periods greater than one year are annualized.Returns are expressed as percentages. THE Total Fund Policy Target Allocations = 50% S&P500, 15%MSCI EAFE, 30%LB Int. Aggregate, & 5%NCREIF ~~;: BQGDAHN Total Fund Policy = 60% S&P 500, and 40% LB Int. Aggregate { Page 14 of 39 ~~J GR~UP Defined Benefit Plan & Trust for Employees of the City of Winter Springs Comparative Performance Trailing Returns As of June 30, 2009 Total Equity Portfolio 20.52 -16.23 -23.89 -8.22 -3.94 -1.39 -0.34 01/01/2001 Total Equitti Policti 1.93 -19.47 -26.21 -8.19 -3.67 -1.~4 -1.84 Difference 4.59 3.24 2.32 -0.03 -0.27 0.15 1.50 Total Equity Portfolio 20.52 -16.23 -23.89 -8.22 -3.94 -1.39 -0.34 01/01/2001 Total Equity Policti Target Allocations 17.89 -18.19 -?7.09 -8.03 -3.~4 -1.43 -1.78 Difference 2.63 1.96 3.20 -0.19 -0.40 0.04 1.44 Domestic Equity Portfolio 17.93 (14) -17.31 (30) -21.19 (14) -7.23 (42) -3.79 (54) -1.37 (56) -0.52 N/A 11/01/2000 S&P X00 1>.93 (4U) -19.47 ((,2) -26.21 (~3) -8.22 ((,6) -4.27 (71) -2.24 (86) -3.19 N/A Difference 2.00 2.16 5.02 0.99 0.48 0.87 2.67 US Core/Large Cap Equity (SA+CF) Median 15.43 -19.05 -26.08 -7.82 -3.57 -1.18 N/A Lateef Asset Mgmt.Equity 14.76 (55) -12.84 (24) -13.28 (2) N/A N/A N/A -15.83 N/A 10/01/2007 Russe111000 Growtlilndex 16.32 (3~) -13.89 (33) -24.0 (4~) -~.4~ (42) -2.68 (~~) -1.83 (71) -19.69 N/A Difference -1.56 1.05 11.22 N/A N/A N/A 3.86 US Growth/Large Cap Equity (SA+CF) Median 15.09 -15.07 -25.23 -5.90 -2.58 -1.01 N/A Dalton, Greiner, Hartman, Maher & Co. N/A N/A N/A N/A N/A N/A 6.95 N/A 05/01/2009 Russe113000ValueIndex 16.81 (78) -24.78 (96) -28.73 (7~) -11.20 (81) -x.83 (77) -2.14 (76) ~.il N/A Difference N/A N/A N/A N/A N/A N/A 1.84 US All Cap Value Equity (SA+CF) Median 18.12 -18.60 -25.73 -7.59 -3.19 -0.62 N/A International Equity Portfolio 31.73 (7) -11.91 (51) -33.30 (88) -11.86 (100) -3.26 (100) -0.10 (100) 0.45 N/A 11/01/2000 MSCI SAFE ltide~ 2~.8~ (30) -13.1(1 (~7) -30.96 (74) -7.~1 (69) 0.13 ((i4) 2.79 (72) 1.21 NiA Difference 5.88 1.25 -2.34 -4.35 -3.39 -2.89 -0.76 International Active Value Equity (SA+CF) Median 23.96 -11.72 -27.91 -6.01 1.35 4.06 N/A Voyageur Asset Mgmt International 31.73 (7) -11.91 (51) -33.30 (88) N/A N/A N/A -30.24 N/A 10/01/2007 MSCI EAFE Index 2~.8~ (30) -1;.16 (57) -30.96 (74) -7.~1 (69) 0.13 (h4) 2.79 (72) -24.83 N/A Difference 5.88 1.25 -2.34 N/A N/A N/A -5.41 International Active Value Equity (SA+CF) Median 23.96 -11.72 -27.91 -6.01 1.35 4.06 N/A Returns for periods greater than one year are annualized. Returns are expressed as percentages. Total Fund Policy= 50% S&P 500, 15% MS A t & 5%NCREIF T t l E i P li = 80% S&P 500 & 20%MSCI EAFE T t l Fi d P li = 85%LB I t A & 15%Ti CI EAFE, 30% LB Int. ~ 'THE ggrega e, . o a qu ty o cy , . o a xe o cy n . gg, ps { ~ BpGDAHN ~~J GR~UP Page 15 of 39 Defined Benefit Plan & Trust for Employees of the City of Winter Springs Comparative Performance Trailing Returns As of June 30, 2009 Total Fixed Portfolio 3.98 5.48 2.32 4.90 3.37 4.02 5.48 11/01/2000 Total Fited Policy 1.68 6.28 6.14 6.~3 -4.6~ x.08 x.97 Difference 2.30 -0.80 -3.82 -1.63 -1.28 -1.06 -0.49 Total Fixed Portfolio 3.98 5.48 2.32 4.90 3.37 4.02 5.48 11/01/2000 Total Fixed Policy Target Allocations 1.51 5.52 4.94 6.47 4.60 5.04 59~ Difference 2.47 -0.04 -2.62 -1.57 -1.23 -1.02 -0.47 Galliard Core Fixed Portfolio 4.80 (18) 6.52 (68) 3.31 (84) N/A N/A N/A 2.68 N/A 10/01/2007 Barclays CapitalInterinediateAQaregate 1.68 (77) 6.28 (71) 6.14 (51) 6.43 (50) 4.79 (59) 4.9? (51) 5.98 N/A Difference 3.12 0.24 -2.83 N/A N/A N/A -3.30 US Intermediate Fixed Income (SA+CF) Median 2.77 7.56 6.16 6.43 4.92 4.92 N/A Galliard TIPS 0.65 (44) 1.27 (88) -1.66 (84) N/A N/A N/A 5.09 N/A 10/01/2007 Barclays CapitalU.S.TreasurylnflationNotes:l- 0.57 (56) 1.01 (91) -1.92 (89) 5.60 (85) 4.23 (45) 4.69 (100) _5.04 N/A Difference 0.08 0.26 0.26 N/A N/A N/A 0.05 US TIPS (SA+CF) Median 0.59 3.08 -1.13 5.82 4.13 5.11 N/A American Stable Value Fund REIT -7.17 (39) -25.21 N/A -25.43 N/A N/A N/A N/A -13.36 N/A 10/01/2007 Real Estate Polio 1.71 (l) 5.21 NiA 7.00 NiA 7.00 NiA 7.00 NiA 7A0 NiA 7.00 N/A Difference -8.88 -30.42 -32.43 N/A N/A N/A -20.36 US Private Real Estate-Open End (SA+CF) Median -9.20 N/A N/A N/A N/A N/A N/A American Stable Value Fund REIT -7.17 (39) -25.21 N/A -25.43 N/A N/A N/A N/A -13.36 N/A 10/01/2007 NCREIF Property Index -9.3 i (51) -2294 N/A -?3.07 N; A -0.50 N/A 3.98 N; A 6.6~ N/A -11.27 N; A Difference 2.16 -2.27 -2.36 N/A N/A N/A -2.09 US Private Real Estate-Oren End (SA+CFI Median -9.20 N/A N/A N/A N/A N/A N/A Returns for periods greater than one year are annualized. Returns are expressed as percentages. Total Fund Policy= 50% S&P 500, 15% MSCI EAFE, 30% LB Int. Aggregate, & 5% NCREIF. Total Equity Policy= 80% S&P 500, & 20% MSCI EAFE. Total Fixed Policy= 85% LB Int. Agg, & 15% Tips Page 16 of 39 THE BOGDAHN Gxour Defined Benefit Plan & Trust for Employees of the City of Winter Springs Comparative Performance Fiscal Year Returns As of June 30, 2009 Total Fund Portfolio(Net) -16.82 (72) Total Fund Polio -12.1. I (23) Difference -4.71 Mixed-Asset Target Alloc Moderate Funds (MF) Median -14.54 Total Fund Portfolio -16.46 Total Fund Policy Target Allocations -14.63 Difference -1.83 Total Fund Portfolio(Net) -16.82 (72) Total Fund Policy -12.11 ("?; j Difference -4.71 Mixed-Asset Target Alloc Moderate Funds (MF) Median -14.54 Total Fund Portfolio -16.46 Total Fund Polio Target Allocations -14.63 Difference -1.83 13.03 (32) 7.89 (40) 11.07 (26) 12.18 (11) 12.49 (82) -7.28 (41) 11.97 (~4) 9.~~ (16) 10.76 (30) 11.65 (1~) 18.84 (1~) -11.92 (87) 1.06 -1.66 031 0.53 -6.35 4.64 11.49 7.26 9.49 9.40 15.67 -8.25 13.92 8.62 11.82 13.05 13.34 -6.54 14.40 9.19 10.76 11.(,~ 18.84 -11.92 -0.48 -0.57 1.06 1.40 -5.50 5.38 13.03 (32) 7.89 (40) 11.07 (26) 12.18 (11) 12.49 (82) -7.28 (41) 11.97 (44) 9.» (I6) 10.76 (30) 11.65 (15) 18.84 (15) -11.92 (87) 1.06 -1.66 031 0.53 -6.35 4.64 11.49 7.26 9.49 9.40 15.67 -8.25 13.92 8.62 11.82 13.05 13.34 -6.54 14.40 9.19 10.76 11.(,~ 18.84 -11.9? -0.48 -0.57 1.06 1.40 -5.50 5.38 Returns for periods greater than one year are annualized. Returns are expressed as percentages. Total Fund Policy= 50% S&P 500, 15% MSCI EAFE, 30% LB Int. Aggregate, & 5% NCREIF. Total Equity Policy= 80% S&P 500, & 20% MSCI EAFE. Total Fixed Policy= 85% LB Int. Agg, & 15% Tips Page 17 of 39 THE BOGDAHN Gxour Defined Benefit Plan & Trust for Employees of the City of Winter Springs Comparative Performance Fiscal Year Returns As of June 30, 2009 Total Equity Portfolio -25.61 18.52 10.83 15.40 17.60 18.76 -14.70 Total Equity Polio -21.98 16.~4~ 12.1 14.30 1~.1~4 24.6=4 -19.94 Difference -3.63 2.08 -1.68 1.10 2.46 -5.88 5.24 Total Equity Portfolio -25.61 18.52 10.83 15.40 17.60 18.76 -14.70 Total Equity Policy Target Allocations -23.61 18.21 11.99 14.30 1.14 24.64 -19.94 Difference -2.00 0.31 -1.16 1.10 2.46 -5.88 5.24 Domestic Equity Portfolio -21.66 (54) 17.58 (36) 9.29 (75) 13.77 (59) 16.77 (19) 17.81 (91) -14.46 (18) S&P X00 -?1.98 (63) 16.44 (~8) 10.79 (~0) 12.2 (81) 13.87 (59) 24.40 (44) -20.49 (76) Difference 0.32 1.14 -1.50 1.52 2.90 -6.59 6.03 US Core/Large Cap Equity (SA+CF) Median -21.38 16.64 10.78 14.37 14.27 24.10 -19.04 Lateef Asset Mgmt.Equity -15.13 (14) N/A N/A N/A N/A N/A N/A Russe111000Gro~vthlnde~ -?0.88 (~1) 19.3 (~5) 6.0~ (~8) 11.60 (71) 7.~1 (74) 292 (27) -22.1 (76) Difference 5.75 N/A N/A N/A N/A N/A N/A US Growth/Large Cap Equity (SA+CF) Median -20.87 19.90 6.75 14.04 10.05 22.40 -19.56 Dalton, Greiner, Hartman, Maher & Co. N/A N/A N/A N/A N/A N/A N/A Russe113000 Value Index -22.70 (72) 13.73 (63) 14.55 (10) 16.78 (57) 20.89 (51) 24.89 (70) -15.89 (76) Difference N/A N/A N/A N/A N/A N/A N/A US All Cap Value Equity (SA+CF) Median -19.93 16.11 10.40 18.10 20.91 28.18 -9.87 International Equity Portfolio -39.55 (100) 23.63 (59) 19.84 (69) 26.83 (53) 22.94 (78) 27.32 (71) -20.13 (99) MSCI SAFE ]i~de~ -30.13 (76) 2 .38 (~-~? 19.6 (71) 26.32 (>9) 22.2 (79) 26.~~ (7~) -1~?( (90) Difference -9.42 -1.75 0.19 0.51 0.42 0.78 -4.87 International Active Value Equity (SA+CF) Median -27.34 24.45 20.94 27.00 25.43 30.08 -6.34 Voyageur Asset Mgmt International -39.55 (100) N/A N/A N/A N/A N/A N/A MSCI EAFE Index -30.13 (76) 25.38 (44) 19.65 (71) 26.32 (59) 22.52 (79) 26.54 (75) -15.26 (90) Difference -9.42 N/A N/A N/A N/A N/A N/A International Active Value Equity (SA+CF) Median -27.34 24.45 20.94 27.00 25.43 30.08 -6.34 Returns for periods greater than one year are annualized. Returns are expressed as percentages. Total Fund Policy= A t & 5%NCREIF T t l E i P li = 80% S&P 500 & 20%MSCI EAFE T t l Fi d P li = 85%L 50% S&P 500, 15% MSCI EAFE, 30% LB Int. B I t A & 15%Ti ~ ~~•~_~t, ggrega e, . o a qu ty o cy , . o a xe o cy n . gg, ps BQGDAHN GROUP Page 18 of 39 Defined Benefit Plan & Trust for Employees of the City of Winter Springs Comparative Performance Fiscal Year Returns As of June 30, 2009 Total Fixed Portfolio T'atal Fixed Po1ic Y Difference Total Fixed Portfolio Total Fixed Policy Target Allocations Difference Galliard Core Fixed Portfolio Barcla s Ca ital Intermediate A ire ate Y p g~ g Difference US Intermediate Fixed Income SA+CF Median Galliard TIPS Barcla s Ca ital U.S. Treasur h~flation Notes: 1- Y p Y Difference US TIPS SA+CF Median American Stable Value Fund REIT Real Estate Policy J Difference US Private Real Estate-0 en End SA+CF Median A American Stable Value Fund REIT NCREIF Pro erty Index 1~ Difference US Private Real Estate-Oben End (SA+CFI Median 0.64 4.96 3.27 2.81 2.68 5.24 9.46 4.1.6 x.33 3.~~ 2.80 3.68 x.40 8.E,1 -3.52 -0.37 -0.28 0.01 -1.00 -0.16 0.85 0.64 4.96 3.27 2.81 2.68 5.24 9.46 4.73 5.33 3.55 2.80 3.68 5.40 8.61 -4.09 -0.37 -0.28 0.01 -1.00 -0.16 0.85 -1.68 (95) N/A N/A N/A N/A N/A N/A 4.16 (31) 5.33 (65) 3.84 (57) 2.23 (41) 3.39 (27) 4.94 (65) 7.92 (57) -5.84 N/A N/A N/A N/A N/A N/A 3.09 5.46 3.91 2.09 2.87 5.52 8.08 7.72 (16) N/A N/A N/A N/A N/A N/A 7.89 (11) 5.32 (25) 2.28 (36) 3.84 (92) 5.75 (9.5) 7.25 (76) 12.29 (99) -0.17 N/A N/A N/A N/A N/A N/A 6.27 4.98 2.08 531 7.50 7.42 14.76 4.03 (43) N/A N/A N/A N/A N/A N/A 7.00 (2U) 7.00 (100) 7.00 (97) 7.00 (100) 7.00 (94) 7.U0 (91) 7.00 (32) -2.97 N/A N/A N/A N/A N/A N/A 3.47 18.34 17.77 19.75 12.35 9.60 6.02 4.03 (43) N/A N/A N/A N/A N/A N/A 5.27 (30) 17.31 (68) 17.6? (51) 19.19 (66) 12.41 (50) 7.83 (82) 5.70 (54) -1.24 N/A N/A N/A N/A N/A N/A 3.47 18.34 17.77 19.75 12.35 9.60 6.02 Returns for periods greater than one year are annualized. Returns are expressed as percentages. Total Fund Policy= 50% S&P 500, 15% MSCI EAFE, 30% LB Int. Aggregate, & 5% NCREIF. Total Equity Policy= 80% S&P 500, & 20% MSCI EAFE. Total Fixed Policy= 85% LB Int. Agg, & 15% Tips Page 19 of 39 THE BOGDAHN Gxour Winter Springs General Employees Total Fund Portfolio (Net) June 30, 2009 Market Value Net Capital Market Value As of Transfers Contributtons Distributtons Fees Expenses Income Apprec.l Deprec. As of 3/31/2009 6/30/2009 Total Fund Portfolio (Net) 13,358 - 547 -175 -20 -9 35 1,542 15,279 I ~ I ~ , ~ I ~ Market Value Net Capital Market Value As of Transfers Contributtons Distributtons Fees Expenses Income Apprec.l Deprec. As of 9/30/2008 6/30/2009 Total Fund Portfolio (Net) 15,561 - 1,656 -504 -77 -14 106 -1,450 15,279 $160.0 30.00 20.00 10.00 0.00 -10.00 -20.00 -30 00 $145.0 $130.0 $115.0 ~~~:~ $100.0 . ~ 1 Oct-2008 1 2 3 4 5 $85.0 Quarter To Year Years Years Years Years :: Jun-2009 ^ Total Fund Portfolio (Net) 11.59 (63) -9.54 (72) -15.50 (56) -12.44 (75) -3.97 (68) -1.56 (69) 0.28 (60) ~ Total Fund Policy 10.13 (85) -9.24 (69) -13.85 (37) -9.64 (37) -2.13 (32) 0.19 (30) 1.58 (28) X70.0 12/00 9/02 6/04 3/06 12/07 6/09 Median 12.51 -7.78 -14.88 -10.52 -3.01 -0.80 0.66 -Total Fund Portfolio (Net) Total Fund Policy . ~. I~ 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Mar-2009 Dec-2008 Se -2008 Jun-2008 Mar-2008 Dec-2007 Total Fund Portfolio (Net) -4.27 (28) -15.33 (73) -6.59 (25) -4.79 (100) -4.35 (32) -2.22 (84) Total Fund Policy -6.14 (73) -12.19 (30) -5.08 (9) -1.90 (77) -4.81 (38) -0.84 (50) Mixed-Asset Target Alloc Moderate Funds (MF) Median -5.13 -13.38 -8.04 -1.05 -5.41 -0.85 Page 21 of 39 THE BOGDAHN Gxour Winter Springs General Employees Total Fund Portfolio (Net) June 30, 2009 JU.U 20.0 ~, a 10.0 z ~~ o.o Over Performance a w -1o.a w -20.0 c -20.0 -10.0 0.0 10.0 H Total Fund Policy (%) ~ OverPerformance ~ UnderPerfornrance ~ Sep-2004 5.00 0.00 a ~ -5.00 a ~ -10.00 a~ a -15.00 U.UU a 25.00 .., ~ 50.00 w ~s.oo 100.00 9/04 9/05 9/06 9/07 9/08 6/09 Total Period 5-25 25-Median Median-75 75-95 Count Count Count Count ^ Total Fund Portfolio (Net) 20 2 (10%) 13 (65%) 5 (25%) 0 (0%) ~ Total Fund Policy 20 11 (55%) 9 (45%) 0 (0°/0) 0 (0%) 7.50 5.00 2.50 0.00 .~ ~ -2.50 ~ -5.00 x -7.50 5.00 10.00 15.00 20.00 25.00 2.50 5.00 7.50 10.00 12.50 15.00 17.50 Risk (Standard Deviation %) Risk (Standard Deviation %) Return Standard Deviation Return Standard Deviafion ^ Total Fund Portfolio (Net) -3.97 12.48 ^ Total Fund Portfolio (Net) 028 10.44 • Total Fund Policy -2.13 11.67 • Total Fund Policy 1.58 9.71 -Median -3.01 12.47 -Median 0.66 10.36 Tracking Up Down Sharpe Downside Error Market Market Alpha IR Ratio Beta Risk Capture Capture Total Fund Portfolio (Net) 3.63 92.17 104.26 -1.76 -0.49 -0.52 1.02 10.52 Total Fund Policy 0.00 100.00 100.00 0.00 N/A -0.40 1.00 9.56 Tracking Up Down Sharpe Downside Error Market Market Alpha IR Ratio Beta Risk Capture Capture Total Fund Portfolio (Net) 2.98 95.43 105.27 -L28 -0.41 -0.21 1.03 8.41 Total Fund Policy 0.00 100.00 100.00 0.00 N/A -0.10 1.00 7.62 ~~~1-[ h, ~:; „ Pa e 22 of 3 9 g Under P erfornance 20.0 30.0 ~ Jun-2009 Winter Springs General Employees Domestic Equity Portfolio June 30, 2009 Market Value Net Capital Market Value As of Contributions Distributions Transfers Fees Expenses Income Apprec./Deprec. As of 3/31/2009 6/30/2009 Domestic Equity Portfolio 5,528 248 - - -8 -1 26 974 6,767 I ~ I ~ , ~ I ~ Market Value Net Capital Market Value As of Contributions Distributions Transfers Fees Expenses Income Apprec./Deprec. As of 9/30/2008 6/30/2009 Domestic Equity Portfolio 7,423 626 - - -47 -2 84 -1,316 6,767 30.00 15.00 0.00 ~, a a ~, -15.00 -30.00 -45 00 $160.0 $140.0 $120.0 $100.0 X96.6 -._ _ $81.6 1 Oct-2008 1 2 3 4 5 $80 ~ Quarter To fear fears fears Years 1'ea~s Jun-2009 ^DomesticEgaityPortfolio 17.93 (14) -1731 (30) -21.19 (14) -18.44 (36) -723 (42) -3.79 (54) -1.37 (56) ~~ • S&P 500 15.93 (40) -19.47 (62) -26.21 (53) -19.93 (66) -822 (66) -427 (71) -224 (86) $60.0 12/00 9/02 6/04 3/06 12/07 6/09 Mediae 15.43 -19.05 -26.08 -19.34 -7.82 -3.57 -1.18 -Domestic Equity Portfiilio S&P 500 1. ~' 1 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Mar-2009 Dec-2008 Sep-2008 Jun-2008 Mar-2008 Dec-2007 Domestic Equity Portfolio -7.99 (23) -23.80 (86) -4.69 (8) -6.34 (99) -9.30 (41) -3.24 (60) SRP 500 -11.01 (68) -21.94 (58) -837 (39) -2.73 (82) -9.44 (48) -333 (67) US Core/Large Cap Equity (SA+CF) Median -10.49 -21.74 -9.00 -1.29 -9.47 -2.87 Page 23 of 39 THE BOGDAHN Gxour Winter Springs General Employees Domestic Equity Portfolio June 30, 2009 ~~.~ 18.0 a .s 6.0 ~° o -6.0 w c -18.0 W ~ -30.0 Over Performance Under P erfornance o -30.0 -18.0 -6.0 6.0 A S&P 500 (°/a) ~ UnderPerformance ~ OverPerfom~ance ~ Sep-2004 5.00 0.00 -5.00 a ~ -10.00 a .. ~ -15.00 ~ -20.00 a -25.00 18.0 30.0 Jun-2009 ~.~~ ~ 25.00 0 a ~ 50.00 a~ a~ a ~ 75.00 a~ a 100.00 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 ^ Domestic Equity Portfolio 20 0 (0°/a) 7 (35%) 7 (35%) 6 (30°/a) ~ S&P 500 20 0 (0%) 0 (0%) 13 (65%) 7 (35%) 15.00 10.00 5.00 0 " 0.00 -5.00 x -10.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 5.00 10.00 15.00 20.00 25.00 30.00 Risk (Standard Deviation %) Risk (Standard Deviation %) Return Standard Deviation Return Standard Deviation ^ Domestic Equity Portfolio -7.23 20.02 ^ Domestic Equity Portfolio -1.37 16.60 • S&P 500 -8.22 19.35 • S&P 500 -2.24 16.04 - Median -7.82 19.28 -Median -1.18 16.03 Tracking Up Down Sharpe Downside Error Market Market Alpha IR Ratio Beta Risk Capture Capture Domestic Equity Portfolio 5.38 100.97 96.18 1.32 0.23 -0.44 1.01 16.11 S&P 500 0.00 100.00 100.00 0.00 N/A -0.53 1.00 15.81 Tracking Up Down Sharpe Downside Error Market Market Alpha IR Ratio Beta Risk Capture Capture Domestic Equity Portfolio 43.93 145.35 97.97 8.69 0.20 0.10 0.93 23.89 S&P 500 0.00 100.00 100.00 0.00 N/A -0.27 1.00 12.53 ~~~1-[ h, ~:; „ Pa e 24 of 3 9 g Winter Springs General Employees Lateef Asset Mgmt.Equity June 30, 2009 Market Value Net Capital Market Value As of Contributions Distributions Transfers Fees Expenses Income Apprec.l Deprec. As of 3/31/2009 6/30/2009 Lateef Asset Mgmt.Equity 3,192 124 - - -8 - 10 464 3,781 I ~ I ~ , ~ I ~ Market Value Net Capital Market Value As of Contributions Distributions Transfers Fees Expenses Income Apprec.l Deprec. As of 9/30/2008 6/30/2009 Lateef Asset Mgmt.Equity 3,999 313 - - -36 -1 34 -527 3,781 $110.0 30.00 15.00 0.00 ~, -15.00 -30.00 -45.00 -60 00 $100.0 $90.0 $80.0 $70.0 1 1 Oct-2008 1 2 3 4 5 $60.0 Quarter To Year Years Years Years Years Jun-2009 ^ Lateef Asset Mgmt.Equity 14.76 (55) -12.84 (24) -13.28 (2) N/A N/A N/A N/A ~ Russell 1000 Growth Index 16.32 (35) -13.89 (33) -24.50 (45) -15.74 (50) -5.45 (42) -2.68 (54) -1.83 (71) X50.0 9/07 3/08 9/08 3/09 6/09 Median 15.09 -15.07 -25.23 -15.82 -5.90 -2.58 -1.01 -LateefAsset Mgmt.Equity Russell 1000 Growth Index . ~. I~ 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Mar-2009 Dec-2008 Se -2008 Jun-2008 Mar-2008 Dec-2007 Lateef Asset Mgmt.Equity -5.85 (64) -19.33 (9) -0.50 (4) -7.28 (99) -9.70 (36) L87 (23) Russell 1000 Growth Index -4.12 (43) -22.79 (56) -12.33 (47) 1.25 (55) -10.18 (42) -0.77 (57) US GrowthlLarge Cap Equity (SA +CF) Median -4.72 -22.51 -12.51 1.48 -10.70 -0.23 Page 25 of 39 THE BOGDAHN Gxour Winter Springs General Employees Dalton, Greiner, Hartman, Maher & Co. June 30, 2009 Market Value Market Value Net Capital As of Contributtons Distributtons Fees Expenses Income As of Transfers ApprecJ Deprec. 3/31/2009 6/30/2009 Dalton, Greiner, Hartman, Maher & Co. - 2,795 - - - - 13 178 2,986 Market Value Market Value Net Capital As of Contributtons Distributtons Fees Expenses Income As of Transfers ApprecJ Deprec. 9/30/2008 6/30/2009 Dalton, Greiner, Hartman, Maher & Co. - 2,795 - - - - 13 178 2,986 45.00 30.00 15.00 ~, 0.00 -15.00 -30.00 -45.00 ~~~~ 1 Oct-2008 1 2 3 4 5 Quarter To Year Years Years Years Years Jun-2009 ^ Dalton, Greiner, Hartman, Maher & Co. N/A NIA NIA N/A N/A N/A N/A ~ Russell 3000 Value Index 16.81 (78) -24.78 (96) -28.73 (74) -24.03 (84) -11.20 (81) -5.83 (77) -2.14 (76) Median 18.12 -18.60 -25.73 -19.40 -7.59 -3.19 -0.62 . ~. , I~ 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Mar-2009 Dec-2008 Se -2008 Jun-2008 Mar-2008 Dec-2007 Dalton, Greiner, Hartman, Maher & Co. NIA NlA NIA NlA N/A NlA Russell 3000 ValueIndex -17.00 (100) -22.41 (53) -5.26 (25) -5.17 (93) -8.55 (52) -591 (78) US All Cap Value Equity (SA+CF) Median -11.14 -22.17 -7.46 -1.06 -8.37 -4.42 Page 26 of 39 THE BOGDAHN Gxour Winter Springs General Employees International Equity Portfolio June 30, 2009 Market Value Net Capital Market Value As of Contributtons Distributtons Transfers Fees Expenses Income Apprec./Deprec. As of 3/31/2009 6/30/2009 International Equity Portfolio 1,278 77 - - -3 - 4 406 1,762 I ~ I ~ , ~ I ~ Market Value Net Capital Market Value As of Contributtons Distributtons Transfers Fees Expenses Income Apprec./Deprec. As of 9/30/2008 6/30/2009 International Equity Portfolio 1,746 162 36 - -11 - 4 -176 1,762 60.00 40.00 20.00 ~, 0.00 -20.00 -40.00 -60.00 $200.0 $150.0 $100.0 $111.3 $100.0 1 Oct-2008 1 2 3 4 5 Quarter To Year Years Years Years Years Jun-2009 ^ International Equity Portfolio 31.73 (9) -1191 (51) -33.30 (89) -27.12 (99) -11.86 (99) -3.26 (99) -0.10 (99) ~ MSCIEAFE Index 25.85 (31) -13.16 (57) -30.96 (77) -21.24 (69) -7.51 (75) 0.13 (69) 2.79 (76) X50.0 12/00 9/02 6/04 3/06 12/07 6/09 Median 23.75 -11.72 -26.57 -19.30 -5.93 1.56 4.09 -International Equity Portfolio MSCI SAFE Index . ~. I~ 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Mar-2009 Dec-2008 Se -2008 Jun-2008 Mar-2008 Dec-2007 International Equity Portfolio -9.63 (20) -26.00 (98) -24.28 (94) -10.94 (100) -0.22 (3) -10.17 (100) MSCI EAFEIndex -13.85 (60) -19.90 (59) -20.50 (81) -1.93 (39) -8.82 (65) -1.71 (52) International Active Value Equity (SA+CF) Median -12.97 -19.14 -17.03 -2.81 -8.12 -1.42 Page 27 of 39 THE BOGDAHN Gxour Winter Springs General Employees International Equity Portfolio June 30, 2009 JU.U a 30.0 10.0 ~° 0 ~' -10.0 .., c w -30.0 0 -50.0 Over Performance Under P erfornance ~ -50.0 -30.0 -10.0 10.0 a MSCI EAFE Index(%) ~ OverPerformance ~ UnderPerfornrance ~ Sep-2004 30.0 50.0 Jun-2009 10.00 5.00 0.00 ~, a `-' -5.00 ~, -10.00 a -15.00 ^ 10.00 15.00 20.00 25.00 30.00 Risk (Standard Deviation %) Return Standard Deviafion ^ International Equity Portfolio -11.86 30.27 • MSCI EAFE Index -7.51 25.41 - Median -5.93 23.86 U.UU x ~ 25.00 a~ ~ 50.00 a~ v a~ a a 75.00 100.00 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 ^ International Equity Portfolio 20 0 (0%) 0 (0%) 9 (45%) 11 (55%) • MSCI EAFE Index 20 0 (0%) 1 (5%) 12 (60%) 7 (35%) 15.00 12.00 9.00 6.00 .~ ~ 3.00 ~ 0.00 x -3.00 ^ 35.00 10.00 15.00 20.00 25.00 Risk (Standard Deviation %) Return Standard Deviafion ^ International Equity Portfolio -0.10 25.71 • MSCI EAFE Index 2.79 21.78 -Median 4.09 20.63 30.00 Tracking Up Down Sharpe Downside Error Market Market Alpha IR Ratio Beta Risk Capture Capture International Equity Portfolio 7.99 96.72 109.37 -3.34 -0.48 -0.46 1.10 21.95 MSCI EAFE Index 0.00 100.00 100.00 0.00 N/A -0.36 1.00 18.65 Tracking Up Down Sharpe Downside Error Market Market Alpha IR Ratio Beta Risk Capture Capture International Equity Portfolio 6.32 98.80 108.60 -2.66 -0.35 -0.03 1.09 17.30 MSCI EAFE Index 0.00 100.00 100.00 0.00 NIA 0.09 1.00 14.78 T~~; =.f Pa e 28 of 39 g Winter Springs General Employees Voyageur Asset Mgmt. International June 30, 2009 Market Value Net Capital Market Value As of Contributions Distributions Transfers Fees Expenses Income Apprec.l Deprec. As of 3/31/2009 6/30/2009 Voyageur Asset Mgmt. International 1,278 77 - - -3 - 4 406 1,762 I ~ I ~ ~ ~ I ~ Market Value Net Capital Market Value As of Contributions Distributions Transfers Fees Expenses Income Apprec.l Deprec. As of 9/30/2008 6/30/2009 Voyageur Asset Mgmt. International 1,746 162 36 - -ll - 4 -176 1,762 $115.0 60.00 40.00 20.00 ~, 0.00 -20.00 -40.00 -60 00 $100.0 $85.0 $70.0 1 $55.0 )_ $40.0 1 Oct-2008 1 2 3 4 5 Quarter To Year Years Years Years Years Jun-2009 ^ Voyageur Asset Mgmt. International 31.73 (9) -11.91 (51) -33.30 (89) N/A N/A N/A N/A $25.0 ~ MSCI EAFE Index 25.85 (31) -13.16 (57) -30.96 (77) -21.24 (69) -7.51 (75) 0.13 (69) 2.79 (76) 9/07 3108 9/08 3/09 6/09 -Voyageur Asset Mg mt. International Median 23.75 -11.72 -26.57 -19.30 -5.93 L56 4.09 MSCI EAFE Index . ~. I~ 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Mar-2009 Dec-2008 Se -2008 Jun-2008 Mar-2008 Dec-2007 Voyageur Asset Mgmt. International -9.63 (20) -26.00 (98) -24.28 (94) -10.94 (100) -0.22 (3) -10.17 (100) MSCI EAFEIndex -13.85 (60) -19.90 (59) -20.50 (81) -1.93 (39) -8.82 (65) -1.71 (52) International Active Value Equity (SA+CF) Median -12.97 -19.14 -17.03 -2.81 -8.12 -1.42 Page 29 of 39 THE BOGDAHN Gxour Winter Springs General Employees Galliard Core Fixed Portfolio June 30, 2009 Market Value Market Value Net Capital As of Contributtons Distributtons Fees Expenses Income As of Transfers Apprec.l Deprec. 3/31/2009 6/30/2009 Galliard Core Fixed Portfolio 4,482 114 3 - -3 -1 - 218 4,813 Market Value Market Value Net Capital As of Contributtons Distributtons Fees Expenses Income As of Transfers ApprecJ Deprec. 9/30/2008 6/30/2009 Galliard Core Fixed Portfolio 4,243 288 3 -5 -5 -2 - 292 4,813 15.00 5.00 0.00 $115.0 $110.0 $105.0 $100.0 1.7 ~.7 -5.00 i, u u ~ u~ ~~ u ~ 1 Oct-2008 1 2 3 4 5 Quarter To Year Years Years Years Years Jun-2009 ^ Galliard Core Fixed Portfolio 4.80 (18) 6.52 (68) 3.31 (84) NIA N/A NIA N/A $95.0 ~ Barclays Capital Intermediate Aggregate 1.68 (77) 6.28 (71) 6.14 (51) 6.66 (52) 6.43 (50) 4.79 (59) 4.92 (51) 9/07 3/08 9/08 3/09 6/09 -Galliard Core Fixed Portfolio Median 2.77 7.56 6.16 6.81 6.43 4.92 4.92 Barclays Capital Intermediate Aggregate . ~. , I~ 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Mar-2009 Dec-2008 Se -2008 Jun-2008 Mar-2008 Dec-2007 Galliard Core Fixed Portfolio 2.34 (3) -0.68 (90) -3.02 (85) -0.61 (20) 0.20 (96) 1.81 (94) Barclays Capital Intermediate Aggregate 0.91 (38) 3.58 (58) -0.13 (20) -0.96 (42) 2.35 (59) 2.89 (45) US Intermediate Fixed Income (SA+CF) Median 0.74 4.16 -1.18 -1.03 2.57 2.82 Page 30 of 39 10.00 THE BOGDAHN Gxour Winter Springs General Employees Galliard TIPS June 30, 2009 ,, Market Value Net Capital Market Value As of Contributions Distributions Fees Transfers Expenses Income Apprec.l Deprec. As of 3/31/2009 6/30/2009 Galliard TIPS 1,051 25 - - - -1 5 - 1,080 I ~ I ~ , ~ I ~ Market Value Net Capital Market Value As of Contributions Distributions Fees Expenses Income As of 9/30/2008 Transfers Apprec.l Deprec. 6/30/2009 Galliard TIPS 1,006 63 3 - -3 -1 16 -3 1,080 iu.uu 7.50 5.00 2.50 0.00 -2.50 -5 00 $115.0 1 Oct-2008 1 2 3 4 5 Quarter To Year Years Years Years Years Jun-2009 ^ 0 65 63 127 88 -166 ~83 A N A N A N A Galliard TIPS ( ) ( ) ( ) Nl I I I $100.0 M ~ ~ Barclays Capital U.S. Treasury Inflation Notes: 1-10 Year 0.57 (71) 1.01 (91) -1.92 (92) 6.30 (94) 5.60 (85) 4.23 (45) 4.69 (100) 9/07 3108 9/08 3/09 6/09 -Galliard TIPS Median 0.68 3.08 -0.87 6.94 5.82 4.13 5.11 Barclays Capital U.S. Treasury Inflation Notes: 1-10 Year . ~. I~ 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Mar-2009 Dec-2008 Se -2008 Jun-2008 Mar-2008 Dec-2007 Galliard TIPS 4.16 (83) -3.40 (74) -2.89 (17) 0.03 (24) 5.67 (23) 4.94 (68) Barclays Capital U.S. Treasury Inflation Notes: 1-10 Year 5.89 (13) -5.15 (98) -2.90 (17) 0.23 (13) 5.70 (21) 4.88 (84) US TIPS (SA+CF) Median 4.94 -2.59 -3.51 -0.25 5.36 4.99 Page 31 of 39 THE BOGDAHN Gxour Winter Springs General Employees American Stable Value Fund REIT June 30, 2009 Market Value Net Capital Market Value As of Contributions Distributions Fees Expenses Income As of 3/31/2009 Transfers Apprec./Deprec. 6/30/2009 American Stable Value Fund REIT 786 -7 - -6 -2 - - -56 715 I ~ I ~ ~ ~ I ~ Market Value Net Capital Market Value As of Transfers Contributions Distributions Fees Expenses Income Apprec./Deprec. As of 9/30/2008 6/30/2009 American Stable Value Fund REIT 988 -7 - -13 -7 - - -247 715 10.00 0.00 ~, -10.00 a -20.00 -30.00 • • • • • • ^ ^ $110.0 $100.0 $90.0 $80.0 1 S 1 Oct-2008 1 2 3 4 5 Quarter To Year Years Years Years Years Jun-2009 ^ American Stable Value Fund REIT -7.17 (39) -25.21 (N/A) -25.43 (N/A) N/A N/A NIA N/A $70.0 ~ NCREIF Property Index -9.33 (51) -22.94 (N/A) -23.07 (N/A) -8.34 (NlA) -0.50 (N/A) 3.98 (N/A) 6.65 (N/A) 9/07 3108 9/08 3/09 6/09 -Ame rican Stable Value Fund REIT Median -9.20 N/A N/A N/A NIA NIA N/A NCREIF Property Index . ~. I~ 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Mar-2009 Dec-2008 Se -2008 Jun-2008 Mar-2008 Dec-2007 American Stable Value Fund REIT -12.86 (34) -7.53 (26) -0.30 (46) 1.52 (24) 1.19 (61) 1.58 (71) NCREIF Property Index -7.33 (10) -8.29 (28) -0.17 (40) 0.56 (61) L60 (34) 3.21 (11) US Private Real Estate-Open End (SA+CF ) Median -14.81 -9.92 -0.30 0.82 1.28 1.94 Page 32 of 39 THE BOGDAHN Gxour Defined Benefit Plan & Trust for Employees of the City of Winter Springs Benchmark History As of June 30, 2009 Benchmark Policv Total Fund Effective Date: Nov-2000 S&P 500 Index 65.00 Barclays Capital Aggregate 30.00 MSCI EAFE 5.00 Effective Date: Oct-2003 S&P 500 Index 60.00 Barclays Capital Aggregate 30.00 MSCI EAFE 10.00 Effective Date: Sep-2006 S&P 500 Index 60.00 Barclays Capital Intermediate Aggregate 40.00 Page 33 of 39 Benchmark Policy Real Estate THE BOGDAHN Gxour Benchmark Policy Total Fixed Defined Benefit Plan & Trust for Employees of the City of Winter Springs Benchmark History Target Allocations As of June 30, 2009 Page 34 of 39 Benchmark Policy Total Fixed Target Allocations THE BOGDAHN Gxour Statistics Definitions Page 35 of 39 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. 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 benclunark. 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. Information 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. Consistency -- 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. Excess Return -- Arithmetic difference between the managers return and the risk-free return over a specified time period. Active Return -- Arithmetic difference between the managers return and the benchmark return over a specified time period. Excess Risk -- A measure of the standard deviation of a portfolio's performance relative to the risk free return. Up Market Capture -- The ratio of average portfolio return over the benclunark during periods of positive benchmark return. Higher values indicate better product performance. Down 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 monthl eriodicit . Yp Y THE BOGDAHN GROUP Investment Market Summary 2nd Quarter 2009 Dislocation Nation ^ 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 statistics. 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. 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. ^ 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. dollars (25.8%) and local currency (17.3%). ^ 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. Portfolio Attribution: (Reference pages 9, 16 and 17 of the Bogdahn Group June 2009 Report) Investment results for the Plan were significantly positive capturing the rebound in the broad equity markets. While broad fixed income markets were positive, the active management emphasis in non-U.S. Treasury investments also provided a significant boost to returns. The Fund investment returns net of management fees, were measurably better than the program benchmark for the quarter ended June (11.59% vs. 10.13%). Despite benchmark outperformance, peer group results were below median (63~d percentile). A conservative portfolio allocation to equity below targets was a drag to relative performance results (49.3% vs. 60% Total Fund Policy). The equity allocation in aggregate benefited from active management which was positioned well for the recovery with returns relative to the domestic benchmark of (20.52%) vs. (17.89%). Foreign equity performed well both absolute and relative to the benchmark (31.73%) vs. (25.85%). The portfolio also received a meaningful boost from the active fixed income allocation which in aggregate returned (3.98%) vs. (1.51%). Year over year results for the period ended June are now moderately lagging the benchmark declining (-15.5%) vs. (-13.85%). These results improve the Fund ranking to 56t" percentile from the (68`") percentile of peers reported for the March period. Past quarters steep market declines continue to impact rolling returns with all trailing periods below the actuarial required rate of return. Investment results place the Fund in the (68th) percentile and (69t") percentile of peers respectively for the rolling 3 and 4 year periods ended June. Total Fund down capture has been slightly more than the market benchmark (104.3%). As previously reported, investment results for Snow Capital Management have weighed heavily on overall program results. Snow Capital was replaced and the assets transitioned to Dalton Greiner, Hartman, Maher & Co., LLC. During the quarter, on April 8`" 2009. DG assumes the domestic equity, all-cap value mandate. What helped? Active management of equity mandates provided an additional boost to strong absolute market returns (20.5% vs. 17.8%). Transition timing was fortuitous with partial period out performance from both the Snow Capital portfolio and DG. Huge returns from foreign equity (largely due to dollar weakness) were boosted significantly by Voyageur active management (31.73% vs. 25.85%); posting peer- group results of Top 7th percentile. Successful active sector positioning by Galliard Capital Management provided significant outperformance to the core bond benchmark (4.8%) vs. (1.68%). What hurt? Under allocation to equity (49.2%) relative to the Policy (60%) and current target (65%). Declines in Real Estate continued in the June quarter, while less than the index (- 7.17% vs. -9.33%). Investment Market Summary 2nd Quarter 2009 Program Measurement: The target policy incorporates a fixed rate of return target of 8% absolute for alternatives (Real Estate). Asset class results have been negative affecting the benchmark return comparisons. The new benchmarked policy which remedies this measurement deficiency will take effect in the 3`a Quarter. Recommendations: Portfolio: Monitor the pace of rebalancing with consideration given to moving to Policy targets.