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Home My WebLink About2010 02 22 Regular 600 Bogdahn Report For Quarter Ended December 31, 2009Date: February 23, 2010 The attached Report was provided by Mr. David West, Bogdahn Consulting, LLC to the Winter Springs Board of Trustees and was discussed during Regular Agenda Item "600 at the February 23, 2010 Regular Meeting. WWW,BOI] ;DAHNC;ROUI "C OM Winter Springs General Employees General Plan and Trust 4th Quarter 2009 `I m, BOGDAHN GRoup sirsplifyingyvrer iMe rs +ureut apad fiduciary decisions The Market Environment Major Market Index Performance Period Ended: December 31, 2009 Domestic Equity ■ Much like 2008, 2009 will not be a year that investors will soon forget. After opening the year with a continuation of 2008's risk aversion and negative performance, investors embraced equity and credit -based risk assets, which drove market returns higher at one of the most rapid paces in history. However, each of the chart's strong annual equity results are somewhat deceptive since many of the equity benchmarks were down in excess of -20% during the 4th quarter of 2008. Most of the core domestic equity indices posted similar results to the S &P 500's return of +6.0% for the quarter. Small cap issues, returned a slightly lower +3.9% for the quarter. Over the one -year period, the Russell Mid -Cap index posted the group's outsized performance with a return of +40.5 %. A rally in two of the largest sectors of the growth benchmarks (information technology and health care) drove growth index performance to outpace value index results at all capitalization levels. The financial sector's negative performance, which represented a weight of more than 20% in each of the Russell value indices at the end of the quarter, was also a contributing factor to the underperformance of value relative to growth investments. ■ Large cap stock performance was positive across the various GICS sectors for the quarter with the exception of financial issues, which were mildly negative. While six of the index's ten sectors outpaced the +6.1% return of the Russell 1000, performance was led by strong results in the information technology ( +10.8 %) and health care ( +8.7 %) sectors. The financial sector of the Russell 1000, which was the strongest sector of the index during the 2nd and 3rd quarters of the year, posted the index's weakest performance during the 4th quarter with a return of -2.6 %. International Equity ■ Outside of the United States, emerging markets was once again the strongest broad asset class in our summary. These results are even more pronounced on an annual basis with emerging markets posting an impressive +79.0% for the year. Unlike the developed markets, which were impacted by USD strength, the currency effect on the performance of the emerging markets index continued to be positive. For the first time since the equity markets turned positive back in March, international developed markets lagged the domestic markets during the last quarter. Fixed Income ■ The Barclays aggregate return of +0.2% for the quarter was dominated by the performance of credit issues ( +1.3 %) in the index as spreads continued to compress for most of the quarter. The government index's return of -1.0% was impacted by the yield curve's move during the quarter. For the trailing 1 -year period, the Barclays Aggregate posted a solid +5.9% return, which stands in contrast to the -2.2% return of the Government Index and the +18.7% return of the Investment Grade Credit index. ■ A move down the quality ladder continued to reward to reward investors willing to take on lower quality debt. The longer -dated broad index suffered relative to the shorter -term broad indices as a result of a steepening yield curve. This yield curve movement is particularly evident in the results of the chart's government benchmark (-1.1%). All of these themes are much more dramatic for the one -year period. Portfolio Attribution (Reference pages 12, 16, 17, 18, 23 of the Bogdahn Group Dec 2009 Report) ■ The Plan experienced another strong quarter of investment returns with markets generally positive across all investment allocations with Real Estate the one exception. The Plan net - total- return was close to the policy benchmark (3.28% vs. 3.4 %). A closer look at attribution shows a mix of elements modestly affecting results. The active management effort of the international equity portfolio lagged the benchmark, while the bond manager's over - allocation to corporate and mortgage- backed fixed income securities helped the bond portfolio performance again this quarter. The domestic equity allocation, while within policy guidelines, started the quarter below target resulting in a modest drag on performance. Conversely, a lighter allocation to international equities (13.3% vs. 15 %) helped relative performance. Notably, Dalton, Greiner out - performed the benchmark by 3% and was in the 1St percentile of its peer - group. ■ The fund's year over year number was exceptionally strong, 22.86% outperforming the policy benchmark by a very healthy 4.72 %. The fund's one -year ranking improved significantly from the 43rd percentile to the 26th percentile largely due to a lower allocation to Real Estate than the peer group, and value added from the actively managed strategies. Total fund performance still lags the three ( -2.23% vs. -.78 %) and five (1.55% vs. 2.91 %) year numbers, but remains ahead of the benchmark inception (2.78% vs. 2.16 %). Total fund down market capture is above the benchmark for the 3 year (121.23 %) and 5 year (120.22 %) time periods. Legacy manager performance, Snow Capital, remains a significant factor in calculating longer period, cumulative program results. What helped? ■ Active management to equity mandates provided another strong return and outpaced the benchmark by .28 %. (5.34% vs. 5.06 %). ■ Dalton, Greiner out - performed the benchmark by 3.00% and ranked in the first percentile of its peer - group. ■ Under - allocation to real estate, which performed poorly as an asset class ( -2.11% benchmark return). ■ Active management in fixed income. Galliard continues to outperform, beating the index this quarter by .23 %. ■ Under - allocation to international equity. RBC Global (Voyageur) lagged the benchmark this quarter. (1.54% vs. 2.22 %). What hurt? T "L • Domestic equity (45.6 %) relative to the policy (50 % �� BDGDAHN • Lateef performance (5.84% vs. 7.94 %). `�� GROUP The Market Environment Major Market Index Performance Period Ended: December 31, 2009 Quarter Performance ■ Much like 2008, 2009 will not be a year that investors will soon forget. After opening the year with a continuation of 2008's risk aversion and negative performance, investors embraced equity and credit -based risk assets, which drove market returns higher at one of the most rapid paces in history. However, each of the chart's strong annual equity results are somewhat deceptive since many of the equity benchmarks were down in excess of -20% during the 4t" quarter of 2008. ■ Outside of the United States, emerging markets more than tripled the performance of developed markets during the quarter and was once again the strongest broad asset class in our summary. These results are even more pronounced on an annual basis with emerging markets posting an impressive +79.0% for the year. MSCI ACWxUS 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 I 3mos. T -Bill MIM 8.6% 6.0% 5.9% 6.1% 5.9% 3.9% 0.2 -1.0 0.6 1.3 0.0% ■ Most of the core domestic equity indices posted similar results to the S &P 500's return of +6.0% for the quarter. Small cap issues, represented by the Russell 2000 index, returned a slightly lower +3.9% for the quarter. Over the one -year period, the Russell MidCap index posted the group's outsized performance relative to the various capitalization ranges with a return of +40.5 %. ■ The Barclays aggregate return of +0.2% for the quarter was dominated by the performance of credit issues ( +1.3 %) in the index as spreads continued to compress for most of the quarter. The government index's return of -1.0% was impacted by the yield curve's move during the quarter. For the trailing 1 -year period, the Barclays Aggregate posted a solid +5.9% return, which stands in contrast to the -2.2% return of the Government Index and the +18.7% return of the Investment Grade Credit index. Source: Barclays Capital, MSCI Capital Markets, Russell Investments 2 -5.0% 0.0% 5.0% 10.0% One Year Performance MSCI ACWxUS 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 THE ` BOGDAHN GROUP -10.0% 10.0% 30.0% 50.0% 70.0% 90.0% The Market Environment Domestic Equity Style Index Performance Period Ended: December 31, 2009 Quarter Performance ■ A rally in two of the largest sectors of the growth benchmarks (information technology and health care) drove growth index performance to outpace value index results at all capitalization levels. The financial sector's negative performance, which represented a weight of more than 20% in each of the Russell value indices at the end of the quarter, was also a contributing factor to the underperformance of value relative to growth investments. ■ The differential between value and growth index results for the 4th quarter were broader at the large cap levels primarily due to a larger exposure to the strong performing information technology sector in the smaller capitalization value indices. While the range of style -based returns is much broader at all capitalization levels over the one year period, the causes are similar to the 4th quarter's results. Annual differentials were driven by the strong positive results in the information technology sector and the negative performance of the financial sector. ■ Style -based results over the one -year period were heavily impacted by the end -point sensitivity of the calculation. This sensitivity is quantified by the elimination of the 4th quarter of 2008's performance in the calculation, which fell by more than 20% for each style -based index, and the inclusion of the 4th quarter of 2009's results, which were positive for all of the indices. 3000 Value 30001ndex 3000 Growth 1000 Value 10001ndex 1000 Growth MidCap Value MidCapindex MidCap Growth 2000 Value 20001ndex 2000 Growth 3000 Value 30001ndex 3000 Growth 1000 Value 10001ndex 1000 Growth MidCap Value MidCapindex MidCap Growth 2000 Value 20001ndex 2000 Growth One Year Performance Source: Russell Investments ✓ THE 3 ` BOGDAHN \ GROUP 0.0% 5.0% 10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% The Market Environment GICS Sector Performance & (Quarter -End Sector Weight) Period Ended: December 31, 2009 ■ Large cap stock performance was positive across the various Global Industry Classification Standard (GICS) sectors for the quarter with the exception of financial issues, which were mildly negative. While six of the index's ten sectors outpaced the +6.1 % return of the Russell 1000, performance was led by strong results in the information technology ( +10.8 %) and health care ( +8.7 %) sectors. ■ The financial sector of the Russell 1000, which was the strongest sector of the index during the 2nd and 3rd quarters of the year, posted the index's weakest performance during the 4th quarter with a return of -2.6 %. However, the strong results of the previous quarters are evident in the solid +16.7% return of the financial sector for the year. ■QTR 01 -Year Energy (11.3 %) Materials (4.0 %) Industrials (10.4 %) Consumer Disc (10.2 %) Consumer Staples (10.7 %) Health Care (12.5 %) Financials (14.4 %) Info Technology (19.4 %) Telecom Services (3.1 %) Utilities (4.0 %) Russell 1000 5.6 17.2% 8.1 52.5% 5.5 22.9% 8.3 45.1% 4.9% 15.5% 8.7 21.7% -2.6 16.7% 10.8% 62.0% 8.3% 12.4% 6.8% 12.9% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% ■ Wlthln the Russell 1000 Index, each of the ten GICS sectors posted positive results for the year. The strongest ■QTR performance came from the information technology ( +62.0 %), o1 -Year materials ( +52.5 %) and consumer discretionary (+45.1%) sectors of the index. Energy (5.2%) Materials (4.8 %) • For the quarter, small cap stock performance was positive Industrials (15.8%) across all ten GICS sectors with the materials ( +10.3 %), consumer staples ( +7.7 %), and energy ( +7.1 %) sectors Consumer Disc (13.8%) providing the largest contribution. Six of the Russell 2000's Consumer Staples (3.5% economic sectors managed to outpace the 3.9% return of the core index for the 4th quarter. Health Care (14.3% Financials (20.3 %) • For the year, seven of the ten GICS sectors in the Russell Info Technology (18.3%) 2000 posted annual returns in excess of 20 %. In fact, three sectors posted returns in excess of 50 %. Only the financial Telecom Services (1.0% sector, which returned -1.5 %, posted a negative result for the Utilities (3.2% year Russell 2000 7.1% 41.0% 10.3% 60.9% 3.7% 13.9% 4.1% 60.8% 7.7% 23.8% 2.7% 22.6% 1.8% 3.4% 59.9% 5.8% 23.9 7.0 � 7.9% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Source: Thompson Financial THE ✓ 4 BOGDAHN ` \ GROUP The Market Environment Quality Rankings* Breakdown by Weight and Quarterly Performance Period Ended: December 31, 2009 ■ Within the Russell 1000 index, the performance of each of the quality segments, with the exception of those classified as "not available ", were spread over a relatively narrow spectrum during the 4th quarter. Of the companies that received a rating, "B" rated stocks turned in the strongest performance with a return of +7.2 %, while "13 rated stocks returned a weaker but still solid +4.7% for the quarter. ■ With nearly 30% of the small cap Russell 2000 index being classified as "not rated ", drawing sweeping quality conclusions from the data can be more problematic. However, for the issues with a weight in excess of 1 % in the breakdown, there appears to be a clear advantage to quality in smaller cap issues with the "A +" and "A" rated segments of the index leading performance for the quarter. Russell 000 Quality Breakdown A+ Average Weight 10.6% QTR Return 5.5% A 10.7% 7.0% A- 14.1% 4.8% B+ 16.9% 6.5% B 5.9% 7.2% B- 28.1% 4.7% c 2.1% 6.5% D 0.0% 0.0% Not Rated 10.8% 8.8% N/A Russell 000 Index 0.8% 100.0% 14.2% Russell 000 Quality Breakdown A+ Average Weight 3.1% QTR Return 6.2% A 5.0% 4.6% A- 0.7% -0.2% B+ 17.3% 4.6% B 20.4% 2.5% B- 12.2% 4.3% c 11.2% 1.1% D 0.2% 16.6% Not Rated 29.3% 4.8% N/A Russell iii Index 0.6% 100.0% 10.0% Quality Rankings Table Highest I High I Above Average I Average I Below Average I Lower I Lowest I In Reorganization 'Standard and Poor's rankings are generated by a computerized system and are based on per -share earnings and dividend records of the most recent 10 years. - October 2005 report Source: Thompson Financial THE ✓ 5 BOGDAHN ` \ GROUP The Market Environment International and Regional Market Index Performance (# Countries) Period Ended: December 31, 2009 ■ For the first time since the equity markets turned positive back in March, international developed markets ( +2.2 %) lagged the performance of domestic equity markets across the capitalization spectrum. Another phenomenon visible in the performance of international developed markets during the 4t" quarter is the strength of the U.S. dollar (USD). Both the Europe and Pacific regions of the MSCI -EAFE index show stronger results in local currency vs. USD. ■ Emerging Markets continued its strong performance during the 4t" quarter with a return of +8.6 %. Unlike the developed markets, which were impacted by USD strength, the currency effect on the performance of the emerging markets index continued to be positive. This USD depreciation is visible in the 4t" quarter performance of each of the emerging market country segments. ■ Over the trailing one -year period, the USD's broad deprecation against various foreign currencies is evident. This USD deprecation had a positive impact for U.S. investors on un- hedged international returns. ■ In contrast to the domestic indices which were driven by information technology and health care results, the GICS sector attribution of both the EAFE and ACWIxUS indices illustrates the largest strength coming from exposure to materials and consumer staples issues. While financial sector weakness was evident in both indices ( -4.5% & - 1.8 %), the information technology and utilities sectors also posted negative results in the EAFE index. Source: MSCI Capital Markets 6 ■QTR (USD) QTR (Local) AC World US (44) WORLD x US (22) EAFE (2 1) Europe (16) Pacific (5) Emerging Mkt (22) EM Europe (5) EM Asia (8) EM Latin Amer (7) ■1 -Year (USD) ❑ 1 -Year (Local) AC World x US (44) WORLD x US (22) EAFE (21) Europe (16) Pacific (5) Emerging Mkt (22) EM Europe (5) EM Asia (8) EM Latin Amer (7) Quarter Performance M3.8% 4.1 2 5% 3.3% 2.2% 3.4% NL % 4.0 a1% 2.1% 4.2% 6.6% 6.8% 4.5% 2.3 0.0% 5.0% 8.6% . 9.3% 12.5% 10.0% 15.0% One -Year Performance 42.1 % 32. 34.4% 26.0% 32. 4 6.8 9 % 79.0% 62.8% 86.2 73.6 74.2 68.1 104.2% 63.2 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% THE ` BOGDAHN GROUP The Market Environment U.S. Dollar International Index Attribution & Country Detail Period Ended: December 31, 2009 Source: MSCI Capital Markets, & Franklin/Templeton Country United Kingdom Ending Weight 21.6% Ending Weight 15.2% Return 7.0% Energy 8.4% 7.0% 34.9% Materials 10.4% 13.2% 70.0% Industrials 11.2% 1.5% 31.8% Consumer Discretionary 9.7% 2.9% 38.0% Consumer Staples 10.1% 8.1% 32.2% Health Care 8.4% 5.4% 18.3% Financials 25.5% -4.5% 38.7% Information Technology 4.8% -2.6% 21.9% Telecommunication Services 5.8% 1.6% 16.6% Utilities Total 5.9% 11 1' -0.3% 5.3% 43.0% Sweden 2.5% 1.8% Source: MSCI Capital Markets, & Franklin/Templeton Country United Kingdom Ending Weight 21.6% Ending Weight 15.2% Return 7.0% Energy 11.2% 7.3% 51.2% Materials 12.0% 12.7% 76.5% Industrials 9.8% 2.4% 36.0% Consumer Discretionary 8.4% 4.4% 45.9% Consumer Staples 8.5% 9.2% 36.3% Health Care 6.4% 6.0% 19.8% Financials 25.8% -1.8% 48.6% Information Technology 6.7% 2.7% 51.7% Telecommunication Services 6.2% 1.9% 19.8% Utilities Total 1 5.0% 100.0% 1 0.9% 1 11.2% 43.0% Sweden 2.5% 1.8% Source: MSCI Capital Markets, & Franklin/Templeton Country United Kingdom Ending Weight 21.6% Ending Weight 15.2% Return 7.0% Return 43.4% Japan 20.7% 14.5% -2.8% 6.4% France 11.1% 7.8% 2.2% 33.3% Australia 8.4% 5.9% 5.0% 76.8% Germany 8.1% 5.7% 2.2% 26.6% Switzerland 7.7% 5.4% 3.8% 26.6% Spain 4.6% 3.2% 1.6% 45.1% Italy 3.5% 2.4% -2.6% 28.0% Netherlands 2.7% 1.9% 3.8% 43.0% Sweden 2.5% 1.8% 3.6% 65.9% Hong Kong 2.3% 1.6% 3.6% 60.2% Singapore 1.5% 1.0% 9.8% 74.0% Finland 1.1% 0.8% -3.5% 12.7% Belgium 1.0% 0.7% 1.6% 58.6% Denmark 0.9% 0.6% -2.8% 37.1% Norway 0.8% 0.6% 14.9% 88.6% Greece 0.5% 0.4% - 22.4% 25.3% Austria 0.3% 0.2% -9.8% 44.8% Portugal 0.3% 0.2% 0.5% 1 41.7% Ireland 0.3% 0.2% -2.7% 12.9% New Zealand 0.1% 0.1% 0.1% 51.7% Canada 11 1' 1 7.3% 5.2% 57.4% China 4.0% 9.6% 62.6% Brazil 3.8% 13.1% 128.6% Korea 2.8% 2.3% 72.1% Taiwan 2.5% 8.1% 80.3% India 1.7% 7.7% 102.8% South Africa 1.5% 9.4% 57.8% Russia 1.4% 10.5% 104.9% Mexico 1.0% 13.7% 56.6% Israel 0.6% 14.1% 54.6% Malaysia 0.6% 6.7% 52.1% Indonesia 0.4% 5.2% 127.6% Turkey 0.3% 9.2% 98.5% Chile 0.3% 15.4% 86.7% Thailand 0.3% 1.1% 77.3% Poland 0.3% 12.9% 42.5% Colombia 0.1% -1.1% 84.4% Peru 0.1% 0.8% 72.1% Hungary 0.1% 3.5% 77.6% Egypt 0.1% -6.2% 39.7% Philippines 0.1% 1 9.8% 1 68.0% Czech Republic 0.1% -6.9% 27.8% Morocco Total Emerging Countries Total ACWIxUS Countries 0.0% 22.4% 100.0% -7.1% 8.6% 5.0 % 1' THE BQGDAHN GROUP The Market Environment Domestic Credit Sector & Broad Market Maturity Performance Period Ended: December 31, 2009 Quarter Performance I ■ Although the equity quality performance distribution showed a much more narrow range than in previous quarters, a move down the quality ladder in fixed income assets continued to reward investors willing to take on lower quality debt. In addition to the "quality- play" that is evident in the performance numbers of the various credit indices, the longer -dated broad index suffered relative to the shorter -term broad indices as a result of a steepening curve. This yield curve movement is particularly evident in the results of the chart's government benchmark, which recorded a -1.1 % return for the quarter. ■ For the quarter, high yield issues once again produced the strongest results with a return of +6.0 %. Results in investment grade segment of the credit market (BBB to AAA) step down dramatically from high yield results. These investment grade results range from +2.2% for BBB issues down to -0.8% for AAA issues. Outside of government and credit issues, the chart's mortgage- backed benchmark posted a mild but positive return of +0.5 %. ■ Each of the themes that are described in the paragraphs above for 4t" quarter are also evident, and much more dramatic, over the one -year period. This disparity is best illustrated in the more than 60% performance differential between the year's high yield return of +57.5% and the government return of -2.6 %. AAA AA A BBB <BBB Govt Mort 1 -3yr G /M /C 1 -5yr G /M /C 1 -10yr G /M /C 10 +yrG /M /C -0.s% 0.6% 0.7% 2.2% 6.0% -1.1% 0.5% G /M /C = Broad Market (Government + Mortgage + Corporate) 0.6% 0.5% 0.4% -2.6% 5.0% 5.0% 10.0% 0.0% One Year Performance AAA -0.7% AA 9.1 % A 15.9% BBB L31 <BBB Govt -2.6% Mort 5.8%. 1 -3yr G /M /C 1- 5yrG /M /C 1 -10yr G /M /C 10 +yrG /M /C -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 5.1% 5.4% 5.8% 1.8% .5% �� THE Source: Merrill Lynch Index System 8 ` OGDAHN GROUP The Market Environment Market Rate & Yield Curve Comparison Period Ended: December 31, 2009 ■ During the quarter, the Fed kept the target for the Fed funds rate unchanged at 0 -25 basis points, despite calls by many market observers to systematically remove the stimulative effects of such a low interest rate policy. The Fed continued to state in its press release that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. ■ The various indicators reported in the 2009 Market Rates charts continue to show improving credit conditions and more stable inflation expectations than were evident earlier in the year. ■ Reversing its move during the 3rd quarter, the Treasury yield curve increased at maturities beyond two years during 4t" quarter to their highest level of 2009. This steepening is particularly visible at the long end of the curve where rates spiked by 60 basis points during the quarter. ■ The benchmark 10 -year Treasury finished the quarter with a yield of 3.85 %. This yield represented an increase of 54 basis points from the yield at the end of the 3rd quarter (3.31 %) and a 160 basis point increase from the yield at the end of 2008 (2.25 %). Source: Mortgage -X.com , US Department of Treasury & St. Louis Fed 6.00 5.00 4.00 3.00 2.00 1.00 0.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 n nn Dec -08 Mar -09 Jun -09 Sep -09 Dec -09 Treasury Yield Curve t 12/31/2008 ❑ 6/30/2009 X9/30/2009 —c 0 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr r� THE 9 t BQGDAHN GROUP 2009 Market Rates The Market Environment Decades in Review Period Ended: December 31, 2009 ■ Despite some exciting years along the way, the decade that ended December 31, 2009 represented the weakest calendar decade on record for stocks back to the 1930's. In contrast to the returns on stocks, both bond and cash results for the 2000's were consist with long -term averages. 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% 25.00 20.00 15.00 10.00 5.00 0.00 -5.00 -1000 Returns by Decade ■ The rolling decade chart presents a similar visual story as the "Returns by Decade" chart. However, by moving the inception period back to 1926 and rolling the 10 -year periods forward by month, some mid 1930's 10 -year returns were lower than those recorded during the 2000's decade. Source: /bbotson & Zephyr Associates e a � e N e N r e e N ' e O O OD c p M T M e O � e Oi O ■Stocks ■Bonds ■Cash 1930's 1940's 1950's 1960's 1970's 1980's 1990's 2000's Average Rolling 10 -Year Returns — Equity —Bonds —Cash Dec -35 Mar -45 Jun -54 Sep -63 Dec -72 Mar -82 Jun -91 Sep -00 Dec -09 r� THE 10 t BQGDAHN GROUP The Market Environment A Closer Look at the Measurement of CPI -U & Core CPI Period Ended: December 31, 2009 ■ The Consumer Price Index for All Urban Consumers (CPI -U) is a measure of the average change in prices over time of goods and services purchased by consumers (inflation). The CPI -U data is calculated on both an unadjusted (chart) and a seasonally adjust basis. While the seasonally adjusted data is often used for analyzing economic trends, the unadjusted data is used extensively for escalation purposes. The December 2009 year- over -year change in CPI -U was 2.7 %. ■ The Core Consumer Price Index is a more narrow measure of inflation in that it excludes the food and energy segments of the CPI -U index. These segments are often excluded by analysts due to their volatility and susceptibility to price shocks that cannot be dampened through monetary policy. Although both the CPI -U and the Core CPI have averaged 4.0% over the analysis period, the chart clearly shows that the two measures have diverged significantly at various times in history. The December 2009 year- over -year change in Core CPI was 1.8 %. ■ The table illustrates the various components of CPI -U as well as the items that are excluded in the measurement of Core CPI. This data is from the December 2009 report from the Bureau of Labor Statistics (BLS). Each major component of the index is made up of several sub - segments. Housing as an example, which also carries the heaviest weight in the index, is made up of lodging, fuels & utilities, and household furnishings & operations. Change vs. Prior Year 15.00 12.00 9.00 6.00 3.00 0.00 -3 00 CPI -U Core CPI -- Average (both series) Jan -58 Jan -68 Jan -78 Jan -88 Jan -98 Jan -08 Components Food & Bev 15.8% -0.4% Housing 43.4% -0.3% Apparel 3.7% 1.9% Transportation 15.3% 14.4% Medical Care 6.4% 3.4% Recreation 5.7% -0.4% Education & Communication 6.3% 2.4% Other Urban CP1 All Less Food 3.4% 7.6% 8.0% 18.2% Less Energy 14.6% -0.5% BLS 2008 Relative Importance Source: St. Louis Fed & BLS 11 4.0% 2.7% 1.8% THE ` J BOGDAHN GROUP Defined Benefit Plan & Trust for Employees of the City of Winter Springs December 31, 2009 September 30, 2009 : $17,327,600 December 31, 2009 : $18,269,494 Segments Market Value Allocation Segments Market Value Allocation ■ Domestic Equity 7,849,480 45.3 ■ Domestic Equity 8,323,521 45.6 ❑ International Equity 2,318,143 13.4 ❑ International Equity 2,431,014 13.3 ❑ Fixed Income 6,163,134 35.6 ❑ Fixed Income 6,218,135 34.0 ■ Real Estate 639,006 3.7 ■ Real Estate 605,618 3.3 ■ Cash Equivalent 357,836 2.1 ■ Cash Equivalent 691,206 3.8 12 THE BOGDAHN ` GROUP Defined Benefit Plan & Trust for Employees of the City of Winter Springs December 31, 2009 September 30, 2009 : $17,327,600 ■ Galliard Core Fixed Income ■ Lateef Asset Mgmt.Equity ■ Dalton, Greiner, Hartman, Maher & Co ■ RBC Global (Voyageur) ■ Galliard TIPS ❑ American Stable Value Fund ❑ Receipt & Disbursement December 31, 2009 : $18,269,494 Market Value Allocation Market Value Allocation 5,089,040 29.4 ■ Galliard Core Fixed Income 5,123,295 28.0 4,480,407 25.9 ■ Lateef Asset Mgmt.Equity 4,854,033 26.6 3,596,107 20.8 ■ Dalton, Greiner, Hartman, Maher & Co. 3,971,638 21.7 2,318,143 13.4 ■ RBC Global (Voyageur) 2,431,014 13.3 1,116,517 6.4 ■ Galliard TIPS 1,141,913 6.3 639,006 3.7 ❑ American Stable Value Fund 605,618 3.3 88,380 0.5 ❑ Receipt & Disbursement 141,982 0.8 13 THE BOGDAHN ` GROUP Defined Benefit Plan & Trust for Employees of the City of Winter Springs Asset Allocation As of December 31, 2009 Asset Allocation History by Portfolio Domestic Equity Portfolio Snow Capital Mgmt. Equity Dalton, Greiner, Hartman, Maher & Co. Lateef Asset Mgmt.Equity International Equity Portfolio RBC Global (Voyageur) Total Fixed Portfolio Galliard Core Fixed Income Galliard TIPS American Stable Value Fund Receipt & Disbursement Total Fund Portfolio 8,825,671 48.31 3,971,638 21.74 4,854,033 26.57 2,431,014 13.31 2,431,014 13.31 6,265,208 34.29 5,123,295 28.04 1,141,913 6.25 605,618 3.31 141,982 0.78 18,269,494 100.00 8,076,514 46.61 3,596,107 20.75 4,480,407 25.86 2,318,143 13.38 2,318,143 13.38 6,205,557 35.81 5,089,040 29.37 1,116,517 6.44 639,006 3.69 88,380 0.51 17,327,600 100.00 6,767,374 44.28 2,985,975 19.54 3,781,399 24.74 1,762,078 11.53 1,762,078 11.53 5,893,704 38.56 4,813,261 31.49 1,080,442 7.07 714,964 4.68 146,556 0.96 15,284,676 100.00 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 42.72 2,519,390 18.49 3,302,683 24.24 1,353,407 9.93 1,353,407 9.93 5,296,491 38.87 4,304,428 31.59 992,062 7.28 904,042 6.63 251,710 1.85 13,627,723 100.00 Historical Asset Allocation By 100.E 80. 0 60. 0 0 U 40. d 20. 0. 9/09 Domestic Equity International Equity 10/09 0 Fixed Income 11/09 1 Real Estate 12/09 Cash Equivalent 14 THE BOGDAHN ` GROUP Defined Benefit Plan & Trust for Employees of the City of Winter Springs Financial Reconciliation As of December 31, 2009 Financial Reconciliation Ouarter to Date Domestic Equity Portfolio 8,076,514 239,400 - - - 17,941 -981 31,854 496,825 8,825,671 Lateef Asset Mgmt.Equity 4,480,407 119,700 - - 11,199 -537 13,757 251,905 4,854,033 Dalton, Greiner, Hartman, Maher & Co. 3,596,107 119,700 - -6,742 -443 18,097 244,920 3,971,638 International Equity Portfolio 2,318,143 80,774 - - -5,174 -413 4,902 32,782 2,431,014 RBC Global (Voyageur) 2,318,143 80,774 - - -5,174 -413 4,902 32,782 2,431,014 Total Fixed Portfolio 6,205,557 209 - - -4,419 -766 4,771 59,856 6,265,208 Galliard Core Fixed Income 5,089,040 209 - - -4,000 -630 - 38,676 5,123,295 Galliard TIPS 1,116,517 - - - -419 -136 4,771 21,180 1,141,913 American Stable Value Fund 639,006 -4,754 - - -1,636 - 9,356 - 36,355 605,618 Receipt & Disbursement 88,380 - 315,629 551,430 - 177,335 - -4,867 3 - 141,982 Total Fund Portfolio 17,327,600 - 551,430 - 177,335 - 29,169 -7,026 50,886 553,109 18,269,494 Financial Reconciliation Fiscal Year to Date Domestic Equity Portfolio 8,076,514 239,400 - - - 17,941 -981 31,854 496,825 8,825,671 Lateef Asset Mgmt.Equity 4,480,407 119,700 - - 11,199 -537 13,757 251,905 4,854,033 Dalton, Greiner, Hartman, Maher & Co. 3,596,107 119,700 - -6,742 -443 18,097 244,920 3,971,638 International Equity Portfolio 2,318,143 80,774 - - -5,174 -413 4,902 32,782 2,431,014 RBC Global (Voyageur) 2,318,143 80,774 - - -5,174 -413 4,902 32,782 2,431,014 Total Fixed Portfolio 6,205,557 209 - - -4,419 -766 4,771 59,856 6,265,208 Galliard Core Fixed Income 5,089,040 209 - - -4,000 -630 - 38,676 5,123,295 Galliard TIPS 1,116,517 - - - -419 -136 4,771 21,180 1,141,913 American Stable Value Fund 639,006 -4,754 - - -1,636 - 9,356 - 36,355 605,618 Receipt & Disbursement 88,380 - 315,629 551,430 - 177,335 - -4,867 3 - 141,982 Total Fund Portfolio 17,327,600 - 551,430 - 177,335 - 29,169 -7,026 50,886 553,109 18,269,494 15 THE BOGDAHN ` GROUP Defined Benefit Plan & Trust for Employees of the City of Winter Springs Comparative Performance Trailing Returns As of December 31, 2009 otal Fund Portfolio (Net) 3.28 (64) 3.28 (64) 22.86 (26) -2.23 (85) 0.83 (91) 1.55 (94) 2.78 N/A 11/01/2000 otal Fund Policy 3.40 (53) 3.40 (53) 18.14 (66) -0.78 (57) 2.36 (53) 2.91 (64) 2.16 N/A lifference -0.12 -0.12 4.72 -1.45 -1.53 -1.36 0.62 .11 Public Plans -Total Fund Median 3.42 3.42 19.66 -0.55 2.45 3.30 N/A otal Fund (New Mgrs) (Net) 3.28 (64) 3.28 (64) 22.86 (26) N/A N/A N/A -6.25 N/A 10/01/2007 otal Fund Policy 3.40 (53) 3.40 (53) 18.14 (66) -0.78 (57) 2.36 (53) 2.91 (64) -4.02 N/A lifference -0.12 -0.12 4.72 N/A N/A N/A -2.23 .11 Public Plans -Total Fund Median 3.42 3.42 19.66 -0.55 2.45 3.30 N/A otal Fund Portfolio (Gross) 3.45 (49) 3.45 (49) 23.61 (18) -1.60 (74) 1.48 (80) 2.23 (85) 3.48 N/A 11/01/2000 otal Fund Policy 3.40 (53) 3.40 (53) 18.14 (66) -0.78 (57) 2.36 (53) 2.91 (64) 2.16 N/A lifference 0.05 0.05 5.47 -0.82 -0.88 -0.68 1.32 .11 Public Plans -Total Fund Median 3.42 3.42 19.66 -0.55 2.45 3.30 N/A otal Fund (New Mgrs) (Gross) 3.45 (49) 3.45 (49) 23.61 (18) N/A N/A N/A -5.70 N/A 10/01/2007 otal Fund Policy 3.40 (53) 3.40 (53) 18.14 (66) -0.78 (57) 2.36 (53) 2.91 (64) -4.02 N/A lifference 0.05 0.05 5.47 N/A N/A N/A -1.68 .11 Public Plans -Total Fund Median 3.42 3.42 19.66 -0.55 2.45 3.30 N/A Returns for periods greater than one year are annualized. Returns are expressed as percentages. 10/1/2007 inception date represents the date new managers were THE hired. Total Fund Policy represents new policy beginning 10/1/2009. Old policy geometrically linked to new policy. See benchmark history for details. 16 D OGDAHN ` B GROUP Defined Benefit Plan & Trust for Employees of the City of Winter Springs Comparative Performance Trailing Returns As of December 31, 2009 otal Equity Portfolio otal Equity Policy omestic Equity Portfolio otal Domestic Equity Policy lifference S Core /LC Equity (SA +CF) Median iternational Equity Portfolio ISCI EAFE Index lifference ul Active Value Equity (SA +CF) Median otal Fixed Portfolio otal Fixed Policy 5.34 5.34 37.45 -4.84 -0.30 1.05 2.12 01/01/2001 5.06 5.06 25.29 -5.92 -0.60 0.74 0.41 0.28 0.28 12.16 1.08 0.30 0.31 1.71 6.43 (26) 6.43 (26) 33.67 (15) -3.92 (31) -0.06 (47) 1.06 (55) 1.80 N/A 11/01/2000 5.90 (53) 5.90 (53) 26.30 (49) -5.67 (68) -0.71 (70) 0.39 (80) -0.85 N/A 0.53 0.53 7.37 1.75 0.65 0.67 2.65 5.97 5.97 25.92 -5.18 -0.29 1.25 N/A 1.54 (63) 1.54 (63) 53.51 (7) -8.57 (89) -0.69 (90) 2.02 (94) 3.25 N/A 11/01/2000 2.22 (48) 2.22 (48) 32.46 (49) -5.57 (70) 1.66 (73) 4.02 (77) 3.37 N/A 0.68 -0.68 21.05 -3.00 -2.35 -2.00 -0.12 2.04 2.04 31.78 -3.98 3.33 5.43 N/A 1.04 1.04 13.04 5.33 4.88 4.42 5.83 11/01/2000 0.53 0.53 6.46 6.11 5.64 4.99 6.06 0.51 0.51 6.58 -0.78 -0.76 -0.57 -0.23 Returns for periods greater than one year are annualized. Returns are expressed as percentages. 10/1/2007 inception date represents the date new managers were THE hired. Total Fund Policy represents new policy beginning 10/1/2009. Old policy geometrically linked to new policy. See benchmark history for details. 17 D OGDAHN ` B GROUP Defined Benefit Plan & Trust for Employees of the City of Winter Springs Comparative Performance Trailing Returns As of December 31, 2009 ton, Greiner, Hartman, Maher & Co. 7.17 (1) 7.17 (1) N/A N/A N/A N/A 33.26 N/A 05/01/2009 sell 3000 Value Index 4.17 (83) 4.17 (83) 19.76 (97) -8.91 (91) -1.94 (82) -0.24 (85) 29.84 N/A Terence 3.00 3.00 N/A N/A N/A N/A 3.42 All Cap Value Equity (SA +CF) Median 5.08 5.08 29.88 -3.78 0.41 2.23 N/A eef Asset Mgmt.Equity 5.83 (77) 5.83 (77) 31.88 (61) N/A N/A N/A -4.44 N/A 10/01/2007 .sell 1000 Growth Index 7.94 (28) 7.94 (28) 37.21 (32) -1.89 (49) 0.75 (49) 1.63 (60) -7.54 N/A Ference -2.11 -2.11 -5.33 N/A N/A N/A 3.10 Growth/LC Equity (SA +CF) Median 7.04 7.04 33.99 -1.99 0.70 1.99 N/A C Global (Voyageur) 1.54 (63) 1.54 (63) 53.51 (7) N/A N/A N/A N/A 10/01/2007 CI EAFE Index 2.22 (48) 2.22 (48) 32.46 (49) -5.57 (70) 1.66 (73) 4.02 (77) -12.45 N/A Ference -0.68 -0.68 21.05 N/A N/A N/A N/A Active Value Equity (SA +CF) Median 2.04 2.04 31.78 -3.98 3.33 5.43 N/A liard Core Fixed Income 0.76 (37) 0.76 (37) 13.71 (11) N/A N/A N/A 4.76 N/A 10/01/2007 clays Capital Intermediate Aggregate 0.53 (57) 0.53 (57) 6.46 (67) 6.11 (65) 5.72 (65) 4.97 (64) 6.35 N/A Ference 0.23 0.23 7.25 N/A N/A N/A -1.59 Int Fixed Income (SA +CF) Median 0.62 0.62 7.85 6.51 5.99 5.20 N/A liard TIPS 2.32 (17) 2.32 (17) 10.12 (93) N/A N/A N/A 6.24 N/A 10/01/2007 clays Capital TIPS 1.76 (84) 1.76 (84) 11.41 (39) 6.69 (77) 5.11 (80) 4.65 (80) 6.08 N/A Ference 0.56 0.56 -1.29 N/A N/A N/A 0.16 TIPS (SA +CF) Median 1.91 1.91 11.23 6.97 5.45 4.82 N/A erican Stable Value Fund -4.23 (71) -4.23 (71) -30.00 (55) N/A N/A N/A -15.87 N/A 10/01/2007 REiF Property Index -2.11 (11) -2.11 (11) -16.85 (6) -3.41 (8) 1.24 (9) 4.75 (1) -9.30 N/A Ference -2.12 -2.12 -13.15 N/A N/A N/A -6.57 Private RE -Open End (SA +CF) Median -3.07 -3.07 -29.33 -11.21 -3.75 1.74 N/A Returns for periods greater than one year are annualized. Returns are expressed as percentages. 10/1/2007 inception date represents the date new managers were THE hired. Total Fund Policy represents new policy beginning 10/1/2009. Old policy geometrically linked to new policy. See benchmark history for details. 18 D OGDAHN ` B GROUP Defined Benefit Plan & Trust for Employees of the City of Winter Springs Comparative Performance Fiscal Year Returns As of December 31, 2009 Total Fund Portfolio (Net) 0.73 (59) -16.82 (94) 13.03 (73) 7.89 (86) 11.07 (88) 12.18 (62) 12.49 (94) Total Fund Policy 0.33 (64) -12.11 (35) 11.97 (87) 9.55 (51) 10.76 (91) 11.65 (72) 18.84 (40) Difference 0.40 -4.71 1.06 -1.66 0.31 0.53 -6.35 All Public Plans -Total Fund Median 1.30 -13.01 14.25 9.55 14.10 12.63 18.22 Total Fund (New Mgrs) (Net) 0.68 (59) -16.82 (94) N/A N/A N/A N/A N/A Total Fund Policy 0.33 (64) -12.11 (35) 11.97 (87) 9.55 (51) 10.76 (91) 11.65 (72) 18.84 (40) Difference 0.35 -4.71 N/A N/A N/A N/A N/A All Public Plans -Total Fund Median 1.30 -13.01 14.25 9.55 14.10 12.63 18.22 Total Fund Portfolio (Gross) 1.44 (48) -16.46 (92) 13.92 (55) 8.62 (78) 11.82 (86) 13.05 (42) 13.34 (93) Total Fund Policy 0.33 (64) -12.11 (35) 11.97 (87) 9.55 (51) 10.76 (91) 11.65 (72) 18.84 (40) Difference 1.11 -4.35 1.95 -0.93 1.06 1.40 -5.50 All Public Plans -Total Fund Median 1.30 -13.01 14.25 9.55 14.10 12.63 18.22 Total Fund (New Mgrs) (Gross) 1.39 (49) -16.46 (92) N/A N/A N/A N/A N/A Total Fund Policy 0.33 (64) -12.11 (35) 11.97 (87) 9.55 (51) 10.76 (91) 11.65 (72) 18.84 (40) Difference 1.06 -4.35 N/A N/A N/A N/A N/A All Public Plans -Total Fund Median 1.30 -13.01 14.25 9.55 14.10 12.63 18.22 Returns for periods greater than one year are annualized. Returns are expressed as percentages. 10/1/2007 inception date represents the date new managers were THE hired. Total Fund Policy represents new policy beginning 10/1/2009. Old policy geometrically linked to new policy. See benchmark history for details. 19 D OGDAHN ` B GROUP Defined Benefit Plan & Trust for Employees of the City of Winter Springs Comparative Performance Fiscal Year Returns As of December 31, 2009 Total Equity Portfolio -1.09 -25.61 18.52 10.83 15.40 17.60 18.76 Total Equity Policy -6.91 -21.98 16.44 12.51 14.30 15.14 24.64 Difference 5.82 -3.63 2.08 -1.68 1.10 2.46 -5.88 Domestic Equity Portfolio -4.29 (26) -21.66 (55) 17.58 (36) 9.29 (75) 13.77 (59) 16.77 (20) 17.81 (91) Total Domestic Equity Policy -6.91 (59) -21.98 (64) 16.44 (58) 10.79 (50) 12.25 (81) 13.87 (59) 24.40 (44) Difference 2.62 0.32 1.14 -1.50 1.52 2.90 -6.59 US Core /Large Cap Equity (SA +CF) Median -6.56 -21.34 16.68 10.78 14.37 14.27 24.10 International Equity Portfolio 11.87 (21) -39.55 (100) 23.63 (60) 19.84 (68) 26.83 (53) 22.94 (78) 27.32 (71) MSCI EAFE Index 3.80 (57) -30.13 (75) 25.38 (45) 19.65 (70) 26.32 (60) 22.52 (79) 26.54 (75) Difference 8.07 -9.42 -1.75 0.19 0.51 0.42 0.78 International Active Value Equity (SA +CF) Median 4.82 -27.22 24.71 20.92 27.00 25.43 30.08 Total Fixed Portfolio 10.53 0.64 4.96 3.27 2.81 2.68 5.24 Total Fixed Policy 9.69 4.16 5.33 3.55 2.80 3.68 5.40 Difference 0.84 -3.52 -0.37 -0.28 0.01 -1.00 -0.16 Returns for periods greater than one year are annualized. Returns are expressed as percentages. 10/1/2007 inception date represents the date new managers were THE hired. Total Fund Policy represents new policy beginning 10/1/2009. Old policy geometrically linked to new policy. See benchmark history for details. 20 D OGDAHN ` l � GROUP Defined Benefit Plan & Trust for Employees of the City of Winter Springs Comparative Performance Fiscal Year Returns As of December 31, 2009 Dalton, Greiner, Hartman, Maher & Co. Russell 3000 Value Index Difference US All Cap Value Equity (SA +CF) Median Lateef Asset Mgmt.Equity Russell 1000 Growth Index Difference US Growth/Large Cap Equity (SA +CF) Median RBC Global (Voyageur) MSCI EAFE Index Difference International Active Value Equity (SA +CF) Median Galliard Core Fixed Income Barclays Capital Intermediate Aggregate Difference US Intermediate Fixed Income (SA +CF) Median Galliard TIPS Barclays Capital TIPS Difference US TIPS (SA +CF) Median American Stable Value Fund NCREIF Property Index Difference US Private Real Estate -Open End N/A N/A N/A N/A N/A N/A N/A -10.79 (96) -22.70 (69) 13.73 (70) 14.55 (9) 16.78 (59) 20.89 (56) 24.89 (73) N/A N/A N/A N/A N/A N/A N/A -2.67 -20.17 16.50 10.28 19.36 21.13 28.58 0.53 (19) -15.13 (15) N/A N/A N/A N/A N/A -1.85 (34) -20.88 (52) 19.35 (55) 6.04 (58) 11.60 (71) 7.51 (74) 25.92 (27) 2.38 5.75 N/A N/A N/A N/A N/A -3.25 -20.64 19.84 6.79 14.04 10.04 22.36 11.87 (21) N/A N/A N/A N/A N/A N/A N/A 3.80 (57) -30.13 (75) 25.38 (45) 19.65 (70) 26.32 (60) 22.52 (79) 26.54 (75) 8.07 N/A N/A 6.10 N/A N/A N/A N/A N/A 4.82 -27.22 24.71 20.92 27.00 25.43 30.08 12.08 (40) -1.68 (94) N/A N/A N/A N/A N/A 9.69 (81) 4.16 (33) 5.33 (66) 3.84 (57) 2.23 (41) 3.39 (27) 4.94 (65) 2.39 -5.84 N/A N/A N/A N/A N/A 11.41 3.21 5.46 3.90 2.08 2.87 5.52 3.97 (91) 7.72 (14) N/A N/A N/A N/A N/A 5.67 (68) 6.20 (61) 4.97 (58) 1.91 (75) 5.32 (52) 7.52 (38) 7.22 (77) -1.70 1.52 N/A N/A N/A N/A N/A 6.10 6.35 4.98 2.08 5.36 7.50 7.42 -32.42 (37) 4.72 (38) N/A N/A N/A N/A N/A -22.09 (6) 5.27 (29) 17.31 (66) 17.62 (51) 19.19 (17) 12.41 (50) 7.83 (82) -10.33 -0.55 N/A N/A N/A N/A N/A Median -33.38 3.23 18.34 17.77 13.30 12.35 9.60 Returns for periods greater than one year are annualized. Returns are expressed as percentages. 10/1/2007 inception date represents the date new managers were THE hired. Total Fund Policy represents new policy beginning 10/1/2009. Old policy geometrically linked to new policy. See benchmark history for details. 21 D OGDAHN ` B GROUP Winter Springs General Employees Total Fund (Net) December 31, 2009 Financial Reconciliation Market Value Market Value As of Net Contributions Distributions Fees Expenses Income Capital As of 9/30/2009 Transfers Apprec./ Deprec. 12/31/2009 Total Fund (Net) 17,328 - 55j -177 -29 -7 51 553 18,269 Financial Reconciliation I I' III To December 1 I I Market Value Net Capital Market Value As of Transfers Contributions Distributions Fees Expenses Income Apprec./ Deprec. As of 9/30/2009 12/31/2009 Total Fund (Net) 17,328 551 -177 -29 -7 1 553 18,269 Peer Group Public Plans-To Plans-Total Fund Cummulative Performance ,100.0- 45.00 30.00 15.00 0 c L 0.00 a -15.00 -30.00 S145.0- $130.0 HU $115.0 $100.0 1 Oct -2009 1 2 3 4 5 $85.0 Quarter To Year Years Years Years Years Dec -2009 ■ Total Fund (Net) 3.28 (64) 3.28 (64) 22.86 (26) -5.93 (77) -2.23 (85) 0.83 (91) 1.55 (94) • Total Fund Policy 3.40 (53) 3.40 (53) 18.14 (66) -4.11 (43) -0.78 (57) 2.36 (53) 2.91 (64) $70.0 12/00 12/02 12/04 12/06 12/09 Median 3.42 3.42 19.70 -4.43 -0.55 2.45 3.30 -Total Fund (Net) -Total Fund Policy Comparative 1 Performance 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Sep -2009 Jun -2009 Mar -2009 Dec -2008 Sep -2008 Jun -2008 Total Fund (Net) 11.36 (54) 11.59 (35) -4.27 (26) -15.33 (87) -6.59 (31) -4.79 (100) Total Fund Policy 10.55 (68) 10.13 (56) -6.14 (61) -12.19 (45) -5.08 (8) -1.90 (93) All Public Plans -Total Fund Median 11.53 10.58 -5.70 -12.40 -7.54 -0.76 22 THE BOGDAHN ` GROUP Winter Springs General Employees Total Fund (Net) December 31, 2009 20.0 10.0 0 0.0 c -10.0 A 0 F -20.0 Over Performance Under Performance 20.0 30.0 Dec -2009 -20.0 -1 0J) 0.0 10.0 Total Fund Policy( %) f Ovcr Performance f UndcrPerformance Mar -2005 7.50 5.00 2.50 0.00 i -2.50 -5.00 -7.50 0 (H)0 c 25.00 A a � d 50.00 . V 40 GO 3/07 3/08 3/09 12/09 25- Median Median -75 75 -95 Count Count Count 2 (10 %) 9 (45 %) 9 (45 %) 9 (45 %) 10 (50 %) 1 (5 %) L a i 75.00 a 100.00 3/05 3/06 Total Period 5 -25 Count ■ Total Fund (Net) 20 0 (0 %) • Total Fund Policy 20 0 (0 %) 9.00 7.50 6.00 4.50 i 3.00 1.50 0.00 0 0.00 5.00 10.00 15.00 20.00 25.00 0.00 4.50 9.00 13.50 18.00 22.50 Risk (Standard Deviation %) Risk (Standard Deviation %) Return Standard Deviation Return Standard Deviation ■ Total Fund (Net) -2.23 14.63 ■ Total Fund (Net) 1.55 11.81 Total Fund Policy -0.78 12.71 ♦ Total Fund Policy 2.91 10.42 Median -0.55 13.57 Median 3.30 11.20 Hist Tracking Up Down Sharpe Downside Error Market Market Alpha IR Ratio Beta Risk Capture Capture Total Fund (Set) 3.11 109.64 121.23 -1.20 -0.38 -0.24 1.13 10.70 Total Fund Pulict 0.00 100.00 100.00 0.00 N/A -0.18 1.00 8.94 Hist Tracking Up Down Sharpe Downside Error Market Market Alpha IR Ratio Beta Risk Capture Capture Total Fund (Net) 2.48 101.65 120.22 -1.56 -0.47 -0.06 1.11 8.32 Total Fund Policy 0.00 100.00 100.00 0.00 N/A 0.05 1.00 6.96 23 THE BOGDAHN ` GROUP Winter Springs General Employees Domestic Equity Portfolio December 31, 2009 Financial Reconciliation 0 c L 0.00 a Market Value Net -15.00 -30.00 Capital Market Value As of Transfers Contributions Distributions Fees Expenses Income Apprec./ Deprec. As of 9/30/2009 12/31/2009 Domestic Equity Portfolio 8,077 239 - -18 -1 32 497 8,826 Financial Reconciliation October 00 To December 00 Market Value Net Capital Market Value As of Transfers Contributions Distributions Fees Expenses Income Apprec./ Deprec. As of 9/30/2009 12/31/2009 Domestic Equity Portfolio 8,077 -18 -1 32 497 8,826 Peer Group Analysis - US Core/Large Cap Equity Performance $160.0 45.00 30.00 $140.0 $120.0 $118.9 $100.0 $100.0 1 Oct -2009 1 2 3 4 5 $80.0 Quarter To Year Years Years Years Years Dec -2009 ■ Domestic Equity Portfolio 6.43 (26) 6.43 (26) 33.67 (15) -9.18 (31) -3.92 (31) -0.06 (47) 1.06 (55) • S &P 500 6.04 (48) 6.04 (48) 26.46 (47) -10.74 (63) -5.63 (67) -0.67 (69) 0.42 (79) $60.0 12/00 12/02 12/04 12/06 12/09 Median 5.97 5.97 25.92 -10.38 -5.18 -0.29 1.25 - Domestic Equity Portfolio -S &P 500 Comparative 1 Performance 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Sep -2009 Jun -2009 Mar -2009 Dec -2008 Sep -2008 Jun -2008 Domestic Equity Portfolio 15.75 (31) 17.93 (14) -7.99 (22) -23.80 (87) -4.69 (9) -6.34 (99) S &P 500 15.61 (36) 15.93 (41) -11.01 (69) -21.94 (60) -8.37 (40) -2.73 (82) US Core /Large Cap Equity (SA +CF) Median 15.25 15.54 -10.47 -21.67 -8.97 -1.19 24 THE 7 6*111 BOGDAHN ` GROUP 15.00 0 c L 0.00 a -15.00 -30.00 $140.0 $120.0 $118.9 $100.0 $100.0 1 Oct -2009 1 2 3 4 5 $80.0 Quarter To Year Years Years Years Years Dec -2009 ■ Domestic Equity Portfolio 6.43 (26) 6.43 (26) 33.67 (15) -9.18 (31) -3.92 (31) -0.06 (47) 1.06 (55) • S &P 500 6.04 (48) 6.04 (48) 26.46 (47) -10.74 (63) -5.63 (67) -0.67 (69) 0.42 (79) $60.0 12/00 12/02 12/04 12/06 12/09 Median 5.97 5.97 25.92 -10.38 -5.18 -0.29 1.25 - Domestic Equity Portfolio -S &P 500 Comparative 1 Performance 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Sep -2009 Jun -2009 Mar -2009 Dec -2008 Sep -2008 Jun -2008 Domestic Equity Portfolio 15.75 (31) 17.93 (14) -7.99 (22) -23.80 (87) -4.69 (9) -6.34 (99) S &P 500 15.61 (36) 15.93 (41) -11.01 (69) -21.94 (60) -8.37 (40) -2.73 (82) US Core /Large Cap Equity (SA +CF) Median 15.25 15.54 -10.47 -21.67 -8.97 -1.19 24 THE 7 6*111 BOGDAHN ` GROUP Winter Springs General Employees Domestic Equity Portfolio December 31, 2009 30.0 18.0 0 a 6.0 Over Performance t a -6.0 w -18.0 Z5 -30.0 I� o -30.0 -18.0 -6.0 6.0 A S &P500( %) f llndcrPerformance f OverPerfornunce Mar -2005 10.00 0.00 -10.00 c L 7 -20.00 d a -30.00 a 25.00 a d c 50.00 i a i 75.00 a 100.00 3/05 3/06 3/07 3/08 3/09 12/09 Total Period 5 -25 25- Median Median -75 75 -95 Count Count Count Count 20 0 (0 %) 7 (35 %) 7 (35 %) 6 (30 %) 20 0 (0 %) 0 (0 %) 13 (65 %) 7 (35 %) ■ Domestic Equity Portfolio • S &P 500 15.00 10.00 5.00 0 � 0.00 L -5.00 a -10.00 0.00 10.00 20.00 30.00 40.00 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 -3.92 22.02 ■ Domestic Equity Portfolio 1.06 17.56 • S &P 500 -5.63 21.21 • S &P 500 0.42 17.17 Median -5.18 21.07 - Median 1.25 17.11 Hist Up Down Tracking Sharpe Downside Error Market Market Alpha IR Ratio Beta Risk Capture Capture Domestic Equity Portfolio 5.59 105.38 97.54 2.06 0.36 -0.20 1.02 16.20 S &P 500 0.00 100.00 100.00 0.00 N/A -0.31 1.00 15.85 Hist Up Down Tracking Sharpe Downside Error Market Market Alpha IR Ratio Beta Risk Capture Capture Domestic Equity Portfolio 43.94 138.67 97.88 8.62 0.19 0.16 0.93 23.85 S &P 500 0.00 100.00 100.00 0.00 N/A -0.07 1.00 12.47 Under Performance 18.0 30.0 Dec -2009 25 THE BOGDAHN ` GROUP Winter Springs General Employees Lateef Asset Mgmt.Equity December 31, 2009 Financial Reconciliation Market Value Net Capital Market Value As of Transfers Contributions Distributions Fees Expenses Income Apprec./ Deprec. As of 9/30/2009 12/31/2009 Lateef Asset Mgmt.Equity 4,480 120 - - -11 -1 14 252 4,854 Financial Reconciliation October 00 To December 00 Quarter To Year Years Years Years Market Value Net Capital Market Value As of Transfers Contributions Distributions Fees Expenses Income Apprec.// Deprec. As of 9/30/2009 12/31/2009 Lateef Asset Mgmt.Equity 4,480 120 -11 -1 14 252 4,854 Group Peer Analysis - US Growth/Large Cap Equity Performance • Russell 1000 Growth Index 7.94 (28) 7.94 (28) $110.0 -8.09 (35) -1.89 (49) 60.00 40.00 20.00 0 c L 0.00 a -20.00 -40.00 $100.0 $90.0- $ 90.3 $83.8 $70.0- 1 Oct -2009 1 2 3 4 5 $60.0 Quarter To Year Years Years Years Years Dec -2009 ■ Lateef Asset Mgmt.Equity 5.83 (77) 5.83 (77) 31.88 (61) -5.86 (15) N/A N/A N/A • Russell 1000 Growth Index 7.94 (28) 7.94 (28) 37.21 (32) -8.09 (35) -1.89 (49) 0.75 (49) 1.63 (60) $50.0 9/07 3/08 9/08 3/09 12/09 Median 7.04 7.04 33.99 -9.09 -1.99 0.70 1.99 - LateefAsset Mgmt.Equity - Russell 1000 Growth Index Comparative 1 Performance 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Sep -2009 Jun -2009 Mar -2009 Dec -2008 Sep -2008 Jun -2008 Lateef Asset Mgmt.Equity 15.34 (26) 14.76 (53) -5.85 (65) -19.33 (10) -0.50 (5) -7.28 (99) Russell 1000 Growth Index 13.97 (54) 16.32 (33) -4.12 (44) -22.79 (56) -12.33 (48) 1.25 (54) US Growth /Large Cap Equity (SA +CF) Median 14.03 14.95 -4.68 -22.49 -12.42 1.46 7 6*111 THE 26 BOGDAHN ` GROUP Winter Springs General Employees Dalton, Greiner, Hartman, Maher & Co. December 31, 2009 Fi nancial I I I I 1 Q uarter Market Value Market Value Transfers As of Net Contributions Distributions Fees Expenses Income Capital As of 9/30/2009 Appre./ ./ Dprec. 12/31/2009 Dalton, Greiner, Hartman, Maher & Co. 3,596 120 -7 18 245 3,972 Fi n a ncial Reconciliation Oct2009 ober I D2009 ecember c L d Quarter To Year Market Value Net Capital Market Value Market As of Contributions Distributions Fees Expenses Income of 9/30/2009 Transfers Apprec./ Deprec. 12/31/2009 Dalton, Greiner, Hartman, Maher & Co. 3,596 120 -7 18 245 3,972 Peer Group Analysis - US All Cap Value Equity (SA+CF) Cumulative Performance 1 011E $120.0 $115.0 $110.0 $1050 40.00 0 2 �- 20.00 c L d Quarter To Year Years 0.00 Years -20.00 40.00 $120.0 $115.0 $110.0 $1050 1 Oct -2009 1 2 3 4 5 Quarter To Year Years Years Years Years Dec -2009 ■ Dalton, Greiner, Hartman, Maher & Co. 7.17 (1) 7.17 (1) N/A N/A N/A N/A N/A $100.0 • Russell 3000 Value Index 4.17 (83) 4.17 (83) 19.76 (97) -12.62 (95) -8.91 (91) -1.94 (82) -0.24 (85) 6/09 9/09 12/09 - Dalton, Greiner, Hartman, Maher & Co. Median 5.08 5.08 29.88 -8.85 -3.78 0.41 2.23 - Russell 3000 Value Index C omparative 1 Performan 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Sep -2009 Jun -2009 Mar -2009 Dec -2008 Sep -2008 Jun -2008 Dalton, Greiner, Hartman, Maher & Co. 16.26 (65) N/A N/A N/A N/A N/A Russell 3000 Value Index 18.59 (47) 16.81 (78) -17.00 (100) -22.41 (51) -5.26 (26) -5.17 (92) US All Cap Value Equity (SA +CF) Median 18.14 18.10 -10.05 -22.39 -7.61 -0.96 27 THE 7 6*111 BOGDAHN ` GROUP Winter Springs General Employees International Equity Portfolio December 31, 2009 Financial Reconciliation Market Value Market Value Transfers As of Net Contributions Distributions Fees Expenses Income Capital As of 9/30/2009 Appre./ ./ Dprec. 12/31/2009 International Equity Portfolio 2,318 81 - -5 5 33 2,431 Financial Reconciliation Oct2009 ober I D2009 ecember c L d Market Value Net Capital Market Value As of Contributions Distributions Fees Expenses Income As of 9/30/2009 Transfers Apprec.// Deprec. 12/31/2009 lineinational Equity Portfolio 2,318 81 -5 5 33 2,431 Peer Group Analysis - International Active Value Equity (SA+CF) Cumulative Performance :1 II $150.0 $135.9 $129.0 $100.0 1 Oct -2009 1 2 3 4 5 Quarter To Year Years Years Years Years Dec -2009 ■ International Equity Portfolio 1.54 (63) 1.54 (63) 53.51 (7) -12.57 (75) -8.57 (89) -0.69 (90) 2.02 (94) • MSCI EAFE Index 2.22 (48) 2.22 (48) 32.46 (49) -13.15 (81) -5.57 (70) 1.66 (73) 4.02 (77) $50.0 12/00 12/02 12/04 12/06 12/09 Median 2.04 2.04 31.78 -10.92 -3.98 3.33 5.43 - International Equity Portfolio -MSCI EAFE Index Comparative 1 Performance 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Sep -2009 Jun -2009 Mar -2009 Dec -2008 Sep -2008 Jun -2008 International Equity Portfolio 27.00 (2) 31.73 (8) -9.63 (20) -26.00 (98) -24.28 (94) -10.94 (100) MSCI EAFE Index 19.52 (45) 25.85 (29) -13.85 (60) -19.90 (58) -20.50 (79) -1.93 (39) International Active Value Equity (SA +CF) Median 19.21 23.60 -13.01 -19.35 -17.03 -2.72 BOGDAHN 2a i GROUP 40.00 0 20.00 c L d 0.00 -20.00 -40.00 $150.0 $135.9 $129.0 $100.0 1 Oct -2009 1 2 3 4 5 Quarter To Year Years Years Years Years Dec -2009 ■ International Equity Portfolio 1.54 (63) 1.54 (63) 53.51 (7) -12.57 (75) -8.57 (89) -0.69 (90) 2.02 (94) • MSCI EAFE Index 2.22 (48) 2.22 (48) 32.46 (49) -13.15 (81) -5.57 (70) 1.66 (73) 4.02 (77) $50.0 12/00 12/02 12/04 12/06 12/09 Median 2.04 2.04 31.78 -10.92 -3.98 3.33 5.43 - International Equity Portfolio -MSCI EAFE Index Comparative 1 Performance 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Sep -2009 Jun -2009 Mar -2009 Dec -2008 Sep -2008 Jun -2008 International Equity Portfolio 27.00 (2) 31.73 (8) -9.63 (20) -26.00 (98) -24.28 (94) -10.94 (100) MSCI EAFE Index 19.52 (45) 25.85 (29) -13.85 (60) -19.90 (58) -20.50 (79) -1.93 (39) International Active Value Equity (SA +CF) Median 19.21 23.60 -13.01 -19.35 -17.03 -2.72 BOGDAHN 2a i GROUP Winter Springs General Employees International Equity Portfolio December 31, 2009 30.0 0 0 10.0 t 0 p -10.0 rr w -30.0 A c 0 -50.0 Over Performance Under Performance 30.0 50.0 Dec -2009 -50.0 -30.0 -10.0 10.0 c MSCI EAFE Index ( %) f Ovcr Performance f UndcrPer16 mance Mar -2005 10.00 5.00 0.00 0 � -5.00 d -10.00 tx -15.00 0 0.00 c 25.00 A tx c 50.00 d d a i 75.00 0 d tx 100.00 Total Period ■ International Equity Portfolio 20 • MSCI EAFE Index 20 12.50 10.00 7.50 0 c 5.00 2.50 tx 0.00 0 0 15.00 20.00 25.00 30.00 35.00 40.00 10.00 15.00 20.00 25.00 30.00 Risk (Standard Deviation %) Risk (Standard Deviation %) Return Standard Deviation Return Standard Deviation ■ International Equity Portfolio -8.57 33.56 ■ International Equity Portfolio 2.02 27.31 MSCI EAFE Index -5.57 27.14 MSCI EAFE Index 4.02 22.37 - Median -3.98 25.58 Median 5.43 21.28 Hist Up Down Tracking Sharpe Downside Error Market Market Alpha IR Ratio Beta Risk Capture Capture International Equity Portfolio 8.78 106.16 111.93 -1.67 -0.23 -0.26 1.12 22.06 MSCI EAFE Index 0.00 100.00 100.00 0.00 N/A -0.22 1.00 18.67 Hist Up Down Tracking Sharpe Downside Error Market Market Alpha IR Ratio Beta Risk Capture Capture International Equity Portfolio 6.89 104.21 110.87 -1.88 -0.18 0.08 1.11 17.31 MSCI EAFE Index 0.00 100.00 100.00 0.00 N/A 0.15 1.00 14.72 29 THE BOGDAHN ` GROUP 3/06 3/07 3/08 3/09 12/09 5 -25 25- Median Median -75 75 -95 Count Count Count Count 0 (0 %) 0 (0 %) 9 (45 %) 11 (55 %) 0 (0 %) 1 (5 %) 14 (70 %) 5 (25 %) Winter Springs General Employees RBC Global (Voyageur) December 31, 2009 Financial Rec onciliatio n Market Value Market Value Transfers As of Net Contributions Distributions Fees Expenses Income C ap i tal c.e As of 9/30/2009 Apprec. De 12/31/2009 RBC Global (Voyageur) 2,318 � I - -5 5 33 2,431 Fi nancial I I I I October I T Dece c L $20.0 d Market Value Net Cap ital Market Value As of Transfers Contributions Distributions Fees Expenses Income Apprec./ Deprec. As of 9/30/2009 12/31/2009 RBC Global (Voyageur) 2,318 81 -5 5 33 2,431 Peer Group Inter national 1 Perfo ■ RBC Global (Voyageur) $120.0 1.54 (63) 80.00 60.00 $100.0 $80.0 $74.1 $60.0 $40.0- 40.00 0 1 �- 20.00 c L $20.0 d Quarter 0.00 Year -20.00 Years -40.00 $100.0 $80.0 $74.1 $60.0 $40.0- 1 Oct -2009 1 2 3 4 5 $20.0 Quarter To Year Years Years Years Years Dec -2009 ■ RBC Global (Voyageur) 1.54 (63) 1.54 (63) 53.51 (7) -12.57 (75) N/A N/A N/A • MSCI EAFE Index 2.22 (48) 2.22 (48) 32.46 (49) -13.15 (81) -5.57 (70) 1.66 (73) 4.02 (77) $0.0 9/07 3/08 9/08 3/09 12/09 Median 2.04 2.04 31.78 -10.92 -3.98 3.33 5.43 -RBC Global (Voyageur) - MSCIEAFEIndex C omparative 1 Performan 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Sep -2009 Jun -2009 Mar -2009 Dec -2008 Sep -2008 Jun -2008 RBC Global (Voyageur) 27.00 (2) 31.73 (8) -9.63 (20) -26.00 (98) -24.28 (94) -10.94 (100) MSCI EAFE Index 19.52 (45) 25.85 (29) -13.85 (60) -19.90 (58) -20.50 (79) -1.93 (39) International Active Value Equity (SA +CF) Median 19.21 23.60 -13.01 -19.35 -17.03 -2.72 30 `� BOGDAHN GROUP Winter Springs General Employees Galliard Core Fixed Income December 31, 2009 Financial Reconciliation Market Value Market Value Transfers As of Net Contributions Distributions Fees Expenses Income Capital As of 9/30/2009 Apprec./ De. 12/31/2009 Galliard Core Fixed Income 5,089 - -4 -1 39 5,123 Financial Reconciliation II' III To December III Market Value Net Capital Market Value As of Transters Contributions Distributions Fees Expenses Income Apprec.// Deprec. As of 9/30/2009 12/31/2009 Galliard Core Fixed Income 5.089 2U.UU 15.00 -4 -1 - 39 5,123 Cumulative Performance $ I I5.0 $114.9 / $111.0 $110.0 $105.0 $100.0 10.00 0 c L 5.00 a 0.00 1 -5.00 -4 -1 - 39 5,123 Cumulative Performance $ I I5.0 $114.9 / $111.0 $110.0 $105.0 $100.0 1 Oct -2009 1 2 3 4 5 Quarter To Year Years Years Years Years Dec -2009 ■ Galliard Core Fixed Income 0.76 (37) 0.76 (37) 13.71 (11) 4.44 (89) N/A N/A N/A $95.0 • Barclays Capital Intermediate Aggregate 0.53 (57) 0.53 (57) 6.46 (67) 5.66 (67) 6.11 (65) 5.72 (65) 4.97 (64) 9/07 3/08 9/08 3/09 12/09 - Galliard Core Fixed Income Median 0.62 0.62 7.85 6.13 6.51 5.99 5.20 - Barclays Capital Intermediate Aggregate Comparative 1 Performance I 1 1 1 I 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Sep -2009 Jun -2009 Mar -2009 Dec -2008 Sep -2008 Jun -2008 Galliard Core Fixed Income 5.22 (17) 4.80 (16) 2.34 (4) -0.68 (90) -3.02 (85) -0.61 (20) Barclays Capital Intermediate Aggregate 3.21 (69) 1.68 (75) 0.91 (37) 3.58 (58) -0.13 (21) -0.96 (42) US Intermediate Fixed Income (SA +CF) Median 3.66 2.65 0.73 4.16 -1.18 -1.02 THE 31 BOGDAHN ` GROUP Winter Springs General Employees Galliard TIPS December 31, 2009 Financial Reconciliation 9.00 1 2 3 Market Value Net Capital Market Value As of Contributions Distributions Fees Expenses Income As of 9/30/2009 Transfers Apprec./ Deprec. 12/31/2009 Galliard TIPS 1,117 - 5 21 1,142 Financial Reconciliation October 00 To December 00 ■ Galliard TIPS 2.32 (17) 2.32 (17) 10.12 (93) 4.50 (74) N/A Market Value Net Capital Market Value As of Contributions Distributions Fees Expenses Income As of 9/30/2009 Transfers Apprec./ Deprec. 12/31/2009 Galliard TIPS 1,117 t !).uu 12.00 $115.0 $110.0 $105.0 9.00 1 2 3 i V 6.00 a Years Years Years 3.00 0.00 $115.0 $110.0 $105.0 ormance 1 Oct -2009 1 2 3 4 5 V Quarter To Year Years Years Years Years Dec -2009 ■ Galliard TIPS 2.32 (17) 2.32 (17) 10.12 (93) 4.50 (74) N/A N/A N/A $100.0 • Barclays Capital U.S. Treasury Inflation Notes: 1 -10 Year 2.14 (30) 2.14 (30) 12.02 (31) 4.54 (71) 6.80 (72) 5.47 (49) 4.74 (73) 9/07 3/08 9/08 3/09 12/09 - Galliard TIPS Median 1.91 1.91 11.23 4.69 6.97 5.45 4.82 - Barclays Capital U.S. Treasury Inflation Notes: 1 -10 Year Comparative 1 Performance 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Sep -2009 Jun -2009 Mar -2009 Dec -2008 Sep -2008 Jun -2008 Galliard TIPS 2.85 (84) 0.48 (90) 4.15 (84) -3.40 (72) -2.89 (20) 0.03 (26) Barclays Capital U.S. Treasury Inflation Notes: 1 -10 Year 2.98 (67) 0.57 (79) 5.89 (12) -5.15 (98) -2.90 (20) 0.23 (16) US TIPS (SA +CF) Median 3.08 0.68 4.95 -2.68 -3.51 -0.24 32 THE 7 6*111 BOGDAHN ` GROUP ormance Winter Springs General Employees American Stable Value Fund December 31, 2009 Financial Rec onciliatio n -15.00 0 2 c L 4 5 d Market Value Net $67.8 -45.00 C ap i tal Market Value As of Years Years Contributions Distributions Fees Expenses Income As of 9/30/2009 Transfers Apprec./ De. 12/31/2009 American Stable Value Fund 639 - 5 - - 2 9 - 36 606 Fi n a ncial Reconciliation October 00 To Decem 00 • NCREIF Property Index -2.11 (11) -2.11 (11) -16.85 (6) -11.80 (9) -3.41 (8) 1.24 (9) 4.75 (1) $60.0 Market Value Net Cap ital Market Value As of 3/08 9/08 Contributions Distributions Fees Expenses Income -3.06 -29.33 As of 9/30/2009 Transfers - American Stable Value Fund - NCREIF Property Index C omparative 1 Performan Apprec./ Deprec. 12/31/2009 American Stable Value Fund 639 -2 9 -36 606 $110.0 15.00 0.00 $100.0 $90.0 ti�u 3 $80.0 -15.00 0 2 c L 4 5 d -30.00 a $67.8 -45.00 To Year -60.00 $100.0 $90.0 ti�u 3 $80.0 1 Oct -2009 1 2 3 4 5 $70.0 $67.8 Quarter To Year Years Years Years Years Dec -2009 ■ American Stable Value Fund -4.23 (71) -4.23 (71) -30.00 (55) -18.31 (42) N/A N/A N/A • NCREIF Property Index -2.11 (11) -2.11 (11) -16.85 (6) -11.80 (9) -3.41 (8) 1.24 (9) 4.75 (1) $60.0 9/07 3/08 9/08 3/09 12/09 Median -3.06 -3.06 -29.33 -20.85 -11.21 -3.75 1.74 - American Stable Value Fund - NCREIF Property Index C omparative 1 Performan 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Sep -2009 Jun -2009 Mar -2009 Dec -2008 Sep -2008 Jun -2008 American Stable Value Fund -9.62 (70) -7.20 (47) -12.86 (38) -7.53 (25) -0.30 (45) 1.52 (23) NCREIF Property Index -3.32 (21) -5.20 (17) -7.33 (13) -8.29 (27) -0.17 (38) 0.56 (59) US Private Real Estate -Open End (SA +CF) Median -7.30 -8.01 -14.11 -9.99 -0.41 0.74 7 01,41 THE 33 BOGDAHN ` GROUP Defined Benefit Plan & Trust for Employees of the City of Winter Springs Benchmark History As of December 31, 2009 Total Fund Effective Date: Jan -1976 S &P 500 Index Barclays Capital Aggregate MSCI EAFE Effective Date: Oct -2003 S &P 500 Index Barclays Capital Aggregate MSCI EAFE Effective Date: Sep -2006 S &P 500 Index Barclays Capital Intermediate Aggregate Effective Date: Oct -2009 Russell 3000 Index Barclays Capital Intermediate Aggregate MSCI EAFE Barclays Capital Global Inflation - Linked: U.S. TIPS NCREIF Property Index Total E Effective Date: Jan -1970 65.00 S &P 500 Index 90.00 30.00 MSCI EAFE 10.00 5.00 Effective Date: Oct -2003 S &P 500 Index 85.00 60.00 MSCI EAFE 15.00 30.00 10.00 Effective Date: Sep -2006 S &P 500 Index 100.00 60.00 Effective Date: Oct -2009 40.00 Russell 3000 Index 77.00 MSCI EAFE 23.00 50.00 25.00 Total Domestic Equity Policy 15.00 5.00 Allocation Effective Date: Jan -1926 5.00 S &P 500 Index 100.00 Effective Date: Oct -2009 Russell 3000 Index 100.00 Total Fixed Effective Date: Nov -2000 Barclays Capital Aggregate Effective Date: Sep -2006 Barclays Capital Intermediate Aggregate 34 100.00 100.00 THE BQGDAHN 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 ide Risk 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 ig Error 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 ation Ratio 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. - 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. r 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. ide 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. ig Error -- A measure of the standard deviation of a portfolio's performance relative to the performance of an appropriate market benchmark. ation 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. 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. 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. 35 THE BOGDAHN GROUP City of Winter Springs General Employee Retirement System Compliance Checklist as of December 31, 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. ✓ 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 75% of the total plan assets at market. ✓ 4. Total foreign equity was less than 20% 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. All fixed income investments had a minimum rating of investment grade or higher. 1. Manager outperformed the index over the trailing three and five year periods. ✓ ✓ ✓ 2. Manager ranked within the top 40th percentile over trailing three and five year periods. ✓ ✓ ✓ 3. Less than four consecutive quarters of under performance relative to the benchmark. ✓ ✓ ✓ 4. Three and five -year down - market capture ratios less than the index. ✓ ✓ ✓ 5. Standard deviation <= 150% of the index over the trailing three and five year periods. ✓ ✓ ✓ City of Winter Springs General Employee Retirement System Compliance Checklist as of December 31, 2009 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. ✓ 37 Z£6COVZ'998 ZOZ£S u1SuoosiM `333InumpW 008I 01!nS and uisuoOsiAk '3 OSZ IISZ£ Ep«0I4 `Opuuljo 009 al!nS °prog purlauiA I06t SSSO9 sxouiiiI `aiiiAuaaJUAk OOZ 3 1?nS proU piai3uLm OZ£V aa 0puP1.10 02BaIu3 suoxs:aap xiv puv luauusaaur cnoi('B d f I cY vcka 1 ) NHVCIDOq 9HJL