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2015 02 10 Regular 602 1st Quarter Investment Return Report
Winter Springs General Employees' WWW.BOGDAHNGROUP.COM General Plan and Trust Investment Performance Review 4th Quarter 2014 THE BOGDAHN GROUP© ``d siniplifj,hil your investment and fiduciay decisions 4th Quarter 2014 Market Environment THE {� BOGDAHN \ GROUP. ■ The fourth quarter of 2014 provided a polar opposite experience to what was seen in the third quarter. While large cap stocks greatly outperformed their small cap brethren last quarter, the reversal this period was pronounced and swift. Small caps returned between +9.4% and +10.1% during the period, which was significantly better than the +4.8% to +5.0% return within the large cap realm. However, for the year, large caps (as measured by the S &P 500 Index) remained on top, exceeding mid and small caps by approximately 50 and 880 basis points (bps), respectively. ■ The third quarter ended a streak of eight consecutive positive quarters for small cap equities, but the hiccup was short - lived. Small caps, while not "cheap" by relative standards, were more reasonably valued at the beginning of the period relative to recent history. The decline allowed many managers to reinvest heavily in the fourth quarter, lifting the Russell 2000 Index +9.7% higher. Unlike the previous two quarters, which were characterized by fits and starts, all three months of the fourth quarter were positive for the major equity indexes. Only the Russell 1000 Index, with a -0.2% return in December, experienced a down month during the period. ■ Non -US equity markets underperformed domestic equity returns significantly during the fourth quarter and ended in negative territory. Currency effects worked against US investors during the period as the USD appreciated strongly against almost every other country's currency except China. Emerging market equities lagged developed markets by 0.9 %. For the calendar year 2014, non -US equities drastically underperformed domestic equities. This disparity is the largest on record since 1997, when the MSCI EAFE Index underperformed the S &P 500 Index by over 30% -after two consecutive double -digit underperforming years in 1995 and 1996. ■ Against all expectations, with lower credit quality and the ultra short -term segments being the sole exceptions, domestic bond yields continued to fall during the fourth quarter. The trailing, one -year return for the Barclays Aggregate Index was strongly positive ( +6.0 %). Higher quality dominated benchmarks (Treasuries, IG Corporates, Agency Mortgages) posted healthy returns. Performance dispersion across sectors was low, as Government Bonds returned +1.9% followed by Mortgages and IG Corporates at +1.8 %. In contrast, TIPS lagged, essentially remaining flat (- 0.03 %) for the period. Source: Investment Metrics MSCI ACWxUS MSCI EAFE MSCI Emerg Mkts S &P 500 Russell 3000 Russell 1000 Russell MidCap Russell 2000 Barclays US Agg Barclays US Govt Barclays US TIPS Barclays MBS Barclays Corp IG 3 -Month T -Bill The Market Environment Major Market Index Performance As of December 31, 2014 Quarter Performance -3.8% -3.5° -4.4% 0.0% M4.9% 5. 4.9% 5.9% 1.8% 1.9% 1.8% 1.8% 9.7% 0.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% MSCI ACWxUS MSCI EAFE MSCI Emerg Mkts S &P 500 Russell 3000 Russell 1000 Russell MidCap Russell 2000 Barclays US Agg Barclays US Govt Barclays US TIPS Barclays MBS Barclays Corp IG 3 -Month T -Bill 1 -Year Performance -3.4% L -4.5% C 1.8% -10.0% -5.0% 13 7% 12.6% 13.2% 13.2% 4.9% 6.0% 4.9% 3.6% 6.1% 7.5% 0.0% 0.0% 5.0% 10.0% 15.0% THE (� BOGDAHN `� GROUP ■ After treading water in the third quarter, domestic equities experienced a strong last quarter to close out 2014 with double digit returns in large and mid capitalization stocks. Large caps duplicated a strong second quarter with returns in a range of +4.8% to +5.0% (value, core, growth) to end the year with a return above 13 %. The Russell 1000 Index and Russell MidCap Index both finished with a +13.2% return for the 2014 calendar year. Both core indices had a similar quarterly result as well, gaining 4.9% and 5.9 %, respectively. Small caps experienced a dramatic resurgence, as the Russell 2000 Index gained 9.7% in the fourth quarter after having dropped 7.4% in the third quarter. However, small caps still underperformed their larger cap peers on the year by a fairly wide margin, as the core index gained 4.9 %. ■ Following the largest performance gap between large and small caps in a quarter since the first quarter of 1999, small caps doubled the performance of large caps during the fourth quarter, finishing the year with a positive return for the fifth time out of the past six years. ■ Following a quarter where value underperformed growth indices across the spectrum of domestic equity benchmarks, there was little discrepancy between style- specific indices during the fourth quarter. This is best reflected by the Russell 3000 Value Index ( +5.3 %) and the Russell 3000 Growth Index ( +5.2 %) quarterly result. The range between growth and value was fairly narrow for the entire year as well. When factoring in the seven GICS sectors that comprise more than 5% of the Russell 1000 Index, only the Energy sector performed outside of a narrow range for the fourth quarter. Despite brief periods of spiked activity, the year has been marked by low trading volume and low volatility. ■ Small caps continue to support a slightly higher valuation than large caps on a forward P/E basis (18.1 vs. 16.2), but are now below mid caps in relative valuation (18.6). All three categories are above their 20 -year average P/E ratios, led by mid cap (18.6 vs. 16.5) and followed by small cap (18.1 vs. 17.3). The current valuation on large caps is modestly above its long -term average (16.2 vs. 16.1). When comparing growth versus value averages, the P/E multiples is narrowing between the two style categories, as small, mid, and large cap value P/E multiples are all now above 20 -year averages while the growth equivalents are below. 3000 Value 3000 Index 3000 Growth 1000 Value 1000 Index 1000 Growth MidCap Value MidCap Index MidCap Growth 2000 Value 2000 Index 2000 Growth The Market Environment Domestic Equity Style Index Performance As of December 31, 2014 Quarter Performance - Russell Style Series 5.3 5.2' 5.29/ 5.0% 4.9% 4.8% 6.1% 5.9% 5.8% 9.4% ] 9.7% 10.1% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 1 -Year Performance - Russell Style Series 3000 Value 3000 Index 3000 Growth 1000 Value 1000 Index 1000 Growth MidCap Value MidCap Index MidCap Growth 2000 Value 2000 Index 2000 Growth 0.0% 12.7% 12.6% 12.4% 13.5% 13.2% 13.1% 14.7°/ 13.2% 11.9% 4. % 4.9% 5.6% 5.0% 10.0% 15.0% Source: Investment Metrics THE. 3 {� BOGDAHN \ GROUP. The Market Environment GICS Sector Performance & (Sector Weight) As of December 31, 2014 Russell 1000 ❑Quarter Ell-Year ■ There was wide economic sector performance dispersion during the fourth Consumer Disc (12.4 %) quarter. Within large caps, Utilities, Consumer Discretionary, and Consumer -8.6% Staples posted the strongest results. On a one year basis, the strongest Consumer Staples (8.9 %) performers were Utilities, Health Care, Technology, and Consumer Staples, 15.0% three of four of which are traditionally considered defensive sectors. Energy, Energy (8.5 %) Telecom, and Materials were the only sectors with negative returns for the Financials (17.1 %) fourth quarter, with only Energy posting a negative return for 2014 as a 6.7% whole due to a sharp drop in oil prices that began in the third quarter. Health Care (13.9 %) -12.2% .4% 9.8% 8.3% 16.0% -8.6% 7.4 well as calendar year 2014 was strongest in defensive sectors with 15.0% 7.9% 25.7% underperformed during 2014 with the Energy sector being the largest outlier, 6.7% 8.9% Telecom Services (2.3 %) 4.9% • As the broad US stock market rebounded from near -term lows, valuations 18.8% 1.2% tended to remain elevated as compared to recent years. On a trailing P/E 6.7% -4.1 basis, as expected, the Russell 1000 is relatively cheaper than the Russell - 15.0 % -5.0% 2.4% Russell 2000 12.7% 27.3% • Compared to large caps, small caps posted a strong quarter, but still trailed Industrials (11.1 %) in all sectors over calendar year 2014. Performance for the fourth quarter as well as calendar year 2014 was strongest in defensive sectors with Info Technology (19.1 %) particularly strong results in Utilities and Health Care. Three sectors underperformed during 2014 with the Energy sector being the largest outlier, Materials (3.7 %) returning a disproportionate -35.9% for the year. Telecom Services (2.3 %) • As the broad US stock market rebounded from near -term lows, valuations Utilities (3.1 %) tended to remain elevated as compared to recent years. On a trailing P/E basis, as expected, the Russell 1000 is relatively cheaper than the Russell - 15.0 % -5.0% 2000. In both large and small caps, Health Care, Financial, and Technology Russell 2000 sectors look relatively overvalued, whereas Utility, Telecom, and Energy sectors appear to be among the most undervalued. Consumer Disc (13.4 %) • By far the most drastic underperformance of all sectors occurred in Energy. Consumer Staples (3.2 %) As mentioned above, oil prices (Brent Crude Spot Price) have plunged since the beginning of the third quarter, falling from a June high near $115 /barrel Energy (4.8 %) and closing the year around $56 /barrel. The cause of this drastic price change centers around an expanding world oil supply with lower forecasts of Financials (24.0 %) world oil consumption growth due to a weaker outlook for the global Health Care (13.9 %) economy. Industrials (13.9 %) Info Technology (17.9 %) Materials (4.7 %) Telecom Services (0.8 %) Utilities (3.4 %) 5.0% 15.0% 25.0% 35.0% ❑Quarter 01 -Year 13.9 2.0% 12.9% 12.4% -31.8 35.9% 11.5% 9.3% 17.6% 19.6% 9.2% -0.1% 11.8% 8.0 4.8 °gyp -2.7% 8.9% 1% 21.1% -40.0% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% Source: Morningstar Direct THY, 4 BOGDAHN GROUP. Russell 1000 Apple Inc Top 10 Weighted Weight 3.16% Stocks 1-Qtr Return 10.0% 1-Year Return 40.6% Information Technology Exxon Mobil Corporation 1.89% -1.0% -6.1% Energy Microsoft Corp 1.82% 0.8% 27.5% Information Technology Johnson & Johnson 1.41% -1.3% 17.3% Health Care Berkshire Hathaway Inc Class B 1.31% 8.7% 26.6% Financials Wells Fargo & Co 1.24% 6.4% 24.1% Financials General Electric Co 1.20% -0.5% -6.7% Industrials Procter & Gamble Co 1.17% 9.6% 15.4% Consumer Staples JPMorgan Chase & Co 1.13% 4.6% 9.9% Financials Chevron Corp 1.01% -5.1% -7.0% Energy 1 - I Energy Oasis Petroleum Inc 0.01% 10'. i Clear Channel Outdoor Holdings Inc 0.00% 57.1% 11.6% Consumer Discretionary Rite Aid Corp 0.03% 55.4% 48.6% Consumer Staples Cubist Pharmaceuticals Inc 0.04% 51.7% 46.1% Health Care American Airlines Group Inc 0.18% 51.5% 113.5% Industrials Staples Inc 0.06% 50.8% 18.4% Consumer Discretionary Incyte Corp Ltd 0.05% 49.1% 44.4% Health Care Dean Foods Co 0.00% 46.9% 14.7% Consumer Staples Rackspace Hosting Inc 0.03% 43.8% 19.6% Information Technology CarMax Inc 0.07% 43.3% 41.6% Consumer Discretionary United Continental Holdings Inc 0.12% 43.0% 76.8% 1 Industrials Quarter) Russell rrr ktLurAWL Seventy Seven Energy Inc 0.00% - 77.2% N/A I Energy Oasis Petroleum Inc 0.01% - 60.4% -64.8% Energy SandRidge Energy Inc 0.00% - 57.6% -70.0% Energy Whiting Petroleum Corp 0.03% - 57.4% -46.7% Energy Seadrill Ltd 0.02% -57.0% - 70.6% Energy Laredo Petroleum Inc 0.00% -53.8% - 62.6% Energy WPX Energy Inc Class A 0.01% -51.7% - 42.9% Energy SM Energy Co 0.01% -50.5% -53.5% Energy McDermott International Inc 0.00% - 49.1% - 68.2% Energy Patterson -UTI Energy Inc 0.01% - 48.7% - 33.4% Energy Source: Morningstar Direct The Market Environment Top 10 Index Weights & Quarterly Performance for the Russell 1000 & 2000 As of December 31, 2014 THE �BOGDAHN � GROUP Isis Pharmaceuticals 0.41% 59.0% 55.0% Health Care Brunswick Corp 0.27% 22.0% 12.4% Consumer Discretionary RF Micro Devices Inc 0.27% 43.8% 221.5% Information Technology Triquint Semiconductor 0.27% 44.5% 230.3% Information Technology Office Depot Inc 0.26% 66.8% j 62.1% Consumer Discretionary LaSalle Hotel Properties 0.26% 19.3% 36.4% Financials Graphic Packaging Holding Co 0.25% 9.6% 41.9% Materials Puma Biotechnology Inc 0.25% - 20.7% 82.8% Health Care RLJ Lodging Trust 0.25% 18.8% 42.8% 1 Financials Ultimate Software Group Inc 0.24% 3.7% -4.2% 1 Information Technology Top 10 Performing Stocks (b e Weight OvaScience Inc 0.04% 166.4% 383.8% Health Care bluebird bio Inc 0.11% 155.6% 337.2% Health Care Regulus Therapeutics Inc 0.01% 134.8% 117.1% Health Care Five Prime Therapeutics Inc 0.03% 130.2% 60.8% Health Care Alder BioPharmaceuticals Inc 0.01% 129.4% N/A Health Care Cytokinetics Inc 0.02% 127.6% 23.2% Health Care ITT Educational Services, Inc. 0.01% 124.0% - 71.4% Consumer Discretionary Sucampo Pharmaceuticals Inc Class A 0.01% 119.7% 51.9% Health Care Vitae Pharmaceuticals Inc 0.01% 118.1% N/A Health Care Cempra Inc 0.03% 114.5% 89.7% Health Care r%I GT Advanced Technolo gies Inc 0.00% 96.9% ion Technology Endeavour International Corp 0.00% - 95.1% Dendreon Corp 0.00% - 94.9% - 97.6% Health Care KiOR Inc 0.00% - 94.3% - 99.6% Energy Cal Dive International Inc 0.00% -92.8% -96.5% Energy Wet Seal Inc Class A 0.00% - 87.6% - 97.6% Consumer Discretionary BPZ Resources Inc 0.00% - 84.9% -84.1% Energy Education Management Corp 0.00% - 84.9% - 98.4% Consumer Discretionary American Eagle Energy Corp 0.00% - 84.7% - 92.4% Energy Forest Oil Corp 0.00% -80.8% -93.8% Energy THE �BOGDAHN � GROUP ■ The pattern of returns during the fourth quarter was similar to the prior quarter, in that a moderately positive middle month was book -ended by negative months. Volatility continued to be above average during the period. ■ On a regional basis, equities in Latin America turned in the worst quarterly performance in both local and USD terms. In addition, Latin America was one of two regions to turn in negative performance in local currency terms for the 2014 calendar year, with EM EMEA being the other. ■ The range of returns for individual non -US countries was tighter this period, but with several negative outliers. Hong Kong ( +3.1 %) was the best developed market performer and Turkey ( +11.6 %) was the best emerging market performer. The worst - performing developed country was Norway (- 24.9 %) followed by Portugal (- 23.0 %). Russia was the worst - performing equity market within the EM universe with a return of - 32.8% for the quarter. ■ During the fourth quarter, USD appreciation once again created a significant drag on returns for US investors in overseas markets. All four of the broad, non -US equity indices shown to the right ended the quarter in positive territory when measured in local currency terms, but turned negative when converted to USD. The biggest exchange difference came with the MSCI EAFE Index, which returned +1.8% in local terms and - 3.5% in USD terms. ■ USD strength again weighed on the Energy sector during the fourth quarter, as it posted the weakest sector return (- 19.8 %) by far in the MSCI- ACWIxUS Index. The Materials sector, which is also negatively impacted by USD strength, was the second worst performing sector within the MSCI ACWIxUS Index, returning -7.5% for the quarter. In the developed market MSCI EAFE Index, Consumer Discretionary was the only sector to end the quarter in positive territory ( +3.1 %). Financials ( +1.7 %) and Information Technology ( +1.5 %) were the only positive sectors in the MSCI EM Index for the quarter. ■ Growth widely outperformed value across the board. Small caps slightly outperformed large caps within developed markets and vice versa in emerging markets. The Market Environment International and Regional Market Index Performance (Country Count) As of December 31, 2014 AC World x US (45) WORLD x US (22) EAFE (21) Europe & ME (16) Pacific (5) Emerging Mkt (23) EM EM EA (10) EM Asia (8) EM Latin Amer (5) Quarter Performance ❑USD ❑ Local Currency -3.8% 1.2% -3.6% 1.5% 1.8% -4.3% 0.1% -2.1% 5.3% -4.4°/ 0.1 -10.1 0.8% - o.z °% o - 13.4% 2.1% -6.1% -15.0% -10.0% -5.0% 0.0% 5.0% 1 -Year Performance oUSD ❑Local Currency AC World x US (45) WORLD x US (22) EAFE (21) Europe & ME (16) Pacific (5) Emerging Mkt (23) EM EM EA (10) EM Asia (8) EM Latin Amer (5) -3.4% 6.5% -3.9% 6.8% -4.5% 6.4% -5.5% 5.4% -2.5% 8.2% -1.8% - 14.7% 5.6% 3.3% .3% 8.1% - 12.0% 0.6% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% Source: MSCI Global Index Monitor (Returns are Gross) THE 6 {� BOGDAHN \ GROUP. MSCI-EAFE Sector Weight Quarter Return 1 -Year Return Consumer Discretionary 12.4% 3.1% -4.1% Consumer Staples 11.1% -1.6% -2.0% Energy 5.7% -19.0% -18.2% Financials 25.9% -3.1% -5.4% Health Care 11.0% -5.3% 6.7% Industrials 12.6% -3.4% -7.3% Information Technology 4.8% -0.5% -0.3% Materials 7.6% -5.3% -10.4% Telecommunication Services 5.0% -0.4% -3.9% Utilities Total 3.9% 00 -3.9% 4.4% Consumer Discretionary 11.2% Quarter 2.4% -2.7% Consumer Staples 9.9% -1.7% -1.6% Energy 7.5% -19.8% -18.7% Financials 27.6% -1.9% -2.1% Health Care 8.6% -4.5% 7.8% Industrials 11.0% -3.6% -5.6% Information Technology 7.5% 0.7% 5.4% Materials 7.7% -7.5% -12.7% Telecommunication Services 5.4% -2.2% -2.8% Utilities 3.6% -4.1% 4.0% Sweden it r, 2.2% -3.4% Consumer Discretionary 9.2% -2.6% -1.3% Consumer Staples 8.2% -4.9% -4.7% Energy 8.0% -24.5% -26.4% Financials 29.3% 1.7% 5.6% Health Care 2.3% -0.9% 19.6% Industrials 6.7% -4.3% -2.6% Information Technology 18.0% 1.5% 10.3% Materials 7.4% -12.2% -19.2% Telecommunication Services 7.5% -6.7% -1.3% Utilities Total 3.5% 100.0% -5.9% 2.8% Sweden 3.1% 2.2% -3.4% Source: MSCI Global Index Monitor (Returns are Gross in USD) The Market Environment U.S. Dollar International Index Attribution & Country Detail As of December 31, 2014 Japan 21.2% im 15.0% -2.4% A ft-. - -3.7% United Kingdom 21.1% 14.9% -4.2% -5.4% France 9.7% 6.9% -5.8% -9.0% Switzerland 9.3% 6.6% -2.2% 0.7% Germany 9.2% 6.5% -0.4% -9.8% Australia 7.5% 5.3% -3.6% -3.2% Spain 3.5% 2.5% -8.2% -4.4% Hong Kong 3.1% 2.2% 3.1% 5.1% Sweden 3.1% 2.2% -3.4% -6.6% Netherlands 2.8% 2.0% -0.2% -3.2% Italy 2.3% 1.6% -13.4% -9.0% Singapore 1.6% 1.1% -0.5% 3.1% Denmark 1.5% 1.1% -7.8% 6.8% Belgium 1.3% 0.9% 0.8% 4.9% Finland 0.9% 0.6% -2.0% 0.8% Norway 0.7% 0.5% -24.9% -21.2% Israel 0.6% 0.4% 1.4% 23.7% Ireland 0.3% 0.2% 1.9% 2.6% Austria 0.2% 0.1% -7.3% -29.4% New Zealand 0.2% 1 0.1% 2.6% 1 8.2% Portugal 0.2% 0.1% -23.0% -37.7% Canada Total Developed Countries 7.5% 78.3% -4.6% 11WF--3.6% 2.2% -3.9% China 4.7% 7.2% 8.3% Korea 3.2% -7.7% -10.7% Taiwan 2.7% 1.7% 10.1% Brazil 1.9% -14.8% -13.7% South Africa 1.7% 3.0% 5.7% India 1.6% -0.7% 23.9% Mexico 1.1% -12.2% -9.2% Malaysia 0.8% -10.5% -10.7% Russia 0.7% -32.8% -45.9% Indonesia 0.6% 0.7% 27.2% Thailand 0.5% -6.4% 16.8% Turkey 0.4% 11.6% 19.1% Poland 0.3% -13.9% -13.6% Chile 0.3% -5.2% -12.2% Philippines 0.3% 0.7% 26.4% Qatar 0.2% -8.9% 16.6% Colombia 0.2% -22.9% -19.8% United Arab Emirates 0.1% -21.6% 13.7% Peru 0.1% -0.8% 10.5% Greece 0.1% -28.8% -39.9% Czech Republic 0.1% -15.4% -2.4% Egypt 0.1% -8.6% 29.4% Hungary 0.0% -12.8% -27.4% THE (� BOGDAHN `� GROUP ■ With the exception of credit sensitive segments, domestic bond markets were mostly positive in the fourth quarter, as concerns about foreign growth and overseas inflation trumped the effects of strong economic data. The Fed's dovish comments in the fourth quarter seemed to indicate no rate hikes are imminent. Given low yields abroad, foreign investor interest in domestic paper remains robust and led to lower yields during the period. ■ In contrast to the third quarter, in which sector performance was mixed, most sectors posted positive returns during the period. Treasuries and mortgages rose +1.9% and +1.8 %, respectively. These strong gains were partially off -set by weakness in high yield ( -1.0 %) and in overseas markets as the Global Aggregate x US and Multiverse indices returned - 3.0% and -1.2 %, respectively. ■ For the second consecutive quarter, lower rated bonds lagged their higher quality peers. Baa -rated bonds lagged higher quality credits by 50 to 100 bps during the period. However, on a one -year basis, Baa -rated bonds outpaced higher -rated credits by a moderate margin. ■ Longer -dated securities drastically outperformed short and intermediate maturities despite the end of the Federal Reserve's QE program. The rally pushed the broad -based Barclays Aggregate Index ahead of the Barclays Intermediate Aggregate Index by +0.6% for the quarter and +1.9% for the 2014 calendar year. ■ High yield bonds fell 1.0 %, marking back -to -back negative quarterly returns for the asset class. After exceeding investment grade bonds for seven consecutive quarters up until March 31, 2014, high yield bonds trailed investment grade securities for the last nine months and were the worst performing domestic sector in 2014. The Market Environment Domestic Bond Sector & Broad /Global Bond Market Performance (Duration) As of December 31, 2014 AAA (4.9) AA (5.9) A (7.1) Baa (7.6) U.S. High Yield (4.3) U.S. Treasury (5.6) U.S. Mortgage (4.3) U.S. Corporate IG (7.2) U.S. TIPS (5.8) Aggregate (5.6) Intermediate Agg (4.0) Global Agg x US (7.3) Multiverse (6.4) Quarter Performance -3.0% -1.0% -1.2% 0.0% 1.8% 1.8% 2.3% 1.3% _ 1.9% 1.2% -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 1 -Year Performance AAA (4.9) AA (5.9) A (7.1) Baa (7.6) U.S. High Yield (4.3) U.S. Treasury (5.6) U.S. Mortgage (4.3) U.S. Corporate IG (7.2) U.S. TIPS (5.8) ■ The US bond market easily outpaced international bonds by 480 bps, represented by the Barclays Global Aggregate ex US Index, which was negatively impacted by USD strength. The fourth quarter's weak Aggregate (5.6) performance by global bonds exacerbated an already wide performance Intermediate Agg (4.0) disparity as the one -year trailing domestic bond performance remained Global Agg x US (7.3) ahead by a wide margin. Multiverse (6.4) 5.3% 6.1% 7.5% 8.3% 2.5% 5.1% 6.1% 7.5% 3.6% 6.0% -3.1% 4.1% 0.5% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Source: Barclays Capital Live THE a BOGDAHN `� GROUP ■ Despite the Fed's bond buying program drawing to a close in October, investors continue to wonder if rising rates will ever occur. This is due to domestic economic strength exceeding the rest of the developed world and the resulting strength of the USD. As a result, while domestic yields remain low, they exceed those of overseas sovereign bonds, especially on a real return basis. This has led to a demand for longer -term US paper and a flattening of the yield curve. ■ After moving wider in the third quarter, option adjusted spreads on Baa- rated bonds continued to broaden relative to Treasuries, widening by an additional 39 bps during the fourth quarter. This spread widening negatively impacts bond prices (which move in the opposite direction) and performance of lower quality credits. This quarter's rise in spreads erased the rally that occurred earlier in the year. Spreads are now at their widest point in over a year. ■ The yield curve in the US continued to flatten during the fourth quarter. Since prices and performance move in the opposite direction of yields, the long -end of the curve was the best performing maturity segment as 30 -year Treasuries returned +10.1% during the period. The yield on the 10 -year Treasury fell from 2.52% to 2.17% and dropped below 2.0% early in 2015. At the short end of the curve, 2 -year Treasuries rose from 0.58% to 0.67 %. ■ Since rising to more attractive yields in mid -to -late 2013, the yield curve has gradually flattened and interest rates have declined, particularly in longer -dated maturities. This resulted in positive returns over the past twelve months, especially in investment grade or better, intermediate term or longer securities. The expectation is that given strong economic growth, lower unemployment, the end of the Fed's QE program, and better housing numbers, interest rates will soon rise. However, the impact of foreign purchases and generally benign inflation has been a natural headwind to rising rates. Investment professionals have migrated to a more neutral position when forecasting when and if rates will rise from here. The Market Environment Market Rate & Yield Curve Comparison As of December 31, 2014 1 -Year Trailing Market Rates 4.00 Fed Funds Rate TED Spread 3 -Month Libor 3.50 BAA OAS 10yr Treasury 10yr TIPS 3.00 2.50 2.00 1.50 1.00 0.50 0.00 I Dec -13 Jan -14 Feb -14 Mar -14 Apr -14 May -14 Jun -14 Jul -14 Aug -14 Sep -14 Oct -14 Nov -14 Dec -14 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 Treasury Yield Curve 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr Source: US Department of Treasury FRED (Federal Reserve of St. Louis) �� THE 9 BOGDAHN `� GROUP Asset Allocation By Segment as of September 30, 2014 : $3694379643 Asset Allocation Summary Total Fund As of December 31. 2014 Asset Allocation By Segment as of December 31, 2014 : $3797819187 Allocation Allocation Segments Market Value Allocation Segments Market Value Allocation _ Domestic Equity 16,779,784 46.1 _ Domestic Equity 18,651,785 49.4 m International Equity 5,406,026 14.8 m International Equity 5,330,260 14.1 ■ Domestic Fixed Income 5,758,526 15.8 ■ Domestic Fixed Income 7,800,029 20.6 Global Fixed Income 1,361,535 3.7 Global Fixed Income 1,278,113 3.4 ■ Real Estate 2,986,572 8.2 ■ Real Estate 3,532,749 9.4 Private Equity - 0.0 Private Equity 600,151 1.6 Cash Equivalent 4,145,201 11.4 Cash Equivalent 588,100 1.6 7HE 10 BOGDAHN �� GROUP. Allocation Asset Allocation By Manager as of September 30, 2014 : $3694379643 Market Value Allocation Allocation Asset Allocation Summary Total Fund As of December 31. 2014 Asset Allocation By Manager as of December 31, 2014 : $3797819187 Market Value Allocation Vanguard Total Stock Market (VITSX) 16,779,784 46.1 Vanguard Total Stock Market (VITSX) 18,651,785 49.4 — RBC Global (Voyageur) 5,406,026 14.8 — RBC Global (Voyageur) 5,330,260 14.1 ■ Galliard Core Fixed Income 4,603,250 12.6 ■ Galliard Core Fixed Income 4,654,026 12.3 — Receipt & Disbursement 4,104,947 11.3 ■ Intercontinental 2,277,737 6.0 • Intercontinental 2,171,962 6.0 Vanguard Short Term Bond Index (VSCSX) 2,002,316 5.3 • Templeton Global Bond Fund (FBNRX) 1,361,535 3.7 ■ Templeton Global Bond Fund (FBNRX) 1,278,113 3.4 Galliard TIPS 1,185,806 3.3 American Core Realty Fund 1,264,952 3.3 American Core Realty Fund 824,333 2.3 Galliard TIPS 1,168,063 3.1 Vanguard Short Term Bond Index (VSCSX) - 0.0 Crescent Direct Lending Fund 600,151 1.6 Crescent Direct Lending Fund 0.0 Receipt & Disbursement 553,785 1.5 THE 11 (� BOGDAHN `� GROUP Page Intentionally Left Blank 12 Asset Allocation vs. Target Allocation Total Domestic Equity Total International Equity Total Domestic Fixed Income Total Global Fixed Income Total Real Estate Total Private Equity Receipt & Disbursement Galliard Cash -3.4% -0.6% -0.9 1.6% -0.6% .5% 7% Asset Allocation vs. Target Allocation Total Fund As of December 31, 2014 -15.0% -12.0% -8.0% Allocation Differences Market Value -4.0% 0.0% 4.0% Allocation ( %) 8.0% 12.0% 15.0% Target ( %) Total Domestic Equity 18,651,785 49.4 50.0 Total International Equity 5,330,260 14.1 15.0 Total Domestic Fixed Income 7,824,405 20.7 15.0 Total Global Fixed Income 1,278,113 3.4 5.0 Total Real Estate 3,542,688 9.4 10.0 Total Private Equity 600,151 1.6 5.0 Receipt & Disbursement 553,785 1.5 0.0 Galliard Cash - - 0.0 Total Fund 37,781,187 100.0 100.0 THE 13 (� BOGDAHN `� GROUP Historical Asset Allocation by Portfolio Total Equity Total Domestic Equity Vanguard Total Stock Market (VITSX) Total International Equity RBC Global (Voyageur) Total Fixed Income Total Domestic Fixed Income Galliard Core Fixed Income Galliard TIPS Vanguard Short Term Bond Index (VSCSX) Total Global Fixed Income Templeton Global Bond Fund (FBNRX) Total Real Estate American Core Realty Fund Intercontinental Total Private Equity Crescent Direct Lending Fund Receipt & Disbursement Galliard Cash Total Fund Portfolio Asset Allocation History Total Fund As of December 31, 2014 Dec -2014 Sep -2014 Jun -2014 Mar -2014 Dec -2013 23,982,046 63.48 22,186,810 60.89 22,646,717 62.04 21,721,660 61.42 24,633,160 70.96 18,661,786 49.37 16,779,784 46.06 16,781,266 46.97 16,003,601 46.26 19,041,969 66.08 18,651,785 49.37 16,779,784 46.05 16,781,266 45.97 16,003,501 45.25 19,041,959 55.08 6,330,260 14.11 6,406,026 14.84 6,864,461 16.07 6,718,169 16.17 6,491,201 16.88 5,330,260 14.11 5,406,026 14.84 5,864,451 16.07 5,718,159 16.17 5,491,201 15.88 9,102,617 24.09 7,160,691 19.62 7,182,682 19.68 7,064,606 19.96 6,970,377 20.16 7,824,406 20.71 6,789,066 16.89 6,811,778 16.92 6,709,449 16.16 6,632,261 16.29 4,654,026 12.32 4,603,250 12.63 4,599,045 12.60 4,527,502 12.80 4,463,859 12.91 1,168,063 3.09 1,185,806 3.25 1,212,733 3.32 1,181,946 3.34 1,168,392 3.38 2,002,316 5.30 - 0.00 - 0.00 - 0.00 - 0.00 1,278,113 3.38 1,361,636 3.74 1,370,804 3.76 1,346,066 3.80 1,338,127 3.87 1,278,113 3.38 1,361,535 3.74 1,370,804 3.76 1,345,056 3.80 1,338,127 3.87 3,642,688 9.38 2,996,296 8.22 2,906,000 7.96 2,860,017 8.06 2,802,484 8.11 1,264,952 3.35 824,333 2.26 809,377 2.22 798,958 2.26 785,657 2.27 2,277,737 6.03 2,171,962 5.96 2,096,623 5.74 2,051,059 5.80 2,016,827 5.83 600,151 1.59 - 0.00 - 0.00 - 0.00 - 0.00 663,786 1.47 4,104,947 11.27 3,768,316 10.32 3,737,282 10.67 266,326 0.77 - 0.00 - 0.00 - 0.00 - 0.00 - 0.00 37,781,187 100.00 36,437,643 100.00 36,602,614 100.00 36,363,463 100.00 34,672,347 100.00 14 THE (� BOGDAHN `� GROUP Historical Asset Allocation by Segment 90.0 75.0 60.0 c 0 0 45.0 Q 30.0 15.0 Asset Allocation History Total Fund As of December 31, 2014 0.0 9/07 3/08 Domestic Equity Real Estate MIN 3/09 9/09 International Equity Private Equity 3/10 9/10 Domestic Fixed Income Cash Equivalent 3/11 9/11 3/12 Global Fixed Income 15 F�7ff��7fB�7fB�7fC�7f[ltif�af[! ps� THE (� BOGDAHN `� GROUP Page Intentionally Left Blank m Plan Sponsor TF Asset Allocation Total Fund Portfolio Vs. All Public Plans -Total Fund As of December 31, 2014 68.0 60.0 52.0 44.0 36.0 0 0 28.0 0 a 20.0 O 12.0 O 4.0 O O O -4.0 -12.0 US Equity Intl. Equity US Fixed Income Intl. Fixed Income Alternative Inv. Real Estate Cash O Total Fund Portfolio 49.37 (34) 14.11 (50) 20.71 (82) 3.38 (83) 1.59 (93) 9.38 (25) 1.47 (42) 5th Percentile 58.22 27.48 48.36 10.19 32.27 12.53 6.69 1 st Quartile 51.04 19.29 34.09 5.23 17.22 9.20 2.33 Median 45.01 14.05 28.08 4.56 10.81 5.53 1.16 3rd Quartile 33.70 12.06 22.56 3.97 4.64 4.62 0.59 95th Percentile 19.12 7.72 14.05 1.59 1.34 2.82 0.04 THE. 17 r {� BOGDAHN \ GROUP. Financial Reconciliation Quarter to Date Total Equity Total Domestic Equity Vanguard Total Stock Market (VITSX) Total International Equity RBC Global (Voyageur) Total Fixed Income Total Domestic Fixed Income Galliard Core Fixed Income Galliard TIPS Vanguard Short Term Bond Index (VSCSX) Total Global Fixed Income Templeton Global Bond Fund (FBNRX) Total Real Estate American Core Realty Fund Intercontinental Total Private Equity Crescent Direct Lending Fund Receipt & Disbursement Galliard Cash Total Fund Portfolio Financial Reconciliation Quarter to Date Total Fund 1 Quarter Ending December 31, 2014 Market Value Net Management Contributions Distributions Other Income Apprec./ Market Value 10/01/2014 Transfers Fees Expenses Deprec. 12/31/2014 22,185,810 1,013,170 - 13,170 -884 127,873 669,247 23,982,045 16,779,784 1,000,000 - - 98,521 773,480 18,651,785 16,779,784 1,000,000 - - 98,521 773,480 18,651,785 5,406,026 13,170 - 13,170 -884 29,352 - 104,233 5,330,260 5,406,026 13,170 - 13,170 -884 29,352 - 104,233 5,330,260 7,150,591 1,939,133 - -3,467 69,978 - 53,717 9,102,517 5,789,056 2,000,000 -3,467 9,111 29,705 7,824,405 4,603,250 - - - 50,776 4,654,026 1,185,806 - -3,467 2,192 - 16,468 1,168,063 - 2,000,000 - 6,919 -4,603 2,002,316 1,361,535 - 60,867 60,867 - 83,422 1,278,113 1,361,535 - 60,867 - 60,867 - 83,422 1,278,113 2,996,295 428,277 -2,280 9,939 110,458 3,542,688 824,333 428,277 -2,280 9,939 4,684 1,264,952 2,171,962 - - - 105,775 2,277,737 - 600,151 - - - - - 600,151 4,104,947 - 3,980,730 968,759 - 532,210 -7,060 80 553,785 36,437,643 968,759 - 532,210 - 15,450 - 11,411 207,869 725,988 37,781,187 18 ps� THE (� BOGDAHN `� GROUP Financial Reconciliation Fiscal Year to Date Total Fund October 1, 2014 To December 31, 2014 Financial Reconciliation Fiscal Year to Date Market Value Net Management Contributions Distributions Other Income Apprec./ Market Value 10/01/2014 Transfers Fees Expenses Deprec. 12/31/2014 Total Equity 22,185,810 1,013,170 - 13,170 -884 127,873 669,247 23,982,045 Total Domestic Equity 16,779,784 1,000,000 - - 98,521 773,480 18,651,785 Vanguard Total Stock Market (VITSX) 16,779,784 1,000,000 - - 98,521 773,480 18,651,785 Total International Equity 5,406,026 13,170 - 13,170 -884 29,352 - 104,233 5,330,260 RBC Global (Voyageur) 5,406,026 13,170 - 13,170 -884 29,352 - 104,233 5,330,260 Total Fixed Income 7,150,591 1,939,133 - -3,467 69,978 - 53,717 9,102,517 Total Domestic Fixed Income 5,789,056 2,000,000 -3,467 9,111 29,705 7,824,405 Galliard Core Fixed Income 4,603,250 - - - 50,776 4,654,026 Galliard TIPS 1,185,806 - -3,467 2,192 - 16,468 1,168,063 Vanguard Short Term Bond Index (VSCSX) - 2,000,000 - 6,919 -4,603 2,002,316 Total Global Fixed Income 1,361,535 - 60,867 60,867 - 83,422 1,278,113 Templeton Global Bond Fund (FBNRX) 1,361,535 - 60,867 - 60,867 - 83,422 1,278,113 Total Real Estate 2,996,295 428,277 -2,280 9,939 110,458 3,542,688 American Core Realty Fund 824,333 428,277 -2,280 9,939 4,684 1,264,952 Intercontinental 2,171,962 - - - 105,775 2,277,737 Total Private Equity Crescent Direct Lending Fund Receipt & Disbursement Galliard Cash Total Fund Portfolio - 600,151 - - - - 600,151 4,104,947 - 3,980,730 968,759 - 532,210 -7,060 80 553,785 36,437,643 968,759 - 532,210 - 15,450 - 11,411 207,869 725,988 37,781,187 m ps� THE (� BOGDAHN `� GROUP Comparative Performance Trailling Returns Comparative Performance Trailing Returns Total Fund As of December 31, 2014 QTR FYTD 1 YR 3 YR 5 YR Inception Total Fund (Net) 2.51 (39) 2.51 (39) 6.75 (46) 14.16 Total Fund Policy 2.65 (33) 2.65 (33) 7.76 (19) 13.65 All Public Plans -Total Fund Median 2.25 (3) POW 0 2.25 0 6.56 11.23 ( 12.03 Total Fund (New Mgrs) (Net) 2.52 (38) 2.52 (38) 6.76 (45) 14.17 Total Fund Policy 2.65 (33) 2.65 (33) 7.76 (19) 13.65 All Public Plans -Total Fund Median 2.25 (64) 1 2.25 (6f 6.56 15.63 ( 12.03 Total Fund (Gross) 2.56 2.56 (35) 7.00 (39) 14.70 Total Fund Policy 2.65 (33) 2.65 (33) 7.76 (19) 13.65 All Public Plans -Total Fund Median 2.25 2.25 6.56 12.03 Total Fund (New Mgrs) (Gross) 2.57 (35) 2.57 (35) 7.01 (39) 14.70 Total Fund Policy 2.65 (33) 2.65 (33) 7.76 (19) 13.65 All Public Plans -Total Fund Median 2.25 2.25 6.56 12.03 Total Equity 3.61 3.61 8.28 In 19.65 Total Equity Policy 3.18 3.18 8.44 18.46 Total Domestic Equity 5.20 (47) 5.20 (47) 12.34 (62) 19.97 Total Domestic Equity Policy 5.24 (46) 5.24 (46) 12.56 (60) 20.51 IM U.S. Large Cap Core Equity (SA +CF) Median 5.07 5.07 13.26 20.60 Total International Equity -1.39 (15) -1.39 (15) -2.87 (27) 19.42 MSCI EAFE Index -3.53 (52) -3.53 (52) -4.48 (49) 11.56 IM International Large Cap Value Equity (SA +CF) Median -3.50 -3.50 -4.53 11.09 Total Fixed Income 0.23 0.23 3.30 2.86 Total Fixed Policy 1.20 1.20 4.12 2.19 Total Domestic Fixed Income 0.67 (99) 0.67 (99) 3.66 (100) 2.21 Total Domestic Fixed Policy 1.20 (99) 1.20 (99) 4.12 (100) 2.19 IM U.S. Large Cap Core Equity (SA +CF) Median 5.07 5.07 13.26 20.60 Total Global Fixed Income -1.67 (75) -1.67 (75) 1.77 (52) 6.58 Total Global Fixed Income Policy -1.49 (71) -1.49 (71) -0.48 (82) -0.97 IM Global Fixed Income (MF) Median -1.05 -1.05 1.93 2.61 Total Real Estate ono� 4.03 (17) 4.03 (17) 13.06 (37) 14.29 NCREIF Fund Index -ODCE (EW) (Net) 3.25 (30) 3.25 (30) 12.49 (48) 12.45 IM U.S. Open End Private Real Estate (SA +CF) Median 2.87 2.87 12.24 12.25 (6) 1 10.82 ( (14 (10) 1 11.23 ( (8) 9.78 (6) 1 10.82 ( (1 (10) 1 11.23 ( (8) 9.78 (3) POW 0 0 (10) 1 11.23 ( (8) 9.78 (3) 1 11.45 ( (5) (10) 1 11.23 ( (8) 9.78 14.01 13.37 (64) 1 14.85 ( (6f (53) 1 15.63 ( (4-, 5.55 (69) 5.2f 5.85 5.22 (56) 6.25 (13) 5.32 1_2 (27) 5.27 (85) 5.85 5.82 (30) 6.25 (13) 5.32 !tfY: 6.22 (41) 4.68 (89) 5.87 6.13 (63) 4.23 (94) 6.46 5- 5.23 I 5.21 (72) I 5.23 (70) 5.87 6.42 (6) -0.67 (92) 2.70 3.74 (N/ 3.00 (N/ N/A Inception Date 11/01/2000 10/01/2007 11/01/2000 10/01/2007 01/01/2001 11/01/2000 11/01/2000 11/01/2000 11/01/2000 12/01/2011 A) 10/01/2007 A) Returns for periods greater than one year are annualized. Returns are expressed as percentages. THE 10/1/2007 inception date represents the date new managers were hired. Total Fund Policy represents new policy beginning 10/1/2009. Old policy geometrically linked to new policy. See benchmark history for details. R Intercontinental Returns are preliminary 20 1zOGDAHN Parenthesized number represents pertinent peer group ranking: 1 -100, best to worst GROUP Inception Date 11/01/2000 10/01/2007 11/01/2000 10/01/2007 01/01/2001 11/01/2000 11/01/2000 11/01/2000 11/01/2000 12/01/2011 A) 10/01/2007 A) Returns for periods greater than one year are annualized. Returns are expressed as percentages. THE 10/1/2007 inception date represents the date new managers were hired. Total Fund Policy represents new policy beginning 10/1/2009. Old policy geometrically linked to new policy. See benchmark history for details. R Intercontinental Returns are preliminary 20 1zOGDAHN Parenthesized number represents pertinent peer group ranking: 1 -100, best to worst GROUP Comparative Performance Trailing Returns Total Fund As of December 31, 2014 QTR FYTD 1 YR 3 YR 5 YR Inception Inception Date RBC Global (Voyageur) -1.39 (15) -1.39 (15) -2.87 (27) 19.42 (3) 11.63 (3) 2.46 (18) 11/01/2007 MSCI EAFE Index -3.53 (52) -3.53 (52) -4.48 (49) 11.56 (43) 5.81 (56) -0.77 (77) IM International Large Cap Value Equity (SA +CF) Median -3.50 -3.50 -4.53 11.09 6.34 0.09 Vanguard Total Stock Market (VITSX) 5.20 (36) 5.20 (36) 12.55 (26) N/A N/A 20.43 (36) 03/01/2013 Vanguard Total Stock Market Index Hybrid 5.24 (33) 5.24 (33) 12.58 (25) 20.54 (33) 15.74 (19) 20.50 (35) IM U.S. Multi -Cap Core Equity (MF) Median 4.42 4.42 10.62 19.57 14.30 19.61 Galliard Core Fixed Income 1.10 (23) 1.10 (23) 4.33 (24) 2.76 (44) 4.44 (22) 4.54 (79) 10/01/2007 Barclays Intermediate Aggregate Index 1.20 (17) 1.20 (17) 4.12 (29) 2.19 (76) 3.72 (69) 4.53 (80) IM U.S. Intermediate Duration (SA +CF) Median 0.90 0.90 3.47 2.63 3.97 4.88 Vanguard Short Term Bond Index (VSCSX) N/A N/A N/A N/A N/A N/A 01/01/2015 Barclays U.S. Corporate 1 -5 Year Index 0.36 (34) 0.36 (34) 2.08 (31) 3.24 (23) 3.73 (32) N/A IM U.S. Intermediate Investment Grade (MF) 0.26 0.26 1.62 2.10 3.08 N/A Galliard TIPS -1.21 -1.21 0.85 0.02 2.57 3.70 10/01/2007 Barclays U.S. TIPS 1 -10 Year -1.00 -1.00 0.91 0.03 2.78 3.85 Templeton Global Bond Fund (FBNRX) -1.67 (75) -1.67 (75) 1.79 (52) 6.59 (2) N/A 6.43 (6) 12/01/2011 Citigroup World Government Bond -1.49 (71) -1.49 (71) -0.48 (82) -0.97 (94) 1.67 (91) -0.67 (92) IM Global Fixed Income (MF) Median -1.05 -1.05 1.93 2.61 3.39 2.70 American Core Realty Fund 1.80 (89) 1.80 (89) 11.62 (64) 11.75 (67) 12.30 (99) 2.67 (N /A) 10/01/2007 American Core Realty Policy 3.25 (30) 3.25 (30) 12.48 (48) 12.45 (42) 13.36 (56) 5.78 (N /A) IM U.S. Open End Private Real Estate (SA +CF) Median 2.87 2.87 12.24 12.25 13.60 N/A Intercontinental 4.87 (1) 4.87 (1) 13.58 (22) 15.40 (19) N/A 15.65 (22) 10/01/2010 NCREIF Fund Index -ODCE 3.25 (30) 3.25 (30) 12.49 (48) 12.45 (42) 13.93 (44) 13.79 (49) IM U.S. Open End Private Real Estate (SA +CF) Median 2.87 2.87 12.24 12.25 13.60 13.63 Crescent Direct Lending Fund N/A N/A N/A N/A N/A 0.00 11/01/2014 Credit Suisse Leveraged Loan Index -0.25 -0.25 2.18 5.88 5.86 -0.53 Returns for periods greater than one year are annualized. Returns are expressed as percentages. THE 10/1/2007 inception date represents the date new managers were hired. Total Fund Policy represents new policy beginning 10/1/2009. Old policy geometrically linked to new policy. See benchmark history for details. /� u7�7 Intercontinental Returns are preliminary 21 BOG�1'1111�1 Parenthesized number represents pertinent peer group ranking: 1 -100, best to worst GROUP Comparative Performance Fiscal Year Returns Total Fund As of December 31, 2014 Comparative Performance Fiscal Year Returns Oct -2013 Oct -2012 Oct -2011 Oct -2010 Oct -2009 Oct -2008 Oct -2007 Oct -2006 Oct -2006 FYTD To To To To To To To To To Sep -2014 Sep -2013 Sep -2012 Sep -2011 Sep -2010 Sep -2009 Sep -2008 Sep -2007 Sep -2006 Total Fund (Net) 2.61 (39) 11.86 (16) 16.72 (7) 18.96 (29) -1.17 (80) 10.67 (32) 0.70 (62) -16.84 (91) 13.03 (73) 7.89 (63) Total Fund Policy 2.65 (33) 11.38 (22) 15.06 (14) 19.59 (20) 2.53 (13) 9.13 (73) 0.33 (66) -12.11 (30) 11.97 (86) 9.55 (31) All Public Plans -Total Fund Median 2.25 10.09 12.51 17.89 0.32 9.90 1.52 -13.61 14.39 8.58 Total Fund (New Mgrs) (Net) 2.52 (38) 11.85 (15) 15.72 (7) 18.95 (29) -1.17 (80) 10.66 (32) 0.68 (62) -16.82 (91) N/A N/A Total Fund Policy 2.65 (33) 11.38 (22) 15.06 (14) 19.59 (20) 2.53 (13) 9.13 (73) 0.33 (66) -12.11 (30) 11.97 (86) 9.55 (31) All Public Plans -Total Fund Median 2.25 10.09 12.51 17.89 0.32 9.90 1.52 -13.61 14.39 8.58 Total Fund (Gross) F, 2.66 (36) 12.21 (10) 16.33 (6) 19.81 (17) -0.46 (68) 11.40 1.43 (61) -16.48 (89) 13.92 (68) 8.62 (60) Total Fund Policy 2.65 (33) 11.38 (22) 15.06 (14) 19.59 (20) 2.53 (13) 9.13 (73) 0.33 (66) -12.11 (30) 11.97 (86) 9.55 (31) All Public Plans -Total Fund Median 2.25 10.09 12.51 17.89 0.32 9.90 1.52 -13.61 14.39 8.58 Total Fund (New Mgrs) (Gross) 2.57 (35) 12.21 (10) 16.33 (5) 19.81 (17) -0.45 (68) 11.40 (20) 1.39 (52) -16.46 (89) N/A N/A Total Fund Policy 2.65 (33) 11.38 (22) 15.06 (14) 19.59 (20) 2.53 (13) 9.13 (73) 0.33 (66) -12.11 (30) 11.97 (86) 9.55 (31) All Public Plans -Total Fund Median 2.25 10.09 12.51 17.89 0.32 9.90 1.52 -13.61 14.39 8.58 Total Equity MV&mM 16.46 � 27.08 -4.68 13.61 W - 1.09.61 10.83 Total Equity Policy 3.18 14.65 22.30 26.46 -1.66 9.34 -6.91 -21.98 16.44 12.51 Total Domestic Equity 5.20 (47) 17.58 (69) 21.85 (35) 27.76 (63) -3.30 (89) 14.19 (8) -4.29 (37) -21.66 (62) 17.58 (43) 9.29 (67) Total Domestic Equity Policy 5.24 (46) 17.76 (66) 21.60 (37) 30.20 (46) 0.55 (57) 10.96 (31) -6.91 (63) -21.98 (67) 16.44 (60) 10.79 (48) IM U.S. Large Cap Core Equity (SA +CF) Median 5.07 19.08 20.72 29.82 1.16 9.46 -5.80 -20.48 16.97 10.76 Total International Equity -1.39 (15) 10.08 (9) 27.54 (14) 24.74 (3) -8.75 (55) 11.69 (14) 11.87 (21) -39.55 (100) 23.63 (55) 19.84 (67) MSCI EAFE Index -3.53 (52) 4.70 (64) 24.29 (40) 14.33 (54) -8.94 (57) 3.71 (66) 3.80 (66) -30.13 (71) 25.38 (40) 19.65 (69) IM International Large Cap Value Equity (SA +CF) Median -3.50 5.76 22.63 15.24 -8.41 5.00 6.20 -27.36 23.91 20.94 Total Fixed Income 3.23 -0.69 6.34 =7 10.63 0.64 4.96 3.27 Total Fixed Policy 1.20 - - " -0.71 4.31 4.22 7.52 9.69 4.16 5.33 3.55 Total Domestic Fixed Income 0.67 (99) 2.61 (100) -1.30 (100) 5.88 (100) 4.67 (12) 9.27 (53) 10.53 (2) 0.64 (1) 4.96 (100) 3.27 (98) Total Domestic Fixed Policy 1.20 (99) 2.74 (100) -0.71 (100) 4.31 (100) 4.22 (15) 7.52 (78) 9.69 (2) 4.16 (1) 5.33 (99) 3.55 (98) IM U.S. Large Cap Core Equity (SA +CF) Median 5.07 19.08 20.72 29.82 1.16 9.46 -5.80 -20.48 16.97 10.76 Total Global Fixed Income -1.67 (75) 6.31 (13) 3.53 (3) N/A N/A N/A N/A N/A N/A N/A Total Global Fixed Income Policy -1.49 (71) -0.07 (97) -4.60 (85) N/A N/A N/A N/A N/A N/A N/A IM Global Fixed Income (MF) Median -1.05 3.57 -1.52 7.19 1.61 7.82 13.86 -1.53 7.30 2.53 Total Real Estate 4.03 (17) 13.47 (41) 16.42 (17) 12.81 (64) 16.82 (79) 2.71 (76) -32.42 (36) 4.72 (39) N/A N/A NCREIF Fund Index -ODCE 3.25 (30) 12.40 (69) 13.04 (51) 11.61 (67) 18.27 (41) 6.97 (45) -35.19 (50) 3.18 (52) 18.21 (56) 17.45 (57) IM U.S. Open End Private Real Estate (SA +CF) Median 2.87 12.78 13.09 12.90 16.62 6.09 -35.27 3.47 18.53 18.17 Returns for periods greater than one year are annualized. Returns are expressed as 10/1/2007 inception date represents the date new managers were hired. Total Fund percentages. Policy represents new policy beginning 10/1/2009. Old policy geometrically linked to new policy. See benchmark history for details. Intercontiner THE Parenthesized number represents pertinent peer group ranking: 1 -100, best to worst 22 /� u7�7 ( BOGD1'1111�1 `� GROUP Lateef Asset Mgmt.Equity Russell 1000 Growth Index IM U.S. Large Cap Growth Equity (SA +CF) Median RBC Global (Voyageur) MSCI EAFE Index IM International Large Cap Value Equity (SA +CF) Median Vanguard Total Stock Market (VITSX) Vanguard Total Stock Market Index Hybrid IM U.S. Multi -Cap Core Equity (MF) Median Galliard Core Fixed Income Barclays Intermediate Aggregate Index IM U.S. Intermediate Duration (SA +CF) Median Galliard TIPS Barclays U.S. TIPS 1 -10 Year Vanguard Short Term Bond Index (VSCSX) Barclays U.S. Corporate 1 -5 Year Index IM U.S. Intermediate Investment Grade (MF) Median Templeton Global Bond Fund (FBNRX) Citigroup World Government Bond IM Global Fixed Income (MF) Median American Core Realty Fund American Core Realty Policy IM U.S. Open End Private Real Estate (SA +CF) Median Intercontinental NCREIF Fund Index -ODCE IM U.S. Open End Private Real Estate (SA +CF) Median Crescent Direct Lending Fund Credit Suisse Leveraged Loan Index Comparative Performance Fiscal Year Returns Total Fund As of December 31, 2014 Oct -2013 Oct -2012 Oct -2011 Oct -2010 Oct -2009 Oct -2008 Oct -2007 Oct -2006 Oct -2006 FYTD To To To To To To To To To Sep -2014 Sep -2013 Sep -2012 Sep -2011 Sep -2010 Sep -2009 Sep -2008 Sep -2007 Sep -2006 N/A N/A N/A 33.21 (8) -1.17 (75) 11.93 (43) 0.53 (23) -15.13 (17) N/A N/A 4.78 (57) 19.15 (38) 19.27 (66) 29.19 (37) 3.78 (30) 12.65 (36) -1.85 (38) -20.88 (54) 19.35 (57) 6.04 (58) 5.10 17.98 20.50 27.47 1.35 11.28 -3.01 -20.37 20.32 6.80 -1.39 (15) 10.08 (9) 27.54 (14) 24.74 (3) -8.75 (55) 11.69 (14) 11.87 (21) N/A N/A N/A -3.53 (52) 4.70 (64) 24.29 (40) 14.33 (54) -8.94 (57) 3.71 (66) 3.80 (66) -30.13 (71) 25.38 (40) 19.65 (69) -3.50 5.76 22.63 15.24 -8.41 5.00 6.20 -27.36 23.91 20.94 5.20 (36) 17.77 (25) N/A N/A N/A N/A N/A N/A N/A N/A 5.24 (33) 17.77 (25) 21.60 (64) 30.28 (17) 0.71 (21) 11.16 (29) -6.03 (59) -21.19 (31) 16.98 (46) 10.38 (30) 4.42 15.65 23.36 26.32 -1.86 9.55 -5.13 -22.84 16.64 9.14 1.10 (23) 3.15 (37) -0.64 (75) 5.82 (45) 4.16 (25) 9.63 (17) 12.08 (38) -1.68 (95) N/A N/A 1.20 (17) 2.74 (60) -0.71 (77) 4.31 (84) 4.22 (20) 7.52 (77) 9.69 (81) 4.16 (35) 5.33 (69) 3.84 (61) 0.90 2.87 -0.27 5.58 3.58 8.27 11.50 3.21 5.49 3.92 -1.21 0.59 -3.71 6.01 6.73 7.28 3.97 7.72 N/A N/A -1.00 0.61 -3.90 6.32 7.19 7.40 4.02 7.89 5.32 2.28 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 0.36 (34) 2.46 (28) 1.47 (15) 6.29 (30) 1.83 (58) 8.25 (38) 16.02 (2) -2.84 (74) 5.04 (13) 3.99 (7) 0.26 1.72 -0.47 5.13 1.99 7.53 10.58 -0.22 4.27 3.13 -1.67 (75) 6.33 (13) 3.54 (3) N/A N/A N/A N/A N/A N/A N/A -1.49 (71) -0.07 (97) -4.60 (85) 3.29 (97) 4.61 (8) 4.99 (95) 13.78 (51) 5.90 (6) 8.69 (31) 2.23 (64) -1.05 3.57 -1.52 7.19 1.61 7.82 13.86 -1.53 7.30 2.53 1.80 (89) 12.49 (65) 12.27 (71) 11.56 (70) 16.11 (78) 2.71 (76) -32.42 (36) 4.72 (39) N/A N/A 3.25 (30) 12.40 (69) 13.04 (51) 11.61 (67) 18.27 (41) 5.84 (52) -22.09 (5) 5.27 (28) N/A N/A 2.87 12.78 13.09 12.90 16.62 6.09 -35.27 3.47 18.53 18.17 4.87 (1) 14.10 (36) 18.21 (10) 13.38 (43) 15.68 (80) N/A N/A N/A N/A N/A 3.25 (30) 12.40 (69) 13.04 (51) 11.61 (67) 18.27 (41) 6.97 (45) -35.19 (50) 3.18 (52) 18.21 (56) 17.45 (57) 2.87 12.78 13.09 12.90 16.62 6.09 -35.27 3.47 18.53 18.17 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A -0.25 4.31 5.83 10.73 2.40 10.34 7.72 -7.68 4.07 6.43 Returns for periods greater than one year are annualized. Returns are expressed as percentages. THE 10/1/2007 inception date represents the date new managers were hired. Total Fund Policy represents new policy beginning 10/1/2009. Old policy geometrically linked to new policy. See benchmark history for details. Intercontiner /� u7�7 Parenthesized number represents pertinent peer group ranking: 1 -100, best to worst 23 ( BOGD1'1111�1 `� GROUP Performance Review Total Fund (Gross) As of December 31. 2014 Financial Reconciliation 1 Quarter Market Value Net Management Other Apprec./ Market Value 10/01/2014 Transfers Contributions Distributions Fees Expenses Income Deprec. 12/31/2014 Total Fund (Gross) 36,438 969 -532 -15 -11 208 726 37,781 Financial Reconciliation October 1, 2014 To December 31, 2014 Market Value Net Management Other Apprec./ Market Value 10/01/2014 Transfers Contributions Distributions Fees Expenses Income Deprec. 12/31/2014 Total Fund (Gross) 36,438 969 -532 -15 -11 208 726 37,781 Peer Group Analysis - All Public Plans -Total Fund Cummulative Performance 20.00 $300.00 15.00 10.00 v K 5.00 0.00 - O O O O ho ,OAK As -5.00 2.25 6.56 11.78 12.03 8.86 9.78 1 - QTR FYTD 1 YR 2 YR 3 YR 4 YR 5 YR • Total Fund (Gross) 2.56 (35) 2.56 (35) 7.00 (39) 14.63 (4) 14.70 (3) 10.76 (6) 11.45 (5) • Total Fund Policy 2.65 (33) 2.65 (33) 7.76 (19) 13.89 (9) 13.65 (10) 10.78 (5) 11.23 (8) $250.00 $200.00 $150.00 $100.00 $50.00 $234.23 $0.00 12/00 9/02 6/04 3/06 12/07 9/09 6/11 3/13 12/14 Median 2.25 2.25 6.56 11.78 12.03 8.86 9.78 Total Fund (Gross) - Total Fund Policy Comparative Performance M 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr Ending Ending Ending Ending Ending Ending Sep -2014 Jun -2014 Mar -2014 Dec -2013 Sep -2013 Jun -2013 Total Fund (Gross) -1.02 (47) 3.24 (79) 2.10 (22) 7.55 (3) 5.10 (43) 1.27 (3) Total Fund Policy -0.64 (25) 3.90 (31) 1.69 (51) 6.10 (31) 5.46 (26) 0.91 (13) All Public Plans -Total Fund Median -1.12 3.63 1.71 5.60 4.91 0.10 THE 24 (� BOGDAHN `� GROUP 3 Yr Rolling Under /Over Performance - 5 Years 20.0 Over Performance N ° 10.0 C7 v 0.0 LL A o -10.0 1 1 1 1 1 1 -16.0 -12.0 -8.0 -4.0 0.0 4.0 8.0 Total Fund Policy (% ) • Over Performance • Under Performance Earliest Date X Latest Date Peer Group Scatterg ram - 3 Years 15.66 14.79 13.92 O «' 13.05 v K 12.18 11.31 1 1 1 5.75 6.00 6.25 6.50 6.75 Risk (Standard Deviation %) Return Performance Review Total Fund (Gross) As of December 31. 2014 3 Yr Rolling Percentile Ranking - 5 Years y 0.00 ® e e® ® 0 8 8 w 25.00 p O o Q 8 e 8 O O 50.00 0 O O O O 8 a 75.00 O O O O Under w Performance 1 100.00 12.0 16.0 20.0 24.0 3/10 9/10 3/11 9/11 3/12 9/12 3/13 9/13 3/14 12/14 Total Period 5 -25 25- Median Median -75 75 -95 Count Count Count Count L lb Total Fund (Gross) 20 • Total Fund Policy 20 Peer Group Scatterg ram - 5 Years 12.10 11.55 11.00 O «' 10.45 v K 9.90 12 (60 %) 3 (15 %) 5 (25 %) 0 (0 %) 11 (55 %) 6 (30 %) 3 (15 %) 0 (0 %) x 9.35 1 7.00 7.25 7.50 9.00 9.25 9.50 9.75 10.00 10.25 10.50 10.75 Risk (Standard Deviation %) Standard Return Standard Deviation Deviation • Total Fund (Gross) 14.70 7.26 • Total Fund (Gross) 11.45 10.32 O Total Fund Policy 13.65 6.01 O Total Fund Policy 11.23 9.30 Median 12.03 6.07 Median 9.78 9.24 Historical Statistics - 3 Years Tracking Up Down Information Sharpe Downside Error Market Market Alpha Ratio Ratio Beta Risk Capture Capture Total Fund (Gross) 1.66 111.52 168.67 -1.46 0.62 1.95 1.19 2.00 Total Fund Policy 0.00 100.00 100.00 0.00 2.18 1.00 1.17 Historical Statistics - 5 Years Tracking Up Down Information Sharpe Downside Error Market Market Alpha Ratio Ratio Beta Risk Capture Capture Total Fund (Gross) 1.85 106.54 117.99 -0.76 0.17 1.11 1.10 6.04 Total Fund Policy 0.00 100.00 100.00 0.00 1.00 5.24 25 ps� THE (� BOGDAHN GROUP Performance Review Vanguard Total Stock Market (VITSX) As of December 31. 2014 Financial Reconciliation 1 Quarter Market Value Net Management Other Apprec./ Market Value 10/01/2014 Transfers Contributions Distributions Fees Expenses Income Deprec. 12/31/2014 Vanguard Total Stock Market (VITSX) 16,780 1,000 99 773 18,652 Financial Reconciliation October 1, 2014 To December 31, 2014 Market Value Net Management Other Apprec./ Market Value 10/01/2014 Transfers Contributions Distributions Fees Expenses Income Deprec. 12/31/2014 Vanguard Total Stock Market (VITSX) 16,780 1,000 99 773 18,652 Peer Group Analysis - IM U.S. Multi -Cap Core Equity (MF) 36.00 28.00 20.00 ! 12.00 K 4.00 • • • • _ -4.00 12.00 Cumulative Performance $150.00 QTR FYTD 1 YR 2 YR 3 YR 4 YR 33 $90.00 1 5 YR 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 • Vanguard Total Stock Market (VITSX) 5.20 (36) 5.20 (36) 12.55 (26) N/A N/A N/A N/A O Vanguard Total Stock Market Index Hybrid 5.24 (33) 5.24 (33) 12.58 (25) 22.65 (35) 20.54 (33) 15.35 (20) 15.74 (19) - Vanguard Total Stock Market (VITSX) Median 4.42 4.42 10.62 21.97 19.57 13.84 14.30 - Vanguard Total Stock Market Index Hybrid Comparative Performance 1 Qtr $140.00 1 Qtr 1 Qtr $130.00 - o9 ■ $120.00 - Ending Ending $110.00 - Ending Ending $100.00 - QTR FYTD 1 YR 2 YR 3 YR 4 YR 33 $90.00 1 5 YR 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 • Vanguard Total Stock Market (VITSX) 5.20 (36) 5.20 (36) 12.55 (26) N/A N/A N/A N/A O Vanguard Total Stock Market Index Hybrid 5.24 (33) 5.24 (33) 12.58 (25) 22.65 (35) 20.54 (33) 15.35 (20) 15.74 (19) - Vanguard Total Stock Market (VITSX) Median 4.42 4.42 10.62 21.97 19.57 13.84 14.30 - Vanguard Total Stock Market Index Hybrid Comparative Performance THE 26 (� BOGDAHN `� GROUP 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr Ending Ending Ending Ending Ending Ending Sep -2014 Jun -2014 Mar -2014 Dec -2013 Sep -2013 Jun -2013 Vanguard Total Stock Market (VITSX) -0.01 (32) 4.86 (35) 2.04 (48) 10.08 (34) 6.29 (60) 2.77 (47) Vanguard Total Stock Market Index Hybrid -0.02 (32) 4.87 (34) 2.04 (48) 10.09 (33) 6.29 (60) 2.81 (46) IM U.S. Multi -Cap Core Equity (MF) Median -0.73 4.49 1.99 9.58 6.72 2.67 THE 26 (� BOGDAHN `� GROUP Page Intentionally Left Blank 27 (� BOGDAHN ``� GROUP Performance Review RBC Global (Voyageur) As of December 31. 2014 Financial Reconciliation 1 Quarter Market Value Net Management Other Apprec./ Market Value 10/01/2014 Transfers Contributions Distributions Fees Expenses Income Deprec. 12/31/2014 RBC Global (Voyageur) 5,406 13 -13 -1 29 -104 5,330 Financial Reconciliation October 1, 2014 To December 31, 2014 Market Value Net Management Other Apprec./ Market Value 10/01/2014 Transfers Contributions Distributions Fees Expenses Income Deprec. 12/31/2014 RBC Global (Voyageur) 5,406 13 -13 -1 29 -104 5,330 Peer Group Analysis - IM International Large Cap Value Equity (SA +CF) 30.00 20.00 1 Qtr 1 Qtr 1 Qtr 1 Qtr 0 Ending Ending Ending Ending Ending Ending O Jun -2014 Mar -2014 Dec -2013 10.00 c Jun -2013 RBC Global (Voyageur) -7.80 (93) 2.57 (84) 0 O 0 0.69 (33) v 4.34 (46) 0.77 (62) 5.75 (59) 11.61 (35) -0.73 (61) 0 4.16 K 6.14 10.79 -0.03 0.00 0 • -10.00 -20.00 QTR FYTD 1 YR 2 YR 3 YR 4 YR 5 YR • RBC Global (Voyageur) -1.39 (15) -1.39 (15) -2.87 (27) 13.79 (7) 19.42 (3) 9.44 (8) 11.63 (3) • MSCI EAFE Index -3.53 (52) -3.53 (52) -4.48 (49) 8.52 (44) 11.56 (43) 5.22 (51) 5.81 (56) Median -3.50 -3.50 -4.53 8.09 11.09 5.30 6.34 Comparative Performance Cumulative Performance $175.00 $150.00 $125.00 $100.00 $75.00 $50.00 $25.00 - 50 02 $0.00 1 1 1 ---T-1 1 1 1 12/07 12/08 12/09 12/10 12/11 12/12 12/13 12/14 RBC Global (Voyageur) MSCI EAFE Index 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr Ending Ending Ending Ending Ending Ending Sep -2014 Jun -2014 Mar -2014 Dec -2013 Sep -2013 Jun -2013 RBC Global (Voyageur) -7.80 (93) 2.57 (84) 4.15 (5) 11.77 (1) 8.88 (79) 0.69 (33) MSCI EAFE Index -5.83 (61) 4.34 (46) 0.77 (62) 5.75 (59) 11.61 (35) -0.73 (61) IM International Large Cap Value Equity (SA +CF) Median -5.67 4.16 1.16 6.14 10.79 -0.03 28 ps� THE (� BOGDAHN `� GROUP 3 Yr Rolling Under /Over Performance - 5 Years 40.0 Over Performance 30.0 v o 0 20.0 ;Xy O (J " on A 10.0 O o M o0 0 0.0 U Under -10.0 Performance 1 1 1 -15.0 -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 MSCI EAFE Index ( %) • Over Performance Earliest Date GO Latest Date Peer Group Scatterg ram - 3 Years 21.00 0 18.00 15.00 v ° 12.00 - 9.00 1 1 11.16 11.78 12.40 13.02 13.64 14.26 14.88 15.50 Risk (Standard Deviation %) Return Standard Deviation Performance Review RBC Global (Voyageur) As of December 31. 2014 3 Yr Rolling Percentile Ranking - 5 Years y 0.00 14.48 O RBC Global (Voyageur) 0000 00000 19.06 c 11.56 11.80 pOp 0 16.44 w 11.09 12.33 0 Median 6.34 16.63 Historical Statistics - 3 Years 25.00 O Tracking 50.00 Down Information O O p p p 0 0 EL Market 0 Alpha 0 0 0 0 0 Beta Risk E 75.00 000000 Capture O 0 v 121.95 85.66 6.91 1.33 1.31 1.03 8.24 K 100.00 100.00 1.00 8.20 Historical Statistics - 5 Years 100.00 1 1 Tracking 3/10 9/10 3/11 9/11 3/12 9/12 3/13 9/13 3/14 12/14 Error Market Market Alpha 5 -25 25- Median Median -75 75 -95 Capture Total Period Count Count Count Count 0 RBC Global (Voyageur) 17 O MSCI EAFE Index 20 Peer Group Scatterg ram - 5 Years 14.00 12.00 E 10.00 ' 8.00 v K 6.00 4.00 15.86 16.47 14 (82 %) 2 (12 %) 1 (6 %) 0 (0 %) 0 (0 %) 6 (30 %) 12 (60 %) 2 (10 %) X 17.08 17.69 18.30 18.91 19.52 Risk (Standard Deviation %) Return Standard Deviation • RBC Global (Voyageur) 19.42 14.48 O RBC Global (Voyageur) 11.63 19.06 O MSCI EAFE Index 11.56 11.80 O MSCI EAFE Index 5.81 16.44 Median 11.09 12.33 Median 6.34 16.63 Historical Statistics - 3 Years Tracking Up Down Information Sharpe Downside Error Market Market Alpha Ratio Ratio Beta Risk Capture Capture RBC Global (Voyageur) 5.32 121.95 85.66 6.91 1.33 1.31 1.03 8.24 MSCI EAFE Index 100.00 100.00 1.00 8.20 Historical Statistics - 5 Years Tracking Up Down Information Sharpe Downside Error Market Market Alpha Ratio Ratio Beta Risk Capture Capture RBC Global (Voyageur) 5.96 115.44 91.50 5.49 0.96 0.69 1.05 11.18 MSCI EAFE Index 100.00 100.00 0.00 1.00 10.95 ORA THE (� BOGDAHN `� GROUP Performance Review Galliard Core Fixed Income As of December 31. 2014 Financial Reconciliation 1 Quarter Market Value Net Management Other Apprec./ Market Value 10/01/2014 Transfers Contributions Distributions Fees Expenses Income Deprec. 12/31/2014 Galliard Core Fixed Income 4,603 51 4,654 Financial Reconciliation October 1, 2014 To December 31, 2014 Market Value Net Management Other Apprec./ Market Value 10/01/2014 Transfers Contributions Distributions Fees Expenses Income Deprec. 12/31/2014 Galliard Core Fixed Income 4,603 51 4,654 Peer Group Analysis - IM U.S. Intermediate Duration (SA +CF) 8.00 6.00 4.00 E K 2.00 0.00 2.00 •0 I 00 • 0 Cumulative Performance $150.00 $135.00 0 O 0 0 0 $120.00 0 00 $105.00 QTR FYTD 1 YR 2 YR 3 YR 4 YR 5 YR • Galliard Core Fixed Income 1.10 (23) 1.10 (23) 4.33 (24) 1.56 (45) 2.76 (44) 3.65 (34) 4.44 (22) • Barclays Intermediate Aggregate Index 1.20 (17) 1.20 (17) 4.12 (29) 1.51 (52) 2.19 (76) 3.12 (65) 3.72 (69) Median 0.90 0.90 3.47 1.52 2.63 3.36 3.97 Comparative Performance $137:88 $90.00 1 fir- -T----T 9/07 9/08 9/09 9/10 9/11 9/12 9/13 12/14 Galliard Core Fixed Income Barclays Intermediate Aggregate Index 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr Ending Ending Ending Ending Ending Ending Sep -2014 Jun -2014 Mar -2014 Dec -2013 Sep -2013 Jun -2013 Galliard Core Fixed Income 0.09 (25) 1.65 (22) 1.43 (29) -0.05 (83) 0.58 (78) -1.95 (75) Barclays Intermediate Aggregate Index 0.03 (38) 1.62 (26) 1.20 (51) -0.14 (92) 0.76 (41) -1.78 (51) IM U.S. Intermediate Duration (SA +CF) Median 0.00 1.40 1.21 0.20 0.72 -1.78 W ps� THE (� BOGDAHN `� GROUP 3 Yr Rolling Under /Over Performance - 5 Years 0.00 w 12.0 Down B Over Sharpe u 10.0 Performance w 25.00 Market Alpha v 8.0 w ° ° ° ° ° X • LL 6.0 O • , v 0 4.0 Capture U v 2.0 Under T Performance 0.0 r 1 I T 1 1 1 1 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0 Barclays Intermediate Aggregate Index ( %) 1.04 1.19 • Over Performance • Under Performance 0.00 + Earliest Date X Latest Date 0 Peer Group Scatterg ram - 3 Years 50.00 3.00 O O 2.80 O 2.60 EL ° 75.00 ° 00p000 «' 2.40 v °000°00° Down 2.20 O Information _ 2.00 O 1.75 1.80 1.85 1.90 1.95 2.00 2.05 2.10 Risk (Standard Deviation %) 0000 Return Standard Deviation Performance Review Galliard Core Fixed Income As of December 31. 2014 3 Yr Rolling Percentile Ranking - 5 Years y 0.00 Up Down Information Sharpe Downside w 25.00 Market Alpha O ° ° ° ° ° c Capture Galliard Core Fixed Income 0 0 0 112.68 97.15 0.47 1.48 1.30 1.04 1.19 Barclays Intermediate Aggregate Index 0.00 0 0 0 0 0.00 50.00 O O 0 EL ° 75.00 ° 00p000 Tracking °000°00° Down Information _ Downside O Market Market Alpha 0000 Ratio K Capture Capture 100.00 -r-1 3/10 9/10 3/11 9/11 3/12 9/12 3/13 9/13 3/14 12/14 Total 5 -25 25- Median Median -75 75 -95 Period Count Count Count Count 1p Galliard Core Fixed Income 18 • Barclays Intermediate Aggregate Index 20 Peer Group Scatterg ram - 5 Years 4.80 is 4.50 4.20 v 6(33%) 10(56%) 0(0%) 2 (11%) 0(0%) 0(0%) 11 (55 %) 9(45%) 101 3.90 3.60 O 1 1 1 1 2.10 2.16 2.22 2.28 2.34 2.40 2.46 2.52 2.58 Risk (Standard Deviation %) Return Standard Deviation • Galliard Core Fixed Income 2.76 2.03 • Galliard Core Fixed Income 4.44 2.47 • Barclays Intermediate Aggregate Index 2.19 1.81 • Barclays Intermediate Aggregate Index 3.72 2.19 Median 2.63 1.88 Median 3.97 2.33 Historical Statistics - 3 Years Galliard Core Fixed Income 0.65 109.62 85.27 0.65 1.07 1.95 1.01 1.05 Barclays Intermediate Aggregate Index 0.00 100.00 100.00 1.00 1.01 ca ps� THE (� BOGDAHN `� GROUP Tracking Up Down Information Sharpe Downside Error Market Market Alpha Ratio Ratio Beta Risk Capture Capture Galliard Core Fixed Income 0.38 112.68 97.15 0.47 1.48 1.30 1.04 1.19 Barclays Intermediate Aggregate Index 0.00 100.00 100.00 0.00 1.15 Historical Statistics - 5 Years Tracking Up Down Information Sharpe Downside Error Market Market Alpha Ratio Ratio Beta Risk Capture Capture Galliard Core Fixed Income 0.65 109.62 85.27 0.65 1.07 1.95 1.01 1.05 Barclays Intermediate Aggregate Index 0.00 100.00 100.00 1.00 1.01 ca ps� THE (� BOGDAHN `� GROUP Performance Review Galliard TIPS As of December 31. 2014 Financial Reconciliation 1 Quarter Market Value Net Management Other Apprec./ Market Value 10/01/2014 Transfers Contributions Distributions Fees Expenses Income Deprec. 12/31/2014 Galliard TIPS 1.186 -3 2 -16 1.168 Financial Reconciliation October 1, 2014 To December 31, 2014 Market Value Net Management Other Apprec./ Market Value 10/01/2014 Transfers Contributions Distributions Fees Expenses Income Deprec. 12/31/2014 Galliard TIPS 1.186 -3 2 -16 1.168 Peer Group Analysis - IM U.S. TIPS (SA +CF) 8.00 5.00 2.00 v K -1.00 4.00 7.00 •• • • W • WM QTR FYTD 1 YR 2 YR 3 YR 4 YR 5 YR • Galliard TIPS -1.21 (95) -1.21 (95) 0.85 (93) -2.47 (44) 0.02 (89) 2.02 (95) 2.57 (94) O Barclays U.S. TIPS 1 -10 Year -1.00 (86) -1.00 (86) 0.91 (83) -2.39 (39) 0.03 (88) 2.18 (88) 2.78 (93) Median -0.20 -0.20 3.42 -2.54 0.47 3.58 4.14 Comparative Performance Cumulative Performance $150.00 $135.00 a a� $120.00 $105.00 $90.00 9/07 9/08 9/09 9/10 Galliard TIPS Barclays U.S. TIPS 1 -10 Year 9/11 9/12 9/13 12/14 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr Ending Ending Ending Ending Ending Ending Sep -2014 Jun -2014 Mar -2014 Dec -2013 Sep -2013 Jun -2013 Galliard TIPS -1.94 2.90 1.17 -1.46 0.97 -5.53 Barclays U.S. TIPS 1 -10 Year 0.92 -5.52 32 THE. {� BOGDAHN \ GROUP. 3 Yr Rolling Under /Over Performance - 5 Years 12.0 Over Performance 9.0 Ul a 6.0 v A 3.0 0.0 Under Performance -3.0 1 T 1 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 Barclays U.S. TIPS 1 -10 Year ( %) • Under Performance + Earliest Date GO Latest Date Peer Group Scatterg ram - 3 Years 0.60 0.45 0.30 «' 0.15 v K 0.00 Ce -0.15 1 1 1 1 3.91 4.14 4.37 4.60 4.83 5.06 5.29 5.52 5.75 Risk (Standard Deviation %) Return Standard Deviation Performance Review Galliard TIPS As of December 31. 2014 3 Yr Rolling Percentile Ranking - 5 Years y 0.00 4.32 • Galliard TIPS 2.57 3.84 c A K w 25.00 4.28 O Barclays U.S. TIPS 1 -10 Year 2.78 3.86 c v � `w 50.00 5.49 Median 4.14 5.25 a E 75.00 - �10000 Tracking o0e8e ®gee0000000 Information Sharpe ®oeo Downside Error Market Market Alpha Ratio Ratio Beta Risk 3/10 9/10 3/11 9/11 3/12 9/12 3/13 9/13 3/14 12/14 Galliard TIPS 1.01 98.93 98.91 5 -25 25- Median Median -75 75 -95 Barclays U.S. TIPS 1 -10 Year Total Period 0.00 N/A 0.01 1.00 Historical Statistics - 5 Years Count Count Count Count • Galliard TIPS 18 0 (0 %) 0 (0 %) 0 (0 %) 18(100%) • Barclays U.S. TIPS 1 -10 Year 20 0 (0 %) 0 (0 %) 1 (5 %) 19(95%) Peer Group Scatterg ram - 5 Years 4.68 4.16 3.64 «' 3.12 K 2.60 2.08 1 1 1 1 3.51 3.78 4.05 4.32 4.59 4.86 5.13 5.40 5.67 Risk (Standard Deviation %) Return Standard Deviation • Galliard TIPS 0.02 4.32 • Galliard TIPS 2.57 3.84 O Barclays U.S. TIPS 1 -10 Year 0.03 4.28 O Barclays U.S. TIPS 1 -10 Year 2.78 3.86 Median 0.47 5.49 Median 4.14 5.25 Historical Statistics - 3 Years Tracking Up Down Information Sharpe Downside Error Market Market Alpha Ratio Ratio Beta Risk Capture Capture Galliard TIPS 1.01 98.93 98.91 0.00 0.00 0.01 1.01 2.95 Barclays U.S. TIPS 1 -10 Year 0.00 N/A 0.01 1.00 Historical Statistics - 5 Years Tracking Up Market Down Market Information Alpha Sharpe Beta Downside Error Capture Capture Ratio Ratio Risk Galliard TIPS 1.03 96.79 99.98 -0.19 -0.20 0.68 1.00 2.44 Barclays U.S. TIPS 1 -10 Year 0 100.00 2., 33 THE (� BOGDAHN `� GROUP Performance Review Templeton Global Bond Fund (FBNRX) As of December 31. 2014 Financial Reconciliation 1 Quarter Market Value Net Management Other Apprec./ Market Value 10/01/2014 Transfers Contributions Distributions Fees Expenses Income Deprec. 12/31/2014 Templeton Global Bond Fund (FBNRX) 1,362 -61 61 -83 1,278 Financial Reconciliation October 1, 2014 To December 31, 2014 Market Value Net Management Other Apprec./ Market Value 10/01/2014 Transfers Contributions Distributions Fees Expenses Income Deprec. 12/31/2014 Templeton Global Bond Fund (FBNRX) 1,362 -61 61 -83 1,278 Peer Group Analysis - IM Global Fixed Income (MF) 12.00 8.00 4.00 E v K 0.00 -4.00 -8.00 091 M O O ■ QTR FYTD 1 YR 2 YR 3 YR 4 YR 5 YR Cumulative Performance $136.00 $128.00 $120.00 $112.00 $104.00 $96.00 $88.00 12/11 10 '--.Q.7.12 1 1 6/12 12/12 6/13 12/13 6/14 12/14 • Templeton Global Bond Fund (FBNRX) -1.67 (75) -1.67 (75) 1.79 (52) 2.11 (17) 6.59 (2) N/A N/A O Citigroup World Government Bond -1.49 (71) -1.49 (71) -0.48 (82) -2.25 (81) -0.97 (94) 0.81 (85) 1.67 (91) - Templeton Global Bond Fund (FBNRX) Median -1.05 -1.05 1.93 0.30 2.61 2.57 3.39 - Citigroup World Government Bond Comparative Performance THE 34 (� BOGDAHN GROUP 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr Ending Ending Ending Ending Ending Ending Sep -2014 Jun -2014 Mar -2014 Dec -2013 Sep -2013 Jun -2013 Templeton Global Bond Fund (FBNRX) 0.06 (15) 2.68 (41) 0.75 (95) 2.72 (1) 1.09 (49) -2.72 (29) Citigroup World Government Bond -3.78 (91) 2.27 (54) 2.66 (41) -1.09 (90) 2.88 (3) -2.97 (36) IM Global Fixed Income (MF) Median -1.70 2.40 2.43 0.63 0.99 -3.32 THE 34 (� BOGDAHN GROUP Page Intentionally Left Blank 35 (� BOGDAHN ``� GROUP Performance Review American Core Realty Fund As of December 31. 2014 Financial Reconciliation 1 Quarter Market Value Net Management Other Apprec./ Market Value 10/01/2014 Transfers Contributions Distributions Fees Expenses Income Deprec. 12/31/2014 American Core Realty Fund 824 428 -2 10 5 1,265 Financial Reconciliation October 1, 2014 To December 31, 2014 Market Value Net Management Other Apprec./ Market Value 10/01/2014 Transfers Contributions Distributions Fees Expenses Income Deprec. 12/31/2014 American Core Realty Fund 824 428 -2 10 5 1,265 Peer Group Analysis - IM U.S. Open End Private Real Estate (SA +CF) 25.00 20.00 Cumulative Performance $175.00 $150.00 15.00 00 00 �0 0O 00 $125.00 c v 10.00 K $100.00 - 5.00 0 O O O 0.00 $75.00 - -5.00 QTR FYTD 1 YR 2 YR 3 YR 4 YR 5 YR • American Core Realty Fund 1.79 (89) 1.79 (89) 11.62 (64) 11.99 (67) 11.75 (67) 12.57 (67) 12.30 (99) O American Core Realty Policy 3.25 (30) 3.25 (30) 12.48 (48) 13.21 (40) 12.45 (42) 13.32 (51) 13.36 (56) Median 2.87 2.87 12.24 12.74 12.25 13.38 13.60 Comparative Performance $50.00 1 1 1 1 9/07 9/08 9/09 9/10 American Core Realty Fund American Core Realty Policy $150.28 $121.04 1 1 9/11 9/12 9/13 12/14 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr Ending Ending Ending Ending Ending Ending Sep -2014 Jun -2014 Mar -2014 Dec -2013 Sep -2013 Jun -2013 American Core Realty Fund 3.36 (50) 2.80 (61) 3.20 (40) 2.59 (76) 3.40 (54) 3.36 (66) American Core Realty Policy 3.24 (59) 2.93 (57) 2.52 (65) 3.17 (53) 3.56 (50) 3.86 (52) IM U.S. Open End Private Real Estate (SA +CF) Median 3.35 3.18 2.87 3.23 3.54 3.88 ps� THE (� BOGDAHN `� GROUP 3 Yr Rolling Under /Over Performance - 5 Years 0.00 18.0 Over 0 0 O Performance c 12.30 � 12.0 LL 2.11 r % 6.0 • 12.45 v • 0.0 v 0.86 o U -6.0 0 c 1.75 v -12.0 25.00 Under E -18.0 Performance 1 1 1 1 1 1 1 1 1 -20.0 -16.0 -12.0 -8.0 -4.0 0.0 4.0 8.0 12.0 16.0 20.0 American Core Realty Policy ( %) O p • Under Performance + Earliest Date X Latest Date 0 Peer Group Scatterg ram - 3 Years p 12.60 50.00 O Down O O ZS 12.30 p Downside Error E 12.00 Market p 11.70 • 0 Risk 11.40 75.00 Capture 0.60 0.80 1.00 1.20 1.40 1.60 Risk (Standard Deviation %) p 0eO0 Return Standard 1.01 Deviation Performance Review American Core Realty Fund As of December 31. 2014 3 Yr Rolling Percentile Ranking - 5 Years y c 0.00 0 0 0 0 0 p 12.30 2.11 K 12.45 0.86 • American Core Realty Policy 0 1.75 w 25.00 1.48 Median 13.60 2.74 c O O p 0 p 50.00 Up Down O O Sharpe p Downside Error Market Market p pp 0 Risk E 75.00 Capture Capture p 0eO0 American Core Realty Fund 1.01 94.64 N/A 7.06 -0.63 12.36 0.37 0.00 K 0.00 100.00 0.00 N/A 13.68 1.00 u.uU Historical Statistics - 5 Years 100.00 3/10 9/10 3/11 9/11 3/12 9/12 3/13 9/13 3/14 12/14 Error Market Market Alpha Ratio 5 -25 25- Median Median -75 75 -95 Capture Total Period Count Count Count Count • American Core Realty Fund 18 O American Core Realty Policy 18 Peer Group Scatterg ram - 5 Years 14.19 13.76 13.33 O «' 12.90 K 12.47 12.04 1 1.52 1.71 1.90 0 (0 %) 5 (28 %) 7 (39 %) 6 (33 %) 7 (39 %) 2 (11%) 8 (44 %) 1 (6 %) 1 1 1 2.09 2.28 2.47 2.66 2.85 Risk (Standard Deviation %) Return Standard Deviation 3.04 • American Core Realty Fund 11.75 0.91 • American Core Realty Fund 12.30 2.11 O American Core Realty Policy 12.45 0.86 • American Core Realty Policy 13.36 1.75 Median 12.25 1.48 Median 13.60 2.74 Historical Statistics - 3 Years Tracking Up Down Information Sharpe Downside Error Market Market Alpha Ratio Ratio Beta Risk Capture Capture American Core Realty Fund 1.01 94.64 N/A 7.06 -0.63 12.36 0.37 0.00 American Core Realty Policy 0.00 100.00 0.00 N/A 13.68 1.00 u.uU Historical Statistics - 5 Years Tracking Up Down Information Sharpe Downside Error Market Market Alpha Ratio Ratio Beta Risk Capture Capture American Core Realty Fund 1.21 92.44 N/A -0.82 -0.79 5.59 0.99 0.30 American Core Realty Policy 0.00 100.00 N/A 0.00 0.00 37 THE (� BOGDAHN GROUP Performance Review Intercontinental As of December 31. 2014 Financial Reconciliation 1 Quarter Market Value Net Management Other Apprec./ Market Value 10/01/2014 Transfers Contributions Distributions Fees Expenses Income Deprec. 12/31/2014 Intercontinental 2,172 106 2,278 Financial Reconciliation October 1, 2014 To December 31, 2014 Market Value Net Management Other Apprec./ Market Value 10/01/2014 Transfers Contributions Distributions Fees Expenses Income Deprec. 12/31/2014 Intercontinental 2,172 106 2,278 Peer Group Analysis - IM U.S. Open End Private Real Estate (SA +CF) 25.00 20.00 15.00 • E • • • - v 10.00 K 5.00 • Q O O 0.00 -5.00 QTR FYTD 1 YR 2 YR 3 YR 4 YR Cumulative Performance � $225.00 $200.00 $175.00 - • $150.00 - $125.00 - $100.00 - 5 YR • Intercontinental 4.87 (1) 4.87 (1) 13.58 (22) 15.35 (21) 15.40 (19) 15.58 (21) N/A • NCREIF Fund Index -ODCE (VV) 3.25 (30) 3.25 (30) 12.48 (48) 13.21 (40) 12.45 (42) 13.32 (51) 13.92 (44) Median 2.87 2.87 12.24 12.74 12.25 13.38 13.60 Comparative Performance $185.53 15 $75.00 1 1 1 9/10 3/11 9/11 3/12 9/12 3/13 9/13 3/14 12/14 Intercontinental NCREIF Fund Index -ODCE (VVV) I 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr Ending Ending Ending Ending Ending Ending Sep -2014 Jun -2014 Mar -2014 Dec -2013 Sep -2013 Jun -2013 Intercontinental 3.79 (24) 2.42 (89) 1.89 (82) 5.35 (3) 3.66 (43) 4.35 (29) NCREIF Fund Index -ODCE (VV) 3.24 (59) 2.93 (57) 2.52 (65) 3.17 (53) 3.56 (50) 3.86 (52) IM U.S. Open End Private Real Estate (SA +CF) Median 3.35 3.18 2.87 3.23 3.54 3.88 38 ps� THE (� BOGDAHN `� GROUP 3 Yr Rolling Under /Over Performance - 5 Years Over • 16.0 Performance }z 15.0 • c v r 14.0 0 U w 13.0 c Performance Review Intercontinental As of December 31. 2014 3 Yr Rolling Percentile Ranking - 5 Years y 0.00 • NCREIF Fund Index -ODCE (VW) 12.45 0.86 O NCREIF Fund Index -ODCE (VW) 13.92 2.05 Under 12.0 Historical Statistics - 3 Years c w 25.00 Performance Error 1 1 1 1 1 1 1 Ratio 12.0 12.5 13.0 13.5 14.0 14.5 15.0 15.5 16.0 16.5 p = NCREIF Fund Index -ODCE (VW) ( %) O • Over Performance + Earliest Date X Latest Date 50.00 Peer Group Scatterg ram - 3 Years O O 5.71 16.00 EL NCREIF Fund Index -ODCE (VV) 0.00 100.00 N/A ems.°. 14.00 E 13.68 75.00• ,..- Historical Statistics - 5 Years 12.00 K Tracking 10.00 1 1 Information 1 Downside 0.40 0.80 1.20 1.60 2.00 2.40 2.80 3.20 3/13 9/13 3/14 12/14 Risk (Standard Deviation %) Risk 5 -25 25- Median Median -75 Return Standard Total Period Deviation Performance Review Intercontinental As of December 31. 2014 3 Yr Rolling Percentile Ranking - 5 Years y 0.00 • NCREIF Fund Index -ODCE (VW) 12.45 0.86 O NCREIF Fund Index -ODCE (VW) 13.92 2.05 Median 12.25 1.48 Median 13.60 2.74 Historical Statistics - 3 Years c w 25.00 Error Market O O _ Ratio Beta Risk p = O O O O p 0 O O O O 2.51 50.00 O 7.04 O O 5.71 0.65 EL NCREIF Fund Index -ODCE (VV) 0.00 100.00 N/A 0.00 13.68 75.00• ,..- Historical Statistics - 5 Years OOOOOO K Tracking Up 100.00 Information 1 Downside 3/10 9/10 3/11 9/11 3/12 9/12 3/13 9/13 3/14 12/14 Beta Risk 5 -25 25- Median Median -75 75 -95 Total Period Count Count Count Count lb Intercontinental 6 • NCREIF Fund Index -ODCE (VW) 20 Peer Group Scatterg ram - 5 Years 14.00 O ems.°. 13.80 E 13.60 13.40 2(33%) 4(67%) 0(0%) 0 (0 %) 0(0%) 11 (55 %) 9(45%) 0 (0 %) 1.80 2.00 2.20 2.40 2.60 2.80 Risk (Standard Deviation %) Return Standard Deviation • Intercontinental 15.40 2.55 • Intercontinental N/A N/A • NCREIF Fund Index -ODCE (VW) 12.45 0.86 O NCREIF Fund Index -ODCE (VW) 13.92 2.05 Median 12.25 1.48 Median 13.60 2.74 Historical Statistics - 3 Years 3.00 Intercontinental N/A N/A N/A N/A N/A N/A N/A N/A NCREIF Fund Index -ODCE (VV) 0.00 100.00 N/A 0.00 6.51 1.00 0.00 KE THE [� BOGDAHN `'� GROUP. Tracking Up Down Information Sharpe Downside Error Market Market Alpha Ratio Ratio Beta Risk Capture Capture Intercontinental 2.51 122.73 N/A 7.04 1.08 5.71 0.65 0.00 NCREIF Fund Index -ODCE (VV) 0.00 100.00 N/A 0.00 13.68 1.00 ,..- Historical Statistics - 5 Years Tracking Up Down Information Sharpe Downside Error Market Market Alpha Ratio Ratio Beta Risk Capture Capture Intercontinental N/A N/A N/A N/A N/A N/A N/A N/A NCREIF Fund Index -ODCE (VV) 0.00 100.00 N/A 0.00 6.51 1.00 0.00 KE THE [� BOGDAHN `'� GROUP. Page Intentionally Left Blank 40 Compliance Checklist Total Fund Winter Springs GE As of December 31, 2014 Total Fund Compliance: Yes No NIA 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. ✓ Equity Compliance: 1. Total domestic equity returns meet or exceed the benchmark over the trailing three and five year periods. 2. Total foreign equity returns meet or exceed the benchmark over the trailing three and five year periods. 3. Total domestic equity returns ranked within the top 40th percentile of its peer group over the trailing three year period. 4. Total domestic equity returns ranked within the top 40th percentile of its peer group over the trailing five year period. 5. The total equity allocation was less than 75% of the total plan assets at market. 6. Total foreign equity was less than 25% of the total plan assets at cost. Fixed Income Compliance: 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 separately managed fixed income investments have a minimum rating of investment grade or higher.' 'Less than 1.0% rated below investment grade as reported by the manager. Manager Compliance: 1. Manager outperformed the index over the trailing three year period. 2. Manager outperformed the index over the trailing five year period. 3. Manager ranked within the top 40th percentile over the trailing three year period. 4. Manager ranked within the top 40th percentile over the trailing five year period. 5. Less than four consecutive quarters of under performance relative to the benchmark. 6. Three year down - market capture ratio less than the index. Manager Compliance: 1. Manager outperformed the index over the trailing three year period. 2. Manager outperformed the index over the trailing five year period. 3. Manager ranked within the top 40th percentile over the trailing three year period. 4. Manager ranked within the top 40th percentile over the trailing five year period. 5. Less than four consecutive quarters of under performance relative to the benchmark. 6. Three year down - market capture ratio less than the index. 41 Yes No NIA Yes No NIA Vanguard RBC Global Gaillard TIPS VSCSX Yes No NIA Yes No NIA Yes No NIA Yes No NIA Templeton American RE Intercontinental Yes No NIA Yes No NIA Yes No NIA Yes No NIA Yes No NIA Total Fund Policy 60.00 Allocation Mandate Weight ( %) Jan -1976 20.00 S &P 500 Index 65.00 Barclays Aggregate Index 30.00 MSCI EAFE Index 5.00 Oct -2003 S &P 500 Index 60.00 Barclays Aggregate Index 30.00 MSCI EAFE Index 10.00 Sep -2006 S &P 500 Index 60.00 Barclays Intermediate Aggregate Index 40.00 Oct -2009 20.00 Russell 3000 Index 50.00 Barclays Intermediate Aggregate Index 25.00 MSCI EAFE Index 15.00 Barclays U.S. Treasury: U.S. TIPS Index 5.00 NCREIF Property Index 5.00 Oct -2010 Russell 3000 Index 50.00 Barclays Intermediate Aggregate Index 20.00 MSCI EAFE Index 15.00 Barclays U.S. Treasury: U.S. TIPS Index 5.00 NCREIF Fund Index -ODCE (VVv) 10.00 Vanguard Total Stock Market Policy Allocation Mandate Weight ( %) 'un -200? MSCI US Broad Market Index 100.00 Benchmark Historical Hybrid Compositions Total Fund As of December 31, 2014 Total Equity Policy Allocation Mandate Weight ( %) Jan -1970 S &P 500 Index 90.00 MSCI EAFE Index 10.00 Oct -2003 S &P 500 Index 85.00 MSCI EAFE Index 15.00 S &P 500 Index 100.00 Oct -2009 Russell 3000 Index 77.00 MSCI EAFE Index 23.00 Total Domestic Equity Policy Allocation Mandate Weight ( %) Jan -1926 S &P 500 Index 100.00 Oct -2009 Russell 3000 Index 100.00 Total Fixed Income Policy Allocation Mandate Weight ( %) Nov -2000 Barclays Aggregate Index 100.00 Sep -200 Barclays Intermediate Aqqreqate Index 100.00 American Realty Policy Allocation Mandate Weight ( %) Feb -2013 )ct -2007 CRSP U.S. Total Market TR Index 100.00 NCREIF Property Index 100.00 Oct -2010 NCREIF Fund Index -ODCE (VVv) 100.00 THE. 42 r {� BOGDAHN \ GROUP. Department: Tit Direct Phone: Performance Measurement Performance Analyst 407 -520 -5355 NickR @bogdahngroup.com Mishab @bogdahngroup.com 43 Department: Direct Phone: Address: Phone: Service Team Group Email: 1 The Bogdahn Group Your Service Team Contact Information Consultant Team Senior Consultant 863 - 904 -0858 DaveW @bogdahngroup.com 4901 Vineland Road, Suite 600 Orlando, Florida 32811 ServiceTeam003@bogdahngroup.com THE (r BOGDAHN ♦~� GROUP. Disclosures Total Fund As of December 31, 2014 Disclosures Neither The Bogdahn Group, nor any covered associates have made political contributions to any official associated with the Winter Springs General Employees General Plan and Trust, in excess of the permitted amount. THE. 44 {� BOGDAHN \ GROUP. Report Statistics Definitions and Descriptions Active Return - Arithmetic difference between the manager's performance and the designated benchmark return over a specified time period. Alpha - A measure of the difference between a portfolio's actual performance and its expected return based on its level of risk as determined by beta. It determines the portfolio's non - systemic return, or its historical performance not explained by movements of the market. Beta - A measure of the sensitivity of a portfolio to the movements in the market. It is a measure of the portfolio's systematic risk. Consistency - The percentage of quarters that a product achieved a rate of return higher than that of its benchmark. Higher consistency indicates the manager has contributed more to the product's performance. Down Market Capture - The ratio of average portfolio performance over the designated benchmark during periods of negative returns. A lower value indicates better product performance Downside Risk - A measure similar to standard deviation that utilizes only the negative movements of the return series. It is calculated by taking the standard deviation of the negative quarterly set of returns. A higher factor is indicative of a riskier product. Excess Return Arithmetic difference between the manager's performance and the risk -free 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. Information Ratio This calculates the value -added contribution of the manager and is derived by dividing the active rate of return of the portfolio by the tracking error. The higher the Information Ratio, the more the manager has added value to the portfolio. R- Squared - The percentage of a portfolio's performance that can be explained by the behavior of the appropriate benchmark. A high R- Squared means the portfolio's performance has historically moved in the same direction as the appropriate benchmark. Return - Compounded rate of return for the 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 an absolute rate of return per unit of risk. A higher value demonstrates better historical risk - adjusted performance. Standard Deviation - A statistical measure of the range of a portfolio's performance. It represents the variability of returns around the average return over a specified time period. Tracking Error - This is a measure of the standard deviation of a portfolio's returns in relation to the performance of its designated market benchmark. Treynor Ratio - Similar to Sharpe ratio but utilizes beta rather than excess risk as determined by standard deviation. It is calculated by taking the excess rate of return above the risk free rate divided by beta to derive the absolute rate of return per unit of risk. A higher value indicates a product has achieved better historical risk - adjusted performance. Up Market Capture - The ratio of average portfolio performance over the designated benchmark during periods of positive returns. A higher value indicates better product performance. THE 45 (� BOGDAHN `� GROUP Disclosures The Bogdahn Group compiled this report for the sole use of the client for which it was prepared. The Bogdahn Group is responsible for evaluating the performance results of the Total Fund along with the investment advisors by comparing their performance with indices and other related peer universe data that is deemed appropriate. The Bogdahn group uses the results from this evaluation to make observations and recommendations to the client. The Bogdahn Group uses time - weighted calculations which are founded on standards recommended by the CFA Institute. The calculations and values shown are based on information that is received from custodians. The Bogdahn Group analyzes transactions as indicated on the custodian statements and reviews the custodial market values of the portfolio. As a result, this provides The Bogdahn Group with a reasonable basis that the investment information presented is free from material misstatement. This methodology of evaluating and measuring performance provides The Bogdahn Group with a practical foundation for our observations and recommendations. Nothing came to our attention that would cause The Bogdahn Group to believe that the information presented is significantly misstated. The strategies listed may not be suitable for all investors. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. Past performance is not an indication of future performance. Any information contained in this report is for informational purposes only and should not be construed to be an offer to buy or sell any securities, investment consulting, or investment management services. Additional information included in this document may contain data provided by from index databases, public economic sources and the managers themselves. This document may contain data provided by Barclays. Barclays Index data provided by way of Barclays Live. This document may contain data provided by Standard and Poor's. Nothing contained within any document, advertisement or presentation from S &P Indices constitutes an offer of services in jurisdictions where S &P Indices does not have the necessary licenses. All information provided by S &P Indices is impersonal and is not tailored to the needs of any person, entity or group of persons. 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This document may contain data provided by Morningstar. All rights reserved. Use of this content requires expert knowledge. It is to be used by specialist institutions only. The information contained herein: (1) is proprietary to Morningstar and /or its content providers; (2) may not be copied, adapted or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information, except where such damages or losses cannot be limited or excluded by law in your jurisdiction. Past financial performance is not guarantee of future results. THE 46 (� BOGDAHN `� GROUP THE BOGDAHN GROUP. simpiifti�irrg your inrestment and fiduciary decisions Orlando 4901 Vineland Road, Suite 600 Orlando, Florida 32811 866.240.7932 Chicago I Cleveland I Milwaukee Pittsburgh