HomeMy WebLinkAboutMINUTES - 09132011 - C.136RECOMMENDATION(S):
ACCEPT quarterly report of the Post Retirement Health Benefits Trust Agreement
Advisory Body.
FISCAL IMPACT:
No specific fiscal impact. This is a quarterly report of the County's assets in the Public
Agency Retirement Services (PARS) Public Agencies Post-Retirement Health Care Plan
Trust.
BACKGROUND:
On December 14, 2010 the Board of Supervisors directed the formation of a Post
Retirement Health Benefits Trust Agreement Advisory Body (consisting of the County
Administrator, County Finance Director, Treasurer-Tax Collector, Auditor-Controller, and
Health Services Finance Director).
The Advisory Body meets quarterly. At its meeting of August 4, 2011 the body discussed
and reviewed final report formats with HighMark Capital Management and made
recommendations regarding a final standardized quarterly report. The attached second
APPROVE OTHER
RECOMMENDATION OF CNTY
ADMINISTRATOR
RECOMMENDATION OF BOARD
COMMITTEE
Action of Board On: 09/13/2011 APPROVED AS RECOMMENDED OTHER
Clerks Notes:
VOTE OF SUPERVISORS
AYE:John Gioia, District I Supervisor
Gayle B. Uilkema, District II Supervisor
Mary N. Piepho, District III Supervisor
Karen Mitchoff, District IV Supervisor
Federal D. Glover, District V Supervisor
Contact: Lisa Driscoll, County
Finance Director (925) 335-1023
I hereby certify that this is a true and correct copy of an action taken and entered
on the minutes of the Board of Supervisors on the date shown.
ATTESTED: September 13, 2011
David Twa, County Administrator and Clerk of the Board of
Supervisors
By: June McHuen, Deputy
cc: Robert Campbell, Auditor-Controller, Lisa Driscoll, County Finance Director, Patrick Godley, HSD Chief Financial Officer, David Twa,
County Administrator, Russell Watts, Treasurer-Tax Collector
C.136
To:Board of Supervisors
From:Post Retire Hlth Benefits Trust Advisory Body
Date:September 13, 2011
Contra
Costa
County
Subject:Quarterly Report of the Post Retirement Health Benefits Trust Agreement Advisory Body
quarter report is in the standardized format. The following is the investment summary for
the period ending June 30, 2011:
BACKGROUND: (CONT'D)
Beginning Value $ 51,335,134.57
Net Contributions/Withdrawals 10,605,213.79
Fees Deducted -17,738.51
Income Received 128,040.41
Market Appreciation 182,888.21
Net Change in Accrued Income 83,693.11
Ending Market Value $ 62,317,231.58
Additional Materials -
A Post Retirement Health Benefits Trust Agreement Advisory Body web-page can be found at the following address:
http://ca-contracostacounty.civicplus.com/index.aspx?NID=291. The page describes the function of the body, posts
quarterly meeting materials, and all pertinent trust and plan documents.
CONSEQUENCE OF NEGATIVE ACTION: None. CHILDREN'S IMPACT STATEMENT: None.
ATTACHMENTS 2011 Second Quarter Report
PARS: County of Contra CostaySecond Quarter 2011Presented byAndrew Brown CFAAndrew Brown, CFA
DISCUSSION HIGHLIGHTSDISCUSSION HIGHLIGHTSWe used the majority of the second quarter of 2011 to “average in” to the market the initial $51 million contribution received in February 2011.As we progressed towards the end of June, we began to reach our targeted asset allocation of 22% large cap equity, 7% mid-cap equity, 7%small cap equity, 8% global equity, 7% international equity, 5% real estate, 41% fixed income (of which 3% allocated to high yield bond) and3% cash/money market. The Plan received a $5.6 million contribution (9% of Plan assets) on June 30, which inflated the quarter ending cashposition.In the second quarter, the Plan returned 0.6%, which underperformed the Plan benchmark return of 1.36%. In a quarter that provided plentyof uncertainty between European sovereign debt issues, the end of quantitative easing II, continuation of the recovery from the nuclear reactoraccident in Japan, and continued volatility in commodity prices, our strategyof “averaging in” the initial contribution to the market felt like thecorrect strategy. The end of the quarter provided a tight distribution range for asset class returns. REIT holdings were the leading area for thePlan, returning 3.88%. Bonds, as measured by the Barclay’s Capital Aggregate Index returned 2.3%. The MSCI-EAFE Index (internationalequities) returned 1.57%. After these three asset classes, the distribution of returns narrowed considerably with Russell Mid-Cap Indexreturning0.41%,MSCI-ACWI(global equities)0.24%,Russell 1000 Index0.12%,and cash returned 0%. The onlyasset class to register ag%,(gq)%,%,%ygnegative return from a benchmark standpoint was small cap stocks, withthe Russell 2000 Index returning -1.61%. The drag from our cashholdings, as well as an underweight to fixed income, had the largest impact on the underperformance relative to the Plan benchmark during thesecond quarter. Our underperformance within the individual holdingsthat comprise our large cap core allocation also detracted fromperformance. Given the staging in strategy, we never fully got to an overweight position in any one specific asset class during the quarter,however our investments in mid-cap equities, global equities and real estate were additive to performance. Our underweight in small capstocks, coupled with our “relative” outperformance in this sector also supported returns.DomesticequitiesTheRussell1000Indexreturned012%forthesecondquarterInmanyrespectsitseemedlikeahardfoughtthreeDomesticequities.TheRussell1000Indexreturned0.12%forthesecondquarter.Inmanyrespects,itseemedlikeahardfoughtthreemonths to reap only 0.12%. After starting off with a strong April, the market slipped into a six week losing streak. During this time, marketwatchers were fond of stating that our economy had entered a ‘soft patch’. This soft patch was represented in weaker-than-expectedeconomic readings. Certainly, the non-farm payroll growth in May (+25,000) and June (+54,000) were highly disappointing. Additionally, GDPstatistics during the 1st quarter (+1.8%) were highly disappointing. Higher gas prices and supply disruptions from the Japanese tsunami andearthquake, coupled with the continued woes in the housing market, wore on investor’s nerves. On the other hand, there are signs that thissoft patch might only be temporary in nature, given the fact that we continue to see strong corporate earning results being generated. A furtherpositive development is that Japan seems to be getting “back on line” with many factories beginning to return to higher levels of capacity. TheendoftheqarteralsomarkedtheendofQ antitati eEasingII(QE2)ThisprogramherebtheFedp rchased$600billioninUSendofthequarteralsomarkedtheendofQuantitativeEasingII(QE2).Thisprogram,wherebytheFedpurchased$600billioninU.S.Treasuries, coincided with a very strong run for the stock market. Thus, with the end of the program upon us, some investors were nervousabout life, post-QE2. While some of the weakness we saw during the middle of the quarter might have been impacted by the end of QE2, wewould offer that the stock market has fully discounted the end of QE2.The large cap core equity holdings declined -1.41% during the quarter compared to the Russell 1000 Index return of 0.12%. Most of theunderperformance was attributable to stock selection, particularly in the financial, consumer discretionary, healthcare and informationtechnologysectors.ThelargestdetractorsforthequarterincludedSuncorEnergy(-12.6%),Google(-13.6%),JPMorganChase(-10.7%),technologysectors.ThelargestdetractorsforthequarterincludedSuncorEnergy(12.6%),Google(13.6%),JPMorganChase(10.7%),Wells Fargo (-11.1%), and Greenhill & Co. (-17.5%). Other factors that influenced performance during the quarter included sector allocation,which had a modest negative impact on overall performance. While the strategy benefitted from being underweight financials, performancewas more than offset by an overweight in energy and an underweight in both consumer staples andutilities Positions sold during the quarterincluded the Hanover Group (-8.9%) and Staples (-14.1%). At the sector level, as of quarter end, the most significant overweights includedenergy, materials, industrials, consumer staples, and information technology. The largest underweights were in the consumer discretionary,financials, and telecommunications sectors.June 30, 2011PARS: County of Contra Costa1
DISCUSSION HIGHLIGHTSDISCUSSION HIGHLIGHTSDriven by the uncertainty in the market, defensive sectors were the strongest performers during the second quarter. The top three performingsectors in the Russell 1000 Index were Healthcare (+7.8%), Utilities (+6.1%), and Consumer Staples (+5.3%). The bottom three sectors wereFinancials(-5.9%),Energy(-4.6%),and Technology(-1.4%).Largecapgrowth outperformed largecapvalue duringthequarter(0.8% vs.(),gy(),gy()gpgpgpgq(-0.5%) as the large weighting in the financial sector (26.7%) dragged down the average large cap value fund. In the Plan, we maintained aslight tilt in our allocation to large cap value (5.25% to 3.5%) relative to large cap growth.Our investment in the Harbor Capital Appreciation Fund (large cap growth) was a highlight in the quarter. The fund returned 3.63% and rankedin the 2nd percentile of large cap growth funds as measured by Morningstar. Holdings from the consumer sector drove returns for the quartersuch as Lululemon (+25.6%), Tiffany & Co. (+27.8%), Green Mountain Coffee (+38.2%), and Burberry Group (+23.7%) leading the way. Beingdihfi i llhl dhfdlh hfhhfi i lhldihiidAiE(144%)hl dunderweightfinancialsalsohelpedthefund,althoughone ofthethreefinancialholdings theymaintained,AmericanExpress(+14.4%)helpedreturns. The other large cap growth fund, the T. Rowe Price Growth Fund was in-line with the benchmark return, posting a 0.06% return.As mentioned previously, the sizable allocation that large cap value funds typically maintained in financial related holdings played a large rolein the underperformance relative to the Russell 1000. The T. Rowe Price Equity Income Fund was positioned at 19% at quarter end, while theLoomis Sayles Value Y Fund had a 21.6% allocation to financial stocks. The T. Rowe Equity Income Fund was down -0.95% for the quarter,and the Loomis Fund was off -1.06%.Our Mid-Cap equities registered a 0.89% return for the quarter, compared the Russell Mid-cap Index return of 0.41%. On a relative basis, theHighMark Geneva Mid-Cap Growth Fund’s return of 0.63%, placed it in the 42nd percentile in Morningstar’s mid-cap growth universe. On theother hand, while the TIAA-CREF Mid Cap Value Fund posted only a slightly higher return of 0.71%, this was worth a ranking in the 12thpercentile of Morningstar’s mid-cap value universe.ForthefirsttimeinanmberofqarterssmallcapstocksnderperformedlargecapstocksWithal ationsgettingalittlestretchedithinForthefirsttimeinanumberofquarters,smallcapstocksunderperformedlargecapstocks.Withvaluationsgettingalittlestretchedwithinsmall caps, it was likely a little overdue. Of the two funds in the Plan, the T. Rowe Price Growth Fund had the stronger showing, returning1.57%. This ranked the fund in the 23rd percentile of the Morningstar small growth category. The fund benefited from technology relatednames in software services, as well as biotechnology positions. As mentioned previously, growth stocks outperformed value stocks during thequarter, and the small cap space was no different. The Columbia Small Cap Value Fund returned -1.99%, and ranked in the 47th percentile ofthe Morningstar small value fund universe. Highlights from the consumer sector drove returns for the fund during the quarter including GNCHoldings (+30.2%), Domino’s Pizza (+37.0%), and Helen of Troy (+17.4%). The fund managers, in their quarterly commentary, indicated adesire to maintain overweights vs. the Russell 2000 Index in a number of economically-sensitive sectors, including technology, consumerdi tidid tildiscretionary, andindustrials.June 30, 2011PARS: County of Contra Costa2
DISCUSSION HIGHLIGHTSDISCUSSION HIGHLIGHTSREITs were once again the leading asset class in the Plan for the quarter, returning 3.88% as measured by the DJ Wilshire REIT Index. Ourfund, the Nuveen Real Estate Equity Fund was basically in-line with this return, posting a 3.71% return. Supporting returns for the quarter wereholdingsintheirtop10: Boston Properties +11.9%,Simon PropertyGroup+8.5%,Macerich +8.0%,Avalonbay+6.9% and Vornado Realtygpp,pyp,,yyTrust 6.5%. Year to date, the fund is up 10.4%, Real estate has been supported by continued improvement in the fundamentals. Rents areimproving, buildings are beginning to trade, and there has been some improvement in new developments. An expanding global economydoes bode well for this sector, and so far the macro-oriented events such as the Middle East, Japanese earthquake/tsunami, and the sovereigndebt crisis has not impacted this sector. Peripheral dynamics such as individual investors seeking yield, in a yield-starved environment, as wellas private equity potentially looking to put money to work into properties also have supported performance in this asset class.Emerging markets still appear attractive to us due to the combination of attractive earnings growth, strong governmental balance sheets, andvaluationsonaprice/earningsbasisthatarepricedat105XonaforwardearningsbasisThechallengehasbeenthatvariousemergingvaluationsonaprice/earningsbasisthatarepricedat10.5Xonaforwardearningsbasis.Thechallengehasbeenthatvariousemergingmarkets are trying to engineer a “soft landing” type of scenario, raising interest rates to slightly slow their growth rates, while temper inflationarypressures. Our emerging market fund the RS Emerging Markets Fund was off -2.82%. During the quarter, the bell-weather emerging market“BRIC” nations struggled: Brazil -4.1%, Russia -5.6%, India -3.6%, and China -1.9%. While it was a difficult quarter, it is our inclination tomaintain our current 2.5% allocation to emerging markets.Developed international markets were mixed in the second quarter. Developed markets, as measured by the MSCI-EAFE Index were up1.57%duringthequarter.Wecontinuetomaintainourunderweightpositionininternationalequitiesasweareconcernedaboutthesovereign1.57%duringthequarter.Wecontinuetomaintainourunderweightpositionininternationalequitiesasweareconcernedaboutthesovereigndebt situation in Europe. Greece, and towards the end of the quarter, Italy weighed on international market returns. While the Dodge and CoxInternational Stock Fund lagged the benchmark during the quarter (+0.46%), both the MFS International Growth Fund (+3.63%) and theHighMark International Opportunity Fund (+2.31%) had solid quarters.Within global equities, the Templeton Global Opportunities Fund returned 1.12%, outperforming the MSCI-ACWI Index (+.24%). From ageographic standpoint, investments in Continental Europe supported performance, as well as North American equity exposure. In regards tosector exposure, while the fund’s holdings in healthcare had been a drag on performance throughout previous quarters, this quarter the fundasre ardedfortheirpatienceashealthcareasthesinglemostpositi esectorto ardsperformanceThefnd’scontrarianbentalsosaitwasrewardedfortheirpatienceashealthcarewasthesinglemostpositivesectortowardsperformance.Thefund’scontrarianbentalsosawitseek to slightly increase their financial holdings – although the fund still is underweight relative to the benchmark. The managers, in theirquarterly commentary suggest that the growing debt burdens within countries, rising interest rates, creeping inflationary pressures and politicaldiscord is impacting most regions of the world. However, in this environment the managers believe that opportunities will emerge for potentialattractive investments. In the second quarter the fund ranked in the 41st percentileof the Morningstar World Stock universe.June 30, 2011PARS: County of Contra Costa3
DISCUSSION HIGHLIGHTSDISCUSSION HIGHLIGHTSThe Barclays Aggregate Bond Index gained 2.3% in the second quarter as investment-grade corporate bonds, agency mortgage-backed securities and U S Treasuries posted positive returns Thequarter was generally characterized by a return to quality or the“risk off”trade assecurities and U.S. Treasuries posted positive returns. The quarter was generally characterized by a return to quality, or the risk off trade, as lower quality and more cyclical names underperformed while Treasuries and higher quality names performed well. As of June 30, 2011, the Federal Reserve completed its $600 billion Treasury purchase program, marking the end of an eight month program of Treasury purchases intended to keep interest rates low and stimulate economic activity. In addition to approximately $1.5 trillion Treasury securities, the Federal Reserve continues to hold over $900 billion worth of mortgage-backed securities acquired during the initial quantitative easing program which ended in March 2010. Upon the completion of the Treasury purchase program in June, the Fed announced that it would continue to reinvest the principal payments from all domestic securities into additional Treasury securities in order to maintain the total face value of its securities holdings at approximately $2.6 trillion. In the absence of this reinvestment activity the Federal Reserve would be implicitly tightening monetary policy which they want to avoid until they believe the economy has reached a self-sustaining recoverypolicy, which they want to avoid until they believe the economy has reached a self-sustaining recovery. Weaker economic data and the ongoing European debt crisis led to a 2.4% gain in the U.S. Treasury index this quarter, as ten-year Treasury yields declined 31 basis points and thirty-year bond yields fell 14 basis points. Investment-grade corporate bonds returned 2.3% for the quarter, underperforming equal-duration Treasuries by −32 basis points, as spreads widened +14 basis points. Mortgage-backed securities outperformed equal-duration Treasuries by +35 basis points this quarter, with a return of 2.3%. The individual fixed income holdings outperformed the Barclays Aggregate index during the second quarter with a return of 2 4%versus 2 3%The individual fixed income holdings outperformed the Barclays Aggregate index during the second quarter with a return of 2.4% versus 2.3% for the index. Although we maintained a shorter duration than the benchmark during a quarter when rates declined, our advantageous yield curve positioning offset the impact from a short duration. The U.S. Treasury sector had the best performance this quarter, however, our underweight to Treasuries and overweight to corporate bonds was offset by the higher income from corporate bonds and positive security selection. A number of corporate bonds held in the Plan, such as Verizon, Comcast, Time Warner, AB InBev, and BP had total returns of 4% or more for the quarter. The Pimco Total Return Bond Fund returned 1.86%. The underperformance relative to the benchmark stems from several strategic moves. pgFirst, the fund maintained an underweight to U.S. Treasuries of 31% vs. the Barclays Aggregate Index. Second, the duration ofthe fund at the quarter end was 4.4 years (Barclay's Aggregate duration 5.2 years), but the average duration that the fund maintained over the course of the quarter was much lower. Finally, relative to the duration positioning, the fund was the 29% net cash equivalent position during the quarter. On the positive side for the fund was the 11% weight in emerging market debt. Emerging market debt had a strong quarter, up over 3.4%. The Pimco High Yield Fund returned 0.88% for the quarter, underperforming the Merrill Lynch U.S. High Yield BB-B Index return of 1.13%. On a relative basis, this performance was strong enough to place the fund in the 23rd percentile of Morningstar’s High Yield Bond Universe. June 30, 2011PARS: County of Contra Costa4
INVESTMENT STRATEGY AS OF June 30 2011INVESTMENT STRATEGY AS OF June 30, 2011Tactical Asset Allocation Asset Class% Portfolio WeightingRationaleAsset ClassRationaleTargetCurrent PortfolioOver/Under WeightingCash1%18%17%Large cash contribution of $5.6 million (9% ofCash1%18%Large cash contribution of $5.6 million (9% of Plan assets) at the end of the quarter is skewing cash position.Fixed Income45% 33%(12%)While cash contribution skews fixed income allocation position, we are strategically targeting a 5% underweight to fixed income Lack ofa 5% underweight to fixed income. Lack of compelling valuation and expectations for an increase in interest rates in 2Q012 are driving the underweight position. Duration target is 90% of benchmark.High Yield0%2%2%We are targeting a 3% allocation to high yieldHigh Yield0%2%2%We are targeting a 3% allocation to high yield. Corporate default rates are low, spreads over treasuries are somewhat attractive, and in an environment of continued growth in the economy, high yield should do well.Real Estate (REITS)4% 4%0%With interest rates low, cash flows improving, and an up-tick in demand, prices for properties in the commercial REIT sector have improved. Apartment REITs are also benefiting due to the ti d i th h i k t Wcontinued woes in the housing market. We are targeting a 1% overweight to real estate.June 30, 2011PARS: County of Contra Costa5
Tactical Asset AllocationTactical Asset Allocation Asset Class% Portfolio WeightingRationaleTargetCurrent PortfolioOver/Under WeightingGlobal Equity8% 5.5%(2.5%)While similar challenges exist within global equities, that international equities face, we will seek to maintain at least an equal weight withinseek to maintain at least an equal weight within this “go-anywhere” asset class.International (Developed)10% 4%(6%)Sovereign debt issues in Western Europe, coupled with some spill over from a modest decline in growth from emerging market nations ltt t2%d ihttcompel us to target a 2% underweight to international equitiesInternational (Emerging)0% 2.5%2.5%Currently targeting a 2.5% allocation to emerging markets. We are cautious regarding BRIC nations as some have raised their interest rates to both slow down growth rates and to fight inflationary forces.Total Domestic Equity32% 33%1%LC18%19%1%Wtti3% ihttlLarge Cap18%19%1%We are targeting a 3% overweight to large cap equities. Valuations are attractive with a forward PE ratio of between 12-13X. We maintain a slight value tiltMid Cap6% 7%1%We maintain a modest overweight with mid-caps as we see growth rates attractive, and valuations reasonable for this asset class.June 30, 2011PARS: County of Contra Costa6
Tactical Asset AllocationTactical Asset Allocation Asset Class% Portfolio WeightingRationaleTargetCurrent PortfolioOver/Under WeightingSmall Cap8% 7%(1%)We look to maintain a slight underweight of 1% to small cap equities. Valuations are getting a little expensive with a forward PE ratio of 17Xlittle expensive with a forward PE ratio of 17X earnings.June 30, 2011PARS: County of Contra Costa7
ASSET ALLOCATIONASSET ALLOCATION 3/31/2011 3/31/2011 6/30/2011 6/30/2011 TargetAsset Allocation Market Value % of Total Market Value % of Total AllocationDomestic EquityLarge Cap Core Holdings 3,312,220$ 6.5% 6,271,790$ 10.1% -T. Rowe Price Equity Income Fund 1,637,562 3.2% 2,488,235$ 4.0% -qyLoomis Sayles Value Fund - - 781,772$ 1.3% -Harbor Capital Appreciation Instl 549,443 1.1% 1,138,415$ 1.8% -T. Rowe Price Growth Stock Fund 548,939 1.1% 1,130,186$ 1.8% -TIAA-CREF Mid-Cap Value Instl 1,248,351 2.4% 2,452,191$ 3.9%HighMark Geneva Mid Cap Growth Fund 1,154,557 2.3% 1,800,084$ 2.9% -Columbia Small Cap Value Fund II 1,581,587 3.1% 2,457,719$ 4.0% -T. Rowe Price New Horizons Fund 1,134,414 2.2% 1,929,657$ 3.1% -Total Domestic Equity 11,167,073$ 21.8% 20,450,048$ 32.9% 32.0%Range 21-57%International HighMark International Opportunity Fund 701,904 1.4% 852,154$ 1.4% -Dodge & Cox International Stock Fund 522,119 1.0% 857,112$ 1.4% -MFS International Growth Fund 528,599 1.0% 850,309$ 1.4% -RS Emerging Markets Y 958,507 1.9% 1,531,402$ 2.5% -ggTotal International 2,711,128$ 5.3% 4,090,977$ 6.6% 10.0%Range 4-19%GlobalTempleton Global Opportunities A LW 1,164,252 2.3% 3,455,269$ 5.6% -Total Real Estate 1,164,252$ 2.3% 3,455,269$ 5.6% 8.0%Range 4-12%Real EstateNuveen Real Estate Secs I Fund 1,240,437 2.4% 2,579,657$ 4.1% -Total Real Estate 1,240,437$ 2.4% 2,579,657$ 4.1% 4.0%Range 0-8%Fixed IncomeCore Fixed Income Holdings 6,247,579$ 12.2% 14,961,474$ 24.1% -PIMCO Total Return Instl Fund 2,637,212 5.1% 4,517,142$ 7.3% -PIMCO High Yield Instl 998,013 1.9% 1,117,014$ 1.8% -Total Fixed Income 9,882,804$ 19.3% 20,595,629$ 33.1% 45.0% Range 35-67%CashHighMark Diversified MM Fund 25,101,777$ 49.0% 10,997,465$ 17.7% -Total Cash 25,101,777$ 49.0% 10,997,465$ 17.7% 1.0%Range 0-5%June 30, 2011PARS: County of Contra CostaTOTAL 51,267,470$ 100.0% 62,169,045$ 100.0% 100.0%8
INVESTMENT RETURNS: Equities and Fixed IncomeINVESTMENT RETURNS: Equities and Fixed IncomeAs of Second Quarter 2011Investment Returns: Equities and Fixed Income 3 Months Inception5 Months* Cash Equivalents .01 .01iMoneyNet Taxable0000 iMoneyNet Taxable.00 .00 Fixed Holdings 2.17 3.10 Barclays Aggregate Bond Index 2.30 2.62 Equity Holdings Domestic Common Stocks -1.41 -1.37 Russell 1000 Index .12 3.88 Large Cap Holdings .31 -.49 Russell 1000 Index .12 3.88 Mid Cap Holdings .89 3.37 Russell Mid Cap Index.41 5.82 Small Cap Holdings -.42 3.77 Russell 2000 Index -1.61 6.47 International Holdings .22 2.64MSCI EAFE Index (Net)157257 MSCI EAFE Index (Net)1.57 2.57 Global Equity Holdings 1.12 2.27 MSCI AC World Index (Net) .24 3.06 Real Estate Holdings 3.89 4.76WilshireREIT Index388709 WilshireREIT Index3.88 7.09 Annualized Investment Returns 3 Months Inception5 Months Total Portfolio .63 1.18Total Portfolio (net of fees).60 1.15June 30, 2011PARS: County of Contra Costa() County of Contra Costa Benchmark** 1.36 3.61 9
*Inception Date: 02/01/201**Benchmark: 18% Russell 1000 Index, 6% Russell Midcap Index, 8% Russell 2000 Index, 8% MSCI AC World ex US Index, 10% MSCI EAFE Index, 45% Barclays Aggregate Index, 4% DJ Wilshire REIT Index, 1% Citigroup 3 Month T-Bill Index.Returns are gross-of-fees unless otherwise noted. Returns for periods over one year are annualized. The information presented has been obtained from sources believed to be t d li bl P t f i t i di ti f f t t S iti t FDIC i d h b ktdllJune 30, 2011PARS: County of Contra Costaaccurate and reliable. Past performance is not indicative of future returns. Securities are not FDIC insured, have no bank guarantee, and may lose value.10
PARS/COUNTY OF CONTRA COSTA PRHCP1-Month 3-Month Year-to- 1-Year 3-Year 5-Year 10-YearFund Name Return Return Date Return Return Return ReturnT. Rowe Price Equity Income (1) -1.86 -0.95 4.65 27.78 3.98 2.64 4.50PARS/COUNTY OF CONTRA COSTA PRHCPFor Periods Ending June 30, 2011LARGE CAP EQUITY FUNDSLoomis Sayles Value (2) -1.80 -1.06 5.80 30.00 2.18 3.13 5.01Harbor Capital Appreciation Instl -0.25 3.64 8.44 35.45 5.85 5.73 2.78T. Rowe Price Growth Stock -1.31 0.06 5.26 33.77 4.19 4.91 4.01Russell 1000 TR USD -1.75 0.12 6.37 31.95 3.68 3.30 3.21HighMark Geneva Mid Cap Growth -1.12 0.63 7.55 41.14 8.69 6.88 7.65TIAA Cref Mid Cap Value Instl19207178037 69546505MID CAP EQUITY FUNDSTIAA-Cref Mid-Cap Value Instl-1.920.717.8037.695.465.05--Russell Mid Cap TR USD -2.09 0.41 8.08 38.49 6.46 5.30 7.59Columbia Small Cap Value II Z -2.70 -1.99 7.56 40.37 6.86 4.31 --T. Rowe Price New Horizons -0.79 1.57 11.97 51.21 14.18 8.28 7.88Russell 2000 Index -2.31 -1.61 6.20 37.40 7.77 4.08 6.27SMALL CAP EQUITY FUNDSINTERNATIONAL EQUITY FUNDSDodge & Cox Intl Stock -2.13 0.46 3.00 31.37 1.34 3.43 9.72HighMark Int'l Opportunities Fid -1.69 2.31 5.01 33.10 -2.16 2.83 7.71RS Emerging Markets Y -1.78 -2.82 -3.21 22.89 3.96 11.68 16.82MFS International Growth I -1.53 3.63 4.81 32.78 3.29 6.11 8.48MSCI EAFE Index -1.25 1.57 4.99 30.39 -1.77 1.48 5.66Templeton Global Opportunities A LW -2.12 1.12 7.00 29.19 -0.26 3.64 5.76MSCI AC World NR USD15802446730 12091314478INTERNATIONAL EQUITY FUNDSMSCI AC World NR USD-1.580.244.6730.120.913.144.78Nuveen Real Estate Secs I -3.13 3.71 10.36 35.47 7.92 4.60 12.85Wilshire REIT Index -3.35 3.88 10.86 35.55 4.89 1.00 10.18Pimco Total Return Inst'l -0.36 1.86 2.99 5.93 9.46 8.87 7.38BC USA tB d029230274394647653575BOND FUNDSREIT EQUITY FUNDSBarCap US Aggregate Bond-0.292.302.743.946.476.535.75PIMCO High Yield Instl -0.97 0.88 4.29 13.85 10.04 7.90 7.87Merrill Lynch US High Yield BB-B Index -0.87 1.13 4.81 14.72 10.50 8.23 7.86Source: SEI Investments, Morningstar Investments(1) Fund was added to the Plan in March 2011(2) Fund was added to the Plan in June 2011Returns less than one year are not annualized Past performance is no indication of future results The information presented has been obtained from sourcesJune 30, 2011PARS: County of Contra CostaReturns less than one year are not annualized. Past performance is no indication of future results. The information presented has been obtained from sources believed to be accurate and reliable. Securities are not FDIC insured, have no bank guarantee and may lose value.11