HomeMy WebLinkAboutMINUTES - 12032013 - C.122RECOMMENDATION(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 report is in the standardized format. The following is the investment summary presented at the
November 7, 2013 quarterly meeting for the period ending September 30, 2013:
APPROVE OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
Action of Board On: 12/03/2013 APPROVED AS RECOMMENDED OTHER
Clerks Notes:
VOTE OF SUPERVISORS
AYE:John Gioia, District I Supervisor
Candace Andersen, 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: December 3, 2013
David Twa, County Administrator and Clerk of the Board of Supervisors
By: Stephanie L. Mello, Deputy
cc: Robert Campbell, Auditor-Controller, Russell Watts, Treasurer-Tax Collector, Patrick Godley, Chief Financial Officer/Health Services
C.122
To:Board of Supervisors
From:David Twa, County Administrator
Date:December 3, 2013
Contra
Costa
County
Subject:Quarterly Report of the Post Retirement Health Benefits Trust Agreement Advisory Body
BACKGROUND: (CONT'D)
Investment Summary Third Quarter 2013
Beginning Value $114,563,290.81
Net Contributions/Withdrawals 15,201.42
Fees Deducted -25,116.85
Income Received 536,249.04
Market Appreciation 4,127,369.00
Net Change in Accrued Income -39,934.34
Ending Market Value $119,177,059.08
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=2915. 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 Third Quarter 2013
PARS: County of Contra CostaThird Quarter 2013Presented byAndrew Brown, CFA
PARS: County of Contra CostaDISCUSSION HIGHLIGHTSU.S Economic and Market Overview One can only speculate whether the Federal Reserve expected such a protracted wait for the U.S. economy to stabilize when embarking upon itsactivist monetary policy regime in 2008. Back then, something needed to be done to bring some semblance of order to markets that were on thebrink of collapse. The Fed’s objective in 2008 was clear and simple: Do everything within its power to stem contraction in an economy that hadlost its way. By applying the adage, “Stabilize the economy and the markets will follow”, its actions, in conjunction with considerable support fromfiscal stimulus, did the job. We are now four years removed from recession and there is little on the horizon to suggest another downturn. Still, wecontinue to wonder if the Fed has a viable plan to stem the tide of money flowing into the system – and if so, when it will be implemented.Meanwhile, the markets are telling us that the answer to this question is becoming increasingly important.In recent months, the most dramatic example of the relationship between market sensitivity and Fed expectations took place on June 19th, whenChairman Bernanke announced that the Fed intended to begin reducing the pace of asset purchases (currently at $85 billion per month) shouldthe economy and job market continue to improve during the remainder of 2013. Following this announcement, the markets promptly traded off,with the S&P 500 declining by 5%, and the 10-year Treasury yield dropping 3.5% over a four-day trading period. The Chairman clearly stated inhis announcement that Round 3 of Quantitative Easing (QE3) could end bymid-2014 if unemployment fell to 7.0%. The unemployment rate was7.6% at the time of his June statement, and fell to 7.3% over the subsequent three months, down from 8.1% one year ago.Needless to say, unemployment was a central focus over the third quarter. Heightened attention was paid to initial unemployment claims (weeklyreports published every Thursday) and employment reports (published on the first Friday of every month.) With both weekly unemployment claimsand the overall unemployment rate declining over the quarter, many market participants expected the Fed to announce QE3 tapering followingthe conclusion of its FOMC (Federal Open Market Committee) meeting on September 18th. In anticipation of such tapering, the bond marketcontinued to trade down, with the 10-year Treasury yield moving up to 3% before the September 6themployment report was released. Despiteunemployment’s drop to 7.3%, the September report still disappointed markets due to the decline in a statistic known as the Participation Rate,which is a ratio calculated by dividing the number of those in the civilian labor force by the civilian non-institutional population.During the month of August, the Participation Rate dropped from 63.4% to 63.2%, which many felt was due to discouraged workers leaving the labor force. This trend is not considered a positive sign for the economy, and when the number was released on September 6th, the bond market promptly reacted by taking prices up and yields lower. Following the FOMC meetings held on September 17-18th, the Fed announced that no changes would be made to QE3, stating: “The Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.”September 30, 20131
PARS: County of Contra CostaDISCUSSION HIGHLIGHTSWe found the Fed’s comment interesting, given the economic progress that has occurred for four years now. Neither can it be ignoredthat the number of discouraged workers hasdeclined by over 100,000 from July to August,so the dropping Participation Rate maynot have been a significant factor in its decision to delay tapering. The budget and debt ceiling debates, however, could have beenprimary drivers in their decision to wait. Hopefully, when the next FOMC meetingsconclude on October 29-30th, political influence willbe no more, and we will have greater clarity as to when the longestperiod of soft monetary policy in United States history will end. Aspublished by the U.S. Bureau of Labor Statistics; September 6th, 2013Third Quarter Economic Highlights:The housing sector remained stable over the quarter. New homesales slowed modestly, while existing home sales improved.Housing starts increased, while new building permits slowed slightly. Construction spending continued to expand..The consumer became more cautious over the quarter. The Consumer Confidence Index dropped to 79.7 in September from 82.1in June. Retail sales, meanwhile, remained positive, though growth slowed.Manufacturing showed signs of improvement over the quarter. The Institute for Supply Management Survey reported thePurchasing Managers Index (PMI) increased to 55.7 in August from 50.9 in June. Any reading above 50 suggests the sector isexpandingJob growth remained positive over the quarter, but the pace slowed. Initial weekly claims for unemployment declined whileunemployment fell to 7.3% -- an optimistic number which may have been unduly influenced by decreasing labor forceparticipation.September 30, 20132
PARS: County of Contra CostaDISCUSSION HIGHLIGHTSMarket overview/Performance DiscussionTotal Plan•The County of Contra Costa OPEB Plan returned 4.01% in the third quarter, which was in-line with the County’s performance benchmarkreturn target of 3.95%. Performance was supported by outperformance within the large cap equity funds, mid-cap equity, and small cap equitysegments. Plan performance was further aided by a style tilt instituted in August, which resulted in a transition from an overweight from valueto growth across all domestic market cap segments – small, mid, and large cap disciplines. In the quarter, growth outperformed value by aconsiderable margin. While the Plan ended the quarter at approximately an equal weight in the international equity segment, our underweightthroughout most of the quarter was a detractor to performance. Additionally, the Plan’s emerging market exposure was also a detractor toperformance. Finally, in the quarter, we instituted a position in four alternative investment funds. While the alternative investments slightlyoutperformed their benchmark target, the 11% allocation to alternatives was a negative in the quarter, as alternatives underperformed cash,bonds, and equities.Domestic EquityThe third quarter was another strong quarter for the U.S. equity markets. High beta and economically cyclical sectors fared the best In thequarter. Leading sectors in the S&P500 included consumer discretionary (+7.8%), technology (+6.6%), industrials (+8.9%) and materials(+10.3%). Large cap growth stocks outperformed large cap value by almost 4% in the quarter, as the large cap growth index has largerallocations to technology, consumer discretionary, and materials sectors. While investors received mixed signals from the Federal Reserveregarding the potential tapering of quantitative easing in the quarter, investors have begun to discount some type of a rise in interest rates, asmanifested by the sell-off in the higher dividend yielding sectors – utilities (+0.17%), telecommunications (-4.4%), and consumer staples(0.8%). This impacted large cap value managers as they tend to have higher allocations to these sectors. The Plan’s large cap fundssegment outperformed the Russell 1000 Index in the quarter by 1.1%. During the month of July, the Plan transitioned from an internallymanaged large cap core separately managed strategy, into two large cap core investment funds: the Columbia Contrarian Core Fund and theSentinel Common Stock Fund. For the month of July, the separately managed large cap core portfolio returned 4.02%.The Plan’s large cap funds returned 7.33% in the quarter, which outperformed the Russell 1000 Index.The Sentinel Common Stock Fund returned 5.03% in the quarter, which underperformed the benchmark by 1%. The Fund ranked inthe 74thpercentile of the Morningstar Large Cap Blend Universe.The Columbia Contrarian Core Fund beat its benchmark with a 6.72% return. The Fund ranked in the 24thpercentile of theMorningstar Large Cap Blend UniverseThe Harbor Capital Appreciation Fund returned 12.38% in the quarter, which outperformed the Russell 1000 Growth Index’s return of8.11%. The Harbor Fund ranked in the 11thpercentile of the Morningstar Large Cap Growth Universe.The T. Rowe Price Growth Stock Fund returned 11.86% in the quarter, which exceeded the Russell 1000 Growth Index. The Fundranked in the15th percentile of the Morningstar Large Cap Growth Universe.September 30, 20133
PARS: County of Contra CostaDISCUSSION HIGHLIGHTSDomestic Equity (Cont.)The T. Rowe Price Equity Income Fund returned 4.57%, which ranked in the 43rdpercentile of the Morningstar Large Cap ValueUniverse, and outperformed the Russell 1000 Value Index return of 3.94%.The Loomis Sayles Value Fund posted a 5.38% return which bested the Russell 1000 Value Index, and ranked in the 21stpercentileof the Morningstar Large Cap Value Universe.Small cap and mid-cap equity shares outperformed large cap stocks in the quarter. Small caps and mid-caps were supported by a similardynamic that large cap shares benefitted from – strength in performance from the consumer discretionary and technology sectors. Additionally,within small and mid-cap sectors, there is a large representation in REITs within the Russell Value Indices. The performance struggles of REITsin the quarter, caused a further divergence within the performance of value and growth shares for both small and mid-caps.•The mid-cap equity segment returned 8.21% in the quarter, which outperformed the Russell Mid-Cap Equity return of 7.70%The TIAA-CREF Mid-Cap Value Fund returned 6.29% in the quarter, which outperformed the Russell Mid-Cap Value Index return of5.89%. The Fund ranked in the 60thpercentile of the Morningstar Mid-Cap Value Universe of managers.The Nationwide Geneva Mid-Cap Growth Fund posted a 10.62% return, which ranked in the 34thpercentile of Morningstar’s Mid-CapGrowth Manager Universe. The Fund outperformed the Russell Mid-Cap Growth Index return of 9.34%.The small cap equity segment returned 12.02% in the quarter, which outperformed the Russell 2000 Index return of 10.21%.The T. Rowe Price New Horizons Fund was the top performing fund in the Plan on an absolute return basis in the quarter. The Fundreturned 14.32%, and outperformed the Russell 2000 Growth Index return of 12.80%. This performance ranked in the 20thpercentileof small cap growth managers as measured by Morningstar.The Columbia Small Cap Value Fund II return of 10.20% outperformed their small cap style benchmark target by almost 2.5% (Russell2000 Value Index 7.59%). This ranked in the 6thpercentile of Morningstar’s Small Cap Value Universe.Real EstateREIT securities posted a modest negative return in the quarter, with the Dow Jones Wilshire REIT Index declining -3.03%. This was the secondquarter in a row where REITs have posted a negative return. REITs reacted negatively to the mixed interest rate message communicated bythe Federal Reserve in the quarter. In rising interest rate environments, REITs are impacted on several levels.September 30, 20134
DISCUSSION HIGHLIGHTSReal Estate (Cont.)On the one hand, higher rates can potentially make other higher yielding investments, such as bonds, more attractive in comparison to thedividends offered by REITs. As well, there is a general over-hang of rising borrowing costs on the operations for REITs. These two factorspressured REIT returns in the quarter.The Nuveen Real Estate Securities Fund returned -2.59% in the quarter which outperformed the Wilshire REIT Index -3.03%. TheFund placed in the 36thpercentile of the Morningstar Real Estate Manager’s Universe.Global/International EquityInternational equities bounced back in the quarter. The MSCI-EAFE Index returned 11.57% the MSCI-ACWI gained 7.9%, and the MSCI-EM Index 5.76%. With Europe emerging (barely) from it’s recession and a somewhat improved situation in China, international markets rallied. For non-dollar based investors, the Federal Reserve’s decision to continue its QE program led to a decline in the dollar in the quarter, and this had a positive effect on international equity returns. On the geopolitical front, international markets responded positively as Russia was able to broker a diplomatic solution to the chemical weapons impasse in Syria.The Plan’s international/global equity segment returned 9.64% in the quarter.This return outperformed the MSCI-ACWI Index,but underperformed the MSCI-EAFE Index. The primary factor in the underperformance in respect to the MSCI-EAFE Index is theEAFE Indices' lack of exposure (0%) to emerging market countries. All four of the Plan’s international funds, as well as the Plan’sglobal equity fund have exposure to emerging market holdings.The Dodge & Cox International Stock Fund’s 11.15% return underperformed the MSCI-EAFE Index in the quarter, but ranked in the22ndpercentile of the Foreign Large Blend Universe as measured by Morningstar.The Nationwide Bailard International Equity Fund registered a 10.0% return in the third quarter, and underperformed the MSCI-EAFEIndex. The Fund ranked in the 53rdpercentile of the Morningstar Foreign Large Blend Universe.The MFS International Fund’s return of 9.63% lagged the index and the peer group in the quarter. The Fund ranked in the 49thpercentile for foreign large cap growth managers as measured by Morningstar.PARS: County of Contra CostaSeptember 30, 2013DISCUSSION HIGHLIGHTS5
DISCUSSION HIGHLIGHTSThe Schroder Emerging Market Equity Fund (+7.15%) ranked in the 26thpercentile of emerging market equity managers, andoutperformed the MSCI Emerging Market Index (+5.15%) by over 2%.The Templeton Global Opportunities Fund’s return of 10.20% placed it in the 21stpercentile of Morningstar’s World Stock FundUniverse, and the Fund outperformed the MSCI-ACWI Index (+7.90%) by over 2%.Fixed IncomeThe Barclays U.S. Aggregate Bond Index gained 0.58% in the third quarter as investment-grade corporate bonds, agency mortgage-backed securities and U.S. Treasuries posted positive returns. The fixed income markets were volatile during the quarter due to uncertainty surrounding the future of the Federal Reserve’s bond purchase program. After months of hints from the Federal Reserve that they would begin to moderate their monthly bond purchases, the Fed ultimately decided at their September meeting to do nothing. Since Treasury rates had backed up more than 100 basis points on the expectation that monetary policy was about to be tightened, this came as a surprise to the markets. As a result, Treasury rates, which reached two year highs in early September, fell rapidly as investors reassessed the timing of the Fed’s exit. In addition, most risk assets, including equities, high yield bonds, and emerging markets, all began substantial recoveries in the third quarter. The Plan’s fixed income segment returned 0.8% in the quarter, which exceeded the Barclays Aggregate return of 0.58%.The separately managed fixed income portfolio performed in-line with the BC Aggregate, gaining 0.65% in the quarter.The Pimco Total Return Bond Fund gained 1.17% in the quarter which placed it in the 6thpercentile of Morningstar’s Intermediate-Term Bond Universe. The Fund outperformed the BC Aggregate Index.The Pimco High Yield Fund returned 2.05% in the quarter which was slightly under the BofA Merrill Lynch U.S. High Yield, BB-B Indexreturn of 2.18%. The Fund placed in the 59thpercentile of Morningstar’s High Yield Bond UniverseSeptember 30, 2013PARS: County of Contra Costa6
DISCUSSION HIGHLIGHTSAlternative InvestmentsOn July 12th, we initiated several alternative investments in the Plan. Over the course of the quarter, we moved towards a targeted 11% allocation in alternative investments. The alternative investment segment returned -1.53% over the third quarter, which slightly outpaced the Hedge FundResearch Institute Market Defensive Index return of -1.85%.The Arbitrage Fund returned 0.63% in the quarter which ranked in the 53rdpercentile of Morningstar’s Market Neutral Universe.The JP Morgan Research Market Neutral Fund returned 0.40%, which placed the Fund in the 64thpercentile of the MorningstarMarket Neutral Universe.The Eaton Vance Global Macro Absolute Return Fund posted a -1.48% return, which placed in the 85thpercentile of the MorningstarNon-Traditional Bond Universe.The AQR Managed Futures Fund’s return of -1.48% ranked in the 31stpercentile of Morningstar’s Managed Futures Fund Universe.Please note, the performance for the strategies listed above represent the performance for the entire third quarter period. The Plan initiated investmentsin the four alternative funds on July 12, 2013.September 30, 2013PARS: County of Contra Costa7
PARS: County of Contra CostaDISCUSSION HIGHLIGHTSAsset Allocation/Portfolio TransitionsThe third quarter of 2013 saw several portfolio transitions. The largest strategic impact was the adoption of alternatives in the Plan portfolio.Over the course of the quarter, we moved from a 0% allocation in alternatives to an 11% targeted allocation. This was not however the onlynotable transaction. Other strategic considerations in the quarter included:Due to rising interest rate concerns, and how that could pressure REIT returns, the REIT allocation was reduced from 4% of Planassets to a target 1.5% allocation.Across small cap, mid-cap, and large cap investments, financial-related issues have performed well year-to-date. Valuations thoughseem to be somewhat stretched. As the value-oriented indices tend to have higher weightings to financials, we felt that it would beprudent to tilt the portfolio to growth oriented managers, in order to lessen our exposure to financial-oriented equities. In August weshifted from an underweight, to a slight overweight to growth equities across all domestic equity disciplines (small cap, mid-cap, largecap).Due to the underperformance of the internal large cap core equity managers over the past six quarters, we eliminated the HighMarkmanagers from the investment platform. We replaced the HighMark team, with two large cap core Funds: the Sentinel Common StockFund, and the Columbia Contrarian Core FundWith domestic equity markets becoming “rich” from a valuation perspective, we increased our allocation to global equities by +1% inthe quarter, and increased our allocation to international equity managers by +2%. We chose to keep the emerging market allocationat a 2% level.September 30, 20138
INVESTMENT STRATEGY As of September 30, 2013Tactical Asset Allocation September 30, 2013Asset Class% Portfolio WeightingRationaleTargetCurrent PortfolioOver/Under Weighting Cash1.00%1.1% +.1%Fixed Income38.00%39.4% +1.4%The increase to the fixed income allocation is more of a function of the reduction in our equity allocation. Wecontinue to forecast fixed income returns to range between 2-3% for intermediate-term bonds over the next three tofive years.High Yield0.00%1% +1%We continue to maintain a modest allocation to high yield.Alternatives10%11.1% +1.1%We initiated the alternative allocation with a slight overweight.Real Estate (REITS)4.00%1.5% -2.5%We reduced the REIT position due to concerns about valuation, as well as the impact on REITs due to a rise ininterest rates.Global Equity7.00%8% +1%While challenges persist in international markets, valuations seem more attractive, relative to domestic equitymarkets. We moved to a slight overweight this quarter. Europe has emerged (barely) from a recession and Chinaposted a better GDP figure last quarter.International (Developed)9.00%6.7% -2.3%As stated above, international equity markets are trading at more attractive relative valuations, compared withdomestic U.S. markets. We added two percent to the international developed market allocation to move theinternational equity allocation to almost an equal weight in comparison to the Plan benchmark.International (Emerging)0.00%2% +2%Current valuations compel us to maintain a position in emerging market equities, but numerous challenges existthroughout the various emerging market regions: emerging Asia, emerging Europe, and Emerging Latin America.Total Domestic Equity31.00%30.2% -0.8%Large Cap17.00%18.0% +1%The large cap equity allocation is still an “overweight” in the Plan. Compared to small cap and mid cap equities, largecap stocks appear to be more reasonably valued.Mid Cap6.00%6.1% +.1%We maintain an equal weight with the benchmark allocation with mid-cap equities trading at 16X next year’searnings.Small Cap8.00%6.1% -1.9%We are underweight small cap stocks. Valuations at 20X next year’s earnings, appear to be overvaluedPARS: County of Contra Costa9
September 30, 2013PARS: County of Contra CostaInvestment SummaryThird QuarterBeginning Value114,563,290.81$ Net Contributions/Withdrawals15,201.42 Fees Deducted-25,116.85 Income Received536,249.04 Market Appreciation4,127,369.00 Net Change in Accrued Income-39,934.34Ending Market Value119,177,059.08$ Investment SummaryPeriod Ending September 30, 201310
September 30, 2013PARS: County of Contra Costa6/30/20136/30/20139/30/20139/30/2013 TargetAsset AllocationMarket Value% of Total Market Value % of Total AllocationLarge Cap EquitiesLarge Cap Core Holdings14,754,218$ 12.9%-- -Columbia Contrarian Core Z--4,450,5383.7% -Sentinel Common Stock I--3,858,7033.2%T. Rowe Price Equity Income Fund2,978,3292.6%2,392,5312.0% -Loomis Sayles Value Fund2,998,9532.6%3,551,9933.0% -Harbor Capital Appreciation Instl1,635,0661.4%3,605,5063.0% -T. Rowe Price Growth Stock Fund1,643,8781.4%3,622,2563.0% -Total Large Cap Equities24,010,44321.0%21,481,52818.1% 17.0%RangeRange 13-32%Mid Cap EquitiesTIAA-CREF Mid-Cap Value Instl3,868,2103.4%3,286,2492.8% -Nationwide Geneva Mid Cap Growth Fund3,284,0132.9%3,926,8453.3% -Total Mid Cap Equities7,152,2236.3%7,213,0946.1%6.0%RangeRange 2-10%Small Cap EquitiesColumbia Small Cap Value Fund II3,958,2753.5%3,332,5112.8% -T. Rowe Price New Horizons Fund2,748,3052.4%3,931,6053.3% -Total Small Cap Equities6,706,581$ 5.9%7,264,116$ 6.1%8.0%RangeRange 4-12%International Nationwide Bailard Intl Equities Fund2,185,7241.9%2,705,1772.3% -Dodge & Cox International Stock Fund1,651,3641.4%3,119,7682.6% -MFS International Growth Fund1,632,9131.4%2,092,4061.8% -Schroder Emerging Market Equity2,243,3872.0%2,403,7592.0% -Total International 7,713,388$ 6.8%10,321,111$ 8.7%9.0%RangeRange 4-16%GlobalTempleton Global Opportunities A LW7,645,9726.7%9,529,3158.0% -Total Real Estate7,645,972$ 6.7%9,529,315$ 8.0%7.0%RangeRange 4-12%Real EstateNuveen Real Estate Secs I Fund4,404,0043.9%1,750,7861.5% -Total Real Estate4,404,004$ 3.9%1,750,786$ 1.5%4.0%RangeRange0-8%CURRENT ASSET ALLOCATIONSeptember 30, 201311
September 30, 2013PARS: County of Contra Costa6/30/20136/30/20139/30/20139/30/2013 TargetAsset AllocationMarket Value% of Total Market Value % of Total AllocationFixed IncomeCore Fixed Income Holdings34,801,043$ 30.5% $38,491,77832.4% -PIMCO Total Return Instl Fund9,782,8588.6%7,223,9366.1% -PIMCO High Yield Instl2,209,8081.9%1,195,8181.0% -Total Fixed Income46,793,709$ 41.0%46,911,531$ 39.4% 38.0%Range Range 30-50%AlternativesAQR Managed Futures I--4,186,2733.5% -Arbitrage I--2,433,4862.0% -Eaton Vance Glbl Macro Abs Ret I--4,132,1833.5% -JP Morgan Research Market Neutral I--2,432,1942.0% -Total Alternatives-$ 0.00%13,184,136$ 11.1% 10.0%Range Range 5-20%CashMoney Market9,840,681$ 8.6%1,270,3691.1% -Total Cash9,840,681$ 8.6%1,270,369$ 1.1%1.0%RangeRange0-5%TOTAL114,267,002$ 100.0% 118,925,985$ 100.0% 100.0%12
September 30, 2013Inception Date: 02/01/2011* Benchmark from February 1, 2011 to June 30, 2013: 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. From July 1, 2013: 17% Russell 1000 Index, 6% Russell Midcap Index, 8% Russell 2000 Index, 7% MSCI AC World ex US Index, 9% MSCI EAFE Index, 38% Barclays Aggregate Index, 4% DJ Wilshire REIT Index, 10% HFRI Fund of Funds Market Defensive Index, 1% Citigroup 3 Month T-Bill IndexReturns 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 accurate and reliable. Past performance is not indicative of future returns. Securities are not FDIC insured, have no bank guarantee, and may lose value.PARS: County of Contra CostaSector3 MonthsYear to Date (9 Months) 1 YearInception to Date (32 Months)Cash Equivalents.00.01.02.02 iMoneyNet, Inc. Taxable.00.02.02.01Fixed Income ex Funds.65 -1.64 -1.26 4.51Total Fixed Income.80 -1.48-.74 4.65 BC US Aggregate Bd Index.58 -1.88 -1.67 3.70Total Equities7.67 17.78 19.94 9.99Individual Securities4.02 15.21 11.84 8.83Large Cap Funds7.33 21.86 23.02 11.66 Russell 1000 Index6.02 20.76 20.90 13.25Mid Cap Funds8.21 22.31 24.33 11.42 Russell Midcap Index7.70 24.33 27.91 13.61Small Cap Funds12.02 32.43 34.87 15.55 Russell 2000 Index10.21 27.69 30.05 14.27REIT Funds-2.72 2.08 4.66 8.29 Wilshire REIT Index-3.03 2.73 5.28 9.53International Equities9.64 11.63 18.88 5.51 MSCI EAFE Index11.57 16.15 23.78 6.06 MSCI EM Free Index5.76 -4.38.96 -1.99 MSCI AC World Index7.92 14.46 17.75 7.48Alternatives-1.53-100.00 -100.00 -100.00 HFRI FOF Mkt Def Index-1.85 -2.16 -3.86 -3.73Total Account Net of Fees4.01 8.20 9.54 6.66 County of Contra Costa*3.95 8.27 10.07 7.49Selected Period PerformancePARS/COUNTY OF CONTRA COSTA PRHCPAccount 6746038001Period Ending: 09/30/201313
September 30, 2013PARS: County of Contra Costa3-MonthYTD1-Year3-Year5-YearFund NameInception Return Rank Return Rank Return Rank Return Rank Return RankSentinel Common Stock I(7/13) 5.03 74 20.01 43 21.03 41 15.97 29 10.34 20Columbia Contrarian Core Z(7/13) 6.72 24 22.82 17 23.37 20 17.92 6 12.09 6T. Rowe Price Equity Income 4.57 43 19.34 61 21.63 46 15.51 33 9.36 33Harbor Capital Appreciation Instl 12.38 11 22.98 27 21.47 35 16.85 24 12.43 22Loomis Sayles Value Fund (7/11) 5.38 21 22.26 20 24.65 19 16.86 10 9.00 43T. Rowe Price Growth Stock11.86 15 24.33 17 23.03 25 17.69 12 13.38 14Idx: Russell 1000 6.02 -- 20.76 -- 20.91 -- 16.64 -- 10.53 --TIAA-CREF Mid-Cap Value Instl6.29 60 22.18 70 26.55 67 16.09 45 11.13 66Idx: Russell Mid Cap Value5.89 -- 22.94 -- 27.77 -- 17.27 -- 11.86 --Nationwide Geneva Mid Cap Growth10.62 34 22.28 72 21.27 87 16.85 32 12.83 32Idx: Russell Mid Cap Growth9.34 -- 25.42 -- 27.54 -- 17.65 -- 13.92 --Columbia Small Cap Value II Z10.20 6 29.00 14 33.47 19 18.87 13 11.56 38Idx: Russell 2000 Value7.59 -- 23.07 -- 27.04 -- 16.57 -- 9.13 --T. Rowe Price New Horizons14.32 20 37.17 12 36.10 11 26.09 1 19.51 1Idx: Russell 2000 Growth12.80 -- 32.47 -- 33.07 -- 19.96 -- 13.17 --Dodge & Cox International Stock11.15 22 17.15 7 27.76 3 8.75 20 8.11 13Nationwide Bailard Intl Eqs InSvc10.00 53 12.05 59 20.46 47 7.09 55 5.58 55MFS International Growth I9.63 49 10.30 62 16.57 54 8.89 37 8.90 22Templeton Global Opportunities A LW10.20 21 15.97 54 23.69 30 10.44 60 6.88 79Idx: MSCI EAFE11.56 -- 16.14 -- 23.77 -- 8.47 -- 6.35 --Idx: MSCI ACWI7.90 -- 14.43 -- 17.73 -- 10.21 -- 7.71 --Schroder Emerging Market Equity(11/12) 7.15 26 -4.14 50 2.64 45 1.34 26 7.98 19Idx: MSCI Emerging Markets5.01 -- -6.42 -- -1.52 -- -2.81 -- 4.64 --Nuveen Real Estate Secs Y-2.59 36 2.34 35 4.94 25 12.15 13 7.18 12Idx: Wilshire REIT -3.03 -- 2.73 -- 5.28 -- 12.49 -- 5.56 --Pimco Total Return Inst'l 1.17 6 -1.89 52 -0.74 34 3.77 33 7.96 16BarCap US Aggregate Bond0.57 -- -1.89 -- -1.68 -- 2.86 -- 5.41 --Pimco High Yield Inst'l(2/12) 2.05 59 2.72 71 6.00 62 7.85 60 11.85 26Merrill Lynch US High Yield BB-B2.18 -- 2.43 -- 5.20 -- 8.27 -- 11.81 --Arbitrage I(7/13) 0.63 53 0.55 67 1.38 50 1.86 29 3.31 21AQR Managed Futures (7/13) -1.48 31 1.84 16 5.66 3 0.99 6 -- --Eaton Vance Glbl Macro Abs Ret (7/13) -1.48 85 -1.27 64 -1.59 78 0.96 79 3.65 94JPMorgan Research Market Neutral Instl (7/13) 0.40 64 1.33 52 2.14 34 -0.63 70 2.06 25Data Source: Morningstar, SEI Investmentsbelieved accurate and reliable. Securities are not FDIC insured, have no bank guarantee and may lose value.Returns less than one year are not annualized. Past performance is not indicative of future returns. The information presented has been obtained from sourcesALTERNATIVE FUNDSREIT EQUITY FUNDSBOND FUNDSPARS/COUNTY OF CONTRA COSTAFor Period Ending September 30, 2013LARGE CAP EQUITY FUNDSMID CAP EQUITY FUNDSSMALL CAP EQUITY FUNDSINTERNATIONAL EQUITY FUNDS14