04/13/2010
PENSION TRUSTEES AGENDA
Location: Council Chambers - City Hall
Date: 4/13/2010- 9:00 AM
1. Call to Order
2. Approval of Minutes
2.1 Approve the minutes of the March 15, 2010 Pension Trustees meeting as submitted in written summation
by the City Clerk.
Attachments
3. Pension Trustee Items
3.1 Employees listed below be accepted into membership in the City of Clearwater's Employees' Pension Plan
as approved by the Pension Advisory Committee.
Attachments
3.2 Accept the Actuary's Report for the Employees' Pension Plan for the plan year beginning January 1, 2010.
Attachments
3.3 Review of the pension investment performance for the year ended December 31, 2009.
Attachments
3.4 Approve changes to the Employees' Pension Plan investment policy to provide for the addition of
alternative investments, to change the REIT classification to Real Estate, to make other changes as
approved in the asset allocation study, and to clarify and make grammatical corrections to make the policy
easier to understand.
Attachments
3.5 Approve the recommended administrative expenditures for fiscal year 2010-11 totaling $336,500.
Attachments
4. Other Business
5. Adjourn
Pension Trustees Agenda
Council Chambers - City Hall
Meeting Date:4/13/2010
SUBJECT / RECOMMENDATION:
Approve the minutes of the March 15, 2010 Pension Trustees meeting as submitted in written summation by the City Clerk.
SUMMARY:
Review Approval:1) Clerk
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Pension Trustees Agenda
Council Chambers - City Hall
Meeting Date:4/13/2010
SUBJECT / RECOMMENDATION:
Employees listed below be accepted into membership in the City of Clearwater's Employees' Pension Plan as approved by the Pension
Advisory Committee.
SUMMARY:
Pension
Name, Job Classification, and Department/Division Hire Date Elig. Date
Wayne Barker, Risk Management Specialist/Finance 2/1/10 2/1/10
Belinda Bannister, Customer Ser. Rep./Customer Service 2/1/10 2/1/10
Charles Graves, Maintenance Worker II/General Services 2/1/10 2/1/10
Brooke Russell, Police Communication Operator/Police 2/1/10 2/1/10
Amanda Pullen, Recreation Programmer/Parks & Recreation 2/14/10 2/14/10
Gordon McTaggart, Police Com. Operator Trainee/Police 2/16/10 2/16/10
Jennifer Perrin, Police Com. Operator Trainee/Police 2/16/10 2/16/10
Martha Hefenbarth, Police Com. Operator Trainee/Police 2/16/10 2/16/10
Nicholas Dorrough, Systems Prog./Information Technology 2/16/10 2/16/10
Julie Villarreal, Police Information Technician I/Police 2/16/10 2/16/10
Joseph Bortolus, Police Com. Operator Trainee/Police 2/19/10 2/16/10
Review Approval:1) Clerk
Cover Memo
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Pension Trustees Agenda
Council Chambers - City Hall
Meeting Date:4/13/2010
SUBJECT / RECOMMENDATION:
Accept the Actuary's Report for the Employees' Pension Plan for the plan year beginning January 1, 2010.
SUMMARY:
Per the January 1, 2010 actuary report for the Employees' Pension Plan, a minimum City employer contribution of $19,361,992,
equivalent to 24.07% of covered payroll, is required for fiscal year 2011. This is a decrease from the fiscal year 2010 required
contribution of $23.9 million, or 29.17% of pay.
The decrease in the required employer contribution is primarily due to an actuarial investment return (essentially a 5-year moving
weighted average) of 16.53 percent versus the prior year's negative actuarial investment return of (10.61) percent. The plan's expected
investment return is 7.5 percent.
The improvement in the actuarial investment return is primarily the result of a 30.93 percent return for calendar year 2009. This 30.93
percent return replaced a 9.73 percent for calendar year 2004 that effectively dropped out of the calculation of the five-year average
actuarial investment return.
The plan’s credit balance, which reflects prior year employer contributions in excess of the actuarially required contributions, decreased
from $15.3 million to $ 8.4 million for the current year. This decrease was due to the use of $8.1 million to supplement City employer
contributions, partially offset by $1.2 million in current year interest earnings on the credit balance.
The plan’s current credit balance of $8.4 million can be used to subsidize future City employer contributions. Staff recommends
retaining the credit balance at the current level for fiscal year 2011 and funding the employer contribution for fiscal year 2010 at 24
percent of covered payroll.
It is anticipated that future actuarially required contributions will average approximately 30.5 percent of covered payroll over the next
five years. Consequently staff projects funding the employer contribution at 27 percent of covered payroll for fiscal year 2012 and
increasing the contribution to 30 percent for years thereafter.
Review
Approval:
1) Financial Services 2) Office of Management and Budget 3) Clerk 4) Assistant City Manager 5) Clerk 6) City
Manager 7) Clerk
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Pension Trustees Agenda
Council Chambers - City Hall
Meeting Date:4/13/2010
SUBJECT / RECOMMENDATION:
Review of the pension investment performance for the year ended December 31, 2009.
SUMMARY:
This is the annual presentation on the performance of the Employees’ Pension Plan for calendar and plan year ending 12/31/2009.
For the last calendar year the plan had a return of 30.26% VS a benchmark of 25.53%. This is an excess return of 4.73% and placed the
plan in the top 1st percentile of pension plan performance.
For the last three calendar years the plan has a return of 0.60% VS a benchmark of (1.24%). This is an excess return of 1.84% and
placed the plan in the top 36th percentile of pension plan performance.
During the calendar year the REITs (real estate), active EAFE and emerging market managers received their funding or the final part of
their funding. Those managers are:
Earnest Partners
Wentworth, Hauser & Violich
Wellington Management
Eaton Vance
Security Capital
All of the current managers in the pension plan have performed as expected. A couple of managers whose style is out of favor have
underperformed against their peer group but that is expected. For the new managers, it takes time for them to overcome implementation
obstacles.
The recently completed asset allocation study is being implemented. The search for private real estate is underway. Once this search is
nearing completion, the search for a timber manger will be started. After the timber search the search for a hedge fund (absolute return)
manager will commence.
The Pension Plan has participated in securities lending for several years. There has been negative press regarding securities lending
recently. Although we had some issues, our experience with securities lending with our custodian, Northern Trust, has been better than
most. Northern Trust has set the standard on how securities lend should be done and how a financial institution should perform when
problems do occur. Our issues with security lending are over and we continue to feel that securities lending will continue to add income
to our pension plan.
Review
Approval:
1) Financial Services 2) Office of Management and Budget 3) Clerk 4) Assistant City Manager 5) Clerk 6) City
Manager 7) Clerk
Cover Memo
Item # 4
City of ClearwaterCity of Clearwater
Employees Employees Employees
Pension
Plan
Employees
Pension
PlanApril 13, 2010April 13, 2010
Item # 4
Last Calendar Years
Performance
Last Calendar Years
Performance
Total Fund 30.26% Total Fund 30.26%
Benchmark 25.53%
Plus 4.73%
Benchmark 25.53%
Plus 4.73%
Item # 4
Last Calendar Years
Performance
Last Calendar Years
Performance
Domestic Equity 32.12%Domestic Equity 32.12%
Benchmark 26.46%
Plus 5.66%
Benchmark 26.46%
Plus 5.66%
Item # 4
Last Calendar Years
Performance
Last Calendar Years
Performance
Inter. Equity 57.93% Inter. Equity 57.93%
Benchmark 32.46%
Plus 25.47%
Benchmark 32.46%
Plus 25.47%
Item # 4
Last Calendar Years
Performance
Last Calendar Years
Performance
Dom. Fix Inc. 12.37%Dom. Fix Inc. 12.37%
Benchmark 5.93%
Plus 6.44%
Benchmark 5.93%
Plus 6.44%
Item # 4
Last Calendar Years
Performance
Last Calendar Years
Performance
Real Estate 24.67% Real Estate 24.67%
Benchmark 29.22%
Under (4.54)%
Benchmark 29.22%
Under (4.54)%
Item # 4
Last Three CY Years Last Three CY Years
Total Fund 0.60%
Benchmark (1.24%)
Total Fund 0.60%
Benchmark (1.24%)Benchmark (1.24%)
Plus 1.84%
Benchmark (1.24%)
Plus 1.84%
Item # 4
Individual Manager
Performance
Individual Manager
Performance
ING LCG 24.42% 99
th
Aletheia LCV 36.49% 1st
ING LCG 24.42% 99
th
Aletheia LCV 36.49% 1st
NT Russell 1000 20.35% 76
th
Artisan MCV 51.38% 10th
Wedge MCG 38.50% 36th
NT Russell 1000 20.35% 76
th
Artisan MCV 51.38% 10th
Wedge MCG 38.50% 36th
Item # 4
Individual Manager
Performance
Individual Manager
Performance
Atlanta SCV 26.84% 70th
Systematic SCV 35.72% 11th
Atlanta SCV 26.84% 70th
Systematic SCV 35.72% 11thSystematicSCV 35.72% 11th
Munder SCG 35.95% 48th
Sec Cap REITS 24.67% 99th
Systematic SCV 35.72% 11th
Munder SCG 35.95% 48th
Sec Cap REITS 24.67% 99th
Item # 4
Individual Manager
Performance
Individual Manager
Performance
Earnest EAFE 55.52% 4th
Wentworth EAFE 55.97% 4th
Earnest EAFE 55.52% 4th
Wentworth EAFE 55.97% 4thWentworthEAFE 55.97% 4th
Eaton EM 67.01% 75
th
Wellington EM 74.44% 50
th
Wentworth EAFE 55.97% 4th
Eaton EM 67.01% 75
th
Wellington EM 74.44% 50
th
Item # 4
Individual Manager
Performance
Individual Manager
Performance
Dodge & Cox FIX 14.52% 46thDodge & Cox FIX 14.52% 46th
WAMCO FIX 9.22% 74thWAMCO FIX 9.22% 74th
Item # 4
Over All PerformanceOver All Performance
One Year 30.26% 1stOne Year 30.26% 1st
Three Year 0.60% 36th
Five Year 3.96% 31th
Three Year 0.60% 36th
Five Year 3.96% 31th
Item # 4
Changes In ProgressChanges In Progress
Asset Allocation Recommendations
Real Estate In progress
Asset Allocation Recommendations
Real Estate In progressReal Estate In progress
Timber Next
Hedge Fund After Timber
Real Estate In progress
Timber Next
Hedge Fund After Timber
Item # 4
Securities LendingSecurities Lending
Northern TrustNorthern TrustNorthern TrustNorthern Trust
Item # 4
City of Clearwater
Employees Pension Plan
City of Clearwater
Employees Pension Plan
Questions?Questions?
Item # 4
102 W. Whiting Street, Suite 400, Tampa, FL 33602-5140 Ƈ Tel: 813/218-5000 Ƈ www.captrustadv.com
CITY OF CLEARWATER
EMPLOYEES PENSION FUND
PERFORMANCE REVIEW
DECEMBER 31, 2009
Attachment number 2
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TABLE OF CONTENTS
Capital Markets Review 1
Fund Overview 2
Performance Review
Total Fund 3
Domestic Equity 4
International Equity 5
Fixed Income 6
Real Estate 7
Appendix 8
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Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance.
CAPITAL MARKETS REVIEW – DECEMBER 31, 2009
Index QTR YTD 1 Yr 3 Yr 5 Yr 10 Yr
Domestic Fixed Income
3 Month T-Bill 0.02% 0.16% 0.16% 2.13% 2.95% 2.88%
Barclays Capital 1-3 year Gov't 0.09% 1.41% 1.41% 5.03% 4.18% 4.65%
Barclays Capital Interm Gov't -0.42% -0.33% -0.33% 6.09% 4.74% 5.65%
Barclays Capital Interm Credit 1.61% 15.93% 15.93% 5.98% 4.76% 6.39%
Barclays Capital Interm Govt/Cred 0.31% 5.25% 5.25% 5.90% 4.66% 5.93%
Barclays Capital Aggregate Bond 0.20% 5.93% 5.93% 6.04% 4.97% 6.33%
Domestic Equity
Standard & Poor's 500 6.04% 26.46% 26.46% -5.63% 0.42% -0.95%
Dow Jones Industrial Average 8.10% 22.68% 22.68% -3.12% 1.95% 1.30%
Dow Jones Wilshire 5000 5.87%29.35% 29.35% -5.01% 1.09% -0.17%
Dow Jones Wilshire REIT 9.18% 28.46% 28.46% -13.65% -0.07% 10.67%
Russell 1000 - Large Cap 6.07% 28.43% 28.43% -5.36% 0.79% -0.49%
Russell 1000 Growth - Large Cap 7.94% 37.21% 37.21% -1.89% 1.63% -3.99%
Russell 1000 Value - Large Cap 4.22% 19.69% 19.69% -8.96% -0.25% 2.47%
Russell Midcap 5.92% 40.48% 40.48% -4.59% 2.43% 4.98%
Russell Midcap Growth 6.69%46.29% 46.29% -3.18% 2.40% -0.52%
Russell Midcap Value 5.21% 34.21% 34.21% -6.62% 1.98% 7.58%
Russell 2000 - Small Cap 3.88% 27.17% 27.17% -6.07% 0.51% 3.51%
Russell 2000 Growth - Small Cap 4.14% 34.47% 34.47% -4.00% 0.87% -1.37%
Russell 2000 Value - Small Cap 3.63% 20.58% 20.58% -8.22% -0.01% 8.27%
International Equity
MSCI EAFE 2.18% 31.78% 31.78% -6.04% 3.54% 1.17%
MSCI World 4.07% 29.99% 29.99% -5.64% 2.01% -0.24%
MSCI EM 8.25% 74.50% 74.50% 2.73% 12.79% 7.29%
Blended Benchmarks
30% S&P 500 / 70% Barclays Agg 1.95% 12.09% 12.09% 2.54% 3.61% 4.15%
40% S&P 500 / 60% Barclays Agg 2.54% 14.14% 14.14% 1.37% 3.15% 3.42%
50% S&P 500 / 50% Barclays Agg 3.12% 16.20% 16.20% 0.21% 2.70% 2.69%
60% S&P 500 / 40% Barclays Agg 3.70% 18.25% 18.25% -0.96% 2.24% 1.96%
70% S&P 500 / 30% Barclays Agg 4.29% 20.30% 20.30% -2.13% 1.79% 1.23%
1
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Data Sources: Zephyr StyleAdvisor , Barclay’s Capital, MSCI Barra & Standard & Poor’s
Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance.
CAPITAL MARKETS REVIEW – DECEMBER 31, 2009
Capital Markets Summary
The overall trend of the equity markets remained
positive during the fourth quarter of 2009 with all
averages posting positive numbers for the quarter
and year. The fixed income markets remained under
pressure lead by the Treasury market that was down
for the quarter and posted its worst yearly returns
since 1978.
Fourth quarter earnings season started on a positive
note as Intel and JP Morgan announced better than
expected earnings. Closely following were Apple
and DuPont’s earnings surprises that helped move
all three major averages to new highs for the year.
Corporations have pared costs and significantly
reduced inventories from the start of this recession.
Despite overall positive earnings news from 85% of
reporting companies, daily market volumes
remained low indicating investors are still waiting
for conviction before putting their money at risk.
Institutional investors will now focus on companies
showing top-line growth in the coming quarters.
The October GDP numbers (+3.5%) offered some
encouragement and showed the first signs of
expansion in over a year. Nervousness was evident
from traders as volatility returned to the market and
brought with it several days of 200+ intraday point
movements.
One Year Performance of Asset Classes
as of December 31, 2009
108.0%
79.0%
56.3%
46.3%
40.5%
38.7%
37.2%
34.5%
34.2%
32.5%
28.4%
27.2%
26.5%
20.6%
19.7%
18.4%
12.9%
5.8%
5.8%
5.7%
4.5%
0.2%
-12.9%
Latin American Stocks
Emerging Markets Stocks
High Yield Bonds
MidCap US Growth
MidCap Stocks
European Stocks
Lg Cap US Growth
Sm Cap US Growth
MidCap US Value
International Stocks
Large Cap US Stocks
Small Cap US Stocks
S&P 500 Index
Small Cap US Value
Large Cap US Value
US Corporate Bonds
Municipals
Foreign Bonds
Mtge Backed Securities
Japanese Stocks
US Govt/Credit
90 Day Treasury Bills
Long Term Treasuries
There were signs this quarter that pronouncements of the U.S. economy, dependent on consumer
spending, in recovery mode may have been slightly premature. Consumer confidence numbers
released in October failed to meet expectations by a wide margin. Unemployment statistics released,
and then revised throughout the quarter signaled to investors that many “would-be” consumers are still
seeking non-existent jobs. Unemployment numbers, measured by jobless claims, have been decreasing
since the middle of the third quarter. Job losses are expected to continue until mid-year 2010, albeit at
a much slower pace, as the recovery gains momentum. According to the government’s Small Business
Administration most job growth comes from the small-business sector and the availability of credit
remains difficult for small businesses (further hurt by CIT’s bankruptcy filing in November). Investors
worried this could further impede an economic recovery.
2
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Data Sources: Zephyr StyleAdvisor , Barclay’s Capital
Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance.
CAPITAL MARKETS REVIEW – DECEMBER 31, 2009
Capital Markets Summary
A series of mixed economic reports kept investors
edgy and served to slow the market’s advance.
The October GDP numbers (+3.5%) offered some
encouragement and showed the first signs of
expansion in over a year. Industrial production
was up, but then stalled. Transportation issues
were up, then down, then up again. Durable
goods orders were expected to decline, but
advanced instead (post-Clunker). New and
existing homes sales were up, then down. The
same was true for mortgage applications as home
sales suffered from an increase in mortgage
interest rates.
Benchmark interest rates remained unchanged for the quarter as the Fed minimized inflationary
concerns. However, statements by Federal Reserve President Yellen and others made last quarter
stating interest rates will remain stable for an “extended period” will be challenged should the
economy and Gross Domestic Product (GDP) continue to accelerate. An industry survey indicates
economists now expect an interest rate increase will be necessary by mid-2010 to keep inflation under
control. There seems to be no lack of appetite for U.S. government debt and the Treasury continues to
auction record amounts of notes and bonds.
Oil was higher early in the quarter, then retreated to its 4Q09 starting point, only to accelerate into the
final weeks based on unusually cold weather in the Mid-west that increased demand for heating oil.
Demand for gasoline is down in the U.S. and refiners are producing less. Lower production ahead of
holiday travel and the unexpected demand for heating oil did cause some supplies to dwindle resulting
in higher prices at the pump – just ahead of the holiday spending season.
The European economy continues to show signs of improvement. Overseas markets, lead by France,
Germany, and then Great Britain posted strong gains for the quarter and ended the year with solid
returns. Asian markets, lead by China, also posted significant gains for the year, however through
government controlled banking policy, China began to tighten consumer lending as a preemptive
control measure against increased debt and inflation. China now fears that money lent for consumer
spending was not fueling the economy, but actually being used for speculation in the markets. Japan’s
Nikkei market rebounded sharply in December and posted a solid gain for the year. Greece’s credit
downgrade added it to the list of countries having financial troubles.
(6.0)
0.0
6.0
12.0
18.0
0.0 5.0 10.0 15.0 20.0 25.0 30.0
Risk/Return Comparison of Asset Classes
Five Years Ended December31, 2009
BC Agg
R2000
S&P Value
T-Bills
EAFE World
S&P500
Emg Mkts
Int Bonds
EAFE
S&P Growth
Risk (Standard Deviation %)Return (%)3
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Data Sources: Zephyr StyleAdvisor , Barclay’s Capital
Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance.
CAPITAL MARKETS REVIEW – DECEMBER 31, 2009
Domestic Equity
As 2009 drew to a close, a strong November return helped cap the best percentage return for the major
indices since 2003. Modest changes in October and December bookended that strong November
showing as all the major averages ended the year higher. The year’s big winner was the NASDAQ
Composite as it rose 7.19% for the quarter and finished 2009 up 45.57%. The DJIA rose 8.10% for
the quarter and ended 2009 up 22.68%. The S&P 500 reported a 6.04% gain for the quarter and a
26.46% gain for the year. The Russell 3000 rose 5.90% in the fourth quarter and ended 2009 up
28.34%.
In comparing capitalizations, mega caps were the strongest performers of the quarter as the Russell
Top 200 rode a solid November gain (6.29%) to eke out the top return. For the quarter, the index was
up 6.12%. Other caps that followed closely behind in the quarter were the Russell 1000 which rose
6.07% and the Russell Midcap which was up 5.92%. Trailing for the quarter was the Russell 2000
with a 3.87% gain. For 2009, the Russell Midcap was able to ride the strength of previous quarters to
win the year with a 40.48% gain. Trailing in a distant second, the Russell 1000 rose 28.43% and the
Russell 2000 rose 27.17%. Despite its strong fourth quarter showing, the Russell Top 200 came up
last with a 24.21% gain in 2009.
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
1 quarter 1 year 3 years 5 years 10 years 15 years
Broad Domestic Equity Market Performance Periods Ending
December 31, 2009
Large Cap
Mid Cap
Small Cap
4
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Data Sources: Zephyr StyleAdvisor , Barclay’s Capital
Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance.
CAPITAL MARKETS REVIEW – DECEMBER 31, 2009
50
90
130
170
210
250
290
330 Russell 1000 Growth
Russell 1000 Value
Russell 2000 Growth
Russell 2000 Value
Style Performance
10 Year Growth of $100
Domestic Equity
In comparing styles, growth stocks continued to have the hot hand. For the fourth quarter, the Russell
1000 Growth (up 7.94%) nearly doubled the return of the Russell 1000 Value (up 4.21%). This
outperformance was reflected in the year’s performance as well as the Russell 1000 Growth was up
37.21% in 2009 as it easily outpaced the Russell 1000 Value’s gain of 19.69%. Similarly in small
caps in 2009, the Russell 2000 Growth (up 34.47%) outpaced the Russell 2000 Value (up 20.58%).
For the quarter, Russell 2000 Growth actually trailed its value counterpart in October and November,
but used a strong December to end the quarter up 4.14% against a 3.63% gain in the Russell 2000
Value.
Breaking the S&P 500 down into broad
sectors, a solid fourth quarter helped three
sectors to outperform the broader index for the
year. Taking home the gold in 2009,
Information Technology posted a 61.72% gain
for the year. IT also led the fourth quarter as
the only double digit gainer after posting a
10.70% gain. Materials earned the silver in
2009 achieving a 48.59% return for the year
and 7.36% return for the quarter. Third place
in the quarter and 2009 went to Consumer
Discretionary as it posted a fourth quarter gain
of 9.07% and a 41.30% gain for the year.
Sectors that trailed the overall S&P 500 in
2009, but outpaced the broader index in the
fourth quarter were Health Care (up 9.09% in
the quarter and 19.70% for the year), Utilities (up 7.26% quarter; 11.91% 2009), and Telecom, which
despite a 7.43% return for the fourth quarter, ended the year in last place among the sectors with an
8.93% gain. Trailing the overall S&P 500 for the quarter and year were Energy (up 5.58% quarter;
13.82% 2009), Industrials (up 5.39% quarter; 20.93% 2009), and Consumer Staples (up 5.02%
quarter; 14.89% 2009). Financials posted a decline in the fourth quarter as they slid 3.32% and ended
the year up 17.22%. However, since the market low on March 9, 2009, Financials have considerably
outperformed the overall S&P 500 and all other sectors by gaining over 130%.
5
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Data Sources: Zephyr StyleAdvisor , Barclay’s Capital
Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance.
CAPITAL MARKETS REVIEW – DECEMBER 31, 2009
Subsector Scorecard - 2009
Gainers Losers
Health Care
Facilities 368.7%1
Photographic
Products -35.9%
Automobile
Manufacturers 229.5%2
Oil & Gas Refining
& Marketing -22.5%
Diversified Metals
& Mining 215.0%3
Construction
Materials -21.7%
Real Estate
Services 214.1%4 Education Services -14.2%
Internet Retail 173.5%5 Insurance Brokers -10.2%
Subsector Scorecard - Fourth Quarter 2009
Gainers Losers
Internet Retail 42.2%1 Tires & Rubber -17.2%
Automobile
Manufacturers 38.7%2
Diversified Support
Services -14.4%
Health Care
Technology 37.4%3 Casinos & Gaming -12.5%
Electronic
Components 25.7%4 Education Services -12.3%
Household
Appliances 24.5%5
Construction &
Engineering -12.0%
Domestic Equity
Over on the Nasdaq, Diedrich Coffee rose 9,597.22% to take home top performer for the year.
Tremendous growth in sales of its coffee packs for single-cup brewing system subsequently caused a
bidding war that Green Mountain (GMCR) won over Peet’s (PEET) for the California wholesaler. The
deal is set to close in the first quarter of 2010. The biggest loser of the year was Repros Therapeutics
(RPRX) which fell 92.3% in 2009 after its trials for Proellex were stopped in August amidst liver
damage concerns.
In individual stocks in 2009, American Express (up 118.4%), Microsoft (up 56.8%), and IBM (up
55.5%) led the Dow while the biggest losers on the index were Exxon Mobil (down 12.5%) and
General Electric (down 2.8%). Over on the S&P 500, XL Capital (XL) rebounded from being the
second worst performer in the index in 2008 to the top performer in 2009 with a 397.57% return.
Following XL Capital in 2009 was Tenet Healthcare (THC) which ended the year up 352.17% after
trading as low as $1 at the beginning of the second quarter. The biggest loser in 2009 for the S&P was
Marshall & Illsley (MI) which dropped 60.19% as the regional bank has struggled with its exposure to
commercial loans. Next to last was Huntington Bancshares (HBAN) which fell 51.96% in 2009 as it
was another regional bank that struggled to cover its loan losses.
6
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Item # 4
Data Sources: Zephyr StyleAdvisor , Barclay’s Capital
Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance.
CAPITAL MARKETS REVIEW – DECEMBER 31, 2009
52.1%
56.6%
57.8%
62.6%
64.0%
68.0%
72.1%
86.7%
104.9%
128.6%
0% 20% 40% 60% 80% 100% 120% 140%
Malaysia
Mexico
South Africa
China
Argentina
Philippines
Korea
Chile
Russia
Brazil
One Year Emerging Market Country Returns
as of December 31, 2009
International Markets
International stocks rose 2.22% as measured by the MSCI EAFE in the fourth quarter 2009. Foreign
issues lagged domestic stocks by nearly 4% for the quarter, the third consecutive quarter of gains
brought the index up 32.46% for 2009, 6% higher on the year than the S&P 500.
The top performing developed country of the fourth quarter in the EAFE was Norway, up 14.93% in
US Dollars while Greece was the laggard with a -22.93% return. In December, credit rating agency
Moody’s lowered Greece’s debt rating from A1 to A2. This move leaves the Moody’s rating two
notches higher than the ratings by Standard and Poor’s and Fitch which had each downgraded Greek
government debt from A- to BBB+ earlier in the month.
The MSCI China Index gained 7.86% in the third quarter. The International Monetary Fund (IMF)
has increased its forecast for growth in China’s economy in 2010 from 8.5% to 9%. Chinese officials
were upset with the United States government in September when the United States imposed a 35%
tariff on Chinese made automobile tires. Although this move is not expected to have a large impact
on China’s growth prospects, it has been criticized by some as protectionist. Eurostar, operator of train
service between Paris and London, made headlines in December as the popular rail route through the
Channel Tunnel had to be shut down temporarily. On December 18th, over 2000 passengers had to
be evacuated from the tunnel when five different trains were unable to make it through. The technical
problems were later attributed to temperature differences between the inside and outside of the tunnel.
The timing of the incident coincided with the holiday travel season, causing many travelers to alter
plans.
Emerging markets equities outpaced domestic stocks and international developed stocks for the fourth
quarter in a row as the MSCI Emerging Markets Index rose 8.58% for the three months ending
December 31. This brings emerging markets up an astounding 79.02% for 2009. Despite the large
gains, 2009 still does not make up for the 53.18% that the index lost in 2008. Leading the way in the
fourth quarter was Latin America with a 12.52% gain.
7
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Item # 4
Data Sources: Zephyr StyleAdvisor , Barclay’s Capital
Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance.
CAPITAL MARKETS REVIEW – DECEMBER 31, 2009
International Markets
Dubai’s status as a burgeoning financial center was called into question in November as government
owned Dubai World announced that it would default on debt payments. Dubai’s financial problems
threatened to overshadow the opening of the Burj Dubai (later renamed Burj Khalifa) as its neighbor
Abu Dhabi pumped billions of dollars of bailout money into Dubai World. After falling for 13 straight
months, Chinese exports finally increased again in December as China passed Germany to become the
world’s biggest exporter. Despite this fact, China’s trade surplus fell 34% in 2009 to $196 billion.
This marked the first decline in China’s trade surplus since 2003.
Fixed Income
Broad fixed income markets were generally flat this quarter, with the longer maturity indexes showing
sharp declines due to steep losses in December. The Barclays Capital US Aggregate index was up
only 0.20% this quarter, on the back of monthly returns of 0.49%, 1.29%, and -1.56% for October,
November, and December respectively. The Barclays Capital Intermediate Gov-Credit index was
only up 0.30% while the US Long Gov-Credit index was down -2.64%. The Barclays Capital
Treasury indexes followed the same pattern, with the 1-3 Year index being up 0.02%, the 7-10 index
being down -2.34%, and the Long Treasury index being down -5.33%. Finally, the Barclays US
Municipal Bond index was down -0.95% for the fourth quarter.
Most of the major fixed income news for the quarter continued to be dominated by 2009’s main
themes: the housing markets and the lingering effects of the recession. On the housing front, the
government made the decision to tighten FHA lending standards, forcing borrowers of FHA-backed
loans to increase their down payments. Higher premiums are also being charged to borrowers. The
move will hopefully replenish FHA’s reserves back above their congressionally mandated 2% level.
Housing prices in general are still declining in most markets, but not nearly as sharply as in previous
quarters. The S&P/Case-Shiller Home Price 20-City Composite showed an October/September
change of roughly 0%. Some markets did show improvements through October—the most recent data
available—in cities such as Phoenix (1.3% gain), San Francisco (1.2% gain), and San Diego (0.4%
gain).
On the Treasury bond front, the government became increasingly concerned this quarter as short-term,
low-interest debt started maturing. Given steadily increasing interest rates on new bond issuances, the
projected interest costs of our nation’s debt are forecasted to increase from roughly $200 Billion a
year now, up to possibly $700 Billion a year in 2019 based on conservative estimates. For the current
year, however, given the historically low interest rate environment, the government actually paid less
in interest in 2009 than it did in 2008, despite adding more than $2 Trillion to the deficit.
8
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Item # 4
Data Sources: Zephyr StyleAdvisor , Barclay’s Capital
Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance
CAPITAL MARKETS REVIEW – DECEMBER 31, 2009
Fixed Income
By far, the largest issue in the corporate debt world
was the $71 Billion bankruptcy of CIT, a large
lender to small and medium-sized businesses, in
early November. The Chapter 11 filing immediately
stunted small business lending, exacerbating an
already tight credit market for most of the nation’s
small businesses. The prepackaged filing had the
support of the majority of CIT’s bondholders, as
well as influential investor Carl Icahn. After only
thirty-eight days in bankruptcy, the firm re-emerged
on December 9th after shedding $10.5 Billion in
debt. Existing bondholders were issued new paper
worth about seventy cents on the dollar from their
old notes. Shareholder equity was completely wiped
out as part of the filing, and $5.4 Billion in new
equity was available for trading on Thursday,
December 10th.
It wasn’t all bad news in the corporate debt space,
however. Many firms still came to the market
searching to tap wide investor appetite for corporate
debt. Ford Motor Credit was one of the major
speculative-grade borrowers to issue junk bonds
during the quarter. BlackRock Inc. also sold its first
debt in more than two years in December. Signs of
an economic recovery have led many corporations to
try to tap into increased investor confidence in the
corporate debt space, especially on the speculative
end of the spectrum. More than 20% of junk bonds
in November were sold by CCC rated companies—
those with the greatest risk of default. Only 11.5%
were sold by CCC rated companies in October, with
only 10.5% in September.
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
4Q09 YTD 1 YR 3 YR 5 YR
AAA AA A BBB BBTreasury Yield Curve0.0%
2.0%
4.0%
6.0%
8.0%
3 MO 6 MO 2 YR 5 YR 10 YR 30 YR
12/31/2006 12/31/2007
12/31/2008 12/31/2009
-5%
0%
5%
10%
15%
20%
4Q09 YTD 1 YR 3 YR 5 YR 10 YR
Govts Corps
Mortgages Munis
Sector PerformanceCredit PerformanceIn municipal debt news, the quarter opened on the decline as interest in California’s $4 Billion debt
issuance was weaker than expected. The lingering concerns over California’s budget issues—both at
the state and local level—have continued to sting the California debt market. The state’s revenue
shortfalls and the lowest debt rating of any state certainly didn’t help matters, either.
9
Attachment number 2
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Item # 4
45.5%
32.5%
28.0%
29.4%
5.7%
62.2%
13.0%
10.0%
10.0%
10.0%
-1.7%
15.7%
-10% 0% 10% 20% 30% 40% 50% 60% 70%
U.K.
France
Italy
Germany
Japan
Canada
1 Year Country and Currency Returns
G-7 Excluding U.S. as of December 31, 2009
Currency Country Return
Data Sources: Zephyr StyleAdvisor , Barclay’s Capital
Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance
CAPITAL MARKETS REVIEW – DECEMBER 31, 2009
Commodities
The declining dollar drove commodity prices higher again this quarter. The price per barrel of crude
oil traded in a narrow price range for most of the 3rd quarter ($70), but advanced sharply in reaching
just over $80 per barrel by the end of December. Oil was up 74.28% for the year. Higher demand for
heating oil in the Midwest and China’s increased demands for gasoline were cited as the reason for the
rise in oil prices.
Metals, both precious and industrial were also up for the year. Copper was up 134%, platinum was up
59%, nickel was up 58%, silver was up 47% and gold advanced 27%. Gold began a consolidation
phase after reaching new highs earlier in the quarter and then resumed its advance into the quarter end.
Long-term Investors continue to purchase gold in anticipation of increased inflation in 2010. Short-
term investors are using gold to offset the Dollar’s weakness. Industrial metals were supported by the
expectation of continued, although slower, industrial growth in China.
Currency
The dollar’s safety premium further eroded this quarter as world economies continue to recover. The
dollar exceeded a 14 month low as the Euro traded to $1.50 in Mid-October. For the year, the Dollar
lost ground to all other major currencies. The Dollar was down 11.14% to the GB Pound, 1.82% to the
Euro, 2.97% to the Yen, and .07% to the Yuan.
10
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Item # 4
Russell 1000 Value contains those Russell 1000 (larger capitalization) securities with a less-than-average growth orientation.
Securities in this index generally have lower price-to-book and price-to-earnings ratios, higher dividend yields, and lower
forecasted growth rates.
Russell 1000 Growth contains those Russell 1000 (larger capitalization) securities with a greater-than-average growth
orientation. Securities in this index generally have higher price-to-book and price-to-earnings ratios, lower dividend yields,
and higher forecasted growth rates.
Russell 2000 Value contains those Russell 2000 (smaller capitalization) securities with a less-than-average growth
orientation. Securities in this index generally have lower price-to-book and price-to-earnings ratios than those in the Russell
2000 Growth Index.
Russell 2000 Growth contains those Russell 2000 (smaller capitalization) securities with a greater-than-average growth
orientation. Securities in this index generally have higher price-to-book and price-to-earnings ratios than those in the Russell
2000 Value Index.
MSCI EAFE is the Morgan Stanley Capital International Europe, Australia, Far East Index designed to measure the
performance of developed stock markets in these areas.
Barclays Agg Bond is the Lehman Brothers Aggregate Bond Index. This index includes U.S. government, corporate and
mortgage-backed securities rated investment grade or higher with maturities up to 30 years.
S&P 500 is a representative sample of 500 leading companies in leading industries of the U.S. economy.
DJ Wilshire REIT is intended as a broad measure of the performance of publicly traded real estate equity. The index is
comprised of companies whose charter is the equity ownership and operation of commercial real estate.
Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance.
Data Source: Morningstar
CAPITAL MARKETS REVIEW – DECEMBER 31, 2009
CAPITAL MARKET INDEX RETURNS
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Barclay Russell Russell Russell DJ Russell Russell Russell DJ Russell Barclay Russell DJ DJ DJ Russell Barclay Russell
BEST Agg 2000 2000 1000 Wilshire 1000 1000 2000 Wilshire 2000 Agg 2000 Wilshire Wilshire Wilshire 1000 Agg 1000
Bond Value Value Value REIT Value Growth Growth REIT Value Bond Growth REIT REIT REIT Growth Bo nd Growth
8.96% 41.70%29.15%32.94%8.06%38.35%37.04%35.18%38.71%43.09% 31.04%13 .9 6 %10 .2 7 %48.53%33.14%14.00% 36.13%11.8 1% 5.2 4 %37.21%
Russell Russell DJ Russell Russell Russell Russell Russell DJ DJ Russell Russell Russell Russell
1000 1000 Wilshire 2000 1000 1000 1000 2000 Wilshire Wilshire 2000 2000 2000 2000
Growth Growth REIT Value Growth Growth Growth Value REIT REIT Value Value Value Growth
-0.26 %41.16%15.13 % 2 3 .8 4 %2.66%37.53%23.12%33.35% 28.57%33.16%22.83% 12.36%3.60% 46.02% 22.25%13 .54 %26.34%11.17% -28.92%34.47%
DJ Russell Russell DJ Russell Russell Barclay Barclay Russell Russell Russell Russell Russell
Wilshire 1000 1000 Wilshire 1000 2000 Agg Agg 2000 10 0 0 2000 2000 1000
REIT Value Value REIT Growth Value Bond Bond Value Value Value Growth Value
-3.12%23.84%13 .8 1% 18 .12 %2.66%37.19%22.94%31.78%20.33%27.30%11.63% 8.44% -11.42% 39.16%20.25%7.05%23.48%7.05%-36.85%31.78%
Russell Russell Russell DJ Russell Russell Russell Russell Russell Russell Russell DJ Russell Russell Russell Barclay DJ
1000 2000 2000 Wilshire 2000 10 0 0 1000 1000 1000 1000 1000 Wilshire 1000 10 0 0 1000 Agg Wilshire
Value Growth Growth REIT Growth Value Growth Value Value Value Value REIT Value Growth Value Bond REIT
-8.08 %21.18%7.77%15.14 %1.3 1%31.04%21.64%30.49%15.6 3 %21.04%7.01%-5.59% -15.52%36.06%16 .4 9 %5.26 %22.25%6.97%-37.00%28.46%
Russell Russell Russell Russell Russell DJ Barclay Russell Russell Russell Russell Russell
2000 2000 2000 2000 2000 Wilshire Agg 10 0 0 2000 1000 2000 1000
Growth Growth Value Value Value REIT Bond Value Growth Value Growth Growth
-17.42 %30.48% 7.62%13 .3 7 %-1.55%25.75%21.37%19 .6 7 %8.67%7.35%-9.10%-9.22 %-15.94%30.03%14 .3 1%4.91%15.79% 5.49%-38.44%26.46%
Russell Russell Barclay Russell Barclay Russell Russell Russell DJ Russell Russell Rus sell Russell Russell Russell
2000 10 0 0 Agg 1000 Agg 2000 2000 2000 Wilshire 1000 2000 2000 10 0 0 2000 2000
Value Value Bond Value Bond Growth Growth Growth REIT Growth Value Growth Value Growth Value
-21.77%24.61%7.40%10 .0 6 %-1.99%18 .4 8 %11.26% 12.95%1.23% -2.57% -13.96%-11.88 %-22.09 %29.76%10 .8 7 %4.71%13 .3 5 %-0.17%-38.54% 20.58%
Barclay Russell Barclay Russell DJ Barclay Russell Barclay Russell Russell Russell Russell Russell Russell Russell DJ Russell
Agg 1000 Agg 2000 Wilshire Agg 2000 Agg 1000 1000 1000 1000 2000 1000 2000 Wilshire 1000
Bond Growth Bond Growth REIT Bond Value Bond Growth Growth Growth Growth Growth Growth Value REIT Value
-23.19%16.00% 5.00% 9.75% -2.44% 12.24%6.36% 9.68%-6.46 %-0.83 %-22.42%-20.42%-27.89%28.67%6.30% 4.15%9.07% -9.78%-39.20%19 .6 9 %
DJ Russell Barclay Barclay DJ Russell Russell Russell Barclay Barclay Barclay Barclay DJ Barclay
Wilshire 1000 Agg Agg Wilshire 2000 2000 2000 Agg Agg Agg Agg Wilshire Agg
WORS T
REIT Growth Bond Bond REIT Value Growth Growth Bond Bond Bond Bond REIT Bond
-23.44%12.49% -11.85%2.90% -2.92% 11.55% 3.61% 2.06%-17.00 %-1.49% -22.43%-22.00%-30.27% 4.11%4.34% 2.43%4.33% -17.56%-45.09% 5.93%
S&P
500
MSCI
EAFE
MSCI
EAFE
S&P
500
MSCI
EAFE
S&P
500
S&P
500
MSCI
EAFE
MSCI
EAFE
S&P
500
S&P
500
MSCI
EAFE
MSCI
EAFE
S&P
500
MSCI
EAFE
S&P
500
S&P
500
MSCI
EAFE
MSCI
EAFE
S&P
500
S&P
500
MSCI
EAFE
S&P
500
MSCI
EAFE
MSCI
EAFE
S&P
500
MSCI
EAFE
S&P
500
MSCI
EAFE
S&P
500
MSCI
EAFE
S&P
500
MSCI
EAFE
MSCI
EAFE
S&P
500
S&P
500
S&P
500
MSCI
EAFE
S&P
500
MSCI
EAFE
11
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CAPITAL MARKETS REVIEW – DECEMBER 31, 2009
RELATIVE PERFORMANCE OF KEY INDICES
Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance.
Data Source: Morningstar
Equity vs. Fixed
-60
-40
-20
0
20
40
60
12/79 - 12/8012/80 - 12/8112/81 - 12/8212/82 - 12/8312/83 - 12/8412/84 - 12/8512/85 - 12/8612/86 - 12/8712/87 - 12/8812/88 - 12/8912/89 - 12/9012/90 - 12/9112/91 - 12/9212/92 - 12/9312/93 - 12/9412/94 - 12/9512/95 - 12/9612/96 - 12/9712/97 - 12/9812/98 - 12/9912/99 - 12/0012/00 - 12/0112/01 - 12/0212/02 - 12/0312/03 - 12/0412/04 - 12/0512/05 - 12/0612/06 - 12/0712/07 - 12/0812/08 - 12/09Equity vs. Fixed Mean 1 Standard Deviation 2 Standard Deviations
Equity Outperformin g
Fixed Outperformin g
Domestic vs. Foreign
-60
-40
-20
0
20
40
60
12/79 - 12/8012/80 - 12/8112/81 - 12/8212/82 - 12/8312/83 - 12/8412/84 - 12/8512/85 - 12/8612/86 - 12/8712/87 - 12/8812/88 - 12/8912/89 - 12/9012/90 - 12/9112/91 - 12/9212/92 - 12/9312/93 - 12/9412/94 - 12/9512/95 - 12/9612/96 - 12/9712/97 - 12/9812/98 - 12/9912/99 - 12/0012/00 - 12/0112/01 - 12/0212/02 - 12/0312/03 - 12/0412/04 - 12/0512/05 - 12/0612/06 - 12/0712/07 - 12/0812/08 - 12/09Domestic vs. Foreign Mean 1 Standard Deviation 2 Standard Deviations
Foreign Outperforming
Domestic Outperforming
Aug '82 –DJIA 776
Black Monday - Oct '87
Asian Crisis
Invasion of Iraq
12
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Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance.
Data Source: Morningstar
CAPITAL MARKETS REVIEW – DECEMBER 31, 2009
RELATIVE PERFORMANCE OF KEY INDICES
Large vs. Small
-60
-40
-20
0
20
40
60
12/79 - 12/8012/80 - 12/8112/81 - 12/8212/82 - 12/8312/83 - 12/8412/84 - 12/8512/85 - 12/8612/86 - 12/8712/87 - 12/8812/88 - 12/8912/89 - 12/9012/90 - 12/9112/91 - 12/9212/92 - 12/9312/93 - 12/9412/94 - 12/9512/95 - 12/9612/96 - 12/9712/97 - 12/9812/98 - 12/9912/99 - 12/0012/00 - 12/0112/01 - 12/0212/02 - 12/0312/03 - 12/0412/04 - 12/0512/05 - 12/0612/06 - 12/0712/07 - 12/0812/08 - 12/09Large vs. Small Mean 1 Standard Deviation 2 Standard Deviations
Large Outperforming
Small Outperforming
Large Value vs. Large Growth
-60
-40
-20
0
20
40
60
12/79 - 12/8012/80 - 12/8112/81 - 12/8212/82 - 12/8312/83 - 12/8412/84 - 12/8512/85 - 12/8612/86 - 12/8712/87 - 12/8812/88 - 12/8912/89 - 12/9012/90 - 12/9112/91 - 12/9212/92 - 12/9312/93 - 12/9412/94 - 12/9512/95 - 12/9612/96 - 12/9712/97 - 12/9812/98 - 12/9912/99 - 12/0012/00 - 12/0112/01 - 12/0212/02 - 12/0312/03 - 12/0412/04 - 12/0512/05 - 12/0612/06 - 12/0712/07 - 12/0812/08 - 12/09Lar ge Value vs. Large Growth Mean 1 Std Deviation 2 Std Deviations
Value Outperforming
Growth Outperforming
13
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Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance.
Data Source: Morningstar
CAPITAL MARKETS REVIEW – DECEMBER 31, 2009
RELATIVE PERFORMANCE OF KEY INDICES
Small Value vs. Small Growth
-60
-40
-20
0
20
40
60
12/79 - 12/8012/80 - 12/8112/81 - 12/8212/82 - 12/8312/83 - 12/8412/84 - 12/8512/85 - 12/8612/86 - 12/8712/87 - 12/8812/88 - 12/8912/89 - 12/9012/90 - 12/9112/91 - 12/9212/92 - 12/9312/93 - 12/9412/94 - 12/9512/95 - 12/9612/96 - 12/9712/97 - 12/9812/98 - 12/9912/99 - 12/0012/00 - 12/0112/01 - 12/0212/02 - 12/0312/03 - 12/0412/04 - 12/0512/05 - 12/0612/06 - 12/0712/07 - 12/0812/08 - 12/09Small Value vs. Small Growth Mean 1 Standard Deviation 2 Standard Deviations
Value Outperformin g
Growth Outperformin g
Equity vs. REIT
-60
-40
-20
0
20
40
60
12/79 - 12/8012/80 - 12/8112/81 - 12/8212/82 - 12/8312/83 - 12/8412/84 - 12/8512/85 - 12/8612/86 - 12/8712/87 - 12/8812/88 - 12/8912/89 - 12/9012/90 - 12/9112/91 - 12/9212/92 - 12/9312/93 - 12/9412/94 - 12/9512/95 - 12/9612/96 - 12/9712/97 - 12/9812/98 - 12/9912/99 - 12/0012/00 - 12/0112/01 - 12/0212/02 - 12/0312/03 - 12/0412/04 - 12/0512/05 - 12/0612/06 - 12/0712/07 - 12/0812/08 - 12/09Equity vs. REIT Mean 1 Standard Deviation 2 Standard Deviations
Equity Outperforming
REIT Outperforming
14
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Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance.
Data Source: Morningstar
CAPITAL MARKETS REVIEW – DECEMBER 31, 2009
RELATIVE PERFORMANCE OF KEY INDICES
Fixed Income vs. REIT
-80
-60
-40
-20
0
20
40
60
80
12/79 - 12/8012/80 - 12/8112/81 - 12/8212/82 - 12/8312/83 - 12/8412/84 - 12/8512/85 - 12/8612/86 - 12/8712/87 - 12/8812/88 - 12/8912/89 - 12/9012/90 - 12/9112/91 - 12/9212/92 - 12/9312/93 - 12/9412/94 - 12/9512/95 - 12/9612/96 - 12/9712/97 - 12/9812/98 - 12/9912/99 - 12/0012/00 - 12/0112/01 - 12/0212/02 - 12/0312/03 - 12/0412/04 - 12/0512/05 - 12/0612/06 - 12/0712/07 - 12/0812/08 - 12/09Fixed Income vs. REIT Mean 1 Standard Deviation 2 Standard Deviations
Fixed Income Outperforming
REIT Outperforming
15
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Statement Of Opinion:This and/or the accompanying information was prepared by or obtained from sources which
Wells Fargo Advisors believes to be reliable but does not guarantee its accuracy. Any opinions expressed or implied
herein are not necessarily the same as those of Wells Fargo Advisors or its affiliates and are subject to change without
notice. The report herein is not a complete analysis of every material fact in respect to any company, industry or security.
Any market prices are only indications of market values and are subject to change. The material has been prepared or is
distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to
participate in any trading strategy. Additional information is available upon request.
Asset Class Suitability:Stocks of small companies are typically more volatile than stocks of larger companies. They
often involve higher risks because they may lack the management expertise, financial resources, product diversification
and competitive strengths to endure adverse economic conditions. High-yield, non-investment grade bonds are only
suitable for aggressive investors willing to take greater risks,which could result in loss of principal and interest payments.
Global/International investing involves risks not typically associated with US investing, including currency fluctuations,
political instability, uncertain economic conditions and different accounting standards.
Past Performance:Past performance is not an indication of future results.
Asset Class Performance Representations:Long Term Treasuries = BC Treasury Long; Municipals = BC Municipal;
Foreign Bonds = Salomon World BIG – IB; US Govt/Credit = BC Govt/Credit; Mtge Backed Securities = ML Mortgage
Master; Corporate Bonds = Salomon Corporate; 90 Day T-Bills = Salomon; Japanese Stocks = Salomon Japan BMI; High
Yield Bonds = ML High Yield Master; Small Cap US Value = RU 2000 Value; MidCap US Stocks = RU Midcap; Large
Cap US Value = RU 1000 Value; European Stocks = Salomon Europe BMI; Small Cap US Stocks = RU 2000; Lg Cap US
Growth = RU 1000 Growth; Latin American Stocks = Salomon Latin America BMI; Sm Cap US Growth = RU 2000
Growth
Broad Equity Market & Sector Performance Representations:Large-Cap = S&P 500 or Russell 1000; Mid-Cap = RU
Midcap; Small-Cap = RU 2000; International = MSCI EAFE
Data Sources:Information found in this document was derived from the following sources: Zephyr Associates
StyleAdvisor, Informa M-Watch, Investor Force, Barclays Capital, MSCI Barra, and Standard & Poor’s.
CAPITAL MARKETS REVIEW – DECEMBER 31, 2009
GENERAL DISCLOSURE STATEMENT
16
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Dow Jones Industrial Average - This index is comprised of 30 "blue-chip" US stocks selected for their history of
successful growth and wide interest among investors. The DJIA represents about 20% of the total market value of all US
stocks and about 25% of the NYSE market capitalization. It is a price-weighted arithmetic average, with the divisor
adjusted to reflect stock splits and the occasional stock switches in the index.
NASDAQ Composite - A cap-weighted index comprised of all common stocks that are listed on the NASDAQ Stock
Market (National Association of Securities Dealers Automated Quotation system).
S&P 500 - A broad-based measurement of changes in stock market conditions based on the average performance of 500
widely held common stocks. This index does not contain the 500 largest companies nor the most expensive stocks traded in
the U.S. While many of the stocks are among the largest, this index also includes many relatively small companies. This
index consists of approximately 380 industrial, 40 utility, 10 transportation and 70 financial companies listed on U.S.
market exchanges. It is a capitalization-weighted index (stock price times number of shares outstanding), calculated on a
total return basis with dividends reinvested.
S&P 500/Citigroup Growth - The S&P/Citigroup Growth tracks the performance of those stocks in the S&P 500 with
lower book-to-price ratios. A cap-weighted index, it is rebalanced semi-annually, based on its price-to-book ratios and
market capitalizations at the close of trading one month prior. The index is adjusted each month to reflect changes in the
S&P 500. This index is more heavily weighted in the consumer non-cyclical, health care, and technology sectors than the
S&P 500.
S&P 500/Citigroup Value - The S&P Citigroup/Value tracks the performance of those stocks in the S&P 500 with higher
book-to-price ratios. A cap-weighted index, it is rebalanced semi-annually on January 1 and July 1, based on its book-to-
price ratios and market capitalizations at the close of trading one month prior. The index is adjusted each month to reflect
changes in the S&P 500. This index tends to be more heavily concentrated in the energy and financial sectors than the S&P
500.
Russell 1000 - The 1000 largest companies in the Russell 3000 index, based on market capitalization.
Russell 1000 Growth - A segment of the Russell 1000 with a greater-than-average growth orientation. Companies in this
index have higher price-to-book and price-earnings ratios, lower dividend yields and higher forecasted growth values than
the Russell 1000 Value index.
Russell 1000 Value - Represents a segment of the Russell 1000 with a less-than-average growth orientation. Companies in
this index have low price-to-book and price-earnings ratios, higher dividend yields and lower forecasted growth values than
the Russell 1000 Growth Index.
Russell Mid Cap - The index consisting of the bottom 800 securities in the Russell 1000 as ranked by total market
capitalization, and it represents over 35% of the Russell 1000 total market cap.
Russell 2000 - The 2000 smallest companies in the Russell 3000 index.
Russell 2000 Growth - A segment of the Russell 2000 with a greater-than-average growth orientation. Companies in this
index have higher price-to-book and price-earnings ratios, lower dividend yields and higher forecasted growth values than
the Russell 2000 Value index.
Russell 2000 Value - A segment of the Russell 2000 with a less-than-average growth orientation. Companies in this index
have low price-to-book and price-earnings ratios, higher dividend yields and lower forecasted growth values than the
Russell 2000 Growth index.
Russell 2500 - The index consisting of the bottom 500 stocks in the Russell 1000(as ranked by market capitalization) and
all of the stocks in the Russell 2000. This index is intended to be used as a measure of small to medium/small stock
performance, and it represents over 22% of the Russell 3000 total market cap.
CAPITAL MARKETS REVIEW – DECEMBER 31, 2009
GENERAL DISCLOSURE STATEMENT
17
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MSCI EAFE - A market capitalization-weighted index representing all of the MSCI developed markets outside North
America. It comprises 20 of the 22 countries in the MSCI World. These 20 countries include the 14 European countries in
the MSCI Europe and the 6 Pacific countries in the MSCI Pacific. This index is created by aggregating the 20 different
country indexes, all if which are created separately.
MSCI World - This market capitalization-weighted index represents all 22 of the MSCI developed markets in the world. It
is created by aggregating the 22 different country indexes, all if which are created separately.
MSCI Emerging Markets Free (EMF)- A market capitalization-weighted index representing 26 of the emerging markets
in the world. Several factors are used to designate whether a country is considered to be emerging vs. developed, the most
common of which is Gross Domestic Product Per Capita. The "Free" aspect indicates that this index includes only securities
that are allowed to be purchased by global investors. This index is created by aggregating the 26 different country indexes,
all if which are created separately.
Barclays Capital Government/Credit - This index includes all bonds that are in the Barclays Capital Government Bond
and the Barclays Capital Credit Bond indices.
Barclays Capital Government Intermediate - All bonds covered by the Barclays Capital Government Bond index with
maturities of 1 and 10 years.
Barclays Capital Aggregate Bond - This index is made up of the Barclays Capital Government/Credit, the Mortgage-
Backed Securities, and the Asset-Backed Securities indices. All issues in the index are rated investment grade or higher,
have at least one year to maturity, and have an outstanding par value of at least $100 million.
Barclays Capital Government Long Term - All bonds covered by the Barclays Capital Government Bond index with
maturities of 10 years or greater.
Barclays Capital Municipal Bond - This market cap weighted index includes investment grade tax-exempt bonds and is
classified into four main sectors: General Obligation, Revenue, Insured, and Pre-refunded. To be included in this index, the
original transaction size of a bond must have been greater than $50 million.
Merrill Lynch Convertibles - The convertible securities used in this index span all corporate sectors and must have a par
amount outstanding of $25 million or more. The maturity must be at least one year. The coupon range must be equal to or
greater than zero and all quality of bonds are included. Excluded from this index are preferred equity redemption stocks.
When the component bonds of this index convert into common stock, the converted securities are dropped from the index.
Merrill Lynch High Yield Master - Market-cap weighted index providing a broad-based measure of bonds in the US
domestic bond market rated below investment grade but not in default. Includes only issues with a credit rating of BB1 or
below as rated by Moody’s and/or S&P, at least $100 million in face value outstanding and a remaining term to final
maturity equal to or greater than one year.
Dow Jones Wilshire REIT Index - A measurement of equity REITs and Real Estate Operating Companies. No special-
purpose or health care REITs are included. It is a market capitalization-weighted index for which returns are calculated
monthly using buy and hold methodology; it is rebalanced monthly.
Citigroup 3 Month Treasury Bill - Representing the monthly return equivalents of yield averages that are not marked to
market, this index is an average of the last three three-month Treasury bill issues.
50/50 Blend (S&P 500/BCIGC)– A blended benchmark consisting of 50% S&P 500 and 50% Barclays Capital
Government/Credit Intermediate indices.
CAPITAL MARKETS REVIEW – DECEMBER 31, 2009
GENERAL DISCLOSURE STATEMENT
18
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Item # 4
Asset Class Actual ($) Actual (%) Target ($) Target (%) Difference ($) Difference (%)
Domestic Equity 239,449,484.8 41.9% 240,004,609.1 42.0% (555,124.3) (0.1%)
Domestic Fixed Income 180,115,150.6 31.5% 171,431,863.7 30.0% 8,683,286.9 1.5%
International Equity 102,104,635.5 17.9% 102,859,118.2 18.0% (754,482.7) (0.1%)
Real Estate 49,770,274.7 8.7% 57,143,954.6 10.0% (7,373,679.8) (1.3%)
Total Fund $571,439,545.5 100.0% $571,439,545.5 100.0% $0.0 0.0%
Actual Asset Allocation Target Asset Allocation
City of Clearwater Employees Pension Fund
Total Fund
Asset Allocation as of December 31, 2009
19
Attachment number 2
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Item # 4
Begining Investment Ending Current
Name Market Value Net New Inv. Gain/Loss Market Value Allocation
Domestic Equity
ING Investment Management 49,223,405 0 3,551,997 52,775,402 9.24
Russell 1000 Growth
Aletheia Research 14,683,300 0 929,749 15,613,050 2.73
Russell 1000 Value
NTGI-QM Russell 1000 Value 35,416,923 0 1,592,501 37,009,424 6.48
Russell 1000 Value
Artisan Partners 29,097,510 0 1,610,177 30,707,687 5.37
Russell Mid Growth
Wedge Capital Management 30,905,295 0 2,300,523 33,205,817 5.81
Russell Mid Value
Independence Investments LLC 35,686,841 0 1,756,307 37,443,148 6.55
Russell 2000 Growth
Atlanta Capital Management 17,826,908 0 804,989 18,631,897 3.26
Russell 2000 Value
Systematic Financial Management 13,494,035 0 569,025 14,063,060 2.46
Russell 2000 Value
International Equity
Earnest Partners 24,105,213 0 1,379,042 25,484,255 4.46
MSCI EAFE
Wentworth, Hauser & Violich 24,520,263 0 2,165,167 26,685,431 4.67
MSCI EAFE
Eaton Vance Management 23,743,278 0 1,376,091 25,119,369 4.40
MSCI Emerg Mkts
Wellington Management 23,140,569 0 1,675,013 24,815,581 4.34
MSCI Emerg Mkts
Domestic Fixed Income
Dodge & Cox 89,229,002 7,585,037 1,470,147 98,284,186 17.20
BC Aggregate Bond
Western Asset Management Co. 75,876,055 0 213,235 76,089,290 13.32
BC Aggregate Bond
Security Lending Income Account 1,844,272 -869,036 74,004 1,049,239 0.18
Citigrp 3 Mo TBill
In House Account 2,093,788 2,598,647 0 4,692,436 0.82
Real Estate
Security Capital 45,245,366 0 4,524,909 49,770,275 8.71
Wilshire RESI
TOTAL: 541,817,101 3,627,782 25,994,662 571,439,546 100.00
City of Clearwater Employees Pension Fund
Total Fund
Asset Distribution Across Investment Managers for the Quarter ending December 31, 2009
20
Attachment number 2
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Item # 4
Name Quarter 1 Year 3 Year 5 Years 10 Years
Domestic Equity
ING Investment Management 7.22 24.42 -0.88 3.17 -0.07
Russell 1000 Growth 7.94 37.21 -1.89 1.63 -3.98
Aletheia Research 6.33 36.49 - - -
Russell 1000 Value 4.22 19.69 -8.96 -0.25 2.47
NTGI-QM Russell 1000 Value 4.50 20.35 - - -
Russell 1000 Value 4.22 19.69 -8.96 -0.25 2.47
Artisan Partners 5.53 51.38 1.90 5.28 -
Russell Mid Growth 6.69 46.29 -3.18 2.40 -0.52
Wedge Capital Management 7.44 38.50 - - -
Russell Mid Value 5.21 34.21 -6.62 1.98 7.57
Independence Investments LLC 4.92 35.95 - - -
Russell 2000 Growth 4.14 34.47 -4.00 0.88 -1.38
Atlanta Capital Management 4.52 26.84 2.96 6.14 -
Russell 2000 Value 3.63 20.58 -8.22 -0.01 8.27
Systematic Financial Management 4.22 35.72 -6.84 0.75 -
Russell 2000 Value 3.63 20.58 -8.22 -0.01 8.27
International Equity
Earnest Partners 5.72 55.52 - - -
MSCI EAFE 2.22 32.46 -5.57 4.02 1.58
Wentworth, Hauser & Violich 8.83 55.97 - - -
MSCI EAFE 2.22 32.46 -5.57 4.02 1.58
Eaton Vance Management 5.80 67.01 - - -
MSCI Emerg Mkts 8.58 79.02 5.42 15.88 10.11
Wellington Management 7.24 74.44 - - -
MSCI Emerg Mkts 8.58 79.02 5.42 15.88 10.11
Domestic Fixed Income
Dodge & Cox 1.68 14.52 6.98 5.78 -
BC Aggregate Bond 0.20 5.93 6.04 4.97 6.33
Western Asset Management Co. 0.28 9.22 6.53 5.39 -
BC Aggregate Bond 0.20 5.93 6.04 4.97 6.33
Security Lending Income Account 5.05 17.51 8.15 6.46 -
Citigrp 3 Mo TBill 0.03 0.17 2.22 2.88 2.84
In House Account 0.00 0.00 0.00 0.00 0.00
Real Estate
Security Capital 10.00 24.67 - - -
Wilshire RESI 8.94 29.22 -13.82 -0.21 10.48
TOTAL:4.78 30.26 0.60 3.96 2.90
City of Clearwater Employees Pension Fund
Total Fund
Trailing Returns as of December 31, 2009
21
Attachment number 2
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Item # 4
Name YTD 2008 2007 2006 2005
Domestic Equity
ING Investment Management 24.42 -33.17 17.11 7.14 12.02
Russell 1000 Growth 37.21 -38.44 11.81 9.07 5.27
Aletheia Research 36.49 -37.98 - - -
Russell 1000 Value 19.69 -36.85 -0.17 22.25 7.05
NTGI-QM Russell 1000 Value 20.35 -36.85 - - -
Russell 1000 Value 19.69 -36.85 -0.17 22.25 7.05
Artisan Partners 51.38 -42.86 22.32 10.95 10.20
Russell Mid Growth 46.29 -44.32 11.42 10.66 12.09
Wedge Capital Management 38.50 -34.87 - - -
Russell Mid Value 34.21 -38.44 -1.42 20.22 12.64
Independence Investments LLC 35.95 -46.26 - - -
Russell 2000 Growth 34.47 -38.54 7.05 13.35 4.16
Atlanta Capital Management 26.84 -19.51 6.90 16.21 6.21
Russell 2000 Value 20.58 -28.92 -9.78 23.47 4.71
Systematic Financial Management 35.72 -40.70 0.47 18.60 8.25
Russell 2000 Value 20.58 -28.92 -9.78 23.47 4.71
International Equity
Earnest Partners 55.52 - - - -
MSCI EAFE 32.46 -43.06 11.63 26.86 14.02
Wentworth, Hauser & Violich 55.97 - - - -
MSCI EAFE 32.46 -43.06 11.63 26.86 14.02
Eaton Vance Management 67.01 - - - -
MSCI Emerg Mkts 79.02 -53.18 39.78 32.59 34.53
Wellington Management 74.44 - - - -
MSCI Emerg Mkts 79.02 -53.18 39.78 32.59 34.53
Domestic Fixed Income
Dodge & Cox 14.52 1.37 5.47 5.62 2.39
BC Aggregate Bond 5.93 5.24 6.96 4.33 2.43
Western Asset Management Co. 9.22 3.91 6.51 4.65 2.78
BC Aggregate Bond 5.93 5.24 6.96 4.33 2.43
Security Lending Income Account 17.51 2.43 5.09 4.87 3.10
Citigrp 3 Mo TBill 0.17 1.80 4.74 4.76 3.00
In House Account 0.00 0.00 0.00 0.00 0.00
Real Estate
Security Capital 24.67 - - - -
Wilshire RESI 29.22 -39.83 -17.67 35.79 13.83
TOTAL:30.26 -27.10 7.22 11.76 6.72
City of Clearwater Employees Pension Fund
Total Fund
Calendar Returns as of December 31, 2009
22
Attachment number 2
Page 24 of 141
Item # 4
QTR 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 10 Yr
Fund
Return 4.78 30.26 -2.55 0.60 3.28 3.96 4.93 6.91 4.82 2.90
%-tile 1 1 36 36 36 31 31 26 42 78
Policy
Return 4.42 25.53 -4.97 -1.24 2.94 3.99 5.51 8.06 5.85 4.07
%-tile 5 1 68 68 42 31 10 5 15 26
Universe
5th %-tile 4.48 25.52 0.55 2.94 4.73 4.91 5.78 8.23 6.40 5.61
25th %-tile 3.70 21.63 -1.21 1.71 3.76 4.20 5.17 6.92 5.35 4.17
50th %-tile 3.05 18.11 -3.57 -0.41 2.63 3.47 4.42 6.30 4.64 3.56
75th %-tile 2.29 14.34 -5.58 -1.65 1.64 2.49 3.76 5.74 4.27 3.05
95th %-tile 1.42 9.09 -8.01 -3.04 0.90 1.78 3.10 4.88 3.21 2.27
Trailing Returns through December 31, 2009
QTR 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 10 YrRates of Return (%)30.00
25.00
20.00
15.00
10.00
5.00
0.00
-5.00
-10.00
TOTAL FUND Blnd Idx
City of Clearwater Employees Pension Fund
Total Fund
Public Funds Universe Comparison
*Portfolio is compared againse the Total Public Funds universe.
23
Attachment number 2
Page 25 of 141
Item # 4
Account Reconciliation
12/31/2009
QTR
Beginning Value 541,817,101
Net Flows 3,627,782
Investment G/L 25,994,662
Ending Value 571,439,546
Investment Policy
Index Weight
Standard and Poor's 500 42.00
Barclays Aggregate Bond 30.00
MSCI Gross EAFE Index 10.00
Wilshire RESI 10.00
MSCI Gross Emerging Markets Free Index 8.00
Trailing Returns Through December 31, 2009
12/31/1987
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 30.26 -2.55 0.60 3.28 3.96 4.93 6.91 4.82 3.64 2.90 9.02
Policy 25.53 -4.97 -1.24 2.94 3.99 5.51 8.06 5.85 4.75 4.07 9.19
Diff 4.73 2.42 1.84 0.34 -0.03 -0.58 -1.15 -1.04 -1.11 -1.17 -0.17
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 4.78 30.26 -27.10 7.22 11.76 6.72 9.89 19.63 -8.75 -5.33 -3.49
Policy 4.42 25.53 -28.07 6.69 16.58 8.30 13.41 24.75 -8.39 -3.69 -1.88
Diff 0.36 4.73 0.97 0.53 -4.82 -1.58 -3.53 -5.12 -0.35 -1.65 -1.61
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 39.7 31.9 23.2 21.5 Portfolio -6.7 -23.3 -19.4 -17.8
Policy 38.7 31.4 24.9 24.5 Policy -9.5 -25.7 -21.0 -18.3
Ratio 102.6 101.6 93.1 87.8 Ratio 71.2 90.3 92.4 97.2
City of Clearwater Employees Pension Fund
Total Fund
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is December 31, 1987.
24
Attachment number 2
Page 26 of 141
Item # 4
Period Ending Portfolio Policy Diff
Dec 1987 0.00
Mar 1988 3.11 7.13 -4.02
Jun 1988 4.74 4.27 0.47
Sep 1988 0.58 1.21 -0.63
Dec 1988 2.04 3.37 -1.33
Mar 1989 4.89 5.01 -0.12
Jun 1989 5.92 6.53 -0.62
Sep 1989 7.62 8.05 -0.43
Dec 1989 1.39 2.52 -1.13
Mar 1990 0.06 -4.47 4.53
Jun 1990 7.02 6.05 0.97
Sep 1990 -6.22 -11.66 5.44
Dec 1990 5.72 5.76 -0.04
Mar 1991 11.93 12.57 -0.65
Jun 1991 0.59 -0.17 0.76
Sep 1991 6.24 4.82 1.41
Dec 1991 8.31 6.58 1.72
Mar 1992 -1.73 -0.89 -0.84
Jun 1992 -1.52 0.92 -2.44
Sep 1992 3.89 2.82 1.07
Dec 1992 6.07 3.09 2.99
Mar 1993 2.30 6.64 -4.34
Jun 1993 0.77 2.23 -1.45
Sep 1993 4.60 4.63 -0.03
Dec 1993 1.39 2.80 -1.41
Mar 1994 -1.67 -2.60 0.93
Jun 1994 -1.38 0.40 -1.79
Sep 1994 3.75 3.69 0.06
Dec 1994 0.40 -1.16 1.56
Mar 1995 5.43 4.78 0.66
Jun 1995 6.95 7.17 -0.23
Sep 1995 5.99 4.78 1.21
Dec 1995 2.97 4.49 -1.52
Mar 1996 3.66 2.92 0.74
Jun 1996 3.55 3.04 0.51
Sep 1996 3.27 2.18 1.09
Dec 1996 3.54 6.36 -2.82
Mar 1997 -1.16 1.72 -2.88
Jun 1997 11.19 10.80 0.39
Sep 1997 7.96 4.63 3.33
Dec 1997 -0.24 -0.14 -0.10
Mar 1998 8.17 8.18 -0.01
Jun 1998 1.63 -0.29 1.92
Sep 1998 -6.12 -7.12 0.99
City of Clearwater Employees Pension Fund
Total Fund
Quarterly Comparison Analysis (%)
Returns for periods exceeding one year are annualized.
25
Attachment number 2
Page 27 of 141
Item # 4
Period Ending Portfolio Policy Diff
Dec 1998 12.86 12.19 0.67
Mar 1999 3.42 2.74 0.67
Jun 1999 4.99 5.92 -0.93
Sep 1999 -4.42 -3.39 -1.03
Dec 1999 14.22 9.80 4.42
Mar 2000 4.61 2.22 2.39
Jun 2000 -3.11 -0.64 -2.47
Sep 2000 1.69 -0.47 2.16
Dec 2000 -6.36 -2.94 -3.43
Mar 2001 -6.94 -6.01 -0.94
Jun 2001 4.34 4.00 0.34
Sep 2001 -8.99 -8.60 -0.39
Dec 2001 7.13 7.79 -0.66
Mar 2002 0.41 2.03 -1.62
Jun 2002 -5.25 -5.19 -0.06
Sep 2002 -8.46 -10.46 2.00
Dec 2002 4.77 5.75 -0.98
Mar 2003 -0.54 -2.11 1.57
Jun 2003 9.75 12.16 -2.40
Sep 2003 1.91 4.07 -2.15
Dec 2003 7.53 9.18 -1.65
Mar 2004 3.25 3.91 -0.66
Jun 2004 -0.76 -1.13 0.37
Sep 2004 -0.81 1.61 -2.42
Dec 2004 8.12 8.64 -0.52
Mar 2005 -1.66 -1.51 -0.15
Jun 2005 2.14 3.14 -1.00
Sep 2005 3.57 4.14 -0.57
Dec 2005 2.59 2.38 0.21
Mar 2006 4.84 4.98 -0.13
Jun 2006 -1.69 -0.89 -0.80
Sep 2006 3.37 5.23 -1.86
Dec 2006 4.89 6.48 -1.59
Mar 2007 1.92 1.74 0.17
Jun 2007 4.14 3.33 0.81
Sep 2007 2.15 3.29 -1.14
Dec 2007 -1.11 -1.76 0.65
Mar 2008 -6.13 -4.85 -1.29
Jun 2008 -0.30 -2.12 1.83
Sep 2008 -8.96 -7.63 -1.32
Dec 2008 -14.45 -16.38 1.94
Mar 2009 -6.74 -9.46 2.73
Jun 2009 16.38 15.76 0.62
Sep 2009 14.53 14.71 -0.18
City of Clearwater Employees Pension Fund
Total Fund
Quarterly Comparison Analysis (%)
Returns for periods exceeding one year are annualized.
26
Attachment number 2
Page 28 of 141
Item # 4
Period Ending Portfolio Policy Diff
Dec 2009 4.78 4.42 0.36
City of Clearwater Employees Pension Fund
Total Fund
Quarterly Comparison Analysis (%)
Returns for periods exceeding one year are annualized.
27
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Item # 4
QTR YTD 1 Yr 3 Yr 5 Yr Incept Inception Date Current Assets
Net Time Weighted Return 4.78 30.26 30.26 0.60 3.96 9.02 12/31/1987 $571,439,546
Blnd Idx 4.42 25.53 25.53 -1.24 3.99 9.19
(42% Standard and Poor's 500, 30% Barclays Aggregate Bond, 10% MSCI Gross EAFE Index, 10% Wilshire RESI, 8% MSCI Gross Emerging Markets Free Index,
established 12/31/1987)
ING Investment Management
Net Time Weighted Return 7.22 24.42 24.42 -0.88 3.17 10.82 12/31/1987 $52,775,402
Russell 1000 Growth 7.94 37.21 37.21 -1.89 1.63 8.81
%-tile 29 99 99 14 8 9
(100.00% Russell 1000 Growth; established 12/31/1987)
Aletheia Research
Net Time Weighted Return 6.33 36.49 36.49 -8.67 06/30/2007 $15,613,050
Russell 1000 Value 4.22 19.69 19.69 -12.79
%-tile 17 1 1 11
(100.00% Russell 1000 Value; established 6/30/2007)
NTGI-QM Russell 1000 Value
Net Time Weighted Return 4.50 20.35 20.35 -12.57 06/30/2007 $37,009,424
Russell 1000 Value 4.22 19.69 19.69 -12.79
%-tile 84 76 76 85
(100.00% Russell 1000 Value; established 6/30/2007)
Artisan Partners
Net Time Weighted Return 5.53 51.38 51.38 1.90 5.28 5.63 07/31/2001 $30,707,687
Russell Mid Growth 6.69 46.29 46.29 -3.18 2.40 3.40
%-tile 47 10 10 10 21 36
(100.00% Russell Mid Growth; established 7/31/2001)
QTR YTD 1 Yr 3 Yr 5 Yr InceptRates of Return (%)30.00
25.00
20.00
15.00
10.00
5.00
0.00
TOTAL FUND Blnd Idx
City of Clearwater Employees Pension Fund
Total Fund
Performance Summary Through December 31, 2009
Returns for periods exceeding one year are annualized.
Fiscal Year ends in December.
28
Attachment number 2
Page 30 of 141
Item # 4
QTR YTD 1 Yr 3 Yr 5 Yr Incept Inception Date Current Assets
Wedge Capital Management
Net Time Weighted Return 7.44 38.50 38.50 -4.51 02/28/2007 $33,205,817
Russell Mid Value 5.21 34.21 34.21 -8.18
%-tile 21 36 36 42
(100.00% Russell Mid Value; established 2/28/2007)
Independence Investments LLC
Net Time Weighted Return 4.92 35.95 35.95 -9.97 02/28/2007 $37,443,148
Russell 2000 Growth 4.14 34.47 34.47 -4.75
%-tile 53 48 48 99
(100.00% Russell 2000 Growth; established 2/28/2007)
Atlanta Capital Management
Net Time Weighted Return 4.52 26.84 26.84 2.96 6.14 8.90 08/31/2003 $18,631,897
Russell 2000 Value 3.63 20.58 20.58 -8.22 -0.01 5.52
%-tile 48 70 70 3115
(100.00% Russell 2000 Value; established 8/31/2003)
Systematic Financial Management
Net Time Weighted Return 4.22 35.72 35.72 -6.84 0.75 4.22 08/31/2003 $14,063,060
Russell 2000 Value 3.63 20.58 20.58 -8.22 -0.01 5.52
%-tile 48 11 11 81 77 96
(100.00% Russell 2000 Value; established 8/31/2003)
Earnest Partners
Net Time Weighted Return 5.72 55.52 55.52 -7.44 04/30/2008 $25,484,255
MSCI EAFE 2.22 32.46 32.46 -13.60
%-tile 644 1
(100.00% MSCI EAFE; established 4/30/2008)
City of Clearwater Employees Pension Fund
Total Fund
Performance Summary Through December 31, 2009
Returns for periods exceeding one year are annualized.
Fiscal Year ends in December.
29
Attachment number 2
Page 31 of 141
Item # 4
QTR YTD 1 Yr 3 Yr 5 Yr Incept Inception Date Current Assets
Wentworth, Hauser & Violich
Net Time Weighted Return 8.83 55.97 55.97 -11.80 04/30/2008 $26,685,431
MSCI EAFE 2.22 32.46 32.46 -13.60
%-tile 144 29
(100.00% MSCI EAFE; established 4/30/2008)
Eaton Vance Management
Net Time Weighted Return 5.80 67.01 67.01 -8.41 04/30/2008 $25,119,369
MSCI Emerg Mkts 8.58 79.02 79.02 -8.00
%-tile 87 75 75 46
(100.00% MSCI Emerg Mkts; established 4/30/2008)
Wellington Management
Net Time Weighted Return 7.24 74.44 74.44 -0.69 03/31/2008 $24,815,581
MSCI Emerg Mkts 8.58 79.02 79.02 -3.42
%-tile 72 50 50 40
(100.00% MSCI Emerg Mkts; established 3/31/2008)
Dodge & Cox
Net Time Weighted Return 1.68 14.52 14.52 6.98 5.78 5.36 02/29/2004 $98,284,186
BC Aggregate Bond 0.20 5.93 5.93 6.04 4.97 4.67
%-tile 24 46 46 1 1 7
(100.00% BC Aggregate Bond; established 2/29/2004)
City of Clearwater Employees Pension Fund
Total Fund
Performance Summary Through December 31, 2009
Returns for periods exceeding one year are annualized.
Fiscal Year ends in December.
30
Attachment number 2
Page 32 of 141
Item # 4
QTR YTD 1 Yr 3 Yr 5 Yr Incept Inception Date Current Assets
Western Asset Management Co.
Net Time Weighted Return 0.28 9.22 9.22 6.53 5.39 5.34 09/30/2004 $76,089,290
BC Aggregate Bond 0.20 5.93 5.93 6.04 4.97 4.92
%-tile 49 74 74 349
(100.00% BC Aggregate Bond; established 9/30/2004)
Security Lending Income Account
Net Time Weighted Return 5.05 17.51 17.51 8.15 6.46 5.22 06/30/2003 $1,049,239
Citigrp 3 Mo TBill 0.03 0.17 0.17 2.22 2.88 2.48
(100.00% Citigrp 3 Mo TBill; established 6/30/2003)
In House Account
Net Time Weighted Return 0.00 0.00 0.00 0.00 0.00 0.83 12/31/1987 $4,692,436
Citigrp 3 Mo TBill 0.03 0.17 0.17 2.22 2.88 4.27
(100.00% Citigrp 3 Mo TBill; established 12/31/1987)
Security Capital
Net Time Weighted Return 10.00 24.67 24.67 -18.92 04/30/2008 $49,770,275
Wilshire RESI 8.94 29.22 29.22 -18.07
%-tile 10 99 99 78
(100.00% Wilshire RESI; established 4/30/2008)
City of Clearwater Employees Pension Fund
Total Fund
Performance Summary Through December 31, 2009
Returns for periods exceeding one year are annualized.
Fiscal Year ends in December.
31
Attachment number 2
Page 33 of 141
Item # 4
Account Reconciliation
12/31/2009
QTR
Beginning Value 226,334,217
Net Flows 0
Investment G/L 13,115,268
Ending Value 239,449,485
Investment Policy
Index Weight
Standard and Poor's 500 100.00
Trailing Returns Through December 31, 2009
12/31/1987
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 32.12 -9.32 -4.12 -0.10 1.50 3.35 7.23 3.17 1.49 0.27 10.32
Policy 26.46 -10.74 -5.63 -0.67 0.42 2.09 5.52 1.59 0.00 -0.95 9.54
Diff 5.66 1.42 1.50 0.58 1.08 1.27 1.71 1.57 1.49 1.22 0.78
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 5.79 32.12 -37.76 7.17 13.03 8.12 13.17 33.75 -21.29 -10.98 -10.07
Policy 6.04 26.46 -37.00 5.49 15.80 4.90 10.87 28.69 -22.11 -11.88 -9.11
Diff -0.24 5.66 -0.76 1.68 -2.77 3.22 2.30 5.06 0.82 0.90 -0.97
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 46.0 37.6 28.0 30.8 Portfolio -9.5 -33.2 -28.3 -30.0
Policy 42.1 34.0 25.0 26.3 Policy -11.0 -33.5 -27.7 -28.7
Ratio 109.2 110.5 112.0 117.4 Ratio 86.4 99.0 102.3 104.8
City of Clearwater Employees Pension Fund
Domestic Equity Composite
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is December 31, 1987.
32
Attachment number 2
Page 34 of 141
Item # 4
Period Ending Portfolio Policy Diff
Dec 1987
Mar 1988 4.51 5.70 -1.19
Jun 1988 6.37 6.59 -0.22
Sep 1988 -2.93 0.33 -3.26
Dec 1988 1.68 3.06 -1.38
Mar 1989 7.56 7.12 0.44
Jun 1989 9.76 8.77 0.99
Sep 1989 12.84 10.69 2.15
Dec 1989 0.80 2.06 -1.26
Mar 1990 -1.97 -2.96 1.00
Jun 1990 11.64 6.22 5.42
Sep 1990 -13.86 -13.72 -0.14
Dec 1990 9.18 8.94 0.24
Mar 1991 20.94 14.60 6.34
Jun 1991 -1.09 -0.28 -0.80
Sep 1991 9.64 5.32 4.32
Dec 1991 12.98 8.39 4.60
Mar 1992 -3.96 -2.53 -1.44
Jun 1992 -4.57 1.89 -6.46
Sep 1992 5.04 3.15 1.88
Dec 1992 9.97 5.03 4.94
Mar 1993 1.93 4.37 -2.44
Jun 1993 -0.29 0.49 -0.77
Sep 1993 6.20 2.58 3.62
Dec 1993 1.72 2.32 -0.60
Mar 1994 -2.89 -3.79 0.91
Jun 1994 -3.04 0.42 -3.46
Sep 1994 6.56 4.89 1.67
Dec 1994 -0.13 -0.02 -0.12
Mar 1995 7.47 9.74 -2.27
Jun 1995 9.55 9.55 0.01
Sep 1995 9.36 7.95 1.41
Dec 1995 2.56 6.02 -3.46
Mar 1996 7.60 5.37 2.23
Jun 1996 5.57 4.49 1.08
Sep 1996 4.53 3.09 1.44
Dec 1996 4.35 8.34 -3.98
Mar 1997 -1.83 2.68 -4.51
Jun 1997 16.89 17.46 -0.57
Sep 1997 11.48 7.49 3.99
Dec 1997 -2.13 2.87 -5.00
Mar 1998 12.72 13.95 -1.22
Jun 1998 1.23 3.31 -2.07
Sep 1998 -12.21 -9.95 -2.27
City of Clearwater Employees Pension Fund
Domestic Equity Composite
Quarterly Comparison Analysis (%)
Returns for periods exceeding one year are annualized.
33
Attachment number 2
Page 35 of 141
Item # 4
Period Ending Portfolio Policy Diff
Dec 1998 21.83 21.30 0.54
Mar 1999 5.28 4.98 0.29
Jun 1999 8.14 7.05 1.09
Sep 1999 -7.05 -6.25 -0.81
Dec 1999 22.08 14.88 7.20
Mar 2000 5.57 2.29 3.28
Jun 2000 -5.17 -2.66 -2.52
Sep 2000 1.49 -0.97 2.46
Dec 2000 -11.49 -7.83 -3.66
Mar 2001 -12.23 -11.86 -0.37
Jun 2001 7.68 5.86 1.82
Sep 2001 -17.43 -14.68 -2.75
Dec 2001 14.07 10.69 3.37
Mar 2002 0.93 0.27 0.66
Jun 2002 -11.85 -13.40 1.55
Sep 2002 -18.20 -17.28 -0.92
Dec 2002 8.15 8.43 -0.28
Mar 2003 -1.14 -3.15 2.01
Jun 2003 16.57 15.40 1.16
Sep 2003 3.63 2.64 0.98
Dec 2003 12.00 12.18 -0.17
Mar 2004 3.92 1.70 2.23
Jun 2004 0.36 1.71 -1.36
Sep 2004 -3.08 -1.87 -1.20
Dec 2004 11.96 9.23 2.72
Mar 2005 -2.72 -2.15 -0.57
Jun 2005 2.21 1.36 0.85
Sep 2005 4.87 3.61 1.26
Dec 2005 3.70 2.09 1.61
Mar 2006 7.01 4.21 2.80
Jun 2006 -3.38 -1.44 -1.94
Sep 2006 2.89 5.67 -2.78
Dec 2006 6.25 6.70 -0.45
Mar 2007 1.57 0.64 0.93
Jun 2007 6.72 6.28 0.44
Sep 2007 1.95 2.03 -0.08
Dec 2007 -3.01 -3.33 0.32
Mar 2008 -10.75 -9.45 -1.30
Jun 2008 0.15 -2.73 2.88
Sep 2008 -8.87 -8.37 -0.50
Dec 2008 -23.59 -21.94 -1.65
Mar 2009 -9.51 -11.01 1.50
Jun 2009 18.13 15.93 2.21
Sep 2009 16.82 15.61 1.22
City of Clearwater Employees Pension Fund
Domestic Equity Composite
Quarterly Comparison Analysis (%)
Returns for periods exceeding one year are annualized.
34
Attachment number 2
Page 36 of 141
Item # 4
Period Ending Portfolio Policy Diff
Dec 2009 5.79 6.04 -0.24
City of Clearwater Employees Pension Fund
Domestic Equity Composite
Quarterly Comparison Analysis (%)
Returns for periods exceeding one year are annualized.
35
Attachment number 2
Page 37 of 141
Item # 4
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 5.79 32.12 32.12 -9.32 -4.12 -0.10 1.50 3.35 7.23 3.17
%-tile 39 42 42 40 43 43 41 41 40 43
Policy
Return 6.04 26.46 26.46 -10.74 -5.63 -0.67 0.42 2.09 5.52 1.59
%-tile 31 68 68 59 63 55 62 67 71 71
Universe
5th %-tile 8.31 52.24 52.24 -2.32 1.54 4.16 5.38 7.33 11.32 7.61
25th %-tile 6.28 36.79 36.79 -7.74 -2.67 0.96 2.41 4.31 8.33 4.50
50th %-tile 5.43 30.22 30.22 -10.05 -4.72 -0.41 1.04 2.92 6.66 2.78
75th %-tile 4.45 25.57 25.57 -12.03 -6.29 -1.60 -0.10 1.80 5.38 1.42
95th %-tile 2.29 14.82 14.82 -16.63 -10.24 -4.78 -2.65 -0.33 3.40 -0.56
Trailing Returns through December 31, 2009
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 YrRates of Return (%)50.00
40.00
30.00
20.00
10.00
0.00
-10.00
-20.00
DOM EQ COMP S&P 500
City of Clearwater Employees Pension Fund
Domestic Equity Composite
Universe Comparison - Trailing Years
36
Attachment number 2
Page 38 of 141
Item # 4
Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 5.79 32.12 -37.76 7.17 13.03 8.12 13.17 33.75 -21.29 -10.98
%-tile 39 42 49 45 60 42 47 39 54 59
Policy
Return 6.04 26.46 -37.00 5.49 15.80 4.90 10.87 28.69 -22.11 -11.88
%-tile 31 68 39 55 31 74 66 65 59 63
Universe
5th %-tile 8.31 52.24 -26.80 22.57 21.56 16.16 23.75 52.35 -5.33 19.13
25th %-tile 6.28 36.79 -34.97 11.36 16.53 10.08 16.50 38.11 -15.40 1.61
50th %-tile 5.43 30.22 -37.82 6.32 14.20 7.25 12.83 31.29 -20.43 -8.18
75th %-tile 4.45 25.57 -41.20 2.78 10.44 4.88 10.10 27.55 -24.23 -13.51
95th %-tile 2.29 14.82 -48.68 -5.31 3.68 1.47 5.00 21.55 -32.86 -27.59
Calendar Returns through December 31, 2009
Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001Rates of Return (%)50.00
40.00
30.00
20.00
10.00
0.00
-10.00
-20.00
-30.00
-40.00
-50.00
DOM EQ COMP S&P 500
City of Clearwater Employees Pension Fund
Domestic Equity Composite
Universe Comparison - Calendar Year
37
Attachment number 2
Page 39 of 141
Item # 4
1 Year
Risk (Annualized Std Dev)
23.0022.0021.00Annualized Return (%)32.00
31.00
30.00
29.00
28.00
27.00
26.00
Return Std Dev Alpha Beta R-Squared
Portfolio 32.12 22.23 4.11 1.02 95.92
S&P 500 26.46 21.33 0.00 1.00 100.00
S&P 500
Universe Median
Portfolio
S&P 500
3 Years
Risk (Annualized Std Dev)
22.0021.0020.00Annualized Return (%)-2.00
-3.00
-4.00
-5.00
-6.00
Return Std Dev Alpha Beta R-Squared
Portfolio -4.12 21.63 2.52 1.08 96.89
S&P 500 -5.63 19.63 0.00 1.00 100.00
S&P 500
Universe Median
Portfolio
S&P 500
Since Inception
Risk (Annualized Std Dev)
16.0015.0014.00Annualized Return (%)11.00
10.00
9.00
Return Std Dev Alpha Beta R-Squared
Portfolio 10.32 13.80 2.15 0.74 62.66
S&P 500 9.54 14.71 0.00 1.00 100.00
S&P 500 Universe Median
Portfolio
S&P 500
5 Years
Risk (Annualized Std Dev)
18.0017.0016.00Annualized Return (%)2.00
1.00
0.00
Return Std Dev Alpha Beta R-Squared
Portfolio 1.50 17.81 1.51 1.10 95.76
S&P 500 0.42 15.91 0.00 1.00 100.00
S&P 500
Universe Median
Portfolio
S&P 500
City of Clearwater Employees Pension Fund
Domestic Equity Composite
Return vs Risk as of December 31, 2009
38
Attachment number 2
Page 40 of 141
Item # 4
Account Reconciliation
12/31/2009
QTR
Beginning Value 99,323,628
Net Flows 0
Investment G/L 6,074,248
Ending Value 105,397,876
Investment Policy
Index Weight
Russell 1000 100.00
Trailing Returns Through December 31, 2009
03/31/1988
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 24.58 -10.17 -4.55 -0.76 1.05 2.68 6.36 2.31 0.53 -0.30 9.61
Policy 28.43 -10.48 -5.36 -0.53 0.79 2.48 6.01 2.08 0.35 -0.49 9.51
Diff -3.86 0.31 0.81 -0.23 0.26 0.20 0.34 0.23 0.18 0.19 0.11
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 6.12 24.58 -35.22 7.76 11.52 8.63 11.24 31.37 -22.03 -12.64 -7.49
Policy 6.07 28.43 -37.60 5.77 15.46 6.27 11.39 29.90 -21.65 -12.45 -7.80
Diff 0.04 -3.86 2.38 1.99 -3.94 2.36 -0.15 1.47 -0.38 -0.19 0.31
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 41.1 33.6 24.8 25.3 Portfolio -11.7 -31.8 -26.4 -29.2
Policy 43.4 35.0 25.9 26.5 Policy -10.5 -33.6 -27.8 -30.6
Ratio 94.7 96.0 95.9 95.3 Ratio 112.1 94.5 95.0 95.5
City of Clearwater Employees Pension Fund
Large Cap Equity Composite
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is March 31, 1988.
39
Attachment number 2
Page 41 of 141
Item # 4
Period Ending Portfolio Policy Diff
Mar 1988
Jun 1988 5.70 6.63 -0.93
Sep 1988 -0.70 0.43 -1.13
Dec 1988 2.30 2.54 -0.24
Mar 1989 7.14 7.21 -0.07
Jun 1989 9.96 8.96 1.00
Sep 1989 13.53 10.34 3.19
Dec 1989 2.94 1.18 1.76
Mar 1990 -2.59 -3.29 0.70
Jun 1990 11.93 5.94 5.99
Sep 1990 -12.81 -14.60 1.79
Dec 1990 9.08 9.54 -0.46
Mar 1991 17.37 15.53 1.84
Jun 1991 -2.21 -0.44 -1.76
Sep 1991 7.16 6.18 0.98
Dec 1991 12.98 8.93 4.05
Mar 1992 -5.09 -2.16 -2.93
Jun 1992 -1.88 1.40 -3.27
Sep 1992 5.35 3.28 2.07
Dec 1992 6.90 6.43 0.47
Mar 1993 2.40 4.16 -1.76
Jun 1993 -1.96 0.69 -2.65
Sep 1993 3.34 3.23 0.12
Dec 1993 0.97 1.74 -0.77
Mar 1994 -2.56 -3.95 1.39
Jun 1994 -1.76 -0.19 -1.57
Sep 1994 3.56 5.12 -1.55
Dec 1994 0.72 -0.39 1.11
Mar 1995 7.72 9.51 -1.79
Jun 1995 10.96 9.42 1.54
Sep 1995 8.50 8.91 -0.41
Dec 1995 3.31 5.57 -2.26
Mar 1996 8.09 5.51 2.58
Jun 1996 4.88 4.08 0.80
Sep 1996 5.31 3.26 2.05
Dec 1996 6.30 7.98 -1.68
Mar 1997 1.39 1.55 -0.16
Jun 1997 15.34 16.81 -1.47
Sep 1997 10.15 8.73 1.41
Dec 1997 -0.12 3.01 -3.13
Mar 1998 13.19 13.37 -0.18
Jun 1998 2.22 2.50 -0.28
Sep 1998 -9.96 -10.31 0.35
Dec 1998 20.10 21.88 -1.77
City of Clearwater Employees Pension Fund
Large Cap Equity Composite
Quarterly Comparison Analysis (%)
Returns for periods exceeding one year are annualized.
40
Attachment number 2
Page 42 of 141
Item # 4
Period Ending Portfolio Policy Diff
Mar 1999 5.65 4.12 1.53
Jun 1999 8.05 7.12 0.92
Sep 1999 -7.95 -6.60 -1.35
Dec 1999 12.94 16.06 -3.12
Mar 2000 1.50 4.37 -2.86
Jun 2000 -1.49 -3.43 1.94
Sep 2000 0.57 0.72 -0.15
Dec 2000 -8.01 -9.16 1.16
Mar 2001 -11.22 -12.57 1.34
Jun 2001 6.09 6.31 -0.22
Sep 2001 -15.44 -15.23 -0.21
Dec 2001 9.70 11.12 -1.42
Mar 2002 0.85 0.74 0.11
Jun 2002 -12.26 -13.46 1.19
Sep 2002 -19.27 -16.92 -2.36
Dec 2002 9.15 8.16 1.00
Mar 2003 -1.82 -2.93 1.11
Jun 2003 15.55 15.74 -0.19
Sep 2003 3.14 3.00 0.14
Dec 2003 12.28 12.26 0.02
Mar 2004 2.81 1.90 0.91
Jun 2004 0.26 1.40 -1.13
Sep 2004 -1.99 -1.82 -0.17
Dec 2004 10.10 9.79 0.30
Mar 2005 -1.33 -1.90 0.57
Jun 2005 1.67 2.05 -0.38
Sep 2005 4.39 3.95 0.45
Dec 2005 3.73 2.12 1.60
Mar 2006 4.08 4.49 -0.41
Jun 2006 -2.51 -1.66 -0.85
Sep 2006 4.22 5.06 -0.84
Dec 2006 5.46 6.95 -1.49
Mar 2007 0.38 1.21 -0.84
Jun 2007 6.51 5.90 0.62
Sep 2007 2.32 1.98 0.34
Dec 2007 -1.50 -3.23 1.73
Mar 2008 -8.40 -9.48 1.09
Jun 2008 -1.76 -1.89 0.13
Sep 2008 -8.93 -9.35 0.42
Dec 2008 -20.96 -22.48 1.52
Mar 2009 -11.72 -10.45 -1.26
Jun 2009 13.75 16.50 -2.75
Sep 2009 16.90 16.07 0.83
Dec 2009 6.12 6.07 0.04
City of Clearwater Employees Pension Fund
Large Cap Equity Composite
Quarterly Comparison Analysis (%)
Returns for periods exceeding one year are annualized.
41
Attachment number 2
Page 43 of 141
Item # 4
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 6.12 24.58 24.58 -10.17 -4.55 -0.76 1.05 2.68 6.36 2.31
%-tile 32 75 75 41 33 56 43 45 35 50
Policy
Return 6.07 28.43 28.43 -10.48 -5.36 -0.53 0.79 2.48 6.01 2.08
%-tile 33 42 42 47 48 47 53 53 47 54
Universe
5th %-tile 7.69 38.70 38.70 -6.49 -1.22 2.28 3.45 4.98 8.54 5.00
25th %-tile 6.34 30.98 30.98 -9.30 -3.81 0.41 1.67 3.43 6.72 3.38
50th %-tile 5.86 27.17 27.17 -10.56 -5.42 -0.60 0.88 2.58 5.92 2.32
75th %-tile 4.90 24.76 24.76 -11.55 -6.17 -1.31 0.14 1.85 5.26 1.40
95th %-tile 3.56 17.91 17.91 -14.33 -9.12 -3.29 -1.35 0.69 4.05 0.17
Trailing Returns through December 31, 2009
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 YrRates of Return (%)40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
-5.00
-10.00
-15.00
LARGE CAP COMP Russell 1000
City of Clearwater Employees Pension Fund
Large Cap Equity Composite
Universe Comparison - Trailing Years
42
Attachment number 2
Page 44 of 141
Item # 4
Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 6.12 24.58 -35.22 7.76 11.52 8.63 11.24 31.37 -22.03 -12.64
%-tile 32 75 22 28 86 22 53 18 65 80
Policy
Return 6.07 28.43 -37.60 5.77 15.46 6.27 11.39 29.90 -21.65 -12.45
%-tile 33 42 60 44 52 49 52 31 62 79
Universe
5th %-tile 7.69 38.70 -30.95 14.80 21.24 11.86 18.44 37.95 -11.41 6.67
25th %-tile 6.34 30.98 -35.50 8.22 17.40 8.27 13.69 30.49 -16.16 -4.19
50th %-tile 5.86 27.17 -37.18 5.47 15.53 6.25 11.60 28.46 -19.91 -9.92
75th %-tile 4.90 24.76 -39.07 3.75 13.72 4.83 10.15 26.28 -22.41 -12.28
95th %-tile 3.56 17.91 -42.83 -1.14 8.07 2.82 6.69 22.95 -26.79 -21.75
Calendar Returns through December 31, 2009
Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001Rates of Return (%)40.00
30.00
20.00
10.00
0.00
-10.00
-20.00
-30.00
-40.00
LARGE CAP COMP Russell 1000
City of Clearwater Employees Pension Fund
Large Cap Equity Composite
Universe Comparison - Calendar Year
43
Attachment number 2
Page 45 of 141
Item # 4
1 Year
Risk (Annualized Std Dev)
22.0021.0020.00Annualized Return (%)28.00
27.00
26.00
25.00
24.00
Return Std Dev Alpha Beta R-Squared
Portfolio 24.58 21.64 -3.15 1.00 97.67
Russell 1000 28.43 21.29 0.00 1.00 100.00
Russell 1000
Universe Median
Portfolio
Russell 1000
3 Years
Risk (Annualized Std Dev)
21.0020.0019.00Annualized Return (%)-3.00
-4.00
-5.00
-6.00
Return Std Dev Alpha Beta R-Squared
Portfolio -4.55 19.52 0.54 0.97 98.40
Russell 1000 -5.36 20.05 0.00 1.00 100.00
Russell 1000Universe Median
Portfolio
Russell 1000
Since Inception
Risk (Annualized Std Dev)
15.0014.0013.00Annualized Return (%)11.00
10.00
9.00
Return Std Dev Alpha Beta R-Squared
Portfolio 9.61 12.59 1.57 0.70 69.34
Russell 1000 9.51 14.85 0.00 1.00 100.00
Russell 1000
Universe Median
Portfolio
Russell 1000
5 Years
Risk (Annualized Std Dev)
17.0016.0015.00Annualized Return (%)2.00
1.00
0.00
Return Std Dev Alpha Beta R-Squared
Portfolio 1.05 15.92 0.18 0.97 98.05
Russell 1000 0.79 16.25 0.00 1.00 100.00
Russell 1000
Universe Median
Portfolio
Russell 1000
City of Clearwater Employees Pension Fund
Large Cap Equity Composite
Return vs Risk as of December 31, 2009
44
Attachment number 2
Page 46 of 141
Item # 4
Account Reconciliation
12/31/2009
QTR
Beginning Value 49,223,405
Net Flows 0
Investment G/L 3,551,997
Ending Value 52,775,402
Investment Policy
Index Weight
Russell 1000 Growth 100.00
Trailing Returns Through December 31, 2009
12/31/1987
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 24.42 -8.81 -0.88 1.07 3.17 4.32 7.65 3.36 0.28 -0.07 10.82
Policy 37.21 -8.09 -1.89 0.74 1.63 2.40 5.92 0.95 -1.68 -3.98 8.81
Diff -12.79 -0.72 1.01 0.32 1.53 1.92 1.73 2.41 1.96 3.92 2.01
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 7.22 24.42 -33.17 17.11 7.14 12.02 10.28 29.99 -22.23 -21.30 -3.13
Policy 7.94 37.21 -38.44 11.81 9.07 5.27 6.30 29.76 -27.89 -20.42 -22.43
Diff -0.73 -12.79 5.27 5.30 -1.93 6.75 3.98 0.23 5.66 -0.88 19.29
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 36.1 28.3 23.4 25.3 Portfolio -8.6 -30.9 -26.0 -26.4
Policy 43.1 32.3 24.4 28.8 Policy -4.1 -35.5 -30.2 -35.5
Ratio 83.7 87.5 95.8 87.9 Ratio 207.7 87.2 86.2 74.5
City of Clearwater Employees Pension Fund
ING Investment Management - Large Cap Growth
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is December 31, 1987.
45
Attachment number 2
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Item # 4
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 7.22 24.42 24.42 -8.81 -0.88 1.07 3.17 4.32 7.65 3.36
%-tile 29 99 99 32 14 22 8 11 13 10
Policy
Return 7.94 37.21 37.21 -8.09 -1.89 0.74 1.63 2.40 5.92 0.95
%-tile 10 29 29 21 27 31 41 58 53 70
Universe
5th %-tile 8.92 45.71 45.71 -5.46 0.44 3.28 4.27 5.46 9.10 4.70
25th %-tile 7.45 38.21 38.21 -8.24 -1.66 1.01 2.35 3.55 7.00 2.66
50th %-tile 6.49 33.62 33.62 -9.83 -3.10 0.01 1.44 2.64 6.06 1.69
75th %-tile 5.66 29.36 29.36 -11.52 -4.68 -1.26 0.49 1.97 5.35 0.80
95th %-tile 4.26 24.94 24.94 -15.49 -6.33 -3.00 -1.03 0.18 3.81 -0.56
Trailing Returns through December 31, 2009
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 YrRates of Return (%)45.00
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
-5.00
-10.00
-15.00
ING Russell 1000 Growth
City of Clearwater Employees Pension Fund
ING Investment Management - Large Cap Growth
Universe Comparison - Trailing Years
46
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Item # 4
Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 7.22 24.42 -33.17 17.11 7.14 12.02 10.28 29.99 -22.23 -21.30
%-tile 29 99 1 18 77 8 42 38 30 83
Policy
Return 7.94 37.21 -38.44 11.81 9.07 5.27 6.30 29.76 -27.89 -20.42
%-tile 10 29 42 53 55 78 89 40 78 80
Universe
5th %-tile 8.92 45.71 -33.38 21.67 15.99 15.29 16.67 44.18 -15.33 -1.84
25th %-tile 7.45 38.21 -37.64 15.29 12.75 9.09 11.66 31.88 -21.51 -10.82
50th %-tile 6.49 33.62 -39.07 12.21 9.55 6.91 9.85 29.22 -24.04 -14.40
75th %-tile 5.66 29.36 -41.80 9.58 7.29 5.41 8.03 26.10 -26.81 -19.56
95th %-tile 4.26 24.94 -45.92 4.49 2.03 2.12 4.20 22.31 -32.99 -31.70
Calendar Returns through December 31, 2009
Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001Rates of Return (%)50.00
40.00
30.00
20.00
10.00
0.00
-10.00
-20.00
-30.00
-40.00
-50.00
ING Russell 1000 Growth
City of Clearwater Employees Pension Fund
ING Investment Management - Large Cap Growth
Universe Comparison - Calendar Year
47
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Item # 4
RATE OF RETURN (%)6.00
4.00
2.00
0.00
-2.00
-4.00
-6.00
-8.00
-10.00
-12.00
-14.00
-16.00
-18.00
-20.00
3 YRS ENDING 12/09 3 YRS ENDING 9/09 3 YRS ENDING 6/09 3 YRS ENDING 3/09 3 YRS ENDING 12/08 3 YRS ENDING 9/08
HIGHEST VALUE 1.54 1.86 -2.45 -7.60 -3.21 4.58
FIRST QUARTILE -2.67 -2.32 -6.25 -11.82 -7.43 1.69
MEDIAN VALUE -4.72 -4.18 -8.18 -13.63 -8.98 0.06
THIRD QUARTILE -6.29 -5.81 -9.77 -15.50 -10.78 -1.25
LOWEST VALUE -10.24 -9.23 -13.85 -20.12 -14.95 -4.65
MEAN -4.49 -4.04 -8.03 -13.71 -9.05 0.16
3 YRS ENDING 12/09 3 YRS ENDING 9/09 3 YRS ENDING 6/09 3 YRS ENDING 3/09 3 YRS ENDING 12/08 3 YRS ENDING 9/08
RETURN RANK RETURN RANK RETURN RANK RETURN RANK RETURN RANK RETURN RANK
ING -0.88 10 -1.77 18 -4.85 11 -9.63 6 -5.70 10 2.70 13
RUSSELL 1000 GROWTH -1.89 17 -2.50 27 -5.45 16 -11.28 19 -9.11 52 0.04 50
6.48
3.24
0.00
-3.24
-6.48
ALPHA
HIGHEST VALUE 5.98
FIRST QUARTILE 1.91
MEDIAN VALUE 0.05
THIRD QUARTILE -1.57
LOWEST VALUE -5.60
MEAN 0.14
VALUE RANK
ING 2.06 23
0.47
0.00
-0.47
-0.94
-1.41
INFO RATIO
0.48
-0.09
-0.38
-0.71
-1.20
-0.39
VALUE RANK
0.10 12
0.46
0.31
0.15
0.00
-0.15
-0.31
SHARPE RATIO
0.34
0.13
0.03
-0.04
-0.21
0.04
VALUE RANK
0.25 7
3.30
0.00
-3.30
-6.59
-9.89
EXCESS RETURN
3.42
-0.78
-2.84
-4.40
-8.35
-2.61
VALUE RANK
1.01 10
33.62
22.41
11.21
0.00
-11.21
-22.41
TREYNOR RATIO
26.54
5.27
2.28
-0.45
-13.48
2.71
VALUE RANK
7.38 15
Cummulative Excess Returns vs Benchmark
12/1989 12/1992 12/1995 12/1998 12/2001 12/2004 12/2007 12/2009CUMULATIVE EXCESS RATE OF RETURN (%)30
25
20
15
10
5
0
-5
-10
-15
-20
ING RUSSELL 1000 GROWTH
City of Clearwater Employees Pension Fund
ING Investment Management - Large Cap Growth
Return Analysis Summary as of December 31, 2009
48
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Item # 4
1 Year
Risk (Annualized Std Dev)
19.0018.0017.00Annualized Return (%)39.00
38.00
37.00
36.00
35.00
34.00
33.00
32.00
31.00
30.00
29.00
28.00
27.00
26.00
25.00
24.00
23.00
Return Std Dev Alpha Beta R-Squared
Portfolio 24.42 18.29 -8.45 0.77 35.34
Russell 1000 Growth 37.21 17.47 0.00 1.00 100.00
Russell 1000 Growth
Universe Median
Portfolio
Russell 1000 Growth
3 Years
Risk (Annualized Std Dev)
20.0019.0018.00Annualized Return (%)-1.00
-2.00
-3.00
Return Std Dev Alpha Beta R-Squared
Portfolio -0.88 18.07 2.06 0.61 17.47
Russell 1000 Growth -1.89 19.73 0.00 1.00 100.00
Russell 1000 Growth
Universe Median
Portfolio
Russell 1000 Growth
Since Inception
Risk (Annualized Std Dev)
19.0018.0017.0016.00Annualized Return (%)11.00
10.00
9.00
Return Std Dev Alpha Beta R-Squared
Portfolio 10.82 16.20 1.17 0.41 22.23
Russell 1000 Growth 8.81 18.82 0.00 1.00 100.00
Russell 1000 Growth
Universe Median
Portfolio
Russell 1000 Growth
5 Years
Risk (Annualized Std Dev)
17.0016.0015.0014.00Annualized Return (%)3.00
2.00
Return Std Dev Alpha Beta R-Squared
Portfolio 3.17 15.06 1.68 0.54 15.04
Russell 1000 Growth 1.63 16.17 0.00 1.00 100.00
Russell 1000 Growth
Universe Median
Portfolio
Russell 1000 Growth
City of Clearwater Employees Pension Fund
ING Investment Management - Large Cap Growth
Return vs Risk as of December 31, 2009
49
Attachment number 2
Page 51 of 141
Item # 4
Account Reconciliation
12/31/2009
QTR
Beginning Value 14,683,300
Net Flows 0
Investment G/L 929,749
Ending Value 15,613,050
Investment Policy
Index Weight
Russell 1000 Value 100.00
Trailing Returns Through December 31, 2009
06/30/2007
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 36.49 -7.99 -8.67
Policy 19.69 -13.06 -12.79
Diff 16.80 5.07 4.12
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 6.33 36.49 -37.98
Policy 4.22 19.69 -36.85
Diff 2.12 16.80 -1.13
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 52.1 Portfolio -10.2
Policy 43.8 Policy -16.8
Ratio 118.9 Ratio 61.1
City of Clearwater Employees Pension Fund
Aletheia Research - Large Cap Value
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is June 30, 2007.
50
Attachment number 2
Page 52 of 141
Item # 4
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 6.33 36.49 36.49 -7.99
%-tile 17 1 1 1
Policy
Return 4.22 19.69 19.69 -13.06
%-tile 89 80 80 86
Universe
5th %-tile 7.43 32.74 32.74 -7.81
25th %-tile 6.04 26.76 26.76 -10.26
50th %-tile 5.73 25.67 25.67 -10.92
75th %-tile 4.71 20.50 20.50 -12.13
95th %-tile 3.29 15.69 15.69 -15.62
Trailing Returns through December 31, 2009
QTR YTD 1 Yr 2 YrRates of Return (%)40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
-5.00
-10.00
-15.00
Aletheia Russell 1000 Value
City of Clearwater Employees Pension Fund
Aletheia Research - Large Cap Value
Universe Comparison - Trailing Years
51
Attachment number 2
Page 53 of 141
Item # 4
Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 6.33 36.49 -37.98
%-tile 17 1 77
Policy
Return 4.22 19.69 -36.85
%-tile 89 80 45
Universe
5th %-tile 7.43 32.74 -30.32
25th %-tile 6.04 26.76 -35.04
50th %-tile 5.73 25.67 -37.03
75th %-tile 4.71 20.50 -37.57
95th %-tile 3.29 15.69 -41.64
Calendar Returns through December 31, 2009
Qtr YTD 2008Rates of Return (%)40.00
30.00
20.00
10.00
0.00
-10.00
-20.00
-30.00
-40.00
Aletheia Russell 1000 Value
City of Clearwater Employees Pension Fund
Aletheia Research - Large Cap Value
Universe Comparison - Calendar Year
52
Attachment number 2
Page 54 of 141
Item # 4
1 Year
Risk (Annualized Std Dev)
27.0026.0025.0024.0023.0022.0021.00Annualized Return (%)38.00
36.00
34.00
32.00
30.00
28.00
26.00
24.00
22.00
20.00
18.00
Return Std Dev Alpha Beta R-Squared
Portfolio 36.49 26.69 14.30 0.97 85.63
Russell 1000 Value 19.69 25.55 0.00 1.00 100.00
Russell 1000 Value
Universe Median
Portfolio
Russell 1000 Value
3 Years
Risk (Annualized Std Dev)
22.0021.0020.0019.00Annualized Return (%)-6.00
-7.00
-8.00
-9.00
Return Std Dev Alpha Beta R-Squared
Portfolio N/A N/A N/A N/A N/A
Russell 1000 Value -8.96 21.10 0.00 1.00 100.00
Russell 1000 Value
Universe Median
Russell 1000 Value
Since Inception
Risk (Annualized Std Dev)
27.0026.0025.0024.0023.0022.0021.00Annualized Return (%)-9.00
-10.00
-11.00
-12.00
-13.00
Return Std Dev Alpha Beta R-Squared
Portfolio -8.67 26.38 6.47 1.07 85.21
Russell 1000 Value -12.79 22.67 0.00 1.00 100.00
Russell 1000 Value
Universe Median
Portfolio
Russell 1000 Value
5 Years
Risk (Annualized Std Dev)
18.0017.0016.0015.00Annualized Return (%)2.00
1.00
0.00
Return Std Dev Alpha Beta R-Squared
Portfolio N/A N/A N/A N/A N/A
Russell 1000 Value -0.25 17.12 0.00 1.00 100.00
Russell 1000 Value
Universe Median
Russell 1000 Value
City of Clearwater Employees Pension Fund
Aletheia Research - Large Cap Value
Return vs Risk as of December 31, 2009
53
Attachment number 2
Page 55 of 141
Item # 4
Account Reconciliation
12/31/2009
QTR
Beginning Value 35,416,923
Net Flows 0
Investment G/L 1,592,501
Ending Value 37,009,424
Investment Policy
Index Weight
Russell 1000 Value 100.00
Trailing Returns Through December 31, 2009
06/30/2007
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 20.35 -12.82 -12.57
Policy 19.69 -13.06 -12.79
Diff 0.66 0.24 0.22
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 4.50 20.35 -36.85
Policy 4.22 19.69 -36.85
Diff 0.28 0.66 0.00
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 44.3 Portfolio -16.6
Policy 43.8 Policy -16.8
Ratio 101.2 Ratio 99.1
City of Clearwater Employees Pension Fund
NTGI-QM Russell 1000 Value - Large Cap Value
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is June 30, 2007.
54
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Item # 4
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 4.50 20.35 20.35 -12.82
%-tile 84 76 76 83
Policy
Return 4.22 19.69 19.69 -13.06
%-tile 89 80 80 86
Universe
5th %-tile 7.43 32.74 32.74 -7.81
25th %-tile 6.04 26.76 26.76 -10.26
50th %-tile 5.73 25.67 25.67 -10.92
75th %-tile 4.71 20.50 20.50 -12.13
95th %-tile 3.29 15.69 15.69 -15.62
Trailing Returns through December 31, 2009
QTR YTD 1 Yr 2 YrRates of Return (%)35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
-5.00
-10.00
-15.00
NTGI R1000V Russell 1000 Value
City of Clearwater Employees Pension Fund
NTGI-QM Russell 1000 Value - Large Cap Value
Universe Comparison - Trailing Years
55
Attachment number 2
Page 57 of 141
Item # 4
Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 4.50 20.35 -36.85
%-tile 84 76 45
Policy
Return 4.22 19.69 -36.85
%-tile 89 80 45
Universe
5th %-tile 7.43 32.74 -30.32
25th %-tile 6.04 26.76 -35.04
50th %-tile 5.73 25.67 -37.03
75th %-tile 4.71 20.50 -37.57
95th %-tile 3.29 15.69 -41.64
Calendar Returns through December 31, 2009
Qtr YTD 2008Rates of Return (%)30.00
20.00
10.00
0.00
-10.00
-20.00
-30.00
-40.00
NTGI R1000V Russell 1000 Value
City of Clearwater Employees Pension Fund
NTGI-QM Russell 1000 Value - Large Cap Value
Universe Comparison - Calendar Year
56
Attachment number 2
Page 58 of 141
Item # 4
1 Year
Risk (Annualized Std Dev)
26.0025.0024.0023.0022.0021.00Annualized Return (%)26.00
25.00
24.00
23.00
22.00
21.00
20.00
19.00
Return Std Dev Alpha Beta R-Squared
Portfolio 20.35 25.53 0.57 1.00 99.99
Russell 1000 Value 19.69 25.55 0.00 1.00 100.00
Russell 1000 Value
Universe Median
Portfolio
Russell 1000 Value
3 Years
Risk (Annualized Std Dev)
22.0021.0020.0019.00Annualized Return (%)-6.00
-7.00
-8.00
-9.00
Return Std Dev Alpha Beta R-Squared
Portfolio N/A N/A N/A N/A N/A
Russell 1000 Value -8.96 21.10 0.00 1.00 100.00
Russell 1000 Value
Universe Median
Russell 1000 Value
Since Inception
Risk (Annualized Std Dev)
23.0022.0021.00Annualized Return (%)-10.00
-11.00
-12.00
-13.00
Return Std Dev Alpha Beta R-Squared
Portfolio -12.57 22.70 0.27 1.00 99.99
Russell 1000 Value -12.79 22.67 0.00 1.00 100.00
Russell 1000 Value
Universe Median
Portfolio
Russell 1000 Value
5 Years
Risk (Annualized Std Dev)
18.0017.0016.0015.00Annualized Return (%)2.00
1.00
0.00
Return Std Dev Alpha Beta R-Squared
Portfolio N/A N/A N/A N/A N/A
Russell 1000 Value -0.25 17.12 0.00 1.00 100.00
Russell 1000 Value
Universe Median
Russell 1000 Value
City of Clearwater Employees Pension Fund
NTGI-QM Russell 1000 Value - Large Cap Value
Return vs Risk as of December 31, 2009
57
Attachment number 2
Page 59 of 141
Item # 4
Account Reconciliation
12/31/2009
QTR
Beginning Value 60,002,805
Net Flows 0
Investment G/L 3,910,699
Ending Value 63,913,504
Investment Policy
Index Weight
Russell Midcap 100.00
Trailing Returns Through December 31, 2009
03/31/1988
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 45.34 -8.02 -2.30 1.22 2.51 4.41 8.76 4.69 3.28 1.18 11.62
Policy 40.48 -9.32 -4.59 0.02 2.43 5.20 9.59 5.98 4.62 4.98 10.96
Diff 4.86 1.29 2.30 1.20 0.08 -0.79 -0.83 -1.29 -1.34 -3.80 0.66
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 6.52 45.34 -41.80 10.25 12.54 7.84 14.48 38.94 -19.87 -7.30 -15.90
Policy 5.92 40.48 -41.46 5.60 15.26 12.64 20.23 40.08 -16.19 -5.64 8.25
Diff 0.60 4.86 -0.34 4.65 -2.72 -4.80 -5.75 -1.13 -3.68 -1.67 -24.15
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 56.3 46.1 33.6 38.7 Portfolio -7.0 -34.7 -31.1 -37.0
Policy 54.3 44.8 32.5 37.9 Policy -9.0 -37.1 -30.4 -30.3
Ratio 103.5 103.0 103.3 102.3 Ratio 77.8 93.4 102.3 122.2
City of Clearwater Employees Pension Fund
Mid Cap Equity Composite
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is March 31, 1988.
58
Attachment number 2
Page 60 of 141
Item # 4
Period Ending Portfolio Policy Diff
Mar 1988
Jun 1988 7.12 7.26 -0.14
Sep 1988 -5.40 -0.93 -4.47
Dec 1988 0.96 0.48 0.48
Mar 1989 8.05 7.47 0.58
Jun 1989 9.54 9.14 0.40
Sep 1989 12.06 9.53 2.53
Dec 1989 -1.69 -1.72 0.03
Mar 1990 -1.20 -3.87 2.67
Jun 1990 11.29 3.70 7.59
Sep 1990 -15.12 -19.83 4.71
Dec 1990 9.66 10.74 -1.08
Mar 1991 28.90 20.48 8.42
Jun 1991 1.18 0.52 0.66
Sep 1991 14.50 7.41 7.09
Dec 1991 12.99 8.79 4.20
Mar 1992 -1.89 1.56 -3.45
Jun 1992 -9.36 -0.21 -9.15
Sep 1992 4.43 3.89 0.54
Dec 1992 15.95 10.50 5.45
Mar 1993 1.08 5.44 -4.36
Jun 1993 2.74 1.58 1.16
Sep 1993 11.13 5.35 5.78
Dec 1993 2.93 1.30 1.63
Mar 1994 -3.40 -2.96 -0.44
Jun 1994 -5.16 -2.16 -3.00
Sep 1994 11.71 5.69 6.02
Dec 1994 -1.49 -2.43 0.94
Mar 1995 7.06 10.41 -3.35
Jun 1995 7.24 8.37 -1.13
Sep 1995 10.81 8.87 1.94
Dec 1995 1.32 3.22 -1.90
Mar 1996 6.76 6.02 0.74
Jun 1996 6.76 2.82 3.94
Sep 1996 3.24 3.13 0.11
Dec 1996 1.10 5.85 -4.75
Mar 1997 -9.57 -0.82 -8.75
Jun 1997 21.06 13.56 7.50
Sep 1997 14.83 13.28 1.55
Dec 1997 -7.30 1.11 -8.41
Mar 1998 11.45 10.81 0.64
Jun 1998 -1.56 -1.51 -0.05
Sep 1998 -18.81 -14.82 -3.99
Dec 1998 27.45 18.44 9.01
City of Clearwater Employees Pension Fund
Mid Cap Equity Composite
Quarterly Comparison Analysis (%)
Returns for periods exceeding one year are annualized.
59
Attachment number 2
Page 61 of 141
Item # 4
Period Ending Portfolio Policy Diff
Mar 1999 4.12 -0.47 4.59
Jun 1999 8.44 10.86 -2.42
Sep 1999 -4.28 -8.59 4.31
Dec 1999 49.23 17.23 32.00
Mar 2000 14.74 10.08 4.65
Jun 2000 -12.52 -4.51 -8.01
Sep 2000 3.54 6.80 -3.26
Dec 2000 -19.08 -3.58 -15.49
Mar 2001 -14.71 -10.49 -4.22
Jun 2001 12.35 9.52 2.83
Sep 2001 -21.91 -17.86 -4.05
Dec 2001 23.89 17.20 6.69
Mar 2002 1.06 4.25 -3.19
Jun 2002 -11.04 -9.54 -1.49
Sep 2002 -16.14 -17.64 1.50
Dec 2002 6.28 7.91 -1.63
Mar 2003 0.16 -2.36 2.51
Jun 2003 18.47 18.26 0.21
Sep 2003 5.37 6.44 -1.06
Dec 2003 11.13 13.97 -2.85
Mar 2004 5.19 5.14 0.05
Jun 2004 0.61 1.45 -0.85
Sep 2004 -5.71 -0.84 -4.87
Dec 2004 14.71 13.66 1.05
Mar 2005 -4.89 -0.26 -4.63
Jun 2005 3.19 4.18 -0.98
Sep 2005 4.81 5.92 -1.11
Dec 2005 4.83 2.35 2.49
Mar 2006 8.93 7.62 1.31
Jun 2006 -5.49 -2.57 -2.91
Sep 2006 1.57 2.11 -0.54
Dec 2006 7.63 7.67 -0.04
Mar 2007 2.92 4.38 -1.45
Jun 2007 8.17 5.30 2.87
Sep 2007 2.28 -0.39 2.67
Dec 2007 -3.18 -3.55 0.37
Mar 2008 -10.91 -9.98 -0.94
Jun 2008 1.53 2.67 -1.15
Sep 2008 -12.12 -12.91 0.80
Dec 2008 -26.78 -27.27 0.50
Mar 2009 -6.98 -8.98 1.99
Jun 2009 23.05 20.80 2.25
Sep 2009 19.21 20.62 -1.41
Dec 2009 6.52 5.92 0.60
City of Clearwater Employees Pension Fund
Mid Cap Equity Composite
Quarterly Comparison Analysis (%)
Returns for periods exceeding one year are annualized.
60
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QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 6.52 45.34 45.34 -8.02 -2.30 1.22 2.51 4.41 8.76 4.69
%-tile 31 31 31 31 42 31 42 47 52 52
Policy
Return 5.92 40.48 40.48 -9.32 -4.59 0.02 2.43 5.20 9.59 5.98
%-tile 42 31 31 42 42 42 42 31 31 42
Universe
5th %-tile 8.34 63.42 63.42 -1.14 3.17 6.71 7.96 8.89 13.40 10.86
25th %-tile 7.38 46.40 46.40 -4.98 -0.86 1.99 3.55 5.77 11.98 6.89
50th %-tile 4.95 36.54 36.54 -10.17 -5.97 -0.73 1.63 4.24 8.86 4.72
75th %-tile 2.53 28.05 28.05 -13.20 -7.45 -3.17 -1.11 1.03 5.41 1.79
95th %-tile 1.75 10.42 10.42 -22.75 -12.00 -7.51 -4.94 -1.22 3.01 -0.80
Trailing Returns through December 31, 2009
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 YrRates of Return (%)60.00
50.00
40.00
30.00
20.00
10.00
0.00
-10.00
-20.00
MID CAP COMP Russell Midcap
City of Clearwater Employees Pension Fund
Mid Cap Equity Composite
Universe Comparison - Trailing Years
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Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 6.52 45.34 -41.80 10.25 12.54 7.84 14.48 38.94 -19.87 -7.30
%-tile 31 31 52 31 68 50 63 54 68 86
Policy
Return 5.92 40.48 -41.46 5.60 15.26 12.64 20.23 40.08 -16.19 -5.64
%-tile 42 31 47 49 43 24 28 54 59 86
Universe
5th %-tile 8.34 63.42 -26.81 21.14 23.04 17.94 27.02 91.00 -1.58 33.02
25th %-tile 7.38 46.40 -30.74 12.42 16.49 12.81 20.93 59.03 -3.79 14.21
50th %-tile 4.95 36.54 -41.73 5.47 14.93 8.07 15.89 41.42 -8.86 8.01
75th %-tile 2.53 28.05 -51.11 -0.59 11.32 2.80 13.32 27.39 -25.80 3.23
95th %-tile 1.75 10.42 -54.25 -8.87 6.57 -0.23 5.58 15.45 -33.32 -19.22
Calendar Returns through December 31, 2009
Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001Rates of Return (%)100.00
50.00
0.00
-50.00
MID CAP COMP Russell Midcap
City of Clearwater Employees Pension Fund
Mid Cap Equity Composite
Universe Comparison - Calendar Year
62
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1 Year
Risk (Annualized Std Dev)
25.0024.0023.00Annualized Return (%)46.00
45.00
44.00
43.00
42.00
41.00
40.00
39.00
38.00
37.00
36.00
Return Std Dev Alpha Beta R-Squared
Portfolio 45.34 23.34 4.77 0.96 99.00
Russell Midcap 40.48 24.20 0.00 1.00 100.00
Russell Midcap
Universe Median
Portfolio
Russell Midcap
3 Years
Risk (Annualized Std Dev)
26.0025.0024.00Annualized Return (%)-2.00
-3.00
-4.00
-5.00
-6.00
Return Std Dev Alpha Beta R-Squared
Portfolio -2.30 24.62 2.50 1.01 98.16
Russell Midcap -4.59 24.21 0.00 1.00 100.00
Russell Midcap
Universe Median
Portfolio
Russell Midcap
Since Inception
Risk (Annualized Std Dev)
18.0017.00Annualized Return (%)12.00
11.00
10.00
9.00
Return Std Dev Alpha Beta R-Squared
Portfolio 11.62 18.47 1.89 0.87 60.39
Russell Midcap 10.96 16.39 0.00 1.00 100.00
Russell Midcap
Universe Median
Portfolio
Russell Midcap
5 Years
Risk (Annualized Std Dev)
21.0020.0019.00Annualized Return (%)3.00
2.00
1.00
Return Std Dev Alpha Beta R-Squared
Portfolio 2.51 20.37 0.17 1.01 97.10
Russell Midcap 2.43 19.78 0.00 1.00 100.00
Russell Midcap
Universe Median
Portfolio
Russell Midcap
City of Clearwater Employees Pension Fund
Mid Cap Equity Composite
Return vs Risk as of December 31, 2009
63
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Account Reconciliation
12/31/2009
QTR
Beginning Value 29,097,510
Net Flows 0
Investment G/L 1,610,177
Ending Value 30,707,687
Investment Policy
Index Weight
Russell Midcap Growth 100.00
Trailing Returns Through December 31, 2009
07/31/2001
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 51.38 -7.00 1.90 4.09 5.28 7.01 10.49 5.55 5.63
Policy 46.29 -9.75 -3.18 0.11 2.40 4.47 9.23 3.79 3.40
Diff 5.09 2.76 5.08 3.98 2.89 2.54 1.26 1.75 2.23
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 5.53 51.38 -42.86 22.32 10.95 10.20 16.08 33.85 -23.38
Policy 6.69 46.29 -44.32 11.42 10.66 12.09 15.48 42.72 -27.40
Diff -1.16 5.09 1.46 10.89 0.30 -1.89 0.60 -8.87 4.02
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 48.6 42.4 31.7 Portfolio 1.9 -36.2 -30.5
Policy 51.4 39.7 30.5 Policy -3.4 -42.1 -34.8
Ratio 94.6 106.6 103.8 Ratio -55.2 86.0 87.8
City of Clearwater Employees Pension Fund
Artisan Partners - Mid Cap Growth
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is July 31, 2001.
64
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QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 5.53 51.38 51.38 -7.00 1.90 4.09 5.28 7.01 10.49 5.55
%-tile 47 10 10 31 10 21 21 15 31 42
Policy
Return 6.69 46.29 46.29 -9.75 -3.18 0.11 2.40 4.47 9.23 3.79
%-tile 26 26 26 42 42 42 42 47 36 63
Universe
5th %-tile 8.34 63.42 63.42 -1.14 3.17 6.71 7.96 8.89 13.40 10.86
25th %-tile 7.38 46.40 46.40 -4.98 -0.86 1.99 3.55 5.77 11.98 6.89
50th %-tile 4.95 36.54 36.54 -10.17 -5.97 -0.73 1.63 4.24 8.86 4.72
75th %-tile 2.53 28.05 28.05 -13.20 -7.45 -3.17 -1.11 1.03 5.41 1.79
95th %-tile 1.75 10.42 10.42 -22.75 -12.00 -7.51 -4.94 -1.22 3.01 -0.80
Trailing Returns through December 31, 2009
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 YrRates of Return (%)60.00
50.00
40.00
30.00
20.00
10.00
0.00
-10.00
-20.00
Artisan Russell Mid Growth
City of Clearwater Employees Pension Fund
Artisan Partners - Mid Cap Growth
Universe Comparison - Trailing Years
65
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Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 5.53 51.38 -42.86 22.32 10.95 10.20 16.08 33.85 -23.38
%-tile 47 10 56 1 77 35 47 63 70
Policy
Return 6.69 46.29 -44.32 11.42 10.66 12.09 15.48 42.72 -27.40
%-tile 26 26 57 29 78 28 54 49 92
Universe
5th %-tile 8.34 63.42 -26.81 21.14 23.04 17.94 27.02 91.00 -1.58
25th %-tile 7.38 46.40 -30.74 12.42 16.49 12.81 20.93 59.03 -3.79
50th %-tile 4.95 36.54 -41.73 5.47 14.93 8.07 15.89 41.42 -8.86
75th %-tile 2.53 28.05 -51.11 -0.59 11.32 2.80 13.32 27.39 -25.80
95th %-tile 1.75 10.42 -54.25 -8.87 6.57 -0.23 5.58 15.45 -33.32
Calendar Returns through December 31, 2009
Qtr YTD 2008 2007 2006 2005 2004 2003 2002Rates of Return (%)100.00
50.00
0.00
-50.00
Artisan Russell Mid Growth
City of Clearwater Employees Pension Fund
Artisan Partners - Mid Cap Growth
Universe Comparison - Calendar Year
66
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RATE OF RETURN (%)6.00
4.00
2.00
0.00
-2.00
-4.00
-6.00
-8.00
-10.00
-12.00
-14.00
-16.00
-18.00
-20.00
3 YRS ENDING 12/09 3 YRS ENDING 9/09 3 YRS ENDING 6/09 3 YRS ENDING 3/09 3 YRS ENDING 12/08 3 YRS ENDING 9/08
HIGHEST VALUE 1.54 1.86 -2.45 -7.60 -3.21 4.58
FIRST QUARTILE -2.67 -2.32 -6.25 -11.82 -7.43 1.69
MEDIAN VALUE -4.72 -4.18 -8.18 -13.63 -8.98 0.06
THIRD QUARTILE -6.29 -5.81 -9.77 -15.50 -10.78 -1.25
LOWEST VALUE -10.24 -9.23 -13.85 -20.12 -14.95 -4.65
MEAN -4.49 -4.04 -8.03 -13.71 -9.05 0.16
3 YRS ENDING 12/09 3 YRS ENDING 9/09 3 YRS ENDING 6/09 3 YRS ENDING 3/09 3 YRS ENDING 12/08 3 YRS ENDING 9/08
RETURN RANK RETURN RANK RETURN RANK RETURN RANK RETURN RANK RETURN RANK
ARTISAN 1.90 1 2.35 1 -2.58 1 -9.86 7 -8.13 34 3.93 3
RUSSELL MID GROWTH -3.18 31 -3.10 35 -7.93 45 -14.89 68 -11.78 84 -0.75 66
7.45
3.73
0.00
-3.73
-7.45
ALPHA
HIGHEST VALUE 4.23
FIRST QUARTILE -0.40
MEDIAN VALUE -2.52
THIRD QUARTILE -4.34
LOWEST VALUE -8.10
MEAN -2.36
VALUE RANK
ARTISAN 5.21 1
1.13
0.57
0.00
-0.57
-1.13
INFO RATIO
0.50
-0.05
-0.29
-0.50
-0.89
-0.27
VALUE RANK
1.13 1
0.00
-0.16
-0.31
-0.47
-0.62
SHARPE RATIO
-0.03
-0.23
-0.32
-0.41
-0.57
-0.31
VALUE RANK
-0.01 1
6.80
3.40
0.00
-3.40
-6.80
EXCESS RETURN
4.72
0.52
-1.54
-3.10
-7.05
-1.31
VALUE RANK
5.08 1
0.00
-4.07
-8.14
-12.21
-16.28
TREYNOR RATIO
-0.67
-5.66
-8.15
-10.36
-14.85
-7.99
VALUE RANK
-0.32 1
Cummulative Excess Returns vs Benchmark
12/2001 12/2002 12/2003 12/2004 12/2005 12/2006 12/2007 12/2008 12/2009CUMULATIVE EXCESS RATE OF RETURN (%)25
22.5
20
17.5
15
12.5
10
7.5
5
2.5
0
-2.5
ARTISAN RUSSELL MID GROWTH
City of Clearwater Employees Pension Fund
Artisan Partners - Mid Cap Growth
Return Analysis Summary as of December 31, 2009
67
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1 Year
Risk (Annualized Std Dev)
25.0024.0023.0022.0021.00Annualized Return (%)53.00
52.00
51.00
50.00
49.00
48.00
47.00
46.00
45.00
44.00
43.00
42.00
41.00
40.00
39.00
38.00
37.00
36.00
35.00
Return Std Dev Alpha Beta R-Squared
Portfolio 51.38 21.65 3.27 1.01 95.58
Russell Mid Growth 46.29 20.97 0.00 1.00 100.00
Russell Mid Growth
Universe Median
Portfolio
Russell Mid Growth
3 Years
Risk (Annualized Std Dev)
26.0025.0024.0023.00Annualized Return (%)3.00
2.00
1.00
0.00
-1.00
-2.00
-3.00
-4.00
-5.00
-6.00
-7.00
Return Std Dev Alpha Beta R-Squared
Portfolio 1.90 24.48 5.21 1.00 96.43
Russell Mid Growth -3.18 24.01 0.00 1.00 100.00
Russell Mid Growth
Universe Median
Portfolio
Russell Mid Growth
Since Inception
Risk (Annualized Std Dev)
22.0021.0020.00Annualized Return (%)5.00
4.00
Return Std Dev Alpha Beta R-Squared
Portfolio 5.63 20.28 2.20 0.97 95.51
Russell Mid Growth 3.40 20.48 0.00 1.00 100.00
Russell Mid Growth
Universe Median
Portfolio
Russell Mid Growth
5 Years
Risk (Annualized Std Dev)
21.0020.0019.00Annualized Return (%)5.00
4.00
3.00
2.00
Return Std Dev Alpha Beta R-Squared
Portfolio 5.28 20.21 2.84 0.99 95.97
Russell Mid Growth 2.40 19.93 0.00 1.00 100.00
Russell Mid Growth
Universe Median
Portfolio
Russell Mid Growth
City of Clearwater Employees Pension Fund
Artisan Partners - Mid Cap Growth
Return vs Risk as of December 31, 2009
68
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Item # 4
Account Reconciliation
12/31/2009
QTR
Beginning Value 30,905,295
Net Flows 0
Investment G/L 2,300,523
Ending Value 33,205,817
Investment Policy
Index Weight
Russell Midcap Value 100.00
Trailing Returns Through December 31, 2009
02/28/2007
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 38.50 -5.03 -4.51
Policy 34.21 -9.11 -8.18
Diff 4.29 4.08 3.67
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 7.44 38.50 -34.87
Policy 5.21 34.21 -38.44
Diff 2.24 4.29 3.57
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 64.0 Portfolio -15.6
Policy 57.3 Policy -14.7
Ratio 111.8 Ratio 106.1
City of Clearwater Employees Pension Fund
Wedge Capital Management - Mid Cap Value
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is February 28, 2007.
69
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Item # 4
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 7.44 38.50 38.50 -5.03
%-tile 21 36 36 26
Policy
Return 5.21 34.21 34.21 -9.11
%-tile 47 57 57 42
Universe
5th %-tile 8.34 63.42 63.42 -1.14
25th %-tile 7.38 46.40 46.40 -4.98
50th %-tile 4.95 36.54 36.54 -10.17
75th %-tile 2.53 28.05 28.05 -13.20
95th %-tile 1.75 10.42 10.42 -22.75
Trailing Returns through December 31, 2009
QTR YTD 1 Yr 2 YrRates of Return (%)60.00
50.00
40.00
30.00
20.00
10.00
0.00
-10.00
-20.00
Wedge Russell Mid Value
City of Clearwater Employees Pension Fund
Wedge Capital Management - Mid Cap Value
Universe Comparison - Trailing Years
70
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Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 7.44 38.50 -34.87
%-tile 21 36 31
Policy
Return 5.21 34.21 -38.44
%-tile 47 57 42
Universe
5th %-tile 8.34 63.42 -26.81
25th %-tile 7.38 46.40 -30.74
50th %-tile 4.95 36.54 -41.73
75th %-tile 2.53 28.05 -51.11
95th %-tile 1.75 10.42 -54.25
Calendar Returns through December 31, 2009
Qtr YTD 2008Rates of Return (%)70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
-10.00
-20.00
-30.00
-40.00
-50.00
-60.00
Wedge Russell Mid Value
City of Clearwater Employees Pension Fund
Wedge Capital Management - Mid Cap Value
Universe Comparison - Calendar Year
71
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1 Year
Risk (Annualized Std Dev)
28.0027.0026.0025.0024.00Annualized Return (%)39.00
38.00
37.00
36.00
35.00
34.00
Return Std Dev Alpha Beta R-Squared
Portfolio 38.50 26.26 5.41 0.92 96.05
Russell Mid Value 34.21 27.94 0.00 1.00 100.00
Russell Mid Value
Universe Median
Portfolio
Russell Mid Value
3 Years
Risk (Annualized Std Dev)
26.0025.0024.00Annualized Return (%)-4.00
-5.00
-6.00
-7.00
Return Std Dev Alpha Beta R-Squared
Portfolio N/A N/A N/A N/A N/A
Russell Mid Value -6.62 25.01 0.00 1.00 100.00
Russell Mid Value
Universe Median
Russell Mid Value
Since Inception
Risk (Annualized Std Dev)
27.0026.0025.00Annualized Return (%)-4.00
-5.00
-6.00
-7.00
-8.00
Return Std Dev Alpha Beta R-Squared
Portfolio -4.51 25.95 3.89 0.99 95.26
Russell Mid Value -8.18 25.65 0.00 1.00 100.00
Russell Mid Value
Universe Median
Portfolio
Russell Mid Value
5 Years
Risk (Annualized Std Dev)
22.0021.0020.00Annualized Return (%)3.00
2.00
1.00
Return Std Dev Alpha Beta R-Squared
Portfolio N/A N/A N/A N/A N/A
Russell Mid Value 1.98 20.20 0.00 1.00 100.00
Russell Mid Value
Universe Median
Russell Mid Value
City of Clearwater Employees Pension Fund
Wedge Capital Management - Mid Cap Value
Return vs Risk as of December 31, 2009
72
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Item # 4
Account Reconciliation
12/31/2009
QTR
Beginning Value 67,007,784
Net Flows 0
Investment G/L 3,130,321
Ending Value 70,138,105
Investment Policy
Index Weight
Russell 2000 100.00
Trailing Returns Through December 31, 2009
08/31/2003
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 33.49 -9.49 -5.42 -0.17 1.26 3.54 4.79
Policy 27.17 -8.24 -6.06 -0.48 0.51 3.28 5.03
Diff 6.32 -1.25 0.64 0.30 0.75 0.26 -0.24
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 4.67 33.49 -38.63 3.26 17.40 7.21 15.71
Policy 3.87 27.17 -33.79 -1.56 18.36 4.56 18.32
Diff 0.80 6.32 -4.84 4.82 -0.97 2.65 -2.61
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 44.9 36.9 28.8 Portfolio -7.9 -34.7 -29.4
Policy 49.5 36.9 30.1 Policy -15.0 -35.5 -31.8
Ratio 90.6 100.1 95.6 Ratio 52.6 97.6 92.6
City of Clearwater Employees Pension Fund
Small Cap Equity Composite
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is August 31, 2003.
73
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Period Ending Portfolio Policy Diff
Sep 2003 -3.38 -1.85 -1.53
Dec 2003 12.97 14.53 -1.56
Mar 2004 4.82 6.26 -1.44
Jun 2004 0.21 0.47 -0.26
Sep 2004 -2.24 -2.85 0.61
Dec 2004 12.69 14.09 -1.40
Mar 2005 -2.96 -5.34 2.38
Jun 2005 2.12 4.32 -2.20
Sep 2005 6.24 4.69 1.54
Dec 2005 1.83 1.13 0.69
Mar 2006 11.93 13.93 -2.01
Jun 2006 -2.78 -5.02 2.24
Sep 2006 1.31 0.44 0.87
Dec 2006 6.49 8.90 -2.42
Mar 2007 2.94 1.95 0.99
Jun 2007 5.36 4.42 0.95
Sep 2007 0.54 -3.09 3.63
Dec 2007 -5.30 -4.58 -0.72
Mar 2008 -14.55 -9.90 -4.65
Jun 2008 1.92 0.58 1.34
Sep 2008 -5.22 -1.11 -4.11
Dec 2008 -25.65 -26.12 0.47
Mar 2009 -7.87 -14.95 7.08
Jun 2009 20.74 20.69 0.05
Sep 2009 14.66 19.28 -4.62
Dec 2009 4.67 3.87 0.80
City of Clearwater Employees Pension Fund
Small Cap Equity Composite
Quarterly Comparison Analysis (%)
Returns for periods exceeding one year are annualized.
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QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 4.67 33.49 33.49 -9.49 -5.42 -0.17 1.26 3.54
%-tile 49 37 37 73 64 55 60 69
Policy
Return 3.87 27.17 27.17 -8.24 -6.06 -0.48 0.51 3.28
%-tile 75 79 79 60 73 62 75 75
Universe
5th %-tile 6.34 45.57 45.57 1.07 1.47 5.26 6.13 8.26
25th %-tile 5.41 36.34 36.34 -5.38 -2.60 1.34 2.71 5.28
50th %-tile 4.58 30.45 30.45 -7.15 -4.71 0.08 1.78 4.46
75th %-tile 3.92 27.64 27.64 -9.84 -6.12 -0.87 0.65 3.32
95th %-tile 2.58 22.18 22.18 -14.43 -9.31 -3.60 -1.60 0.89
Trailing Returns through December 31, 2009
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 YrRates of Return (%)45.00
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
-5.00
-10.00
-15.00
SMALL CAP COMP Russell 2000
City of Clearwater Employees Pension Fund
Small Cap Equity Composite
Universe Comparison - Trailing Years
75
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Item # 4
Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 4.67 33.49 -38.63 3.26 17.40 7.21 15.71
%-tile 49 37 68 40 35 58 72
Policy
Return 3.87 27.17 -33.79 -1.56 18.36 4.56 18.32
%-tile 75 79 46 72 25 86 56
Universe
5th %-tile 6.34 45.57 -23.43 14.29 22.00 14.42 25.83
25th %-tile 5.41 36.34 -31.45 8.36 18.65 9.20 22.21
50th %-tile 4.58 30.45 -34.28 1.67 15.92 7.67 19.09
75th %-tile 3.92 27.64 -39.78 -1.75 13.47 5.84 15.47
95th %-tile 2.58 22.18 -44.52 -8.19 8.40 3.14 9.57
Calendar Returns through December 31, 2009
Qtr YTD 2008 2007 2006 2005 2004Rates of Return (%)50.00
40.00
30.00
20.00
10.00
0.00
-10.00
-20.00
-30.00
-40.00
-50.00
SMALL CAP COMP Russell 2000
City of Clearwater Employees Pension Fund
Small Cap Equity Composite
Universe Comparison - Calendar Year
76
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Item # 4
1 Year
Risk (Annualized Std Dev)
28.0027.0026.0025.0024.00Annualized Return (%)34.00
33.00
32.00
31.00
30.00
29.00
28.00
27.00
Return Std Dev Alpha Beta R-Squared
Portfolio 33.49 24.37 8.24 0.85 95.43
Russell 2000 27.17 28.10 0.00 1.00 100.00
Russell 2000
Universe Median
Portfolio
Russell 2000
3 Years
Risk (Annualized Std Dev)
26.0025.0024.0023.00Annualized Return (%)-3.00
-4.00
-5.00
-6.00
Return Std Dev Alpha Beta R-Squared
Portfolio -5.42 24.21 0.29 0.95 95.73
Russell 2000 -6.06 24.83 0.00 1.00 100.00
Russell 2000
Universe Median
Portfolio
Russell 2000
Since Inception
Risk (Annualized Std Dev)
21.0020.0019.00Annualized Return (%)7.00
6.00
5.00
4.00
Return Std Dev Alpha Beta R-Squared
Portfolio 4.79 19.16 -0.11 0.94 95.77
Russell 2000 5.03 20.00 0.00 1.00 100.00
Russell 2000
Universe Median
Portfolio
Russell 2000
5 Years
Risk (Annualized Std Dev)
22.0021.0020.00Annualized Return (%)2.00
1.00
0.00
Return Std Dev Alpha Beta R-Squared
Portfolio 1.26 20.36 0.58 0.94 95.66
Russell 2000 0.51 21.17 0.00 1.00 100.00
Russell 2000
Universe Median
Portfolio
Russell 2000
City of Clearwater Employees Pension Fund
Small Cap Equity Composite
Return vs Risk as of December 31, 2009
77
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Item # 4
Account Reconciliation
12/31/2009
QTR
Beginning Value 35,686,841
Net Flows 0
Investment G/L 1,756,307
Ending Value 37,443,148
Investment Policy
Index Weight
Russell 2000 Growth 100.00
Trailing Returns Through December 31, 2009
02/28/2007
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 35.95 -14.52 -9.97
Policy 34.47 -9.09 -4.75
Diff 1.48 -5.43 -5.23
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 4.92 35.95 -46.26
Policy 4.14 34.47 -38.54
Diff 0.78 1.48 -7.72
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 42.8 Portfolio -4.8
Policy 49.0 Policy -9.7
Ratio 87.3 Ratio 49.0
City of Clearwater Employees Pension Fund
Independence Investments LLC - Small Cap Growth
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is February 28, 2007.
78
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QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 4.92 35.95 35.95 -14.52
%-tile 53 48 48 95
Policy
Return 4.14 34.47 34.47 -9.09
%-tile 69 56 56 37
Universe
5th %-tile 7.17 51.05 51.05 -3.88
25th %-tile 5.73 41.38 41.38 -8.07
50th %-tile 5.05 35.82 35.82 -10.09
75th %-tile 3.92 28.39 28.39 -12.31
95th %-tile 2.47 20.95 20.95 -15.79
Trailing Returns through December 31, 2009
QTR YTD 1 Yr 2 YrRates of Return (%)50.00
40.00
30.00
20.00
10.00
0.00
-10.00
-20.00
Independence Russell 2000 Growth
City of Clearwater Employees Pension Fund
Independence Investments LLC - Small Cap Growth
Universe Comparison - Trailing Years
79
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Item # 4
Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 4.92 35.95 -46.26
%-tile 53 48 96
Policy
Return 4.14 34.47 -38.54
%-tile 69 56 30
Universe
5th %-tile 7.17 51.05 -31.45
25th %-tile 5.73 41.38 -38.02
50th %-tile 5.05 35.82 -40.24
75th %-tile 3.92 28.39 -43.11
95th %-tile 2.47 20.95 -47.50
Calendar Returns through December 31, 2009
Qtr YTD 2008Rates of Return (%)50.00
40.00
30.00
20.00
10.00
0.00
-10.00
-20.00
-30.00
-40.00
-50.00
Independence Russell 2000 Growth
City of Clearwater Employees Pension Fund
Independence Investments LLC - Small Cap Growth
Universe Comparison - Calendar Year
80
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Item # 4
1 Year
Risk (Annualized Std Dev)
25.0024.00Annualized Return (%)37.00
36.00
35.00
34.00
Return Std Dev Alpha Beta R-Squared
Portfolio 35.95 24.00 4.44 0.89 88.10
Russell 2000 Growth 34.47 25.32 0.00 1.00 100.00
Russell 2000 Growth
Universe Median
Portfolio
Russell 2000 Growth
3 Years
Risk (Annualized Std Dev)
26.0025.0024.0023.00Annualized Return (%)-2.00
-3.00
-4.00
-5.00
Return Std Dev Alpha Beta R-Squared
Portfolio N/A N/A N/A N/A N/A
Russell 2000 Growth -4.00 24.85 0.00 1.00 100.00
Russell 2000 Growth
Universe Median
Russell 2000 Growth
Since Inception
Risk (Annualized Std Dev)
27.0026.0025.00Annualized Return (%)-4.00
-5.00
-6.00
-7.00
-8.00
-9.00
-10.00
Return Std Dev Alpha Beta R-Squared
Portfolio -9.97 27.31 -4.93 1.03 93.14
Russell 2000 Growth -4.75 25.54 0.00 1.00 100.00
Russell 2000 Growth
Universe Median
Portfolio
Russell 2000 Growth
5 Years
Risk (Annualized Std Dev)
22.0021.0020.00Annualized Return (%)2.00
1.00
0.00
Return Std Dev Alpha Beta R-Squared
Portfolio N/A N/A N/A N/A N/A
Russell 2000 Growth 0.88 21.60 0.00 1.00 100.00
Russell 2000 Growth
Universe Median
Russell 2000 Growth
City of Clearwater Employees Pension Fund
Independence Investments LLC - Small Cap Growth
Return vs Risk as of December 31, 2009
81
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Item # 4
Account Reconciliation
12/31/2009
QTR
Beginning Value 17,826,908
Net Flows 0
Investment G/L 804,989
Ending Value 18,631,897
Investment Policy
Index Weight
Russell 2000 Value 100.00
Trailing Returns Through December 31, 2009
08/31/2003
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 26.84 1.04 2.96 6.12 6.14 8.37 8.90
Policy 20.58 -7.43 -8.22 -1.15 -0.01 3.40 5.52
Diff 6.27 8.47 11.17 7.27 6.15 4.97 3.37
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 4.52 26.84 -19.51 6.90 16.21 6.21 20.24
Policy 3.63 20.58 -28.92 -9.78 23.47 4.71 22.25
Diff 0.89 6.27 9.41 16.68 -7.26 1.50 -2.01
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 42.3 34.9 26.7 Portfolio -10.9 -21.4 -18.6
Policy 50.0 38.8 31.3 Policy -19.6 -39.3 -33.5
Ratio 84.5 90.1 85.3 Ratio 55.3 54.6 55.5
City of Clearwater Employees Pension Fund
Atlanta Capital Management - Small Cap Value
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is August 31, 2003.
82
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Item # 4
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 4.52 26.84 26.84 1.04 2.96 6.12 6.14 8.37
%-tile 48 70 70 11 3 1 1 1
Policy
Return 3.63 20.58 20.58 -7.43 -8.22 -1.15 -0.01 3.40
%-tile 70 99 99 88 92 85 85 92
Universe
5th %-tile 6.26 36.91 36.91 3.36 3.23 5.44 6.12 8.05
25th %-tile 5.07 31.87 31.87 -3.79 -3.62 1.34 2.15 6.05
50th %-tile 3.96 30.19 30.19 -5.63 -4.85 -0.03 1.77 4.60
75th %-tile 3.49 25.52 25.52 -6.65 -6.61 -0.82 0.80 4.28
95th %-tile 1.51 22.18 22.18 -8.72 -8.80 -2.21 -0.95 2.50
Trailing Returns through December 31, 2009
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 YrRates of Return (%)40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
-5.00
-10.00
Atlanta Russell 2000 Value
City of Clearwater Employees Pension Fund
Atlanta Capital Management - Small Cap Value
Universe Comparison - Trailing Years
83
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Item # 4
Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 4.52 26.84 -19.51 6.90 16.21 6.21 20.24
%-tile 48 70 1 1 70 74 61
Policy
Return 3.63 20.58 -28.92 -9.78 23.47 4.71 22.25
%-tile 70 99 40 99 1 92 50
Universe
5th %-tile 6.26 36.91 -21.63 2.97 22.00 11.06 25.47
25th %-tile 5.07 31.87 -27.22 -0.79 20.19 9.26 23.55
50th %-tile 3.96 30.19 -30.76 -5.22 18.80 7.70 22.26
75th %-tile 3.49 25.52 -32.04 -6.98 16.14 6.07 19.34
95th %-tile 1.51 22.18 -36.79 -8.97 12.37 3.61 13.95
Calendar Returns through December 31, 2009
Qtr YTD 2008 2007 2006 2005 2004Rates of Return (%)40.00
30.00
20.00
10.00
0.00
-10.00
-20.00
-30.00
-40.00
Atlanta Russell 2000 Value
City of Clearwater Employees Pension Fund
Atlanta Capital Management - Small Cap Value
Universe Comparison - Calendar Year
84
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Item # 4
RATE OF RETURN (%)6.00
4.00
2.00
0.00
-2.00
-4.00
-6.00
-8.00
-10.00
-12.00
-14.00
-16.00
-18.00
-20.00
-22.00
3 YRS ENDING 12/09 3 YRS ENDING 9/09 3 YRS ENDING 6/09 3 YRS ENDING 3/09 3 YRS ENDING 12/08 3 YRS ENDING 9/08
HIGHEST VALUE 1.54 1.86 -2.45 -7.60 -3.21 4.58
FIRST QUARTILE -2.67 -2.32 -6.25 -11.82 -7.43 1.69
MEDIAN VALUE -4.72 -4.18 -8.18 -13.63 -8.98 0.06
THIRD QUARTILE -6.29 -5.81 -9.77 -15.50 -10.78 -1.25
LOWEST VALUE -10.24 -9.23 -13.85 -20.12 -14.95 -4.65
MEAN -4.49 -4.04 -8.03 -13.71 -9.05 0.16
3 YRS ENDING 12/09 3 YRS ENDING 9/09 3 YRS ENDING 6/09 3 YRS ENDING 3/09 3 YRS ENDING 12/08 3 YRS ENDING 9/08
RETURN RANK RETURN RANK RETURN RANK RETURN RANK RETURN RANK RETURN RANK
ATLANTA 2.96 1 3.56 1 -0.71 1 -6.87 1 0.00 1 6.05 1
RUSSELL 2000 VALUE -8.22 91 -6.65 85 -12.07 95 -17.55 91 -7.49 25 2.00 20
11.73
7.82
3.91
0.00
-3.91
-7.82
ALPHA
HIGHEST VALUE 7.62
FIRST QUARTILE 3.06
MEDIAN VALUE 0.86
THIRD QUARTILE -1.05
LOWEST VALUE -4.84
MEAN 1.03
VALUE RANK
ATLANTA 9.12 1
1.53
1.02
0.51
0.00
-0.51
INFO RATIO
0.74
0.35
0.17
0.03
-0.32
0.19
VALUE RANK
1.50 1
0.00
-0.17
-0.34
-0.51
-0.68
SHARPE RATIO
-0.03
-0.23
-0.32
-0.41
-0.57
-0.31
VALUE RANK
0.03 1
11.08
7.39
3.69
0.00
-3.69
EXCESS RETURN
9.75
5.55
3.49
1.93
-2.02
3.72
VALUE RANK
11.17 1
0.00
-4.86
-9.73
-14.59
-19.45
TREYNOR RATIO
-0.85
-6.62
-9.21
-11.60
-16.46
-9.03
VALUE RANK
0.90 1
Cummulative Excess Returns vs Benchmark
12/2003 6/2004 12/2004 6/2005 12/2005 6/2006 12/2006 6/2007 12/2007 6/2008 12/2008 6/2009 12/2009CUMULATIVE EXCESS RATE OF RETURN (%)30
25
20
15
10
5
0
-5
-10
-15
-20
ATLANTA RUSSELL 2000 VALUE
City of Clearwater Employees Pension Fund
Atlanta Capital Management - Small Cap Value
Return Analysis Summary as of December 31, 2009
85
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Item # 4
1 Year
Risk (Annualized Std Dev)
32.0031.0030.0029.0028.0027.0026.0025.00Annualized Return (%)31.00
30.00
29.00
28.00
27.00
26.00
25.00
24.00
23.00
22.00
21.00
20.00
Return Std Dev Alpha Beta R-Squared
Portfolio 26.84 25.44 8.21 0.80 95.91
Russell 2000 Value 20.58 31.27 0.00 1.00 100.00
Russell 2000 Value
Universe Median
Portfolio
Russell 2000 Value
3 Years
Risk (Annualized Std Dev)
26.0025.0024.0023.0022.00Annualized Return (%)4.00
3.00
2.00
1.00
0.00
-1.00
-2.00
-3.00
-4.00
-5.00
-6.00
-7.00
-8.00
-9.00
Return Std Dev Alpha Beta R-Squared
Portfolio 2.96 21.67 9.12 0.82 93.87
Russell 2000 Value -8.22 25.62 0.00 1.00 100.00
Russell 2000 Value
Universe Median
Portfolio
Russell 2000 Value
Since Inception
Risk (Annualized Std Dev)
20.0019.0018.0017.00Annualized Return (%)9.00
8.00
7.00
6.00
5.00
Return Std Dev Alpha Beta R-Squared
Portfolio 8.90 16.92 3.49 0.81 92.07
Russell 2000 Value 5.52 20.12 0.00 1.00 100.00
Russell 2000 Value
Universe Median
Portfolio
Russell 2000 Value
5 Years
Risk (Annualized Std Dev)
22.0021.0020.0019.0018.00Annualized Return (%)7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
Return Std Dev Alpha Beta R-Squared
Portfolio 6.14 18.23 5.20 0.82 92.90
Russell 2000 Value -0.01 21.44 0.00 1.00 100.00
Russell 2000 Value
Universe Median
Portfolio
Russell 2000 Value
City of Clearwater Employees Pension Fund
Atlanta Capital Management - Small Cap Value
Return vs Risk as of December 31, 2009
86
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Item # 4
Account Reconciliation
12/31/2009
QTR
Beginning Value 13,494,035
Net Flows 0
Investment G/L 569,025
Ending Value 14,063,060
Investment Policy
Index Weight
Russell 2000 Value 100.00
Trailing Returns Through December 31, 2009
08/31/2003
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 35.72 -10.29 -6.84 -1.04 0.75 2.45 4.22
Policy 20.58 -7.43 -8.22 -1.15 -0.01 3.40 5.52
Diff 15.14 -2.86 1.38 0.11 0.76 -0.95 -1.31
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 4.22 35.72 -40.70 0.47 18.60 8.25 11.40
Policy 3.63 20.58 -28.92 -9.78 23.47 4.71 22.25
Diff 0.59 15.14 -11.78 10.25 -4.88 3.54 -10.85
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 54.8 31.3 27.4 Portfolio -12.3 -33.9 -29.1
Policy 50.0 38.8 31.3 Policy -19.6 -39.3 -33.5
Ratio 109.6 80.9 87.5 Ratio 62.8 86.3 86.9
City of Clearwater Employees Pension Fund
Systematic Financial Management - Small Cap Value
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is August 31, 2003.
87
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Item # 4
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 4.22 35.72 35.72 -10.29 -6.84 -1.04 0.75 2.45
%-tile 48 11 11 99 81 85 77 99
Policy
Return 3.63 20.58 20.58 -7.43 -8.22 -1.15 -0.01 3.40
%-tile 70 99 99 88 92 85 85 92
Universe
5th %-tile 6.26 36.91 36.91 3.36 3.23 5.44 6.12 8.05
25th %-tile 5.07 31.87 31.87 -3.79 -3.62 1.34 2.15 6.05
50th %-tile 3.96 30.19 30.19 -5.63 -4.85 -0.03 1.77 4.60
75th %-tile 3.49 25.52 25.52 -6.65 -6.61 -0.82 0.80 4.28
95th %-tile 1.51 22.18 22.18 -8.72 -8.80 -2.21 -0.95 2.50
Trailing Returns through December 31, 2009
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 YrRates of Return (%)40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
-5.00
-10.00
Systematic Russell 2000 Value
City of Clearwater Employees Pension Fund
Systematic Financial Management - Small Cap Value
Universe Comparison - Trailing Years
88
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Item # 4
Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 4.22 35.72 -40.70 0.47 18.60 8.25 11.40
%-tile 48 11 99 11 51 40 99
Policy
Return 3.63 20.58 -28.92 -9.78 23.47 4.71 22.25
%-tile 70 99 40 99 1 92 50
Universe
5th %-tile 6.26 36.91 -21.63 2.97 22.00 11.06 25.47
25th %-tile 5.07 31.87 -27.22 -0.79 20.19 9.26 23.55
50th %-tile 3.96 30.19 -30.76 -5.22 18.80 7.70 22.26
75th %-tile 3.49 25.52 -32.04 -6.98 16.14 6.07 19.34
95th %-tile 1.51 22.18 -36.79 -8.97 12.37 3.61 13.95
Calendar Returns through December 31, 2009
Qtr YTD 2008 2007 2006 2005 2004Rates of Return (%)40.00
30.00
20.00
10.00
0.00
-10.00
-20.00
-30.00
-40.00
Systematic Russell 2000 Value
City of Clearwater Employees Pension Fund
Systematic Financial Management - Small Cap Value
Universe Comparison - Calendar Year
89
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Item # 4
RATE OF RETURN (%)6.00
4.00
2.00
0.00
-2.00
-4.00
-6.00
-8.00
-10.00
-12.00
-14.00
-16.00
-18.00
-20.00
3 YRS ENDING 12/09 3 YRS ENDING 9/09 3 YRS ENDING 6/09 3 YRS ENDING 3/09 3 YRS ENDING 12/08 3 YRS ENDING 9/08
HIGHEST VALUE 1.54 1.86 -2.45 -7.60 -3.21 4.58
FIRST QUARTILE -2.67 -2.32 -6.25 -11.82 -7.43 1.69
MEDIAN VALUE -4.72 -4.18 -8.18 -13.63 -8.98 0.06
THIRD QUARTILE -6.29 -5.81 -9.77 -15.50 -10.78 -1.25
LOWEST VALUE -10.24 -9.23 -13.85 -20.12 -14.95 -4.65
MEAN -4.49 -4.04 -8.03 -13.71 -9.05 0.16
3 YRS ENDING 12/09 3 YRS ENDING 9/09 3 YRS ENDING 6/09 3 YRS ENDING 3/09 3 YRS ENDING 12/08 3 YRS ENDING 9/08
RETURN RANK RETURN RANK RETURN RANK RETURN RANK RETURN RANK RETURN RANK
SYSTEMATIC -6.84 80 -6.12 79 -12.67 97 -18.29 95 -10.93 76 -0.51 62
RUSSELL 2000 VALUE -8.22 91 -6.65 85 -12.07 95 -17.55 91 -7.49 25 2.00 20
6.98
3.49
0.00
-3.49
-6.98
ALPHA
HIGHEST VALUE 7.62
FIRST QUARTILE 3.06
MEDIAN VALUE 0.86
THIRD QUARTILE -1.05
LOWEST VALUE -4.84
MEAN 1.03
VALUE RANK
SYSTEMATIC 0.60 53
0.89
0.59
0.30
0.00
-0.30
INFO RATIO
0.74
0.35
0.17
0.03
-0.32
0.19
VALUE RANK
0.09 63
0.00
-0.15
-0.30
-0.45
-0.60
SHARPE RATIO
-0.03
-0.23
-0.32
-0.41
-0.57
-0.31
VALUE RANK
-0.36 61
9.89
6.59
3.30
0.00
-3.30
EXCESS RETURN
9.75
5.55
3.49
1.93
-2.02
3.72
VALUE RANK
1.38 80
0.00
-4.37
-8.74
-13.11
-17.48
TREYNOR RATIO
-0.85
-6.62
-9.21
-11.60
-16.46
-9.03
VALUE RANK
-9.99 57
Cummulative Excess Returns vs Benchmark
12/2003 6/2004 12/2004 6/2005 12/2005 6/2006 12/2006 6/2007 12/2007 6/2008 12/2008 6/2009 12/2009CUMULATIVE EXCESS RATE OF RETURN (%)2.5
0
-2.5
-5
-7.5
-10
-12.5
-15
-17.5
-20
SYSTEMATIC RUSSELL 2000 VALUE
City of Clearwater Employees Pension Fund
Systematic Financial Management - Small Cap Value
Return Analysis Summary as of December 31, 2009
90
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Item # 4
1 Year
Risk (Annualized Std Dev)
32.0031.0030.0029.0028.0027.00Annualized Return (%)37.00
36.00
35.00
34.00
33.00
32.00
31.00
30.00
29.00
28.00
27.00
26.00
25.00
24.00
23.00
22.00
21.00
20.00
19.00
Return Std Dev Alpha Beta R-Squared
Portfolio 35.72 27.17 14.40 0.85 95.32
Russell 2000 Value 20.58 31.27 0.00 1.00 100.00
Russell 2000 Value
Universe Median
Portfolio
Russell 2000 Value
3 Years
Risk (Annualized Std Dev)
26.0025.0024.00Annualized Return (%)-5.00
-6.00
-7.00
-8.00
Return Std Dev Alpha Beta R-Squared
Portfolio -6.84 24.95 0.60 0.91 86.57
Russell 2000 Value -8.22 25.62 0.00 1.00 100.00
Russell 2000 Value
Universe Median
Portfolio
Russell 2000 Value
Since Inception
Risk (Annualized Std Dev)
20.0019.00Annualized Return (%)6.00
5.00
4.00
Return Std Dev Alpha Beta R-Squared
Portfolio 4.22 20.47 -0.93 0.95 86.81
Russell 2000 Value 5.52 20.12 0.00 1.00 100.00
Russell 2000 Value
Universe Median
Portfolio
Russell 2000 Value
5 Years
Risk (Annualized Std Dev)
22.0021.0020.00Annualized Return (%)2.00
1.00
0.00
Return Std Dev Alpha Beta R-Squared
Portfolio 0.75 21.29 0.67 0.93 86.94
Russell 2000 Value -0.01 21.44 0.00 1.00 100.00
Russell 2000 Value
Universe Median
Portfolio
Russell 2000 Value
City of Clearwater Employees Pension Fund
Systematic Financial Management - Small Cap Value
Return vs Risk as of December 31, 2009
91
Attachment number 2
Page 93 of 141
Item # 4
Account Reconciliation
12/31/2009
QTR
Beginning Value 101,194,401
Net Flows -5,686,715
Investment G/L 6,597,100
Ending Value 102,104,786
Investment Policy
Index Weight
MSCI Gross EAFE Index 100.00
Trailing Returns Through December 31, 2009
05/31/2001
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 57.93 -9.34 -3.01 3.88 5.67 7.58 10.66 7.38 5.61
Policy 32.46 -13.15 -5.57 1.66 4.02 6.63 10.76 7.06 5.03
Diff 25.47 3.82 2.57 2.22 1.65 0.95 -0.10 0.32 0.58
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 6.66 57.93 -47.95 11.01 27.63 13.14 17.66 31.06 -13.03
Policy 2.22 32.46 -43.06 11.63 26.86 14.02 20.70 39.15 -15.64
Diff 4.44 25.47 -4.89 -0.62 0.77 -0.88 -3.04 -8.09 2.61
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 66.6 53.0 40.2 Portfolio -5.2 -38.5 -30.8
Policy 53.8 45.0 36.6 Policy -13.9 -38.5 -30.9
Ratio 123.9 117.7 109.9 Ratio 37.6 100.0 99.9
City of Clearwater Employees Pension Fund
International Equity Composite
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is May 31, 2001.
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Period Ending Portfolio Policy Diff
Jun 2001 -2.97 -4.05 1.08
Sep 2001 -13.88 -13.95 0.07
Dec 2001 8.18 6.97 1.21
Mar 2002 3.37 0.57 2.80
Jun 2002 -1.83 -1.93 0.10
Sep 2002 -20.24 -19.67 -0.56
Dec 2002 7.45 6.48 0.96
Mar 2003 -8.19 -8.13 -0.06
Jun 2003 16.91 19.56 -2.65
Sep 2003 5.85 8.18 -2.34
Dec 2003 15.36 17.11 -1.75
Mar 2004 2.85 4.40 -1.55
Jun 2004 -1.52 0.44 -1.96
Sep 2004 1.06 -0.23 1.29
Dec 2004 14.95 15.36 -0.41
Mar 2005 -0.49 -0.10 -0.39
Jun 2005 -0.31 -0.75 0.44
Sep 2005 10.30 10.44 -0.13
Dec 2005 3.39 4.12 -0.73
Mar 2006 10.40 9.47 0.93
Jun 2006 0.73 0.94 -0.21
Sep 2006 4.30 3.99 0.31
Dec 2006 10.04 10.40 -0.36
Mar 2007 4.66 4.15 0.52
Jun 2007 6.77 6.67 0.10
Sep 2007 1.64 2.23 -0.59
Dec 2007 -2.26 -1.71 -0.55
Mar 2008 -8.64 -8.82 0.19
Jun 2008 1.49 -1.93 3.42
Sep 2008 -23.71 -20.50 -3.21
Dec 2008 -26.42 -19.90 -6.52
Mar 2009 -5.21 -13.85 8.64
Jun 2009 31.05 25.85 5.20
Sep 2009 19.18 19.52 -0.34
Dec 2009 6.66 2.22 4.44
City of Clearwater Employees Pension Fund
International Equity Composite
Quarterly Comparison Analysis (%)
Returns for periods exceeding one year are annualized.
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QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 6.66 57.93 57.93 -9.34 -3.01 3.88 5.67 7.58 10.66 7.38
%-tile 1 3 3 8 17 17 27 32 48 44
Policy
Return 2.22 32.46 32.46 -13.15 -5.57 1.66 4.02 6.63 10.76 7.06
%-tile 58 50 50 45 49 45 50 47 47 49
Universe
5th %-tile 8.07 82.13 82.13 -6.95 1.34 7.05 10.82 14.11 20.99 17.31
25th %-tile 4.04 38.66 38.66 -11.33 -3.67 3.22 5.78 8.40 12.49 9.26
50th %-tile 2.69 32.69 32.69 -13.49 -5.64 1.37 4.03 6.41 10.58 7.02
75th %-tile 1.59 27.86 27.86 -15.81 -7.22 0.08 2.85 5.42 9.32 5.98
95th %-tile -0.42 20.79 20.79 -19.44 -11.35 -3.01 0.59 3.21 7.20 3.59
Trailing Returns through December 31, 2009
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 YrRates of Return (%)80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
-10.00
-20.00
INT EQ COMP MSCI EAFE
City of Clearwater Employees Pension Fund
International Equity Composite
Universe Comparison - Trailing Years
94
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Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 6.66 57.93 -47.95 11.01 27.63 13.14 17.66 31.06 -13.03
%-tile 1 3 80 59 35 79 73 88 40
Policy
Return 2.22 32.46 -43.06 11.63 26.86 14.02 20.70 39.15 -15.64
%-tile 58 50 42 53 44 66 37 47 58
Universe
5th %-tile 8.07 82.13 -35.62 28.02 36.32 32.29 31.74 65.29 -2.33
25th %-tile 4.04 38.66 -41.62 17.02 28.62 19.47 23.11 43.50 -9.85
50th %-tile 2.69 32.69 -44.08 12.46 26.29 15.63 19.61 38.84 -14.44
75th %-tile 1.59 27.86 -47.04 9.03 24.11 13.50 17.40 33.03 -17.42
95th %-tile -0.42 20.79 -54.66 3.71 19.36 9.75 12.32 27.46 -22.33
Calendar Returns through December 31, 2009
Qtr YTD 2008 2007 2006 2005 2004 2003 2002Rates of Return (%)50.00
0.00
-50.00
INT EQ COMP MSCI EAFE
City of Clearwater Employees Pension Fund
International Equity Composite
Universe Comparison - Calendar Year
95
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1 Year
Risk (Annualized Std Dev)
26.0025.0024.00Annualized Return (%)60.00
58.00
56.00
54.00
52.00
50.00
48.00
46.00
44.00
42.00
40.00
38.00
36.00
34.00
32.00
30.00
Return Std Dev Alpha Beta R-Squared
Portfolio 57.93 25.10 19.22 0.96 89.74
MSCI EAFE 32.46 24.64 0.00 1.00 100.00
MSCI EAFE Universe Median
Portfolio
MSCI EAFE
3 Years
Risk (Annualized Std Dev)
26.0025.0024.00Annualized Return (%)-3.00
-4.00
-5.00
-6.00
Return Std Dev Alpha Beta R-Squared
Portfolio -3.01 25.73 3.49 1.06 94.04
MSCI EAFE -5.57 23.65 0.00 1.00 100.00
MSCI EAFE Universe Median
Portfolio
MSCI EAFE
Since Inception
Risk (Annualized Std Dev)
20.0019.0018.0017.00Annualized Return (%)6.00
5.00
4.00
Return Std Dev Alpha Beta R-Squared
Portfolio 5.61 18.87 0.63 1.02 94.89
MSCI EAFE 5.03 18.04 0.00 1.00 100.00
MSCI EAFE
Universe Median
Portfolio
MSCI EAFE
5 Years
Risk (Annualized Std Dev)
21.0020.00Annualized Return (%)5.00
4.00
Return Std Dev Alpha Beta R-Squared
Portfolio 5.67 21.00 1.75 1.05 94.29
MSCI EAFE 4.02 19.51 0.00 1.00 100.00
MSCI EAFE Universe Median
Portfolio
MSCI EAFE
City of Clearwater Employees Pension Fund
International Equity Composite
Return vs Risk as of December 31, 2009
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Account Reconciliation
12/31/2009
QTR
Beginning Value 24,105,213
Net Flows 0
Investment G/L 1,379,042
Ending Value 25,484,255
Investment Policy
Index Weight
MSCI Gross EAFE Index 100.00
Trailing Returns Through December 31, 2009
04/30/2008
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 55.52 -7.44
Policy 32.46 -13.60
Diff 23.06 6.16
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 5.72 55.52
Policy 2.22 32.46
Diff 3.50 23.06
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 69.5 Portfolio -8.2
Policy 53.8 Policy -13.9
Ratio 129.2 Ratio 59.3
City of Clearwater Employees Pension Fund
Earnest Partners - International Equity
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is April 30, 2008.
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QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 5.72 55.52 55.52
%-tile 6 4 4
Policy
Return 2.22 32.46 32.46
%-tile 58 50 50
Universe
5th %-tile 8.07 82.13 82.13
25th %-tile 4.04 38.66 38.66
50th %-tile 2.69 32.69 32.69
75th %-tile 1.59 27.86 27.86
95th %-tile -0.42 20.79 20.79
Trailing Returns through December 31, 2009
QTR YTD 1 YrRates of Return (%)80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
Earnest MSCI EAFE
City of Clearwater Employees Pension Fund
Earnest Partners - International Equity
Universe Comparison - Trailing Years
98
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Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 5.72 55.52
%-tile 6 4
Policy
Return 2.22 32.46
%-tile 58 50
Universe
5th %-tile 8.07 82.13
25th %-tile 4.04 38.66
50th %-tile 2.69 32.69
75th %-tile 1.59 27.86
95th %-tile -0.42 20.79
Calendar Returns through December 31, 2009
Qtr YTDRates of Return (%)80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
Earnest MSCI EAFE
City of Clearwater Employees Pension Fund
Earnest Partners - International Equity
Universe Comparison - Calendar Year
99
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1 Year
Risk (Annualized Std Dev)
28.0027.0026.0025.00Annualized Return (%)58.00
56.00
54.00
52.00
50.00
48.00
46.00
44.00
42.00
40.00
38.00
36.00
34.00
32.00
30.00
Return Std Dev Alpha Beta R-Squared
Portfolio 55.52 27.67 14.81 1.08 92.02
MSCI EAFE 32.46 24.64 0.00 1.00 100.00
MSCI EAFE Universe Median
Portfolio
MSCI EAFE
3 Years
Risk (Annualized Std Dev)
25.0024.0023.00Annualized Return (%)-4.00
-5.00
-6.00
Return Std Dev Alpha Beta R-Squared
Portfolio N/A N/A N/A N/A N/A
MSCI EAFE -5.57 23.65 0.00 1.00 100.00
MSCI EAFE
Universe Median
MSCI EAFE
Since Inception
Risk (Annualized Std Dev)
33.0032.0031.0030.0029.00Annualized Return (%)-7.00
-8.00
-9.00
-10.00
-11.00
-12.00
-13.00
-14.00
Return Std Dev Alpha Beta R-Squared
Portfolio -7.44 32.88 8.78 1.09 95.18
MSCI EAFE -13.60 29.50 0.00 1.00 100.00
MSCI EAFE Universe Median
Portfolio
MSCI EAFE
5 Years
Risk (Annualized Std Dev)
21.0020.0019.00Annualized Return (%)6.00
5.00
4.00
Return Std Dev Alpha Beta R-Squared
Portfolio N/A N/A N/A N/A N/A
MSCI EAFE 4.02 19.51 0.00 1.00 100.00
MSCI EAFE Universe MedianMSCI EAFE
City of Clearwater Employees Pension Fund
Earnest Partners - International Equity
Return vs Risk as of December 31, 2009
100
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Account Reconciliation
12/31/2009
QTR
Beginning Value 24,520,263
Net Flows 0
Investment G/L 2,165,167
Ending Value 26,685,431
Investment Policy
Index Weight
MSCI Gross EAFE Index 100.00
Trailing Returns Through December 31, 2009
04/30/2008
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 55.97 -11.80
Policy 32.46 -13.60
Diff 23.51 1.80
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 8.83 55.97
Policy 2.22 32.46
Diff 6.61 23.51
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 61.4 Portfolio -3.3
Policy 53.8 Policy -13.9
Ratio 114.1 Ratio 24.1
City of Clearwater Employees Pension Fund
Wentworth, Hauser & Violich - International Equity
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is April 30, 2008.
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QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 8.83 55.97 55.97
%-tile 1 4 4
Policy
Return 2.22 32.46 32.46
%-tile 58 50 50
Universe
5th %-tile 8.07 82.13 82.13
25th %-tile 4.04 38.66 38.66
50th %-tile 2.69 32.69 32.69
75th %-tile 1.59 27.86 27.86
95th %-tile -0.42 20.79 20.79
Trailing Returns through December 31, 2009
QTR YTD 1 YrRates of Return (%)80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
Wentworth MSCI EAFE
City of Clearwater Employees Pension Fund
Wentworth, Hauser & Violich - International Equity
Universe Comparison - Trailing Years
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Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 8.83 55.97
%-tile 1 4
Policy
Return 2.22 32.46
%-tile 58 50
Universe
5th %-tile 8.07 82.13
25th %-tile 4.04 38.66
50th %-tile 2.69 32.69
75th %-tile 1.59 27.86
95th %-tile -0.42 20.79
Calendar Returns through December 31, 2009
Qtr YTDRates of Return (%)80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
Wentworth MSCI EAFE
City of Clearwater Employees Pension Fund
Wentworth, Hauser & Violich - International Equity
Universe Comparison - Calendar Year
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1 Year
Risk (Annualized Std Dev)
26.0025.0024.00Annualized Return (%)58.00
56.00
54.00
52.00
50.00
48.00
46.00
44.00
42.00
40.00
38.00
36.00
34.00
32.00
30.00
Return Std Dev Alpha Beta R-Squared
Portfolio 55.97 24.35 21.36 0.85 73.81
MSCI EAFE 32.46 24.64 0.00 1.00 100.00
MSCI EAFE Universe Median
Portfolio
MSCI EAFE
3 Years
Risk (Annualized Std Dev)
25.0024.0023.00Annualized Return (%)-4.00
-5.00
-6.00
Return Std Dev Alpha Beta R-Squared
Portfolio N/A N/A N/A N/A N/A
MSCI EAFE -5.57 23.65 0.00 1.00 100.00
MSCI EAFE
Universe Median
MSCI EAFE
Since Inception
Risk (Annualized Std Dev)
34.0033.0032.0031.0030.0029.00Annualized Return (%)-12.00
-13.00
-14.00
Return Std Dev Alpha Beta R-Squared
Portfolio -11.80 33.75 3.57 1.01 77.76
MSCI EAFE -13.60 29.50 0.00 1.00 100.00
MSCI EAFE
Universe Median
Portfolio
MSCI EAFE
5 Years
Risk (Annualized Std Dev)
21.0020.0019.00Annualized Return (%)6.00
5.00
4.00
Return Std Dev Alpha Beta R-Squared
Portfolio N/A N/A N/A N/A N/A
MSCI EAFE 4.02 19.51 0.00 1.00 100.00
MSCI EAFE Universe MedianMSCI EAFE
City of Clearwater Employees Pension Fund
Wentworth, Hauser & Violich - International Equity
Return vs Risk as of December 31, 2009
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Account Reconciliation
12/31/2009
QTR
Beginning Value 23,743,278
Net Flows 0
Investment G/L 1,376,091
Ending Value 25,119,369
Investment Policy
Index Weight
MSCI Gross Emerging Markets Free Index 100.00
Trailing Returns Through December 31, 2009
04/30/2008
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 67.01 -8.41
Policy 79.02 -8.00
Diff -12.02 -0.40
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 5.80 67.01
Policy 8.58 79.02
Diff -2.78 -12.02
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 67.0 Portfolio
Policy 79.0 Policy
Ratio 84.8 Ratio
City of Clearwater Employees Pension Fund
Eaton Vance Management - Emerging Markets
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is April 30, 2008.
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QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 5.80 67.01 67.01
%-tile 87 75 75
Policy
Return 8.58 79.02 79.02
%-tile 54 34 34
Universe
5th %-tile 13.77 116.76 116.76
25th %-tile 9.43 82.32 82.32
50th %-tile 8.69 74.75 74.75
75th %-tile 7.19 68.25 68.25
95th %-tile 2.11 31.55 31.55
Trailing Returns through December 31, 2009
QTR YTD 1 YrRates of Return (%)120.00
110.00
100.00
90.00
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
Eaton Vance MSCI Emerg Mkts
City of Clearwater Employees Pension Fund
Eaton Vance Management - Emerging Markets
Universe Comparison - Trailing Years
106
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Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 5.80 67.01
%-tile 87 75
Policy
Return 8.58 79.02
%-tile 54 34
Universe
5th %-tile 13.77 116.76
25th %-tile 9.43 82.32
50th %-tile 8.69 74.75
75th %-tile 7.19 68.25
95th %-tile 2.11 31.55
Calendar Returns through December 31, 2009
Qtr YTDRates of Return (%)120.00
110.00
100.00
90.00
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
Eaton Vance MSCI Emerg Mkts
City of Clearwater Employees Pension Fund
Eaton Vance Management - Emerging Markets
Universe Comparison - Calendar Year
107
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1 Year
Risk (Annualized Std Dev)
29.0028.0027.00Annualized Return (%)80.00
79.00
78.00
77.00
76.00
75.00
74.00
73.00
72.00
71.00
70.00
69.00
68.00
67.00
66.00
Return Std Dev Alpha Beta R-Squared
Portfolio 67.01 27.69 -5.35 0.97 93.94
MSCI Emerg Mkts 79.02 27.64 0.00 1.00 100.00
MSCI Emerg Mkts
Universe Median
Portfolio
MSCI Emerg Mkts
3 Years
Risk (Annualized Std Dev)
33.0032.0031.00Annualized Return (%)7.00
6.00
5.00
Return Std Dev Alpha Beta R-Squared
Portfolio N/A N/A N/A N/A N/A
MSCI Emerg Mkts 5.42 32.35 0.00 1.00 100.00
MSCI Emerg Mkts
Universe Median
MSCI Emerg Mkts
Since Inception
Risk (Annualized Std Dev)
39.0038.0037.00Annualized Return (%)-6.00
-7.00
-8.00
-9.00
Return Std Dev Alpha Beta R-Squared
Portfolio -8.41 37.26 -0.84 0.96 97.49
MSCI Emerg Mkts -8.00 38.34 0.00 1.00 100.00
MSCI Emerg Mkts
Universe Median
Portfolio
MSCI Emerg Mkts
5 Years
Risk (Annualized Std Dev)
28.0027.0026.00Annualized Return (%)17.00
16.00
15.00
14.00
Return Std Dev Alpha Beta R-Squared
Portfolio N/A N/A N/A N/A N/A
MSCI Emerg Mkts 15.88 27.76 0.00 1.00 100.00
MSCI Emerg Mkts
Universe Median
MSCI Emerg Mkts
City of Clearwater Employees Pension Fund
Eaton Vance Management - Emerging Markets
Return vs Risk as of December 31, 2009
108
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Account Reconciliation
12/31/2009
QTR
Beginning Value 23,140,569
Net Flows 0
Investment G/L 1,675,013
Ending Value 24,815,581
Investment Policy
Index Weight
MSCI Gross Emerging Markets Free Index 100.00
Trailing Returns Through December 31, 2009
03/31/2008
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 74.44 -0.69
Policy 79.02 -3.42
Diff -4.59 2.73
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 7.24 74.44
Policy 8.58 79.02
Diff -1.34 -4.59
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 74.4 Portfolio
Policy 79.0 Policy
Ratio 94.2 Ratio
City of Clearwater Employees Pension Fund
Wellington Management - Emerging Markets
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is March 31, 2008.
109
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Item # 4
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 7.24 74.44 74.44
%-tile 72 50 50
Policy
Return 8.58 79.02 79.02
%-tile 54 34 34
Universe
5th %-tile 13.77 116.76 116.76
25th %-tile 9.43 82.32 82.32
50th %-tile 8.69 74.75 74.75
75th %-tile 7.19 68.25 68.25
95th %-tile 2.11 31.55 31.55
Trailing Returns through December 31, 2009
QTR YTD 1 YrRates of Return (%)120.00
110.00
100.00
90.00
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
Wellington MSCI Emerg Mkts
City of Clearwater Employees Pension Fund
Wellington Management - Emerging Markets
Universe Comparison - Trailing Years
110
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Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 7.24 74.44
%-tile 72 50
Policy
Return 8.58 79.02
%-tile 54 34
Universe
5th %-tile 13.77 116.76
25th %-tile 9.43 82.32
50th %-tile 8.69 74.75
75th %-tile 7.19 68.25
95th %-tile 2.11 31.55
Calendar Returns through December 31, 2009
Qtr YTDRates of Return (%)120.00
110.00
100.00
90.00
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
Wellington MSCI Emerg Mkts
City of Clearwater Employees Pension Fund
Wellington Management - Emerging Markets
Universe Comparison - Calendar Year
111
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Item # 4
1 Year
Risk (Annualized Std Dev)
28.0027.0026.00Annualized Return (%)79.00
78.00
77.00
76.00
75.00
74.00
Return Std Dev Alpha Beta R-Squared
Portfolio 74.44 26.66 -0.09 0.95 97.84
MSCI Emerg Mkts 79.02 27.64 0.00 1.00 100.00
MSCI Emerg Mkts
Universe Median
Portfolio
MSCI Emerg Mkts
3 Years
Risk (Annualized Std Dev)
33.0032.0031.00Annualized Return (%)7.00
6.00
5.00
Return Std Dev Alpha Beta R-Squared
Portfolio N/A N/A N/A N/A N/A
MSCI Emerg Mkts 5.42 32.35 0.00 1.00 100.00
MSCI Emerg Mkts
Universe Median
MSCI Emerg Mkts
Since Inception
Risk (Annualized Std Dev)
38.0037.0036.00Annualized Return (%)-1.00
-2.00
-3.00
-4.00
Return Std Dev Alpha Beta R-Squared
Portfolio -0.69 36.01 2.20 0.94 98.80
MSCI Emerg Mkts -3.42 37.90 0.00 1.00 100.00
MSCI Emerg Mkts
Universe Median
Portfolio
MSCI Emerg Mkts
5 Years
Risk (Annualized Std Dev)
28.0027.0026.00Annualized Return (%)17.00
16.00
15.00
14.00
Return Std Dev Alpha Beta R-Squared
Portfolio N/A N/A N/A N/A N/A
MSCI Emerg Mkts 15.88 27.76 0.00 1.00 100.00
MSCI Emerg Mkts
Universe Median
MSCI Emerg Mkts
City of Clearwater Employees Pension Fund
Wellington Management - Emerging Markets
Return vs Risk as of December 31, 2009
112
Attachment number 2
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Item # 4
Account Reconciliation
12/31/2009
QTR
Beginning Value 169,043,117
Net Flows 9,314,648
Investment G/L 1,757,385
Ending Value 180,115,151
Investment Policy
Index Weight
Barclays Aggregate Bond 100.00
Trailing Returns Through December 31, 2009
12/31/1987
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 12.37 7.34 6.87 6.42 5.65 5.36 5.13 5.49 5.50 6.05 6.98
Policy 5.93 5.59 6.04 5.61 4.97 4.86 4.76 5.43 5.76 6.33 7.38
Diff 6.44 1.76 0.83 0.81 0.68 0.49 0.37 0.06 -0.26 -0.28 -0.40
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 1.08 12.37 2.54 5.94 5.07 2.61 3.92 3.78 8.07 5.57 11.13
Policy 0.20 5.93 5.24 6.96 4.33 2.43 4.34 4.11 10.27 8.42 11.63
Diff 0.88 6.44 -2.71 -1.02 0.74 0.18 -0.42 -0.33 -2.20 -2.86 -0.50
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 12.4 11.1 10.3 8.9 Portfolio -3.6 -2.5 -3.1
Policy 5.9 9.1 9.1 9.2 Policy -2.0 -2.2 -2.9
Ratio 208.5 121.4 114.1 97.0 Ratio 179.8 114.0 109.9
City of Clearwater Employees Pension Fund
Fixed Income Composite
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is December 31, 1987.
113
Attachment number 2
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Item # 4
Period Ending Portfolio Policy Diff
Dec 1987
Mar 1988 2.36 3.77 -1.41
Jun 1988 3.59 1.17 2.42
Sep 1988 3.38 1.99 1.39
Dec 1988 2.43 0.75 1.68
Mar 1989 2.46 1.14 1.32
Jun 1989 2.39 7.97 -5.58
Sep 1989 2.42 1.13 1.29
Dec 1989 2.08 3.71 -1.63
Mar 1990 2.18 -0.80 2.98
Jun 1990 2.52 3.66 -1.14
Sep 1990 2.03 0.85 1.18
Dec 1990 2.29 5.06 -2.77
Mar 1991 2.33 2.81 -0.48
Jun 1991 2.56 1.62 0.94
Sep 1991 2.08 5.68 -3.60
Dec 1991 2.32 5.07 -2.75
Mar 1992 1.44 -1.28 2.72
Jun 1992 2.37 4.03 -1.66
Sep 1992 2.50 4.30 -1.79
Dec 1992 1.31 0.27 1.04
Mar 1993 2.78 4.13 -1.35
Jun 1993 2.13 2.65 -0.52
Sep 1993 2.52 2.61 -0.09
Dec 1993 0.96 0.06 0.91
Mar 1994 0.02 -2.87 2.89
Jun 1994 0.42 -1.03 1.45
Sep 1994 0.83 0.61 0.22
Dec 1994 1.00 0.38 0.62
Mar 1995 3.22 5.04 -1.83
Jun 1995 3.98 6.09 -2.11
Sep 1995 1.92 1.96 -0.04
Dec 1995 3.51 4.26 -0.75
Mar 1996 -1.42 -1.77 0.36
Jun 1996 0.73 0.57 0.16
Sep 1996 1.59 1.85 -0.26
Dec 1996 2.60 3.00 -0.40
Mar 1997 -0.23 -0.56 0.33
Jun 1997 3.23 3.68 -0.45
Sep 1997 2.67 3.33 -0.67
Dec 1997 2.69 2.95 -0.26
Mar 1998 1.53 1.54 -0.02
Jun 1998 2.27 2.34 -0.07
Sep 1998 3.73 4.23 -0.49
City of Clearwater Employees Pension Fund
Fixed Income Composite
Quarterly Comparison Analysis (%)
Returns for periods exceeding one year are annualized.
114
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Item # 4
Period Ending Portfolio Policy Diff
Dec 1998 0.69 0.34 0.35
Mar 1999 0.32 -0.51 0.83
Jun 1999 -0.55 -0.88 0.33
Sep 1999 0.68 0.68 0.00
Dec 1999 0.10 -0.12 0.23
Mar 2000 2.50 2.21 0.29
Jun 2000 1.51 1.73 -0.22
Sep 2000 2.13 3.02 -0.89
Dec 2000 4.59 4.21 0.37
Mar 2001 2.62 3.03 -0.41
Jun 2001 -0.32 0.56 -0.88
Sep 2001 3.94 4.62 -0.68
Dec 2001 -0.71 0.04 -0.75
Mar 2002 -0.83 0.10 -0.93
Jun 2002 2.53 3.70 -1.17
Sep 2002 4.83 4.59 0.25
Dec 2002 1.38 1.57 -0.19
Mar 2003 1.30 1.39 -0.09
Jun 2003 2.38 2.50 -0.12
Sep 2003 -0.30 -0.14 -0.15
Dec 2003 0.36 0.32 0.04
Mar 2004 2.30 2.65 -0.35
Jun 2004 -2.39 -2.44 0.05
Sep 2004 2.84 3.20 -0.36
Dec 2004 1.19 0.95 0.24
Mar 2005 -0.35 -0.48 0.13
Jun 2005 2.66 3.01 -0.35
Sep 2005 -0.22 -0.68 0.45
Dec 2005 0.52 0.59 -0.07
Mar 2006 -0.28 -0.64 0.37
Jun 2006 0.06 -0.08 0.14
Sep 2006 3.77 3.81 -0.04
Dec 2006 1.47 1.24 0.24
Mar 2007 1.56 1.50 0.06
Jun 2007 -0.50 -0.52 0.03
Sep 2007 2.46 2.85 -0.39
Dec 2007 2.32 3.00 -0.68
Mar 2008 1.57 2.17 -0.60
Jun 2008 -0.61 -1.02 0.41
Sep 2008 -2.54 -0.48 -2.06
Dec 2008 4.22 4.57 -0.35
Mar 2009 -0.23 0.12 -0.35
Jun 2009 5.73 1.79 3.94
Sep 2009 5.40 3.74 1.66
City of Clearwater Employees Pension Fund
Fixed Income Composite
Quarterly Comparison Analysis (%)
Returns for periods exceeding one year are annualized.
115
Attachment number 2
Page 117 of 141
Item # 4
Period Ending Portfolio Policy Diff
Dec 2009 1.08 0.20 0.88
City of Clearwater Employees Pension Fund
Fixed Income Composite
Quarterly Comparison Analysis (%)
Returns for periods exceeding one year are annualized.
116
Attachment number 2
Page 118 of 141
Item # 4
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 1.08 12.37 12.37 7.34 6.87 6.42 5.65 5.36 5.13 5.49
%-tile 31 58 58 1 1 1 1 9 18 16
Policy
Return 0.20 5.93 5.93 5.59 6.04 5.61 4.97 4.86 4.76 5.43
%-tile 51 86 86 15 9 12 12 16 23 17
Universe
5th %-tile 5.89 49.68 49.68 7.45 7.05 6.71 5.88 6.25 8.57 7.62
25th %-tile 1.61 20.91 20.91 5.01 5.02 5.00 4.41 4.46 4.67 5.05
50th %-tile 0.25 13.77 13.77 4.05 3.88 4.08 3.76 3.78 3.92 4.46
75th %-tile -0.74 8.86 8.86 2.90 2.78 3.32 3.23 3.28 3.39 3.90
95th %-tile -1.86 1.52 1.52 -2.43 -1.35 0.74 1.38 1.87 2.00 2.55
Trailing Returns through December 31, 2009
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 YrRates of Return (%)50.00
45.00
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
-5.00
FIXED COMP BC Aggregate Bond
City of Clearwater Employees Pension Fund
Fixed Income Composite
Universe Comparison - Trailing Years
117
Attachment number 2
Page 119 of 141
Item # 4
Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 1.08 12.37 2.54 5.94 5.07 2.61 3.92 3.78 8.07 5.57
%-tile 31 58 16 19 28 43 54 72 49 43
Policy
Return 0.20 5.93 5.24 6.96 4.33 2.43 4.34 4.11 10.27 8.42
%-tile 51 86 6 6 49 49 41 65 4 4
Universe
5th %-tile 5.89 49.68 7.58 8.57 10.94 5.79 10.75 27.13 10.94 9.07
25th %-tile 1.61 20.91 0.05 5.58 5.37 3.26 5.29 6.31 9.09 7.08
50th %-tile 0.25 13.77 -5.40 3.52 4.32 2.41 4.06 4.75 8.04 5.10
75th %-tile -0.74 8.86 -12.32 2.18 3.79 1.78 2.99 3.62 5.95 4.19
95th %-tile -1.86 1.52 -31.10 -0.94 2.68 0.88 1.06 1.35 -2.70 -0.08
Calendar Returns through December 31, 2009
Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001Rates of Return (%)50.00
40.00
30.00
20.00
10.00
0.00
-10.00
-20.00
-30.00
FIXED COMP BC Aggregate Bond
City of Clearwater Employees Pension Fund
Fixed Income Composite
Universe Comparison - Calendar Year
118
Attachment number 2
Page 120 of 141
Item # 4
1 Year
Risk (Annualized Std Dev)
6.005.004.003.00Annualized Return (%)14.00
13.00
12.00
11.00
10.00
9.00
8.00
7.00
6.00
5.00
Return Std Dev Alpha Beta R-Squared
Portfolio 12.37 3.66 6.46 0.91 63.46
BC Aggregate Bond 5.93 3.20 0.00 1.00 100.00
BC Aggregate Bond
Universe Median
Portfolio
BC Aggregate Bond
3 Years
Risk (Annualized Std Dev)
6.005.004.00Annualized Return (%)7.00
6.00
5.00
4.00
Return Std Dev Alpha Beta R-Squared
Portfolio 6.87 4.81 0.51 1.08 83.14
BC Aggregate Bond 6.04 4.11 0.00 1.00 100.00
BC Aggregate Bond
Universe Median
Portfolio
BC Aggregate Bond
Since Inception
Risk (Annualized Std Dev)
5.004.003.00Annualized Return (%)8.00
7.00
6.00
Return Std Dev Alpha Beta R-Squared
Portfolio 6.98 2.87 1.11 0.50 47.58
BC Aggregate Bond 7.38 3.99 0.00 1.00 100.00
BC Aggregate Bond
Universe Median
Portfolio
BC Aggregate Bond
5 Years
Risk (Annualized Std Dev)
6.005.004.003.00Annualized Return (%)5.00
4.00
Return Std Dev Alpha Beta R-Squared
Portfolio 5.65 4.05 0.60 1.03 84.74
BC Aggregate Bond 4.97 3.67 0.00 1.00 100.00
BC Aggregate Bond
Universe Median
Portfolio
BC Aggregate Bond
City of Clearwater Employees Pension Fund
Fixed Income Composite
Return vs Risk as of December 31, 2009
119
Attachment number 2
Page 121 of 141
Item # 4
Account Reconciliation
12/31/2009
QTR
Beginning Value 89,229,002
Net Flows 7,585,037
Investment G/L 1,470,147
Ending Value 98,284,186
Investment Policy
Index Weight
Barclays Aggregate Bond 100.00
Trailing Returns Through December 31, 2009
02/29/2004
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 14.52 7.75 6.98 6.64 5.78 5.36
Policy 5.93 5.59 6.04 5.61 4.97 4.67
Diff 8.59 2.16 0.94 1.03 0.81 0.69
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 1.68 14.52 1.37 5.47 5.62 2.39
Policy 0.20 5.93 5.24 6.96 4.33 2.43
Diff 1.48 8.59 -3.87 -1.49 1.29 -0.04
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 14.5 11.0 10.1 Portfolio -3.2 -1.9
Policy 5.9 9.1 9.1 Policy -2.0 -2.2
Ratio 244.7 120.4 112.0 Ratio 156.7 84.4
City of Clearwater Employees Pension Fund
Dodge & Cox - Fixed Income
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is February 29, 2004.
120
Attachment number 2
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Item # 4
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 1.68 14.52 14.52 7.75 6.98 6.64 5.78
%-tile 24 46 46 1 1 1 1
Policy
Return 0.20 5.93 5.93 5.59 6.04 5.61 4.97
%-tile 51 86 86 15 9 12 12
Universe
5th %-tile 5.89 49.68 49.68 7.45 7.05 6.71 5.88
25th %-tile 1.61 20.91 20.91 5.01 5.02 5.00 4.41
50th %-tile 0.25 13.77 13.77 4.05 3.88 4.08 3.76
75th %-tile -0.74 8.86 8.86 2.90 2.78 3.32 3.23
95th %-tile -1.86 1.52 1.52 -2.43 -1.35 0.74 1.38
Trailing Returns through December 31, 2009
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 YrRates of Return (%)50.00
45.00
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
-5.00
Dodge & Cox BC Aggregate Bond
City of Clearwater Employees Pension Fund
Dodge & Cox - Fixed Income
Universe Comparison - Trailing Years
121
Attachment number 2
Page 123 of 141
Item # 4
Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 1.68 14.52 1.37 5.47 5.62 2.39
%-tile 24 46 19 26 23 50
Policy
Return 0.20 5.93 5.24 6.96 4.33 2.43
%-tile 51 86 6 6 49 49
Universe
5th %-tile 5.89 49.68 7.58 8.57 10.94 5.79
25th %-tile 1.61 20.91 0.05 5.58 5.37 3.26
50th %-tile 0.25 13.77 -5.40 3.52 4.32 2.41
75th %-tile -0.74 8.86 -12.32 2.18 3.79 1.78
95th %-tile -1.86 1.52 -31.10 -0.94 2.68 0.88
Calendar Returns through December 31, 2009
Qtr YTD 2008 2007 2006 2005Rates of Return (%)50.00
40.00
30.00
20.00
10.00
0.00
-10.00
-20.00
-30.00
Dodge & Cox BC Aggregate Bond
City of Clearwater Employees Pension Fund
Dodge & Cox - Fixed Income
Universe Comparison - Calendar Year
122
Attachment number 2
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Item # 4
RATE OF RETURN (%)8.00
6.00
4.00
2.00
0.00
-2.00
-4.00
-6.00
-8.00
-10.00
-12.00
-14.00
-16.00
-18.00
-20.00
-22.00
3 YRS ENDING 12/09 3 YRS ENDING 9/09 3 YRS ENDING 6/09 3 YRS ENDING 3/09 3 YRS ENDING 12/08 3 YRS ENDING 9/08
HIGHEST VALUE 1.54 1.86 -2.45 -7.60 -3.21 4.58
FIRST QUARTILE -2.67 -2.32 -6.25 -11.82 -7.43 1.69
MEDIAN VALUE -4.72 -4.18 -8.18 -13.63 -8.98 0.06
THIRD QUARTILE -6.29 -5.81 -9.77 -15.50 -10.78 -1.25
LOWEST VALUE -10.24 -9.23 -13.85 -20.12 -14.95 -4.65
MEAN -4.49 -4.04 -8.03 -13.71 -9.05 0.16
3 YRS ENDING 12/09 3 YRS ENDING 9/09 3 YRS ENDING 6/09 3 YRS ENDING 3/09 3 YRS ENDING 12/08 3 YRS ENDING 9/08
RETURN RANK RETURN RANK RETURN RANK RETURN RANK RETURN RANK RETURN RANK
DODGE & COX 6.98 1 6.98 1 6.24 1 3.98 1 4.14 1 3.20 8
BC AGGREGATE BOND 6.04 1 6.41 1 6.43 1 5.77 1 5.51 1 4.15 2
4.81
0.00
-4.81
-9.63
-14.44
-19.25
ALPHA
HIGHEST VALUE -2.50
FIRST QUARTILE -7.56
MEDIAN VALUE -9.95
THIRD QUARTILE -12.08
LOWEST VALUE -16.21
MEAN -9.76
VALUE RANK
DODGE & COX 0.98 1
0.29
0.00
-0.29
-0.58
-0.87
INFO RATIO
-0.20
-0.39
-0.49
-0.58
-0.74
-0.48
VALUE RANK
0.30 1
1.30
0.86
0.43
0.00
-0.43
-0.86
SHARPE RATIO
-0.03
-0.23
-0.32
-0.41
-0.57
-0.31
VALUE RANK
0.97 1
0.00
-4.82
-9.64
-14.46
-19.28
EXCESS RETURN
-4.51
-8.71
-10.77
-12.33
-16.28
-10.54
VALUE RANK
0.94 1
7.77
3.88
0.00
-3.88
-7.77
-11.65
TREYNOR RATIO
-0.42
-3.39
-4.71
-5.86
-9.03
-4.64
VALUE RANK
4.85 1
Cummulative Excess Returns vs Benchmark
6/2004 12/2004 6/2005 12/2005 6/2006 12/2006 6/2007 12/2007 6/2008 12/2008 6/2009 12/2009CUMULATIVE EXCESS RATE OF RETURN (%)5
4
3
2
1
0
-1
-2
-3
-4
-5
-6
DODGE & COX BC AGGREGATE BOND
City of Clearwater Employees Pension Fund
Dodge & Cox - Fixed Income
Return Analysis Summary as of December 31, 2009
123
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Item # 4
1 Year
Risk (Annualized Std Dev)
6.005.004.003.00Annualized Return (%)15.00
14.00
13.00
12.00
11.00
10.00
9.00
8.00
7.00
6.00
5.00
Return Std Dev Alpha Beta R-Squared
Portfolio 14.52 4.00 9.07 0.79 40.07
BC Aggregate Bond 5.93 3.20 0.00 1.00 100.00
BC Aggregate Bond
Universe Median
Portfolio
BC Aggregate Bond
3 Years
Risk (Annualized Std Dev)
6.005.004.00Annualized Return (%)7.00
6.00
5.00
4.00
Return Std Dev Alpha Beta R-Squared
Portfolio 6.98 4.90 0.98 0.98 65.81
BC Aggregate Bond 6.04 4.11 0.00 1.00 100.00
BC Aggregate Bond
Universe Median
Portfolio
BC Aggregate Bond
Since Inception
Risk (Annualized Std Dev)
5.004.003.00Annualized Return (%)5.00
4.00
Return Std Dev Alpha Beta R-Squared
Portfolio 5.36 3.99 0.85 0.91 70.74
BC Aggregate Bond 4.67 3.74 0.00 1.00 100.00
BC Aggregate Bond
Universe Median
Portfolio
BC Aggregate Bond
5 Years
Risk (Annualized Std Dev)
6.005.004.003.00Annualized Return (%)6.00
5.00
4.00
Return Std Dev Alpha Beta R-Squared
Portfolio 5.78 4.03 0.96 0.92 67.42
BC Aggregate Bond 4.97 3.67 0.00 1.00 100.00
BC Aggregate Bond
Universe Median
Portfolio
BC Aggregate Bond
City of Clearwater Employees Pension Fund
Dodge & Cox - Fixed Income
Return vs Risk as of December 31, 2009
124
Attachment number 2
Page 126 of 141
Item # 4
Account Reconciliation
12/31/2009
QTR
Beginning Value 75,876,055
Net Flows 0
Investment G/L 213,235
Ending Value 76,089,290
Investment Policy
Index Weight
Barclays Aggregate Bond 100.00
Trailing Returns Through December 31, 2009
09/30/2004
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 9.22 6.53 6.53 6.06 5.39 5.34
Policy 5.93 5.59 6.04 5.61 4.97 4.92
Diff 3.29 0.95 0.48 0.44 0.42 0.43
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 0.28 9.22 3.91 6.51 4.65 2.78
Policy 0.20 5.93 5.24 6.96 4.33 2.43
Diff 0.08 3.29 -1.33 -0.45 0.32 0.35
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 9.2 10.8 10.2 Portfolio -4.0 -3.0
Policy 5.9 9.1 9.1 Policy -2.0 -2.2
Ratio 155.4 118.3 112.9 Ratio 199.1 136.1
City of Clearwater Employees Pension Fund
Western Asset Management Co. - Fixed Income
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is September 30, 2004.
125
Attachment number 2
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Item # 4
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 0.28 9.22 9.22 6.53 6.53 6.06 5.39
%-tile 49 74 74 4 3 5 4
Policy
Return 0.20 5.93 5.93 5.59 6.04 5.61 4.97
%-tile 51 86 86 15 9 12 12
Universe
5th %-tile 5.89 49.68 49.68 7.45 7.05 6.71 5.88
25th %-tile 1.61 20.91 20.91 5.01 5.02 5.00 4.41
50th %-tile 0.25 13.77 13.77 4.05 3.88 4.08 3.76
75th %-tile -0.74 8.86 8.86 2.90 2.78 3.32 3.23
95th %-tile -1.86 1.52 1.52 -2.43 -1.35 0.74 1.38
Trailing Returns through December 31, 2009
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 YrRates of Return (%)50.00
45.00
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
-5.00
WAMCO BC Aggregate Bond
City of Clearwater Employees Pension Fund
Western Asset Management Co. - Fixed Income
Universe Comparison - Trailing Years
126
Attachment number 2
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Item # 4
Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 0.28 9.22 3.91 6.51 4.65 2.78
%-tile 49 74 10 11 36 36
Policy
Return 0.20 5.93 5.24 6.96 4.33 2.43
%-tile 51 86 6 6 49 49
Universe
5th %-tile 5.89 49.68 7.58 8.57 10.94 5.79
25th %-tile 1.61 20.91 0.05 5.58 5.37 3.26
50th %-tile 0.25 13.77 -5.40 3.52 4.32 2.41
75th %-tile -0.74 8.86 -12.32 2.18 3.79 1.78
95th %-tile -1.86 1.52 -31.10 -0.94 2.68 0.88
Calendar Returns through December 31, 2009
Qtr YTD 2008 2007 2006 2005Rates of Return (%)50.00
40.00
30.00
20.00
10.00
0.00
-10.00
-20.00
-30.00
WAMCO BC Aggregate Bond
City of Clearwater Employees Pension Fund
Western Asset Management Co. - Fixed Income
Universe Comparison - Calendar Year
127
Attachment number 2
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Item # 4
RATE OF RETURN (%)8.00
6.00
4.00
2.00
0.00
-2.00
-4.00
-6.00
-8.00
-10.00
-12.00
-14.00
-16.00
-18.00
-20.00
-22.00
3 YRS ENDING 12/09 3 YRS ENDING 9/09 3 YRS ENDING 6/09 3 YRS ENDING 3/09 3 YRS ENDING 12/08 3 YRS ENDING 9/08
HIGHEST VALUE 1.54 1.86 -2.45 -7.60 -3.21 4.58
FIRST QUARTILE -2.67 -2.32 -6.25 -11.82 -7.43 1.69
MEDIAN VALUE -4.72 -4.18 -8.18 -13.63 -8.98 0.06
THIRD QUARTILE -6.29 -5.81 -9.77 -15.50 -10.78 -1.25
LOWEST VALUE -10.24 -9.23 -13.85 -20.12 -14.95 -4.65
MEAN -4.49 -4.04 -8.03 -13.71 -9.05 0.16
3 YRS ENDING 12/09 3 YRS ENDING 9/09 3 YRS ENDING 6/09 3 YRS ENDING 3/09 3 YRS ENDING 12/08 3 YRS ENDING 9/08
RETURN RANK RETURN RANK RETURN RANK RETURN RANK RETURN RANK RETURN RANK
WAMCO 6.53 1 6.90 1 6.68 1 5.21 1 5.02 1 3.41 7
BC AGGREGATE BOND 6.04 1 6.41 1 6.43 1 5.77 1 5.51 1 4.15 2
0.00
-4.48
-8.96
-13.43
-17.91
ALPHA
HIGHEST VALUE -2.50
FIRST QUARTILE -7.56
MEDIAN VALUE -9.95
THIRD QUARTILE -12.08
LOWEST VALUE -16.21
MEAN -9.76
VALUE RANK
WAMCO -0.22 1
0.30
0.00
-0.30
-0.61
-0.91
INFO RATIO
-0.20
-0.39
-0.49
-0.58
-0.74
-0.48
VALUE RANK
0.34 1
0.80
0.40
0.00
-0.40
-0.80
SHARPE RATIO
-0.03
-0.23
-0.32
-0.41
-0.57
-0.31
VALUE RANK
0.86 1
0.00
-4.69
-9.39
-14.08
-18.78
EXCESS RETURN
-4.51
-8.71
-10.77
-12.33
-16.28
-10.54
VALUE RANK
0.48 1
3.54
0.00
-3.54
-7.09
-10.63
TREYNOR RATIO
-0.42
-3.39
-4.71
-5.86
-9.03
-4.64
VALUE RANK
3.62 1
Cummulative Excess Returns vs Benchmark
12/2004 6/2005 12/2005 6/2006 12/2006 6/2007 12/2007 6/2008 12/2008 6/2009 12/2009CUMULATIVE EXCESS RATE OF RETURN (%)3
2
1
0
-1
-2
-3
WAMCO BC AGGREGATE BOND
City of Clearwater Employees Pension Fund
Western Asset Management Co. - Fixed Income
Return Analysis Summary as of December 31, 2009
128
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Item # 4
1 Year
Risk (Annualized Std Dev)
6.005.004.003.00Annualized Return (%)14.00
13.00
12.00
11.00
10.00
9.00
8.00
7.00
6.00
5.00
Return Std Dev Alpha Beta R-Squared
Portfolio 9.22 3.56 2.85 1.04 87.69
BC Aggregate Bond 5.93 3.20 0.00 1.00 100.00
BC Aggregate Bond
Universe Median
Portfolio
BC Aggregate Bond
3 Years
Risk (Annualized Std Dev)
6.005.004.00Annualized Return (%)6.00
5.00
4.00
Return Std Dev Alpha Beta R-Squared
Portfolio 6.53 5.00 -0.22 1.19 94.64
BC Aggregate Bond 6.04 4.11 0.00 1.00 100.00
BC Aggregate Bond
Universe Median
Portfolio
BC Aggregate Bond
Since Inception
Risk (Annualized Std Dev)
5.004.003.00Annualized Return (%)6.00
5.00
4.00
3.00
Return Std Dev Alpha Beta R-Squared
Portfolio 5.34 4.21 0.15 1.13 94.64
BC Aggregate Bond 4.92 3.63 0.00 1.00 100.00
BC Aggregate Bond
Universe Median
Portfolio
BC Aggregate Bond
5 Years
Risk (Annualized Std Dev)
6.005.004.003.00Annualized Return (%)5.00
4.00
Return Std Dev Alpha Beta R-Squared
Portfolio 5.39 4.28 0.14 1.14 94.64
BC Aggregate Bond 4.97 3.67 0.00 1.00 100.00
BC Aggregate Bond
Universe Median
Portfolio
BC Aggregate Bond
City of Clearwater Employees Pension Fund
Western Asset Management Co. - Fixed Income
Return vs Risk as of December 31, 2009
129
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Account Reconciliation
12/31/2009
QTR
Beginning Value 45,245,366
Net Flows 0
Investment G/L 4,524,909
Ending Value 49,770,275
Investment Policy
Index Weight
Wilshire RESI 100.00
Trailing Returns Through December 31, 2009
04/30/2008
1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept
Portfolio 24.67 -18.92
Policy 29.22 -18.07
Diff -4.54 -0.85
Calendar Year Returns
2009
QTR YTD 2008 2007 2006 2005 2004 2003 2002 2001 2000
Portfolio 10.00 24.67
Policy 8.94 29.22
Diff 1.06 -4.54
Returns In Up Markets Returns In Down Markets
1 Yr 3 Yr 5 Yr 10 Yr 1 Yr 3 Yr 5 Yr 10 Yr
Portfolio 96.8 Portfolio -36.7
Policy 95.3 Policy -33.9
Ratio 101.5 Ratio 108.3
City of Clearwater Employees Pension Fund
Security Capital - Real Estate
Executive Summary as of December 31, 2009
Returns for periods exceeding one year are annualized. Returns are net time weighted return.
Fiscal year ends in December.
The inception date is April 30, 2008.
130
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Period Ending Portfolio Policy Diff
Jun 2008 -11.38 -10.89 -0.50
Sep 2008 2.80 4.51 -1.71
Dec 2008 -37.93 -40.39 2.46
Mar 2009 -36.65 -33.85 -2.80
Jun 2009 33.98 31.93 2.05
Sep 2009 33.54 35.92 -2.38
Dec 2009 10.00 8.94 1.06
City of Clearwater Employees Pension Fund
Security Capital - Real Estate
Quarterly Comparison Analysis (%)
Returns for periods exceeding one year are annualized.
131
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Item # 4
QTR YTD 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr
Fund
Return 10.00 24.67 24.67
%-tile 10 99 99
Policy
Return 8.94 29.22 29.22
%-tile 73 63 63
Universe
5th %-tile 10.65 48.72 48.72
25th %-tile 9.78 34.40 34.40
50th %-tile 9.29 30.97 30.97
75th %-tile 8.92 26.25 26.25
95th %-tile 7.35 24.71 24.71
Trailing Returns through December 31, 2009
QTR YTD 1 YrRates of Return (%)50.00
45.00
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
Security Wilshire RESI
City of Clearwater Employees Pension Fund
Security Capital - Real Estate
Universe Comparison - Trailing Years
132
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Item # 4
Qtr YTD 2008 2007 2006 2005 2004 2003 2002 2001
Fund
Return 10.00 24.67
%-tile 10 99
Policy
Return 8.94 29.22
%-tile 73 63
Universe
5th %-tile 10.65 48.72
25th %-tile 9.78 34.40
50th %-tile 9.29 30.97
75th %-tile 8.92 26.25
95th %-tile 7.35 24.71
Calendar Returns through December 31, 2009
Qtr YTDRates of Return (%)50.00
45.00
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
Security Wilshire RESI
City of Clearwater Employees Pension Fund
Security Capital - Real Estate
Universe Comparison - Calendar Year
133
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1 Year
Risk (Annualized Std Dev)
50.0049.0048.0047.0046.0045.0044.0043.00Annualized Return (%)31.00
30.00
29.00
28.00
27.00
26.00
25.00
24.00
Return Std Dev Alpha Beta R-Squared
Portfolio 24.67 49.09 -3.74 1.02 99.61
Wilshire RESI 29.22 48.04 0.00 1.00 100.00
Wilshire RESI
Universe Median
Portfolio
Wilshire RESI
3 Years
Risk (Annualized Std Dev)
41.0040.0039.0038.00Annualized Return (%)-11.00
-12.00
-13.00
-14.00
Return Std Dev Alpha Beta R-Squared
Portfolio N/A N/A N/A N/A N/A
Wilshire RESI -13.82 41.04 0.00 1.00 100.00
Wilshire RESI
Universe Median
Wilshire RESI
Since Inception
Risk (Annualized Std Dev)
53.0052.0051.0050.0049.0048.0047.00Annualized Return (%)-16.00
-17.00
-18.00
-19.00
Return Std Dev Alpha Beta R-Squared
Portfolio -18.92 51.73 -1.49 0.99 99.58
Wilshire RESI -18.07 52.21 0.00 1.00 100.00
Wilshire RESI
Universe Median
Portfolio
Wilshire RESI
5 Years
Risk (Annualized Std Dev)
33.0032.0031.00Annualized Return (%)2.00
1.00
0.00
Return Std Dev Alpha Beta R-Squared
Portfolio N/A N/A N/A N/A N/A
Wilshire RESI -0.21 33.24 0.00 1.00 100.00
Wilshire RESI
Universe Median
Wilshire RESI
City of Clearwater Employees Pension Fund
Security Capital - Real Estate
Return vs Risk as of December 31, 2009
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Dow Jones Industrial Average: This index is comprised of 30 "blue-chip" US stocks selected for their history of
successful growth and wide interest among investors. The DJIA represents about 20% of the total market value of all US
stocks and about 25% of the NYSE market capitalization. It is a price-weighted arithmetic average, with the divisor
adjusted to reflect stock splits and the occasional stock switches in the index.
NASDAQ Composite: A cap-weighted index comprised of all common stocks listed on the NASDAQ Stock Market
(National Association of Securities Dealers Automated Quote system).
S&P 500: A broad-based measurement of changes in stock market conditions based on the average performance of 500
widely held common stocks. This index does not contain the 500 largest companies or the most expensive stocks traded
in the US. While many of the stocks are among the largest, this index also includes many relatively small companies.
This index consists of approximately 380 industrial, 40 utility, 10 transportation, and 70 financial companies listed on the
US market exchanges. It is a capitalization-weighted index (stock price times number of shares outstanding), calculated
on a total return basis with dividend reinvested.
Russell 1000: The 1000 largest companies in the Russell 3000 index, based on market capitalization.
Russell 1000 Growth: A segment of the Russell 1000 with a greater-than-average growth orientation. Companies in this
index have higher price-to-book and price-to-earnings ratios, lower dividend yields and higher forecasted growth values
than the Russell 1000 Growth index.
Russell 1000 Value: Represents a segment of the Russell 1000 with a less-than-average growth orientation. Companies
in this index have low price-to book and price-to-earnings ratios, higher dividend yields and lower forecasted growth
values than the Russell 1000 Growth index.
Russell Mid-Cap: This index consists of the bottom 800 securities in the Russell 1000 as ranked by total market
capitalization, and represents over 35% of the Russell 1000 total market cap.
Russell Mid-Cap Growth: The Russell Mid-cap Growth Index offers investors access to the mid-cap growth segment of
the U.S. equity universe. The Russell Midcap Growth Index is constructed to provide a comprehensive and unbiased
barometer of the mid-cap growth market. Based on ongoing empirical research of investment manager behavior, the
methodology used to determine growth probability approximates the aggregate mid-cap growth manager's opportunity
set.
Russell Mid-Cap Value: Measures the performance of the Russell 3000 Index extended to include micro-cap securities of
the Russell Micro-cap Index. The index represents approximately 99% of the U.S. Equity Market. As of the latest
reconstitution, the average market capitalization was approximately $3.8 billion; the median market capitalization was
approximately $612 million. The index had a total market capitalization range of approximately $368.5 billion to $67.3
million.
Russell 2000: the 2000 smallest companies in the Russell 3000 index.
Russell 2000 Growth: A segment of the Russell 2000 with a greater-than-average growth orientation. Companies in this
index have higher price-to book and price-to-earnings ratios, lower dividend yields and higher forecasted growth values
than the Russell 2000 Value index.
City of Clearwater Employees Pension Fund
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Russell 2000 Value: A segment of the Russell 2000 with a less-than-average growth orientation. Companies in this
index have low price-to-book and price-to-earnings ratios, higher dividend yields and lower forecasted growth values
than the Russell 2000 Growth index.
Russell 2500: This index consists of the bottom 500 stocks in the Russell 1000 (as ranked by market capitalization) and
all of the stocks in the Russell 2000. This index is intended to be used as a measure of small to medium/small stock
performance.
Russell 2500 Growth: A segment of the Russell 2500 with a greater-than-average growth orientation. Companies in this
index have higher price-to book and price-to-earnings ratios, lower dividend yields and higher forecasted growth values
than the Russell 2500 Value index.
Russell 2500 Value: A segment of the Russell 2500 with a less-than-average growth orientation. Companies in this
index have low price-to-book and price-to-earnings ratios, higher dividend yields and lower forecasted growth values
than the Russell 2500 Growth index.
Russell 3000: is composed of the 3,000 largest U.S. securities, as determined by total market capitalization.
Russell 3000 Growth: This index measures the performance of those Russell 3000 Index companies with higher
price-to-book ratios and higher forecasted growth values. The stocks in this index are also members of either the Russell
1000 Growth or the Russell 2000 Growth indexes.
Russell 3000 Value: This index measures the performance of those Russell 3000 Index companies with lower
price-to-book ratios and lower forecasted growth values. The stocks in this index are also members of either the Russell
1000Value or the Russell 2000 Value indexes.
MSCI EAFE: A market capitalization-weighted index representing all of the MSCI developed markets outside North
America. It comprises 20 of the 22 countries in the MSCI World. These 20 countries include the 14 European countries
in the MSCI Europe and the 6 Pacific countries in the MSCI Pacific. This index is created by aggregating the 20
different country indexes, all of which are created separately.
MSCI World: A free float-adjusted market capitalization weighted index that is designed to measure the equity market
performance of developed markets. As of June 2007 the MSCI World Index consisted of the following 23 developed
market country indices: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong,
Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United
Kingdom, and the United States.
MSCI World ex U.S.: The MSCI World index excluding the U.S. portion of the index.
MSCI All Country World Index: a free float-adjusted market capitalization weighted index that is designed to measure
the equity market performance of developed and emerging markets. As of January 2009 the MSCI ACWI consisted of 46
country indices comprising 23 developed and 23 emerging market country indices. The developed market country indices
included are: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland,
Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom
and the United States. The emerging market country indices included are: Argentina, Brazil, Chile, China, Colombia,
Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland,
Russia, South Africa, Taiwan, Thailand, and Turkey.
City of Clearwater Employees Pension Fund
Appendix
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MSCI All Country World Index ex U.S.: The MSCI All Country World Index excluding the U.S. portion of the index.
MSCI Emerging Markets Free (EMF): A market capitalization-weighted index representing 2 of the emerging markets in
the world. Several factors are used to designate whether a country is considered to be emerging vs. developed, the most
common of which is Gross Domestic Product Per Capita. The "Free" aspect indicates that this index includes only
securities that are allowed to be purchased by global investors. This index is created by aggregating the 26 different
country indexes, all of which are created separately.
Barclays Capital U.S. Aggregate Bond: This index is made up of the Barclays Capital U.S. Government/Credit, the
Mortgage-Backed Securities, and the Asset-Backed Securities indices. All issues in the index are rated investment grade
or higher, have at least on year maturity, and have an outstanding par value of at least $100 million.
Barclays Capital U.S. Government/Credit: This index includes all bonds that are in the Barclays Capital U.S.
Government Bond and the Barclays Capital U.S. Credit Bond indices.
Barclays Capital U.S. Government/Credit Intermediate: All bonds by the Barclays Capital U.S. Government/Credit Bond
index with maturities of 1 to 10 years.
Barclays Capital Municipal Bond: This market capitalization-weighted index includes investment grade tax-exempt
bonds and is classified into four main sectors General Obligation, Revenue, Insured, and Pre-refunded. To be included in
this index, the original transaction size of a bond must have been greater than $50 million.
Barclays Capital U.S. Treasury Index: This index includes public obligations of the U.S. Treasury. Treasury bills are
excluded by the maturity constraint, but are part of a separate Short Treasury Index. In addition, certain special issues,
such as state and local government series bonds (SLGs), as well as U.S. Treasury TIPS, are excluded. STRIPS are
excluded from the index because their inclusion would result in double-counting. Securities in the Index roll up to the
U.S. Aggregate, U.S. Universal and Global Aggregate Indices.
Barclays Capital U.S. TIPS: This index measures the performance of U.S. Treasury Inflation Protection Securities.
Merrill Lynch Convertibles: The convertible securities used in this index span all corporate sectors and must have a par
amount outstanding of $25 million or more. The maturity must be at least on year. The coupon range must be equal to or
greater than zero and all equity of bonds are included. Excluded from this index are preferred equity redemption stocks.
When the component bonds of this index convert into common stock, the converted securities are dropped from the index.
Merrill Lynch Corp/Govt 1-3 Years A or Better: An unmanaged index of government and corporate fixed-rate debt
issues with maturities between one and 3 years.
Merrill Lynch High Yield Master: Market capitalization weighted index providing a broad-based measure of bonds in
the US domestic bond market rated below investment grade, but not in default. Includes only issues with a credit rating
of BB1 or below as rated by Moody's and/or S&P, at least $100 million in face value outstanding and a remaining term to
final maturity equal to or greater than one year.
Dow Wilshire REIT: A measurement of equity REITs and Real Estate operating Companies. No special-purpose or
health care REITs are included. It is a market capitalization weighted index for which returns are calculated monthly
using buy and hold methodology; it is rebalanced monthly.
City of Clearwater Employees Pension Fund
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Alpha: A risk-adjusted measure of 'excess return' on an investment. That is, it measures an active manager's performance
in excess of a benchmark index or 'risk-free' investment. An alpha of 1.0 means the manager outperformed the market
1.0%. A positive alpha is the extra return awarded to the investor for taking additional risk rather than accepting the
market return.
Batting Average: The percent of periods the manager has beaten the benchmark. A high average for the fund (e.g. over
50) is desirable, indicating the fund has beaten the policy frequently.
Beta: A measure of systematic risk, or the sensitivity of a manager to movements in the benchmark. A beta of 1 implies
that you can expect the movement of a manager's return series to match that of the benchmark used to measure beta.
Down Market Capture Ratio: A measure of a manager's performance in down markets. A down-market is defined as
those periods (months or quarters) in which market return is less than 0. It tells you what percentage of the down-market
was captured by the manager.
Information Ratio: The Information Ratio measures the consistency with which a manager beats a benchmark.
R-squared: The R-Squared (R2) of a manager versus a benchmark is a measure of how closely related the variance of the
manager returns and the variance of the benchmark returns are.
Sharpe Ratio: The Sharpe Ratio is a risk-adjusted measure of return which uses standard deviation to represent risk. It is
calculated by subtracting the risk-free rate from the rate of return for a portfolio and dividing the result by the standard
deviation of the portfolio returns.
Standard Deviation: Standard deviation of return measures the average deviations of a return series from its mean, and is
often used as a measure of risk. A large standard deviation implies that there have been large swings in the return series
of the manager.
Tracking Error: A divergence between the price behavior of a position or a portfolio and the price behavior of a
benchmark.
Treynor Ratio: The Treynor Ratio is a risk-adjusted measure of return which uses beta to represent risk. It is calculated
by subtracting the risk-free rate from the rate of return for a portfolio and dividing the result by the portfolio's beta value.
Up Market Capture Ratio: A measure of a manager's performance in up markets. An up-market is defined as those
periods (months or quarters) in which market return is greater than 0. It tells you what percentage of the up-market was
captured by the manager.
City of Clearwater Employees Pension Fund
Appendix
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This material is for information only and for the use of the recipient. It is not to be reproduced or copied or made
available to others. Any opinions expressed are our current opinions only. Assumptions, opinions and estimates constitute
CapTrust's judgment as of the date of this material and are subject to change without notice.
While the information contained herein is from sources believed reliable, we do not represent that it is accurate or
complete and it should not be relied upon as such. CapTrust accepts no liability for loss arising from the use of this
material.
Performance Comparison Page Information:
Shaded Areas represent where the investment objective was achieved either by:
1)The investment return vs the index;
2)The investment return universe ranking (the lower the number the better the ranking)
Manager performance begins on the last day of the inception month.
Any investment results depicted represent historical net performance.
Past performance is no guarantee of future performance.
City of Clearwater Employees Pension Fund
Appendix
Disclaimer Page
139
Attachment number 2
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Item # 4
Pension Trustees Agenda
Council Chambers - City Hall
Meeting Date:4/13/2010
SUBJECT / RECOMMENDATION:
Approve changes to the Employees' Pension Plan investment policy to provide for the addition of alternative investments, to change the
REIT classification to Real Estate, to make other changes as approved in the asset allocation study, and to clarify and make grammatical
corrections to make the policy easier to understand.
SUMMARY:
At the Trustee workshop on January 29, 2010, Cap Trust, the Pension Plan’s consultant, and staff conducted a presentation and led
discussion on the changes to the Employees’ Pension Plan investment model as a result of the recently completed asset allocation study.
The investment policy implements the changes that were presented at that meeting and recommended in the asset allocation study.
Additions have been underlined and deletions have been marked as a strike through.
The major changes deal with the addition of alternative assets to the portfolio. Alternative Investments are being defined and limits set.
The REIT investment class is being changed to Real Estate and an Alternative asset class is being added to the Investment Management
Structure.
The amount of allowable investments in each asset class is being updated to recognize the addition of the new asset class.
Grammatical changes and changes to make the document easier to understand have also been made.
Review
Approval:
1) Financial Services 2) Office of Management and Budget 3) Clerk 4) Assistant City Manager 5) Clerk 6) City
Manager 7) Clerk
Cover Memo
Item # 5
STATEMENT OF INVESTMENT
OBJECTIVES AND GUIDELINES
CITY OF CLEARWATER EMPLOYEES’
PENSION PLANFUND
Proposed Approved April 13, 2010
February 12, 2010
Attachment number 1
Page 1 of 30
Item # 5
1
PURPOSE
The purpose of this Statement of Investment Objectives and Guidelines hereinafter referred to as
the “Policy Statement” or “Policy” is to assist the City of Clearwater Employees’ Pension Plan
Fund (hereafter referred to as the fFund) in more effectively supervising and monitoring the
investment of the Fund's assets.
In the various sections of this policy document, the Fund defines its investment program by:
y y stating in a written document the Fund's attitudes, expectations and
objectives in the investment of Fund assets.
y y setting forth an investment "structure" for managing assets. This structure
includes various asset classes and investment management styles that, in aggregate, are
expected to produce a prudent level of diversification and investment return over time.
y y providing guidelines for each investment portfolio that control the level of
risk assumed in the portfolio and ensure that assets are managed in accordance with
stated objectives.
y y encouraging criteria to monitor and evaluate the performance results
achieved by the investment managers.
This Statement represents the Fund's current philosophy regarding the investment of Fund assets.
In addition, although the Fund shall utilize this Policy Statement in making decisions concerning
the Fund, it shall not necessarily be bound solely by its contents.
PRUDENCE AND ETHICAL STANDARDS
The standard of prudence to be applied by the trustees shall be the "Prudent Person" rule, which
states: "Investments shall be made with judgment and care, under circumstances then prevailing,
which persons of prudence, discretion and intelligence exercise in the management of their own
affairs, not for speculation, but for investment, considering the probable safety of their capital as
well as the probable income derived." The "Prudent Person" rule shall be applied in the context of
managing the overall portfolio.
The trustees shall also be governed by the fiduciary standard set forth in the Employee Retirement
Income Security Act of 1974 at 29U.S.C. s. 1104 (a) (1) (A) – (C).
In the event of a conflict between the Policy and Florida Statutes or City ordinances, the
statutes and ordinances shall prevail. In the event of a conflict between the Policy and Florida Statutes or
City ordinances, the statutes and ordinances shall prevail.
Attachment number 1
Page 2 of 30
Item # 5
2
Funding Philosophy
The Fund's funding objectives for the Fund isare to be as fully funded as possible so that:
y the ability to pay all benefits and expense obligations from the Fund when due is
ensured;
y there will be no principal erosion of contributed funds or the purchasing power
thereof.
y a "funding cushion" is maintained within the Fund for unexpected developments
and for possible future increases in benefit structure and expense levels;
y the Fund assets should earn sufficient total rate of return over time to reduce the
Ffund's dependency on employer contributions to meet all benefit and expense
obligations.
Investment results within the Fund are considered to be the major critical element in achieving
these funding objectives stated above while reliance on contributions is a secondary element.
Liquidity Posture
The iInvestment pPortfolio shall be structured in such a manner as to provide sufficient liquidity to
pay obligations as they come due. Liquidity considerations are low in the short-term and
intermediate-term resulting in an immaterial impact upon investment policy, objectives and
guidelines.
Authorized Investments
The following is a list of authorized investments:
y Invest and reinvest the assets of the pension fund in annuity (including group annuity
contracts of the pension investment type) and life insurance contracts of legal reserve
life insurance companies, in amounts sufficient to provide, in whole or in part,
benefits to which all of the participants shall be or become entitled toentitled to under
the provisions of the Fund, and pay the initial and subsequent premiums thereon.
Provided that the amount invested with a life insurance company shall not exceed three
percent (3%) of the insurance company’sies y’s ies assets.
y Invest and reinvest the assets of the pension fund in:
Attachment number 1
Page 3 of 30
Item # 5
3
a. Time deposits, savings accounts, money market accounts, funds, certificates of
deposits, or money market certificates of a national bank, a state bank, or a
savings, building and loan association.
b. Negotiable direct obligations of, or obligations the principal and interest of
which are unconditionally guaranteed by, and which carry the full faith and credit
of the United States Government and its agencies. Investments in this category
would include but not be limited to the following: United States Treasury Bills,
Notes and Bonds, and securities issued by the Small Business Administration,
Government National Mortgage Association (Ginnie Mae), Veterans
Administration, and Federal Housing Administration.
c. Fully collateralized United States Agency obligations, which carry an implied
guarantee and the implied full faith and credit of the United States government.
Investments in this category would include but not be limited to the following:
obligations of the Federal Home Loan Banks System (FHLB) or its distinct banks
and Financing Corporation (FICO).
d. Other United States Agency obligations, which carry an implied guarantee
(Government Sponsored Entities) and the implied full faith and credit of the
United States Government. Investments in this category would include but not be
limited to the following: obligations of the Federal Farm Credit Bank, Federal
National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage
Corporation (Freddie Mac), Student Loan Marketing Association (Sallie Mae),
Financial Assistance Corporation and Federal Agriculture Mortgage Corporation
(Farmer Mac).
e. Collateralized Mortgage Obligations (CMO) and/or Real Estate Mortgage
Investment Conduits (REMIC), rated investment grade or equivalent by Standard
and Poor's, Moody's Fitch, or other recognized national rating agencies which are
backed by securities otherwise authorized in this ordinance and which are
guaranteed as to the timely payment of principal and interest by the U.S.
Government or its agencies.
f. Securities of countries, states, municipalities and county governments or their
public agencies, which are, rated investment grade or equivalent by Standard and
Poor's, Moody's Fitch, or other recognized national rating agencies.
g. Asset-backed securities, which are, rated investment grade or equivalent by
Standard and Poor's, Moody's Fitch, or other recognized national rating agencies.
h. Common stocks, preferred stocks and bonds and other evidence of indebtedness
issued or guaranteed by a corporation organized under the laws of the United
States, any state, or organized territory of the United States or the District of
Columbia or any non-U.S. corporation, provided:
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1. The corporation is listed on any one or more of the recognized national
or international stock exchanges and/or in the case of bonds and mortgage
backed securities, traded among dealers and investors in a recognized and
agreed upon conventional format;
2. Unless an asset allocation for less than investment grade corporate
bonds is established, all corporate bonds shall carry an investment grade
rating as established either by Standard & Poor's, Moody's, Fitch or other
recognized rating agencies; and
3. Not more than three (3) percent (3%) of the equity assets of the pension
Ffund shall be invested in the common stock or capital stock of any one
issuing corporation except to the extent a higher percentage of the same
issue is included in a nationally recognized market index, based on market
values, at least as broad as the Standard and Poor's Composite Index of
500 Companies, or except upon a specific finding by the investment
committee that such higher percentage is in the best interest of the Ffund;
nor shall the non-U.S. investments exceed twenty five percent (25%) of
the pension Ffund's assets at market cost; nor shall the aggregate of the
investments under this subparagraph at cost exceed seventy percent (70%)
of the pension Ffund's assets at market cost.
i. Alternative Investments, with no more, in the aggregate, than ten percent (10%)
10 percent of the Fund in alternative investments, through participation in
securities or investments or an alternative investment vehicle that is not publicly
traded and is not otherwise authorized by this section. Alternative Investments
include securities which fall outside the scope of traditional investments (stocks,
bonds, and cash) or are strategies investing in securities using alternative means
(derivatives, leverage, short selling), or some combination thereof. Such
alternative investments and strategies include, but are not limited to: hedge Funds,
real estate, private equity and natural resources. An “alternative investment
vehicle" is a limited partnership, limited liability company, or similar legal
structure or investment manager through which the fund invests in a portfolio
company.
Investments not listed above in this section are prohibited.
Bid Requirements
All securities shall be competitively bid where feasible and appropriate. Except as otherwise
required by law, the most economically advantageous bid must be selected. Executions must be
made on a best-execution basis.
Illiquid Investments
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The Fund will not invest in illiquid investments. Illiquid investments being defined as an
investment for which there is no generally recognized market or generally accepted pricing
mechanism. Once an investment becomes illiquid the money manager will notify the plan of the
illiquid investment. Included in that notification will be how the money manager will handle the
illiquid investment.
INVESTMENT MANAGEMENT STRUCTUREInvestment Management Structure
Five distinct asset classes will be considered for inclusion in the portfolio which will include
Domestic Equities, International Equities, Domestic Fixed Income, Real Estate, and Alternative
Investments.
A permanent commitment to these five asset classes will be made to ensure diversification at the
Fund level. The Fund may consider investments in other asset classes which offer potential
enhancement to total return at risks no greater than the exposures under the initially selected asset
classes.
The Fund has reviewed the investment program for the City of Clearwater Employees’ Pension
Fund. The result of the review is an updated, long-term strategic asset allocation Fund.
Initially, four distinct asset classes were considered for inclusion in the portfolio:
Domestic Equities Domestic Fixed Income
International/Non US Equities REITS / Real Estate
After a thorough review, a permanent commitment to these four asset classes will be made to
ensure diversification at the Fund level. The Fund may consider investments in other asset classes,
including alternative asset classes, which offer potential enhancement to total return at risks no
greater than the exposures under the initially selected asset classes.
It is not the intention of the Fund to become involved in day-to-day investment decisions.
Therefore, the assets will be allocated to professional investment managers in a manner consistent
with the Policy's objectives.
Each asset class will have its own investment managers. Diversification of the U.S. Market Equity
commitment will be achieved through the employment of managers of complementary investment
styles, Growth and Value. In the U.S. Fixed Income market, at least one core bond manager will be
utilized to stabilize the Fund. In the U.S. Fixed Income market a core bond managers will be
utilized to stabilize the fund. In the International Equity market, a diversified non-U.S.
managersdiversified non-U.S. managers will be hired to achieve diversification. In the Real Estate
market, the Fund will utilize collective funds or REIT’s for purposes of diversification. In the
Alternatives market, the Fund will hire fund of funds managers to optimize strategies and provide
adequate safety of capital and diversification. Cash and cash equivalents will be managed either by
the Investment Managers or the custodian. In addition the City uses the pooling concept to meet the
immediate cash needs of the city and to maximize the interest earnings. All cash placed in the
City’s pooled cash account shall be separately accounted for and listed as an asset of the Fund. The
Fund will keep sufficient funds in the City’s pooled cash account to meet the current obligations of
the Fund.
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The guidelines for the allocation of assets, at market cost, to investment managers are as follows:
Asset Class Lower Limit Upper Limit Market
U.S. Market Equities
Growth
Value
20%
10%
10%
60%
30%
30%
Market
Market
Market
International Equity 10% 25% Market
Domestic Fixed Income 30% 40% Market
Real Estate 0% 15% Market
Alternative Investments 0% 10% Market
Because the asset classes do not move in concert, deviations from the normal commitments will
occur through normal market activity. The Upper and Lower Limits define the ranges within which
market activity will be allowed to shift the allocations. The ranges are designed to allow for a
reasonable period of time to elapse before rebalancing the portfolio. When the investments are out
of policy the assets will be moved from the over-allocated to the under-allocated in a prudent
manner.
When in market equilibrium, cash flows will be deployed in a manner that returns the portfolio to
its normal commitments.
Internal Controls
As part of the cCity’s annual financial audit the external CPA firm will review the internal controls
of the Fund. The hiring or termination of all money managers, consultants or safekeeping
custodians must be made by the trustees. No individual associated with the Fund may authorize
any movement of monies or securities with out the approval of the trustees, if required, or by the
approval of the Pension Investment Committee if trustee approval is not required. Trustee approval
is not required for rebalancing of the portfolio.olio. An instance not requiring trustee approval is
rebalancing the portfolio. Internal controls will be designed to prevent losses of funds which might
arise from fraud, error, and misrepresentation by third parties or imprudent actions by the trustees or
cCity employees.
Makeup of Thethe Investment Committee
The Pension Investment Committee shall consist be made up (at a minimum) of the following:
Finance Director (Treasurer for the Trustees), Assistant Finance Director, the Cash & Investments
Manager and one member from the general public appointed by the Trustees. The Treasurer for
the Trustees shall appoint/remove other Finance professionals as needs warrant. One representative
for each of the unions maywill also serve on the Investment Committee. The Financeial Director or
its their designee will chair the committee.
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The City Treasurer for the Trustees will make a recommendations to the Trustees as to any
changes in the makeup of the committee.
Continuing Education
The annual budget for the pPension Fund will include sufficient funding for the trustees and
members of the Pension Investment Committee to participate in pension education opportunities.
These educational opportunities will include education on the individual’s duties and
responsibilities as well as investments in general. The chief investment officer will complete no
less than eight (8) hours of continuing educational opportunities on pension investments each fiscal
year.
INVESTMENT RETURN OBJECTIVESInvestment Return Objectives
In formulating investment return objectives for the Fund objectives for the Fund assets, the Fund
placed primary emphasis on the following goals:
y Achieve investment performance that exceeds the rate of inflation over time thereby
providing a real rate of return.
y Achieve investment results of at least the actuarial rate of return.
y Achieve investment performance that is materially above average when compared
to:
- Other investment managers
- Other investment manager peers of related investment style
- Other public retirement plans
- Several capital market indices
y For each actuarial actual valuation Tthe Trustees will determine the expected rate of
return of the current year, and future years next several years and the long term.
Based upon the above and the following the expected annual rate of return for the
current year is 7.5%. The expected rate of return for the foreseeable future is also
7.5%. The total Fund and asset segment return expectations are as follows:
a.1. Total Fund Return Objectives
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The following minimum comparative objectives have been established for
or the total Fund:
1. The total fund should rank in the upper fiftieth (50th) percentile
compared to a recognized performance measure company’s total public plan
sponsor database measured over a minimum period of three (3) or maximum
five (5) years.
2. The Fund's overall annualized total return should perform at least at
the upper fiftieth (50th) percentile compared to investment style peers of
similar type as found in recognized performance measurement company’s
style database for each asset class segment.
3. The Fund's overall annualized total return (which is defined as all
price changes plus all income and/or dividends) should exceed the actuarial
assumption over a rolling three (3) or maximum of five (5) year period.
4. The Fund's overall annualized total return should exceed the returns
that would have collectively been achieved if the Fund had been fully
invested in the appropriate percentage of :
- Standard & Poor's 500 Stock Index
- Lehman Brothers Aggregate Bond Index
- Morgan Stanley Capital International EAFE Index
This is a custom benchmark that will be calculated relative to the
actual collective asset class mix of the Fund measured over a
minimum of three (3) or maximum of five (5) years.
2. b. Equity Segment Return Objectives
A. The following minimum performance goals have been established for the
Fund's domestic equity segment:
1.y The domestic equity segment total return should perform at
least at the upper fiftieth (50th) percentile compared to a recognized
performance measurement company’s total U.S. equity database
measured over a minimum period of three (3) or maximum of five
(5) years.
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2.y The individual domestic equity managers total return should perform
at least at the upper fifth (50th) percentile compared to investment
style peers of similar type as found in a recognized performance
measure company’s total U.S. equity database measured over a
minimum period of three (3) or maximum of five (5) years.
3.y The total domestic equity segment total return should exceed the
total return of the Standard & Poor's 500 Stock Index by at least 100
basis points per year measured over a minimum period of three (3)
or maximum of (5) years.
c. International Equity Segment Return Objectives
. The following minimum performance goals have been established
for the Fund's international equity segment:
1. The international equity segment total return should perform at least
at the upper fiftieth (50th) percentile compared to recognized
performance measure company’s total non U.S. equity database
measured over a minimum period of three (3) or maximum of five
(5) years.
2. The individual international equity managers total return should
perform at least at the upper fiftieth (50th) percentile compared to
the investment style peers of similar type as found in a recognized
performance measure company’s total non U.S. equity database
measured over a minimum period of three (3) or maximum of five
(5) years.
3. The international equity segment total return should exceed the total
return of the Morgan Stanley Capital International Europe, Australia,
Far East Index (EAFE) by at least 200 basis points per year over a
minimum of three (3) or maximum of five (5) years.
d. Fixed Income Segment Return Objectives
. The following minimum performance goals have been established for the
Fund's domestic fixed-income segment:
1. The domestic fixed-income segment total return should perform at
least at the upper fiftieth (50th) percentile compared to the
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recognized performance measure company’s total domestic fixed
income database measured over a minimum period of three (3) or
maximum of five (5) years.
2. The individual domestic fixed income managers total return should
perform at least at the upper fiftieth (50th) percentile compared to
investment style peers of similar type as found in a recognized
performance measure company’s total domestic fixed income
database measured over a minimum period of three (3) or maximum
of five (5) years.
3. The domestic fixed income segment total returns should exceed the
total return of the Barclays Aggregate Bond Index by at least 50
basis points per year measured over a minimum period of three (3)
or maximum of five (5) years.
e. Real Estate Segment Return Objectives
The following minimum performance goals have been established
for the Fund’s Real Estate Segment:
1. The Real Estate segment total return should perform at least at the
upper fiftieth (50th) percentile compared to recognized performance
measurement database measured over a minimum period of three
(3) or maximum of five (5) years.
2. The Real Estate managers total return should perform at least at the
upper fiftieth (50th) percentile compared to the investment style
peers of similar type as found in a recognized performance
measurement company’s database measured over a minimum period
of three (3) or maximum of five (5) years.
3. The Real Estate managers total return should exceed the total return
for comparable strategies of the Wilshire RESI Index over a
minimum of three (3) or maximum of five (5) years.
f. Alternative Segment Return Objectives
b. The following minimum performance goals have been established
for the Fund's international equity segment:
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y The international equity segment total return should perform at least
at the upper fiftieth (50th) percentile compared to recognized performance
measure company’s total non U.S. equity database measured over a
minimum period of three (3) or maximum of (5) years.
y The individual international equity managers total return should
perform at least at the upper fiftieth (50th) percentile compared to the
investment style peers of similar type as found in a recognized performance
measure company’s total non U.S. equity database measured over a
minimum period of three (3) or maximum of (5) years.
y The international equity segment total return should exceed the total
return of the Morgan Stanley Capital International Europe, Australia, Far
East Index (EAFE) by at least 200 basis points per year over a minimum of
three (3) or maximum of (5) years.
The following minimum performance goals have been established for the
fund’s alternative investment segment.
y The Alternative segment total return should perform at least at the
upper fiftieth (50th) percentile compared to recognized performance
measurement database measured over a minimum period of three (3) or
maximum of (5) years.
y The alternative managers total return should perform at least at the
upper fiftieth (50th) percentile compared to the investment style peers of
similar type as found in a recognized performance measurement company’s
database measured over a minimum period of three (3) or maximum of (5)
years.
y The alternative managers total return should exceed
the total return for comparable strategies of the Credit Suisse/Tremont
Hedge Fund Index over a minimum of three (3) or maximum of (5)
years The following minimum performance goals have been established for
the Fund’s alternative investment segment.
1. The Alternative Ssegment total return should perform at least at the
upper fiftieth (50th) percentile compared to recognized performance
measurement database measured over a minimum period of three
(3) or maximum of five (5) years.
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2. The alternative manager’s total return should perform at least at the
upper fiftieth (50th) percentile compared to the investment style
peers of similar type as found in a recognized performance
measurement company’s database measured over a minimum period
of three (3) or maximum of five (5) years.
3. The alternative managersmanager’s total return should exceed the
total return for comparable strategies of the Credit Suisse/Tremont
Hedge Fund Index over a minimum of three (3) or maximum of five
(5) years.
3. Fixed Income Segment Return Objectives
A. The following minimum performance goals have been established for the Fund's
domestic fixed-income segment:
y The domestic fixed-income segment total return should perform at
least at the upper fiftieth (50th) percentile compared to the
recognized performance measure company’s total domestic fixed
income database measured over a minimum period of three (3) or
maximum of (5) years.
y The individual domestic fixed income managers total return should
perform at least at the upper fiftieth (50th) percentile compared to
investment style peers of similar type as found in a recognized
performance measure company’s total domestic fixed income
database measured over a minimum period of three (3) or maximum
of (5) years.
y The domestic fixed income segment total returns should exceed the
total return of the Lehman Brothers Aggregate Bond Index by at
least 50 basis points per year measured over a minimum period of
three (3) or maximum of (5) years.
Criteria for Investment Manager Review
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Consistent performance below the 50th percentile in the specified universe over rolling 3-year
periods.
y Consistent under-performance of the stated target index over rolling 3-year periods.
y Loss by the Manager of any senior personnel deemed detrimental to the Manager’s
ability to perform required duties or any potentially detrimental organizational issues
that may arise and have an effect on the management of the Plan’s assets.
y Substantial change in basic investment philosophy by the Manager.
y Substantial change of ownership of the firm deemed detrimental to the Manager’s
ability to perform the required duties.
y Failure to observe any guidelines as stated in this policy.
ROLES AND RESPONSIBILITIES
Responsibilities of the Third Party Custodian
A third party custodian will hold all Fund assets other than commingled accounts.
In order to maximize the Fund's return, no money should be allowed to remain idle.
Dividends, interest, proceeds from sales, new contributions and all other monies are to be
invested or reinvested promptly. If funds are not reinvested, then they will be placed in
money market instruments or a money market fFund immediately by the designated cash
manager working in concert with the custodian.
The custodian will be responsible for performing the following functions:
y y Accept daily instructions from the investment managers;
y y Advise investment manager’s daily of changes in cash equivalent
balances;
y y Immediately advise investment managers of additions or
withdrawals from account;
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y y Notify investment managers of tenders, rights, fractional
shares or other Ddispositions of holdings;
y y Resolve any problems that investment managers may have
relating to custodial account;
y Safekeeping of securities;
y Interest and dividend collection;
y Daily cash sweep of idle principal and income cash balance;
y Process all investment manager transactions on a delivery vs. payment basis;
y Safekeeping of securities;
y Interest and dividend collection;
y Daily cash sweep of idle principal and
income cash balance;
y Process all investment manager transactions on a delivery vs. payment basis;
y y Collect proceeds from maturing securities;
y Provide monthly statements by investment manager account;
y All securities purchased by the Fund shall be properly designated as an asset of the
Fund;
y No withdrawal of securities, in whole or in part shall be made except by an
authorized member of the committee or the committee’s designee.
Responsibilities of Investment ManagersRESPONSIBILITIES OF INVESTMENT
MANAGERS
The duties and responsibilities of each of the registered investment advisors retained by the
Fund include:
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y 1. Managing the assets under its management in accordance with the
policy guidelines and objectives expressed herein, or expressed in a separate written
agreement when deviation is deemed prudent and desirable.
y 2. Exercising full investment discretion within the guidelines and
objectives stated herein. Such discretion includes decisions to buy, hold or sell
securities in amounts and proportions reflective of the manager's current investment
strategy and compatible with investment objectives.
3. Promptly informing the Fund regarding all significant matters pertaining to the
investment of the Ffund assets, for example:
a. y changes in investment strategy, portfolio structure
and market value of managed assets;
b. y the manager's progress in meeting the investment
objectives set forth in this document; and
c. y significant changes in the ownership, affiliations,
organizational structure, financial condition, professional personnel
staffing and clientele of the investment management organizations.
4. No deviation from guidelines and objectives established in
the e Statement nt should occur until after such communication has
occurred and the Fund has approved such deviation in writing.
y 5. The Fund formally delegates full authority to each investment
manager for exercising all proxy and related actions of the Fund’s investment assets
assigned to it. Each manager shall promptly vote all proxies and related actions in a
manner consistent with the long-term interests of the Fund and its Participants and
Beneficiaries. Each investment manager shall keep detailed records of all said
voting of proxies and related actions and will comply with all regulatory obligations
related thereto. The Fund shall periodically audit and review each investment
manager's policies and actions in this area.
y 6. Each Investment Manager shall utilize the same due care, skill,
prudence and diligence under the circumstances then prevailing that experienced,
investment professionals acting in a like capacity, as a fiduciary, and fully familiar
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with such matters would use in like activities for like Funds with like aims, while
maintaining appropriate diversification to avoid the risks of large losses, in
accordance and compliance with all applicable laws, rules and regulations from
local, state, federal and international political entities as it pertains to fiduciary
duties and responsibilities.
y 7. Notifying the Fund of the filing of a lawsuit by a client against the
manager alleging breach of fiduciary duty or other willful conduct.
EVALUATION AND REVIEW
On a timely basis, but not less than four times a year, the Fund will review actual investment results
achieved by each manager (with a perspective toward a five-year time horizon) to determine
whether:
y the investment managers performed in adherence to the investment philosophy and
policy guidelines set forth herein; and
y the investment managers performed satisfactorily when compared with:
a.- the objectives set forth in Appendix "A", as a primary consideration,
b.- their own previously stated investment style,
c.- other investment managers, both in asset class and in style group,
d.- other retirement Ffunds,
e- several different market indices.
In addition to reviewing each investment manager's results, the Fund will re-evaluate, from time to
time, its progress in achieving the total Ffund, equity, fixed-income, international, and cash and
equivalents segment objectives previously outlined. The periodic re-evaluation also will involve an
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evaluation of the continued appropriateness of: (1) the manager structure set forth in Appendix
"A"; (2) the allocation of assets among the managers; and (3) the investment objectives for the
Fund's assets.
The Fund may appoint investment consultants to assist in the on-going evaluation process. The
consultants selected by the Fund are expected to be familiar with the investment practices of other
similar retirement plans and will be responsible for suggesting appropriate changes in the Fund's
investment program over time.
Filing of Investment Policy
Upon adoption by the trustees,, the investment policy shall be promptly filed with the Department
of
Management Services, the City Clerk, , and the consulting actuary. The effective date of changes
to
the Investment policy will be 31 days after the filing date with the city.
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APPENDIX A:
FUND SEGMENT AND INDIVIDUAL MANAGER GUIDELINES
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CITY OF CLEARWATER EMPLOYEES PENSION FUND
INVESTMENT STRUCTURE
February 12, 2010
Target
Investment Manager Allocation
Domestic Equity
Value Orientation 10% - 30%
Domestic Equity
Growth Orientation 10% - 30%
International Equity 10% - 25%
Domestic Fixed Income 30% - 40%
REITS /Real Estate 05% - 15%
Alternative Investments 0% - 10%
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APPENDIX A: FUND SEGMENT AND INDIVIDUAL MANAGER GUIDELINES
1. Manager Structure
The Fund will retain investment managers that specialize in the use of particular asset
classes. The targeted distribution of Fund assets among specialist managers will be as
illustrated on the previous page. The Fund believes that the established structure:
y is consistent with the practices of other similar-sized retirement funds; and
y offers an appropriate "blend" of investment styles that will produce a
sufficient level of diversification and investment return over time.
2. Cash Flow Allocation
The allocation of assets is consistent with the Fund’s desire to diversify its investment
management program.
The Fund intends to review on a periodic basis the allocation of assets among its investment
managers. To the extent that it is practical practically possible, it is expected that any cash
flow will be allocated to or taken from the managers in the same proportions that each
manager's assets represent to total Ffund assets in the target asset allocation outlined
previously.
3. Trustee Utilization Restrictions
All domestic Fund assets, in any form, shall be solely and exclusively: (a) settled at, (b)
held in custody at, and (c) safe-kept only at custodians designated by the Fund at its sole
discretion. International Fund assets may be held in commingled accounts provided that all
of the normal protection of the Fund’s assets is provided for.
4. Transaction Agent Assignment Restrictions
Assignment of specific brokerage firms, dealers, financial institutions, and other transaction
execution agents to all investment managers shall be the sole responsibility of the Fund.
From time to time, the Fund at its sole discretion may specify certain transaction agents that
investment transactions shall be executed through.
5. Short Selling and Related Restrictions
There shall be no: short selling, non-collateralized and/or non-delivered repurchase
agreements, use of financial futures or options, non-marketable direct investments in equity
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or debt private placements or lease-backs or any other specialized investment activity
without the prior written consent of the Fund.
6. Liquidity and Marketability Restrictions
Liquidity and marketability frequently are perceived to be a function of the quality and the
market capitalization of each security holding. From the Fund's perspective, liquidity and
marketability also may be a function of a manager's aggregate holdings in a particular
security. The Plan believes that an investment manager should not buy or hold a security
for the Funds portfolio if the aggregate holdings among all of that manager's other accounts
in that same security would restrict the manager's ability to expeditiously liquidate the
position at any time.
From a total Fund perspective, the Fund believes the collective holdings among all Fund
managers’ accounts in that same security would restrict all managers’ collective ability to
expeditiously liquidate their respective positions in that same security. Therefore, the Fund
retains the sole right to limit any manager's holding of any security in the Fund at any time
in order to prevent the potential for said Fund's collective liquidation and market risk.
7. Usage of Custodian STIF on all Idle Cash Restrictions
Any idle cash not invested by the investment managers shall be invested daily via an
automatic sweep STIF managed by the Custodian or by others in behalf of each investment
manager. It is the Fund's objective to have no idle cash at any time in any manager's
portfolios.
8. Usage of Cross Asset Segment Investment Guideline Restrictions
When a manager's holdings include Fund assets outside of their primary assigned asset
segment assignment (e.g. a primary domestic equity manager also holds some cash
equivalents or fixed income securities as well as equities) the guidelines stated therein for
the non primary asset segment shall fully apply to the manager, in addition to the primary
asset assigned segment guidelines.
9. Diversification Restrictions
Except for criteria noted elsewhere in this Policy and in specific written contracts with each
manager, the appropriate and reasonable diversification of securities by such factors as
geography, region, sovereign risk, native currency, quality, coupon, country risk, maturity,
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industry, duration, and sector is within the full discretion and responsibility of the
investment managers.
10. Other Objectives, Guidelines and Restrictions Forthcoming
The Fund may l develop additional objectives, guidelines and restrictions and may amend
the Policy from time to time.
11. Fund Segment Guidelines
Following are guidelines and objectives established for the Ffund segments and for each
investment manager retained by the Fund. Individual manager guidelines are designed to be
consistent, in aggregate, with the total Ffund asset allocation guidelines and investment
objectives set forth in the Statement of Investment Objectives and Guidelines.
11A. a. Domestic Equity Segment
Each equity manager is expected to adhere to the following guidelines:
y Equity holdings in any one company (including common and preferred
stock, convertible securities and debt) should not exceed ten percent (10%)
of the market value of the manager's portion of the Fund without the consent
of the Fund.
y Equity holdings in any one industry (as defined by Standard & Poor's)
should not exceed fifty percent (50%) of the market value of the manager's
portion of the Fund.
y Cash equivalents and fixed income positions should not exceed twenty five
percent (25%) of the manager's portfolio. A manager may invest in fixed
income securities if projected returns on such securities are perceived to be
competitive with potential equity returns. However, fixed income securities
will not represent more than twenty-five percent (25%) of a manager's
portfolio without the prior written consent of the Fund.
y No purchase shall be made by an investment manager that would cause a
holding to exceed five percent (5%) of the issue outstanding.
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b.11B. International Equity Segment
Each international equity manager is expected to adhere to the following minimum
guidelines:
y Equity holdings in any one company and all of its subsidiaries and affiliates
(including equities, convertible securities and debt) should not exceed five
percent (5%) of the market value of the manager's portion of the Fund
portfolio without the prior written consent of the Fund.
y Equity holdings in any one industry should not exceed fifty percent (50%) of
the market value of the manager's portion of the Fund portfolio. Equity
holdings in any one sector (e.g., consumer cyclical, energy, technology, etc.)
should not exceed fifty percent (50%) of the market value of the manager's
portfolio without the prior written consent of the Fund.
y Cash equivalents and fixed income positions should not exceed fifty percent
(50%) of the manager's portion of the Fund assets. A manager may invest in
fixed income securities (i.e. securities with more than two years to maturity)
if projected returns on such securities are perceived to be competitive with
potential equity returns.
y The manager may enter into foreign exchange contracts on currency
provided that: (a) such contracts have a maturity of one year or less, and (b)
use of such contracts is limited solely and exclusively to hedging currency
exposure existing within the manager's portfolio. The intent is to dampen
portfolio volatility and prevent currency loss. There shall be no direct
foreign currency speculation or any related investment activity.
y The manager may purchase or sell currency on a spot basis to accommodate
specific securities settlements.
c.11C. Fixed Income Segment
Each fixed income manager is expected to adhere to the following guidelines:
y All Fixed Income Securities held in each portfolio should have a Moody's,
or Standard & Poor's quality rating of no less than Investment Grade from
any of these rating services. (For an issue, which is split-rated, the lower
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quality designation will govern. Once a security falls below investment
grade the money manager will notify the plan of the downgrade as soon as
practical. Included in that notification will be how the money manager will
handle the below investment grade security.
y The diversification of securities by maturity, quality, sector, coupon and
geography is the responsibility of the manager.
y The exposure of each manager's portfolio to any single security other than a
security backed by the full faith and credit of the U.S. Government or any of
its instrumentalities should be limited to five percent (5)%) of the manager's
portion of the Fund measured at market value.
y No purchase shall be made by a Fixed Income Manager, which would cause
a holding to exceed ten percent (10%) of the issue outstanding.
y There shall be no use of options, financial futures, derivatives or other
specialized investment activity without the prior written approval of the
Fund.
y Not more than ten percent (10%) of an investment manager's portfolio,
valued at market, shall be invested in certificates of deposit, time deposits,
bankers acceptances, commercial paper, or related investments of a single
issuer financial institution or financial institution holding company family.
d. Real Estate Segment
Each Real Estate manager is expected to adhere to the following guidelines:
y REIT managers will limit holdings in any one company to fifteen percent
(15%) of the market value of the manager’s Fund, cash equivalents and
positions in fixed income vehicles should not exceed twenty five percent
(25%) of the managers portfolio and no purchase shall be made that would
cause a holding to exceed ten percent (10%) of the issues outstanding.
y Managers of direct investments in real estate structured as limited
partnerships, limited liability companies or separate accounts will operate
strictly within conformance to the regulations of their state of domicile and
comply with any applicable federal or state security laws.
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y Managers of direct investments in real estate may be income oriented or
capital gains oriented but in no event will the manager apply average
leverage in excess of forty percent (40%) of the value of the total portfolio.
y Managers of direct investments in real estate shall seek to diversify the
portfolio in terms of geographic location, tenant usage, and lease schedules.
y Timberland managers shall maintain portfolios of geographically diversified
stands of biological tree growth with the potential for land value
appreciation, alternative use and leasing potential, diversified product
opportunities and long term land appreciation possibilities.
e.11 D. Alternative Investment Segment
Academic research supports the use of alternative investments as a mechanism to
potentiallyto potentially reduce the volatility and/or enhance the expected return
of an investment portfolio. However, the use of alternative investments can
introduce unique types of risks due to their inherent structure and characteristics
which include but are not limited to: leverage, illiquidity, short sales, derivatives,
and lack of transparency and regulation. In light of these unique risks, the Fund
does not attempt to define or limit the manager’s discretion as to the use of
financial instruments. The Fund will actively monitor the investment
managersmanager’s performance and activities to limit exposure to these unique
risks.
11E. f. Cash and Equivalents Segment
Although investment managers will be retained for their expertise in a
certain investment
segment, it is expected that from time-to-time each will have some cash and
equivalents in
their portfolios as a result of discretionary asset allocation decisions. Any
idle cash not
invested by the investment managers shall be invested daily via an automatic
sweep STIF
managed by the custodian. It is the Fund's objective to have no idle cash at
any time in any
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26
manager's portfolio.
11F. g. Pooled Vehicles
To the extent that the Fund invests a portion of the Fund’s assets in commingled
vehicles or
institutional mutual funds, then the investment guidelines of the fund's prospectus will be
adopted as this fund's guidelines.
h.11G. Master Repurchase Agreement
The money managers and safekeeping custodian will use a master repurchase
agreement whenever appropriate. All repurchase agreements transactions shall
adhere to the requirements of the master repurchase agreement.
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12. Individual Manager Descriptions and Five-Year Expectations
All expectations are minimums. All investment managers shall exceed the stated
expectations.
Investment Manager Percentile
Expectation
Relative To
Other Managers
Percentile
Expectation
Relative To
Style Peers
Domestic Equity Specialist Manager
Value Orientation
50th 50th
Domestic Equity Specialist Manager
Growth Orientation
50th 50th
International Equity
Specialist Manager
50th 50th
Domestic Fixed Income Specialist Manager
Core Fixed Income Orientation
50th 50th
Cash and Equivalents and
STIF Portfolios
50th 50th
Investment Manager Percentile
Expectation
Relative To
Other Managers
Percentile
Expectation
Relative To
Style Peers
Domestic Equity Specialist Manager
Value Orientation
50th 50th
Domestic Equity Specialist Manager
Growth Orientation
50th 50th
International Equity
Specialist Manager
50th 50th
Domestic Fixed Income Specialist Manager
Core Fixed Income Orientation
50th 50th0th
Real Estate Specialist Manager 50th 50th
Alternatives Specialist Manager 50th0th 50th
In addition, each domestic equity and fixed income manager is expected to achieve
positive risk-adjusted (alpha) performance over a three (3) or maximum of five (5)
year periods.
13. Reporting Requirements:
a. Consultant Reporting
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The Pension Fund's Consultant will provide quarterly reports to the Pension Fund
which, at a minimum, will review the following information about each Investment
Manager and the Ttotal Fund:
y Overview of the most recent quarter and year-to-date investment indicators
y Total Fund asset allocation
y Comparison of total Fund return versus the customized benchmark
y Performance results by individual Manager and Total Fund compared to
appropriate benchmarks.
b. Investment Reporting:
x On not less that an annual basis the Trustees will receive a report showing a list
of all of the securities held by investment manager. This report will be provided
by the safekeeping custodians and shall include the portfolio by class or type,
book value, income earned, and market value as of the date of the report. This
report will be filed with the Ccity.
c. Proxy Voting:
x On not less that a quarterly basis, money managers will report to the Plan their
proxy voting during the last period.
14. Review of Policy
This Statement of Investment Policy must be reviewed annually by the Pension Investment
Committee with a recommendation to revise or confirm to the Trustees.
15. Meeting Agenda
At each meeting, the written and oral presentations shall cover the following points:
y A report of performance for past periods. Standard time periods for each
report will be last quarter, last year, year to date, latest twelve (12) months,
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two years, three years, etc., and since inception and by calendar year.
Returns should be annualized and calculated on a time-weighted basis for
the total portfolio. All returns should include price change plus income
and/or dividends.
y Discussion of the rationale for performance results by relating them
specifically to investment strategy and tactical decisions implemented during
the current review period.
y Discussion of the investment manager's specific strategy for the portfolio
over the next six to twelve months with specific reference to asset allocation
and sector weighting, as appropriate.
y Supporting discussion of the next period's strategy with reference to
investment manager's capital market and economic assumptions, if
applicable.
Tenwelve (12) copies of the written summary should be received by the Fund at
least five (5) business days prior to the meeting.
The Fund is interested in fostering an effective working relationship with its
investment managers through a discipline of good communication. The
establishment of Objectives, Performance Standards, Policies and Guidelines, and
Reporting Requirements is intended to provide the Fund with a good foundation
from which to understand specific management styles and strategies, evaluate
results and oversee progress toward overall investment objectives.
The Fund shall be using a third party consultant selected, hired and directed by the
Fund to: (1) assist in appraising performance, (2) to provide performance
comparison data with other retirement plans, several capital market indices, and to
other investment managers, (3) assist in evaluating manager style discipline and peer
comparisons, (4) assist in strategic Ffunding and management of the Fund, and (5)
other factors the Fund deems appropriate. Investment managers are required to
support and assist the consultant with their fullest cooperation.
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STATEMENT OF INVESTMENT
OBJECTIVES AND GUIDELINES
CITY OF CLEARWATER EMPLOYEES’
PENSION PLAN
Proposed April 13, 2010
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PURPOSE
The purpose of this Statement of Investment Objectives and Guidelines hereinafter referred to as
the “Policy Statement” or “Policy” is to assist the City of Clearwater Employees’ Pension Plan
(hereafter referred to as the fund) in more effectively supervising and monitoring the investment of
the Fund's assets.
In the various sections of this policy document, the Fund defines its investment program by:
y stating in a written document the Fund's attitudes, expectations and objectives in the
investment of Fund assets.
y setting forth an investment "structure" for managing assets. This structure includes
various asset classes and investment management styles that, in aggregate, are expected
to produce a prudent level of diversification and investment return over time.
y providing guidelines for each investment portfolio that control the level of risk assumed
in the portfolio and ensure that assets are managed in accordance with stated objectives.
y encouraging criteria to monitor and evaluate the performance results achieved by the
investment managers.
This Statement represents the Fund's current philosophy regarding the investment of Fund assets.
In addition, although the Fund shall utilize this Policy Statement in making decisions concerning
the Fund, it shall not necessarily be bound solely by its contents.
PRUDENCE AND ETHICAL STANDARDS
The standard of prudence to be applied by the trustees shall be the "Prudent Person" rule, which
states: "Investments shall be made with judgment and care, under circumstances then prevailing,
which persons of prudence, discretion and intelligence exercise in the management of their own
affairs, not for speculation, but for investment, considering the probable safety of their capital as
well as the probable income derived." The "Prudent Person" rule shall be applied in the context of
managing the overall portfolio.
The trustees shall also be governed by the fiduciary standard set forth in the Employee Retirement
Income Security Act of 1974 at 29U.S.C. s. 1104 (a) (1) (A) – (C). In the event of a conflict
between the Policy and Florida Statutes or City ordinances, the statutes and ordinances shall
prevail.
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Funding Philosophy
The Fund's funding objectives are to be as fully funded as possible so that:
y the ability to pay all benefits and expense obligations from the when due is ensured;
y there will be no principal erosion of contributed funds or the purchasing power
thereof.
y a "funding cushion" is maintained within the fund for unexpected developments and
for possible future increases in benefit structure and expense levels;
y the fund assets should earn sufficient total rate of return over time to reduce the
fund's dependency on employer contributions to meet all benefit and expense
obligations.
Investment results within the Fund are considered to be the major critical element in achieving
these funding objectives stated above while reliance on contributions is a secondary element.
Liquidity Posture
The investment portfolio shall be structured in such a manner as to provide sufficient liquidity to
pay obligations as they come due. Liquidity considerations are low in the short-term and
intermediate-term resulting in an immaterial impact upon investment policy, objectives and
guidelines.
Authorized Investments
The following is a list of authorized investments:
y Invest and reinvest the assets of the pension fund in annuity (including group annuity
contracts of the pension investment type) and life insurance contracts of legal reserve
life insurance companies, in amounts sufficient to provide, in whole or in part,
benefits to which all of the participants shall be or become entitled to under the
provisions of the Fund, and pay the initial and subsequent premiums thereon.
Provided that the amount invested with a life insurance company shall not exceed three
percent (3%) of the insurance company’s assets.
y Invest and reinvest the assets of the pension Fund in:
a. Time deposits, savings accounts, money market accounts, funds, certificates of
deposits, or money market certificates of a national bank, a state bank, or a
savings, building and loan association.
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b. Negotiable direct obligations of, or obligations the principal and interest of
which are unconditionally guaranteed by, and which carry the full faith and credit
of the United States Government and its agencies. Investments in this category
would include but not be limited to the following: United States Treasury Bills,
Notes and Bonds, and securities issued by the Small Business Administration,
Government National Mortgage Association (Ginnie Mae), Veterans
Administration, and Federal Housing Administration.
c. Fully collateralized United States Agency obligations, which carry an implied
guarantee and the implied full faith and credit of the United States government.
Investments in this category would include but not be limited to the following:
obligations of the Federal Home Loan Banks System (FHLB) or its distinct banks
and Financing Corporation (FICO).
d. Other United States Agency obligations, which carry an implied guarantee
(Government Sponsored Entities) and the implied full faith and credit of the
United States Government. Investments in this category would include but not be
limited to the following: obligations of the Federal Farm Credit Bank, Federal
National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage
Corporation (Freddie Mac), Student Loan Marketing Association (Sallie Mae),
Financial Assistance Corporation and Federal Agriculture Mortgage Corporation
(Farmer Mac).
e. Collateralized Mortgage Obligations (CMO) and/or Real Estate Mortgage
Investment Conduits (REMIC), rated investment grade or equivalent by Standard
and Poor's, Moody's Fitch, or other recognized national rating agencies which are
backed by securities otherwise authorized in this ordinance and which are
guaranteed as to the timely payment of principal and interest by the U.S.
Government or its agencies.
f. Securities of countries, states, municipalities and county governments or their
public agencies, which are, rated investment grade or equivalent by Standard and
Poor's, Moody's Fitch, or other recognized national rating agencies.
g. Asset-backed securities, which are, rated investment grade or equivalent by
Standard and Poor's, Moody's Fitch, or other recognized national rating agencies.
h. Common stocks, preferred stocks and bonds and other evidence of indebtedness
issued or guaranteed by a corporation organized under the laws of the United
States, any state, or organized territory of the United States or the District of
Columbia or any non-U.S. corporation, provided:
1. The corporation is listed on any one or more of the recognized national
or international stock exchanges and/or in the case of bonds and mortgage
backed securities, traded among dealers and investors in a recognized and
agreed upon conventional format;
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2. Unless an asset allocation for less than investment grade corporate
bonds is established, all corporate bonds shall carry an investment grade
rating as established either by Standard & Poor's, Moody's, Fitch or other
recognized rating agencies; and
3. Not more than three percent (3%) of the equity assets of the pension
Fund shall be invested in the common stock or capital stock of any one
issuing corporation except to the extent a higher percentage of the same
issue is included in a nationally recognized market index, based on market
values, at least as broad as the Standard and Poor's Composite Index of
500 Companies, or except upon a specific finding by the investment
committee that such higher percentage is in the best interest of the Fund;
nor shall the non-U.S. investments exceed twenty five percent (25%) of
the pension Fund's assets at market; nor shall the aggregate of the
investments under this subparagraph at cost exceed seventy percent (70%)
of the pension Fund's assets at market.
i. Alternative Investments, with no more, in the aggregate, than ten percent (10%)
of the Fund in alternative investments, through participation in securities or
investments or an alternative investment vehicle that is not publicly traded and is
not otherwise authorized by this section. Alternative Investments include
securities which fall outside the scope of traditional investments (stocks, bonds,
and cash) or are strategies investing in securities using alternative means
(derivatives, leverage, short selling), or some combination thereof. Such
alternative investments and strategies include, but are not limited to: hedge Funds,
real estate, private equity and natural resources. An “alternative investment
vehicle" is a limited partnership, limited liability company, or similar legal
structure or investment manager through which the fund invests in a portfolio
company.
Investments not listed above in this section are prohibited.
Bid Requirements
All securities shall be competitively bid where feasible and appropriate. Except as otherwise
required by law, the most economically advantageous bid must be selected. Executions must be
made on a best-execution basis.
Illiquid Investments
The Fund will not invest in illiquid investments. Illiquid investments being defined as an
investment for which there is no generally recognized market or generally accepted pricing
mechanism. Once an investment becomes illiquid the money manager will notify the plan of the
illiquid investment. Included in that notification will be how the money manager will handle the
illiquid investment.
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INVESTMENT MANAGEMENT STRUCTURE
Five distinct asset classes will be considered for inclusion in the portfolio which will include
Domestic Equities, International Equities, Domestic Fixed Income, Real Estate, and Alternative
Investments.
A permanent commitment to these five asset classes will be made to ensure diversification at the
Fund level. The Fund may consider investments in other asset classes which offer potential
enhancement to total return at risks no greater than the exposures under the initially selected asset
classes.
It is not the intention of the Fund to become involved in day-to-day investment decisions.
Therefore, the assets will be allocated to professional investment managers in a manner consistent
with the Policy's objectives.
Each asset class will have its own investment managers. Diversification of the U.S. Market Equity
commitment will be achieved through the employment of managers of complementary investment
styles, Growth and Value. In the U.S. Fixed Income market, at least one core bond manager will be
utilized to stabilize the Fund. In the International Equity market, diversified non-U.S. managers
will be hired to achieve diversification. In the Real Estate market, the Fund will utilize collective
funds or REIT’s for purposes of diversification. In the Alternatives market, the Fund will hire fund
of funds managers to optimize strategies and provide adequate safety of capital and diversification.
Cash and cash equivalents will be managed either by the Investment Managers or the custodian. In
addition the City uses the pooling concept to meet the immediate cash needs of the city and to
maximize the interest earnings. All cash placed in the City’s pooled cash account shall be separately
accounted for and listed as an asset of the Fund. The Fund will keep sufficient funds in the City’s
pooled cash account to meet the current obligations of the Fund.
The guidelines for the allocation of assets, at market, to investment managers are as follows:
Asset Class Lower Limit Upper Limit Market
U.S. Market Equities
Growth
Value
20%
10%
10%
60%
30%
30%
Market
Market
Market
International Equity 10% 25% Market
Domestic Fixed Income 30% 40% Market
Real Estate 0% 15% Market
Alternative Investments 0% 10% Market
Because the asset classes do not move in concert, deviations from the normal commitments will
occur through normal market activity. The Upper and Lower Limits define the ranges within which
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6
market activity will be allowed to shift the allocations. The ranges are designed to allow for a
reasonable period of time to elapse before rebalancing the portfolio. When the investments are out
of policy the assets will be moved from the over-allocated to the under-allocated in a prudent
manner.
When in market equilibrium, cash flows will be deployed in a manner that returns the portfolio to
its normal commitments.
Internal Controls
As part of the City’s annual financial audit the external CPA firm will review the internal controls
of the Fund. The hiring or termination of all money managers, consultants or safekeeping
custodians must be made by the trustees. No individual associated with the Fund may authorize
any movement of monies or securities with out the approval of the trustees, if required, or by the
approval of the Pension Investment Committee if trustee approval is not required. Trustee approval
is not required for rebalancing of the portfolio. Internal controls will be designed to prevent losses
of funds which might arise from fraud, error, and misrepresentation by third parties or imprudent
actions by the trustees or City employees.
Makeup of the Investment Committee
The Pension Investment Committee shall consist (at a minimum) of the following: Finance Director
(Treasurer for the Trustees), Assistant Finance Director, the Cash & Investments Manager and one
member from the general public appointed by the Trustees. The Treasurer for the Trustees shall
appoint/remove other Finance professionals as needs warrant. One representative for each of the
unions may also serve on the Investment Committee. The Finance Director or its designee will
chair the committee.
The Treasurer for the Trustees will make recommendations to the Trustees as to any changes in
the makeup of the committee.
Continuing Education
The annual budget for the Pension Fund will include sufficient funding for the trustees and
members of the Pension Investment Committee to participate in pension education opportunities.
These educational opportunities will include education on the individual’s duties and
responsibilities as well as investments in general. The chief investment officer will complete no
less than eight (8) hours of continuing educational opportunities on pension investments each fiscal
year.
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INVESTMENT RETURN OBJECTIVES
In formulating investment return objectives for the Fund objectives for the Fund assets, the Fund
placed primary emphasis on the following goals:
y Achieve investment performance that exceeds the rate of inflation over time thereby
providing a real rate of return.
y Achieve investment results of at least the actuarial rate of return.
y Achieve investment performance that is materially above average when compared
to:
- Other investment managers
- Other investment manager peers of related investment style
- Other public retirement plans
- Several capital market indices
y The Trustees will determine the expected rate of return of the current year, and
future years. The expected rate of return for the foreseeable future is 7.5%. The total
Fund and asset segment return expectations are as follows:
a. Total Fund Return Objectives
The following minimum comparative objectives have been established for
the total Fund:
1. The total Fund should rank in the upper fiftieth (50th) percentile
compared to a recognized performance measure company’s total public plan
sponsor database measured over a minimum period of three (3) or maximum
five (5) years.
2. The Fund's overall annualized total return should perform at least at
the upper fiftieth (50th) percentile compared to investment style peers of
similar type as found in recognized performance measurement style database
for each asset class segment.
3. The Fund's overall annualized total return (which is defined as all
price changes plus all income and/or dividends) should exceed the actuarial
assumption over a rolling three (3) or maximum of five (5) year period.
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4. The Fund's overall annualized total return should exceed the returns
that would have collectively been achieved if the Fund had been fully
invested in the appropriate percentage of:
- Standard & Poor's 500 Stock Index
- Lehman Brothers Aggregate Bond Index
- Morgan Stanley Capital International EAFE Index
This is a custom benchmark that will be calculated relative to the
actual collective asset class mix of the Fund measured over a
minimum of three (3) or maximum of five (5) years.
b. Equity Segment Return Objectives
The following minimum performance goals have been established for the
Fund's domestic equity segment:
1. The domestic equity segment total return should perform at least at
the upper fiftieth (50th) percentile compared to a recognized
performance measurement company’s total U.S. equity database
measured over a minimum period of three (3) or maximum of five
(5) years.
2. The individual domestic equity managers total return should perform
at least at the upper fifth (50th) percentile compared to investment
style peers of similar type as found in a recognized performance
measure company’s total U.S. equity database measured over a
minimum period of three (3) or maximum of five (5) years.
3. The domestic equity segment total return should exceed the total
return of the Standard & Poor's 500 Stock Index by at least 100 basis
points per year measured over a minimum period of three (3) or
maximum of (5) years.
c. International Equity Segment Return Objectives
. The following minimum performance goals have been established for the
Fund's international equity segment:
1. The international equity segment total return should perform at least
at the upper fiftieth (50th) percentile compared to recognized
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performance measure company’s total non U.S. equity database
measured over a minimum period of three (3) or maximum of five
(5) years.
2. The individual international equity managers total return should
perform at least at the upper fiftieth (50th) percentile compared to
the investment style peers of similar type as found in a recognized
performance measure company’s total non U.S. equity database
measured over a minimum period of three (3) or maximum of five
(5) years.
3. The international equity segment total return should exceed the total
return of the Morgan Stanley Capital International Europe, Australia,
Far East Index (EAFE) by at least 200 basis points per year over a
minimum of three (3) or maximum of five (5) years.
d. Fixed Income Segment Return Objectives
. The following minimum performance goals have been established for the
Fund's domestic fixed-income segment:
1. The domestic fixed-income segment total return should perform at
least at the upper fiftieth (50th) percentile compared to the
recognized performance measure company’s total domestic fixed
income database measured over a minimum period of three (3) or
maximum of five (5) years.
2. The individual domestic fixed income managers total return should
perform at least at the upper fiftieth (50th) percentile compared to
investment style peers of similar type as found in a recognized
performance measure company’s total domestic fixed income
database measured over a minimum period of three (3) or maximum
of five (5) years.
3. The domestic fixed income segment total returns should exceed the
total return of the Barclays Aggregate Bond Index by at least 50
basis points per year measured over a minimum period of three (3)
or maximum of five (5) years.
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e. Real Estate Segment Return Objectives
The following minimum performance goals have been established
for the Fund’s Real Estate Segment:
1. The Real Estate segment total return should perform at least at the
upper fiftieth (50th) percentile compared to recognized performance
measurement database measured over a minimum period of three (3)
or maximum of five (5) years.
2. The Real Estate managers total return should perform at least at the
upper fiftieth (50th) percentile compared to the investment style
peers of similar type as found in a recognized performance
measurement company’s database measured over a minimum period
of three (3) or maximum of five (5) years.
3. The Real Estate managers total return should exceed the total return
for comparable strategies of the Wilshire RESI Index over a
minimum of three (3) or maximum of five (5) years.
f. Alternative Segment Return Objectives
The following minimum performance goals have been established for the
Fund’s alternative investment segment.
1. The Alternative Segment total return should perform at least at the
upper fiftieth (50th) percentile compared to recognized performance
measurement database measured over a minimum period of three (3)
or maximum of five (5) years.
2. The alternative manager’s total return should perform at least at the
upper fiftieth (50th) percentile compared to the investment style
peers of similar type as found in a recognized performance
measurement company’s database measured over a minimum period
of three (3) or maximum of five (5) years.
3. The alternative manager’s total return should exceed the total return
for comparable strategies of the Credit Suisse/Tremont Hedge Fund
Index over a minimum of three (3) or maximum of five (5) years.
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Criteria for Investment Manager Review
y Consistent under-performance of the stated target index over rolling 3-year periods.
y Loss by the Manager of any senior personnel deemed detrimental to the Manager’s
ability to perform required duties or any potentially detrimental organizational issues
that may arise and have an effect on the management of the Plan’s assets.
y Substantial change in basic investment philosophy by the Manager.
y Substantial change of ownership of the firm deemed detrimental to the Manager’s
ability to perform the required duties.
y Failure to observe any guidelines as stated in this policy.
ROLES AND RESPONSIBILITIES
Responsibilities of the Third Party Custodian
A third party custodian will hold all Fund assets other than commingled accounts.
In order to maximize the Fund's return, no money should be allowed to remain idle.
Dividends, interest, proceeds from sales, new contributions and all other monies are to be
invested or reinvested promptly. If funds are not reinvested, then they will be placed in
money market instruments or a money market Fund immediately by the designated cash
manager working in concert with the custodian.
The custodian will be responsible for performing the following functions:
y Accept daily instructions from the investment managers;
y Advise investment managers daily of changes in cash equivalent balances;
y Immediately advise investment managers of additions or withdrawals from account;
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y Dispositions of holdings;
y Resolve any problems that investment managers may have relating to custodial
account;
y Safekeeping of securities;
y Interest and dividend collection;
y Daily cash sweep of idle principal and income cash balance;
y Process all investment manager transactions on a delivery vs. payment basis;
y Collect proceeds from maturing securities;
y Provide monthly statements by investment manager account;
y All securities purchased by the Fund shall be properly designated as an asset of the
Fund;
y No withdrawal of securities, in whole or in part shall be made except by an
authorized member of the committee or the committee’s designee.
Responsibilities of Investment Managers
The duties and responsibilities of each of the registered investment advisors retained by the
Fund include:
y Managing the assets under its management in accordance with the policy guidelines
and objectives expressed herein, or expressed in a separate written agreement when
deviation is deemed prudent and desirable.
y Exercising full investment discretion within the guidelines and objectives stated
herein. Such discretion includes decisions to buy, hold or sell securities in amounts
and proportions reflective of the manager's current investment strategy and
compatible with investment objectives.
y Promptly informing the Fund regarding all significant matters pertaining to the
investment of the Fund assets, for example:
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a. changes in investment strategy, portfolio structure and market value of
managed assets;
b. the manager's progress in meeting the investment objectives set forth in this
document; and
c. significant changes in the ownership, affiliations, organizational structure,
financial condition, professional personnel staffing and clientele of
the investment management organizations.
No deviation from guidelines and objectives established in the Statement
should occur until after such communication has occurred and the Fund has
approved such deviation in writing.
y The Fund formally delegates full authority to each investment manager for
exercising all proxy and related actions of the Fund’s investment assets assigned to
it. Each manager shall promptly vote all proxies and related actions in a manner
consistent with the long-term interests of the Fund and its Participants and
Beneficiaries. Each investment manager shall keep detailed records of all said
voting of proxies and related actions and will comply with all regulatory obligations
related thereto. The Fund shall periodically audit and review each investment
manager's policies and actions in this area.
y Each Investment Manager shall utilize the same due care, skill, prudence and
diligence under the circumstances then prevailing that experienced, investment
professionals acting in a like capacity, as a fiduciary, and fully familiar with such
matters would use in like activities for like Funds with like aims, while maintaining
appropriate diversification to avoid the risks of large losses, in accordance and
compliance with all applicable laws, rules and regulations from local, state, federal
and international political entities as it pertains to fiduciary duties and
responsibilities.
y Notifying the Fund of the filing of a lawsuit by a client against the manager alleging
breach of fiduciary duty or other willful conduct.
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EVALUATION AND REVIEW
On a timely basis, but not less than four times a year, the Fund will review actual investment results
achieved by each manager (with a perspective toward a five-year time horizon) to determine
whether:
y the investment managers performed in adherence to the investment philosophy and
policy guidelines set forth herein; and
y the investment managers performed satisfactorily when compared with:
a. the objectives set forth in Appendix "A", as a primary consideration,
b. their own previously stated investment style,
c. other investment managers, both in asset class and in style group,
d. other retirement funds,
e several different market indices.
In addition to reviewing each investment manager's results, the Fund will re-evaluate, from time to
time, its progress in achieving the total Fund, equity, fixed-income, international, and cash and
equivalents segment objectives previously outlined. The periodic re-evaluation also will involve an
evaluation of the continued appropriateness of: (1) the manager structure set forth in Appendix
"A"; (2) the allocation of assets among the managers; and (3) the investment objectives for the
Fund's assets.
The Fund may appoint investment consultants to assist in the on-going evaluation process. The
consultants selected by the Fund are expected to be familiar with the investment practices of other
similar retirement plans and will be responsible for suggesting appropriate changes in the Fund's
investment program over time.
Filing of Investment Policy
Upon adoption by the trustees, the investment policy shall be promptly filed with the Department of
Management Services, the City Clerk, and the consulting actuary. The effective date of changes to
the Investment policy will be 31 days after the filing date with the city.
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APPENDIX A:
FUND SEGMENT AND INDIVIDUAL MANAGER GUIDELINES
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CITY OF CLEARWATER EMPLOYEES PENSION FUND
INVESTMENT STRUCTURE
February 12, 2010
Target
Investment Manager Allocation
Domestic Equity
Value Orientation 10% - 30%
Domestic Equity
Growth Orientation 10% - 30%
International Equity 10% - 25%
Domestic Fixed Income 30% - 40%
Real Estate 0% - 15%
Alternative Investments 0% - 10%
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APPENDIX A: FUND SEGMENT AND INDIVIDUAL MANAGER GUIDELINES
1. Manager Structure
The Fund will retain investment managers that specialize in the use of particular asset
classes. The targeted distribution of Fund assets among specialist managers will be as
illustrated on the previous page. The Fund believes that the established structure:
y is consistent with the practices of other similar-sized retirement funds; and
y offers an appropriate "blend" of investment styles that will produce a
sufficient level of diversification and investment return over time.
2. Cash Flow Allocation
The allocation of assets is consistent with the Fund’s desire to diversify its investment
management program.
The Fund intends to review on a periodic basis the allocation of assets among its investment
managers. To the extent that it is practical, it is expected that any cash flow will be
allocated to or taken from the managers in the same proportions that each manager's assets
represent to total Fund assets in the target asset allocation outlined previously.
3. Trustee Utilization Restrictions
All domestic Fund assets, in any form, shall be solely and exclusively: (a) settled at, (b)
held in custody at, and (c) safe-kept only at custodians designated by the Fund at its sole
discretion. International Fund assets may be held in commingled accounts provided that all
of the normal protection of the Fund’s assets is provided for.
4. Transaction Agent Assignment Restrictions
Assignment of specific brokerage firms, dealers, financial institutions, and other transaction
execution agents to all investment managers shall be the sole responsibility of the Fund.
From time to time, the Fund at its sole discretion may specify certain transaction agents that
investment transactions shall be executed through.
5. Short Selling and Related Restrictions
There shall be no: short selling, non-collateralized and/or non-delivered repurchase
agreements, use of financial futures or options, non-marketable direct investments in equity
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or debt private placements or lease-backs or any other specialized investment activity
without the prior written consent of the Fund.
6. Liquidity and Marketability Restrictions
Liquidity and marketability frequently are perceived to be a function of the quality and the
market capitalization of each security holding. From the Fund's perspective, liquidity and
marketability also may be a function of a manager's aggregate holdings in a particular
security. The Plan believes that an investment manager should not buy or hold a security
for the Fund’s portfolio if the aggregate holdings among all of that manager's other accounts
in that same security would restrict the manager's ability to expeditiously liquidate the
position at any time.
From a total Fund perspective, the Fund believes the collective holdings among all Fund
managers’ accounts in that same security would restrict all managers’ collective ability to
expeditiously liquidate their respective positions in that same security. Therefore, the Fund
retains the sole right to limit any manager's holding of any security in the Fund at any time
in order to prevent the potential for said Fund's collective liquidation and market risk.
7. Usage of Custodian STIF on all Idle Cash Restrictions
Any idle cash not invested by the investment managers shall be invested daily via an
automatic sweep STIF managed by the Custodian or by others in behalf of each investment
manager. It is the Fund's objective to have no idle cash at any time in any manager's
portfolios.
8. Usage of Cross Asset Segment Investment Guideline Restrictions
When a manager's holdings include Fund assets outside of their primary assigned asset
segment assignment (e.g. a primary domestic equity manager also holds some cash
equivalents or fixed income securities as well as equities) the guidelines stated therein for
the non primary asset segment shall fully apply to the manager, in addition to the primary
asset assigned segment guidelines.
9. Diversification Restrictions
Except for criteria noted elsewhere in this Policy and in specific written contracts with each
manager, the appropriate and reasonable diversification of securities by such factors as
geography, region, sovereign risk, native currency, quality, coupon, country risk, maturity,
industry, duration, and sector is within the full discretion and responsibility of the
investment managers.
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10. Other Objectives, Guidelines and Restrictions Forthcoming
The Fund may develop additional objectives, guidelines and restrictions and may amend the
Policy from time to time.
11. Fund Segment Guidelines
Following are guidelines and objectives established for the Fund segments and for each
investment manager retained by the Fund. Individual manager guidelines are designed to be
consistent, in aggregate, with the total Fund asset allocation guidelines and investment
objectives set forth in the Statement of Investment Objectives and Guidelines.
a. Domestic Equity Segment
Each equity manager is expected to adhere to the following guidelines:
y Equity holdings in any one company (including common and preferred
stock, convertible securities and debt) should not exceed ten percent (10%)
of the market value of the manager's portion of the Fund without the consent
of the Fund.
y Equity holdings in any one industry (as defined by Standard & Poor's)
should not exceed fifty percent (50%) of the market value of the manager's
portion of the Fund.
y Cash equivalents and fixed income positions should not exceed twenty five
percent (25%) of the manager's portfolio. A manager may invest in fixed
income securities if projected returns on such securities are perceived to be
competitive with potential equity returns. However, fixed income securities
will not represent more than twenty-five percent (25%) of a manager's
portfolio without the prior written consent of the Fund.
y No purchase shall be made by an investment manager that would cause a
holding to exceed five percent (5%) of the issue outstanding.
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b. International Equity Segment
Each international equity manager is expected to adhere to the following minimum
guidelines:
y Equity holdings in any one company and all of its subsidiaries and affiliates
(including equities, convertible securities and debt) should not exceed five
percent (5%) of the market value of the manager's portion of the Fund
portfolio without the prior written consent of the Fund.
y Equity holdings in any one industry should not exceed fifty percent (50%) of
the market value of the manager's portion of the Fund portfolio. Equity
holdings in any one sector (e.g., consumer cyclical, energy, technology, etc.)
should not exceed fifty percent (50%) of the market value of the manager's
portfolio without the prior written consent of the Fund.
y Cash equivalents and fixed income positions should not exceed fifty percent
(50%) of the manager's portion of the Fund assets. A manager may invest in
fixed income securities (i.e. securities with more than two years to maturity)
if projected returns on such securities are perceived to be competitive with
potential equity returns.
y The manager may enter into foreign exchange contracts on currency
provided that: (a) such contracts have a maturity of one year or less, and (b)
use of such contracts is limited solely and exclusively to hedging currency
exposure existing within the manager's portfolio. The intent is to dampen
portfolio volatility and prevent currency loss. There shall be no direct
foreign currency speculation or any related investment activity.
y The manager may purchase or sell currency on a spot basis to accommodate
specific securities settlements.
c. Fixed Income Segment
Each fixed income manager is expected to adhere to the following guidelines:
y All Fixed Income Securities held in each portfolio should have a Moody's,
or Standard & Poor's quality rating of no less than Investment Grade from
any of these rating services. For an issue which is split-rated, the lower
quality designation will govern. Once a security falls below investment
grade the money manager will notify the plan of the downgrade as soon as
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practical. Included in that notification will be how the money manager will
handle the below investment grade security.
y The diversification of securities by maturity, quality, sector, coupon and
geography is the responsibility of the manager.
y The exposure of each manager's portfolio to any single security other than a
security backed by the full faith and credit of the U.S. Government or any of
its instrumentalities should be limited to five percent (5%) of the manager's
portion of the Fund measured at market value.
y No purchase shall be made by a Fixed Income Manager, which would cause
a holding to exceed ten percent (10%) of the issue outstanding.
y There shall be no use of options, financial futures, derivatives or other
specialized investment activity without the prior written approval of the
Fund.
y Not more than ten percent (10%) of an investment manager's portfolio,
valued at market, shall be invested in certificates of deposit, time deposits,
bankers acceptances, commercial paper, or related investments of a single
issuer financial institution or financial institution holding company family.
d. Real Estate Segment
Each Real Estate manager is expected to adhere to the following guidelines:
y REIT managers will limit holdings in any one company to fifteen percent
(15%) of the market value of the manager’s Fund, cash equivalents and
positions in fixed income vehicles should not exceed twenty five percent
(25%) of the managers portfolio and no purchase shall be made that would
cause a holding to exceed ten percent (10%) of the issues outstanding.
y Managers of direct investments in real estate structured as limited
partnerships, limited liability companies or separate accounts will operate
strictly within conformance to the regulations of their state of domicile and
comply with any applicable federal or state security laws.
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y Managers of direct investments in real estate may be income oriented or
capital gains oriented but in no event will the manager apply average
leverage in excess of forty percent (40%) of the value of the total portfolio.
y Managers of direct investments in real estate shall seek to diversify the
portfolio in terms of geographic location, tenant usage, and lease schedules.
y Timberland managers shall maintain portfolios of geographically diversified
stands of biological tree growth with the potential for land value
appreciation, alternative use and leasing potential, diversified product
opportunities and long term land appreciation possibilities.
e. Alternative Investment Segment
Academic research supports the use of alternative investments as a mechanism to
potentially reduce the volatility and/or enhance the expected return of an
investment portfolio. However, the use of alternative investments can introduce
unique types of risks due to their inherent structure and characteristics which
include but are not limited to: leverage, illiquidity, short sales, derivatives, and
lack of transparency and regulation. In light of these unique risks, the Fund does
not attempt to define or limit the manager’s discretion as to the use of financial
instruments. The Fund will actively monitor the investment manager’s
performance and activities to limit exposure to these unique risks.
f. Cash and Equivalents Segment
Although investment managers will be retained for their expertise in a certain
investment segment, it is expected that from time-to-time each will have some cash
and equivalents in their portfolios as a result of discretionary asset allocation
decisions. Any idle cash not invested by the investment managers shall be invested
daily via an automatic sweep STIF managed by the custodian. It is the Fund's
objective to have no idle cash at anytime in any manager's portfolio.
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. g. Pooled Vehicles
To the extent that the Fund invests a portion of the Fund's assets in commingled
vehicles or institutional mutual funds, then the investment guidelines of the fund's
prospectus will be adopted as this fund's guidelines.
h.. Master Repurchase Agreement
The money managers and safekeeping custodian will use a master repurchase
agreement whenever appropriate. All repurchase agreements transactions shall
adhere to the requirements of the master repurchase agreement.
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12. Individual Manager Descriptions and Five-Year Expectations
All expectations are minimums. All investment managers shall exceed the stated
expectations.
Investment Manager Percentile
Expectation
Relative To
Other Managers
Percentile
Expectation
Relative To
Style Peers
Domestic Equity Specialist Manager
Value Orientation
50th 50th
Domestic Equity Specialist Manager
Growth Orientation
50th 50th
International Equity
Specialist Manager
50th 50th
Domestic Fixed Income Specialist Manager
Core Fixed Income Orientation
50th 50th
Real Estate Specialist Manager 50th 50th
Alternatives Specialist Manager 50th 50th
In addition, each domestic equity and fixed income manager is expected to achieve
positive risk-adjusted (alpha) performance over a three (3) or five (5) year period.
13. Reporting Requirements:
a. Consultant Reporting
The Pension Fund's Consultant will provide quarterly reports to the Pension Fund
which, at a minimum, will review the following information about each Investment
Manager and the total Fund:
y Overview of the most recent quarter and year-to-date investment indicators
y Total Fund asset allocation
y Comparison of total Fund return versus the customized benchmark
y Performance results by individual Manager and Total Fund compared to
appropriate benchmarks.
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b. Investment Reporting:
x On not less that an annual basis the Trustees will receive a report showing a list
of all of the securities held by investment manager. This report will be provided
by the safekeeping custodians and shall include the portfolio by class or type,
book value, income earned, and market value as of the date of the report. This
report will be filed with the City.
c. Proxy Voting:
x On not less that a quarterly basis, money managers will report to the Plan their
proxy voting during the last period.
14. Review of Policy
This Statement of Investment Policy must be reviewed annually by the Pension Investment
Committee with a recommendation to revise or confirm to the Trustees.
15. Meeting Agenda
At each meeting, the written and oral presentations shall cover the following points:
y A report of performance for past periods. Standard time periods for each
report will be last quarter, last year, year to date, latest twelve (12) months,
two years, three years, etc., and since inception and by calendar year.
Returns should be annualized and calculated on a time-weighted basis for
the total portfolio. All returns should include price change plus income
and/or dividends.
y Discussion of the rationale for performance results by relating them
specifically to investment strategy and tactical decisions implemented during
the current review period.
y Discussion of the investment manager's specific strategy for the portfolio
over the next six to twelve months with specific reference to asset allocation
and sector weighting, as appropriate.
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y Supporting discussion of the next period's strategy with reference to
investment manager's capital market and economic assumptions, if
applicable.
Twelve (12) copies of the written summary should be received by the Fund at least
five (5) business days prior to the meeting.
The Fund is interested in fostering an effective working relationship with its
investment managers through a discipline of good communication. The
establishment of Objectives, Performance Standards, Policies and Guidelines, and
Reporting Requirements is intended to provide the Fund with a good foundation
from which to understand specific management styles and strategies, evaluate
results and oversee progress toward overall investment objectives.
The Fund shall be using a third party consultant selected, hired and directed by the
Fund to: (1) assist in appraising performance, (2) to provide performance
comparison data with other retirement plans, several capital market indices, and to
other investment managers, (3) assist in evaluating manager style discipline and peer
comparisons, (4) assist in strategic Funding and management of the Fund, and (5)
other factors the Fund deems appropriate. Investment managers are required to
support and assist the consultant with their fullest cooperation.
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Pension Trustees Agenda
Council Chambers - City Hall
Meeting Date:4/13/2010
SUBJECT / RECOMMENDATION:
Approve the recommended administrative expenditures for fiscal year 2010-11 totaling $336,500.
SUMMARY:
The Employees’ Pension Plan does not have a legal requirement to have a budget. The Trustees must approve all expenditures. The
following are routine expenditures that staff is requesting approval. These expenditures involve routine business matters and are mostly
small dollar amounts.
Printing and binding is for the statutorily required annual information distribution to the members of the pension plan.
Postage is for required mailings.
Membership dues are for the annual dues for the Florida Public Pension Trust Association.
Training and travel are for the estimated costs of training required by state statute. This is a not-to-exceed amount since we don't know
which Trustees and Pension Advisory Committee members will elect to attend conferences. The total paid for training and travel for
FY09 was $926.00 and for FY10 YTD is $1,545.00.
Reimbursement to the General Fund and the Self Insurance Fund is for the cost of the oversight of the Plan and is recognized as revenue
to the general and insurance funds. This reimbursement covers the services provided by Human Resources, Payroll, and Finance.
Klausner and Kaufman is the Plan's pension attorney firm. Annual attorney’s fees also include medical bills that are for the medical
services authorized by the Pension Advisory Committee. This is an estimated amount and varies from year to year based upon
requirements. Total paid in FY09 was $69,348 and FY10 YTD is $44,823.
Staff is budgeting for a potential referendum next year. A referendum is required for any changes to the pension plan.
Money manager, safekeeping, actuary, and pension administration fees are all set by contracts approved by the Trustees and are not
included in this budget.
Review
Approval:
1) Financial Services 2) Office of Management and Budget 3) Clerk 4) Assistant City Manager 5) Clerk 6) City
Manager 7) Clerk
Cover Memo
Item # 6
Description FY 10/11 FY 09/10
Increase/
Decrease
Printing & Binding 400 400 -
Postage 400 400 -
Memberships 600 600 -
Misc 100 100 -
Training 5,000 5,000 -
Travel Expense 3,000 3,000 -
Reimbursement to Self Insurance Fund (Human Resources) 45,000 45,000 -
Physicals 36,000 35,000 1,000
Reimbursement to General Fund (Accounting & Finance) 21,000 22,000 (1,000)
Reimbursement to General Fund (Payroll) 70,000 70,000 -
Klausner & Kaufman (including Medical Bills) 140,000 140,000 -
Referendum 15,000 - 15,000
336,500$ 321,500$ 15,000
City of Clearwater
Employees' Pension Plan
Administrative Expenses
Attachment number 1
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