portfolio review 3rd quarter 2013 · source: deloitte cfo survey 2013. • the imf lowered its...

Jerry Huggins, CFP, MBA

Prepared by: Caitlin Markel

Wendy J. Dominguez, MBAGordon Tewell, CFA, CPC

PORTFOLIO REVIEW3rd Quarter 2013

Innovest at a Glance

Our History

— Founded in 1996 by Richard Todd and Wendy Dominguez who lead the firm today

— Independent, privately-held and employee-owned — SEC Registered Investment Advisor — Currently $6.0 billion in firm assets*

Our Professionals

— Long-term relationships with top tier managers, vendors, and service providers

— Innovest named one of the Best Places to Work by the Denver Business Journal in 2012

— Ability to hire and retain top quality talent — 95% employee retention rate

Alignment of Interest with Our Clients

— 97% client retention — Conflict-free, independent and objective advocate for our clients — A consistent investment philosophy since firm’s inception — Our culture is client-centered, risk-focused, and performance-

driven — Year-over-year revenue growth 15 of the last 16 years — 2012 Client Survey Results: 100% of clients surveyed rated

Innovest “very good” or “excellent”

Diverse Client Base

— 190+ clients in more than 13 states — Retirement Plans — Foundations & Endowments — Wealthy Families

Fiduciary Expertise

— One of the first investment firms in the Rocky Mountain Region rooted in prudent fiduciary principles

— Accreditations through Investment Management Consultants Association and Center for Fiduciary Studies

— Process oriented approach with a focus on investment and spending policy

— Expert Witness on 41 cases involving fiduciary investment responsibilities

— Numerous fiduciary certifications: AIF, AIFA, CIMA®, CFA , RF

Money Management Experience

— 15-member Investment Committee with median experience of more than 20 years

— Principals have more than 25 years of experience managing large pension and foundation portfolios

— Disciplined and opportunistic approach to forward-looking portfolio design

— Experts in many investment strategies: active, passive, hedge funds, and other alternatives

— Emphasis on downside-risk quantification in developing portfolio design

Client Access and Transparency

— Direct access to Innovest’s investment and operational heads at all times

— Routine access to closed products, waived investment minimums and lower product fees

— Customized asset allocation, benchmarking, and reporting

*As of 6/30/2013

Privileged and Confidential

2

Innovest’s History With Boulder Fire & Police

2001: First quarterly performance report 2007: Replace the Calamos Growth Fund with Allianz CCM Mid Cap Growth & replace the Legg Mason Small Cap Value Fund with the ICM Small Cap Value

2003: Replace the Putnam International Fund with the American Funds Europacific Growth Fund 2007: Replace 50% of the allocation to the Europacific Growth Fund (REREX) and allocate it

to the Dodge & Cox International Fund

2007: Conducted asset allocation study and updated asset allocation

2007: Coordinated the PIMCO share class change to reduce fees


2009: Add BlackRock High Yield Fund and Eaton Vance Floating Rate Fund

Provided quarterly performance reports and research reports each quarter and met with the Trustees

Updated and reviewed the Investment Policy Statement

2001 ‐ 2003

Met with representatives from each investment strategy used in the plans

2003 ‐ 2006 2006 – 2009 2009 ‐ 2013

2004: Replace the One Group Mid Cap Growth Fund (OSGIX) with the Calamos Growth Fund

2005: Presented on Alternative Investment Vehicles,A Cl & S i

2010: Replace Managers Cadence MC Inst. (MCMYX) with Munder Mid Cap Growth

2011: Coordinated the Eaton Vance share class change to reduce feesAsset Classes & Strategies

2005: Added the PIMCO Commodity Real Return Strategy Fund



Provided quarterly performance reports and research reports each quarter and met with the Administrative Committee

3

Performance Over Time

Risk and Return (Since Inception) Asset Allocation

Cumulative Performance over Time

Change in Account Value

Market ValueAs of

07/01/2013

Market ValueAs of

09/30/2013

Change$

Boulder F & P Total Fund 104,298,370 109,088,428 4,790,058

LastQuarter

YearTo Date

1Year

3Years

5Years

7Years

SinceInception

InceptionDate

Boulder F & P Total Fund 5.17 11.98 13.48 10.51 8.78 6.62 8.66 07/01/1990

Boulder F & P Custom BM 5.31 12.55 13.84 11.01 8.35 5.48 8.23

Difference -0.14 -0.57 -0.36 -0.50 0.43 1.14 0.43

$0 $11,000,000 $22,000,000 $33,000,000 $44,000,000

PIMCO Total Return; Inst

Eaton Vance Floating Rate; I

JPMorgan High Yield Select

PIMCO Commodity Real Return

Munder Mid Cap Core Growth

ICM Small Company

American Funds EuroPacific Gr

Dodge & Cox Int'l

Vantage Trust Plus

Boston Trust Fixed Income - Boulder F&P

Boston Trust Equity - Boulder F&P

$3,884,080

$4,858,501

$4,898,505

$4,927,732

$7,199,196

$7,397,617

$7,901,072

$7,998,186

$8,388,108

$10,402,936

$41,232,495

8.7

8.8

8.9

9.0

9.1

9.2

Re

turn

(%)

11.0 12.0 13.0 14.0 15.0 16.0 16.6Risk (Standard Deviation %)

S&P 500 Index

Boulder F & P Total Fund

Boulder F & P Total Fund Boulder F & P Custom BM

0%

220%

440%

660%

9/90 9/91 9/92 9/93 9/94 9/95 9/96 9/97 9/98 9/99 9/00 9/01 9/02 9/03 9/04 9/05 9/06 9/07 9/08 9/09 9/10 9/11 9/12 9/13

Executive SummarySeptember 30, 2013

4

September 30, 2013THE MARKETS

Investment ReturnsThird Quarter 2013

5

September 30, 2013

GOVERNMENT UNCERTAINTY• The U S private sector is increasingly concerned about

Third Quarter 2013 Capital Markets: HEADWINDS

The Private Sector is Cautious• The U.S. private sector is increasingly concerned about

government budget challenges, health care costs and taxes. • Political gridlock in Washington continues to delay reforms in

entitlement and other spending, as well as the tax code.• Federal Reserve’s “data dependent” approach has created

unexpected uncertainty in monetary policy.• U.S. gross government debt is now $16.7 trillion, slightly over

the GDP value of $16.66 trillion.

SLUGGISH GLOBAL GROWTH The Global Economy is Growing at Slower Rates

Source: Deloitte CFO Survey 2013.

• The IMF lowered its global GDP growth estimate to 2.9% in 2013 and 3.6% in 2014.

• The U.S. economy grew by a tepid 2.5% on an annualized basis in the second quarter of 2013, after adjusting for inflation.

• Growth rates in the emerging markets are down 3% from 2010Growth rates in the emerging markets are down 3% from 2010 levels.

• While the Eurozone appeared to emerge from recession, its economic growth remains weak.

*Estimates based on 52 economies representing 90% of world GDP. Sources: IMF and The Economist. Reported 9/21/2013.

6

September 30, 2013HEADWINDS, continued

TEPID WAGE AND EMPLOYMENT GROWTH• Adjusted for inflation U S household income is down 7 2%

Inflation Adjusted Household Income is Declining• Adjusted for inflation, U.S. household income is down 7.2%

since 2000.• U.S. labor force participation is at 63.2% according to BLS,

well below long-term averages.• While the unemployment rate has fallen to 7.3%,

fdiscouraged and retired workers are excluded from that reading.

• A record 23.1 million American households were recently receiving food stamps.

DECELERATING CORPORATE EARNINGS Corporate Profitability: Reversion to Long-Term Averages?

As of August 2013. Sources: dshort.com and Sentier Research.

• Corporate profits as a percentage of GDP were recently at 10%, dramatically higher than the long-term average of 6.3%

• The estimated S&P 500 earnings growth rate for Q3 2013 was recently 3.0%, down from a Q2 increase of 3.3%.

• Significant cost cutting after the 2008-2009 recession is no longer providing a tailwind for corporate profitability.

• With record levels of cash on the sidelines, corporate America has not re-invested in its own growth.

Source: J.P. Morgan Asset Management.

7

September 30, 2013

IMPROVING CONSUMER HEALTH• U S durable goods surveys indicate growth in the purchase

Third Quarter 2013 Capital Markets: TAILWINDS

Vehicle Sales Are Roaring Back• U.S. durable goods surveys indicate growth in the purchase

of big ticket items like cars, trucks and machinery.• Household payments to service debt have declined from

14.0% of disposable personal income in 2007 to a current level of approximately 10.4%.

• Household assets increased to $88.4 trillion in the second quarter, and net worth increased to $74.8 trillion.

• U.S. household re-leveraging has taken hold: outstanding consumer credit has surpassed its 2008 peak.

THE ONGOING COMEBACK IN HOUSING H i St t C ti Th i P iti T d

Sources: BEA, FactSet, and J.P. Morgan Asset Management.

THE ONGOING COMEBACK IN HOUSING• U.S. home prices have increased 21.2% since the end of

2011, based on the Standard & Poor’s Case-Shiller 20 City Home Price Index.

• New single-family home sales are up 12.6% from a year ago

Housing Starts Continue Their Positive Trend

ago.• The median price of an existing home was $212,100 in

August, a 14.7% increase from a year ago.• An improving housing market has comprised 15.6% of the

growth in this year’s U.S. GDP.

As of 8/2013. Source: St. Louis Fed.

8

September 30, 2013TAILWINDS, continued

HEALTHY U.S. CORPORATE BALANCE SHEETS• U S non financial companies now hold a record $1 5 trillion

Cash Levels Remain High

• U.S. non-financial companies now hold a record $1.5 trillion in cash on their balance sheets.

• The ratio of total-debt to total-equity for S&P 500 companies has declined to 102% from 220% in 2007.

• For companies with access to the capital markets, including Apple and Verizon, the cost of capital has never been lower.

• The low cost of U.S. natural gas points to a U.S. manufacturing renaissance, onshoring jobs lost decades ago.

U.S. FEDERAL RESERVE STIMULUS Fed Members Expect Short-Term Rates to Stay Low

Source: J.P Morgan Asset Management.

• The Fed Funds target rate remains close to 0% and is expected to remain there until the beginning of 2015.

• In September the Fed delayed the tapering of its quantitative easing, continuing to buy $85 billion per month in longer term debt.

• Fed Chair nominee Janet Yellen, who has been the Fed's second-in-command since 2010, is viewed as a proponent of an accommodative monetary policy.

Forecast of the Fed’s interest rate target by the 17 voting members of the Federal Open Market Committee. Reported 9/17/2013. Sources: The Wall Street Journal and Federal Reserve.

9

US Market Indices Performance US Market Sector Performance

Source: Investment Metrics, LLC

Source: Investment Metrics, LLCSource: Investment Metrics, LLC

0.0

10.0

20.0

-10.0

Re

turn

(%)

S&P

500

Inde

x

R usse

ll

200 0

Inde

x

MSC

I

EAFE

Inde

x

MSC

I

EAFE

LC In

dex

MSC

I

E me rg

ing

M

a rke ts

Inde

x

Bar

clay

s

Ca pi

t al

A

ggr e

gate

BC

Mun

icip

al B

o nd

Bar

cla ys

U.S

.

C or p

:

Hig

h Y ie

ld

BC

Glo

bal

Ag

gre ga

t e Ex

US D

E me rg

ing

Ma rk

e t

Deb

tS&

P/LS

T A Le

ver a

ged

Loa n

Inde

x

MSC

I

U.S

.

RE IT

Inde

x

DJ -

UB

S

Co m

mo di

t y In

dex

HFR

I

FoF

C

o mp

osit e

Inde

x

5.2

10.211.6

7.55.9

0.6

-0.2

2.3

4.4

0.51.2

-3.0

2.1 2.1

S&P 500 Consumer Discretionary S&P 500 Consumer Staples S&P 500 Energy

S&P 500 Financials S&P 500 Health Care S&P 500 Industrials

S&P 500 Information Technology S&P 500 Materials S&P 500 Telecom Services

S&P 500 Utilities

0.0

20.0

40.0

60.0

-20.0

Re

turn

(%)

1

Quarter

1

Year

0.2

7.0

-4.4-0.7

10.3

16.6

6.6 6.98.9

28.5

6.8

28.5

2.9

30.2

5.2

12.3

0.8

14.0

7.8

31.8

S&P 500 S&P 500 Growth S&P 500 Value

Russell Midcap Index Russell Midcap Growth Index Russell Midcap Value Index

Russell 2000 Index Russell 2000 Growth Index Russell 2000 Value Index

0.0

15.0

30.0

45.0

Re

turn

(%)

1

Quarter

1

Year

7.6

27.0

12.8

33.1

10.2

30.1

5.9

27.8

9.3

27.5

7.7

27.9

3.8

22.2

6.6

17.0

5.2

19.3

Quarterly Market Summary September 30, 2013

Copyright © 2013 Investment Metrics, LLC. All rights reserved.

10

Intl Equity Region PerformanceIntl Equity Indices Performance

Fixed Income Market Sector Performance

Source: Investment Metrics, LLC

Source: Investment Metrics, LLCSource: Investment Metrics, LLC

Barclays U.S. Aggregate Barclays U.S. Treasury Barclays U.S. Agency Barclays U.S. Credit Index Barclays U.S. MBS

Barclays U.S. ABS Barclays U.S. Corp: High Yield Barclays Global Aggregate JPM EMBI Global (USD)

0.0

5.0

10.0

-5.0

-10.0

Ret

urn

(%)

1

Quarter

1

Year

0.9

-4.3

2.8

-2.6

2.3

7.1

0.2

-0.4

1.0

-1.2

0.7

-1.9

0.3

-1.1

0.1

-2.1

0.6

-1.7

MSCI Japan MSCI Pacific ex Japan MSCI United Kingdom MSCI Europe ex U.K.

0.0

10.0

20.0

30.0

40.0

Re

turn

(%)

1

Quarter

1

Year

14.5

29.3

12.1

17.1

10.411.7

6.7

31.7

MSCI EAFE Index MSCI EAFE Small Cap MSCI EAFE Growth Index

MSCI EAFE Value MSCI Emerging Markets

0.0

10.0

20.0

30.0

40.0

Re

turn

(%)

1

Quarter

1

Year

5.9

1.3

12.7

24.9

10.5

23.7

15.6

29.8

11.6

24.3

Quarterly Market Summary September 30, 2013

Copyright © 2013 Investment Metrics, LLC. All rights reserved.

11

Alternative Asset Class Returns September 30, 2013

Source: Christenson Investment Parnters Source: Christenson Investment Parnters

8.0

3.4 3.1

‐4.4

‐7.6

3.8 4.1

‐17.5

2.5 2.4

‐8.9

4.4

1.6 1.3

8.5

1.2 1.2

8.3

11.2

2.1

‐20.0

‐15.0

‐10.0

‐5.0

0.0

5.0

10.0

15.0

Crud

e Oil

Heatin

g Oil

Gasoline

Natural Gas

Coffe

e

Cotton

Sugar

Corn

Soybeans

Whe

at

Soybean Oil

Hogs

Cattle

Alum

inum

Copp

er

Nickel

Zinc

Gold

Silver

DJ‐UBS

Com

m In

dex

Commodity Sector Returns

9.0

4.3

2.12.8

0.9

‐5.1

2.6

‐6.0

‐4.0

‐2.0

0.0

2.0

4.0

6.0

8.0

10.0

Precious Metals

Industrial Metals

DJ‐UBS Comm Index

Energy Softs Grains Livestock

Commodity Broad Sector Returns

Source: Christenson Investment Parnters Source: Standard & Poors

‐3.9

‐10.9

1.10.2

1.83.3

0.9

3.5

1.22.9 2.2

‐12.0‐10.0‐8.0‐6.0‐4.0‐2.00.02.04.06.0

Man

aged

Futures

Dedicated Short B

ias

Fixed Income Arbitrage

Globa

l Macro

HFRI FoF

Com

posite

Multi‐Strategy

Convertib

le Arbitrage

Long/Sho

rt Equ

ity

Equity M

arket N

eutral

Even

t Driv

en

Distressed

Hedge Fund Strategy Returns

‐6.9

‐3.1‐0.8 ‐0.2

0.2 0.72.3

10.2 10.712.2

‐10.0

‐5.0

0.0

5.0

10.0

15.0

Emerging

Markets

U.S.

Hon

g Ko

ng

Cana

da

S&P De

velope

d RE

IT

Singap

ore

Australia

Europe

Japa

n

United Kingdo

m

Global REIT Country and Regional Returns

12

Client Type: Money Purchase Pension PlanTime Horizon: Greater than Five YearsExpected Return: 4.25% to 5.25% over CPIRisk Tolerances: Expected downside of -16.9% to -19.9% per year based on a statistical confidence level of 95% (1)

Asset Allocation Performance Benchmarks

Strategic Asset Investment Primary Peer GroupLower Limit Allocation Upper Limit Category Manager Index Universe

Domestic Equity Domestic Equity Balanced 49.00% 52.00% 55.00% Large Cap Boston Trust S&P 500 / BC Aggregate Total Dom Bal

Boston Tr Eqty S&P 500 Core Equity Mid Cap Growth 4.00% 7.00% 10.00% Mid Cap Growth Munder MC Core Gr Russell Mid Cap Index Mid Cap Growth Small Cap Value 4.00% 7.00% 10.00% Small Cap Value ICM Sm Cap Value Russell 2000 Index Small Cap Value

International Equity 12.00% 15.00% 18.00% International Equity Europacific R-4 MSCI EAFE International GrowthDodge & Cox Intl MSCI EAFE International Value

Domestic Fixed Income 1.00% 4.00% 7.00% Domestic Fixed Income Boston Tr Fixed Inc BC Aggregate Core BondPimco Total Ret. BC Aggregate Core Bond

High Yield 2.00% 5.00% 8.00% High Yield JP Morgan HY BC:HY Credit HY

Floating Rate Corporate Loans 2.00% 5.00% 8.00% Floating Rate Corporate Loans Eaton Vance Floating CSFB Leveraged Loan Loan Participation

INVESTMENT POLICY SUMMARY

Client Variables

Commodities 2.00% 5.00% 8.00% Commodities Pimco Comm RR DJ-UBS Comm N/A

Total Portfolio Strategic Benchmark: 52.00% 70% S&P 500 / 30% BC Aggregate7.00% Russell Mid Cap Index 7.00% Russell 2000 Index

15.00% MSCI EAFE4.00% BC Aggregate5.00% BC:HY Credit 5.00% CSFB Leveraged Loan5.00% DJ-UBS Comm

Total Portfolio Secondary Benchmark: CPI + 4.75%

(1) There is a 5% probability that the 1 year modeled loss of -16.9% to -19.9% will be exceeded. Risk tolerances are based on 2013 capital markets assumptions. NOTE: The 1 year modeled loss will vary from year to year depending on future capital market assumptions.

13

Boulder Fire & PoliceAverage plan assets $93,438,029Estimated Investment, Recordkeeping and Administrative Costs 0.59%Estimated Total Plan Expenses 0.66%

Weighted average (bps)

Employer Paid Employee Paid TotalAsset based fee retained by funds 51 -$ 476,359$ 476,359$ Revenue sharing paid to plan provider 12 -$ 111,602$ 111,602$ Per participant fee 0 -$ -$ -$ Administration/Recordkeeping fee 0 -$ -$ -$ Custodial/Trust fees 0 -$ -$ -$ Direct participant paid fees

Loan origination 0 -$ -$ -$ Loan maintenance 0 -$ -$ -$ QDRO 0 -$ -$ -$ Miscellaneous 0 -$ -$ -$

Rebate to plan -3 -$ (32,180)$ (32,180)$

Total Investment, Recordkeeping and Administrative Costs 59 -$ 555,781$ 555,781$

Third party plan paid feesInvestment Consultant 7 -$ 64,072$ 64,072$

Total Plan Expenses 66 -$ 619,853$ 619,853$

Fee review reflects activity for the following time period: 1/1/2012 - 12/31/2012

Benchmarking: The plan's estimated investment, recordkeeping and administrative costs of 0.59% as shown above, compare favorably to 401(k) Source data, a universe of 84 similarly sized 401(k) plans with an average investment, recordkeeping and administrative cost of 1.19%

Dollars ($)

Total Plan Expenses

Annual Fee Review

14

September 30, 2013

Allocation Differences

0.0% 1.0% 2.0%-1.0 %-2.0 %-2.8 %

Commodities

Floating Rate Corporate Loans

High Yield

Fixed Income

International Equity

Small Cap Equity

Mid Cap Equity

Large Cap Equity

-0.1 %

-0.2 %

-0.1 %

-1.8 %

0.8%

0.3%

0.1%

0.9%

June 30, 2013

Allocation Differences

0.0% 2.0% 3.8%-2.0 %-3.1 %

Commodities


High Yield

Fixed Income


Small Cap Equity

Mid Cap Equity

Large Cap Equity

-0.8 %

0.0%

-0.1 %

-1.7 %

0.0%

0.1%

0.1%

2.3%

September 30, 2013

Market Value($)

Allocation(%)

Target(%)

Large Cap Equity 41,232,495 40.95 40.00

Mid Cap Equity 7,199,196 7.15 7.00

Small Cap Equity 7,397,617 7.35 7.00

International Equity 15,899,258 15.79 15.00

Fixed Income 14,287,017 14.19 16.00

High Yield 4,898,505 4.86 5.00

Floating Rate Corporate Loans 4,858,501 4.82 5.00

Commodities 4,927,732 4.89 5.00

Total Fund 100,700,320 100.00 100.00

June 30, 2013

Market Value($)

Allocation(%)

Target(%)

Large Cap Equity 40,381,258 42.35 40.00

Mid Cap Equity 6,808,491 7.14 7.00

Small Cap Equity 6,756,558 7.09 7.00

International Equity 14,338,062 15.04 15.00

Fixed Income 13,646,275 14.31 16.00

High Yield 4,695,615 4.92 5.00

Floating Rate Corporate Loans 4,761,509 4.99 5.00

Commodities 3,964,528 4.16 5.00

Total Fund 95,352,296 100.00 100.00

Asset Allocation vs. Target Allocation

15

Allocation

MarketValue

($)%

Performance(%)

LastQuarter

YearTo Date

1Year

3Years

5Years

10Years

SinceInception

InceptionDate

Large Cap Equity

Boston Trust Equity - Boulder F&P 41,232,495 37.80 4.88 18.26 17.64 14.22 9.65 7.99 10.42 07/01/1990

S&P 500 Index 5.24 19.79 19.34 16.27 10.02 7.57 9.16

Mid Cap Equity

Munder Mid Cap Core Growth 7,199,196 6.60 7.40 23.24 26.01 17.20 12.06 10.90 16.62 01/01/2010

Russell Midcap Growth Index 9.34 25.42 27.54 17.65 13.92 10.16 17.06

Small Cap Equity

ICM Small Company 7,397,617 6.78 10.41 25.07 30.00 17.42 10.35 10.03 7.18 01/01/2008

Russell 2000 Value Index 7.59 23.07 27.04 16.57 9.13 9.29 6.87


Dodge & Cox Int'l 7,998,186 7.33 11.15 17.15 27.76 8.75 8.11 10.62 1.10 01/01/2008

MSCI EAFE Value Index (Net) 12.63 15.71 24.27 7.99 5.86 7.94 -1.31

American Funds EuroPacific Gr 7,901,072 7.24 9.45 11.64 17.84 6.71 7.14 9.55 7.81 04/01/2004

MSCI EAFE Growth Index (Net) 10.50 16.54 23.27 8.88 6.79 8.00 6.35

Fixed Income

Boston Trust Fixed Income - Boulder F&P 10,402,936 9.54 0.45 -2.00 -1.77 2.84 4.92 4.63 6.32 07/01/1990

Barclays Aggregate Index 0.57 -1.89 -1.68 2.86 5.41 4.60 6.61

PIMCO Total Return; Inst 3,884,080 3.56 1.17 -1.88 -0.74 3.77 7.97 6.12 6.36 10/01/2001

Barclays Aggregate Index 0.57 -1.89 -1.68 2.86 5.41 4.60 4.99

High Yield

JPMorgan High Yield Select 4,898,505 4.49 1.99 3.71 6.97 8.26 11.80 8.46 9.42 01/01/2010

Barclays US Corp: High Yield 2.28 3.73 7.14 9.19 13.53 8.86 10.45


Eaton Vance Floating Rate; I 4,858,501 4.45 1.17 3.20 4.68 5.71 6.83 4.33 12.22 04/01/2009

Credit Suisse Leveraged Loan Index 1.40 4.26 5.83 6.25 7.36 5.10 12.90

Commodities

PIMCO Commodity Real Return 4,927,732 4.52 3.47 -12.82 -17.85 -0.68 -1.06 4.70 0.03 01/01/2006

Dow Jones-UBS Commodity Index 2.13 -8.56 -14.35 -3.16 -5.29 2.14 -2.35

Balanced Account

Boston Trust Balanced - Boulder F&P 51,635,431 47.33 4.07 13.78 13.40 11.66 8.88 7.41 10.09 07/01/1990

70% S&P/30% BC Aggr 3.86 12.94 12.72 12.29 9.00 6.92 8.65

Table of ReturnsSeptember 30, 2013

16

Table of ReturnsSeptember 30, 2013

Allocation

MarketValue

($)%

Performance(%)

LastQuarter

YearTo Date

1Year

3Years

5Years

10Years

SinceInception

InceptionDate

Stable Value

Vantage Trust Plus (gross) 8,388,108 7.69 0.63 1.97 2.71 3.15 3.54 4.25 3.88 07/01/2007

Vantage Trust Plus (net) 0.49 1.55 2.14 2.58 2.98 3.72 3.34

Ryan 3 Yr GIC Master Index 0.25 0.80 1.12 1.83 2.78 3.34 3.17

Total Fund

Boulder Fire & Police Total Fund 109,088,428 100.00 5.17 11.98 13.48 10.51 8.78 7.75 8.66 07/01/1990

Boulder Fire & Police Custom Benchmark 5.31 12.55 13.84 11.01 8.35 7.35 8.23

CPI +4.75% 1.45 5.59 5.99 7.20 6.18 7.24 7.44

17

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

14.0

15.0

16.0

17.0

17.6

Re

turn

3.8

4.4

8.8

10.9

7.6

9.1

6.5

7.8

3.9

5.25.4

6.4

LastQuarter

1Year

3Years

5Years

7Years

10Years

¢£ Boulder Fire & Police Total Fund 5.17 (32) 13.48 (32) 10.51 (24) 8.78 (26) 6.62 (10) 7.75 (9)

pr Boulder Fire & Police Custom Benchmark 5.31 (25) 13.84 (22) 11.01 (13) 8.35 (43) 5.48 (61) 7.35 (14)

5th Percentile 6.27 15.29 11.33 9.77 6.93 7.90

1st Quartile 5.30 13.78 10.46 8.81 6.20 7.15

Median 4.83 12.34 9.83 8.21 5.61 6.86

3rd Quartile 4.41 10.85 9.08 7.79 5.24 6.38

95th Percentile 3.82 8.79 7.55 6.45 3.91 5.40

Plan Sponsor Peer Group AnalysisPublic Plan Sponsors (< $100 mm AUM)

September 30, 2013

Parentheses contain percentile rankings.Calculation based on quarterly periodicity.

18

Cumulative Performance Over Time

Risk and Return

Boulder Fire & Police Total Fund Boulder Fire & Police Custom Benchmark CPI + 4.75%

-100 %

0%

100%

200%

300%

400%

500%

600%

700%

9/90 9/91 9/92 9/93 9/94 9/95 9/96 9/97 9/98 9/99 9/00 9/01 9/02 9/03 9/04 9/05 9/06 9/07 9/08 9/09 9/10 9/11 9/12 9/13

8.6

8.7

8.8

8.9

9.0

9.1

9.2

9.3

Re

turn

(%)

9 10 11 12 13 14 15 16 17 18 18

Risk (Standard Deviation %)

Boulder Fire & Police Total Fund

S&P 500 Index

Total Portfolio Performance AnalysisAs of September 30,2013

19

Innovest’s investment performance analysis is not simply the production of a quarterly performance report.Our in-depth investment product analysis is extensive, continual and designed to reduce surprises.

ONGOING MONITORING

Occurrence Action

Daily We review trades and reconcile accounts. Manager due diligence meetings are held both on and off-site.

Weekly

The Investment Committee meets to review managers, client portfolios, and the financial markets. Special attention is reserved for managers with qualitative issues. Clients with objective changes and other issues are discussed by the committee.

MonthlyWe conduct quantitative analysis to identify outlier managers, both positive and negative, for comprehensive evaluation.

Quarterly

Each client’s account is reviewed for possible portfolio rebalancing. Manager calls are made and portfolio attribution is conducted to help determine “why” performance happened. Custom reports are developed for each client. Client meetings are conducted to review portfolio performance, managers, and policy.

Annually

We review the Due Diligence Questionnaire for every manager. Due diligence meetings are conducted and manager review documentation is created. Capital market assumptions are determined after thoughtful analysis. We conduct a formal Asset Allocation Study for every client and review their objectives, goals and investment policy.

20

Criteria

Organization PeoplePhilosophy& Process

StyleConsistency

Asset Base Performance Expenses Overall

Costs

Exp Ratio(%)

MedianExp Ratio

(%)

Ratio ofExp to

Median (%)

Boston Trust Balanced - Boulder F&P 0.64 1.15 55.00

Munder:MC Core Gr;Y (MGOYX) 1.06 1.41 75.18

ICM Small Company;Inst (ICSCX) 0.92 1.53 60.01

Dodge & Cox Intl Stock (DODFX) 0.64 1.30 49.23

American Funds EuPc;R-4 (REREX) 0.85 1.46 58.22

PIMCO:Tot Rtn;Inst (PTTRX) 0.46 0.92 50.00

Eaton Vance Flt Rt;Ins (EIBLX) 0.76 1.21 62.81

JPMorgan:High Yield;Sel (OHYFX) 0.86 1.21 71.07

PIMCO:Comm RR Str;Inst (PCRIX) 0.74 1.42 51.97

Vantage Trust Plus 0.56 0.50 112.00

Legend For Overall Criteria

No/Minimum Concerns

Minor Concern

Major Concern

Under Review

Manager Score Factor Comments

ICM Small Company;Inst (ICSCX) Performance Poor security selection within financials and an underweight to financials, REITs and utilities have contributed to theunderperformance.

American Funds EuPc;R-4 (REREX) Asset Base One potential concern that we are watching is the large asset base of American Funds EuroPacific. In the past we have likedEuroPacific's flexibility to add value through opportunistic, bottom-up stock selection. However, the fund’s large asset base is likelyto present some challenges for the fund to build meaningful positions in smaller companies and opportunistically trade in less liquidmarkets.

Manager Score Card

21

THIS PAGE LEFT INTENTIONALLY BLANK

22

STRATEGY INFORMATION

ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS

PEER GROUP ANALYSIS - IM U.S. Balanced (SA+CF)

CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS

RISK VS. RETURN (5 YEARS*)

*If less than 5 years, data is since account inception.

Firm and Management:Domenic Colasacco is a portfoliomanager and president of the Adviser.Mr. Colasacco is also the president ofBoston Trust & InvestmentManagement Company and has servedas its Chief Investment Officer since1980. Mr. Colasacco managesportfolios for individual and institutionalclients and also manages the BostonTrust Equity Fund. Mr. Colasacco is aholder of the Chartered FinancialAnalyst (CFA) designation and amember of the Boston SecurityAnalysts Society.

Investment Strategy:The strategy strives to provide long-term growth of capital through adiversified portfolio of stocks, bondsand money market investments. Theallocation among these assets isactively managed based both on theirrelative values and the changingeconomic outlook. By forecastingfinancial market returns across a widerange of possible economic scenarios,they vary the allocation in a mannerthat is designed to provide protectionagainst falling markets in unfavorableeconomic environments, while alsoproviding opportunity to participate inrising markets. The strategy providesbroad diversification across stockmarket sectors; individual equityselections focus on companies withsuperior financial track records.

4.0

6.0

8.0

10.0

12.0

12.6

Re

turn

(%)

4.0 8.0 12.0 16.0 20.0 23.9


ReturnStandardDeviation

¢£ Boston Tr Bal - Boulder F&P 8.88 12.83

Å� 70% S&P/30% BC Aggr 9.00 14.02

¾ Median 8.57 13.24

-1.0

2.0

5.0

8.0

11.0

14.0

17.0

20.0

23.0

Re

turn

LastQuarter

YearTo Date

1Year

3Years

5Years

7Years

10Years

¢£ Boston Tr Bal - Boulder F&P 4.07 (48) 13.78 (34) 13.40 (45) 11.66 (30) 8.88 (38) 6.86 (26) 7.41 (52)

Å� 70% S&P/30% BC Aggr 3.86 (60) 12.94 (43) 12.72 (50) 12.29 (16) 9.00 (37) 5.78 (57) 6.92 (67)

Median 4.03 11.92 12.67 10.67 8.57 5.89 7.45

2012 2011 2010 2009 2008 2007 2006

Boston Tr Bal - Boulder F&P 10.04 (77) 3.45 (23) 14.13 (22) 17.53 (74) -20.93 (41) 11.31 (16) 9.58 (68)

IM U.S. Balanced (SA+CF) Median 11.19 1.65 11.58 20.08 -22.16 6.99 11.58

70% S&P/30% BC Aggr 12.49 (33) 4.08 (20) 12.92 (34) 20.44 (48) -26.03 (80) 6.06 (66) 12.27 (38)

IM U.S. Balanced (SA+CF) Median 11.19 1.65 11.58 20.08 -22.16 6.99 11.58

3Years

EndingSep-2013

3Years

EndingSep-2012

3Years

EndingSep-2011

3Years

EndingSep-2010

3Years

EndingSep-2009

3Years

EndingSep-2008

3Years

EndingSep-2007

Boston Tr Bal - Boulder F&P 11.66 (30) 11.07 (13) 4.19 (42) -0.61 (39) 0.80 (41) 3.98 (25) 10.03 (62)

IM U.S. Balanced (SA+CF) Median 10.67 9.53 3.59 -1.05 0.25 2.76 10.43

70% S&P/30% BC Aggr 12.29 (16) 11.37 (9) 3.70 (48) -2.53 (75) -1.64 (84) 1.53 (73) 10.35 (55)

IM U.S. Balanced (SA+CF) Median 10.67 9.53 3.59 -1.05 0.25 2.76 10.43

Boston Tr Bal - Boulder F&P 09/30/13

23



PEER GROUP ANALYSIS - IM U.S. Large Cap Core Equity (SA+CF)





Investment Strategy:The portfolio consists of stocks from allmarket capitalizations; small, mediumand large. The portfolio is constructedwith a bottom up approach to securityselection, however, macro themes areconsidered in deciding which sectorslook most attractive. Each potentialholding is put through a number ofscreens which consider earningsgrowth and relative valuation.

4.0

6.0

8.0

10.0

12.0

14.0

Re

turn

(%)

0.0 6.0 12.0 18.0 24.0 30.0



¢£ Boston TrEq - Boulder F&P 9.65 18.81

Å� S&P 500 Index 10.02 20.43

¾ Median 10.27 20.43

0.0

4.0

8.0

12.0

16.0

20.0

24.0

28.0

31.2

Re

turn

LastQuarter

YearTo Date

1Year

3Years

5Years

7Years

10Years

¢£ Boston TrEq - Boulder F&P 4.88 (78) 18.26 (81) 17.64 (83) 14.22 (83) 9.65 (74) 6.80 (35) 7.99 (71)

Å� S&P 500 Index 5.24 (72) 19.79 (63) 19.34 (64) 16.27 (54) 10.02 (61) 5.60 (79) 7.57 (83)

Median 6.04 20.41 20.60 16.45 10.27 6.35 8.51

2012 2011 2010 2009 2008 2007 2006

Boston TrEq - Boulder F&P 12.03 (84) 1.56 (55) 16.91 (26) 24.19 (65) -30.73 (17) 11.81 (18) 10.99 (86)

IM U.S. Large Cap Core Equity (SA+CF) Median 15.66 1.87 14.84 26.59 -36.17 7.17 15.54

S&P 500 Index 16.00 (46) 2.11 (48) 15.06 (45) 26.46 (52) -37.00 (61) 5.49 (70) 15.79 (46)

IM U.S. Large Cap Core Equity (SA+CF) Median 15.66 1.87 14.84 26.59 -36.17 7.17 15.54

3Years

EndingSep-2013

3Years

EndingSep-2012

3Years

EndingSep-2011

3Years

EndingSep-2010

3Years

EndingSep-2009

3Years

EndingSep-2008

3Years

EndingSep-2007

Boston TrEq - Boulder F&P 14.22 (83) 12.62 (52) 2.60 (29) -3.57 (18) -1.93 (26) 3.11 (23) 11.96 (86)

IM U.S. Large Cap Core Equity (SA+CF) Median 16.45 12.68 1.54 -6.14 -4.17 1.15 14.16

S&P 500 Index 16.27 (54) 13.20 (44) 1.23 (58) -7.16 (69) -5.43 (75) 0.22 (70) 13.14 (73)

IM U.S. Large Cap Core Equity (SA+CF) Median 16.45 12.68 1.54 -6.14 -4.17 1.15 14.16

Boston TrEq - Boulder F&P 09/30/13

24

TOP TEN HOLDINGS PORTFOLIO CHARACTERISTICS

DISTRIBUTION OF MARKET CAP SECTOR DISTRIBUTION

Portfolio Benchmark

Wtd. Avg. Mkt. Cap ($) 93,624,157,311 105,722,856,206

Median Mkt. Cap ($) 46,858,418,030 15,348,159,235

Price/Earnings ratio 16.43 17.14

Price/Book ratio 3.07 2.75

5 Yr. EPS Growth Rate (%) 7.59 6.01

Current Yield (%) 2.16 2.13

Beta (5 Years, Monthly) 0.93 1.00

Number of Stocks 67 500

PortfolioWeight

(%)

BenchmarkWeight

(%)

ActiveWeight

(%)

QuarterlyReturn

(%)

Exxon Mobil Corp 3.79 2.53 1.26 -4.11

Chevron Corp 3.13 1.57 1.56 3.52

Precision Castparts Corp. 2.56 0.22 2.34 0.56

T. Rowe Price Group Inc 2.50 0.13 2.37 -1.21

JPMorgan Chase & Co 2.25 1.30 0.95 -1.38

Nike Inc 2.25 0.36 1.89 14.45

Grainger (W W) Inc. 2.24 0.11 2.13 4.15

Costco Wholesale Corp 2.15 0.34 1.81 4.43

Sigma-Aldrich Corp 2.15 0.07 2.08 6.35

Microsoft Corp 2.13 1.69 0.44 -2.97

% of Portfolio 25.15 8.32

Boston Trust Equity - Composite

S&P 500 Index

0.0 3.0 6.0 9.0 12.0 15.0 18.0 20.7

Utilities

Telecommunication Services

Materials

Information Technology

Industrials

Health Care

Financials

Energy

Consumer Staples

Consumer Discretionary

0.0

0.0

5.3

15.2

15.9

9.4

16.5

10.4

14.3

13.1

3.2

2.4

3.5

17.9

10.7

13.0

16.3

10.5

10.0

12.5

Boston Trust Equity - Composite S&P 500 Index

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

>100 Bil 75 Bil - 100 Bil

25 Bil - 75 Bil

15 Bil - 25 Bil

2 Bil - 15 Bil

0 - 2 Bil

37.0

7.1

28.6

13.4 13.8

0.0

34.5

6.0

29.8

12.2

17.5

0.0

Boston Trust Equity - Composite 09/30/13

25

PERFORMANCE - 1 Quarter TOTAL ATTRIBUTION - 1 Quarter

ACTIVE RETURN - 1 Quarter

0.0 0.2 0.4-0.2-0.4-0.5

Utilities


Materials


Industrials

Health Care

Financials

Energy

Consumer Staples


0.2

0.3

0.1

-0.4

-0.1

-0.1

-0.4

0.1

0.1

-0.1


S&P 500 Index

0.0 3.0 6.0 9.0 12.0 14.0-3.0-6.0

Utilities


Materials


Industrials

Health Care

Financials

Energy

Consumer Staples


0.0

0.0

10.5

4.3

7.3

5.8

0.8

5.9

2.4

7.1

0.2

-4.1

10.4

6.6

8.9

6.8

2.9

5.1

0.8

7.9

Buy-and-Hold Portfolio 4.81

Portfolio Trading 0.30

Actual Return 5.11

Benchmark Return 5.24

Actual Active Return -0.14

Stock Selection -0.90

Sector Selection 0.47

Interaction 0.00

Total Selection -0.42


Benchmark Trading 0.01

Total Trading 0.31

Buy & Hold Active Return -0.12


26

PERFORMANCE - 3 Years TOTAL ATTRIBUTION - 3 Years

ACTIVE RETURN - 3 Years

0.0 0.3 0.6 0.8-0.3-0.6-0.9-1.2

Utilities


Materials


Industrials

Health Care

Financials

Energy

Consumer Staples


0.0

0.0

0.0

-0.1

-0.2

-0.9

0.4

-0.3

-0.3

-0.6


S&P 500 Index

0.0 10.0 20.0 30.0-10.0-14.3

Utilities


Materials


Industrials

Health Care

Financials

Energy

Consumer Staples


-7.7

-4.1

13.3

13.3

16.2

13.1

15.9

13.5

14.0

18.4

10.7

12.7

12.1

13.8

16.6

20.8

13.6

15.5

15.8

24.3

Buy-and-Hold Portfolio 14.36


Actual Return 14.78

Benchmark Return 16.27

Actual Active Return -1.49

Stock Selection -1.70

Sector Selection 0.26

Interaction -0.56

Total Selection -2.00


Benchmark Trading 0.00

Total Trading 0.41

Buy & Hold Active Return -1.59


27



PEER GROUP ANALYSIS - IM U.S. Fixed Income (SA+CF)





Investment Strategy:Boston Trust's approach to fixedincome investing combines top downeconomic scenario forecasts withbottom up fundamental research. Usingmacroeconomic-based quantitativetools, the investment team forecastsinterest rate changes for a range ofpossible economic outcomes. Theseforecasts contribute to portfoliostrategies with respect to interest ratesand the yield curve. In selectingindividual securities, Boston Trustapplies long-held standards for superiorfinancial quality, appropriate risk, anddiversification.

-12.0

-8.0

-4.0

0.0

4.0

8.0

12.0

16.0

17.9

Re

turn

(%)

0.0 6.0 12.0 18.0 21.6



¢£ Boston Tr FI - Boulder F&P 4.92 2.94

Å� Barclays Agg 5.41 3.45

¾ Median 6.46 3.97

-10.0

-7.0

-4.0

-1.0

2.0

5.0

8.0

11.0

14.0

17.0

Re

turn

LastQuarter

YearTo Date

1Year

3Years

5Years

7Years

10Years

¢£ Boston Tr FI - Boulder F&P 0.45 (74) -2.00 (81) -1.77 (84) 2.84 (74) 4.92 (78) 5.09 (67) 4.63 (65)

Å� Barclays Agg 0.57 (66) -1.89 (78) -1.68 (82) 2.86 (73) 5.41 (70) 5.12 (66) 4.60 (66)

Median 0.71 -0.75 -0.17 3.77 6.46 5.57 5.04

2012 2011 2010 2009 2008 2007 2006

Boston Tr FI - Boulder F&P 4.08 (75) 7.76 (33) 6.55 (64) 4.93 (83) 5.33 (23) 8.43 (10) 3.71 (92)

IM U.S. Fixed Income (SA+CF) Median 6.56 6.42 7.49 10.36 1.42 6.24 4.72

Barclays Agg 4.21 (74) 7.84 (32) 6.54 (65) 5.93 (77) 5.24 (24) 6.97 (33) 4.34 (74)


3Years

EndingSep-2013

3Years

EndingSep-2012

3Years

EndingSep-2011

3Years

EndingSep-2010

3Years

EndingSep-2009

3Years

EndingSep-2008

3Years

EndingSep-2007

Boston Tr FI - Boulder F&P 2.84 (74) 6.27 (65) 7.08 (72) 7.09 (55) 6.28 (43) 4.71 (20) 4.04 (55)


Barclays Agg 2.86 (73) 6.19 (66) 7.97 (61) 7.42 (50) 6.41 (40) 4.15 (38) 3.86 (70)


Boston Tr FI - Boulder F&P 09/30/13

28

TOP TEN HOLDINGS

PORTFOLIO CHARACTERISTICS vs. Barclays Aggregate Index

CREDIT QUALITY DISTRIBUTION vs. Barclays Aggregate Index

SECTOR DISTRIBUTION vs. Barclays Aggregate Index

MATURITY DISTRIBUTION vs. Barclays Aggregate Index

Boston Trust Fixed Income - Boulder F&P Barclays Aggregate Index

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Gove

rnm

en ts/S

overe

igns

A genci

es/R

egiona

ls

Invt

. G

rade

Cor

pora

tes

H igh Yie

ld C

orpo

rate

s

Non-A gen

cy M

BS

Leve

raged

/Bank

Lo

ans

Mo rtg

age-Pass

thro

ugh

Oth

er

44.0

0.0

21.0

0.0 0.0 0.0

32.0

3.0

7.6

47.0

19.3

0.0

5.3

0.0 0.0

20.8

Portfolio Benchmark

Effective Duration 3.89 5.34

Avg. Maturity 5.51 6.89

Avg. Quality AA AA

Yield To Maturity (%) 1.26 2.34

Holdings Count 18 8,577

Boston Trust Fixed Income - Boulder F&P

Company %

FED HOME LN BKS 0.5% 11/20/15 14.40

FED HOME LN BKS .375% 06/24/16 14.30

TREASURY INFL IDX 1.875% 7/15/15 9.80

FED HOME LN BKS 5.625% 6/11/21 8.20

US TREASURY 2.375% 6/30/18 7.60

FED HOME LN BKS 5.250% 8/15/22 6.80

TREASURY INFL IDX 1.625% 1/15/18 5.90

SSGA INST GOV MONEY MARKET INST CL 4.70

AMERICAN EXPRESS CO 7.000% 3/19/18 4.00

BURLINGTON NORTH BRK 4.7% 10/01/19 3.80


0.0

20.0

40.0

60.0

80.0

96.0

AA A

/Aaa

( Inclu

des

Gov'

t &

A genci

e s)

AA /A

a A

BB B

/Baa

Not

Ra ted

75.0

3.4

10.9 10.7

0.0

74.1

3.19.0 8.3

5.5


0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

54.0

0 to

3 Y ea

rs

3 to

5 Y ea

rs

5 to

7 Y ea

rs

7 to

10 Y ea

rs

10+ Y ea

rs

0.0 0.0 0.0 0.0 0.0

44.2

23.822.4

4.05.6

Boston Trust Fixed Income - Boulder F&P 09/30/13

29

FUND INFORMATION


PEER GROUP ANALYSIS - IM U.S. Mid Cap Growth Equity (MF)



*If less than 5 years, data is since inception of fund share class.

Firm and Management:Tony Dong has been the lead managerhere since February 2001. He's workedat Munder since 1988 and managedlarge-cap, growth-at-a-reasonable pricestrategies before taking over this fund.He's backed here by four comanagers:Andy Mui, Brian Matuszak, GeorgeSanders, and Geoffrey Wilson.

Investment Strategy:The Munder team seek companies thattrade cheaply relative to their growthprospects, using a broad range ofvaluation measures. They keep theFund's sector weightings within 3percentage points of those of the fund'sbenchmark, the S&P Midcap 400 Index.They'll typically hold 70-100 stocks andcap position sizes at 3%. And they'rerelatively patient investors; portfolioturnover has averaged around 50%.

Innovest's Assessment:Munder’s low beta bias is likely tooutperform during market drawdownsand when quality growth companies arein favor. Underperformance is expectedwhen low quality, high beta companiesoutpace high quality securities and

during speculative growth rallies.

6.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

14.0

15.0

16.0

Re

turn

(%)

16.0 18.0 20.0 22.0 24.0



¢£ Munder MC Core Gr 12.06 19.67

Å� Russell Midcap Growth Index 13.92 21.08

¾ Median 11.90 20.95

0.0

4.0

8.0

12.0

16.0

20.0

24.0

28.0

32.0

36.0

39.5

Re

turn

LastQuarter

YearTo Date

1Year

3Years

5Years

7Years

10Years

¢£ Munder MC Core Gr 7.40 (94) 23.24 (65) 26.01 (49) 17.20 (17) 12.06 (47) 8.05 (46) 10.90 (13)

Å� Russell Midcap Growth Index 9.34 (77) 25.42 (41) 27.54 (31) 17.65 (12) 13.92 (14) 8.34 (39) 10.16 (30)

Median 10.34 24.95 25.86 15.55 11.90 7.85 9.42

2012 2011 2010 2009 2008 2007 2006

Munder MC Core Gr 16.01 (20) -0.77 (19) 25.48 (56) 32.80 (73) -43.45 (38) 20.97 (27) 11.82 (19)

Russell Midcap Growth Index 15.81 (22) -1.65 (24) 26.38 (51) 46.29 (27) -44.32 (44) 11.43 (74) 10.66 (25)

IM U.S. Mid Cap Growth Equity (MF) Median 13.37 -5.01 26.39 41.04 -45.05 15.88 7.91

3Years

EndingSep-2013

3Years

EndingSep-2012

3Years

EndingSep-2011

3Years

EndingSep-2010

3Years

EndingSep-2009

3Years

EndingSep-2008

3Years

EndingSep-2007

Munder MC Core Gr 17.20 (17) 14.25 (23) 3.72 (50) -6.04 (55) -2.93 (52) 0.99 (32) 19.55 (21)

Russell Midcap Growth Index 17.65 (12) 14.73 (18) 5.89 (24) -3.90 (38) -3.10 (53) -0.75 (57) 17.01 (43)

IM U.S. Mid Cap Growth Equity (MF) Median 15.55 12.81 3.69 -5.55 -2.88 -0.42 16.66

Munder MC Core Gr 09/30/13

30

TOP 10 HOLDINGS

STYLE MAP (07/01/98 - 09/30/13)

SECTOR ALLOCATIONASSET ALLOCATION

PORTFOLIO CHARACTERISTICS

UP/DOWN CAPTURE (10/01/08 - 09/30/13)

Total Securities 84

Avg. Market Cap $9,329 Million

P/E 24.35

P/B 4.29

Div. Yield 1.94%

Annual EPS 19.89

5Yr EPS 14.56

3Yr EPS Growth 25.55

Affiliated Managers Group Inc ORD 2.61 %

Lincoln National Corp ORD 2.09 %

NiSource Inc ORD 1.91 %

LKQ Corp ORD 1.89 %

Liberty Media Corp ORD 1.85 %

Invesco Ltd ORD 1.83 %

Tupperware Brands Corp ORD 1.73 %

Airgas Inc ORD 1.73 %

Cooper Companies Inc ORD 1.60 %

SBA Communications Corp ORD 1.58 %3 Years 5 Years

vs. Russell Midcap Growth Index

Beta 0.97 0.92

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0%

Other

Fixed Income

Convertibles

Cash

Equities

0.0%

0.0%

0.0%

0.6%

99.4%

Munder MC Core Gr Russell Midcap Growth Index

0.0 4.0 8.0 12.0 16.0 20.0 24.0 28.0

UtilitiesTelecommunication Services

MaterialsInformation Technology

IndustrialsHealth Care

FinancialsEnergy

Consumer StaplesConsumer Discretionary

Other

Style History Sep-2013

Average Style Exposure

Ca

pit

ali

za

tio

n

Manager Style

Large Cap Growth

Small Cap GrowthSmall Cap Value

Large Cap Value

Munder MC Core Gr

50.0

70.0

90.0

110.0

130.0

150.0U

p C

ap

ture

50.0 70.0 90.0 110.0 130.0 150.0Down Capture

Munder MC Core Gr 09/30/13

31

FUND INFORMATION


PEER GROUP ANALYSIS - IM U.S. Small Cap Value Equity (MF)




Firm and Management:ICM's Small Cap Value effort began in1989, and today Bill Heaphy, ChiefInvestment Officer, and Sim Wootenserve as co-portfolio managers of theICM Small Company Portfolio. Bothhave research responsibilities and Billserves as Director of Research for thesmall cap team. Gary Merwitz, RobJacapraro, Josh Overholt and MattFleming are analysts on the small capteam.

Investment Strategy:Management starts with a universe ofstocks with market caps of around $1billion and narrows the list throughscreens and company analysis. Theteam favors well-managed companieswith good growth prospects that aretrading at attractive valuations. It tendsto sell when valuations get too high orwhen the company doesn't meetexpectations.

Innovest's Assessment:The strategy should outperform in downand stable markets and when lessercapitalized companies are leading. Thefund should underperform during bullmarkets when companies with little orno earnings are in vogue due to itssensitivity to high valuations; althoughthis may be subdued due to its higherweighting of lesser capitalizedcompanies. The fund should alsounderperform when financials andutilities lead due to management'sperpetual aversion to the sectors.

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Re

turn

(%)

7.0 14.0 21.0 28.0 35.0



¢£ ICM Small Company 10.35 25.65

Å� Russell 2000 Value Index 9.13 24.18

¾ Median 10.80 24.04

0.0

4.0

8.0

12.0

16.0

20.0

24.0

28.0

32.0

36.0

40.0

43.7

Re

turn

LastQuarter

YearTo Date

1Year

3Years

5Years

7Years

10Years

¢£ ICM Small Company 10.41 (7) 25.07 (54) 30.00 (46) 17.42 (40) 10.35 (58) 7.61 (19) 10.03 (29)

Å� Russell 2000 Value Index 7.59 (71) 23.07 (71) 27.04 (73) 16.57 (59) 9.13 (86) 5.36 (72) 9.29 (54)

Median 8.29 25.45 29.41 17.12 10.80 6.18 9.46

2012 2011 2010 2009 2008 2007 2006

ICM Small Company 16.93 (41) -4.85 (49) 22.73 (80) 34.46 (25) -35.11 (64) 3.35 (4) 19.22 (30)

Russell 2000 Value Index 18.05 (30) -5.50 (56) 24.50 (65) 20.58 (80) -28.92 (20) -9.78 (67) 23.48 (5)

IM U.S. Small Cap Value Equity (MF) Median 16.09 -4.97 25.71 28.28 -32.13 -7.34 17.26

3Years

EndingSep-2013

3Years

EndingSep-2012

3Years

EndingSep-2011

3Years

EndingSep-2010

3Years

EndingSep-2009

3Years

EndingSep-2008

3Years

EndingSep-2007

ICM Small Company 17.42 (40) 11.29 (56) -1.50 (77) -4.24 (41) -2.29 (16) 4.37 (5) 15.53 (8)

Russell 2000 Value Index 16.57 (59) 11.72 (46) -2.78 (91) -4.99 (53) -6.65 (52) 2.00 (16) 12.51 (43)

IM U.S. Small Cap Value Equity (MF) Median 17.12 11.57 -0.35 -4.72 -6.37 -0.49 12.19

ICM Small Company 09/30/13

32

TOP 10 HOLDINGS

STYLE MAP (05/01/89 - 09/30/13)

SECTOR ALLOCATIONASSET ALLOCATION

PORTFOLIO CHARACTERISTICS

UP/DOWN CAPTURE (10/01/08 - 09/30/13)

Total Securities 127


P/E 23.55

P/B 2.04

Div. Yield 2.25%

Annual EPS 5.93

5Yr EPS 3.32


Methode Electronics Inc ORD 1.55 %

Integrated Device Technology Inc ORD 1.54 %

ATMI Inc ORD 1.33 %

Dreyfus Treasury Prime Cash Management;Inst 1.33 %

Men's Wearhouse Inc ORD 1.33 %

Belden Inc ORD 1.30 %

Carpenter Technology Corp ORD 1.29 %

Rogers Corp ORD 1.28 %

Hanger Inc ORD 1.27 %

Ameris Bancorp ORD 1.25 %3 Years 5 Years

vs. Russell 2000 Value Index

Beta 1.05 1.05

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0%

Other

Fixed Income

Convertibles

Cash

Equities

0.0%

0.0%

0.0%

1.3%

98.7%

ICM Small Company Russell 2000 Value Index

0.0 10.0 20.0 30.0 40.0 48.0




FinancialsEnergy


Other



Ca

pit

ali

za

tio

n

Manager Style

Large Cap Growth

Small Cap GrowthSmall Cap Value

Large Cap Value

ICM Small Company

50.0

70.0

90.0

110.0

130.0

150.0U

p C

ap

ture

50.0 70.0 90.0 110.0 130.0 150.0Down Capture

ICM Small Company 09/30/13

33

FUND INFORMATION


PEER GROUP ANALYSIS - IM International Large Cap Value Equity (MF)




Firm and ManagementThis fund is run by the Dodge & CoxInternational Investment PolicyCommittee. The members of this nine-person team have been at Dodge &Cox for an average of 19 years.Several members also serve on thecommittee that runs large-value AnalystPick Dodge & Cox Stock. In addition, allthe firm's analysts are involved to acertain extent with this fund becausethey cover sectors on a global basis.

Investment StrategyThis Fund's management team investsin stocks that it considers undervaluedon a range of variables. It favorscompanies with good management,dominant competitive positions, andgood growth potential. Becausemanagement takes such a long-termview, turnover is generally low.Management will hedge part of theFund's currency exposure at times,though it's not a common tactic. It usesfair-value pricing whenever it thinks

such an approach is warranted.

Innovest's AssessmentWe believe this collaborative researchapproach will continue generatingshareholder value over full marketcycles; however, performance maysuffer during periods driven by moremacroeconomic events or a disregardfor company specific fundamentals.The strategy’s notable allocation todeveloping countries also suggests thatrelative performance may be partiallydictated by the market’s preference foremerging market securities.

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Re

turn

(%)

18.0 20.0 22.0 24.0 26.0 28.0



¢£ Dodge & Cox Intl 8.11 25.48

Å� MSCI EAFE Value Idx 5.86 23.63

¾ Median 4.74 22.59

-4.0

0.0

4.0

8.0

12.0

16.0

20.0

24.0

28.0

32.0

Re

turn

LastQuarter

YearTo Date

1Year

3Years

5Years

7Years

10Years

¢£ Dodge & Cox Intl 11.15 (38) 17.15 (9) 27.76 (5) 8.75 (8) 8.11 (10) 4.10 (20) 10.62 (3)

Å� MSCI EAFE Value Idx 12.63 (14) 15.71 (21) 24.27 (18) 7.99 (14) 5.86 (24) 1.28 (54) 7.94 (48)

Median 10.53 14.12 21.39 6.97 4.74 1.37 7.77

2012 2011 2010 2009 2008 2007 2006

Dodge & Cox Intl 21.03 (10) -15.97 (86) 13.69 (6) 47.46 (9) -46.69 (72) 11.71 (29) 28.01 (31)

MSCI EAFE Value Idx 17.69 (39) -12.17 (41) 3.25 (80) 34.23 (29) -44.09 (52) 5.95 (94) 30.38 (9)

IM International Large Cap Value Equity (MF) Median 16.68 -12.91 5.40 28.41 -43.99 9.50 26.51

3Years

EndingSep-2013

3Years

EndingSep-2012

3Years

EndingSep-2011

3Years

EndingSep-2010

3Years

EndingSep-2009

3Years

EndingSep-2008

3Years

EndingSep-2007

Dodge & Cox Intl 8.75 (8) 2.69 (15) -0.02 (11) -6.30 (8) -1.42 (18) 2.55 (31) 24.97 (14)

MSCI EAFE Value Idx 7.99 (14) -0.11 (65) -1.69 (30) -10.72 (57) -4.08 (54) 0.00 (66) 23.36 (24)

IM International Large Cap Value Equity (MF) Median 6.97 1.04 -3.28 -10.31 -3.85 1.08 21.64

Dodge & Cox Intl 09/30/13

34

TOP 10 HOLDINGSPORTFOLIO CHARACTERISTICS

STYLE MAP (06/01/01 - 09/30/13)

SECTOR ALLOCATION

ASSET ALLOCATION

REGION ALLOCATION

TOP 5 COUNTRIES

UP/DOWN CAPTURE (10/01/08 - 09/30/13)

0.0% 30.0% 60.0% 90.0% 120.0%

Convertibles

Fixed Income

Other

Cash

Equities

0.0%

0.1%

0.7%

1.2%

98.1%

Total Securities 90


P/E 26.69

P/B 2.70

Div. Yield 2.81%

Annual EPS -0.50

5Yr EPS -7.87

3Yr EPS Growth 6.77

Naspers Ltd ORD 4.13 %

Roche Holding AG ORD 4.11 %

Sanofi SA ORD 3.77 %

Lafarge SA ORD 2.97 %

Credit Suisse Group AG ORD 2.75 %

Novartis AG DR 2.66 %

Koninklijke Philips NV ORD 2.64 %

Bayer AG ORD 2.50 %

Hewlett-Packard Co ORD 2.49 %

HSBC Holdings PLC ORD 2.47 %

United Kingdom 15.14 %

Switzerland 14.54 %

Japan 12.70 %

France 10.98 %

Germany 6.76 %

3 Years 5 Years

vs. MSCI EAFE Value Idx

Beta 0.94 1.05

Dodge & Cox Intl MSCI EAFE Value Idx

0.0 10.0 20.0 30.0 40.0 50.0 60.0

OtherFrontier Markets

Middle EastUnited Kingdom

Europe ex UKJapan

Pacific ex JapanEM Mid East+Africa

North AmericaEM Latin America

EM EuropeEM Asia

Dodge & Cox Intl MSCI EAFE Value Idx

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0




FinancialsEnergy


Other



Ca

pit

ali

za

tio

n

Manager Style

MSCI EAFE Growth Index

MSCI Emerging Markets IndexMSCI EAFE Small Cap

MSCI EAFE Value Index

Dodge & Cox Intl

50.0

70.0

90.0

110.0

130.0

150.0

Up

Ca

ptu

re

50.0 60.0 70.0 80.0 90.0 100.0 110.0 120.0 130.0 140.0 150.0Down Capture

Dodge & Cox Intl 09/30/13

35

FUND INFORMATION


PEER GROUP ANALYSIS - IM International Large Cap Growth Equity (MF)




Firm and Management:Like all American Funds, this offeringboasts many experienced managers,most of whom have been with thecompany for more than a decade. Eachmanager runs his or her portion ofassets independently of the others. Aportion of the portfolio (less than 25%of assets) is run by the firm's analyststaff.

Investment Strategy:This Fund's managers are focused onyield. They buy a lot of blue-chip stockswith healthy dividends and hold themfor the long term. They usually try topick up stocks on the cheap, so theportfolio's price multiples are below thegroup norm. The managers use cash tomoderate volatility, typically keeping theFund's stake in the double digits. TheFund usually has a stake in emerging-markets companies and will sometimeshold preferred stock and convertibles

debt.

Innovest's Assessment:The fund’s propensity to focus intenselyon bottom-up, fundamental factors canlead to periods of underperformancewhen the market is less concernedabout company fundamentals and moredriven by thematic and macroeconomic factors. Additionally, the fundis likely to lag when highly cyclicalstocks and generally lower qualitycompanies significantly outperform theoverall market. Finally, the fund’simmense asset base is likely to presentsome challenges in the fund’s ability tobuild meaningful positions in smallercompanies and opportunistically tradein less liquid markets.

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

9.9

Re

turn

(%)

12.0 15.0 18.0 21.0 24.0 27.0



¢£ American Funds EuPc 7.15 21.10

Å� MSCI EAFE Growth Index (Net) 6.79 20.81

¾ Median 6.66 21.55

-1.0

2.0

5.0

8.0

11.0

14.0

17.0

20.0

23.0

26.0

27.7

Re

turn

LastQuarter

YearTo Date

1Year

3Years

5Years

7Years

10Years

¢£ American Funds EuPc 9.44 (61) 11.62 (53) 17.85 (51) 6.71 (66) 7.15 (38) 4.33 (23) 9.58 (18)

Å� MSCI EAFE Growth Index (Net) 10.50 (25) 16.54 (2) 23.27 (1) 8.88 (21) 6.79 (49) 3.46 (49) 8.00 (59)

Median 9.65 11.77 17.95 7.41 6.66 3.44 8.41

2012 2011 2010 2009 2008 2007 2006

American Funds EuPc 19.21 (34) -13.58 (48) 9.40 (71) 39.10 (16) -40.53 (14) 18.96 (25) 21.87 (68)

MSCI EAFE Growth Index (Net) 16.86 (75) -12.11 (32) 12.25 (45) 29.36 (69) -42.70 (43) 16.45 (44) 22.33 (64)

IM International Large Cap Growth Equity (MF) Median 18.33 -13.62 11.69 33.28 -43.67 15.58 23.16

3Years

EndingSep-2013

3Years

EndingSep-2012

3Years

EndingSep-2011

3Years

EndingSep-2010

3Years

EndingSep-2009

3Years

EndingSep-2008

3Years

EndingSep-2007

American Funds EuPc 6.71 (66) 3.35 (62) 0.51 (27) -4.63 (6) 1.13 (6) 4.57 (15) 25.35 (29)

MSCI EAFE Growth Index (Net) 8.88 (21) 4.32 (39) -0.63 (49) -8.37 (52) -3.21 (60) 2.16 (49) 23.06 (57)

IM International Large Cap Growth Equity (MF) Median 7.41 3.73 -0.72 -8.26 -2.86 2.07 24.09

American Funds EuPc 09/30/13

36

TOP 10 HOLDINGSPORTFOLIO CHARACTERISTICS

STYLE MAP (01/01/99 - 09/30/13)

SECTOR ALLOCATION

ASSET ALLOCATION

REGION ALLOCATION

TOP 5 COUNTRIES

UP/DOWN CAPTURE (10/01/08 - 09/30/13)

0.0% 30.0% 60.0% 90.0% 120.0%

Convertibles

Cash

Other

Fixed Income

Equities

0.0%

0.3%

0.3%

7.0%

92.4%

Total Securities 409


P/E 21.89

P/B 3.72

Div. Yield 2.34%

Annual EPS 12.98

5Yr EPS 8.33


Novo Nordisk A/S ORD 3.91 %

Softbank Corp ORD 3.34 %

Novartis AG ORD 2.30 %

Bayer AG ORD 2.24 %

Samsung Electronics Co Ltd ORD 1.96 %

Taiwan Semiconductor Manufacturing Co Ltd ORD 1.60 %

Barclays PLC ORD 1.59 %

Prudential PLC ORD 1.53 %

Nestle SA ORD 1.39 %

Tencent Holdings Ltd ORD 1.33 %

Japan 12.73 %

United Kingdom 10.67 %

Germany 8.25 %

Switzerland 8.13 %

France 6.41 %

3 Years 5 Years

vs. MSCI EAFE Growth Index (Net)

Beta 0.96 1.00

American Funds EuPc MSCI EAFE Growth Index (Net)

0.0 10.0 20.0 30.0 40.0 50.0 54.0

OtherFrontier Markets

Middle EastUnited Kingdom

Europe ex UKJapan

Pacific ex JapanEM Mid East+Africa

North AmericaEM Latin America

EM EuropeEM Asia

American Funds EuPc MSCI EAFE Growth Index (Net)

0.0 3.0 6.0 9.0 12.0 15.0 18.0 21.0 24.0




FinancialsEnergy


Other



Ca

pit

ali

za

tio

n

Manager Style

MSCI EAFE Growth Index

MSCI Emerging Markets IndexMSCI EAFE Small Cap

MSCI EAFE Value Index

American Funds EuPc

50.0

70.0

90.0

110.0

130.0

150.0

Up

Ca

ptu

re

50.0 60.0 70.0 80.0 90.0 100.0 110.0 120.0 130.0 140.0 150.0Down Capture

American Funds EuPc 09/30/13

37

FUND INFORMATION


PEER GROUP ANALYSIS - IM U.S. Broad Market Core Fixed Income (MF)




Firm and Management:Bill Gross is a founder and ManagingDirector of PIMCO and has beenassociated with PIMCO since 1973. AsChief Investment Officer of PIMCO heoversees the management of over$500 billion of fixed income securities.He has been in investmentmanagement since 1970 and holds abachelor's degree from Duke Universityand an MBA from the UCLA Graduate

School of Business.

Investment Strategy:PIMCO couples their long termmacroeconomic outlook with their viewon short-term cyclical factors todetermine the fund's sector weightingsand duration. Although the strategy willfocus heavily on certain sectors, theteam doesn't make huge interest-ratebets against the Barclays CapitalAggregate Index. However, the fundwill occasionally invest in non-indexsectors of the bond market, such ashigh yield, international and emerging

markets.

Innovest's Assessment:The fund attempts to add value throughtop-down positioning and byaggressively pursuing relativelyattractive sectors of the bond market.The fund's total return approach allowsthem to diversify from heavily weightedsectors in the benchmark. Historically,their sector allocation decisions haveresulted in strong relativeoutperformance; however, it isimportant to note that the fund’sintermediate duration mandate couldbecome a headwind to performance ina rising interest rate environment.PIMCO also has the potential tounderperform when its macroeconomicforecast is materially wrong, either froma timing perspective or a fundamentalperspective. PIMCO's approach willnot always be lockstep with the broad

bond market index.

2.0

3.0

4.0

5.0

6.0

7.0

8.0

8.9

Re

turn

(%)

2.0 3.0 4.0 5.0 6.0 6.9



¢£ PIMCO Tot Rtn Inst 7.97 4.13

Å� BC Aggregate Idx 5.41 3.63

¾ Median 6.11 4.19

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

Re

turn

LastQuarter

YearTo Date

1Year

3Years

5Years

7Years

10Years

¢£ PIMCO Tot Rtn Inst 1.17 (4) -1.88 (36) -0.74 (20) 3.77 (19) 7.97 (4) 7.07 (1) 6.12 (1)

Å� BC Aggregate Idx 0.57 (46) -1.89 (36) -1.68 (55) 2.86 (61) 5.41 (70) 5.12 (38) 4.60 (34)

Median 0.54 -2.10 -1.59 3.08 6.11 4.90 4.31

2012 2011 2010 2009 2008 2007 2006

PIMCO Tot Rtn Inst 10.35 (2) 4.16 (94) 8.86 (20) 13.87 (42) 4.82 (14) 9.08 (1) 3.99 (45)

Barclays Aggregate Index 4.21 (81) 7.84 (12) 6.54 (70) 5.93 (90) 5.24 (10) 6.97 (10) 4.34 (28)

IM U.S. Broad Market Core Fixed Income (MF) Median 6.16 6.63 7.26 12.44 -3.45 5.30 3.93

3Years

EndingSep-2013

3Years

EndingSep-2012

3Years

EndingSep-2011

3Years

EndingSep-2010

3Years

EndingSep-2009

3Years

EndingSep-2008

3Years

EndingSep-2007

PIMCO Tot Rtn Inst 3.77 (19) 7.69 (22) 9.86 (17) 10.87 (1) 9.18 (1) 4.41 (2) 4.42 (4)

Barclays Aggregate Index 2.86 (61) 6.19 (72) 7.97 (64) 7.42 (40) 6.41 (24) 4.15 (5) 3.86 (17)

IM U.S. Broad Market Core Fixed Income (MF) Median 3.08 6.87 8.33 7.04 5.24 2.10 3.35

PIMCO Tot Rtn Inst 09/30/13

38

TOP SECTOR ALLOCATIONSPORTFOLIO CHARACTERISTICS

STYLE MAP (06/01/87 - 09/30/13)

QUALITY ALLOCATION

ASSET ALLOCATION

MATURITY DISTRIBUTION

UP/DOWN CAPTURE (10/01/08 - 09/30/13)

0.0% 50.0% 100.0% 133.4%-30.4 %

Cash

Convertibles

Equities

Other

Fixed Income

-7.0 %

0.0%

0.0%

4.0%

103.0%

Avg. Coupon 2.99 %

Nominal Maturity 6.54 Years

Effective Maturity N/A

Duration 5.82 Years

SEC 30 Day Yield 2.44

Avg. Credit Quality N/A

GNMA and Other Mtg Backed 45.00 %

Corporate Notes/Bonds 23.00 %

Fgn. Currency Denominated Bonds 13.00 %

Government Agency Securities 12.00 %

Treasury Notes/Bonds 10.00 %

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%-9.9 %

20-30Yrs

>30Yrs

<1Yr

Other

10-20Yrs

1-3Yrs

3-5Yrs

5-10Yrs

-1.0 %

0.0%

0.0%

5.0%

10.5%

16.2%

25.7%

43.7%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

CCC, CC AND C rated

Equities/Other

BB AND B Rated

AA Rated

BBB Rated

Foreign Securities

Government/AAA

0.8%

4.0%

8.4%

18.5%

10.9%

13.0%

44.3%

PIMCO Tot Rtn Inst

50.0

70.0

90.0

110.0

130.0

150.0U

p C

ap

ture

50.0 70.0 90.0 110.0 130.0 150.0Down CaptureStyle History Sep-2013


Ca

pit

ali

za

tio

n

Manager Style

Barclays Capital Long Term Govt Bond

Barclays Capital Long U.S. CreditBarclays Capital U.S. Credit 1-5 Year Index

Barclays Capital 1-5 Yr Gov

PIMCO Tot Rtn Inst 09/30/13

39

FUND INFORMATION


PEER GROUP ANALYSIS - IM U.S. High Yield Bonds (MF)




Firm and Management:William J. Morgan joined J.P. Morgan in2005. He is the high yield team leaderand the portfolio manager for allaccounts in the high yield, aggressiveincome high yield, and insurance asset"BB' default rating styles. He is amember of the High Yield ManagementReview Committee and is alsoresponsible for managing the HighYield Team's credit analysts. Prior tojoining the firm, he held the same roleat Banc One High Yield Partners, LLCand Pacholder Associates, Inc.

Investment Style:The team utilizes a flexible approachthat seeks to generate excess return byutilizing the full range of opportunitiespresented by the high yield market,from investment grade credits trading athigh yield spreads to distressed anddefaulted securities and post-reorganization debt securities.

Innovest's Assessment:The JPMorgan High Yield Fund hashistorically had an overweight allocationto BB and B-rated credits; therefore it islikely to underperform in markets wherelower-rated high yield credits (CCC andlower) perform well. The strategy islikely to outperform when higher qualityhigh yield credits are in favor or wheninvestors generally favor less riskyassets. Additionally, the strategy shouldperform well in market environmentswhere bottom-up fundamental creditresearch is rewarded.

2.0

4.0

6.0

8.0

10.0

12.0

14.0

15.7

Re

turn

(%)

4.0 8.0 12.0 16.0 19.0



¢£ JPMorgan High Yield 11.80 10.80

Å� BC US Corp: High Yield 13.53 13.17

¾ Median 11.00 11.85

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Re

turn

LastQuarter

YearTo Date

1Year

3Years

5Years

7Years

10Years

¢£ JPMorgan High Yield 1.99 (65) 3.71 (36) 6.97 (39) 8.26 (44) 11.80 (27) 8.06 (18) 8.46 (12)

Å� BC US Corp: High Yield 2.28 (43) 3.73 (35) 7.14 (36) 9.19 (16) 13.53 (4) 8.76 (6) 8.86 (7)

Median 2.17 3.26 6.54 8.12 11.00 7.13 7.46

2012 2011 2010 2009 2008 2007 2006

JPMorgan High Yield 14.81 (48) 2.65 (63) 14.67 (36) 48.45 (46) -22.54 (30) 2.18 (41) 12.80 (6)

Barclays US Corp: High Yield 15.81 (29) 4.98 (16) 15.12 (28) 58.21 (11) -26.16 (59) 1.87 (50) 11.86 (13)

IM U.S. High Yield Bonds (MF) Median 14.72 3.31 14.03 47.44 -25.00 1.84 9.98

3Years

EndingSep-2013

3Years

EndingSep-2012

3Years

EndingSep-2011

3Years

EndingSep-2010

3Years

EndingSep-2009

3Years

EndingSep-2008

3Years

EndingSep-2007

JPMorgan High Yield 8.26 (44) 11.63 (42) 11.51 (22) 7.76 (13) 4.96 (14) 2.31 (12) 8.05 (13)

Barclays US Corp: High Yield 9.19 (16) 12.90 (8) 13.83 (2) 8.75 (4) 5.31 (10) 1.04 (43) 7.44 (25)

IM U.S. High Yield Bonds (MF) Median 8.12 11.44 10.21 6.07 3.08 0.90 6.65

JPMorgan High Yield 09/30/13

40


STYLE MAP (12/01/98 - 09/30/13)

QUALITY ALLOCATION

ASSET ALLOCATION


UP/DOWN CAPTURE (10/01/08 - 09/30/13)

0.0% 30.0% 60.0% 90.0% 120.0%

Other

Convertibles

Equities

Cash

Fixed Income

0.0%

0.1%

1.0%

4.7%

94.2%

Avg. Coupon N/A

Nominal Maturity N/A

Effective Maturity 7.15 Years

Duration 5.33 Years


Avg. Credit Quality B


US$ Denominated Fgn. Gvt. 13.25 %

Preferred Stock-Non Convertible 1.28 %

Common Stock 1.00 %

Convertible Securities 0.10 %

Asset Backed Securities 0.07 %

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

>30Yrs

20-30Yrs

1-3Yrs

Other

<1Yr

10-20Yrs

3-5Yrs

5-10Yrs

0.0%

0.0%

0.0%

2.3%

4.7%

6.5%

43.2%

43.3%

0.0% 20.0% 40.0% 60.0% 80.0%

Equities/Other

Not Rated

BBB Rated

Government/AAA

CCC, CC AND C rated

BB AND B Rated

2.3%

2.8%

3.6%

4.7%

15.8%

70.9%

JPMorgan High Yield

50.0

70.0

90.0

110.0

130.0

150.0U

p C

ap

ture



Ca

pit

ali

za

tio

n

Manager Style




JPMorgan High Yield 09/30/13

41

FUND INFORMATION


PEER GROUP ANALYSIS - Loan Participation Mutual Funds




Firm and Management:Scott Page and Craig Russ co-managethe fund. Page has been its comanagersince its inception in early 2001. Russjoined him when Payson Swaffield wasappointed as Eaton Vance's chiefincome investment officer in November2007. Russ isn't a novice, though: Hesigned on with the firm in 1997 and hasserved as a bank-loan analyst and as acomanager on Eaton Vance funds suchas closed-end Senior Floating Rate

EFR since 2003.

Investment Strategy:The Eaton Vance Floating Rate Fundinvests in senior, secured floating-ratebank loans, the majority of which earnjunk-like credit ratings. It is a bottom-upstrategy that is focused on capitalpreservation and giving shareholderslow volatility exposure to the floatingrate corporate loan asset class. Due tothe sheer size of the strategy,incremental gains from inaccuratelyrated credits are not significant enoughto generate meaningful Alpha so theteam focuses on only the largest issuesof the highest rated credits availableand leaves the "diamond in the rough"finds to smaller, more nimble

strategies.

Innovest's Assessment:The strategy should be expected tooutperform during more difficult creditenvironments where higher quality,broad portfolio diversification tactics willprotect the portfolio from widespreadcredit deterioration. The strategyshould underperform when lowerquality credits lead (B- and lower) andin situations when strongerperformance is being derived fromsmaller issues.

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.3

Re

turn

(%)

6.0 8.0 10.0 12.0 14.0 15.4



¢£ Eaton Vance Flt Rt 6.83 10.33

Å� CSFB Leveraged Loan Idx 7.36 9.75

¾ Median 6.45 10.02

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

Re

turn

LastQuarter

YearTo Date

1Year

3Years

5Years

7Years

10Years

¢£ Eaton Vance Flt Rt 1.17 (49) 3.20 (50) 4.68 (51) 5.71 (39) 6.83 (27) 4.19 (19) 4.33 (38)

Å� CSFB Leveraged Loan Idx 1.40 (8) 4.26 (4) 5.83 (10) 6.25 (17) 7.36 (12) 4.60 (6) 5.10 (3)

Median 1.15 3.20 4.68 5.48 6.45 3.71 4.07

2012 2011 2010 2009 2008 2007 2006

Eaton Vance Flt Rt 8.27 (67) 2.44 (9) 9.55 (43) 46.49 (21) -30.25 (63) 2.01 (12) 6.48 (36)

Credit Suisse Leveraged Loan Index 9.42 (33) 1.80 (29) 9.97 (39) 44.88 (27) -28.75 (50) 1.87 (17) 7.35 (10)

Loan Participation Mutual Funds Median 8.89 1.43 9.17 41.50 -29.34 1.14 6.18

3Years

EndingSep-2013

3Years

EndingSep-2012

3Years

EndingSep-2011

3Years

EndingSep-2010

3Years

EndingSep-2009

3Years

EndingSep-2008

3Years

EndingSep-2007

Eaton Vance Flt Rt 5.71 (39) 7.41 (35) 6.58 (19) 2.73 (33) 0.91 (24) 0.37 (30) 4.75 (35)

Credit Suisse Leveraged Loan Index 6.25 (17) 7.74 (27) 6.76 (18) 3.14 (23) 1.15 (18) 0.74 (22) 5.52 (9)

Loan Participation Mutual Funds Median 5.48 7.03 5.50 2.07 -0.06 -0.08 4.46

Eaton Vance Flt Rt 09/30/13

42


STYLE MAP (02/01/01 - 09/30/13)

QUALITY ALLOCATION

ASSET ALLOCATION


UP/DOWN CAPTURE (10/01/08 - 09/30/13)

0.0% 30.0% 60.0% 90.0% 120.0%

Convertibles

Equities

Other

Cash

Fixed Income

0.0%

0.0%

1.8%

5.9%

92.3%

Avg. Coupon 4.48 %

Nominal Maturity 5.16 Years

Effective Maturity N/A

Duration 0.16 Years


Avg. Credit Quality BB


0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

>30Yrs

20-30Yrs

10-20Yrs

Other

1-3Yrs

<1Yr

3-5Yrs

5-10Yrs

0.0%

0.0%

0.3%

1.8%

5.3%

5.9%

36.0%

50.7%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

CCC, CC AND C rated

BBB Rated

Equities/Other

Not Rated

Government/AAA

BB AND B Rated

1.2%

1.6%

1.8%

5.6%

5.9%

83.8%

Eaton Vance Flt Rt

50.0

70.0

90.0

110.0

130.0

150.0U

p C

ap

ture



Ca

pit

ali

za

tio

n

Manager Style




Eaton Vance Flt Rt 09/30/13

43

FUND INFORMATION

INDEX ALLOCATION

PERFORMANCE OVER TIME

INVESTMENT STATISTICS (5 YEARS*)


*If less than 5 years, since inception time period was used.

Firm and Management:PIMCO, founded in 1971, is a globalinvestment solutions provider managingretirement and other assets for morethan 8 million people in the U.S. andmillions more around the world. Thefund is managed by Mihir P. Worah.Mr. Worah is a managing director in theNewport Beach office, a portfoliomanager, and head of the Real Returnportfolio management team.

Investment Strategy:PIMCO uses derivatives linked tocommodity indices in an effort to gainexposure to the returns of thecommodity markets, without investingdirectly in physical commodities.PIMCO fully collateralizes thesepositions with fixed income securities,mainly Treasury Inflation-ProtectedSecurities (TIPS) that are activelymanaged in an attempt to outperformthe cost of gaining commodity exposure(in an effort to deliver excess return)and to provide an additional inflationhedge beyond commodities

Innovest Assessment:PIMCO Commodity Real Return’sprospective performance is largelydependent on the investment team’sability to find favorable trades on theTIPS yield curve as well as the rate atwhich real yields change.Consequently, the strategy is expectedto outperform during periods of riskaversion, characterized by decliningreal interest rates, and when actualinflation exceeds implied inflation.Investors are likely to experienceunderperformance during rising interestrate environments, defined by a rapidascension of real interest rates.

PIMCO Commodity RR

DJ-UBS Commodity Index

-6.0

-5.0

-4.0

-3.0

-2.0

-1.0

-0.2

Re

turn

(%)

18.0 20.0 22.0 24.0


PIMCO Commodity RR DJ-UBS Commodity Index

0.0

4.0

8.0

-4.0

-8.0

-12.0

-16.0

-20.0

-22.4

Re

turn

(%)

Last

Quarter

YTD 1

Year

3

Years

5

Years

7

Years

10

Years

2.1

-8.6

-14.3

-3.2

-5.3

-2.2

2.13.5

-12.8

-17.9

-0.7 -1.1

0.8

4.7

LastQuarter

YearTo Date

1Year

3Years

5Years

7Years

10Years

PIMCO Commodity RR 3.47 -12.82 -17.85 -0.68 -1.06 0.83 4.70

DJ-UBS Commodity Index 2.13 -8.56 -14.35 -3.16 -5.29 -2.15 2.14

2012 2011 2010 2009 2008 2007 2006 2005 2004 2003

PIMCO Commodity RR 5.31 -7.56 24.13 39.91 -43.33 23.80 -3.04 20.50 16.36 29.82

DJ-UBS Commodity Index -1.06 -13.32 16.83 18.91 -35.65 16.23 2.07 21.36 9.15 23.93

Alpha BetaActual

Correlation

UpMarket

Capture

DownMarket

Capture

InceptionDate

PIMCO Commodity RR 6.09 1.17 0.97 128.96 104.66 07/01/2002

DJ-UBS Commodity Index 0.00 1.00 1.00 100.00 100.00 07/01/2002

0.0

10.0

20.0

30.0

40.0

48.0

B ase

Met

a ls

Ener

gy

Gr a

ins

L ives

tock

Pre

ciou

s M

eta ls

So fts

15.8

37.5

19.4

5.4

13.0

9.0

PIMCO Commodity RR 09/30/13

44

FUND INFORMATION


PEER GROUP ANALYSIS - IM U.S. GIC/Stable Value (SA+CF)




Investment StrategyThe PLUS Fund's investment strategiesare based on a structured anddiversified multi-product, multi-managerapproach. The PLUS Fund investsprimarily in a diversified portfolio ofstable value investment contracts andfixed income securities that backcertain stable value investmentcontracts. Cash equivalents are held, inpart, to provide liquidity for payouts.The composition of the PLUS Fundportfolio and its allocations to variousstable value investments and fixedincome investment sectors isdetermined based on prevailingeconomic and capital marketconditions, relative value analysis, andother factors. 1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

5.7

Re

turn

(%)

0.0 1.0 2.0 3.0 3.7



¢£ Vantage Trust Plus 3.54 0.29

Å� Ryan 3 Yr GIC Mstr 2.78 0.65

¾ Median 3.13 0.40

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

6.6

Re

turn

LastQuarter

YearTo Date

1Year

3Years

5Years

7Years

10Years

¢£ Vantage Trust Plus 0.63 (16) 1.97 (4) 2.71 (3) 3.15 (7) 3.54 (31) 4.02 (21) 4.25 (20)

Å� Ryan 3 Yr GIC Mstr 0.25 (100) 0.80 (82) 1.12 (82) 1.83 (92) 2.78 (61) 3.29 (78) 3.34 (88)

Median 0.46 1.22 1.74 2.46 3.13 3.69 4.04

2012 2011 2010 2009 2008 2007 2006

Vantage Trust Plus 3.03 (17) 3.50 (27) 3.85 (41) 4.16 (31) 5.14 (9) 5.20 (23) 5.06 (11)

Ryan 3 Yr GIC Mstr 1.48 (99) 2.44 (64) 3.53 (52) 4.49 (17) 4.79 (34) 4.52 (98) 3.77 (97)

IM U.S. GIC/Stable Value (SA+CF) Median 2.37 2.93 3.55 3.71 4.66 5.01 4.66

3Years

EndingSep-2013

3Years

EndingSep-2012

3Years

EndingSep-2011

3Years

EndingSep-2010

3Years

EndingSep-2009

3Years

EndingSep-2008

3Years

EndingSep-2007

Vantage Trust Plus 3.15 (7) 3.55 (36) 3.96 (30) 4.51 (25) 4.93 (20) 5.15 (8) 5.04 (9)

Ryan 3 Yr GIC Mstr 1.83 (92) 2.72 (67) 3.72 (39) 4.41 (28) 4.59 (37) 4.23 (94) 3.70 (96)

IM U.S. GIC/Stable Value (SA+CF) Median 2.46 3.24 3.50 4.09 4.55 4.79 4.62

Vantage Trust Plus 09/30/13

45

Passive Portfolios Weight (%)

Jul-1990

Barclays Aggregate Index 35.00

MSCI EAFE (net) Index 15.00

Russell 2000 Index 15.00

S&P 500 Index 35.00

Apr-2001




S&P 500 Index 41.00

Jan-2002

70% S&P/30% BC Aggr 50.00




Russell Midcap Index 10.00

Apr-2002





70% S&P/30% BC Aggr 50.00

Oct-2005



Dow Jones-UBS Commodity Index 2.00



70% S&P/30% BC Aggr 54.00

Jan-2006






70% S&P/30% BC Aggr 54.00

Passive Portfolios Weight (%)

Apr-2006






70% S&P/30% BC Aggr 54.00

Oct-2007

70% S&P/30% BC Aggr 54.00






Apr-2010

70% S&P/30% BC Aggr 52.00





Barclays US Corp: High Yield 3.00

CSFB Leveraged Loan 7.00


Apr-2012

70% S&P/30% BC Aggr 52.00





Barclays US Corp: High Yield 5.00

CSFB Leveraged Loan 5.00


Custom Benchmark Allocations Over Time

46

GlossaryAlpha measures a portfolio’s return in excess of the market return adjusted for risk. It is a measure of the manager’s contribution to performance with reference to security selection. A positive alpha indicates that a portfolio was positively rewarded for the residual risk that was taken for that level of market exposure.

Beta measures the sensitivity of rates of portfolio return to movements in the market. A portfolio’s beta measures the expected change in return per 1% change in the return on the market. If the beta of a portfolio is 1.5, a 1 percent increase in the return of the market will result, on average, in a 1.5 percent increase in the return on the portfolio. The converse would also be true.

Dividend Yield - The total amount of dividends paid out for a stock over the preceding twelve months divided by the closing price of a share of the common stock.

Down Capture Ratio - The Down Capture Ratio is a measure of the Investment’s compound return when the Benchmark was down divided by the Benchmark’s compound return when the Benchmark was down. The smaller the value, the better.

Duration - A time measure of a bond’s interest-rate sensitivity, based on the weighted average of the time periods over which a bond’s cash flows accrue to the bondholder.

Forecasted Long-Term Earnings Growth - This growth rate is a measure of a company’s expected long-term success in generating future year-over-year earnings growth. This growth rate is a market value weighted average of the consensus (mean) analysts’ long-term earnings growth rate forecast for each company in the portfolio. The definition of long-term varies by analyst but is limited to a 3-8 year range. This value is expressed as the expected average annual growth of earnings in percent.

Information Ratio measures the excess return per unit of residual “non market” risk in a portfolio. The ratio is equal to the Alpha divided by the Residual Risk.

Market Capitalization - The market value of a company’s outstanding shares of common stock at a specific point in time, computed as the product of the number of outstanding shares times the stock’s closing price per share.

P/E ratio relates the price of the stock to the per-share earnings of the company. A high P/E generally indicates that the market will pay more to obtain the company because it has confidence in the company’s ability to increase its earnings. Conversely, a low P/E indicates that the market has less confidence that the company’s earnings will increase, and therefore will not pay as much for its stock. In most cases a fund with a high average P/E ratio has paid a premium for stocks that have a high potential for increased earnings. If the fund’s average P/E ratio is low, the manager may believe that the stocks have an overlooked or undervalued potential for appreciation.

P/B ratio of a company relates the per-share market price of the company’s stock to its per-share book value, the historical accounting value of the company’s tangible assets. A high P/B ratio indicates that the price of the stock exceeds the actual worth of the company’s assets. A low P/B ratio would indicate that the stock is a bargain, priced below what the company’s assets could be worth if liquidated.

P/CF ratio compares the total market value of the portfolio to the portfolio’s share of the underlying stocks’ earnings (or book value, cash flow, sales or dividends).

Alpha measures a portfolio’s return in excess of the market return adjusted for risk. It is a measure of the manager’s contribution to performance with reference to security selection. A positive alpha indicates that a portfolio was positively rewarded for the residual risk that was taken for that level of market exposure.











R-Squared indicates the extent to which the variability of the portfolio returns is explained by market action. It can also be thought of as measuring the diversification relative to the appropriate benchmark. An R-Squared value of .75 indicates that 75% of the fluctuation in a portfolio return is explained by market action. An R-Squared of 1.0 indicates that a portfolio’s returns are entirely related to the market and it is not influenced by other factors. An R-Squared of zero indicates that no relationship exists between the portfolio’s return and the market.

Residual Risk is the unsystematic risk of a fund, or the portion of the total risk unique to the manager and not related to the overall market. This reflects the “bets” which the manager places in that particular asset class. These bets reflect emphasis in particular sectors, maturities (for bonds), or other issue specific factors which the manager considers a good investment opportunity. Diversification of the portfolio will reduce the residual risk of that portfolio.

Sharpe Ratio is a measure of risk-adjusted return. It is calculated by subtracting the risk-free return (90 day T-Bills) from the portfolio return and dividing the resulting “excess return” by the portfolio’s total risk level (standard deviation). The result is a measure of returned gained per unit of total risk taken.

Standard Deviation is a statistical measure of portfolio risk. It reflects the average deviation of observations from their sample mean. Standard Deviation is used as an estimate of risk since it measures how wide the range of returns typically is. The wider the typical range of returns, the higher the standard deviation of returns, and the higher the portfolio risk. If returns are normally distributed (i.e. as a bell shaped curve distribution) then approximately 66% of 2/3 of the returns would occur within plus or minus one standard deviation of the sample mean.

Style Exposure Chart indicates a portfolio’s exposure to a particular capitalization (large, medium or small) and style (value or growth). Based on Sharpe’s return based style analysis, a style map will attempt to correlate a manager to a particular style of investing (i.e. Large Cap Growth).

Turnover Ratio - This is a measure of the fund’s trading activity which is computed by taking the lesser of purchases or sales (excluding all securities with maturities of less than one year) and dividing by average monthly net assets.

Up Capture Ratio - The Up Capture Ratio is a measure of the Investment’s compound return when the Benchmark was up divided by the Benchmark’s compound return when the Benchmark was up. The greater the value, the better.


Alpha measures a portfolio’s return in excess of the market return adjusted for risk. It is a measure of the manager’s contribution to performance with reference to security selection. A positive alpha indicates that a portfolio was positively rewarded for the residual risk that was taken for that level of market exposure.











R-Squared indicates the extent to which the variability of the portfolio returns is explained by market action. It can also be thought of as measuring the diversification relative to the appropriate benchmark. An R-Squared value of .75 indicates that 75% of the fluctuation in a portfolio return is explained by market action. An R-Squared of 1.0 indicates that a portfolio’s returns are entirely related to the market and it is not influenced by other factors. An R-Squared of zero indicates that no relationship exists between the portfolio’s return and the market.

Residual Risk is the unsystematic risk of a fund, or the portion of the total risk unique to the manager and not related to the overall market. This reflects the “bets” which the manager places in that particular asset class. These bets reflect emphasis in particular sectors, maturities (for bonds), or other issue specific factors which the manager considers a good investment opportunity. Diversification of the portfolio will reduce the residual risk of that portfolio.

Sharpe Ratio is a measure of risk-adjusted return. It is calculated by subtracting the risk-free return (90 day T-Bills) from the portfolio return and dividing the resulting “excess return” by the portfolio’s total risk level (standard deviation). The result is a measure of returned gained per unit of total risk taken.

Standard Deviation is a statistical measure of portfolio risk. It reflects the average deviation of observations from their sample mean. Standard Deviation is used as an estimate of risk since it measures how wide the range of returns typically is. The wider the typical range of returns, the higher the standard deviation of returns, and the higher the portfolio risk. If returns are normally distributed (i.e. as a bell shaped curve distribution) then approximately 66% of 2/3 of the returns would occur within plus or minus one standard deviation of the sample mean.

Style Exposure Chart indicates a portfolio’s exposure to a particular capitalization (large, medium or small) and style (value or growth). Based on Sharpe’s return based style analysis, a style map will attempt to correlate a manager to a particular style of investing (i.e. Large Cap Growth).

Turnover Ratio - This is a measure of the fund’s trading activity which is computed by taking the lesser of purchases or sales (excluding all securities with maturities of less than one year) and dividing by average monthly net assets.

Up Capture Ratio - The Up Capture Ratio is a measure of the Investment’s compound return when the Benchmark was up divided by the Benchmark’s compound return when the Benchmark was up. The greater the value, the better.


47

Organization Asset BasePct. Owned by Employees CurrentBoutique vs. Institutional Growth of AUMRecent Changes in Ownership Capacity ConstraintsManagement Investment in Firm’s Products Soft ClosedSpecialized vs. All in One Re-opening of Products

People PerformanceSize of Team Short Term vs. Benchmark and Style GroupStructure of Team Long Term vs. Benchmark and Style GroupExperience of Team Consistency – Relative/Absolute/Risk AdjustedTurnover of Key MembersGrowth of Team with Assets

Philosophy/Process ExpensesStyle Consistency (Growth/Value, Market Cap) Cost vs. CompetitorsDomestic/Int’l drift

Examples of things that would cause concern resulting in a YELLOW or RED box include but not limited to:

6) EXPENSES - A fund or product that is substantially above the median expense ratio or management fee would be a cause for concern.

Fund Analysis Overview Key

1) ORGANIZATION - A change in ownership whereby it is unclear what the structure of the new organization will be, how will key personnel be compensated, and what type of employment contracts are in place to keep key decision makers.

2) PEOPLE - A change in portfolio manager would be a cause for concern. We would assess the new talent taking over. Is the new portfolio manager a current member of the team or is it someone new from outside the group or organization.

3) PHILOSOPHY/PROCESS - A change in portfolio characteristics would be a cause for concern. For example, if a growth style manager suddenly starts investing in value names during a value rally or if a small cap portfolio was migrating into midcap names due to asset growth.

4) ASSET BASE - A small cap fund with more than $3 billion in assets would be a cause for concern or a fund that continues to add assets as it becomes clear the portfolio management team can not handle the inflows. A sign of this would be a large increase in the cash position of the portfolio.

5) PERFORMANCE - A product that fails to outperform either the index and/or the median manager on a consistent basis (at least 50% of the time) would be a cause for concern. Short term and long term performance is considered both on an absolute basis and relative basis in addition to risk-adjusted measures.

Each of the 6 criteria are evaluated on an individual basis and subjective based on Innovest’s assessment. Below are examples of the many factors under each category we consider when making an assessment.

48

Holdings Based Attribution Key

A. Buy and Hold Portfolio – Return for the portfolio assuming no securities were traded during the quarter B. Portfolio Trading = (C – A) or (Actual Return ‐ Buy and Hold Portfolio) C. Actual Return – return the client experienced D. Benchmark Return – return for benchmark E. Actual Active Return – (C – D) or ( Actual Return minus Benchmark Return ) F. Stock Selection – Is the contribution to return based upon the active stock selection by the manager with in a sector compared to the benchmark. G. Sector Selection – Is the contribution to return based upon the active overweight or underweight of a sector compared to the benchmark by the

manager. H. Interaction – Is the impact of contribution to return that are a combination of both Stock and Security selection also sometimes referred to as the

unexplained. I. Total Selection – Is the Sum of all the selection affects (F,G,H) J. Portfolio Trading – Same as B. K. Benchmark Trading – Benchmark B/H return – Actual Benchmark Return L. Total Trading – Portfolio Trading plus Benchmark Trading M. Buy & Hold Active Return – I + L

49

Disclaimer

The preceding statistical analysis was prepared by Innovest Portfolio Solutions LLC with data provided by Callan Associates, Inc. (CAI), Investment Metrics (IM), Strategic Financial Solutions, LLC, Lipper and Morningstar, Inc. All Rights Reserved.

The information contained herein: (1) is proprietary to the vendors listed above and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. None of the vendors nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Innovest compiles the information utilizing secondary data from statements provided by the plan trustee and/or custodian,

This report may also contain returns and valuations from outside sources as directed by the client. Innovest assumes no responsibility for the accuracy of these valuations or return methodologies. Reasonable care has been taken to assure the accuracy of the computer software and databases. Innovest disclaims responsibility, financial or otherwise for the accuracy and completeness of this report. Copyright 2013 by Innovest Portfolio Solutions LLC Inc.

Note: Actual client mutual fund returns are reflected on the table of returns page. Fund pages subsequent to the table of returns reflect the representative mutual fund with the longest track record and may not be the actual share class held by the client.

“Copyright 2013, Standard & Poor’s Financial Services LLC. Reproduction of S&P Index Services in any form is prohibited except with the prior written permission of S&P. S&P does not guarantee the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions, regardless of the cause or for the results obtained from the use of such information. S&P DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall S&P be liable for any direct, indirect, special or consequential damages, costs, expenses, legal fees, or losses (including lost income or lost profit and opportunity costs) in connection with subscriber’s or others’ use of S&P Index Services (2013)

Copyright MSCI 2013. Unpublished. All Rights Reserved. This information may only be used for your internal use, may not be reproduced or re-disseminated in any form and may not be used to create any financial instruments or products or any indices. This information is provided on an “as is” basis and the user of this information assumes the entire risk of any use it may make or permit to be made of this information. Neither MSCI, any or its affiliates or any other person involved in or related to compiling, computing or creating this information makes any express or implied warranties or representations with respect to such information or the results to be obtained by the use thereof, and MSCI, its affiliates and each such other person hereby expressly disclaim all warranties (including, without limitation, all warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any other person involved in or related to compiling, computing or creating this information have any liability for any direct, indirect, special, incidental, punitive, consequential or any other damages (including, without limitation, lost profits) even if notified of, or if it might otherwise have anticipated, the possibility of such damages.

50

FAL

L 2

01

3

1

Introduction to M

odern Portfolio Theory (M

PT)M

any of the previous articles in the Retirement Report

have addressed introductory investing fundamentals

such as allocation, diversifi cation, and other basic principles of long-term

investing. In this quarter’s edition of the Retirem

ent Report, we w

ould like to usher our readers to an interm

ediate level by describing som

e slightly more advanced term

s often used in the investm

ent industry. A basic knowledge of alpha, beta,

and R-squared can help a do-it-yourself investor build

their own retirem

ent portfolio, and help novice investors m

ake sense of investment new

s.

Since the burst of the housing bubble prompted the

2007-2009 fi nancial crisis, investors have become m

ore attuned to the risk characteristics of the investm

ents in their retirem

ent portfolios. As volatility in the market

continues to be a concern, investors are paying more

attention to the relationship between the potential

for reward and the likelihood of experiencing losses.

Modern Portfolio Th eory (M

PT) is used by m

any investm

ent professionals to help investors make

appropriate investing and asset allocation decisions. M

PT is rooted in the assertion that there are no free

lunches, as investors can only obtain higher returns if they are w

illing to take on more risk. W

ithin MPT

lie m

easurements such as alpha, beta, and R

-squared, which

are useful to understanding and quantifying this risk/rew

ard landscape.

Understanding Beta

Although alpha precedes beta in the Greek alphabet,

beta is a necessary precursor to understanding alpha. Beta can generally be defi ned as the risk factor of a

portfolio to the market, w

hich is usually achieved through asset allocation. A beta num

ber of 1.00 implies

that the portfolio will perform

exactly how the m

arket perform

s. A beta number greater than 1.00 im

plies that the portfolio w

ill perform better than the m

arket when

the market is going up, and w

orse than the market w

hen the m

arket is going down (m

ore risk with m

ore reward).

Conversely, a beta num

ber lower than 1.00 m

eans that the portfolio is expected to perform

worse than the

market w

hen the market is going up, and better than the

market w

hen the market is going dow

n (less risk with

less reward).

Understanding Alpha

Alpha is the measure of the excess return generated

by a portfolio beyond the benchmark returns. It is

the residual (or skill/luck-based) component of active

managem

ent, allowing fund m

anagers to display their value beyond passively m

anaged (or index) funds. Th e benchm

ark is usually a market index, such as the S&

P 500 Index, that the portfolio can be com

pared against to assess its perform

ance relative to the market. G

enerally, if alpha is positive, it m

eans that the portfolio returned m

ore than its expected return from the m

arket, whereas

a negative alpha indicates that the portfolio returned less.

Continued on page 2

Should investors be impressed if an actively m

anaged fund is generating positive alpha for their retirem

ent portfolio? In general, yes, being able to generate alpha is touted as the holy grail of investing; it’s an indication that a fund m

anager has been able to generate an above-average return relative to the risk that he or she is taking on. H

owever, before investors put too m

uch stock in the statistic, it’s im

portant to know w

hat these statistics m

ean, and why they are im

portant. Investors should be cognizant of the fact that a higher beta does not necessarily equate to a higher alpha; a portfolio w

ith a high beta m

ay well sport a negative alpha. Th is is due to

the fact that the greater the risk the portfolio assumes,

the higher the hurdle the portfolio must overcom

e in order to outperform

the market.

Understanding R-squared

Th e R-squared value is a num

ber that measures the

strength of a relationship, or correlation, between a

fund and its benchmark, w

hich can help explain the behavior of a fund or portfolio throughout m

arket sw

ings. Th e higher the R-squared value, the m

ore closely the portfolio’s perform

ance can be explained by the index it tracks. Th e low

er the R-squared value,

the more likely the portfolio doesn’t behave m

uch like its index. R

-squared values can range from 0 to 100.

An R-squared value of 0 indicates there is no degree of

performance correlation betw

een a market benchm

ark and a given portfolio or fund, w

hile a value of 100 m

eans that a portfolio or fund would have identical

reactions to the markets as its benchm

ark. High

R-squared values typically range from

85-100, while low

R

-squared values are 70 or less.

If you have constructed your own portfolio from

your Plan’s investm

ent menu, the funds you hold should

have a low correlation to one another as a w

hole. Th is strategy w

ill help ensure you do not hold multiple funds

with the sam

e objectives, and that your investments

do not move in tandem

with m

arket swings. Fund

comparison tools and M

PT stats can be found on m

any popular investm

ent websites.

Alpha and beta are the heart of traditional performance

(risk and return) analysis, although they do come w

ith their ow

n caveats and limitations. Investors trying to

understand or interpret these MPT

statistics are best advised to attend retirem

ent education sessions provided by your em

ployer and seek professional investment

advice to ensure they are allocating risk appropriately. H

owever, a better understanding of these m

easurements

can go a long way in m

aking better investment decisions

and staying connected to your retirement account.

2

Published by InSight Employee Benefi t Com

munications, Inc.

4643 S. Ulster Street, Suite 800 | Denver, CO 80237 | 720.228.4157 | ww

w.insightebc.com

Whom

do I call for help?The Plan’s Investm

ent Consultant

Innovest Portfolio Solutions

4643 S. Ulster St., Suite 1040

Denver, CO 80237

303.694.1900 | ww

w.innovestinc.com

Account Information

> Balances> > Change personal info

Contact : ICMA-RC

800.669.7400 | ww

w.icmarc.org

Th

e p

ie ch

art a

nd

acco

mp

an

ying

da

ta sh

ow

n fo

r ea

ch p

ortfo

lio illu

strate

s the

pe

rcen

tag

e a

lloca

ted

to e

ach

fun

d.

Ho

w is th

e p

ortfo

lio d

iversifie

d?

Inve

stme

nt p

erfo

rma

nce

resu

lts sho

wn

ab

ove

rep

rese

nt p

ast p

erfo

rma

nce

an

d a

re n

ot in

dica

tive o

f futu

re re

sults. P

lea

se re

ad

the

info

rma

tion

con

tain

ed

in th

e a

pp

licab

le fu

nd

pro

spe

ctuse

s care

fully b

efo

re in

vestin

g m

on

ey.

Pa

st Pe

rform

an

ce

Ris

k L

ev

el:

Th

e a

mo

un

t of e

xpe

cted

risk in th

e P

ortfo

lio. R

isk is me

asu

red

by th

e p

ote

ntia

l loss o

ver a

12

-mo

nth

pe

riod

tha

t an

inve

stor

mig

ht e

xpe

ct in th

e P

ortfo

lio, a

nd

is calcu

late

d via

a sta

tistical p

roce

ss con

sisten

t with

95

% p

rob

ab

ility.

Mo

de

rate

:-1

7.0

% to

-19

.0%

Ex

pe

cte

d R

etu

rn: T

he

leve

l of e

xpe

cted

inve

stme

nt re

turn

from

the

Po

rtfolio

. Th

e ra

ng

e o

f retu

rns sh

ow

n b

elo

w in

dica

tes th

e p

ote

ntia

lg

ain

tha

t an

inve

stor m

igh

t exp

ect e

ach

yea

r, on

ave

rag

e, o

ver a

5-ye

ar p

erio

d. T

his is a

lso re

ferre

d to

as th

e "m

ea

n" re

turn

, an

d is

calcu

late

d u

sing

a sta

tistical p

roce

ss to d

ete

rmin

e a

ran

ge

of p

rob

ab

ilities.

Mo

de

rate

:6

.5%

to 8

.5%

Wh

o typ

ically u

ses th

is po

rtfolio

?

Un

de

rsta

nd

ing

Yo

ur P

rofe

ss

ion

ally

-Ma

na

ge

d P

ortfo

lios

Po

rtfolio

Allo

catio

n (%

)W

ho

typica

lly use

s this p

ortfo

lio?

Th

e fu

nd

see

ks the

hig

he

st tota

l retu

rn o

ver

time

con

sisten

t with

an

em

ph

asis o

n b

oth

cap

ital a

pp

recia

tion

an

d in

com

e.

Th

e fu

nd

pu

rsue

s its ob

jective

by in

vestin

g in

a d

iversifie

d p

ortfo

lio. U

nd

er n

orm

al

con

ditio

ns, th

e p

ortfo

lio’s a

lloca

tion

to th

eb

roa

d a

sset cla

sses w

ill be

with

in th

efo

llow

ing

ran

ge

s: stocks (5

0-7

0%

); bo

nd

s (20

-40

%); a

nd

mo

ne

y ma

rkets (0

-20

%).

Do

me

stic stocks a

re d

raw

n fro

m th

e o

vera

llU

.S. m

arke

t. Inte

rna

tion

al sto

cks are

sele

cted

prim

arily fro

m la

rge

com

pa

nie

s ind

eve

lop

ed

ma

rkets b

ut m

ay a

lso in

clud

ein

vestm

en

ts in e

me

rgin

g m

arke

ts. Bo

nd

s,w

hich

can

inclu

de

fore

ign

issue

s, are

prim

arily in

vestm

en

t gra

de

(i.e., a

ssign

ed

on

e o

f the

fou

r hig

he

st cred

it ratin

gs) a

nd

are

cho

sen

acro

ss the

en

tire g

ove

rnm

en

t,co

rpo

rate

, an

d a

sset- a

nd

mo

rtga

ge

-ba

cked

bo

nd

ma

rkets. M

atu

rities re

flect th

em

an

ag

er’s o

utlo

ok fo

r inte

rest ra

tes.

Pa

st Pe

rform

an

ce (%

)*

Exp

en

se

Ra

tio:

0.6

5%

Se

pte

mb

er 3

0, 2

01

3 : $

10

0,7

00

,32

0

¢£B

osto

n T

rust E

qu

ity - Bo

uld

er F

&P

40

.95

¢£M

un

de

r Mid

Ca

p C

ore

Gro

wth

7.1

5

¢£IC

M S

ma

ll Co

mp

an

y7

.35

¢£D

od

ge

& C

ox In

t'l7

.94

¢£A

me

rican

Fu

nd

s Eu

roP

acific G

r7

.85

¢£B

osto

n T

rust F

ixed

Inco

me

- Bo

uld

er F

&P

10

.33

¢£P

IMC

O T

ota

l Re

turn

; Inst

3.8

6

¢£E

ato

n V

an

ce F

loa

ting

Ra

te; I

4.8

2

¢£JP

Mo

rga

n H

igh

Yie

ld S

ele

ct4

.86

¢£P

IMC

O C

om

mo

dity R

ea

l Re

turn

4.8

9

La

st

Qu

arte

rY

ea

rT

o D

ate

1Y

ea

r3

Ye

ars

5Y

ea

rs1

0Y

ea

rsS

inc

e In

ce

ptio

nJ

uly

-19

90

Bo

uld

er F

ire &

Po

lice T

ota

l Fu

nd

5.1

71

1.9

81

3.4

81

0.5

18

.78

7.7

58

.66

Bo

uld

er F

ire &

Po

lice

To

tal F

un

d0

9/3

0/1

3

*Inn

ove

st relie

s on

3rd

pa

rty da

ta fo

r the

se re

turn

s.

portfolio review 3rd quarter 2013 · source: deloitte cfo survey 2013. • the imf lowered its...

Documents