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Police /Fire Pension Board Meeting February 14, 2012 Page 3 ranking In 29"730"' percentile relative to public funds. The Pension Plan wants to be in top 40% of peer group. The plan is performing great at 25 -35% as compared to peers. The portfolio is outperforming a majority of the peers, but this is not due to overextending diversification. This shows that the plan is diversified & doing things correctly. Galliard fixed income investments are under performing by 38 basis points for the 1 year data, but the most recent quarter outperformed the benchmark. The yield component of Galliard's portfolio is 2% greater than the index. By end of the year, inceptions numbers should be ahead. The plan has good diversification in order to accomplish good income. PIMCO and Templeton are the global managers. On January 1, 2044 2012 PIMCO was up 4.42% and Templeton was down due to the 3rd quarter. January's performance was great for Templeton. Both are good products long -term. Mr. Welker likes the strategy of their investments. Underperformance is due to the equity manager for domestic & international. Page 22 shows comparative performance. Manning was down 6% last yr compared to the market being down 1 %. Megacap stock had a dividend component which performed the best. Indexes are tough to beat. Stocks moved approximately .8% in tandem — meaning a lot of stocks they moved together. The growth market was in mainly influenced by three main stocks: Apple, IBM and Exxon. The Russell 1000 contributed 2.7% positive for the index. The total index was up 2.6 %, showing they created the most of the increase. Manning only owned 50 stocks without a megacap focus. By not having heavy investments in megacap stock, the performance was hurt. Manning did nothing different in the 4th quarter and showed they were down 2.45 %. The performance now shows a big increase in thel" qtr due to a move in investments during that period. Sometimes a change in the portfolio tends to be more cyclical, but the plan is positioned now for slow steady growth. This is a typical strategy for Manning. Mr. Welker expects big things from Manning & Napier's investments this year. Manning has shown this type of performance in the past and has recovered nicely. Total equity is down 8% and blended is down 2.7 %. This is the main reason for underperformance for this year. Mr. Welker provided a "flash Report" to show the I" quarter performance. Stock activity is not performing the same. The correlation is changing. The total fiend is up 4.13% for January, net of fees. Manning & Napier domestic is .5% ahead of the index for the month. Overseas investments are up 7% for Manning. Galliard's investments are up 1.05 %. PIMCO (global corporate bonds) are up 2.8 %, and Templeton is up 5.46 %. The global portfolio is up 4.13 %. Mr. Welker feels that the City's Police Fire Pension Plan portfolio is well positioned. Mr. Welker feels 11.6% international diversification of the portfolio is a good place to be. 7. Consent Agenda - Approval of Expenditure Report In a letter dated February 7, 2012 from Rebecca Bowman, Interim Finance Director, the following invoices were submitted for Board Approval: A. Approval of Expenditure Report — ® Christenson & Delmer, P.A. — September 30,2011 - $273.65 • Salem Trust— October 15, 2011 - $1,020.00 • Salem trust— October 15, 2011 - $1,250.00 • Galliard Capital Management /Wells Fargo — October 20, 2011 - $1,850.29 • Foster & Foster, Inc. — November 17, 2011 - $6,140.00 • Christenson & Delmer, P.A. — November 30, 2011 $998.86 • The Bogdahn Group - December 30, 2011 - $3.,875.00 • Manning & Napier — December 9,2011 - $8,583.63 Mr. Pavlis questioned a charge for a direct e -mail from a plan member handled by Mr. Christiansen. Mr. Christiansen handled the e -mail from the spouse of a police officer regarding what assets the spouse is allowed to access as a result of a pending divorce. Foster & Foster also had a higher bill due to valuations performed. Two former police officers had two