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City of Casselherry Police Officers' and Firefighters' Pension Board of Trustees Minutes of May 14, 2013 Meeting Page 2 of 7 4. Audience Participation None 5. Presentations A. The Bogdahn Group Mr. Michael Welker, The Bogdahn Group, presented a performance review of investment activity for the quarter ending March 31, 2013. Larger cap stocks were up from 10 to 11% and the mid to small cap stocks were up from 12.4 to 13 %, showing that domestic markets performed significantly better than international markets. Domestic Market: The best performing sectors were healthcare, consumer staples, industrials, consumer discretionary, and utilities. There was a broad based rally for the quarter led by these sectors. The telecommunication, information technology, and materials sectors performed positively, but not as well as the others in the portfolio. Fixed Income Market: Bonds were negative for the quarter in aggregate, but there were pockets of fixed income bonds that did well. High yield bonds were up 2.7 %. Allocation: The Plan portfolio is growing nicely at $12.7 million and continues to be overweight on domestic versus international markets while staying in compliance. This overweight is caused by the domestic market being better positioned at this time. Mr. Welker stated that he will be moving 2.5% of allocations from available cash in the portfolio from the domestic fixed income market to the global fixed income market. Mr. Welker recommended that the Plan will continue to diversify in the future by reducing the domestic fixed income investment to 20% and moving the remaining 9% to value added real estate and middle market debt strategy in order to give the Plan a greater return on investment. Mr. Welker's recommendation is dependent upon the future of the Fire Department within the Plan. Chairman Pavlis inquired about changes within the Fire Department. This issue was addressed by City Manager Randy Newlon, who stated that there has been an offer to talk to the County for a few years now, but he has not met with County staff regarding this, and there is no assumption that a consolidation will occur. Should a consolidation occur, there is no expectation that funds would be distributed. Financial Reconciliation: Fiscal year to date growth is good and the Plan has earned over $1 million due to good contributions and returns on investment. Performance: The total fund, net of investments, for the quarter was up 6.6 %. The earnings assumption has been met. Manning & Napier has recovered nicely from the domestic equity underperformance of the past. According to Universe Rankings, the City Plan is outperforming 93% of all public funds