CITY OF LAGUNA NIGUEL
CITY COUNCIL AGENDA ITEM
1989
To: Honorable Mayor and Council Members
FROM: Tamara S. Letourneau, City Manager
DATE: December 6, 2022
SUBJECT: Investment Report as of October 31, 2022
RECOMMENDATION
Staff recommends that the City Council receive and file the City of Laguna Niguel Investment Report as of October 31, 2022.
BACKGROUND
The City Investment Policy requires the City Manager to submit an Investment Report monthly to the City Council that contains a summary of investment transactions, including investment types, percent of portfolio, yield, purchase date, maturity date, issuer or institution, par and dollar amount invested, market value, source of market valuation, the portfolio's average weighted yield and maturity, and a description of any local agency funds or investments under the management of contracted parties.
Submission of, and the City Council's action of receiving and filing this Report, addresses the City Council's goal of fiscal sustainability.
ANALYSIS
The following table compares the portfolio balance as of October 2022 to October 2021.
Portfolio Balance October 2022 October 2021 Difference
Balance $59,251,489.09 $50,663,466.09 $8,588,023.00
• From September 2022 to October 2022, the City's total cash and investments had a net decrease of $2,304,772.11, going from $61,556,261.20 to $59,251,489.09. The cash outlay was higher than receipts for the month.
Notable cash outlay items include a $1,397,760.92 payment to the County of Orange for September law enforcement services, a $319,682.28 payment to MCE for July and August street maintenance, and a $189,999.67 payment for the Palisades pavement repairs.
• The percentage of pooled investments decreased from 48.03% to 44.68%.
Pooled investments include the Local Agency Investment Fund (LAIF) and the Orange County Investment Pool (OCIP).
• The average weighted maturity of City investments, including investment pools, increased from 552 days to 566 days. The average weighted maturity of City investments, including investment pools, is calculated as follows: Sum of days left until maturity of each individual investment multiplied by the cost of each individual investment divided by the total portfolio at cost, excluding cash in bank.
• The net yield of LAIF increased from 1.513% to 1.772%. The net yield of OCIP increased from 1.260% to 1.791%.
• The average weighted yield of City investments, including investment pools, increased from 1.701% to 1.852%. The City's average weighted yield of City investments, including investment pools, is calculated by taking the total investment earnings divided by the total portfolio at cost, excluding cash in bank. A comparison of the City's average weighted yield to short-term and long- term benchmarks is presented below.
City Portfolio Benchmark Comparisons
Average 5-Year 1-Year 6-Month OCIP LAIF
Weighted Treasury Treasury Treasury
Yield
1.852% 4.270% 4.660% 4.570% 1.791% 1.772%
The monthly Investment Report as of October 31, 2022, is attached.
ALTERNATIVES CONSIDERED
1. The City Council can choose not to receive and file the City of Laguna Niguel Investment Report as of October 31, 2022.
FISCAL REVIEW
There is no fiscal impact as a result of this action.
CONCLUSION
The City Investment Policy requires the submittal of a monthly Investment Report. Staff recommends that the City Council receive and file this Report.
Samara & Retousan Eir Pendraba
Tamara S. Letourneau Eric Hendrickson
City Manager Finance Director
Attachments:
A. Monthly Investment Report as of October 31, 2022
ATTACHMENT A
Investment Report as of October 31, 2022
CITY OF LAGUNA NIGUEL
INVESTMENT REPORT
as of
October 31, 2022
Tamara S. Letourneau
CITY MANAGER
Eric Hendrickson
FINANCE DIRECTOR
December 6, 2022
CITY OF LAGUNA NIGUEL
INVESTMENT REPORT
TABLE OF CONTENTS
Statement of Compliance/Non-Compliance 1
Report of Cash and Investments 2
LAIF Investment Reports 3-5
OCIP Investment Reports 6-8
US Bank Statement 9-17
PARS Statement 18-21
City of Laguna Niguel
Statement of Compliance/Non-Compliance with the City's Investment Policy The undersigned officers of the City of Laguna Niguel hereby certify that:
As of October 31, 2022, the City was in compliance with the Investment Policy adopted at the July 19, 2022 Regular City Council Meeting.
Sufficient investment liquidity from cash and cash equivalents and anticipated revenues are available to meet the City's budgeted expenditure requirements for the next six months.
Jamasa S Aptorman Eue Pendiubn
Tamara S. Letourneau Eric Hendrickson
City Manager Finance Director
1 City of Laguna Niguel
Summary of Cash and Investments
10/31/22
Settlement Maturity Coupon Percent of Market
Description Date Date Rate Yield Cost Portfolio Value
Petty Cash/Change Drawers $ 2,600.00 0.00% 2,600.00
US Bank Checking Account $ 2,598,005.12 4.38% 2,598,005.12 US Bank Money Market Variable 61,951.96 0.10% 61,951.96 Local Agency Investment Fund 1.772% $ 25,433,336.85 42.92% $ 24,944,023.92 Orange County Investment Pool 1.791% 1,042,734.80 1.76% $ 1,042,734,80 Federal Home Loan Mortgage Corporation: 8.76%
3134GV5R5 7/15/2020 7/15/2024 0.570% 0.610% 1,000,000.00 929,960.00 3137EAEPO 1/29/2021 2/12/2025 1.500% 1.600% 4,188,112.71 3,741,640.00 Federal National Mortgage Association: 14.59%
3135G05X7 1/29/2021 8/25/2025 0.375% 0.420% 8,645,922.29 7,756,311.00 Federal Farm Credit Banks: 6.74%
3133ENVD9 4/26/2022 4/26/2027 2.875% 3.060% 3,995,360.00 3,761,680.00 Federal Home Loan Banks: 20.73%
3130AJTF6 7/14/2020 7/14/2025 0.740% 0.820% 1,000,000.00 897,950.00 3130AJTX7 7/21/2020 7/21/2025 0.720% 0.800% 625,000.00 560,418.75 3130AMFS6 8/12/2021 6/12/2026 0.750% 0.850% 2,001,415.36 1,755,840.00 3130A8XY4 10/18/2021 9/11/2026 1.875% 2.070% 4,665,690.00 4,080,195.00 3130ATBLO 9/19/2022 12/8/2023 3.625% 3.670% 3,991,360.00 3,947,240.00 Total City Investments Including Investment Pools $ 59,251,489.09 100.00% $ 56,080,550.55 Restricted for Specific Use
PARS 115 Pension Trust 1.260% $ 1,000,000.00 $ 887,896.45 Average weighted maturity of Investments, excluding Investment Pools: 1,063 days Average weighted maturity of Investments, including Investment Pools: 566 days Average weighted yield of Investments, excluding Investment Pools 1.933% Average weighted yield of Investments, including Investment Pools 1.852% * Market value of City investments is provided by US Bank NOTE: Market value disclosure is for informational purposes only. City policy is to hold all investments to maturity; therefore, any unrealized gain or loss reflected between the cost and market value of an investment will not be realized. 2 PMIA/LAIF Performance Report
as of 11/16/22
PMIA Average Monthly Quarterly Performance
Effective Yields(1) Quarter Ended 09/30/22
October 1.772 LAIF Apportionment Rate(2). 1.35
September 1.513 LAN Pair Value Factor, 0.00003699565555327 August 1.276 0.980760962
PMIA Daily (2). 1.63%
PMIA Quarter to Date() 1.29%
PMIA Average Life(): 304
Pooled Money Investment Account
Monthly Portfolio Composition (1)
10/31/22
$215.3 billion
Corporate
Commercial Bonds
Time Paper 0.24%
Deposits 5.02% Loans
2.30% -0.17%
Certificates of
Deposit/Bank Notes.
6.51%
Agencies.
19.19%
Treasuries
66.57%
Chart does not include $3,715,000.00 in mortgages, which equates to 0.002%. Percentages may not total 100% due to rounding.
Daily rates are now available here. View PMIA Daily Rates Notes: The apportionment rate includes interest earned on the CaPERS Supplemental Pension Payment pursuant to Government Code 20825 (c)(1) and interest earned on the Wildfire Fund loan pursuant to Public Utility Code 3288 (a).
Source:
(1) State of California, Office of the Treasurer
2) State of Calfiornia, Office of the Controller
3 State of California
Pooled Money Investment Account
Market Valuation
10/31/2022
Carrying Cost Plus
Description Accrued Interest Purch. Fair Value Accrued Interest United States Treasury:
Bills 41,973,670,327.59 42,029,824,500.00 NA
Notes 101,336,838,099.48 $ 97,612,493,500.00 $ 272,906,659.00 Federal Agency:
SBA $ 350,862,850.97 $ 351,144,378.20 630,490.07
MBS-REMICS 3,715,157.23 $ 3,669,435.05$ 16,655.51
Debentures 8,568,492,588.57 $ 8,313,681,450.00 $ 24,225,208.75 Debentures FR $
Debentures CL 2,550,000,000.00 2,465,259,000.00 $ 15,440,227.50 Discount Notes 27,614.627.937.56 27,666,879,500.00 NA
Supranational Debentures $ 2.229,190,558.99 $ 2,128,898,500.00 $ 6,096,612.10 Supranational Debentures FR $
CDs and YCDs FR $ $
Bank Notes $ 100,000,000.00 $ 99,788,196.26 $ 1,033,333.33 CDs and YCDs $ 13,900,000,000.00 13,863,433,133.84 $ 87,098,625.01 Commercial Paper $ 10,795,126,388.86 10,840,224,777.83 NA Corporate:
Bonds FR $ $
Bonds 489,615,990.00 $ 3,089.902.88
521,177,466.73
Repurchase Agreements $ $ $
Reverse Repurchase $ $ :
Time Deposits 4,959,000,000.00 4,959,000,000.00 NA
PMIA & GF Loans $ 367,981,000.00 367,981,000.00 NA
TOTAL $ 215,270,682,375.98 $ 211,191,893,361.18 410,537,714.15 Fair Value Including Accrued Interest $ 211,602,431,075.33 Repurchase Agreements, Time Deposits, PMIA & General Fund loans, and Reverse Repurchase agreements are carried at portfolio book value (carrying cost). 4 California State Treasurer
Fiona Ma, CPA
November 03,
Local Agency Investment Fund 2022
P.O. Box 942809
Sacramento, CA 94209-0001 LAIF Home
(916) 653-3001 PMIA Average
Monthly Yields
CITY OF LAGUNA NIGUEL
TREASURER
30111 CROWN VALLEY PARK WAY
LAGUNA NIGUEL, CA 92677
Tran Type
Definitions
Account Number:
October 2022 Statement
Web
Tran
Effective Transaction Confirm Confirm
Type Number Authorized Caller
Date Date Number Amount
10/14/2022 10/13/2022 QRD 1716412 N/A SYSTEM 102,739.53 10/19/2022 10/19/2022 RW 1716961 N/A KRISTIN FORIER -2,200,000.00 10/28/2022 10/27/2022 RW 1717382 N/A KRISTIN FORIER -1,000,000.00 Account Summary
Total Deposit: 102,739.53 Beginning Balance: 28,530,597.32 Total Withdrawal: -3,200,000.00 Ending Balance: 25,433,336.85 5 COUNTY OF ORANGE
OFFICE OF THE TREASURER-TAX COLLECTOR CHING COUNTE
Shari L. Freidenrich, CPA, CCMT, CPFA, ACPFIM
P. O.BOX 4515
SANTA ANA, CA 92702-4515
LIFOR
octreasurer.com/publicfunds
October 31, 2022
CITY OF LAGUNA NIGUEL
Attn: Eric Hendrickson, Finance Director
30111 Crown Valley Parkway
Laguna Niguel, CA 92677
Fund Number :
OCTOBER 2022 STATEMENT
INVESTMENT BALANCE IN OCIP
Transactions
Transaction Transaction Description Authorized Signer Amount Date
10/03/2022 September 2022 Investment Admin Fee $ (124.31) 10/26/2022 July 2022 Interest Paid $ 5,541.57
Summary
Total Deposit: $ 5,541.57 Beginning Balance: $ 1,037,317.54 Total Withdrawal: $ (124.31) Ending Balance: $ 1,042,734.80 6 OF
OFFICE OF THE TREASURER-TAX COLLECTOR
SHARI L. FREIDENRICH, CPA, CCMT, CPFA, ACPFIM
P.O. Box 4515
C SANTA ANA, CA 92702-4515
ALIFORNI octreasurer.com/publicfunds
ORANGE COUNTY INVESTMENT POOL
APPORTIONMENT YIELDS & BASIS POINT FEES
Monthly Apportionment Monthly Apportionment Charged Basis Actual Basis FY 22/23 Date Year Point Fees
Gross Yield Net Yield Point Fees
July 2022 0.848% (1) 0.793% (1) 5.5
YTD August 2022 1.034% 0.979% 5.5
GROSS September 2022 1.315% 1.260% 5.5
YIELD October 2022 1.846% 1.791% 5.5
1.266% November 2022
December 2022 Not Yet
January 2023 Available
February 2023
YTD NET March 2023
YIELD April 2023
1.211% May 2023
June 2022
Year Monthly Apportionment Monthly Apportionment Charged Basis Actual Basis FY 21/22 Date Point Fees
Gross Yield Net Yield Point Fees
July 2021 0.593% 0.535% 5.8
YTD August 2021 0.575% 0.517% 5.8
GROSS September 2021 0.562% 0.504% 5.8
YIELD October 2021 0.514% 0.456% 5.8
0.523% November 2021 0.515% 0.457% 5.8
December 2021 0.396% 0.338% 5.8 Not Yet
January 2022 0.402% 0.344% 5.8 Available
February 2022 0.439% 0.381% 5.8
YTD NET March 2022 0.462% 0.404% 5.8
YIELD April 2022 0.513% (1) 0.455% (1) 5.8
0.471% May 2022 0.614% (1) 0.594% (1) 2.0
June 2022 0.722% (1) 0.702% (1) 2.0
Monthly Apportionment Monthly Apportionment Charged Basis Actual Basis FY 20/21 Date Year Point Fees Point Fees
Gross Yield Net Yield
July 2020 1.223% 1.164% 5.9 5.0
YTD August 2020 1.144% 1.085% 5.0
GROSS September 2020 1.060% 1.001% 5.0
YIELD October 2020 0.956% 0.897% 5.0
0.802% November 2020 0.899% 0.840% 5.0
December 2020 0.767% 0.708% 5.0
January 2021 0.694% 0.635% 5.0
February 2021 0.803% 0.744% 5.0
YTD NET March 2021 0.624% 0.565% 5.0
YIELD April 2021 0.539% 0.480% 5.9 5.0
0.752% May 2021 0.562% 0.503% 5.9 5.0
June 2021 0.598% 0.588% 1.0 5.0
(1) Revised gross and net yields based on adjustments to interest income Mission: Ensure safe and timely receipt, deposit, collection and investment of public funds.
ORANGE COUNTY TREASURER - TAX COLLECTOR
BY INVESTMENT TYPE AT MARKET VALUE - By Percentage Holdings October 31, 2022
100%
90%
80%
70%
60%
40%
30%
20%
10%
0%
Orange County Investment Pool Orange County Educational Investment Pool John Wayne Airport Investment Fund Orange County Investment Pool Orange County Educational Investment Pool John Wayne Airport Investment Fund In Thousands In Thousands In Thousands
LU. S. GOVERNMENT AGENCIES 3,041,241 49.55% •lU. S. GOVERNMENT AGENCIES 3.019,252 49.57% U.S. GOVERNMENT AGENCIES 49,915 92.74% U.S. TREASURIES 1,975,898 32.20% U.S. TREASURIES 1,960,333 32.19% MONEY MARKET MUTUAL FUNDS 3,910 7.26% MONEY MARKET MUTUAL FUNDS 888,024 14.47% MONEY MARKET MUTUAL FUNDS 881,009 14.46% MUNICIPAL DEBT 194,732 3.17% MUNICIPAL DEBT 193,198 3.17% • LOCAL AGENCY INVESTMENT FUND 37.573 0.61% •LOCAL AGENCY INVESTMENT FUND 37.277 0.61% $ 6.137.468 100.00% 6,091,069 100.00% 53.825 100.00%
20976
00--M -UC-UU -305-04
0220657-00-04007-04
usbank
CITY OF LAGUNA NIGUEL
ACCOUNT NUMBER: October 1, 2022 to October 31, 2022
MARKET VALUE SUMMARY
Current Period
10/01/22 to 10/31/22
Beginning Market Value Change: -59,173.77
$27,552,360.48 $36,000,000
Taxable Interest 58,276.48 $30,000,000
Change in Investment Value -117,450.25
$24,000,000
Ending Market Value $27,493,186.71 $18,000,000
$12,000,000
$6,000,000
$0'
Beginning Ending
MV MV
$27,552,360.48 $27,493,186.71
1.0 $471,388.13 100.00 $27,493,186.71 Total Market Value 469,600.00 99.80 27,431,234.75 Taxable Bonds
1,788.13 0.20 61,951.96 Cash & Equivalents
Annual Income Total Market Value Assets
Estimated % of Current Period
ASSET SUMMARY
October 1, 2022 to October 31, 2022 ACCOUNT NUMBER:
CITY OF LAGUNA NIGUEL
usbank
0220-7-004005-04
20976
11 $58,276.48 Total Current Period Income
58,276.48 Taxable Interest
Current Period
Income Received
INCOME SUMMARY
October 1, 2022 to October 31, 2022 ACCOUNT NUMBER:
CITY OF LAGUNA NIGUEL
usbank
0220657-00-04007-04
00--M -UC-UU -305-04
20976
12 $0.00 Ending Cash 10/31/2022
-58,276.48 Net Money Market Activity
58,276.48 Taxable Interest
$0.00 Beginning Cash 10/01/2022
Cash
CASH SUMMARY
October 1, 2022 to October 31, 2022 ACCOUNT NUMBER:
CITY OF LAGUNA NIGUEL
usbank
00220657-000407-04
20976
20976
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0220657-00-04007-04
usbank
CITY OF LAGUNA NIGUEL
ACCOUNT NUMBER: October 1, 2022 to October 31, 2022
ASSET DETAIL
Security Description Percent
Unrealized of Total Estimated Estimated
Shares/Face Amt Price Market Value Tax Cost Gain/Loss Portfolio Annual Income Current Yield Cash & Equivalents
Cash/Money Market
First American Goverment - 31846V567
Oblig Fd CIZ
#3676
61,951.960 1.0000 61,951.96 61,951.96 0.00 0.2 1,788.13 2.89 Total Cash/Money Market $61,951.96 $61,951.96 $0.00 0.2 $1,788.13 Total Cash & Equivalents $61,951.96 $61,951.96 $0.00 0.2 $1,788.13 Taxable Bonds
US Government Issues
FHLMC - 3137EAEP0
4,000,000.000 93.5410 3,741,640.00 4,188,112.71 446,472.71 13.6 60,000.00 1.60 FHLMC MTN - 3134GV5R5
0.570 07/15/2024
1,000,000.000 92.9960 929,960.00 1,000,000.00 -70,040.00 3.4 5,700.00 0.61 FNMA - 3135G05X7
0.375 08/25/2025
8,700,000.000 89.1530 7,756,311.00 8,645,922.29 -889,611.29 28.2 32,625.00 0.42 Federal Farm Credit Bks - 3133ENVD9
2.875 04/26/2027
4,000,000.000 94.0420 3,761,680.00 3,995,360.00 -233,680.00 13.7 115,000.00 3.06 Federal Home Loan Bks - 3130AJTX7
0.720 07/21/2025
625,000.000 89.6670 560,418.75 625,000.00 -64,581.25 2.0 4,500.00 0.80 20976
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0220657-00-04007-04
usbank
CITY OF LAGUNA NIGUEL
ACCOUNT NUMBER: October 1, 2022 to October 31, 2022
ASSET DETAIL (continued)
Security Description Percent
Unrealized of Total Estimated Estimated
Shares/Face Amt Price Market Value Tax Cost Gain/Loss Portfolio Annual Income Current Yield
0.74007/402an BKS - 3130AJTFS
1,000,000.000 89.7950 897,950.00 1,000,000.00 -102,050.00 3.3 7,400.00 0.82
0.790 08122026n BKS - 3130AMFS6
2,000,000.000 87.7920 1,755,840.00 2,001,415.36 -245,575.36 6.4 15,000.00 0.85 F. 090 202an B - 3130A8X74
4,500,000.000 90.6710 4,080, 195.00 4,665,690.00 -585,495.00 14.8 84,375.00 2.07 23825 1 HoB20oan Bks - 3130ATBLO
4,000,000.000 98.6810 3,947,240.00 3,991,360.00 -44,120.00 14.4 145,000.00 3.67 Total US Government Issues S27,431,234.75 $30,112,860.36 -$2,681,625.61 99.8 $469,600.00 Total Taxable Bonds $27,431,234.75 $30,112,860.36 -$2,681,625.61 99.8 $469,600.00 Total Assets $27,493,186.71 $30,174,812.32 -$2,681,625.61 100.0 $471,388.13 Estimated Current Yield 1.71
ASSET DETAIL MESSAGES
Time of trade execution and trading party (if not disclosed) will be provided upon request. pulected at values to are are mal sources. Asses for uh a curer value is not available may be renected at a previous value irved by vated, a par vale, or at anarina value: Values own J not necessarily reflect prices at which assets could be bought or sold. Values are updated based on interal policy and may be updated less frequently than statement generation. 20976
00--M -UC-UU -305-04
0220657-00-04007-04
usbank.
CITY OF LAGUNA NIGUEL
ACCOUNT NUMBER: October 1, 2022 to October 31, 2022
ASSET DETAIL MESSAGES (continued)
Estimated Current Yield and Estimated Annual Income are estimates provided for informational purposes only and should not be relied on for making investment, trading, or tax decisions. The estimates may not represent the actual value earned by your investments and they provide no guarantee of what your investments may eam in the future. 15 20976
00220857-00430-04
usbank
CITY OF LAGUNA NIGUEL
ACCOUNT NUMBER: October 1, 2022 to October 31, 2022
TRANSACTION DETAIL
Date
Posted Activity Description Cash Tax Cost
Beginning Balance 10/01/2022 $0.00 $30,116,535.84
10/03/22 Asset Income Interest Earned On 776.48
First Am Govt Ob Fd CI Z
Interest From 9/1/22 To 9/30/22
10/26/22 Asset Income FF CB 2875% 4126/27 57,500.00
0.014375 USD/$1 Pv On 4,000,000 Par Value Due 10/26/22
Purchase Combined Purchases For The Period 10/ 1/22 - 10/31/22 Of -58,276.48 58,276.48 First Am Govt Ob Fd CIZ
• Ending Balance 10/31/2022 $0.00 $30,174,812.32
20976
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usbank
CITY OF LAGUNA NIGUEL
ACCOUNT NUMBER: October 1, 2022 to October 31, 2022
BOND SUMMARY
60% /
50%
40%
30%
20%
0%
2022 2023 2024 2025 2026 2027
Percentage of
Par Value Market Value Category
MATURITY
2022 0.00 0.00
2023 4,000,000.00 3,947,240.00 14.39
2024 1,000,000.00 929,960.00 3.40
2025 14,325,000.00 12,956,319.75 47.23
2026 5,836,035.00 21.27
2027 4,00.0000 3,761,680.00 13.71
Total of Category $29,825,000.00 $27,431,234.75 100.00
MOODY'S RATING
Aaa 28,825,000.00 26,501,274.75 96.61
N/A 1,000,000.00 929,960.00 3.39
Total of Category $29,825,000.00 $27,431,234.75 100.00
20976
00- -M -UC-UU -305-04
0220657-00-04007-04
usbank.
CITY OF LAGUNA NIGUEL
ACCOUNT NUMBER: October 1, 2022 to October 31, 2022
BOND SUMMARY (continued)
Percentage of
Par Value Market Value Category
S&P RATING
AA+ 28,825,000.00 26,501,274.75 96.61
N/A 1,000,000.00 929,960.00 3.39
Total of Category $29,825,000.00 $27,431,234.75 100.00
BOND SUMMARY MESSAGES
Data contained within this section excluded Mutual Funds, Exchange Traded Funds, and Closed-Ended Funds.
PUBLIC
AGENCY PARS
RETIREMENT
SERVICES
CITY OF LAGUNA NIGUEL Account Report for the Period
PARS Post-Employment Benefits Trust 10/1/2022 to 10/31/2022 Tamara Letourneau
City Manager
City of Laguna Niguel
30111 Crown Valley Parkway
Laguna Niguel, CA 92677
Account Summary
Balance as of Balance as o
Source 10/1/2022 Contributions Earnings Expenses Distributions Transfers 10/31/2022 PENSION $877,267.05 $0.00 $11,067.69 $438.29 $0.00 $0.00 $887,896.45 Totals S877,267.05 $0.00 S11,067.69 $438.29 $0.00 $0.00 $887,896.45 Investment Selection
Source
PENSION Moderately Conservative HighMark PLUS
Investment Objective
Source
The dual goals of the Moderately Conservative Strategy are current income and moderate capital appreciation. The major portion of the assets is
PENSION
committed to income-producing securities. Market fluctuations should be expected.
Investment Return
Annualized Return
Source 1-Month 3-Months 1-Year 3-Years 5-Years 10-Years Plan's Inception Date PENSION 1.26% 6.39% -14.82% 5/26/2020
Information as provided by US Bank, Trustee for PARS; Not EDIC Insured; No Bank Guarantee; May Lose Value ast performance does not guarantee future results. Performance returs may not reflect the deduction of applicable fees, which could reduce retums. Information is deemed reliable but may be subject to changi vestment Return: Annualized rate of retum is the return on an investment over a period other than one year multiplied or divided to give a comparable one-year retur Account balances are inclusive of Trust Administration, Trustee and Investment Management fees Headquarters - 4350 Von Karman Ave, Suite 100, Newport Beach, CA 92660 800.540.6369 Fax 949.250.1250 www.pars.org 19 HIGHMARK®
CAPITAL MANAGEMENT
PARS DIVERSIFIED PORTFOLIOS
MODERATELY CONSERVATIVE Q3 2022
INVESTMENT OBJECTIVE Efficient Frontier
WHY THE PARS DIVERSIFIED
MODERATELY CONSERVATIVE PORTFOLIO? To provide current income, with Return) capital appreciation as a Capital Appreciation
Comprehensive Investment Solution Balance
secondary objective. The major Moderate
HighMark® Capital Management, Inc's (HighMark) portion of the assets is (Rate diversified investment portfolios are designed to Moderately Conservative committed to income-producing
balance return expectations with risk tolerance securities. Market fluctuations Conservative
Key features include: sophisticated asset allocation should be expected. and optimization techniques, four layers of Risk (Standard Deviation) diversification (asset class, style, manager, and ASSET ALLOCATION - MODERATELY CONSERVATIVE PORTFOLIO security, access to rigorously screened, top tier Strategic Range Policy Tactical
money managers, flexible investment options, and
Equity 20 - 40% 30% 28%
experienced investment management.
Fixed Income 50 - 80% 65% 67%
Rigorous Manager Due Diligence Cash 0 - 20% 5% 5%
Our manager review committee utilizes a rigorous
(Gross of Investment Management Fees, but Net of
screening process that searches for investment ANNUALIZED TOTAL RETURNS Embedded Fund Fees) managers and styles that have not only produced HighMark Plus Composite (Active) Index Plus Composite (Passive) above-average returns within acceptable risk Current Quarter* -4.11% Current Quarter* -4.21%
parameters, but have the resources and commitment
Blended Benchmark*,** -4.12% Blended Benchmark* ** -4.12% to continue to deliver these results. We have set high
Year To Date* -16.43% Year To Date* -15.94%
standards for our investment managers and funds.
This is a highly specialized, time consuming Blended Benchmark*, ** -15,65% Blended Benchmark*.** -15.65% approach dedicated to one goal: competitive and 1 Year -14.98% 1 Year -14.17% consistent performance. Blended Benchmark** -13.82% Blended Benchmark** - 1382% 3 Year 0.00% 3 Year -0.10%
Flexible Investment Options Blended Benchmark** 0.18% Blended Benchmark**
0.18%
In order to meet the unique needs of our clients, 5 Year 1.91% 5 Year
1.87%
we offer access to flexible implementation strategies: Blended Benchmark**
2.11% Blended Benchmark** 2.11%
HighMark Plus utilizes actively managed mutual
10 Year 3.51% 10 Year 3.36%
funds while Index Plus utilizes index-based
Blended Benchmark** 3.58% Blended Benchmark** 3.58%
securities, including exchange-traded funds. Both
investment options leverage HighMark's active asset * Returns less than one year are not annualized *Breakdown for Blended Benchmark: From 10/1/2012 - Present: 15.5% S&P500, allocation approach. 9/30/2012: the blended benchmark was 25% S&P 500. 1.5% Russell 2000. 3.5% MSCI EAFE (nel). 25% ICE BofA 1-3 Year orp./Govl, 40% Bloomberg US Agg, 5% FTSE 1 Mih US T-Bill. Prior to April 2007, the blended benchmark was 30% S&P 50 5% ICE BofA 1-3Yr Corp/Gov, 40% Bloomberg US Agg, and 5% FTSE 1 Mth US T-Bi Risk Management
(Gross of Investment Management Fees, but Net of Embedded The portfolio is constructed to control risk through ANNUAL RETURNS Fund Fees) four layers of diversification - asset classes (cash, HighMark Plus Composite (Active) Index Plus Composite (Passive) fixed income, equity), investment styles (large cap, 2008 -15.37% 2008 -12.40% small cap, international, value, growth), managers 2009 18.71% 2009 11.92% and securities. Disciplined mutual fund selection and 2010 10.46% 2010 9.72% monitoring process helps to drive return potential 2011 1.75% 2011 3.24% while reducing portfolio risk. 2012 10.88% 2012 8.24%
2013 7.30% 2013 6.78%
2014 4.41% 2014 5.40%
2015 0.32% 2015 -0.18%
2016 4.94% 2016 5.42%
2017 9.56% 2017 8.08%
2018 -2.60% 2018 -2.33%
2019 13.73% 2019 13.53%
2020 10.76% 2020 9.74%
2021 5.15% 2021 5.33%
PORTFOLIO FACTS
HighMark Plus (Active) Index Plus (Passive)
Composite Inception Date 08/2004 Composite Inception Date 05/2005 No of HoRiOngs in Portfolio 20 No of Holdings in Portfolio 13
HOLDINGS HIGHMARK CAPITAL MANAGEMENT
HighMark Plus (Active) Index Plus (Passive)
350 California Street
Columbia Contrarian Core 13 iShares Core S&P 500 ETF Suite 1600 Vanguard Growth & Income Adm iShares S&P 500 Value ETF San Francisco, CA 94104 Dodge & Cox Stock Fund iShares S&P 500 Growth ETF 800-582-4734 iShares S&P 500 Value ETF iShares Russell Mid-Cap ETF
Harbor Capital Appreciation - Retirement Vanguard Real Estate ETF T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF
ABOUT THE ADVISER
iShares Russell Mid-Cap ETF iShares Russell 2000 Growth ETF HighMark® Capital Management, Inc. (HighMark) has Vanguard Real Estate ETF iShares Core MSCI EAFE ETF over 100 years (including predecessor organizations) of institutional money management experience with $8.7
Undiscovered Managers Behavioral Value-R Vanguard FTSE Emerging Markets ETF billion in assets under management and $8,7 billion in Vanguard Small Cap Growth ETF Vanguard Short-Term Invest-Grade Adm assets under advisement* . HighMark has a long term DFA Large Cap International Portfolio iShares Core U.S. Aggregate disciplined approach to money management and currently manages assets for a wide array of clients.
Dodge & Cox International Stock Vanguard High-Yield Corp Adm MFS International Growth - R6 First American Government Obligations Z ABOUT THE PORTFOLIO MANAGEMENT TEAM Hartford Schroders Emerging Markets Eq Andrew Brown, CFA® Senior Portfolio Manager
Vanguard Short-Term invest-Grade Adm Investment Experience since 1994 PIMCO High Yield Instl HighMark Tenure: since 1997
PIMCO Total Return Fund - Inst Holdings are subiect to change at the Education: MBA, University of Southern California; discretion of the investment manager. BA. University of Southern California PGIM Total Return Bond - R6
DoubleLine Core Fixed Income - I Salvatore "Tory" Milazzo III, CFA® Senior Portfolio Manager
First American Government Obligations Z
Investment Experience since 2004
HighMark Tenure: since 2014
STYLE Education: BA, Colgate University
Large Cap Value Real Estate 1,0%
3.8% J. Keith Stribling, CFA®
Cash 5.0%. _ Small Cap 4,3%
Senior Portfolio Manager
Investment Experience: since 1985
Int Stocks 4.7%. HighMark Tenure since 1995
Education: BA, Stetson University
Mid Cap 2.7%
Christiane Tsuda
Large Cap Growth
3.3% Senior Portfolio Manager
Investment Experience, since 1987
Large Cap Core HighMark Tenure since 2010
8.2% Interm-Term Bond Education: BA, International Christian University. Tokyo 525%
Anne Wimmer, CFA®
Senior Portfolio Manager
Short-Term Bond_.. Investment Experience: since 1987
13.5%
HighMark Tenure since 2007
Education: BA. University of California, Santa Barbara
High Yield 1.0%.
The performance records shown represent a size-weighted composite of tax exempt accounts that meet the following criteria: Accounts are managed by HighMark with full investment authonly according to the PARS Moderately Conservative active and passive objectives
The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these Asset Allocation Committee portfolios US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory Number of Members: 16 agreement with US Bank. The 0,36% paid to HighMark, as well as other expenses that may be incurred in the Average Years of Experience: 27 management of the portfolio, will reduce the portfolio's retums. Assuming an investment for five years, a 5% annual total etum. and an annual sub-advison Average Tenure (Years): 15 nillion initial value would grow to $12,53 million after fees (Net-of-Fees) and $12 76 million before fees (Gross-of-Fees Gross retums are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A cent's return will be reduced by the advisory fees and other expenses it Manager Review Group may incur as a client. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do Number of Members: 7 not reflect the deduction of investment advisory fees, custody fees, or faxes but do reflect the deduction of trading Average Years of Experience: 22 expenses. Returns are calculated based on trade-date accounting Average Tenure (Years): 10 Blended benchmarks represent HighMark's strategic allocations between equity. fixed income, and cash and are rebalanced monthly. Benchmark retums do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other eamings. An investor cannot invest directly in an index The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI capitalization index that is designed to measure equity market pet ore in that loralere in serio The Russell *Assets under management ("AUM") include assets for which index tracks the performance of below investment grade US dollar-denominated corporate men rust is man ed HighMark provides continuous and regular supervisory and US domestic marke! Wishire REIT index measures US publicly traded Real Estate investment Trusts.
Aggregate Bond index is generally representative management services. Assets under advisement ("AUA") BofA 1-3 Year U.S. Corporate & Government index tracks the bond performance of the ICE BofA US Corporate & Government Index, with a remainin include assets for which HighMark provides certain investment Greasury Bil index tracks the yield or the 1omonitn US: Treasury an 3 years. The unmanaged FTSE 1-Month US advisory services including. but not limited to, investment lighMark Capital Management. Ind research and strategies) for client assets of its parent company.
MUFG Union Bank. N.A
MUFG Union Bank. N.A.
provides certain services to HighMark and is compensated for these services. Pas performance does not guarantee future results. Individual account management and construction will vary depending or FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or 21