City of san leandro
PARS 115 Trust – OPEB Prefunding Program &
Pension Rate Stabilization Program Plan Client Review
May 3, 2022
City of san leandro ▎ 2
Contacts
Mitch Barker
Executive Vice President
(949) 310-4876
[email protected]
Anthony Armas, CEBS
Client Services Coordinator
(800) 540-6369 x148
[email protected]
Randall Yurchak, CFA
Vice President, Portfolio Manager
(415) 705-7579
[email protected]
City of san leandro ▎ 3
Plan Type: IRC Section 115 Irrevocable Exclusive Benefit Trust Trustee Approach: Discretionary
Plan Effective Date: June 1, 2009
Plan Administrator: City Manager
Current Investment Strategy: Moderately Conservative HighMark Plus (Active) Strategy; Individual Account Summary of Agency’s OPEB Plan
AS OF MARCH 31, 2022:
Initial Contribution: June 2009: $500,000
Additional Contributions: $15,190,000
Total Contributions: $15,690,000
Disbursements: $0
Total Investment Earnings: $5,656,651
Account Balance: $20,844,592
City of san leandro ▎ 4
Summary of Agency’s OPEB Plan
*Plan Year Ending June 2009 is based on 1 month of activity. **Plan Year Ending June 2022 is based on 9 months of activity. ***Account value as of quarter-end includes all interest and dividends.
HISTORY OF CONTRIBUTIONS, DISBURSEMENTS, AND TOTAL ASSETS AS OF MARCH 31, 2022:
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
Plan Year Ending
Contributions
Disbursements
Total Assets
Year Contributions Disbursements Total Assets
Jun-09* $500,000 $0 $500,288
Jun-10 $500,000 $0 $1,026,342
Jun-11 $0 $0 $1,156,626
Jun-12 $250,000 $0 $1,443,468
Jun-13 $0 $0 $1,531,994
Jun-14 $990,000 $0 $2,700,083
Jun-15 $750,000 $0 $3,502,137
Jun-16 $2,500,000 $0 $6,115,430
Jun-17 $6,950,000 $0 $13,665,308
Jun-18 $750,000 $0 $14,876,397
Jun-19 $1,000,000 $0 $16,887,508
Jun-20 $1,500,000 $0 $19,149,376
Jun-21 $0 $0 $21,807,092
Jun-22** $0 $0 $20,844,592
City of san leandro ▎ 5
Plan Type: IRC Section 115 Irrevocable Exclusive Benefit Trust Trustee Approach: Discretionary
Plan Effective Date: June 7, 2021
Plan Administrator: City Manager
Current Investment Strategy: Moderate HighMark Plus (Active) Strategy; Individual Account Summary of Agency’s pension Plan
AS OF MARCH 31, 2022:
Initial Contribution: August 2021: $750,000
Additional Contributions: $5,750,000
Total Contributions: $6,500,000
Disbursements: $0
Total Investment Earnings: ($211,350)
Account Balance: $6,280,453
City of san leandro ▎ 6
Summary of Agency’s pension Plan
*Account value as of quarter-end includes all interest and dividends.
HISTORY OF CONTRIBUTIONS, DISBURSEMENTS, AND TOTAL ASSETS AS OF MARCH 31, 2022:
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Plan Month Ending
Contributions
Disbursements
Total Assets
Month Contributions Disbursements Total Assets
Aug-21 $750,000 $0 $750,000
Sep-21 $750,000 $0 $1,467,879
Oct-21 $1,000,000 $0 $2,505,487
Nov-21 $1,000,000 $0 $3,458,098
Dec-21 $1,000,000 $0 $4,521,301
Jan-22 $1,000,000 $0 $5,380,934
Feb-22 $1,000,000 $0 $6,296,090
Mar-22 $0 $0 $6,280,453
City of san leandro ▎ 7
HighMark Capital Management
Investment Review
City of San Leandro
First Quarter 2022
Presented by
Randall Yurchak, CFA
Investment objective:
▪ OPEB: Moderately Conservative Highmark Plus (Active)
▪ Pension: Moderate Highmark Plus (Active)
Asset Allocation
▪ OPEB: 28.9% stocks (20-40% range), 67.9% bonds (50-80% range), 3.2% cash (0-20% range) ▪ Pension: 48.5% stocks (40-60% range), 46.7% bonds (40-60% range), 4.8% cash (0-20% range) Performance (as of 03-31-2022; net fund fees, gross investment management fees):
OPEB Pension
▪ 3 month: -5.23% -4.86%
▪ 1-year: -.58%
▪ 3-year: 5.79%
▪ 5-year: 5.46%
▪ 10-year: 5.13%
▪ Inception (7/09, 9/21): 6.02% -5.13%
▪ Bonds: Rising bond yields suggests inflation may persist longer than previous market expectations. ▪ Stocks: Equities higher given easy monetary policies and expected continued economic recovery this year. ▪ Domestic markets: Large Cap outperformed Small Cap recently as slowing growth expectations impacted higher-risk assets. ▪ International: International underperformed domestic as vaccination roll-out and growth lagged the US. 12-Month Changes
▪ Stocks: modest underweight
▪ Bonds: modest overweight
▪ Cash: slight underweight
Outlook 2022
▪ Corporate profit growth expected to continue with S&P 500 earnings +8% FY22 est. vs. +65% FY21 est. ▪ Volatility likely to persist with flattening yield curve, higher inflation near-term, and faster-than-expected Fed tightening ▪ Potential tax law changes may cause volatility
▪ Geopolitical uncertainty: China, Middle East, Russia, Ukraine DISCUSSION HIGHLIGHTS – City of San Leandro
City of San Leandro 2
City of San Leandro
*Account Inception: 7/1/2009, Initial Contribution received June 2009.
Aggregate is composed of account XXXXX19203, PARS/PRHCP MOD CONSERV HM PLUS, from 07/01/2009 until 08/31/2015, then of its own proprietary account XXXXX50400, PARS/CITY OF SAN LEANDRO, from 09/01/2015 until 6/30/2021, and then invested into a new proprietary account XXXXX65601, PARS/CITY OF SAN LEANDRO 115P – OPEB, from 7/1/2021 and onwards.. Returns are gross of account level investment advisory fees and net of any fees, including fees to manage mutual fund or exchange traded fund holdings. Returns for periods over one year are annualized. The information presented has been obtained from sources believed to be accurate and reliable. Past performance is not indicative of future returns. Securities are not FDIC insured, have no bank guarantee, and may lose value. 3 Year
to Date
(3 Months) 1 Year 3 Years 5 Years 10 Years
Inception
to Date
07/01/2009
Cash Equivalents .01 .02 .63 .96 .52 .44
Lipper Money Market Funds Index .01 .01 .61 .91 .48 .38 Total Fixed Income -5.51 -3.75 1.85 2.22 2.41 3.47
Bloomberg US Aggregate Bd Index -5.93 -4.15 1.69 2.14 2.24 3.20 Total Equities -5.02 6.24 14.78 12.73 11.47 12.82
Large Cap Funds -4.83 12.43 18.40 15.56 14.23 14.74
S&P 500 Composite Index -4.60 15.65 18.92 15.99 14.64 15.61 Mid Cap Funds -5.59 7.02 14.80 12.54 11.39
Russell Midcap Index -5.68 6.92 14.89 12.62 12.85 15.05 Small Cap Funds -4.19 -3.68 12.30 12.06 12.84 15.37
Russell 2000 Index -7.53 -5.79 11.74 9.74 11.04 13.14
International Equities -6.04 -3.94 8.45 7.28 5.12 6.70
MSCI EAFE Index -5.91 1.16 7.78 6.72 6.27 6.94
MSCI EM Free Index -6.97 -11.37 4.94 5.98 3.36 5.67
RR: REITS -6.09 20.59 11.27 9.88
Wilshire REIT Index -3.87 29.14 11.94 10.04 9.90 14.95
Total Managed Portfolio -5.23 -.58 5.79 5.46 5.13 6.02
Selected Period Performance
City of San Leandro OPEB Plan
Period Ending: 3/31/2022
Asset Allocation
As of March 31, 2022
City of San Leandro 4
Current Asset Allocation Investment Vehicle
Equity 28.94% Range: 20%-40% 6,024,888
Large Cap Core 2.90% COFYX Columbia Contrarian Core Inst3 603,028
5.43% VGIAX Vanguard Growth & Income Adm 1,130,511
Large Cap Value 2.54% DODGX Dodge & Cox Stock Fund 529,162
1.18% IVE iShares S&P 500 Value ETF 246,193
Large Cap Growth 1.63% HNACX Harbor Capital Appreciation Retirement 340,145
1.63% PRUFX T. Rowe Price Growth Stock Fund I 340,390
Mid Cap Core 2.94% IWR iShares Russell Mid-Cap ETF 613,082 Small Cap Value 2.24% UBVFX Undiscovered Managers Behavioral Val R6 466,827 Small Cap Growth 2.21% VBK Vanguard Small-Cap Growth ETF 461,026 International Core 1.78% DFALX DFA Large Cap International I 370,398 International Value 0.69% DODFX Dodge & Cox International Stock Fund 142,807 International Growth 0.69% MGRDX MFS® International Growth R6 143,815 Emerging Markets 2.02% HHHFX Hartford Schroders Emerging Mkts Eq F 420,005 Real Estate 1.04% VNQ Vanguard Real Estate ETF 217,499
Fixed Income 67.88% Range: 50%-80% 14,133,809
High Yield 1.04% PHIYX PIMCO High Yield Instl 216,052
Short-Term 13.37% VFSUX Vanguard Short-Term Investment-Grade Adm 2,784,162 Intermediate-Term 17.75% DBLFX DoubleLine Core Fixed Income I 3,696,306
17.86% PTTRX PIMCO Total Return Instl Fund 3,719,643
17.85% PTRQX Prudential Total Return Bond Q 3,717,647
Cash 3.19% Range: 0%-20% 663,387
3.19% FGZXX First American Government Oblig Z 663,387
TOTAL 100.00% $20,822,084
City of San Leandro
Performance Inception: 9/01/2021
Returns are gross of account level investment advisory fees and net of any fees, including fees to manage mutual fund or exchange traded fund holdings. Returns for periods over one year are annualized. The information presented has been obtained from sources believed to be accurate and reliable. Past performance is not indicative of future returns. Securities are not FDIC insured, have no bank guarantee, and may lose value. 5 Year
to Date
(3 Months) 7 Months
Cash Equivalents .01 .02
Lipper Money Market Funds Index .01 .01
Total Fixed Income -5.52 -6.66
Bloomberg US Aggregate Bd Index -5.93 -6.74
Total Equities -4.97 -4.21
Large Cap Funds -4.74 -1.93
S&P 500 Composite Index -4.60 1.00
Mid Cap Funds -5.52 -4.21
Russell Midcap Index -5.68 -3.74
Small Cap Funds -4.19 -7.02
Russell 2000 Index -7.53 -8.33
International Equities -6.07 -9.35
MSCI EAFE Index -5.91 -6.18
MSCI EM Free Index -6.97 -11.84
RR: REITS -5.86 .36
Wilshire REIT Index -3.87 6.85
Total Managed Portfolio -4.86 -5.13
Selected Period Performance
PARS/CITY OF SAN LEANDRO 115P PENS
Account XXXXX65600
Period Ending: 3/31/2022
Asset Allocation
As of March 31, 2022
City of San Leandro 6
Current Asset Allocation Investment Vehicle
Equity 48.48% Range: 40%-60% 3,042,543
Large Cap Core 4.91% COFYX Columbia Contrarian Core Inst3 307,820
9.32% VGIAX Vanguard Growth & Income Adm 585,099
Large Cap Value 4.33% DODGX Dodge & Cox Stock Fund 271,901
2.02% IVE iShares S&P 500 Value ETF 126,756
Large Cap Growth 2.79% HNACX Harbor Capital Appreciation Retirement 175,297
2.80% PRUFX T. Rowe Price Growth Stock Fund I 175,423
Mid Cap Core 4.90% IWR iShares Russell Mid-Cap ETF 307,322 Small Cap Value 3.70% UBVFX Undiscovered Managers Behavioral Val R6 232,295 Small Cap Growth 3.84% VBK Vanguard Small-Cap Growth ETF 240,686 International Core 2.76% DFALX DFA Large Cap International I 173,463 International Value 1.00% DODFX Dodge & Cox International Stock Fund 63,033 International Growth 1.02% MGRDX MFS® International Growth R6 64,106 Emerging Markets 3.32% HHHFX Hartford Schroders Emerging Mkts Eq F 208,155 Real Estate 1.77% VNQ Vanguard Real Estate ETF 111,188
Fixed Income 46.73% Range: 40%-60% 2,932,670
High Yield 1.02% PHIYX PIMCO High Yield Instl 63,877
Short-Term 9.60% VFSUX Vanguard Short-Term Investment-Grade Adm 602,581 Intermediate-Term 12.00% DBLFX DoubleLine Core Fixed Income I 752,879
12.05% PTTRX PIMCO Total Return Instl Fund 756,142
12.07% PTRQX Prudential Total Return Bond Q 757,191
Cash 4.78% Range: 0%-20% 300,235
4.78% FGZXX First American Government Oblig Z 300,235
TOTAL 100.00% $6,275,448
City of San Leandro 7
1-Month 3-Month Year-to- 1-Year 3-Year 5-Year 10-Year
Fund Name Return Return Date Return Return Return Return Columbia Contrarian Core Inst3 2.73 -2.96 -2.96 12.72 19.88 15.41 14.63 Vanguard Growth & Income Adm 3.67 -3.90 -3.90 16.04 18.83 15.78 14.65 Dodge & Cox Stock 1.53 1.01 1.01 14.85 17.30 13.27 14.25 iShares S&P 500 Value ETF 2.95 -0.21 -0.21 12.39 13.93 10.96 11.71 Harbor Capital Appreciation Retirement 3.72 -13.59 -13.59 3.49 20.59 20.32 16.25 T. Rowe Price Growth Stock I 0.56 -15.01 -15.01 -0.42 16.53 16.96 15.28 S&P 500 TR USD 3.71 -4.60 -4.60 15.65 18.92 15.99 14.64 iShares Russell Mid-Cap ETF 2.54 -5.72 -5.72 6.72 14.70 12.46 12.68 Russell Mid Cap TR USD 2.56 -5.68 -5.68 6.92 14.89 12.62 12.85 Undiscovered Managers Behavioral Val R6 -0.55 3.53 3.53 13.48 16.01 10.91 12.65 Russell 2000 Value TR USD 1.96 -2.40 -2.40 3.32 12.73 8.57 10.54 Vanguard Small-Cap Growth ETF 1.22 -11.95 -11.95 -9.25 11.84 12.64 11.92 Russell 2000 Growth TR USD 0.46 -12.63 -12.63 -14.33 9.88 10.33 11.21 Dodge & Cox International Stock 0.84 -0.59 -0.59 2.99 8.01 5.17 6.24 DFA Large Cap International I 0.46 -4.93 -4.93 2.53 8.60 7.23 6.36 MFS International Growth R6 0.78 -8.13 -8.13 0.02 9.67 10.69 7.69 MSCI EAFE NR USD 0.64 -5.91 -5.91 1.16 7.78 6.72 6.27
Hartford Schroders Emerging Mkts Eq F -3.66 -8.76 -8.76 -16.23 5.92 6.85 4.18 MSCI EM NR USD -2.26 -6.97 -6.97 -11.37 4.94 5.98 3.36
Source: SEI Investments, Morningstar Investments
SMALL CAP EQUITY FUNDS
INTERNATIONAL EQUITY FUNDS
Returns less than one year are not annualized. Past performance is no indication of future results. The information presented has been obtained from sources believed to be accurate and reliable. Securities are not FDIC insured, have no bank guarantee and may lose value.
CITY OF SAN LEANDRO
For Period Ending March 31, 2022
LARGE CAP EQUITY FUNDS
MID CAP EQUITY FUNDS
City of San Leandro 8
1-Month 3-Month Year-to- 1-Year 3-Year 5-Year 10-Year
Fund Name Return Return Date Return Return Return Return Vanguard Real Estate ETF 6.32 -5.97 -5.97 21.45 11.40 9.65 9.69 PIMCO Total Return Instl -3.43 -6.19 -6.19 -4.02 2.18 2.50 2.73 PGIM Total Return Bond R6 -2.43 -6.51 -6.51 -3.29 2.20 2.94 3.50 Vanguard Short-Term Investment-Grade Adm -1.86 -3.80 -3.80 -3.67 1.49 1.78 1.96 DoubleLine Core Fixed Income I -2.36 -4.88 -4.88 -3.19 1.64 2.22 2.87 Bloomberg US Agg Bond TR USD -2.78 -5.93 -5.93 -4.15 1.69 2.14 2.24 PIMCO High Yield Instl -0.89 -4.70 -4.70 -0.91 3.77 4.12 5.14 ICE BofA US High Yield Mstr II Index -0.93 -4.51 -4.51 -0.29 4.40 4.56 5.74 Source: SEI Investments, Morningstar Investments
REAL ESTATE FUNDS
BOND FUNDS
Returns less than one year are not annualized. Past performance is no indication of future results. The information presented has been obtained from sources believed to be accurate and reliable. Securities are not FDIC insured, have no bank guarantee and may lose value.
CITY OF SAN LEANDRO
For Period Ending March 31, 2022