06-30-2012 Investment Performance ReviewInvestment Advisors
Steven Alexander, CTP, CGFO, Managing Director
David Jang, CTP, Senior Managing Consultant
Gregg Manjerovic, CFA, Portfolio Manager
D. Scott Stitcher, CFA, Senior Managing Consultant
Rebecca Dole, CTP, Consultant
Jan Anguel, Consultant
Village of North Palm Beach
Investment Performance Review
Quarter Ended June 30, 2012
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PFM Asset Management LLC
300 S. Orange Avenue, Suite 1170 One Keystone Plaza, Suite 300
Orlando, FL 32801 North Front & Market Streets
(407) 648 -2208 Harrisburg, PA 1 71 01 -2044
(407) 648 -1323 fax 717- 232 -2723
717 - 233 -6073 fax
Village of North Palm Beach Investment Report - Quarter Ended June 30, 2012
Table of Contents
Tab I.
Section A Market Review
Tab II.
Section A Quarterly Summary Report
Section B Investment Portfolio & Performance
Section C Asset Allocation Chart as of June 30, 2012
Tab III. June 30, 2012 PFM Month -End Statement
(statements are available online at www.pfm.com)
This material is based on information obtained from sources generally believed to be reliable and available to the public,
however PFM Asset Management LLC cannot guarantee its accuracy, completeness or suitability. This material is for general
information purposes only and is not intended to provide specific advice or recommendation. The information contained in this
report is not an offer to purchase or sell any securities.
Table of Contents Section i
Village of North Palm Beach Investment Report - Quarter Ended June 30, 2012
TAB I
Village of North Palm Beach
Summary
• During the second quarter, investors searched for a safe place to
hide amid weaker economic data and the ongoing European
sovereign debt crisis. European efforts to stem contagion from
its ongoing debt crisis resulted in higher volatility for European
markets.
• U.S. economic data showed mixed results. While the labor market
and the manufacturing sector looked weaker, the housing market
showed signs of a rebound.
• PFM Asset Management LLC (PFMAM) believes the domestic
economy will continue to expand, albeit at a slower pace, and
aims to take advantage of the more volatile market environment
by finding compelling yet undervalued investment opportunities.
Economic News
Economic data was weaker across the globe. Gross domestic product
(GDP) in the U.S. for the first quarter of 2012 was 1.9 %, compared
to 3.0% for the fourth quarter of 2011. At the same time, the
European economic picture worsened, as Spain fell into its second
recession since 2009 and the European debt crisis continued to pose
challenges. Emerging- markets economies also experienced slower
growth, as China had its slowest pace of economic growth since 2009
and India reported first - quarter growth of 5.3% compared to a 6.1%
rate of growth for the previous quarter. In response, central banks
have kept accommodative policies in place and, in some cases, added
further support to their economies.
U.S. job market conditions deteriorated during the quarter, as the
unemployment rate had its first increase since June 2011, rising to
8.2% in May from 8.1% in April. However, the housing market has
shown some improvements during the quarter. New -home sales in
May exceeded economists' expectations, reaching their highest level
PFM Asset Management LLC
Investment Report — Quarter Ended June 30, 2012
since April 2010, and the S &P /Case - Shiller Index reported a third
consecutive month of price gains for single - family homes.
Oil and other commodity prices fell for most of the quarter due to
reports of slower growth in the global economy. However, they
rebounded sharply at the end of June, with the S &P GSCI Index
rising the most in three years when the European Union announced
it would increase its aid to struggling member nations. The S &P 500
Index rallied on this positive news as well, after losing ground in the
first two months of the quarter.
Total Returns of Various Asset Classes
,Quarter endedJune 30, 2092
Interest Rates
U.S. interest rates declined across the yield curve. Slowing growth, a
decline in inflation, and a flight to quality all fed the decline. The
Federal Reserve (the "Fed ") maintained its commitment to keeping
interest rates at low levels until at least late 2014, and the federal
12.0%
8.0% 5 7.3%
.496
4.096 3'1%
1.996 2.2%
0.3% 0.7% 0.4% 0.6%
0.0%
-4.0% 1 -2.8%
-8.0% -6.9 ❑ Quarterly Retum
- 12.0% ■Annual Return
-16.0% -13.4%
S &P500 Index
MSO Citigroup
1 -5 Year
1 -5 Year 1 -5 Year
Total Return
EAFE Euro
A AAA
Federal Treasury
(Domestic
Total Return Bond Index
Corporate
Agency Index
Equity)
(International
Index
Index
Equity)
Sources: Bank ofAmerica Merrill Lynch, Citigroup, Bloomberg
1
Village of North Palm Beach
funds rate stayed within a band from zero to 0.25 %. The central bank
also stated that it would extend its program of buying longer -dated
Treasuries while selling short -dated Treasuries, also known as
"Operation Twist," until the end of the year. The Fed lowered its
forecasts for domestic economic growth, while at the same time
increasing its forecasts for unemployment.
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0,0%
Jun 11
2 -Year, 5 -Year, and 10 -Year U.S. Treasury Note Yields
June 30 2011 through June 30, 2092
Aug 11 Oct 11 Dec 11 Feb 12 Apr 12 Jun 12
2 -Year TSY 5 -Year TSY 10 -Year TSY
Source: Bloomberg
Thirty -year mortgage rates fell to new lows, which drove some of the
positive developments in the housing market. As shown in the charts
on the following page, longer -dated Treasuries performed well for
the quarter and 12 -month period. Corporate bonds outperformed
Treasuries and Agencies on a duration- adjusted basis for the quarter
and 12 -month period, and Treasuries beat Agencies for the quarter
but not for the 12 -month period. Agencies and corporate bonds had
PFM Asset Management LLC
Investment Report — Quarter Ended June 30, 2012
a difficult time during the month of May as the markets dealt with
the uncertainties surrounding the European debt crisis; however,
both sectors improved markedly in June as a result of Europe's new
commitments to resolving its debt crisis.
Five- and ten -year Treasury yields dropped to record lows after the
employment report was released on June 1, and then increased
slightly during the month. Agency spreads remained mostly
unchanged from May to June, and outperformed Treasuries in June
due to their relatively higher yields. With Agency and corporate
spreads narrowing, PFMAM believes that municipal and Agency
mortgage- backed securities provide good value with acceptable levels
of risk.
U.S. Treasury Yields — Quarter and Year - over -Year
30- Jun -12
0.08%
0.21%
0.30%
0.72%
1.65%
2.75%
31- Mar -12
0.07%
0.17%
0.33%
1.04%
2.21%
3.34%
Change over Quarter
0.02%
0.04%
-0.03%
-0.32%
-0.57%
-0.58%
30- Jun -11 0.02% 0.19% 0.46% 1.76% 3.16% 4.37%
Change over Year 0.07% 0.02% -0.16% -1.04% -1.52% -1.62%
Source data: Bloomberg
PFMAM Outlook
We believe that the domestic economy will continue to grow, despite
weaker reports on the jobs market. Shorter -term rates are range -
bound, while longer -term yields are declining, resulting in a flatter
yield curve. Currently, we do not believe that rates will head
substantially higher, as the Fed is maintaining a loose monetary policy
and inflation remains within the Fed's mandate of 2% for core
personal consumption expenditures.
2
Village of North Palm Beach
Lower oil prices may currently provide some relief to U.S.
consumers. On the other hand, the gloomy employment picture is
still weighing on consumer spending, as is higher core inflation.
20.0%
16.0%
12.0%
8.0%
4.0%
0.0%
Returns for 2 -Year, 5 -Year, and 10 -Year Treasuries
,Quarter ended June 30, 2092
2 -Year U.S. Treasury 5 -Year U.S. Treasury 10 -Year U.S. Treasury
Index Index Index
■ Quarter ended 6/30/2012 ■ 12 Months ended 6/30/2012
Source: Bloomberg, using Bank ofAmerica Merrill Lynch indexes.
The extension of "Operation Twist" announced by the Fed in June
should place continued downward pressure on intermediate -term
Treasury yields, as the Fed will buy up to $267 billion in securities
over the coming months. The action should support rates for
Treasuries with maturities of two years and under, as the Fed offsets
its purchases by selling short -dated Treasuries.
Investment Report — Quarter Ended June 30, 2012
Short -term yields have stayed within a narrow range for the quarter.
There are also fewer opportunities for investment in the money
market sector, as Fannie Mae and Freddie Mac reduce their short -
term debt issuance. Agency and corporate spreads have been volatile
and reactive to risk -on /risk -off psychology in the market, which
creates opportunities for active management strategies to add value.
Duration - Adjusted Returns for Fixed - Income Securities
,Quarter endedJune 30, 2092
2.0%
1.51%
1.5%
1.0% 95 0.93'%
D.79
0.5% 0.36%
0.19% 0.15%
0.0%
U.S. Treasu ry Federal Agency AA /AAA Corporate
Current Quarter ■ Past 12 Months
Source: Bloomberg, using Bank ofAmerica Merrill Lynch 1 -3 year indexes.
The vies expressed ra ithin this maternal constitute the perspective and judgment of PPM Asset Management LLC (PPMAM) at the time of distribution and are subject to
change. Information is obtained from sources generally believed to be reliable and available to the public; hoavever, PPMAM cannot guarantee its accuracy, completeness or
suitability. This material is forgeneral information purposes only and is not intended to provide specific advice or recommendation. The information contained in this report is
not an offer to purchase or sell any securities.
PFM Asset Management LLC
3
Village of North Palm Beach Investment Report - Quarter Ended June 30, 2012
TAB II
Village of North Palm Beach Investment Report - Quarter Ended June 30, 2012
Quarterly Summary Report
Total Portfolio Value'2 June 30.20121 March 31, 2012
Market Value $8,289,853.88 $8,273,977.63
Amortized Cost $8,262,416.12 $8,240,313.29
0.50%
0.25%
a)
0.00%
ry
-0.25%
-0.50%
0.50
Quarter Total Return Comparison
Quarter Ended 06/30/12
1.00 1.50 2.00
Effective Duration (Years)
2.50
2.00%
1.50%
1.00%
0.50%
000%
2.50 3.00 0.50
Total Return Comparison Since Inception as of
Quarter Ended 06/30/12
1.00 1.50 2.00 2.50 3.00
Effective Duration (Years)
Quarterly Return
Annualized
Last
Last
Since Inception
Total Return'2' 4's18'
June 30, 2012
Quarter
12 Months
24 Months
June 30, 2009
Investment Portfolio
0.19%
0.77%
0.75%
1.00%
1.55%
Merrill Lynch 1 -3 Year U.S. Treasury Index
0.19%
0.78%
0.79%
1.06%
1.60%
Total
Current Quarter
Previous Quarter
Total
Current Quarter
Previous Quarter
Effective Duration(Years) °
June 30, 2012
March 31, 2012
Yields
June 30, 2012
March 31, 2012
Investment Portfolio
1.80
1.80
Yield at Market
0.33%
0.36%
Merrill Lynch 1 -3 Year U.S. Treasury Index
1.83
1.82
Yield at Cost
0.58%
0.70%
Portfolio Duration % of Benchmark Duration
99% `
99%
0.50%
0.25%
a)
0.00%
ry
-0.25%
-0.50%
0.50
Quarter Total Return Comparison
Quarter Ended 06/30/12
1.00 1.50 2.00
Effective Duration (Years)
2.50
2.00%
1.50%
1.00%
0.50%
000%
2.50 3.00 0.50
Total Return Comparison Since Inception as of
Quarter Ended 06/30/12
1.00 1.50 2.00 2.50 3.00
Effective Duration (Years)
Notes:
1. In order to comply with GASB accrual accounting reporting requirements.
2. End of quarter trade -date market values of portfolio holdings, including accrued interest.
3. Performance on trade date basis, gross (i.e., before fees), is in accordance with The CFA Institute's Global Investment Performance Standards (GIPS).
4. Merrill Lynch Indices provided by Bloomberg Financial Markets.
5. Quarterly returns are presented on an unannuali -c! basis.
6. Includes money market fund /cash in performance and duration computations.
7. Returns presented for 12 months or longer are presented on an annual basis.
8. Past performance is not indicative of future results.
PFM Asset Management LLC Section A - 1
Current Quarter
Previous Quarter
Fiscal Year 2012
Fiscal Year 2011
Quarterly Interest Income
June 30, 2012
March 31, 2012
Fiscal Year Interest Income
Year to Date
Year to Date
Investment Portfolio
$24,817.77
$15,100.19
Investment Portfolio
$71,724.50
$96,644.68
TD Bank Money Market Fund
1.34
1.54
TD Bank Money Market Fund
4.51
34.78
Total
$24,819.11
$15,101.73
Total
$71,729.01
$96,679.46
Current Quarter
Previous Quarter
Fiscal Year 2012
Fiscal Year 2011
Quarterly Realized Gain /Loss on Cost
June 30, 2012
March 31, 2012
Fiscal Year Realized Gain /Loss on Cost
Year to Date
Year to Date
Investment Portfolio
11,166.28
3,164.76
Investment Portfolio
13,114.11
$24,540.42
Notes:
1. In order to comply with GASB accrual accounting reporting requirements.
2. End of quarter trade -date market values of portfolio holdings, including accrued interest.
3. Performance on trade date basis, gross (i.e., before fees), is in accordance with The CFA Institute's Global Investment Performance Standards (GIPS).
4. Merrill Lynch Indices provided by Bloomberg Financial Markets.
5. Quarterly returns are presented on an unannuali -c! basis.
6. Includes money market fund /cash in performance and duration computations.
7. Returns presented for 12 months or longer are presented on an annual basis.
8. Past performance is not indicative of future results.
PFM Asset Management LLC Section A - 1
Village of North Palm Beach Investment Report - Quarter Ended June 30, 2012
Executive Summary
PORTFOLIO STRATEGY
➢ The Village's Investment Portfolio is of high credit quality and invested in U.S. Treasury and Federal Agency securities.
➢ PFM continued to actively manage the Investment Portfolio during the second quarter and found value in the market, taking
advantage of market inefficiencies or changes in economic outlook. As a result the Portfolio realized over $8,000 in gains on sales
during the quarter. PFM is continually in the market monitoring for opportunities to add value to the Portfolio.
➢ The Investment Portfolio's quarterly total return performance was 0.19 %, performing in -line with the benchmark's performance of
0.19 %. Over the past year, the Portfolio earned 0.75 %, versus 0.79% for the benchmark.
➢ The pace of economic activity in the U.S. slowed further in the second quarter, kicking off a strong rally in the Treasury market.
Weaker than expected economic data, the continuation of the Fed's Operation Twist program, and a flight -to- quality caused by
worsening turmoil in the Euro -Zone pushed long -term yields sharply lower.
➢ After starting the quarter at a yield of 2.21 %, the 10 -year Treasury fell 76 basis points (0.76 %), hitting an all -time low of 1.45% in
early June. At that point, investors decided that getting just 145 pennies of interest each year for every $100 lent to the U.S.
government was perhaps a bad deal, and rates moved modestly higher through June. In contrast to long -term maturities, 2 -year
Treasury yields stayed within a narrow range of 0.24% to 0.37% as the Federal Reserve's near -zero interest rate policy anchored
the front end of the yield curve.
➢ The turmoil in Europe triggered a shift from the first quarter's "risk on" trade, which strongly favored agencies, corporate bonds and
riskier asset classes, to the second quarter's "risk off' trade, which favored Treasuries in April and May. Widening yield spreads
created good investment opportunities, though, as market psychology reversed again in June. The quarter ended with a solid rally in
spread products. The Portfolio benefitted from the allocation in agency debt.
➢ The Euro -Zone debt crisis and decelerating growth across the globe will continue to drive the financial markets. Central banks
around the world remain accommodative. Additional intervention by the EC13, and perhaps by the U.S. Federal Reserve as well, is
likely if conditions weaken. Investments based in U.S. dollars and other non -Euro currencies are perceived as safe - havens, despite
their very low yields.
➢ Another factor driving the U.S. bond market is the prognosis for weaker domestic growth. The U.S. economy will likely muddle
through a slow period, but avoid a double dip recession. Consumer spending is expanding, energy costs have fallen, and borrowing
costs at record lows have eased debt service burdens. With so much bad news priced into the markets, things could turn out better
than expected, which would drive equity prices higher and corporate bond spreads narrower.
➢ A growth surprise in the U.S. could also kick -start a back -up in yields, but that risk is concentrated in longer maturities. With the
Federal Reserve on hold through at least late 2014, shorter -term investments will likely remain range -bound near current levels.
➢ We currently favor extending maturities into the intermediate range. We also plan to keep the Portfolio's duration near the
benchmark's target as we begin the new quarter, using any bouts of market weakness to time monthly extensions advantageously.
➢ As always, we strive to maintain safety of principal, while seeking opportunities to add value through active management. Our
strategy will remain flexible and may change in response to changes in interest rates, economic data, market outlook or specific
opportunities that arise.
PFM Asset Management LLC Section B - 1
Village of North Palm Beach Investment Report - Quarter Ended June 30, 2012
Investment Portfolio Composition and Credit Quality Characteristics
Security Type
June 30, 2012
% of Portfolio
March 31, 2012
% of Portfolio
U.S. Treasuries
$6,562,395.05
79.2%
$6,324,857.55
76.4%
Federal Agencies
1,690,903.92
20.4%
1,881,283.07
22.7%
Commercial Paper
0.00
0.0%
0.00
0.0%
Certificates of Deposit
0.00
0.0%
0.00
0.0%
Bankers Acceptances
0.00
0.0%
0.00
0.0%
Repurchase Agreements
0.00
0.0%
0.00
0.0%
Municipal Obligations
0.00
0.0%
0.00
0.0%
Corporate Notes /Bonds
0.00
0.0%
0.00
0.0%
Corporate Notes /Bonds - FDIC Insured
0.00
0.0%
0.00
0.0%
Mortgage Backed
0.00
0.0%
0.00
0.0%
Money Market Fund /Cash
36,554.91
0.4%
67,837.01
0.8%
Totals
$8,289,853.88
100.0%
$8,273,977.63
100.0%
U.S. Treasuries
79%
Portfolio Composition
as of 06/30/12
Credit Quality Distribution
as of 06/30/12
AA+
Federal Agency - - 100%
Obligations
20%
1
I
Money Market -
Fund /Cash
0.44%
Notes:
1. End of quarter trade -date market values of portfolio holdings, including accrued interest.
2. Credit rating of securities held in portfolio, exclusive of money market fund /LGIP. Standard & Poor's is the source of the credit ratings.
PFM Asset Management LLC Section B - 2
Village of North Palm Beach
Investment Report - Quarter Ended June 30, 2012
Investment Portfolio Maturity Distribution
Maturity Distribution'
June 30, 2012
March 31, 2012
Overnight (Monedy Market Fund)
$36,554.91
$67,837.01
Under 6 Months
0.00
0.00
6 - 12 Months
349,319.10
1,100,241.92
1 - 2 Years
4,484,517.42
4,169,038.16
2 - 3 Years
3,419,462.45
2,936,860.54
3 - 4 Years
0.00
0.00
4 - 5 Years
0.00
0.00
5 Years and Over
0.00
0.00
100%
90%
80%
0
70%
0 60%
a
50%
0
0
40%
0
30%
c�
c 20%
a�
U
10%
a
0%
Totals $8,289,853.88 $8,273,977.63
13%
0% 1% 0% 0%
Overnight Under 6 Months 6 - 12 Months
Portfolio Maturity Distribution'
54%
1 50%
35%
[]June 30, 2012
■March 31, 2012
0% 0% 0% 0% 0% 0%
1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years 5 Years and Over
Notes:
1. Callable securities in portfolio are included in the maturity distribution analysis to their stated maturity date, although they may be called prior to maturity.
PFM Asset Management LLC Section B - 3
Village of North Palm Beach Investment Report - Quarter Ended June 30, 2012
Investment Portfolio Maturity Distribution versus the Benchmark'
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Years to Maturity
G Investment Portfolio ❑ Merrill Lynch 1 -3 Year U.S. Treasury Note Index
Notes:
1. Due to the nature of the security, Mortgage- Backed Securities are represented based on their average life maturity rather than their final maturity.
PFM Asset Management LLC Section B - 4
Village of North Palm Beach' Asset Allocation as of June 30, 2012*
Security Type
June 30, 2012
June 30, 2012
Notes Permitted by Policy
Florida SBA Prime Fund and Fund B
1,288,262.15
7.06%
2 25%
United States Treasury Securities
6,550,166.76
35.88%
100%
United States Government Agency Securities
-
0.00%
100%
Federal Instrumentalities
1,675,694.45
9.18%
50%
Certificates of Deposit
-
0.00%
100%
Repurchase Agreements
-
0.00%
0%
Commercial Paper
-
0.00%
0%
Corporate Notes
-
0.00%
25%
Mortgage - Backed Securities
-
0.00%
0%
Bankers' Acceptances
-
0.00%
0%
Money Market Mutual Funds
183,774.60
1.01%
50%
Intergovernmental Investment Pool
-
0.00%
25%
Interest Bearing Checking or Savings Account
8,555,931.08
46.87%
2 100%
Village Managed
$9,995,087.92
54.76%
Notes
PFM Managed
$8,258,741.12
45.24%
0.00%
Total
$18,253,829.04
100.00%
-
Individual Issuer Breakdom
June 30, 2012
June 30, 2012
Notes Permitted by Policy
Government National Mortgage Association (GNMA)
-
0.00%
100%
US Export-Import Bank (Ex -Im)
-
0.00%
100%
Farmers Home Administration (FMHA)
-
0.00%
100%
Federal Financing Bank
-
0.00%
100%
Federal Housing Administration (FHA)
-
0.00%
100%
General Services Administration
-
0.00%
100%
New Communities Ad Debentures
-
0.00%
100%
US Public Housing Notes & Bonds
-
0.00%
100%
US Dept. of Housing and Urban Development
-
0.00%
100%
Federal Farm Credit Bank(FFCB)
272,683.20
1.49%
10%
Federal Home Loan Bank (FHLB)
340,152.22
1.86%
10%
Federal National Mortgage Association (FNMA)
660,509.84
3.62%
10%
Federal Home Loan Mortgage Corporation (FHLMC)
402,349.19
2.20%
10%
Student Loan Marketing Association (SLMA)
-
0.00%
0%
1. All Assets.
2. These Accounts are managed by the Village.
*PFM managed securities are shown on Amortized Cost plus Accrued Interest basis.
Asset Allocation
as of June 30, 2012
Money Market Mutual
Federal Instrumentalities) Fmds
9.18% \ 1.01%
Interest Bearing Checking
i, or Savings Account
46.87%
United States Treasury
Securities -
35.88%
Florida SBA Prime Fund
and Fund B
7.06%
Individual Issuer Breakdom
June 30, 2012
June 30, 2012
Notes
Permitted by Policy
CD - BankA
-
0.00%
33%
CD - BankB
-
0.00%
33%
Interest Bearing Checking or Savings Account - Wells Fargo
5,553,533.37
30.42%
2
50%
Interest Bearing Checking or Savings Account - Chase
3,002,397.71
16.45%
2
50%
Corporate Notes - A
-
0.00%
33%
Corporate Notes B
-
0.00%
33%
Corporate Notes C
-
0.00%
33%
Corporate Notes D
-
0.00%
33%
Corporate Notes E
-
0.00%
33%
Money Market Fund - TD Bank Sweep Account
32,879.91
0.18%
33%
Money Market Fund - Wells Fargo Advantage Fund
150,894.69
0.83%
2
33%
Florida Prime
1,067,084.53
5.85%
2
25%
SBA Fund B
221,177.62
1.21%
2
N/A
PFM Asset Management LLC Section C - 1
Village of North Palm Beach Investment Report - Quarter Ended June 30, 2012
TAB III
Village of North Palm Beach Investment Report - Quarter Ended June 30, 2012
Insert Month End Statement here to complete the report.
Statements are available online at www.pfm.com
login and click on the link to "Monthly Statements"
on the left side of the screen.
'"'"_ Customer Service
PO Box 11813
Harrisburg, PA 17108 -1813
ACCOUNT STATEMENT
Client Management Team
Steven Alexander, CTP, CGFO
Managing Director
300 South Orange Avenue, Suite 1170
Orlando, FL 32801
407 -648 -2208
alexanders @pfm.com
Gregg Manjerovic, CFA
Senior Portfolio Manager
One Keystone Plaza, Suite 300
Harrisburg, PA 17101
717 - 232 -2723
manjerovicg @pfm.com
Rebecca Dole, CTP
Consultant
300 South Orange Street, Suite 1170
Orlando, FL 32801
407 -648 -2208
doler @pfm.com
Contents
Cover /Disclosures
Summary Statement
Individual Accounts
Accounts included in Statement
61350001 NORTH PALM BEACH INVESTMENT PORTFOLIO
Online Access www.pfm. corn
VILLAGE OF NORTH PALM BEACH
SAM IA JANJUA
501 US HIGHWAY 1
NORTH PALM BEACH, FL 33408
Customer Service 1- 717 - 232 -2723
A
Important Disclosures
This statement is for general information purposes only and is not
intended to provide specific advice or recommendations. PFM Asset
Management LLC ( "PFM ") is an investment advisor registered with the
Securities and Exchange Commission, and is required to maintain a
written disclosure statement of our background and business experience.
If you would like to receive a copy of our current disclosure statement,
please contact Service Operations at the address below.
Proxy Voting PFM does not normally receive proxies to vote on behalf of
its clients. However, it does on occasion receive consent requests. In the
event a consent request is received the portfolio manager contacts the
client and then proceeds according to their instructions. PFM's Proxy
Voting Policy is available upon request by contacting Service Operations
at the address below.
Questions About an Account PFM's monthly statement is intended to
detail our investment advisory activity as well as the activity of any
accounts held by clients in pools that are managed by PFM. The custodian
bank maintains the control of assets and executes (i.e., settles) all
investment transactions. The custodian statement is the official record of
security and cash holdings and transactions. PFM recognizes that clients
may use these reports to facilitate record keeping; therefore the custodian
bank statement and the PFM statement should be reconciled and
differences resolved. Many custodians use a settlement date basis which
may result in the need to reconcile due to a timing difference.
Account Control PFM does not have the authority to withdraw funds from
or deposit funds to the custodian. Our clients retain responsibility for their
internal accounting policies; implementing and enforcing internal controls
and generating ledger entries or otherwise recording transactions.
Market Value Generally, PFM's market prices are derived from closing bid
prices as of the last business day of the month as supplied by Interactive
Data, Bloomberg or Telerate. Where prices are not available from
generally recognized sources the securities are priced using a yield -based
matrix system to arrive at an estimated market value. Prices that fall
between data points are interpolated. Non - negotiable FDIC - insured bank
certificates of deposit are priced at par. Although PFM believes the prices
to be reliable, the values of the securities do not always represent the
prices at which the securities could have been bought or sold. Explanation
of the valuation methods for money market and TERM funds is contained
in the appropriate fund information statement.
Amortized Cost The original cost of the principal of the security is
adjusted for the amount of the periodic reduction of any discount or
premium from the purchase date until the date of the report. Discount or
premium with respect to short term securities (those with less than one
year to maturity at time of issuance) is amortized on a straightline basis.
Such discount or premium with respect to longer term securities is
amortized using the constant yield basis.
Important Disclosures
Tax Reporting Cost data and realized gains / losses are provided for
informational purposes only. Please review for accuracy and consult your
tax advisor to determine the tax consequences of your security transactions.
PFM does not report such information to the IRS or other taxing authorities
and is not responsible for the accuracy of such information that may be
required to be reported to federal, state or other taxing authorities.
Financial Situation In order to better serve you, PFM should be promptly
notified of any material change in your investment objective or financial
situation.
Callable Securities Securities subject to redemption prior to maturity may
be redeemed in whole or in part before maturity, which could affect the yield
represented.
Portfolio The securities in this portfolio, including shares of mutual funds,
are not guaranteed or otherwise protected by PFM, the FDIC (except for
certain non - negotiable certificates of deposit) or any government agency.
Investment in securities involves risks, including the possible loss of the
amount invested.
Rating Information provided for ratings is based upon a good faith inquiry of
selected sources, but its accuracy and completeness cannot be guaranteed.
Shares of some money market and TERM funds are marketed through
representatives of PFM's wholly owned subsidiary, PFM Fund Distributors,
Inc. PFM Fund Distributors, Inc. is registered with the SEC as a
broker /dealer and is a member of the Financial Industry Regulatory
Authority ( "FINRA ") and the Municipal Securities Rulemaking Board
( "MSRB "). You may reach the FINRA by calling the FINRA Regulator Public
Disclosure Hotline at 1- 888 - 289 -9999 or at the FINRA Regulation Internet
website address www.nasd.com. A brochure describing the FINRA
Regulation Public Disclosure Program is also available from the FINRA
upon request.
Key Terms and Definitions
Dividends on money market funds consist of interest earned, plus any
discount ratably amortized to the date of maturity, plus all realized gains and
losses on the sale of securities prior to maturity, less ratable amortization of
any premium and all accrued expenses to the fund. Dividends are accrued
daily and may be paid either monthly or quarterly. The monthly earnings on
this statement represent the estimated dividend accrued for the month for
any program that distributes earnings on a quarterly basis. There is no
guarantee that the estimated amount will be paid on the actual distribution
date.
Current Yield is the net change, exclusive of capital changes and income
other than investment income, in the value of a hypothetical fund account
with a balance of one share over the seven -day base period including the
statement date, expressed as a percentage of the value of one share
(normally $1.00 per share) at the beginning of the seven -day period. This
resulting net change in account value is then annualized by multiplying it by
365 and dividing the result by 7. The yields quoted should not be considered
a representation of the yield of the fund in the future, since the yield is not
fixed.
Account Statement
For the Month Ending June 30, 2012
Average maturity represents the average maturity of all securities and
investments of a portfolio, determined by multiplying the par or
principal value of each security or investment by its maturity (days or
years), summing the products, and dividing the sum by the total
principal value of the portfolio. The stated maturity date of mortgage
backed or callable securities are used in this statement. However the
actual maturity of these securities could vary depending on the level or
prepayments on the underlying mortgages or whether a callable
security has or is still able to be called.
Monthly distribution yield represents the net change in the value of one
share (normally $1.00 per share) resulting from all dividends declared
during the month by a fund expressed as a percentage of the value of
one share at the beginning of the month. This resulting net change is
then annualized by multiplying it by 365 and dividing it by the number of
calendar days in the month.
YTM at Cost The yield to maturity at cost is the expected rate of return,
based on the original cost, the annual interest receipts, maturity value
and the time period from purchase date to maturity, stated as a
percentage, on an annualized basis.
YTM at Market The yield to maturity at market is the rate of return,
based on the current market value, the annual interest receipts,
maturity value and the time period remaining until maturity, stated as a
percentage, on an annualized basis.
Managed Account A portfolio of investments managed discretely by
PFM according to the client's specific investment policy and
requirements. The investments are directly owned by the client and
held by the client's custodian.
Unsettled Trade A trade which has been executed however the final
consummation of the security transaction and payment has not yet
taken place.
Please review the detail pages of this statement carefully. If you think
your statement is wrong, missing account information, or if you need
more information about a transaction, please contact PFM within 60
days of receipt. If you have other concerns or questions regarding your
account you should contact a member of your client management team
or PFM Service Operations at the address below.
PFM Asset Management LLC
Attn: Service Operations
One Keystone Plaza, Suite 300
N. Front & Market Sts
Harrisburg, PA 17101
Managed Account Summary Statement
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Opening Market Value
Maturities/Calls
Principal Dispositions
Principal Acquisitions
Unsettled Trades
Change in Current Value
Closing Market Value
$8,251,845.71
0.00
(527,443.56)
524,528.32
0.00
(8,629.10)
$8,240,301.37
For the Month Ending June 30, 2012
Maturities /Calls
Sale Proceeds
Coupon /Interest /Dividend Income
Principal Payments
Security Purchases
Net Cash Contribution
Reconciling Transactions
Earnings Reconciliation (Cash Basis) - Managed Account Cash Balance
Interest /Dividends /Coupons Received 9,127.11 Closing Cash Balance
Less Purchased Interest Related to Interest /Coupons (567.09)
Plus Net Realized Gains /Losses 4,766.02
Total Cash Basis Earnings $13,326.04
Ending Amortized Value of Securities
8,212,863.61
Ending Accrued Interest
12,997.60
Plus Proceeds from Sales
528,732.67
Plus Proceeds of Maturities /Calls /Principal Payments
0.00
Plus Coupons /Dividends Received
7,838.00
Less Cost of New Purchases
(525,095.41)
Less Beginning Amortized Value of Securities
(8,215,040.04)
Less Beginning Accrued Interest
(15,259.30)
Total Accrual Basis Earnings $7,037.13
0.00
528,732.67
7,838.00
0.00
(525,095.41)
0.00
0.00
$36,554.91
t Account 61350001 Page i
PFM Asset Management LLC
Portfolio Summary and Statistics
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Unsettled Trades
54.33%
Maturity Distribution
0.00 0.00
0 - 6 Months 6 - 12 Months 1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years Over 5 Years
US TSY Bond /
79.54%
For the Month Ending June 30, 2012
Fed Agy Bond /
Note
20.46%
Yield to Maturity at Cost 0.58%
Yield to Maturity at Market 0.33%
Duration to Worst 1.80
Weighted Average Days to Maturity 664
PI'1" Account 61350001 Page 2
PFM ,Asset Management LLC
Description
Par Value
Market Value Percent
U.S. Treasury Bond / Note
6,510,000.00
6,554,528.49 79.54
Federal Agency Bond / Note
1,660,000.00
1,685,772.88 20.46
Managed Account Sub -Total
8,170,000.00
8,240,301.37 100.00%
Accrued Interest
12,997.60
Total Portfolio
8,170,000.00
8,253,298.97
Unsettled Trades
54.33%
Maturity Distribution
0.00 0.00
0 - 6 Months 6 - 12 Months 1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years Over 5 Years
US TSY Bond /
79.54%
For the Month Ending June 30, 2012
Fed Agy Bond /
Note
20.46%
Yield to Maturity at Cost 0.58%
Yield to Maturity at Market 0.33%
Duration to Worst 1.80
Weighted Average Days to Maturity 664
PI'1" Account 61350001 Page 2
PFM ,Asset Management LLC
{''
Managed Account Issuer Summary
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Issuer Summary
Market Value
Issuer of Holdings Percent
FANNIE MAE 664,410.54 8.06
FEDERAL FARM CREDIT BANKS
FEDERAL HOME LOAN BANKS
FREDDIE MAC
UNITED STATES TREASURY
Total
PFM Asset Management LLC
271,629.80
3.30
346,878.54
4.21
402,854.00
4.89
6,554,528.49
79.54
$8,240,301.37 100.000/0
AA+
100.00%
For the Month Ending June 30, 2012
Account 61350001 Page 3
Managed Account Detail of Securities Held For the Month Ending June 30, 2012
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Security Type/ Description S &P Moody's Trade Settle Original YTM Accrued Amortized Market
Dated Date /Coupon /Maturity CUSIP Par Rating Rating Date Date Cost at Cost Interest Cost Value
U.S. Treasury Bond / Note
US TREASURY NOTES
580,000.00 AA+ Aaa 01/24/12 01/26/12 577,802.34 0.38 669.23 578,120.34 578,323.22
DTD 01/17/2012 0.250% 01/15/2015
111 "O Account 61350001 Page 4
WF PFM Asset Management LLC
PENI'
Managed Account Detail of Securities Held For the Month Ending June 30, 2012
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Security Type/ Description
S &P
Moody's
Trade
Settle
Original
YTM
Accrued
Amortized
Market
Dated Date /Coupon /Maturity CUSIP
U.S. Treasury :. Note
Par Rating
Rating
Date
Date
Cost
at Cost
Interest
Cost
Value
19/2012 0.500% 05/27/2015
Security Type Sub -Total 1,660,000.00 1,678,377.60 0.94 5,131.04 1,670,563.41 1,685,772.88
Managed Account Sub -Total 8,170,000.00 8,225,751.45 0.58 12,997.60 8,212,863.61 8,240,301.37
Securities Sub -Total $8,170,000.00 $8,225,751.45 0.58% $12,997.60 $8,212,863.61 $8,240,301.37
Accrued Interest $12,997.60
Total Investments
$8,253,298.97
Zt Account 61350001 Page 5
=�= PFM Asset Management LLC
A
Managed Account Fair Market Value & Analytics For the Month Ending June 30, 2012
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Security Type/ Description
Next Call Market
Market
Unreal G/L
Unreal G/L
Effective
Duration
YTM
Dated Date /Coupon /Maturity
CUSIP
Par Broker
Date Price
Value
On Cost
Amort Cost
Duration
to Worst
at Mkt
U.S. Treasury Bond Note
US TREASURY NOTES
525,000.00 CITIGRP
99.94
524,671.88
143.56
142.61
2.69
2.69
0.40
DTD 03/15/2012 0.375% 03/15/2015
Security Type Sub -Total 6,510,000.00 6,554,528.49 7,154.64 12,228.29 1.82 1.82 0.32
i
P1 11 Account 61350001 Page 6
PFM ,Asset Management LLC
Managed Account Fair Market Value & Analytics For the Month Ending June 30, 2012
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Security Type/ Description
Next Call Market
Market
Unreal G/L
Unreal G/L
Effective
Duration
YTM
Dated Date /Coupon /Maturity
Federal :. Note
CUSIP
Par Broker
Date Price
Value
On Cost
Amort Cost
Duration
to Worst at Mkt
04/19/2012 0.500% 05/27/2015
Security Type Sub -Total
1,660,000.00
1,685,772.88
7,395.28
15,209.47
1.71
1.71
0.36
Managed Account Sub -Total 8,170,000.00 8,240,301.37 14,549.92 27,437.76 1.80 1.80 0.33
Securities Sub -Total
$8,170,000.00
$8,240,301.37 $14,549.92 $27,437.76 1.80 1.80 0.33%
Accrued Interest $12,997.60
Total Investments
$8,253,298.97
� Account 61350001 Page 7
PFM Asset Management LLC
Managed Account Security Transactions & Interest For the Month Ending June 30, 2012
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Transaction Type Principal Accrued Realized G/L Realized G/L Sale
Trade Settle Security Description CUSIP Par Proceeds Interest Total Cost Amort Cost Method
06/27/12
06/29/12
US TREASURY N/B
525,000.00
(524,528.32)
(567.09)
(525,095.41)
180,000.00
180,471.09
463.60
180,934.69
379.69
443.93 SPEC LOT
DTD 01/31/20110.625% 01/31/2013
Transaction Type Sub -Total
525,000.00
527,443.56
1,289.11
528,732.67
4,766.02
2,784.36
Managed Account Sub -Total 2,915.24 8,560.02 11,475.26 4,766.02 2,784.36
Total Security Transactions $2,915.24 $8,560.02
$11,475.26 $4,766.02 $2,784.36
.fi-
=11FM Account 61350001 Page 8
WF PFM Asset Management LLC