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2007 Trusco 4th Quarter Fund Management Report
~ . ~ _ - _ er ~ , t r ' 1 F~ ''~~j'f~ Y f ~ r ? t~ ~ ~f " - F . , Trusco Capital Management, Inc. Village of North Palm Beach General Employees' Retirement Plan Fourth Quarter 2007 Blake Myton Michael T. Hill Vice President Managing Director Investment Manager Senior Portfolio Manager Trusco Capital Management Trusco Capital Management 407-237-5816 615-748-5243 blake.myton @ truscocapital.com mike.hill @truscocapital.com (~pRY.°~.'''~Y ~ ~ .J~ _ t Table of Contents ? Economic Overview /Market Snapshot Section ? Performance & Portfolio Composition ................Section II ? Fund Fact Sheets Section III ? Corporate Governance/Fund Attribution Summary .....Section IV ? Appendix ......................................Section V ...Investment Policy Statement ...Disclosures --, z:: J Market Snapshot: 12/31 /2007 S&P 500 1468.36' -0.7' -3.3 -1:4 5.5' 8.6' 12.8 Lehman Aggregate 4.90 0:28" 3.00. 5.93'' 6.97. 4.56" 4.42 Russell Top 200 630.60: -0.8 -3.1 -0.2 5.9' 8:3 11.7 Treasury . 3.59 - ` 0:08 3.96 7.92 9.01 4.92 4.11 Russell1000 799.82'. -0.7 -3.2 -1:3 5.8 9:1 13.4 Government-Related 4.22' 0.43 3.27 6.63 7.96 4.92 4.30 Russell MidCap - 1031.56: -0:3 -3.5 -3.9 5.6 11.1 18.2 Corporate 5.79 0.16 1.97 3:82 4.56 3.50 4.81 Russell 2000 766.03' -0.1 -4.6 -7:5` -1.6 6.8 16.2 Seduritized 5.37 0.39' 2.88 5.59 6.64' 4.76 4.41 Russell 3000 849.22 -0.6 -3.3 -1.8 5.1 8:9 13.6 Lehmah Government/Credit 4.53 0.19 3.10. ...6.20; 7.23 4.44 4.43 MSCI EAFE{Net) 5032.19' -2.3 -1.8 0:5 11.2 16:8 21.6 Lehman Intermediate G/C 4.27 0.26' 2.90 5.86 7.39 4.32 4.06 MSCI EAFE SmalLCap {Net) 259.93: -3:5 -4.9 -9.0 1.5 t5.2 26.4 Lehman High Yield 9.64 0:29 -1.30 -0.97 1.87 5:39 13.55 MSCI Emerging Markets (Net): 441.29 0.4 3.6 18:7 39.4 35.2 37.0 Lehman Municipal Bond 4.00 0.28 1.37 3:22 3.36 3.90- 4.30 ~ ~ ML U:S Govt: Corp., 1-5 3.90 0.24 2.48 5:21 7.27'. .4:29 3.58 Russell Top 200 Growth 703.07 -0.7? -0.3 4:9` 12.2 7:8' 10.5 ML 1-3 U.S. Treasury 3.08 0:26' 2.36. 5.10 7.32' 4.29 3.12 Russell Tdp 200 Value 630.60 -0.9 -5.7 =4.8 0.2 8:8' 13.1 Russell 1D00 Growth 611.94 -0.4 -0.8 3.4 11.8, 8.7 12.1 3 Md 3.39 0:28'' 1.08 2:48' 5.11 4.35' 3.08 Russell 1000 Value 796.04 -1:0' -5.8 -6.0 -0.2 9:4 14.6 6 Mo' 3.41 0.28 1.33 2.91 5.61 4.50. 3.20 Russell MidCap Growth 453.10 0.3 -1.7 0.4 11.4 11:4 17.9 2 Yr 3.07 0.19 2.51 5.27 7.41 4.13 3.09 Russell MidCap Value 1085.23: -1.1 -6.0 -9.3 -1.41 .10.2 17.9 5 Yr` 3.46. 0.13 4.58 8.99 10.28 4.21 3.42 Russell 2000 Growth.. 421.17 0.6 -2.1 -2.1 7.0 8:1' 16.5 10 Yr 4.03 _ -0.20 5.27 10.23 9.72 4.31 3.81 Russell 2000 Value 1059.69 -0.8 -7.3 -13:1 -9.81 5:3= 15.8 30Yr 4.46 -0:58 7.09 13:28; 10.14 5.85. 5.38 Russell 3000 Growth 496.89 -0.3 -0.9 2:9 11.4' 8.6 12.4 • ~ Russell 3000 Value 1038.84 -1 :0 -5.9 -6.6 -1.0' 9.1 14.7 3-Month 3.30 3:15 3.82' 4:82- 5.02 2:15' 1.16 ~ ~ • ' • 6-Month 3.49 3.37 4.09 4.86. 5.09 2.49 1.16 Consumer Discretionary 259.53 -4.8' -10.0 -15.7`. -13.21 `=1.2A 8.5 2-Years 3.07' 3.04 3.96 4.88' 4.81 3.07 1.56 Consumer Staples 299.55 -1:0 3.8 8.8' 14.2' 10:6 10.3 5-Years 3.46 3.41 4.23 4:94 4.70. 3.61 2.72 Energy. 603.04 7.3 4.4 14:7 34.4', 29:9 29.3 10-Years 4.03 3:97 4.58 5.03 4.71 4:22 3.83 Financials 392.08 -5:41 -14.3 -18.0 -18.6' 1:1 8.4 30-Years 4.45 4.40 4.84 5.13 4.81 4.82 4..79 Health Care 409.70 -3.0' 0.0 1.0' 7.1 ' 7.0 7.5 • ~ = • ~ • Industrials 354.35 -0.6', -4.6 1.0' 12.0 9.1 15.2 Citigroup WGBI (All maturities)'(USD) ' ' -0:51 3.92'- -11:40' 10.95 3:12' 6.61 Informatioh Technology' 411.62 1:5 0.1 6.4 16.3, 8.4 14.0 JP Morgan EMB1 Global 0.62 2.64 5.28 6.27 8.94 12.67 Materials 259.84': 1:1 0.1 5:0 22.5' 14.9 18.9 • • . ~ Telecommunication.Services 168.26 3:2 -5.1 -3.1 11.9', 13:1 13.2 Trade-Weighted Dollar (1973=100)' 73.27" "0.3" -1.5 =6.8 -10.0 -2.6 -6.3 Utilities 216.11 0:3j 7.6 9.7 19.4', 19:1 21.5 Gold Futures 834.90' 6.7 12.4 28:8 31.4 24.0 19.1 ~ Crude Oil Futures 95.98 8:7 17.5 35.8 57.2 30.2 25.2 CS/T Equity Market Neutral' - Nov 07 0.67 3.4 4:0' 9.7', 9:0` 8.1 DJ/AIG Commodity Futures 184.96' ' 4:3 3.8 9:0 11.1 8.3 10.9 CS/T Event,Driven Nov 07 -1.7': 2.8 2.6 14.6',' 13:3 14.6 TIPS 5.10- <-0:16 4.97 9:73 11.63. 4.85 6.27 CS/T Long Short Equity Nov 07 -1.7 5.3 3.6 15.5 t3:4 13.4 ~ • ~ . ~ • CS/T Multi-Strate Nov 07 ' 1.1 3.7 2.3 12.4 gy 11.3 11.1 Consumer'Pride Index (82 84;'1`00); 210.6`' 'D:8' 1.4 Y.5 4.3 3.3I 3.0 FTSE NAREIT Equity Index 485.36 -5A' -12.7 -10.4 -15.71 8.5` 18'.2 Sources: FactSet, Lehman Bros., MSCI, Merrill Lynch, FRB, BLS - - -. - - - :.rr ~ ~ ~ ~ i ~ ~ ~ -~"^ w~ ` e~. sin the f°urth for investor he housing QQ~ ~ force ss in ~ ~ trvatrng wea4cne rimary mo timed ditions • d as the p wed due t0 co ti hter credit Con orr1entun' srO rowth and g but Cut the ar replaced green' ' n job g concerns 4 Fe ~conom sagg~ g inflatron quart ~ 'higher oil prices ~ e ear with e ith stubborn C°o rats to 4~1~%• h y mark rappied w 5p basis p Serve g pother ter but finished$% for the The federal Real lands rate a ° fin the final Guar dentStyle i i ht fede st 3~3 ex fe1i a m°Ce Growth E,rnerging °Vern g tl 30Q° index io tonal ~nd~aps and the a-Gaps and road Ruse SGl EAF~ irate p~7 Large S while Lang The b gain' The M 2% for ,ail 2 estic market ' flight to a 5. der and rose '1 dom led by a ua utperfOrrm rn ationally. carter ex rose 3.Oo/Q for o intern the q fell to ~°ntinued tO during d utperfOrrr1ied roved a ate Bond In note Markets ° indexes imp man Aggr g 14_Yr, Treasund High Yield nt.grade b°nd °nds. The Le a yield on th ads widened a ~ Investmelit 'Treasury b ' T d. Credit sere . ua y ,gale for the yeaene high q 5 steep e quarter and field curve rl sharply. th o and they r but R~1Ts fe ,~.p3 /o concern over. the markets fell• rth quarte ~ al quaker amid uality stainability ~ and a e ir? the fOU the fiin ornmodities r°s bonds gainedS Strength, su a G fell and rof~t line ~ Stocks and corporate p - ? gotto?m f the economy _ _ _ ~~~F~ alth ~ ~ he ° ,,.- ut erformed• o p 1~, ,i"' _ r ~ 1~ J :;N ~ ~ _ F " f> ~~.w ~ r ~~I }$~- f~~,- ~c j - the fiinancial markets and set asst allocation pnan iat markets. _ and the re ularly to discuss the condition of the econo oyd~scuss the condition of the economy t Policy Group meets 9 ,January 22, 2008 t en a broadly lower over the may Ie 1565 h gh on r The Investor IPG) met on Tuesd y cities Investment Policy Group ( ed ush internationah1 26Q points or 16112°I° today fro ? The lobally help p hl 5°/°. ers ective, the S&P 500 is off wined eou9 y sharp write downs on ws of further deterioration in the credit marks s an A9g g eral months including rers such as AMBAC From a longer term p p re ate Bond Index, g , ? Ne and into Tuesday. the Lehm ast sev rades of bond ?nsu s, ns of holiday while bonds, as measured by a ency downg pctober 9 er of challenging announcements ovea~~pg pg softer lob growth and retail sales, g banks and brokerage houses, ested a numb hia Fed survey, before ? The markets have dig 75 basis points to 3.50°/°, ub rime and other cred~u~ n?gated securities by fears d fun wea surveys such as the IS o red essio Philade p ds rate by kenin9 of the s p htened ht fe deterioration in manufac and heig of cutting the overnig economic weakness overseas rve e Fed, "the Committee took this action in Vtew as ets. took the unusual step in housing, tighter credit a sign~~~cant and the Federal Rese 29.30 Quoting th We view this move this morniFngoMC meeting on January rowth:' The Fed cited app h ee~a np and the frnancNal mar ? However, to support the economy the next scheduled downside risks to g nomic outlook and increasing «a reciable downside risks tog this time an S nae pctober r ests a more deliberate and decisive effoa counterp ks ec° market. The Fed also said, pp lit in portfolios during arts softening labo olicy that Bugg and qu y th, sustainability' uality bonds over the10/° and lnternationwe 9°I°. positive shift in Fed p ropriately stressed streng and high q a roximately ~ /2 h Yield by As you know, we have app International stocks, erformed Hig ect the ? e-Caps, the Growth style, Growth outperformed Value by pP roughly 5°t°, and we exp hasized Larg gmall-Gaps by -income markets, Investment-Grade bonds °s~ I off is considerable,ress important Large-Caps outperformed 31°, In the fixed discounted ?n this but we would also st ening short-term autperformed Domestic stocks by ° and the global markets beater clarity emerges' the yield curve is steep er until g more attractive, and fiscal stimulus is incre Is~a le campaign, ? The list of risks a ad u Y nowns to the econ u U cite reasonable and a.ra a~gressv e easing si nals a more favorable investing tilit to continue for aa~n q t a While long n 'c 9 high level of voI valuations rem roactive po y market supports Equity ortfolio re more functional, the eaaonablelatt active valuations and p and quality ?n P sin credit markets a this combination °en again• sustainabrlityo~tunities, and we are u g likely. Historically, ah conditions carefully and continue to stress strenl sad, and we believe this can Kapp d a propriate manner. _ esses such as these oft an re p e opp _ T we will monitor mast le and international). Str ortunit~es in a trine y ? Aver the near-tta~ er Caps the Growth and move toward these opp construction ( g , " lines to identify ent drscip . -. our investor , a o ~ t Domestic E uit Markets in the 4~" Quarter, 2007 q Y 20% 11.8% Large-cap Stocks ~°i° 5•$% I . Drivers of Return outperformed -°~2°I° o°,° Utilities, Energy, Consumer Staples both Mid and s.2% -O.a% Detractors from Return -10°I -5.8°I° Small-Caps again Financials, Consumer Discretionary -20% in the fourth 4th Quarter 2007 1 Year Ending 12/31/07 quarter and for all ? Russell 1000 Value Index ¦ Russell 1000 Core Index ? Russell 1000 Growth Index of 2007. More defe~asive sectors like 2oi° 11.4°!° Energy, Utilities, 1°~° s.s°i° . Drivers of Return Heath Care ar2d of _ ° Energy, Utilities, Health Care Staples -1.7% -1.4% . Detractors from Return -t°~ -6.0% outperformed, Telecom, Consumer Discretionary, -2o i while Corisurner 4th Quarter 2007 1 Year Ending 12/31/07 Financials Discretionary and o Russell Mid-Cap Value Index ¦ Russell Mid-Cap Core Index ? Russell Mid-Cap Growth Index Fi~zancials trailed. Growth outpeYfarrned 20 i° 7,oq° . Drivers of Return Value across all t rl Energy, Utilities, Health Care, Materials market caps for 1 s% Detractors from Return the quarter and -10% -7.3°r° .g,gq, Financials, Consumer Discretionary, the year. -20°,° Telecom 4th Quarter 2007 1 Year Ending 12/31/07 Russell 2000 Value Index ¦ Russell 2000 Core Index ? Russell 2000 Growth Index Past Performance is not indicative of future results. Please refer to appendix for full disclosure. "Source: FactSet - ~ ® a Ir~-~~' ~ i~~J ~ 1 I' ~ ~ r, ii'~~. ~- Bond Markets i n Q4, 2007 US Treasury Benchmark Security Yields Wider Credit Spreads Offset Rate Cut Benefits 5.5 - Junk Bonds, Bae Bonds, Asset-Backed Securities, and T-Bill Rete ' a.a I e ~ ~I 9.8 i 9.6 LCIIma0 arotners HtgD YICItl CofporatC YICIb (-------) I 9.6 M17oooy's Boa Bono Yleltl I 1123 -T-BIII Rates 9.6 9.4 CCllmdn arOlners AxSet-BackCC sCCUDaes Yleld f --~-~-) ~ Start to Decline from 9.4 0,2 'i0~f1aY `will Ral21-1 I High of i.l% g,2 --~ r I 8.; 8.6 i S.6 _- 9.4 I .~._...F..m-.~.,~~-~.,, . _ I 8.0 ~ i 8.0 7.6 4.5 1.8 ~,.-_- 7.6 ~- I 1.6 7 . 7,2 zo 1,a 4.0 - ds ~ b.s 12/31 /2007 d.d b.d 6A 6.4 6.^_ 6.2 __m...~._._.. 9/28/2007 d.D ~ b.D 6.8 j - 5.6 3.5 - 6/29/2007 5:a : -..-~_ . . _,-,.; , : , . I S.~ 1.-.. 12/29/2006 as ~~,,- ~--~~;..;-,- ,-... ~s 4.6 y_J.. I \ ~ ~ Y.6 3.0 I I I ~ ~ I I I 4.< b 1 4 4 4 ; 4.2 0 5 10 15 20 25 30 4.0 t1 i~ .7.0 3,8 ~i .tee ~ - 3.8 ' 3.d ~ ~ )t 3.6 3A i ; 3.4 3.2 3.2 3.0 ~l ~ 3.0 US Sector Benchmark Returns 2S 2s fxa::4 A 5 D T D J F M A RI J 1 0.0 - Oeotti c!F M A AI l ] 001 J A 5 O h D 1 S 2005 O 9aeaa NOR DnclalmeD IW~Ren0~rcomtlmpyr'IOM1t h~m1~Fxa dabv etlxitltotlkcxlalnliwsarelvr b ww~w.^Eli ponllwn ao nfa 8.0 - _ ? Continued signs of economic weakness and severe 6.0 - credit market strains related to problems in the 4.0 - subprime mortgage market prompted the Federal Reserve to further cut short term interest rates in 2.0 the fourth quarter. 0.0 -_ -. __L_ - _ r ~ ? Yields fell and longer-term bonds outperformed. _2 0 _ The yield curve steepened significantly and Agg G/Cr I G/C Tr Agy Cred ABS MBS HiYd Mun Treasuries outperformed. ¦ 3-Mos. 3.00 3_10 -2.90 3.96 3.22 2.19 -0.76 3.06 -1.30 1:64_ ? Wider credit spreads reflected increased risks but 6 Mos. 5.93 6.20 5.86 7 92 6.51 4.31 0.64 5 79 -0.97 3.91 also offset the potential benefit of the Fed rate cuts. 1-Y r. 6.97 7.23 7.39 9.01 7.90 5.11 2.21 6.90 1.87 4.08 "Sources: FactSet, Lehman Brothers, Merrill Lynch rte.=, -. ~ _ _ I ~ _ + ~ ~y r y Economy /Credit Concerns Dominate Q4 Economic Momentum Slowed Housing Weakness Continued 10.0 _ saoo -- - Existing Home. Sales (OOOs) 7.5 6000 ISM Man. Index 5.0 5600 2.5 - 52D0 0.0 4800 _ -.:.: _ - - - --- r Leading Indicators -2.5 (YOY%) 4400 Case-Shiller Home Price Index (YOY%) -5.0 4000 99 00 01 02 03 04 OS O6 07 08 98 99 00 01 02 03 ~ 04 05 O6 07 Sources: CNFBOARD, ISM /Haver Sources: REALTOR, SNP /Haver Job Growth Slowed & Unemployment Rate Rose Record Oil Prices Spark Inflation Fears s.s - , ioo WTI Oil Price ($/Barrel) 8.0 I Nonfarm Job - 8o r' Growth (OOOs) 5.5 - 60 y 5.0 . -_- _ : _ . ~ 40 4.5 _ Unemployment Rate - 20 ~ Core PCE 4.0 (YOY%) 99 00 01 02 03 04 OS O6 D7 08 95 00 OS Source: Bureau of Labor Statistics /Haver Analytics Sources: WSJ, BEA /Haver ~y ' --- - - r~}~ Underlying Cond ition~~ Favor Equities: Equity Valuations Remain Reasonable /Cheap 32 ? E uit valuations relative to both Pri°e'Earnings Ratio q y (S&P 500 TTM) earnings and bond yields remain 28 reasonable. 24 ; ? Core inflation is historically low. 20 ~ _ __-_ _ - - - - _ -- - - ? Interest rates are historically low and the Fed is easing. ,5 Fed Valuation 12 i~~, Model ~tl ii ipi iii ~p~~~~~~~~~~~~~~~~~ ~~~~~~~~~tl~~ ~0 ~~y~ ~ 95 00 05 Sources: S&P, NDR Core Inflation Historically Low Bond Yields Historically Low & Fed is Easing 10 - 10 20 - 8 8 16 6 8 12 a Core PCE 4 9 10-Yr, Treasury (YOY%) Note Yield 2 2 a - - ~ -~ •-------~-- Fed Funds Rate ~ i i i r o i i i i i i i i i i a i i i i ~ i i i i u i i i i i i i i i i I i i i i i 80 85 90 95 00 05 85 90 95 00 05 Source: BEA Source: FRB . _ YJ, d Federal Reserve Policy Update: 12/11 /07 s The Federal Reserve cut the fed funds rate by ~/4% to 4'/4%. This generally matched market expectations, though the accompanying 25 basis point drop in the Discount Rate disappointed.. ? The Fed's assessment of economic and financial conditions became MORE NEGATIVE. ? No change to Fed's assessment of inflation pressures. e The Fed now sees "INCREASED UNCERTAINTY surrounding the outlook for economic growth and inflation," a move which was punctuated by the dissent by Rosengren who favored more aggressive Fed ease. October 31 December 11 FOMC Post-Meeting Statement FOMC Post-Meeting Statement "The Federal Open Market Committee decided today to lower its "The Federal Open Market Committee decided today to lower its Rates target for the federal funds rate 25 basis points to 4'/z% percent. 25 BP CUT target for the federal funds rate 25 basis points to 4~/a% percent. Economic growth was solid in the third quarter, and strains in Incoming information suggests that economic growth is slowing, financial markets have eased somewhat on balance. However, reflecting the intensification of the housing correction and some the pace of economic expansion will likely slow in the near Growth Slowe softening in business and consumer spending. Moreover, strains in Growth term, partly reflecting the intensification of the housing correction. /Credit Risks financial markets have increased in recent weeks. Today's Today's action, combined with the policy action taken in September, Return action, combined with the policy actions taken earlier, should help should help forestall some of the adverse effects on the broader promote moderate growth over time. economy that might otherwise arise from the disruptions in financial Readings on core inflation have improved modestly this year, but markets and promote moderate growth over time. elevated energy and commodity prices, among other factors, may Readings on core inflation have improved modestly this year, but put upward pressure on inflation. In this context, the Committee Inflation recent increases in energy and commodity prices, among other No Change judges that some inflation risks remain, and it will continue to factors, may put renewed upward pressure on inflation. In this monitor inflation developments carefully. context, the Committee judges that some inflation risks remain, and Recent developments, including the deterioration in financial market it will continue to monitor inflation developments carefully. conditions, have increased the uncertainty surrounding the The Committee judges that, after this action, the upside risks to outlook for economic growth and inflation. The Committee will Risks inflation roughly balance the downside risks to growth. The Bias to Ease continue to assess the effects of financial and other developments Committee will continue to assess the effects of financial and other on economic prospects and will act as needed to foster price developments on economic prospects and will act as needed to stability and sustainable economic growth. foster price stability and sustainable economic growth. "Voting against was Eric S. Rosengren, who preferred to lower Vote`Voting against was Thomas M. Hoenig, who preferred no Dissent the target for the federal funds rate by 50 basis points at this change in the federal funds rate at this meeting." meeting." BOTTOM LINE: Returning risks force Fed ease. Additional ease likely in 2008. Alan M. Gayle -Senior Investment Strategist -- ~ - _ ,rte- Economic Outlook: Slow Growth /Moderating Inflation /Gradual Recovery Economic moznentzzna slowing due to weak hoazsizzg, credit ~ ~ - ' • - • - - - • market tiglat~zess and _ Fading Fading At Risk slowing profits growth. Moderate jab gaizas are the key - ~ ~ High Fading Neutral driver at prese~at. _ Low Weaker Weaker /Neutral Cvre inflation lower, but ail pz•ices at Core Slightly Lower Core Easing Core Moderately record liiglzs. Lower Easing Easing Easing Fed has eased azad it likely to provide _ Neutral Neutral additiozaal stimulus. Neutral / Stimulative The dollar is expected to z-emaira under downward pressure over the near-term. - . _ . _m 4 ~ r ~ ~ ~ ~Y ' .s ~ ~ of I ~ ~ ~ ~ t~ JI _r • J ~,~~`~~Y~.~ 1. Outlook: ? Slow growth, recession-like environment in U.S. expected through first half of 2008, which will curtail global expansion. Consumer. under greatest downward pressure (weak housing, slower job growth, higher energy prices, tighter credit). Slower growth in capital spending. ? Core inflation likely to moderate, though weaker dollar could put a floor under prices. ? Fed ease becoming more deliberate. Likely to complete its moves in the next 3-6 months. ? Corporate earnings growth forecasts under downward pressure near-term but relative valuations are reasonable /attractive. ? Still emphasizing strength and quality in portfolio construction. This perspective was prepared for clients and prospective clients of Trusco Capital Management, Inc. Neither Trusco or any affiliations make any representation or warranties as to the accuracy or merit of this analysis for individual use. Past returns are not indicative of future results. Comments and projections were based on information available at the time of writing, are for informational purposes only, are not intended as individual or specific advice, and may not be relied upon for future investing. Investors are advised to consult with their investment professional about (heir specific financial needs and goals before making any investment decisions. ~r 11 r ~ a ~ ~ ~ ~ ~ ~~ues et V r irk r ' His ~6~798y379 1cor~~~' $6773,677 894 929,252 $5,g63'29~ ~5y585,178 ~S~0p0'OOp ~6,750~ $6, $6y~'39a701 ~5,52~°625 ~~,303~7A~2 7p00,0p0 $5yg3~ °17~ '$6~0p0'000 $5~p00,p00 $4~OOp'p00 $3~0p0,0p0 20p6 2007 200' 20p5 ~2,000,OOp 2002 2003 200'1 2p00 ~ 000 .1998 1999 lu 1~000~ Va e ~ Total market 3.i 2007 ~ndin~ December period ~F' _ i . _h Vt~f J J~. Account Activity Summary Beginning Portfolio Market Value 09/30/07 $ 6,732,161.32 Beginning Portfolio Market Value 12/31/06 $ 5,585,178.45 Portfolio Additions/Withdrawals Portfolio Additions!Withdrawals Additions $ 216,119.61 Additions $ 1,087,001.43 Withdrawals $ (169,533.19) Withdrawals $ (422,526.97) Total AdditionsNVithdrawals $ 46,586.42 Total AdditionslWithdrawals $ 664,474.46 Portfolio Earnings Portfolio Earnings Net Accrued Income $ 344.51 Net Accrued Income $ 344.51 Interest and Dividends $ 22,962.59 Interest and Dividends $ 30,023.72 Gains/Losses $ (11,331.32) Gains/Losses $ 510,702.38 Total Portfolio Earnings $ 11,975.78 Total Portfolio Earnings $ 541,070.61 Ending Portfolio Market Value 12/31/07 $ 6,790,723.52 Ending Portfolio Market Value 12/31/07 $ 6,790,723.52 Net Change $ 58,562.20 Net Change $ 1,205,545.07 Period Ending December 31, 2007 Please refer to appendix for full disclosure. Source: First Rate investment performance system. Data includes accrued income .r-~"'g' Performance Comparisons n _ Net of Fees Approximation 0.00% 8.48% 7 52% 9.14% 6.29% 8:68% - _ _ _ _ _ Total Equity. -1.42% 10.05% 10.06%° 13.13% 7.58% 11.23% SunTrust Retirement High Grade Growth 3.27% 20.42% 10.56% 11.75% 8.27% 12.29% Russell 1000 Growth Index -0.77% 11.81 % 8.68% 12.10% 3.83% 8.67% S&P 500 Index -3.33% 5.49% 8.62% 12.83% 5.91 % 10.51 SunTrust Retirement High Grade Equity Income -5.02% 4.94% 11.21% 14.63% 7.30% 10.93% Russell 1000 Value Index -5.80% -0.17% 9.32% 14.63% 768% 12.04% SunTrust Retirement High Grade Relative Value** -5.83% 0.88% 8.66% 13.26% N/A N/A Russell 1000 Value Index -5.80% -0.17% 9.32% 14.63% 7.68% 12.04% S&P 500 Citigroup Value Index -5.37% 1.99% 9.25% 14.73% 6.65% 10.76% S&P 500 Index -3.33% 5.49% 8.62% 12.83% 5.91 % 10.51 STI Classic International Equity Index -1.06% 12.17% 16.99% 22.19% 9.39% 8.94% MSCI-SAFE Index -1.75% 11.18% 16.84% 21.59% 8.64% 783% SunTrust Retirement Mid Cap Equity -3.67% 5.55% 10.64% 15.46% 11.35% N/A Russell Mid Cap Index -3.55% 5.60% 11.09% 18.21 % 9.91 % 13.07% S&P Mid Cap 400 Index -2.73% 798% 10.27% 16..20% 11.19% 14.25% SunTrust Retirement Small Cap Growth*** -0.87% 13.64% 7.65% 17.50% N/A N/A Russe112000 Growth Index -2.10% 705% 8.11% 16.50% 4.32% N/A Total Fixed Income. 3.16% 7.60%° 4 47% -4.15% 5 35% 6.11'%° _- _-__ _ _ _ - - _ - _ v~.., _ SunTrust Retirement High Grade Bond 3.16% 7.54% 4.50% 4.25% 6.02% 6.68% Lehman Aggregate Bond 3.00% 6.97% 4.56% 4..42% 5.97% 6.64% Lehman Govt Credit Bond 3.10% 723% 4.44% 4.43% 5.88% 6.58% Period Ending December 31, 2007 *Inception is 152 months -Inception 6/30/2002. Longer term results are linked to the STI Classic Large Cap Relative Value Fund to show results prior to inception. -Inception 10/20/2003. Longer term results are linked to the Past Performance is not indicative of future results. STI Classic Small Cap Growth Fund to show results prior to inception. Please refer to appendix for full disclosure. Source: First Rate investment performance system A,~,~ w: r,~~ ~ • • • ~r~ ~ ~ J-. _ ~ -- _ Portfolio Composition Total Cash 1.6% Total Equity 63.2% Total Fixed Income 35.2% . . 'Total'Portfolio $ 6,790,379 , 100.0% Total Equity.:. _ _ $ 4,290,990 _ _ 63.2%° SunTrust Retirement High Grade Growth $ 1,475,589 21.7% SunTrust Retirement High Grade Equity Income $ 991,832 14.6% STI Classic International Equity Index $ 838,485 12.3% SunTrust Retirement High Grade Relative Value $ 262,596 3.9% SunTrust Retirement Mid Cap Equity $ 526,011 7.7% SunTrust Retirement Small Cap Growth $ 196,478 2.9% Total Fixed Income $ 2,393,431 35.2% SunTrust Retirement High Grade Bond S 2,393,431 35.2°0 --_- -- ;Total Cash $ 105,958.44 1.6%° Please refer to appendix for full disclosure. Period Ending December 31, 2007 - ;~'R' -/ ~ Historical Asset Allocation oo°i° o:o % o.oa o.o % o.o % o.o % o.o % ia% z.o % z1 % ° ~.s% Fixed Income 90% and Cash 80% 36.1 % 38.0 % 35.3 % 37:4 % 40.1% 35.9° 34.1 % 32',1 % (36.8%) 35.8 % 35.2 70% 8.0% 60% 70< °o ° 1t/o. t°o y0 0 9.1% 12.3% ~- ~.o ° Equities 50% (63.2%) 40% 30% ~- 20% y0% 0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 ¦ Large Cap ®Small/Mid Cap ? International ? Fixed Income ? Cash Period Ending December 31, 2007 ~ • ~ - • - - - ~ - - - • • - 1~ ~ Adviser: Trvsco Capid Managemeric]nc. ~ ~ ~ ~ Ao.P:a MicrosofcCorporation 5.1'5 Fund Benchmark S P~ o[~Mana er ~s.~a sta taa AppSe Incorparated 3,dX Consumer Discre:ionxry 6.I IX 11.19 Porcfoliomanagersince2007 ExpressScripaliocorporaced 3.€5 Consumer5tzp!es 1~0.39X Ia7.305 no.oa . _ --._ __._---- Hewlett-Pzckard Company 3.€5 Energy 6.32X 8.755 Objective sts,aa'- Procaer&GarnbleCompany 3.35 FinanciatScrvices 8.37X 7.EN2% The Fund socks wpitzl appreciation by immsting primarily in large, .~te.OEa Mcrck & Company Ineorporaxed 3.25 Heahb Care 14.1'9,`", 15.9G~X vrelf•established domesvc corporations. The Cvnd is designed to compFy with guidelines that arc based principally cn Florida hws ~'~a Pepsim Ineorpomced 3.2X Industrials 1257X 1295X gorerrting the im•estmenc of munidpal retirement plat~forfrc. sa' Emerson ElCttrie Company 3A5 InformationTeshnology 33'.06% 2$.335 hceand erxrzl remmemem es. 12y31lT! Ik731A0] Itfifl0? Po g €o' P~?'e Incd Carpoatian 295 Maserials 3.87.°„ 3.4-0X ¦ aawm rwr ,~idt reim~etr~mt cr iMrmr and opal gLm Swte Street Carporation 295 Telecom Sen9ces O.CUX 4-b95 Suitability Thor Fund a open to investmeitt only bl' trtrSLS for wti~r3t SunTrusc 71~ ahare groph assumes on initiol drypodteticJlinesunent of $PO.OPO fm'n lDtilities O.COyO 1.-037+0 Bankscrresastnnteeorinvtsrmenamanagorofqualificdretire• I'213P.fP7tal2l3l!(77. mcm plans which adopt the tcmu of a cotkaive wsc F15e perfomance Quoted' herein represents past performance. This Fund is suitable for im~estors v,'ho wznt the value of their ir~vesvnena to graw,buc do not need re receive incase on their imcstmcnc r - Aggregate Returns Average AnnualTata[ dieturns Equtrics' , IOIaO°, Inception Latest I 3 5 10 Egairalem 1}.OX Date Quarter YTQ Year Year Year Year fund 4lIP90 3.17"n 20:€Zm. ep.-02.+0 IIISdX. 11,75°.0" 8.175 Russell 1400° Growth Index (benchmark} -0.7r5 I I,BI X I f.81 X $.685 12.11` 3.835 5&P'SOOlndex -3.335 5.455' 5.49°ti 8.625 1283% 5.91n r`Asof December 31,2007 and subiecc co chatrge. Post performance does natguamntee fu#ure resuWts.The perfomrance da#a quoted represents,past performance and currentreturns trray be dower or higher. Total retwrn f'rguresincdude change in unit price, reinvestment of dividends and co,pita! gains.The roves#ment return and ~rrdncipoP slue wllf fluctuate sa that an imestar's units, wlsen redeemed; may Wfe worth more or dens than ti5e orisdinal cost. ,t~~ SunTrust 8ank.I`7ember WIC.©SunTruu Banks.lnc. S~.[.F~I~~UST SunTrust is af~dcrallyre~isccrcd srr»ce marY.of SunTruu &tnlcs.lne ~.~''1'1~ ,j„$ NOT FORPUBL[C DISf"R16UT[Uy J ' • ~ InvestrnentTerms & Index Definitions CIISIP 490001273 R1p5a• 6.Q7% Price-to-Boak Ratio is used to compare a node's nwfxt raluc Unit Value ~75.~0 F9eta 0.^t4 coicsbooknlue.-EheMghectherzdo.d~eh'~herthepremiumthe Total FundAsmts 521,7b7,524 Et-Squared 73.38 market is willing to pay for a company above is hard assecz Sharpe Rado I.tlre Price-to-Eomings Ratio ("PJE') is a valuavwi ramo oEa compacry's Standard~ev'retnon 743% wrmntunicpricetoittperr~niceamingzThehigher[hePJErado, - • ~ ~ - the more the market is willing w pay for each da4ar of annual Market Czpftalixatlan (5hB} 5.71-q{~y) ~RsaEDecemher 31, 2007 and subject ca change. arr,;~, Pr;ec-to-Book 4.8 Afphumeasures a fund4risk-adjusted perfcermnceand represents Prier-to-Earnings {I2 mo trading} 225 the dffereace between afvnds aa~el performance and its expected Return on E,retiq (72 ma trading} 3b.3% performance,given lgk+rl of risk as measured by beta Beta is a means of measurirg the wlatiliry of a secwiryor portfolio of secufities in comparison with the nurket as a whole A berg of 3 indiVttes that the security will mare vnch the market:greater than 1 indicaces that its mere iatztitc than the nurkc2 and less than i indiates that ici less whole than rate market R-Squaredmessuresthe ponion of a fund's nxn+emenc riot is ' a, ~ m a explained by maremenrs in the market index.an3 helps indicate dm tID'Jr M ~ i - o acwacy trf a fwd's alpha and berg 1 _ I I Sharpe Ratio is arisk-adjusted measut thtt is calculated usircd 36°I. I ~ ~ ~ j standard deviation and excess rewm w determine reward per triit e i e I of risfc The higher the Sharpe rado.rhe bcuer the fund'shiswrical 3~,~ - i ~ = _ 0 4 risk-a~usted performance. _ ~ ! - = - _ _ ~ = _ - _ ~ Standard Deviation is a sraasdnl measurement of dispersion . ~ _ _ ~ e e .e 101• ~ ~ ~ _ i ~ about art average,which depicu haw widely recurs varied aver a - _ f e. ~- t:ertan rind of time- - )R o . li D'! .-. ar~ I n ~ Russell ft10P° Grouch Index o6ers invescon access to the large-cap growth segment of thel7S.equiryvniverse.'fheindex ~ 1 -I@% i i i i measures the perfom~nce of those Russell [000 compaires with - + i higher price-co-book ratios and fufier forecasted grcwch valuez ' j Standard 8 Pools 500 index is am unmanabred index of 500 -30°lu ,o;; ~ ~ s .-x~•, ~ ~ seletted cannon stocks most of w'nich are listed on the New York ''ir'1:. <!.C"I,{1~U! ~ s~.U:.7„}M~+f ,d~J. aia:ti~f1 :~;4"' Stock Exchange, andisameasureoftheUS.scodcmukecu ¦ ColPeca~Trust Uniu ~f itunell 106U~ Growth Index ~ SSP 50(D Index a whole investors comae invest 3eecd;r in an index. Investment Concerns Past performance does not guarantee future resuits. Equity securities {stocks} are rrxrre volarilcand tarry mwrc risY--than other forms of imestmerxs.induding irrvestrrans in hFbfr grade fixed income securimezThe una value per rate of this Fund vnll i<uc[uue as t4c value of the securitces in the portfelio drangez t:afdeaive Fwnds are sponsored and adminfrtered Psy SunTrust Bonk as Trustee and managed by Trusco t:apital Management, Ync. {an investment adviser registered with rthe SEC} in acconiance with the Yaws of Georgia and oppiicabie !ranking regulations. They are open to rnvertment aniy Ixy trusts for wbdch SunTrurt $ank serves as trustee arinvestnnent manager of quafifed retirement plans which adopt the terms a f a coilecaive trust. 't'hese funds are not subject to direct regulation 5y the ~lntted States Securities and Exchange Commission and are exempt from regirtroUon as securities. The Pian and i~eciaration documents which govern the fund's operations are available upon requese.Audited jftnanciat statements are also available upon request. lnformatian cantoineal herein should not be relied upon far any otfrer purposes including separate account dmertment adviser or registered fund investment 1i1~~~ advice.The in formation is 6efieved to be accuwte, trot content accuracy cannot be ensured. Please contact your designated company representative for further informmatian. CTR-HGG- l zo7 6IC3i FOe~'PtJBi[t DISFRIBUi[Oi9 OIi08 -x.111-~ _..vr=.d'"~~. , . - - - - - - . • f ! Adviser:Trusco Crpital Management,lnc. ~ ~ ~ + _ ~Ot'tfoliOMdndger Sio,trG ExxonlMobilCorporadom 9.4% Fund 'Benclemark Mills ftiddick CFA S25,tNe 52r.133. General EleczrSc Company 3.4~ Consumer Discretionary ].50:5 T.22ro Portfolio manager since 1995 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ . _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ . ConocoPhllips 3.3n Consumer StapPes 4.53:'5 B.Td~~ 520,Ra Chevron Corporation 3.1~ Energy 14.10'6 15.49m Ob'ective sls.aa . - _ ~ • _ ATFY Into raced 2.T`x financial Services 23.52' 24.07 The Fund seeks co provide apical appreciation, and asa s~ondary Stp,tRA BankoEAsnerita Corporation 26`.6 Heath. Care 7.46X T.28n goal.currencincome.byinvesongprimarifyindrvideodyaying securities. The Ftmd 6 designed co c,ompfywithguidelinestha[ SS's Pfaer fmcorporated 2.3K Industrials 14.OQX IOSBm are l~ucd prinupaly on RcaidaIav+s governing the invcsimcncoE Se Waclrovia Corporation 22n Infamsation Technology 4.54' 3.35 nw~nci retirement lansforfire, lice and meal aremrnent 11r31ln7 IYy31r42 02r3tNT Pn P Po g. g Johnson & Johnson 2.2X Materials 4:07°6 4,05 empl0feei ~~atttunr riht +.id1 rrimettcmt a! :xomt am! npivl gilm Cmigromip 8ncorporated 22~ Telecom Services. 7.64% dt.50:n Suitability. Tireobartg+ophassumesonPnit~alfyfwrherkalim~esrrnentaf5P0.A'3G,~ram l9[ilides 7,05 b.69~ ibis Fund isopen to investment only bl crttses for which$unTrvsc f2f3ff4Tra f2f31i~pT. Bankserves as trustee or invesrmehc manager of qualiEed retire- Fhe performance quoted6ereirr representx past performance. rnestt plans which adopr the ternsofa cc8ectire cruse This Fund is suitable Eor irnrstorswhoarelookingfor capital apprcmtion potential and some income with less volatility [hanthe r egericymarketasawhole. AggregateR•eturtss Average AnnualTa~ta[Retums ' Equities 99.8Y Inception Latest I 3 5 10 Egviwlenz 1.IX [late Quarter YTD Year Year Year Year Fund 3131143 -5.02"n 4.44' 4.44n II?I°6 14.63% T.30~ Russell 1800mValue fndex ~ -5AOn ~ •0.17% f -0.17"n 9.32;e 14.63% T.68n al".s of De;ember 36,3007 and sub{ecc to change. Past perfiarmance does natguorantee future resufts.Tbe per forman<e data quoted represertds past perjarmance and current returnx eoray be fowerorhigher Total retWrn figures incfade change fn unit yrfce,reirtvesGnent o f ddvfdendsand capdtaf gafns.Tlre fnvestrrtent return and principal value wiM fQuctuate so that art investor's units, wften redeemed', nmay be worth more or Tess than the original oast ~~W ' SunTrust Bank Member FDIC.fl SunTrusr Banks,lnc. S~~usT SunTruscisafederallymg;sceredseiviccmar}:of5tm7ruttBanks,inc. NOT FQR PL1BL[C DISTRIBtJI'lUy 6' - - - .r;?1~'P i ~ ~ ~ • ~ • InvestmentTerms & Index Definitions CLPSIP 490001281 A1p5a, S,Zg~ Price-to-Baok Rollo is used co compare a stock's markr, value UrcitValue $9T-03 Beta 0,.9i co~tsbookrafue.Thehighcriheraao,thehigherthepremiumthe Total FundAsseu S~F2;67?,053 R'-Squared 688y market is willing to pay for a company a6ore iu lord assets. Sharpe Ratio 112 Price-to-Edrnings Ratio {"A1P) is a valuation ratio of a Standard t?eviatuan 8.1376 compzny's current unrt price to iS per-urot earnangs. The tugher the P!E a[io.the mwe the market isvnllingto pay for each dollar MarketCapiraGarian{$bilJ~ X10&I{b) *AsgEDecetnbar3l,'200Tandsulrecetochange. ofannuafcarnings. Rrike-to-Book 21 Alpha rneasrrrrs a fund's risk-adjusted pcrformancc and Praee•eo•Eamings (92 ata armSing) RS-G represents the dd(ererxe between a fund's actual pmfomunce Rewrn on Equity (12 rno trail'itlg] 19.§~, and its expetted pcrfornunce.given its leveE of risk as measured bybeca. Beta is a means of measuring the voia~iry of a security or pordolio of searides in comparison H9th the market as a whole. A belt of I in&cates that the security vrill more with the nvkec grntcr Bran I indicates tha[ its more volatile than the markc[.and less than (indicates that it's less rolarole than die market +c5°/. , 1 I I, ~ ~ ~ ~ R-Squared rncaswes the portion of a fund's movement that is 35°/i d A ~ ,-~', - c~lained 6y movements in the markeci~ct,and helps indinte 1 r _ j ~ ~ the accuracy of a fund's alpha and bew. 25°!e \ -,~', I X r a Sharpe Ratio u arisk-adjured meawre [hat is calculated usircg _ j - I _ - ~ -' standard deviation and excess mwrnto determine rtwr~rd per i5%a ~-n - o i a ~ ~ unit of nsk The h'rdher the Sharpe rotio,thebeuer the fund's •- ~ N ,-C., ,-~.-, ti his[oriwl risk~adlutsied perFarmance. 5°/, ~ r. ~ ~ ~ r ~a q I - - Standanl Deviation is a sta¢sticaf measurement of disp?nion [ ry about an average.svitidr depica hovrw5dcly rctumsvaricd Duero -S;yn . ~`.-' ~ ~ cerrainperiodoftime. ~ Ni - ~ RvsseJlf00P9Yaluelndexiscomposedofthesecuridesinthc 7 i ~ Russel 1OC41ndex wilt alcsvthzn-average gra++tfi oricnc~tioa j I ~ ~ ~ Companies in this index generally have larr price-tobcok -25°~a ;p~aR unG 7; i z.y 7r m x ±.00'0 '101 :i'Oi'i: .i73 ..~09 3'x.0+„ 20G~6 ?0'.0.7. andprice-to-earningsraaas,hlgherdivrdendyields.andkm~er ¦ColfectirreTrustUniu :f?RusselllOP3gVxluelndex forecastedgrovrthvalues.lrnestorscannocimestduecdyinan index Investment Concerns Stocks are mare volarr~e and arty more riskand reaurn potential Aost performance does not ;guarantee future resudts. than other forms of investments The unit value per unit of this Fund wil[ftvctua[e az thc+ratuo of the sccurides en theportfolio changes. Ualue-based in~restments arc subjca to the risk rho[ nc~ broad Collective funds are sponsored and administered by SunTrust Bank as Trustee artd managed by Frosco CapisaY HAonagemeat, Yrlc. ~'an Pnvestment adviser rn[rket Wray not recograxetheir intritrsic value. registered with tdie SEC} Pn accordance wfth the Yaws of Georgia and applPcabde banking reguPatdons, They are open to anrestrrnent only by trusts far wladch Sun7rust Sank serves as trustee orinvestmeni manager of quaPifed retirement plans whdch adopt the terrrrs o f a coiPecaive trust. These funds are not sabject to direct regulation by the lJnited States Securities and Exchange Commission and are exempt from registrotfon os securftiex, The Pdan and t?ecdaratron documents which govern the fund's operotdons are amiPabPe upon request.Audited' ~inanciad statemenu are also avafdabfe upon reQtnest. (r(~ dnformation contained Preredn should not be relied upon for arty other purposes incdaddng separate account investment advisor or registered fond investment ~I~~U~ advice.Tdae in formation is bePieved to be accuwte, but content accuracy cannot be ensared. S~[T~T~t~ST dadease contact your designated' company representative for further in formation. CTR•}iGEI-1207 C+f4}T FfJR'PU81[C DISFRI8UT106V o IfOR -- r- ~.-- i i~ __.~--~ • __- - ~ • _~- ~ ~ ~ s ,r rk 1 ~ fund Den ' 7:2.-% • ~ 2bm E)iSCrcuopacY ~0°~ ~ ~ ~ Consumer 14:rA% • ~2.b-%- ~reureQr SraPfas -..- x4 ~F n non orated iwClau B1 2,b% e~ 1~A2% EpcontlobilCotP~ ~ -,,,,.....-. 1.1ax1~Y tncorP 2S% 11.1 fUSeS _ §t&384 6e~ks3drE FinanaalSeNKes -Y---_ ~ ~ ~ ~ 25:b Hcaxdy Czre 335"w pT&'dlncoR°racnd '-'~` Iq-.42°~ IxCarp~xsan ~,4% s ;70App 1+,iccosa Indusc~ ~r„inc. ~n~Elecx*~ComRa~ ~„b% tnk+mnt+onTechnolaBY -.,.% -. co EaPi°l Manage" amaon bb9m sJSpW CLietisas' Carp 21'% Maxerials lca f _..-.~ pdaiser.Tnn _ M1ana$~ Incn~C°rParauan xj 'SelecomSeN ~14,~p 51e-ppD, ~ressonElc{crcGccnP'n~ -"....~.0% Uxil'rnzs ~n~efsince2~? t1+3i;~ CroodrtchCorP°r`uan uan Pordolw ,~cFasecandarY 5sppp 1~731Ja2 m r~emackCarParn Obectt'1e msm cpa"1 apPreC1a~~ 1n„~,c x ~°tznan~ ~ §+~rox pPar ~ W 411fR9~ al curc'~'xi"cwnd¢s~-,~dw°o~Y"r~ ~eli~to4 ~u~cmcw~x"';h" iivmrlY,YW~er:CClimrsuncr:°I3t0,430I~ 100.6 mB rnens ~ in 4.~ ~d F~" ~ oU d g~~ ~m ,~,e o+w+t gaOAh aswmcs ~armanae. , • ire 1z~ta~~mlz~rr~t. nrePrerent:per E9,s~ nU+n Trust The A°rjormante gyaxed herea turns uiwtenx al'fatal Ae e knnu Since $uttabdibl xa i~;~'mem'cmh b1 er8 of qualified ~s°re- ate Fxetury's i A~ Year Y~ Int~non ~aFund'so ~~arimeseme~acolecnweuusc s A +(ear ~ 1=~ t~ .,change gankser'~ ~et~ 0,~tesc y7p 14.b~'f ~ esindedde rnent PIan4'cA'ifi a~ who are WabnSiar ~ ~ laceptiwn (Znarter ~ ~ 4.3._.---'^2°k ar highet• 7oxa) tretua ~o~~ more oP less th°n is svi+~e(°r icxe??°rs widt lcssvolaaTxY gate ~ .4J7%'~ be lower maY ~ .Fund. ~eincornc Et- .__:__.---- X1.17%'~ nxretarns}naY wlsencedeemed• apu°n P?a+rA~de• rhm ~ Pe~'f°Rnanc axe so thax an irrvestaf s e~rtrts. xhe ~u~ mackM Fund b aloe index e'en ~ .3~ ,&p 64alndex a7 ~a spy~ctw cha"Be' ~lxs.7he Pei ~a~tment rexum~ d D~" P l~° ue wi!! ~ucw +~p, of Oeceml~r 3x.2 araatee d capi~} gains.7h past fe~am'ance d°~nent a~ d'pi°dends an In trrtit 3~rt'ce, ~ tha arlginaN 6t aro2. saRrxurn trwn _~-_." _ ~~U~~ ~y,~sTruu~ksJne.7eus<~n~'lne. ~ , . ' ~ 1~.1 r'`'°t'eE" TncuBOnkM~1 redser~e'nackox5un r , _ 5em'fnnx's a~~~ a ~neue~xco ,m4. J- ~ _ P LJ inuestment Cas3cerns CLl51P 94680 6265 Bonds offer a reEaa?+ely sable lzml aC income" al[hough band prices l7ni[4SI'ue 935.73 will iluauate providing the pomnval for principal gala, or foss. Total Fund?sseu $l"x4.923,425 ]ncermediace-temxls~gher-cpaliry bonds generally offer Iess risk than kmger--term bonds and a lower race of rewrn The Fund is subjett zo the risk oboe principal +ratue reacts in opposition to the maremenc of imcrest rates and that a rising in[eresc rate environment inveases the risk of bssof principal frciex i7elinitions ~ ~ Merrill Lynch GoremmentlCredRA-Roted~ Index is a I5%: o e i o - i - - ~ widely rttog~ed composite made up of the Merrill Lynch 175. _ - i _ - ~ -~~`, .- - - ~ Garcrnmenc ]ndex and the Merrill LyncEi US.Ccedic Index which 10°fa ~ - ~ indude US. ~svernmencTreasury and agency securi[ies.az well -" - ~ ~ ~ az higFi grde corporate bonds.lnvestocscanno~ imescdirettly S°fe i ~ s ` M M_ in an index. ~ i II _ ~ SI - : -- 0% i ~ ~ ~ ~ d ,S~ ~ i t i -10°l. _ ~aw}a ltl'~fJ~U~ ::dfJ,rJ. ?0~0" ":1103 1'.Qtlq ;i8v7F ;?*01;ir'„ «:'Cl•r Co7lecbve ImestmeircTrast Mervill Lynch Governmen[lCredick•fiatedk lrcJex Past performance does not guarantee future results. Coll'eetive Funds are sponsored and administered by SunTrust Sonk as Trustee and managed by Frusco CapitaY Mlonogemen#; Ina ~on investment adviser registered with the SECT in accordance with the laws o f Georgia and appNcable banking regulations. They are open to investment only by trusts for which SunTrust Bonk serves as trustee orinvestment manages f q~uofiTed retirement plans whicfi adapt the terms of a collective trust These funds are nai subject to direct regulation by the United Stater Securities and Exchange Corrrmission and are exempt fr+um registration as securities. The Plon and Declaration documents which govern the fund's operations are amilobfe upon request.Audited ~inoncial statements ore also avaid'obie upon request: r laformation contafined lrereirn should not Ise relied upon for ony other purposes indading separate account invesuzaent adviser or registered fund investment ~j1~ advice.Fhc infarmauon is believed to be accurate; but content accuracy cannot be ensured, ~~~ST Please contact your designated company representative for furzfier inforrtrazion, M~ Fa7g PUBLfC DISTRI BUF[0+ 7 CTR•FiGB- 1207 0 tlQ8 J wi.; ° ~ Fund Attribution Summary - A reciated more than 15% -. SunTrust Retirement Hi h Grade Growth Fund SunTrust Retirement Hi h Grade E ui Income Fund EXPRESS SCRIPTS INC COM $ 490,657.80 $ 716,130.00 30.82 TEKTRONIXINC COM $ 108,458.22 $ - 35.34 APPLE INC COM $ 555,714.87 $ 758,844.48 29.12 ANADARKO PETE CORP COM $ 384,312.50 $ - 21.36 GOOGLE INC CL A COM 362485.53 462600.12 21.87 APACHE CORP COM $ 229,653.00 $ - 17.72 UNITEDHEALTH GROUP INC CO $ 415,771..55 $ 528,747.00 19.98 PEABODY ENERGY CORP COM $ 177,119.00 $ - 16.43 STATE STREETCORP COM 485435.52 $ 612,410.40 19.38 SunTrust Retlrement;Hi h Grade Bond Fund MICROSOFTCORP COM $ 494,044.20 $ 1,079,392.00 18.65 MONSANTO CO NEW COM $ - $ 428,889.60 15.09 NO SECURITIES APPRECIATED MORE THAN 15% SunTrust Retirement Hi h Grade Relative: Value Fund' ANADARKO PETE CORP COM $ 211,882.50 $ 232,871.05 22.55 S:unTrustReti[ement Hi h Grade Intermediate Bond. Fund MICROSOFTCORP COM $ 306,884.82 $ 413,316.00 21.12 BERKSHIRE HATHAWAY INC DE $ 387,296.00 $ 416,768.00 19.60 FNMA POOL #893533 6.50 $ 2,540.39 $ - 28.85 WESTERN UNION CO COM $ 291,986.28 $ 304,058.44 15:93 SunTrust Retitement•SmaII:Ca : E. `ui `~Furd ,.SunTrust:.Retiremerit,Mid:Cap`;E uity°Fund TERRA INDS INC COM $ 92,217.00 $ 133,728.00 44.81 EXPRESS SCRIPTS INC COM $ - $ 244,623.00 31.03 OSI PHARMACEUTICALS INC C $ 23,793.00 $ 33,957.00 42.62 STEEL DYNAMICS INC COM $ 258,157.60 $ 329,302.96 27.83 MGI PHARMA INC COM $ 69,450.00 $ 99,298..50 42.36 DIAMOND OFFSHORE DRILLING $ 376,349.38 $ 429,124..00 26.98 BIOMARIN PHARMACEUTICAL I $ 100,845.00 $ 134,520.00 36.55 COPART INC COM $ 347,339.00 $ 385,077.50 24.46 GLOBAL SOURCES LTD $ 7,088.88 $ 55,875.60 35.19 ANADARKO PETE CORP COM $ 274,985.00 $ 346,383.37 22.54 DEVRY INC DEL COM $ 86,973.50 $ 103,920.00 34.38 CHURCH & DWIGHT INC COM $ 381,024.00 $ 423,368.10 16.07 PETROQUEST ENERGY INC COM $ 48,821.50 $ 65,065.00 31.94 JANUS CAP GROUP INC COM $ 382,996.04 $ 270,848.25 15.86 AEROPOSTALE INC COM $ 66,233.50 $ 52,337.50 31.88 DECKERS OUTDOOR CORP COM $ 87,840.00 $ 77,530.00 30.45 COLUMBUS MCKINNON CORP N $ 46,046.50 $ 60,347.00 30.23 WADDELL & REED FINL INC C $ 39,193.50 $ 66,766.50 28.88 ATWOOD OCEANICS INC COM $ 84,216.00 $ 105,252.00 27.75 FCSTONE GROUP INC $ - $ 46,030.00 24.41 UAP HLDG CORP COM $ 87,808.00 $ - 23.54 ANSYS INC COM $ 59,797.50 $ 72,555.00 20.97 GENOMIC HEALTH INC COM $ 44,137.00 $ 52,072.00 20.00 LINDSAY MFG CO COM $ - $ 70,690.00 19.74 PRICELINE.COM INC NEW COM $ 88,750.00 $ 86,145.00 18.64 NETGEAR INC COM $ 62,908.56 $ 80,899.56 18.32 NAVIGATORS GROUP INC COM $ 54,250.00 $ 65,000.00 18.04 XENOPORT INC COM $ 58,436.10 $ 69,402.96 17.89 DOUBLE-TAKE SOFTWARE INC $ 63,063.00 $ 72,762.00 17.21 LIFECELL CORP COM $ 84,532.50 $ 84,064.50 15.38 FOSSIL INC COM $ 80,324.00 $ 69,267.00 15.30 Please refer to Appendix for full disclosure. For the period ending December 31, 2007. ;...W- Fund Attribution Summary -Depreciated more than 15% -. SunTrust Retirement Hi h Grade Growah Fund: S;unTrustRetirement Hi h Grade Relative Value:Fund COACH INC COM $ 337,602.34 $ 230,940.16 -35.24 WASHINGTON MUTUAL INC COM $ 148,266.69 $ - -45.78 CISCO SYS INC COM $ 618,934.66 $ 535,228.04 -18.53 DARDEN RESTAURANTS INC CO $ 277,741.10 $ 165,345.57 -33.63 BOEING CO COM $ 398,962.00 $ 351,589.20 -16.32 SPRINT NEXTEL CORP COM $ 364,249.00 $ 226,387.46 -30.84 CADENCE DESIGN SYS INC CO $ 287,471.45 $ - -22.24 un: rust etlrement. 1 ra @. UI ;I, nCame Un CAPITAL ONE FINL CORP COM $ 204,537.97 $ - -21.31 WASHINGTON MUTUAL INC COM $ 195,970.50 $ 111.,602.00 -57.34 TARGET CORP COM $ 210,861.69 $ 149,150.00 -21.16 CITIGROUP INC COM $ 631,631.78 $ 489,704.96 -35.85 CITIGROUP INC COM $ 373,640.02 $ - -19.13 OFFICEMAXINCDELCOM $ 118,025.88 $ 111,440.04 -35.31 DISCOVER FINLSVCSCOM $ 228,571.20 $ - -16.85 COLONIAL BANCGROUP INC CO $ 169,717.00 $ 110,351.00 -34.18 CISCO SYS INC COM $ 339,019.29 $ 318,965.81 -17.98 SPRINT NEXfEL CORP COM $ 289,750.00 $ 252,752.50 -30.34 BANK AMER CORP COM $ 409,298.34 $ 302,105.72 -16.65 JABIL CIRCUIT INC COM $ 127,904.00 $ 125,977.50 -30.29 SCHERING PLOUGH CORP COM $ - $ 264,854.88 -16.34 COOPER COS INC COM $ 123,187.00 $ 102,600.00 -27.33 AMGEN INC COM $ 270,913.73 $ - -16.34 MERRILL LYNCH & CO INC CO $ 160,522.56 $ 139,675.36 -23.84 U11 FUS . a IrEnten .ma a UI Lln. WACHOVIACORP 2ND NEW COM $ 556,665.00 $ 494,390.00 -22.64 AUTHORIZENErHLDGS INC C $ 39,667.50 $ - -74.93 ZIONS BANCORP COM $ 216,310.50 $ - -19.71 SMffH & WESSON HLDG CORP $ 43,907.00 $ - -61.70 REGIONS FINL CORP NEW COM $ 206,743.24 $ 126,834.95 -19.12 ZUMI¢ INCCOM $ 46,588.50 $ - -36.18 MARRIOTT INTL INC NEW CL $ 115,195.50 $ 203,371.00 -17.10 ANADIGICS INCCOM $ 95,824.00 $ 39,338.00 -34.00 GENWORTH FINL INC CL ACO $ 233,548.00 $ 225,232.50 -16.85 SOTHEBY-S DEL COM $ 57,348.00 $ - -33.62 BANK AMER CORP COM $ 598,414.08 $ 569,553.04 -16.48 ASTEC INDS INC COM $ 74,685.00 $ 37,190.00 -33.57 HOME DEPOT INCCOM $ 105,430.00 $ 113,146.00 -15.68 ALIGN TECHNOLOGY INCCOM $ 79,789.50 $ 40,032.00 -33.54 MORGANSTANLEYCOMNEW $ 151,515.00 $ 151,629.05 -15.06 J2 GLOBALCOMMUNICATONSI $ 57,277.50 $ 38,106.00 -32.21 Un rUS a IrQmen 1 ~ ra E On UII. MCCORMICK & SCHMICKS SERF $ 38,601.50 $ 24,456.50 -32.14 NO SECURITIES DEPRECIATEDfi40RETHANI5°b VIRGIN MOBILE USA INC CL $ - $ 27,212.29 -31.35 $UrITYUSt,Retlrement H~1 h.Grade IntermedlateBOnd.Fland INVENTIV HEALTH INCCOM $ 89,831.00 $ 63,468.00 -27.47 NOSECURITIESDEPRECIATEDMORETHANI5% GSICOMMERCEINCCOM $ - $ 36,075.00 -25.82 Un~.;CUS E 11'C111en -~i;. 1 a UI ~ :Un ON SEMICONDUCTORCORPCOM $ 89,176.00 $ - -25.23 WELLCARE GROUP INC COM $ 275,383.16 $ - -52.59 ANOCTER INTL INC COM $ 82,450.00 $ 62,270.00 -23.53 NCR CORP NEW COM $ 340,781.40 $ 251,953.80 -48.77 DIGfrAL RNER INC COM $ 71,600.00 $ 52,912.00 -23.07 MENSWEARHOUSEINCCOM $ 336,160.08 $ 179,524.92 -46.48 SHUTTERFLYINCCOM $ - $ 32,025.00 -23.03 CELGENECORPCOM $ 351,843.54 $ 228,000.14 -35.20 TEMPUR-PEDICINTLINCCOM $ 114,400.00 $ 35,059.50 -22.09 DARDENRESTAUR4NiSIN000 $ 375,023.74 $ 231,073.69 -33.90 ARBfrRONINCCOM $ - $ - -21.74 JABIL CIRCUff INC COM $ 483,066.00 $ 199,731.60 -32.01 FORMFACTOR INC COM $ 57,681.00 $ - -20.99 JONES LANG LASALLE INC CO $ 388,946.60 $ 269,340.60 -30.26 ARRIS GROUP INC COM $ 47,238.75 $ 19,211.50 -20.70 PENNEY J C INC COM $ 296,508.23 $ 161,839.21 -28.18 TENNECO INC COM $ - $ - -20.67 DISCOVER FINL SVCS COM $ 323,252.80 $ 234,358.28 -26.99 PIKE ELEC CORP COM $ 49,714.00 $ - -20.05 TERADYNEINCCOM $ 272,867.40 $ 204,452.82 -25.07 JARDENCORPCOM $ 41,769.00 $ 31,873.50 -20.01 OWESTCOMMUNICATIONSINTL $ 414,893.04 $ 317,510.94 -23.47 ARCH CHEMICALS INCCOM $ 28,128.00 $ 22,050.00 -18.92 CADENCE DESIGN SYS INC CO $ 497,699.51 $ 406,385.91 -23.36 VASCO DATA SEC INTL INC C $ 60,027.00 $ 60,028.00 -18.63 SOTHEBY-S DEL COM $ 311,781.96 $ 218,084.40 -21.48 COMSYS IT PARTNERS INC CO $ 50,430.00 $ - -18.54 GENWORTH FINL INC CL A CO $ 414,056.02 $ - -21.01 CORN PRODUCTS IMt INC CO $ 52,750.50 $ 42,262.50 -17.80 NORDSTROM INC COM $ 322,087.41 $ 172,741.19 -20.76 WARNACO GROUP INC COM NEW $ - $ - -16.89 AMERICANEAGLEOUTFfTTERS $ 377,022.30 $ 297,634.10 -20.64 SYNAPiICSINCCOM $ - $ 45,276.00 -16.79 M & T BANK CORP COM $ 249,107.60 $ 233,127.06 -19.09 JACK IN THE BOX INC COM $ 61,598.00 $ 65,713.50 -16.70 THE HERSHEY COCOM $ 365,293.11 $ - -16.22 1-800-FLOWERS.COMIN000M $ - $ 22,261.50 -16.37 AUTHENTECINC $ - $ 36,717.31 -15.03 SIGMA DESIGNS INC COM $ - $ 24,840.00 -15.03 Please refer to Appendix for full disclosure. For the period ending December 31, 2007. Corporate Governance ? What is a GovernanceMetrics International (GMI) rating? • GMI uses a rating system designed to assist institutional investors in evaluating the quality of a company's corporate governance and the impact that governance practices may have on performance. GMI uses a 400 metric set of objective and consistently applied criteria to each of the companies rated. ? What companies are covered in the GMI database? • The database features corporate governance ratings on more than 4,000 companies globally. ? How are GMI ratings determined? • Ratings are calculated on the basis of six core categories: > Board of Directors > Financial Disclosure > Shareholder Rights > Anti-takeover provisions > Executive and director compensation > Corporate Behavior -includes regulatory, environmental, labor and sourcing problems and policies • All GMI ratings for Trusco are expressed on a relative basis compared to al! companies in GMI's Global Universe. A stock or bond's rating of 1 is lowest, 10 is highest and 6.5 is average. > Well Below Average =GMI rating of <=3.0 > Below Average = GMl rating of 3.50 - 5.50 > Average =GMI rating of 6.0 - 7.0 > Well Above Average =GMI rating of 7.5 - 9.5 > GMI's Highesf Rating =GMI rating of 10.0 Please refer to Appendix for full disclosure. Period Ending December 31, 2007 High Grade Fund's Corporate Governance Ratings ..- .u~l~ ..--- - ..- . 27.5% , 4.6% , 8.7% 7.6% 6.2% -^ - _ 7.7% n.o;o 65.0 >3.6 Average Score 8.y Average Score 8.4 Average Score 8.3 - - 4.3% 29.6% 1.2% 61.4% 1.2% 34.3 GM I's Highest Rating (10.0) 68.0 .WellAboveAverage (7.5-9.5) Average (6.0-7.0) Average Score 7.0 Average Score 7.6 Below Average (3.5-5.5) , , ~ _ : ~ ~ , , ~ _ ~ ~ ~ 14.6 % 9.2 Well Below Average (r-3.0) / 1as% - 16.9% 73.9 70.8 Average Score 8.5 Average Score 8.6 Please refer to Appendix for full disclosure.. Period Ending December 31, 2007 -~ ® •- ~~- ~ -'r- r v_ _ ,,~.f -'1 TRC~S~~ { , ~ "-' Blake M ton MANAGE1VlENT Investment Manager February 14, 2007 Jane Lerner Village of North Palm Beach 501 U.S. Highway ~ North Palm Beach, FL 33408 Dear Ms. Lerner: Periodically, our auditors require that. our clients provide written acknowledgment as to the current investment directives and/or policy. In that regard, please sign below and return this letter to me. If you have any questions, please don't hesitate to contact me. Thank you. Very truly yours, Blake Myton Investment Manager BM/ces ~~///D '[n/J//j . ~~j~ ~~~r+'V jJ~+ r I hereby a nowledge that the Investment Policy Statement dated May 10, 2005 rema'ns in effect. Dated this 1~ay of February 2007. 300 South Orange Avenue, Suite 1600, Orlando, FL 32801 Phone: 407-237-5816; Fax: 407-237-4726; E-mail: Blake.Myton@truscocapital.com ' EXHIBIT A VILLAGE OF NORTH PALM BEACH GENERAL EMPLOYEES' PENSION PLAN STATEMENT OF INVESTiVIENT POLICY GOALS AND GUIDELINES ' The guidelines and objectives provided below are designed to complement all applicable laws. The purpose of these guidelines is to: 1) Provide the investment manager(s) an accurate understanding of the Trustees' investment objectives and; 2) Indicate the criteria by which the Investment Manager's performance will ' be evaluated. The primary investment objective of the General Employees' Pension Plan is the protection and preservation of the assets while the secondary objective is long term ' growth. As a result, the investment manager(s) shall seek the highest possible return while maintaining a prudent regard for legal considerations, fiduciary responsibility, safety of capital and minimum volatility of returns. To accomplish these objectives, the Board of Trustees has elected to retain professional investment managers. The investment manager(s) retained will be expected to employ a balanced investment strategy (a combination of stocks, bonds and cash). The following guidelines, restrictions and objectives shall apply to each investment manager retained by the Board of Trustees. 4. GUIDELINES Although the equity portion of the portfolio shall not exceed 65°Io of the Fund's total assets (at costj, there is no limit imposed on the fixed income or cash portions of the Fund. It shall be the decision of the investment manager(sj to determine the most appropriate asset nux (within these linuts) to achieve the Fund's objectives. 1. EQUITY PORTFOLIO: Any stock purchased for the portfolio (except mutual fiend or commingled fund shares) must have been listed on a major stock exchange or NASDAQ Investment in any single stock issue shall not exceed 5% of the Fund's total value nor shall the equity portfolio's total value (at cost) exceed 65010 of the Fund's total assets. 2. FIXED INCOME PORTFOLIO: The fixed income portion of the Pension Fund shall consist only of U.S. Government, U.S. Government Agency bonds or bonds issued by the corporations listed on major stock exchange or NASDAQ and are rated "BBB" or better by a nationally recognized rating service, except that 10% of the fixed income portfolio may be invested in securities not meeting this restriction. Investment in any single corporate bond issue shall not exceed S01o of the Fund's total value. 3. CONVERTIBLE SECURITIES: Bonds and preferred stocks that are convertible into common stock or that include warrants for the purchase of common stock are allowed only if it meets the above mentioned criteria and restriction of equity and fixed income portfolio. 4. MUTUAL FUNDS AND COMMINGLED FUNDS: Investments in mutual fund shares and bank sponsored commingled funds are permissible. However, 90010 of the securities held in muhial or conuzungled funds must meet the criteria outlined above. 5. CASH EQUIVALENT INVESTMENTS: There is no minimum or maximum amount of Fund assets which may be invested in cash equivalents, subject to the cash flow needs of the Fund. Assets of the fund should not be in anon-interest bearing account for more than one (1) day, but should be invested in an interest bearing account. Cash or other non-interest bearing assets shall never total more than 10010 (at market value) of Fund assets. Assets of the Fund may be invested in a variety of cash equivalent investments including obligations of the United States or any agency thereof which are fully guaranteed as to the payment of principal and interest; money market funds, deposits in S&L associations and banks which are federally insured; corporate obligations with a rating of at least A-1 by Standard & Poor's or P-1 by Moody's. 6. PROHIBITED TRANSACTIONS: All investments in options, futures, municipal bonds, precious metals, private placements, short sales, purchases on margin, real estate and partnerships are ' prohibited. B. GOALS 1. TOTAL PORTFOLIO: The total portfolio goal shall be to achieve returns over any rolling three-year period in excess of a Target Index. The Target Index for the Pension Fund is defined as a 60% investment in the S&P 500 Index and a 40% investment in Lehman GavernmentlCorporate Bond Index. It should be a further goal of the investment manager(s) that the total portfolio return in any rolling three-year period should meet or exceed the Consumer Price Index plus 500 basis points and rank in the top 40% of a representative universe of other mentioned relative criteria, a further goal of the total portfolio shall be to provide an annualized return in any rolling three-year period equal to or greater than the rate of 9%. 2. EQUITY PORTFOLIO: The goal of the equity portion of the portfolio shall be to achieve a return over any rolling three-year period in excess of Standard & Poor's 500 Index. In addition, it should be a goal of the investment manager(s) that the equity portfolio returns in any rolling three-year period rank in the Top 40% of a representative universe of other equity portfolios. 3. FIXED INCOME PORTFOLIO: The primary objective of the fixed income portfolio is to add stability, consistency, and safety to the total fund portfolio. The secondary objective shall be total return. As a result it should be a goal of the investment manager(s) to achieve a return in excess of the Lehman Govei7~mentlCorporate Bond Index. It should be a secondary goal of the investment manager(s) that the fixed income portfolio returns over any rolling three-year period rank in the Top 40% of a representative universe of similarly managed bond portfolios. 4 C. REPORTING AND PERFORMANCE MEASUREMENT The investment manager(s) for the Pension Fund shall provide quarterly reports for management purposes. The reports shall include data on investments held, returns earned and any other information necessary for clarification of the investment manager's results. Any loss, realized or unrealized, on any single investment position (e.g. the stock or bond of any single company, any single government bond or commercial paper, etc.) of more than twenty-five percent (25%j of the cost or purchase price, shall be disclosed to the Trustees on a quarterly basis by the investment manager(s) by a separate report. Upon reasonable notice, the investment manager(s) shall provide any relevant information requested by the Board of Trustees. The investment manager's performance shall be evahlated on a quarterly basis in • teams of achieving the goals as outlined in this statement. D. POLICY REVIEW It is the intention of the Board of Trustees of the Village of North Palm Beach General Employees' pension plan to review the Statement of Investment Policy from time to time and to amend them if necessary to reflect any changes in philosophy or objectives. However, if at any time the investment manager believes that the specific objectives defined herein cannot be met, or that the guidelines unnecessarily constrict performance, the Trustees shall be notified. iG~~! ~ Chair an, Board of Trustees Village of North Palm Beach General Employees' Pension Plan Date ~ j~ Tnt~c''o Capital Manag~ient Date r at+on ~nfQrrm? ~osure t „ ectives, risks, and d,s investment obl lassie Funds can gTl C Please read sider the fun about the s•com• ould con t information sticlassicfund investor sh ortan www• . b a prospectus. An d otheUND, or by visiti'o s of principal. nd This an ssible fed by gISYS Fu aared Y ding money g00-STI.F ed or accoinP sting or sea lease call 1- including p° and are distribu ust be pieced before inve rospeCtus, p . involves risk, ervices~ This material m eases carefully To obtain a p d investing a fee for its s es and exp rospectus. Mutual fun which receives of the charg a fund's p before investin9• Inc•~ be found in th carefully anageirent, Inc ected return em rospectus o Capital M ltal IVlanag eat, anon and the exP the p dvised by Trusc rivate inform ands area with Trusco Cap anager with P LP, which is not affiliated of a PodfOlio m erect fit. r- STI Classic F MEASUREMENTS return 0 X00°/0) indicates a P $ervices, e realized of 1. l her the SIOTHER averag s stematic risk, et class. an r_squared ortfolio. The hig TISTIC dii{erence betwee tion with equal y YOpriate ass oints~ investment or p excess return. MPT STA as the ublic informa an app roXirnates real data ance of an with the over a ha - is defined u on p volatility, relative t° line app erorm associated the returns varied p~ based P ent's cession redicts the actual p er unit of risk widely passive strategy n investor of how well a Yeg Model p icts how is a measure of a easure indicates the excess return P gem- ital Asset Pricing , for a mutual fund, dep g oared - a statistow v~ell the Cap tO_Volatility-Rat1O' which, wn as Reward- average b the offering price ~qua~easures h ance out an also kno er{Orm eat of dispersion ab of calculation y do - etter the P date Shar e Ra the b easurem on the Sharpe Ratio, a statistical m 30 days ended peviation - ear, tp0 much for what Standarder1Od of time, er share for the in percent per Y ou°Te paying certain p igT1CS DEFINIT tOhe net investment income p company of whether Y RACIER dividing ualized" rowth rate for each e idea e uity. PORTFOLIO CHA ounded and ann Ives som C Yield - is calculated by earnings Per Share g value This ratio g it by the shareholders q 30 pa SE The figure is coin oiled value to its book dividing on that date.is the five-Year rep market er share. e and bank, and may per share Growth - are a stock s edialely• ,s net incom teed by any 5 Year EPS is used to comp t imm its historical earnin akp9 a company are they guaran to-Rook - company went ban ofi a stock divided by . , calculated by encY nor Price- rice rafitabil~tY~ ederal ag woul~if the _ is the p coreoration's P or any other F PIE 12 months trail's a measure of a the FDIC ui are not insured by Return on E ands eats ?n the STI Classic F Inves~a ue. lose i I~ , ,r i . ~ ~ - Lion fo~~a • to nt ~~QSu ~'s toss of investme Can resents returns g fees The Q ent a i e. net ofi fees, ed by Trusco rep stm dance data, ~ wsory anag tion of in t?n per{°rm . ent ad related to a ~°pa~, l for a descnp resen gce to the ?nvestm pedormanpe data° s whm A~ ve diff endt mef ° without referen of fees T pERF of fiuture results. gee TYUSC ich ent o deduction pNCE ;ndep ORM f fees: roduct o ual return prior to t ultiing aY'nu TMEN indicative se s net°o - of p {ees, p /o ann ten years, the res ance is not tated asbe for a variety of be evaluated of the IN~ESerform unless otheYV+' herein may ation shoule ~ advisoYy Fast p ent fees, orted e Th?s ?nform investm account achieGharged each' es • managem information Yep of th licable le, assume the ent were performaY'ce combinat?on addresses app For examp anagem of fees, or aore specifically results. o of assets under m ctual gYOSS ent that m ulative of p,5 to its a agreem effect on cum al fee or less than ounding ears, annu o more if an to g.48 /o. Fees have a comp . reduc total return, a distribute ear fior a period eesewO Id be ed Fund than the a fund m y each y In any given period net of s of the may change average return current earning d et assets. OR TION resentation, an they would b o ~ndaggregate n MA closely reflects field d request' YIEI-D INF ation more waivers s of a fun hand corner of this p Yield inform ate net earning the left- , eriad are available upon absencrelatesYa9greg shown in ec?f?c p ake any . In theC Yield RAC-~ERIS~ICS of the date , for any sp affiliations at?on available ASE OLIO CHA resented as osit?ons Trusco nor any on inform are income• ANp pORTF are p find?v?dual security P Neither based investors TINC,S aracteristicss and err,ent Inc• ections are esting• SECTOR WE?~`H s and portifolis~G or weighting ital Manag Comments and prOl °n for future inv weighting Cap. e relied up ent decisions The sector . A complete Ust of clients of Trusco dividual u and may not b investm without notice. RKET RENEW and prospective analysis fior ~ oses only, making any d applicable ANp MA for clients or merit of this ational pure stances before eorgia an adopt the ECONOMIC ared accuracy for inform ecific circum with the laws of Gent plansa ~ TeX mpt from ective was prep as to the about their sp ret?rem This persp arranties e accurate, are accordance ualified °mmission and and believed t0 ent profess?onal anagerY?ent, in s trustee or q representetof wr,ting . their investm ital M ank serves a Exchange Yequest. at the tim onsult with ed by Trusco Cap Trust B $ecurit?es and h wh°m they are advised to c DS rr?anag which henUnited States available up°n throng erations are of the broker OMMON ANO So T ust Bank asN rustee endonly by trustsu~ation b`J their op liance office C to investm a?rect re tints which govern °omp Are °p They locum Yoval from the crated lations. They open are not pec~aration banking re9 trust. The plan ar'd absent app s of a colleSe?curities. who is a registered rupiikely. term royal ?s registration as used by any°n that such app The sheets should not berience suggests Recent exp registered. ~ ~~- ~~- • c~ ~