2007 Trusco 2nd Quarter Fund Management Report k r I ~ x~ j'
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Trusco Capital Management, Inc.
Village of North Palm Beach
General Employees' Retirement Plan
Second Quarter 2007
Blake Myton
Investment Manager
Trusco Capital Management
407-237-5816
blake.myton @truscocapital.com
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Market Snapshot: 6/30/2007
S&P 500 ` 1503c35': 6.3 7:0' 7.0 20.6' 11.7 10.7 Lehman Aggregate 5.67!` -0.52 0:98" 0.98 6:1'2' 3.98: .4:48
Russell Top 200. 634:77 6.2 6.1 6.1 20.3 10.5 9.5 Treasury 4.99- -0.43 1.01 1.01 5.48 3.55. 4:10
Russell 1000 818.181 5.9 7.2 7.2 20.41 12.3 11.3 Government-Related 5.42' -0.23 1.25 1.25 5:99 3.96 4.38
Russell MidCap _ 1081.55! 5.3 9.9 9.9 20.8' 17.2 16.4 Corporate 6.01 -0.76 0.71 0.71 6.71 4.11 5.57
Russe112000 833.70; 4.4 6.4 6.4 16:4', 13.4 13.9 Securitized 5.96. -0.55 0.99 0.99 6:29 4.19.' 4:16
Russe11.3000 873.19 5.8 7.1 7.1 20.1 12.4 11.5 Lehman Government/Credit 5.44 -0.49 0.97 0.97 6:00' 3.84 4.70
MSCI EAFE 5012.76, 6.4' 10.7 10.7 27.0 22.2 17.7 Lehman Intermediate G/C 5.33 -0.15 1.44 1.44 5.76 3.43 4.15
MSCI EAFE SmalLCap 286.02". 4.2 11.6 11.6 25.2 24.8 24.3 Lehman High Yield 8.10 0.22 2.87 2.87 11.55' 9.03'.. 11.91
MSCI Emerging Markets 1059.69.! 15.0 17.6 17.6 45.0: 38.2 30.3 Lehman Municipal GO Index 4.29 -0.67 0.14 0.14 4.701. 4.56 4.61
~ ~ ' ~ ML U.S Govt. Corp., 1-5 5.18 0.40. 1.98 1.98 5.54 3.17 3.51.
Russell Top 200 Growth 670.53 6.9 6:9; 6.9' 18':8' 6.7 7.4 ML 1-3 U.S. Treasury 4.94. 0.70 2.13 2.13. 5:06! 2.91 2.77
Russell Top 200 Value 634.77 5.4 5.3( 5.3 21.8 14.4 11.6 ~
Russell 1.000 Growth 595.22 6.9 8.1 8.1 19.0' 8.7 9.3 3 Mo 4,82' 1.29. 2.56' 2.56 5:24 3.78 2.76
Russell 1000 Value 858.51.-, 4.9 6.2 6.2 21:9 16.1 13.3 6 Mo 4.86 1.34 2.62 2.62 5.36 3.79' 2.82
Russell MidCap Growth 453:19 6.7 11.0 11.0 19.7 14.5 15.4 2 Yr 4.8& 0.54 2.04 2.04 4.98 2.71 2:80
Russell MidCap Value 1210:23' 3.7 8.7 8.7' 22:1 19.5 17.2 5 Yr 4.94 -0.59 1.19! 1.19 5.15 2.22 327
Russe112000 Growth 431.41.' 6.7 9.3' 9.3 16.8 11.8 13.1 10 Yr 5.03 -1.90 -0.46' -0.46' 4.97 2.75 3.85
Russe112000 Value 1231,62 2.3 3.8 3.8 16:1 15.2 14.6 30 Yr 5.13. -3.04 -2.77 -2.77' 5:54 4.74 5.49
Russell 3000 Growth 485:42 6.8 8.2 8.2 18.8 9.0 9.6 ~ ~ ~ ~ '
Russe113000 Value 112722 4.7 6.0, 6.0 2i:3 16.0 13.4 3-Month 4.82 5.04 5'02; 5.02. 5:01' 1.36:" 1':64
•- ~ ~ ~
• . 6-Month 4.86 5.01 5.09 5.09 5.10 1.72 1.70
Consumer Discretionary 310c21" 3.7 2.9' 2.9 19:1 8.7 8.5 2-Years 4.88 4.58 4.81' 4.81' 5.16 2.72 2.73
Consumer Staples 278.44 2.7 4.9 4.9 14.8 8.2 6.3 S-Years 4.94 4.54 4.70 4.70 5:10' 3.81 4.06
Energy 529:71 14.8 17.2 17.2 28.0 30.6 21.9 10-Years 5.03' 4.65 4.71 4.71 ' 5.14 4.62 4.83
Financials 485.41 2.1 -0.8 -0.8 14.7 10.9 10.3
Health Care 409.Ot' 5.0 6.1 6.1 18.6 6.5 6.7 30-Years 5.13. 4.85 4.81: 4.81 5.19 5.31 5:52
• ~ ~ i ~
Industrials 354:50! 9.8 11.0! 11.0' 17.4 12.3 11.8
Information Technology 388:21' 10.4 9.3' 9.3 25.9 7.0 10.5 Citigroup WGBI (All maturities) (US 654.76` -0.95 0.19` 0.19 3:47` 3.63 6:54
Materials': 250.10' 7.1 16.7 16.7 29.4 17.6 14.5 JP Morgan EMBI Global 388.10 -1.42 0.94. 0.94. 11.68 11.98 14:09
Telecommunication Services 176.21 7.6 15.5 15.5 38.8 19.9. 14.3 ~ ~ ~ ~ ~ ~ ~ ~
Utilities 200.10 -0.4 8.9 8.9 26.1 22.6 14.5 Trade-Weighted Dollar (1973=100) 78.65"' -2.3 =3'.4' -3.4' -3:1' -3.4 -5;1
~ , , ~ Gold Futures 648.10' -2.2 2.0 2.0, 5.6, 18.2 15'.6
CS/T Equity Market Neutral Jun 07 2.3 5.2? 5.2 9.4' 8.9 g;0 Crude Oif Futures 70.68 7.3 .15.8 15.8 -4.4 24.0 21.3
CS/T Event Driven Jun 07 5.6 10.8 10.8 19.5' 15.0 14.0 DJ/AIG Commodity Futures 169.67 -1.3 1.9 1.9 -2,1 5.6 112
CS/T Long Short Equity Jun 07 5.7 9.7 9.7 19.& 14.3 12.3 TIPS 5.321 -0.76 1.73: 1.73' 3.99;, 3.80 6.03
CS/T Multi=Strategy. Jun. 07 4.4 8.3. 8.3 15.8 11.8 11.4 ~ ~ ~
FTSE NAREIT Equity Index 554119 -9.0 -5.9 -5.9 12.6 21.1 18.6 Consumer Price Index'(82-84=100) 207.8: 1.3 2:5' 2.5 2:7`. 3.2 `3:0
`Sources: FactSet, BLS
___-.
_.KK--
. -
Key Q2 2007 Themes:
Stronger Growth Dashed Hopes for Fed Ease
Current Fed Funds Target is 5.25% ? Stronger economic momentum, better than
- - - - expected first quarter corporate profits, and
Current Fed Funds Rafe=5.25% continued high levels of M&A activity helped
5.2, lift stocks to new highs in the second quarter.
5.1
Dec '07 Fed ? The yield on the 10-Yr. Treasury note rose
5.~~ Funds Futures above 5% in response to the economic strength
(Daily Close) ~
,.9, continued anti-inflation rhetoric by global central
banks and reduced expectations of Federal
4.8~ Reserve ease (See Chart).
4.7
? Core inflation fell back into the Fed's 1-2%
4.6, comfort zone, despite higher headline inflation
Jan Feb Mar Apr May Jun re orts and increased ener rices.
Sources: CBOT, FactSet p gY p
? Housing weakness continued as oversupply kept downward pressure on prices. Stress in the
subprime mortgage market intensified and raised concerns of contagion to other credit markets.
? Quality spreads widened during the quarter, particularly in less liquid markets.
? Large-Cap stocks outperformed Mid- and Small-Cap stocks, the Growth style outperformed
Value, and International equities slightly outperformed Domestic stocks.
? Bottom line: Stronger second quarter economic activity boosted stocks, while credit
markets struggled under the weight of heavy debt issuance, global central bank tightening
and increased credit quality concerns.
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Asset Allocation: Current Strategy
NEUTRAL
Maintaining moderate equity overweight.
U.S. Stock Market ~ ~ ~ ~ Valuations reasonable /attractive, profits
~ ' _ _$OndS ~ growth expectations more realistic, and
economic growth appears sustainable.
June 30, 2007 Large/Small - s ~ :'Small.: Attractive relative valuation. Flatter yield curve.
December 31, 2006 Neutral: Valuation, the shape of the yield
curve, and senti vor Value but the
GrowthNalue = ~ ® :Value. _-~ outperafo ~ t
. extended Value rmance and recen
. _
mixed performance tempers enthusiasm.
Moderate: Attractive valuations, improved
Domestic/Forei n : ~ Foreign : foreign growth prospects in Asia and
(developed
Europe. Projected weaker dollar.
Bond Quality . ~G1aV~3 ~ Subprime mortgage weakness raising
z,-~ market concerns about credit quality.
~ 0 0 0 0 ~ Remain underweight and shift higher on
~ ~ ~ ~ ~ quality spectrum despite expectations of
~ ~ ~ ~ continued economic expansion.
~ m m ~
? Economic growth expected to continue at asub-average pace following moderate Q2 rebound. Recession probability higher
but still low. Job growth is the key economic driver currently. We expect housing will continue to slow and the pace of
consumer spending will soften. CAPEX growth is likely to slow as well due to slower profits growth. Lower, more realistic
corporate earnings forecasts have reduced some valuation risks. Fed policy is on hold, but could eventually shift toward
ease if economic momentum slides significantly.
? Core inflation has declined recently, and is likely to trend somewhat lower this year.
? "Data-dependent" / "Forecast-dependent" -Economic volatility around slower growth rates will help generate continued
market volatility.
? Equity valuations are reasonable.
? Moderate overweight position in Equities emphasizing Large-Caps, and International. Balanced exposure between Growth
and Value styles.
? Bonds: Emphasize quality. Overweight high quality MBS and CMBS. Minimal High Yield weighting.
(1) Strategic/Tactical Asset Allocation models approved by Trusco Investment Policy Group (IPG) on 7/11/07.
2 Portfolio allocations are in accordance with IPG decisions and ma chan eat an time without notice.
~ J ~ iir~%,~ • • ~ • ~ ~ IJ rim !r'iJ~'-~ J
Q2 Business Strength within Slowing Trend
Real GDP Below 3.4% L-T Trend
t o.o
,,5 ? The trend, or momentum in U.S. economic
growth slowed in recent quarters, and was
5.o below the 3.4% long-term trend.
2.5
Real GDP Growth 0.0
(YOY%)
-2.5
-5.0
55 ~ X80 ~ ~ X85 ~ ~ ~ X90 ~ ~ ~ J5 ~ ~ X00 ~ SOS
Source: Bureau of Economic Analysis /Haver Analytics Business Activity Up in Q2 Helped by Exports
64
ISM New Export
Orders Index
? However, growth in the second quarter (3_,r,°, avg.) so
showed signs of moderate acceleration
following a very weak first quarter. 5s
52
? The growth acceleration was more
concentrated in the business sector due to IsM Manufacturing Index as
improved orders growth, particularly
exports orders. 44
40
97 98 99 00 01 02 03 04 OS 06 07
Source: Institute for Supply Management /Haver Analytics
~
lJ rim Jr r~~'~] ~
Consumers Fueled by Moderating Job Gains
Job & Wage Gains Positive but Moderating
4.5 ? The economy continued to generate
Nonfarm Payroll moderate job growth in the second quarter,
Growth (6-iNo. Avg. 4.0
ooos> though the pace of growth continued to
3s moderate.
? Job and wage gains are now the primary
3.o drivers of consumer spending, as the
impetus declines from previous tax cuts
Avg. Hourly 2.5 and mortgage rate drops.
Earnings Growth
(YOY%) 2.0
1.5
s7 9s s9 00 of o2 03 oa os oe o7 Spending Moderating
Source: Bureau of Labor Statistics /Haver Analytics
12
Auto Sales (SAAR)
? Consumer spending growth remained io
positive when adjusted for inflation, but
was well below the pace of recent years. - 8
? Softness was more evident in "big-ticket" s
items such as autos, where large, 4
discretionary purchases can easily be
dela ed if incomes or confidence come Retail sales Ex-
y Autos (YOY%) 2
under pressure.
0
97 98 99 00 01 02 03 04 OS 06 07
Sources: Autodata Corporation, Census Bureau /Haver Analytics
_
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- -
a J rj-~c~tiarel o ~ ~ ~ - r ~
x
_
_ g1Q?
r
¦ X ected.
U ~ ettng, as e p sing
,ts latest me e weak hou
oat ? th
~ ed (5 /4 / ~ despite
s rate unchang of rowth) cage.
ernight fed fund the Fed°s preferred rate g „tang
F ft the ov derate ( «somewhat elevated ditions was
eserve to oved and inflation con have
first half grO~I.h as mo sand rem eVentuatl
+ The Federal R din oth growth Fed may
characterized core inflation rea g ent of b to s out, the o hurry.
? They rovement ?n put the assessor are ?n
market. d modest imP e Fed's policy If their forecast but they n
The Fed note ?ontand continued gr°wthetime in the future,
E. No change'tn rates som 2~
~ B~TT~M SIN lower inflat tion, to lower June 2~.
more favor but not the opli a t
tion, Meeting Statemen
O to keep
the FOMC P~St decided today
arket Camrr~itCee 1 j4 percent.
a ~ The Federal open M rate at 5' oderate during
en been m
eeting ed its target for the federal fun s to have aing adjustment
Statem t
C post M today to keep Unchang rowth appears
FpNi is g despite the angseems likely to
Go~,rnittee decided Econon° this year, coming
canonry over
Market at 5-1t~ percent. the first half of
ds rate and the housing andor. Th moderate pace
The Federal open art of this year in at a
e federal fun Sfiaple e p
Rates tts target forth ed in the first sector is onga'rng• More tinue to
th n°
the housing Gan odestly in
is grow to eXpand at a uarlers, improved m inflation
Ecanom ent ee?rs likely q lion have
core infla ,~,aderatitle~4nstrated.
the adfustm economy s
ing quarters, son sustaine the
Growth Nevertheless, thwer com Reading ths. However, a be convincingly .
recent mop to utilization has
moderate pace ted• Although raved has Y h level of resource
at eleva hi h Imp ressures the hag olicy
somewh e the g p ressures. inapt P
remains oderate over tim , , those Moreover, sustain those p redom
inflation likely tom sustain potential to the Committee s p , erate as
Core seem the potential to will fail to bd on the
ressures In these circumstances, that inflation will dep
inflation p utilization has ains the risk ents and economic
of resource concern rem olicy adjustor
Inflation level inapt policy Future p both inflation
pressures. redom erase ected. the outlook for information.
the Committee's p as Unchanged exp incoming
stances, will fail to end on the evolution °f lied by
In these circum risk that inflation will dep growth, as imp ens Strategist
ains the ustments economic Senior Investor
le -
concern rem olicy adj inflation and vote. ti:
Future p both Unanimous Alan M• Gay
ected. information. Unanimous
of 1 ~ I =~C~,1`,
Risks exp the out
~°aGOm~ng
evolution
~ti
growth, as implied by ~ - - . T, r'--~ -
~ •
vote. - •
Vote Unanimous v
-. ~ ;=~1. ~ e ~ .
c< ~ r Pre
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Domestic Equity Markets in the 2nd Quarter, 2007
30%
Large-cap stocks 21.9°% 20,4% 19 0%
Olltpeif0l")ned 20~ _ o Drivers of Return
• Energy, Technology, Industrials, Materials,
both Mid- and to% 4.9% 5.9% 6'9% Telecom
Small-Caps in the Detractors from Return
second quaff°ter~. 2nd Quarter 2007 1 Year Ending 6/30/2007 Utilities, Financials, Consumer Staples,
Small-Caps now ? Russell 1000 Value Index ¦ Russell 1000 Core Index ~ Russell 1000 Growth Index Consumer Discretionary, Health Care
trail on a l2-
araonth basis
following an
extended period of
30%
OLCtpei,f0]"'Tna12Ce, 22.1% 20.8% 19.7%
20% . Drivers of Return
Eazer~ ° ° Energy, Industrials, Materials, Telecom,
a.Y~ 70% 3.7% 5.3% 6.7 Technology
Industrials, . Detractors from Return
o%
Materials, 2nd Quarter 2007 1 Year Ending 6/30/2007 Financials, Utilities, Consumer Staples,
Telecom and Tech Consumer Discretionary, Health Care
Russell Mid-Cap Value Index ¦ Russell Mid-Cap Core Index ? Russell Mid-Cap Growth Index
outperformed
across rnar-ket
caps, while
Financials and 3oi
Utilities lamed. ° . Drivers of Return
b b 20% 16.1 % 16.4% 16.8 /o
• Energy, Industrials, Materials, Telecom,
s 7% Technology
10 ° 4.4%
Growth 2.3 o Detractors from Return
outpeyforn2ed Utilities, Financials, Consumer Staples,
Value across all 2nd Quarter 2007 1 Year Ending 6/30/2007 Health Care, Consumer Discretionary
market caps. ~ 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. WSource: FactSet
- - - -
. .
~--~ _
-.~l _
International Economies in Q2, 2007
US Growth Slowing /ROW Trending Higher Inflation Higher in U.S. and U.K.
6.0% 6%
- U.S. - E.U. - Japan U. K.
5.0% - 5% - ------------------- -
1
3.0% --- F 4~'
2.0% - --
1 % - - -~ v ---- -- -
0.0% --i-i-i-m -i-r-i-i-,-rr-rT-r,-r-rr-r~-ri-
-1.0% -- -- ---
-U.S. ---E.U. -----Japan U.K. -1% -
-2.0% -
-2% -
-3'0°~ 00 01 02 03 04 O5 06 07
00 01 02 03 04 05 06 07
Real GDP Growth (YOY%) -Data through Q1 2007 Inflation (YOY%) -Data through May 2007
Global Tightening Continued in Q2
7.0 ? U.S. growth moderated in the first half, while growth in
-U.S. -E.U. -Japan u.K. major trading partners trended higher.
6.0 - J 1
? Inflation pressures have been at the top of EU targets,
5.0 - while Japanese inflation appears to moving away from
4.0 - r~ deflation. U.K. inflation trending higher.
3.0 -! ~ ? While the U.S. began raising rates sooner than many
of our trading partners, overseas policy response to
2'0 - the improved growth rates and worrisome inflation
i.o pressures has been significant.
o.o -~-~'~ ~ -~ - ? Expectations of continued growth overseas along with
steady U.S. policy could keep downward pressure on
-1'0 the dollar.
00 01 02 03 04 OS 06 07
Overnight Policy Rate -Data through June 2007
"Source: Haver Analytics
_ _- ---
s _ ~ sue'
International Equity Markets in the 2nd Quarter, 2007
30%
27.0%
International 20°~° International Large Cap Core
Lat^ge-Caps edged o Drivers of Return
out,Uontestic 1 s.4i Portugal, Germany, Finland, Canada,
Norway, New Zealand
Large-Caps in the . Detractors from Return
2't~ quarter, and 2nd Quarter 2007 7 Year Ending 6/30/2007 Japan, Ireland, Italy, Spain, Belgium
Emerging Market ¦MSCI EAFE Index
stocks rebounded.
30%
C~alZada and 2s.2i
International Small Cap
Portugal led the °
20 /o . Drivers of Return
developed •
markets while Portugal, Hong Kong, Australia,
y0 ~ - Singapore, Canada, France
,japafl, Ireland, ,.2, . Detractors from Return
and Spain trailed. 0% Spain, Japan, Austria, UK, Ireland
2nd Quarter 2007 1 Year Ending 6/30/2007
3 Of the 4 BRIO ?MSCI EAFE Index Small Cap Index
ColliZtl^ies (Brazil,
Russia, India, so°,°
China) led the 45.0_
40% International Emer m Market
Efnergirig g g
ao% . Drivers of Return
Markets index in
• Peru, Hungary, Venezuela, China, Brazil,
the second 20°~°- ,S.U.
Pakistan, India
quarter. Russia -lo%~ . Detractors from Return
trailed. o% Sri Lanka, Jordan, Russia, Morocco,
2nd Quarter 2007 1 Year Ending 6/30/2007 South Africa
? MSCI EAFE Emerging Mkts. Index
Past Performance is not indicative of future results. Please refer to appendix for full disclosure. *Sources: FactSet, MSCI
_
Jai (~J (J pP~l s r ~ ~ ~ G~ ~ ~ ~ ~ l~ T1~ ~r~.
~-,
Bond Markets i n Q2, 2007
US Treasury Benchmark Security Yields US Treasury Benchmark Returns
5.4 6.0 _ -.
4.0 -
5.2 -
2.0 - _
5.0 -_
~ _
¦_--
0.0
6/30/07 -2.0 -
4.6 -
3/31/07 -4.0
12/31/06 3 Mo 6 Mo 2 Yr 5 Yr 10 Yr 30 Yr
4.4 --
6/30/06 ¦ 3-Mos. 1.29 1.34 0.54 -0.59 -1.90 -3.04
4.2 ~ YTD 2.56 2.62 2.04 1.19 -0.46 -2.77
0 5 10 15 20 25 30 1-Y r. 5.24 5.36 4.98 5.15 4.97 5.54
US Sector Benchmark Returns ? Stronger second quarter economic reports,
12'0 continued central bank anti-inflation rhetoric, and
10.0 - higher yields in overseas markets pushed U.S.
8,0 _ bond yields significantly higher during the period.
Expectations of Fed rate cuts all but disappeared.
6.0 -
4.0 - ? The yield curve shifted higher across 2 to 10 year
maturities and returned to a slightly positive slope.
2.0 -
? Longer maturity securities were hurt most by the
0.0 - ~----- --r-~ rise in yields.
-2.0
Agg G/Cr ~ G/C Tr Agy Cred ABS MBS HiYd Mun ? All major Investment-Grade bond sectors fell, with
¦ 3-Mos. -0.52 -0.48 -0..14 -0.42 -0.11 -0.74 0.14 -0.50 0.22 -o.s2 Corporate and Securitized bonds weakest. High
6 Mos. 0.97 0.98 1.45 1.02 1.32 0.76 1.55 1.04 2.88 0.16 Yield generated positive returns for the quarter
'3 1-Y r. 6.11 6.02 5.76 5.49 5.75 6.72 5.60 6.38 11.56 4.52 despite a weak June.
`Sources: FactSet, Lehman Brothers
~r ~ _ _
_ z
Credit Risk Premiums Higher at End of 2nd Quarter
Investment Grade Credit Spreads ? The spread between US junk bonds and
government debt widened from a low of
100 241 by to over 300 by by quarter end.
Q s5 This represents the most rapid increase in
so - spreads since April 2005, though credit
s5 - spreads remained well below peak levels
Q so - in the last credit cycle.
75 .
? Non-investment grade bonds lost 1.61
70 during the month of June as investors
1/2/07 2/2/07 3/2/07 4/2/07 5/2/07 6/2/07
-Lehman Investment Grade Credit Index Yield withdrew monies out of these products.
? Leveraged buyouts have lead to
High Yield Credit Spreads immediate downgrades of what were
300 _ investment grade issues, for example
SLMA, Clear Channel.
2so
Q.
-° ? More than a dozen companies have
2so
postponed or restructured debt sales in
240 response to investor demand for stronger
N 220 covenant protections.
200 ? As investors begin to realistically price risk
yi2io7 2i2io7 si2io7 4i2io7 5i2io7 si2io7 into the fixed income markets, high quality
Lehman High Yield Corporate Bond Index Yield Spread bond portfolios should continue to benefit.
Data Source: Lehman Brothers
e ~ - d. r 'a ~ ' rj ~ J~
f ration
trng ~n
oaeCa
h~M
r owl
e~
. vera~
ub ~
t energy price rise ent ,lob
o s _
zo
and recen er Sentim
Weak housing andconsum
_ ending er strength.
At Risk dampening Spdriver ofi cOnsum eriod ofi
2 economic • • Fading growth ?s key roWth, after extended p ofi future
chile ~ , eeted curb pace
growth Ys exp Fading er rofits g likely to
overall Stow p e gains h cash positions. ed
to Ue ~r.dni Neutral verag ate hlg of F .
above-a desp and the possibility
rnorrteatatn 'is Fading ent th ore restrictwe
dt~.e to High inv~
~ domestic gr firm growth and m
slowt~tg a and W with
y~oasiti~, Weaker J tracts overseas• o, but ongoing
"'eon ~ rofits ease con oltcies
slowii~tb Weaker Neutral monetary p down below 2°I arkets
oderate bow recently achy a
ed 9
owth expected to
~rowtii. M Core inflation tight cap
job gains are the Core risks including concern. Slow
key d,.iyer" at olicy. this Year. 17 rate
Core Moderately remain a p later
p~.eseytt. Stable J Easing dower curb core ~nfilat?on ,14°IQ follow?ng continuing
Slightly hold for a year at 5 rhetoric
er Fed °n 4. Anti-inflation IikelY to keep
how 613010 olicy apprOachmay have to
olicy steady Restrictive J hikes since enden~ p Fed focus
Fed ~ softn erslsts•
doe to Moderately Neutral and °°data-dep ear term• ess p
~ i tahle Moderately volatile n rowth ifi recent th, o{~Set
Restrictive markets cyclical grow tial
o,rtcatit o ' Restrictive shift to costa+n+ng g Strong rESiden
irtflatto>t Yrsks~ vut as enjoY~ng osts. 2008 p orals.
ossi~le at Tax reVenu to war c ending prop
ease is P slower in part by addition new sp
oirtt t Neuulat?ve IikelY tO generate
s°~i
~ owtlt persists. Neutral Stim race
Neutral
to the accuracy on
~'1te ljar iS intormationa
dp Warranties acre {or eci{ic
rLmailt representation or o{ Writing, bout their sp
C~peCtetl t0 e any at the time rofessional a
w1lWartl affiliations maation available ent p
tiller tlo Trusco or any on inform ith their investor
~aressttri Dyer the Neither re based consult W r
ement, In0' rojections We advised to
ital Manag ments and p Investors are ~
rtear.terr?t. Trusco Gap investing• ~ j
clients of of future results. ~0 for future
d rospeCtive relied up°n ~ -
s are not inland'
may not be ~ . , f'} ; ! J .
as prepared for client past return •
ecific advice, ~
erspective W for individual use. I or sp
This P ai sis individua ent decisions ~
of intended as investor ~ ,;~I
merit o{ this an area Dais before mak'ng any
p na
~c,asnaeds an g _ ,
- ~Y ~ ~ .
r~,~M `J-J ( l r a
Historical Market Values
$6,929,252
$7,000,000 $6;750,894 $6,734,677
$6,439,701
$6,220,453
$5,931,174 $5,820,625 $5,963,294
$6, 000, 000
$5,585,178
$5, 000, 000
$4,303,742
$4, 000, 000
$3,000,000
$2,000,000
$1,000,000
1998 1999 2000 2001 2002 2003 2004 2005 2006 June-07
® Total Market Value
Period Ending June 30, 2007
~ - ~~n
Account Activity Summary
Beginning Portfolio Market Value 3/31/07 $ 5,747,204.38 Beginning Portfolio Market Value 6/30/06 $ 4,753,378.40
Portfolio Additions!Withdrawals Portfolio AdditionslWithdrawals
Additions $ 284,376.45 Additions $ 1,001,418.17
Withdrawals $ (61,655.90) Withdrawals $ (295,668.77)
Total AdditionsNVithdrawals $ 222,720.55 Total Additions!Withdrawals $ 705,749.40
Portfolio Earnings Portfolio Earnings
Net Accrued Income $ 864.87 Net Accrued Income $ 864.87
Interest and Dividends $ 2,288.37 Interest and Dividends $ 21,058.87
Gains/Losses $ 248,239.69 Gains/Losses $ 740,266.32
Total Portfolio Earnings $ 251,392.93 Total Portfolio Earnings $ 762,190.06
Ending Portfolio Market Value 6/30/07 $ 6,221,317.86 Ending Portfolio Market Value 6/30/07 $ 6,221,317.86
Net Change $ 474,113.48 Net Change $ 1,467,939.46
Period Ending June 30, 2007
Please refer to appendix for full disclosure. Source: First Rate investment performance system. Data includes accrued income
~ _ yi s
_ .
Performance Com arisons
p
Net of Fees Approximation 4.13% 5.56% 9.92% 14.28% 8.60% 7.41 % 6.92% 8.81
.Total Equity _ 6.98% 8 72% 15.76% 21.14% 12.33% 9,94% 8.58% 11.61%
High Grade Growth 7.05% 7.83% 12.57% 20.84% 8.05% 6.67% 8.22% 11.81%
Russell 1000 Growth Index 6.86% 8. i3% 14.53% 19.04% 8.70% 9.28% 4.39% 8.74%
S&P 500 Cifigroup Growth Index 6.63% 6.53% 12.54% 19.37% 8.31 % 8.57% 5.46% 10.10%
S&P 500 Index 6.28% 6.96% 14.12% 20.59% 11.67% 10.71 % 7.13% 11.09%
High Grade Relative Value** 7.47% 7.56% 14.92% 21.18% 14.31% 11.81% WA WA
Russell 1000 Value Index 4.93% 6.23% 14.73% 21.87% 15.93% 13.31 % 9.87% 13.14%
S&P 500 Cifigroup Value Index 5.95% 7.37% 15.66% 21.77% 15.09% 12.84% 8.38% 11.70%
S&P 500 Index 6.28% 6.96% 14.12% 20.59% 1 i.67% 10.71 % 7.13% 11.09%
High Grade Equity Income 6.96% 9.34% 17.85% 26.57% 16.15% 12.67% 8.71% 11.78%
Russell 1000 Value Index 4.93% 6.23% 14.73% 21.87% 15.93% 13.31 % 9.87% 13.14%
Internationallndex 6.76% 11.36% 23.56% 28.40% 22.40% 17.84% 8.97% 9.26%
MSCI-SAFE Index 6.40% 10.74% 22.21 % 27.00% 22.25% 17.73% 7.64% 8.13%
Mid Cap Equity 4.52% 9.76% 17.62% 17.57% 16.82% 12.66% 13.47% WA
Russell Mid Cap Index 5.30% 9.90% 18.33% 20.83% 17.16% 16.39% 11.86% 14.01
S&P Mid Cap 400 Index 5.84% 11.98% 19.80% 18.51 % 15.15% i4. i7% 13.37% 15.22%
Small Cap Growth*** 10.20% 12.57% 17.81% 11.38% 11.56% 13.56% N/A WA
Russe112000 Growth Index 6.69% 9.33% 18.92% 16.83% 11.76% 13.08% 5.28% N/A
_ _ _
Total Fixed lncotne -0.49% 0.00°T 1.82% 5.47% 3.55% 4:22%° 5.33% 5.81%
Hi h Grade Bond -0.53% ° ° o o °
g 0.83 1.77 5.43 3.72 4.38 6.05 6.40
Lehman Aggregate Bond -0.52% 0.97% 2.23% 6.12% 3.98% 4.48% 6.02% 6.42%
Period Ending June 30, 2007
*Inception is 146 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
~ ~ • ~ IJ r~ 1 ~ ~1
Portfolio Composition
Total Cash Total Equity
0.4% 65.1
Total Fixed
Income
34.4%
- ~ .
Tota! Portfolio $ 6,220 453 100.0%
Total Equity _ $ 4,052,620 65.1%
High Grade Growth $ 1,184,446 19.0%
High Grade Relative Value $ 1,122,857 18.1
High Grade Equity Income $ 246,579 4.0%
International Index $ 814,320 13.1
Mid Cap Equity $ 497,783 8.0%
Small Cap Growth $ 186,636 3.0%
_ _
Total Fixed Income $ 2,140,160 34.4%
Hi h Grade Bond. $ 2,1._:_
g 40,160 34.4%
_ _
Total Cash $27,672.98 0.4%
Please refer to appendix for full disclosure.
Period Ending June 30, 2007
® i i
~
r
Historical Asset AI location
100%
0.0%' 0.0%' 0.0% 0.0% 0.0% 0'.0% 1.1%' 2.0% 2.1%.:: 0.4%.
90% Fixed Income
36.1% 0 35.3% o 0 o and Cash
80% 38.0 /0 37.4 /0 40.1% 85.9° 34.1 /0 32.1 /o• 35.8% $4.4% (34.8%)
70%
° -.~ S.0%
60 /0 0 13 °o 0 0 _0 13.1%
9.1 /o
° ' ° Equities
0
50 /0 1, .0 ° . (65.2%)
40%
30%
20%
10%
0%
1998 1999 2000 2001 2002 2003 2004 2005 2006 Jun-07
¦ Large Cap ®Small/Mid Cap ? International ? Fixed Income ? Cash
Period Ending June 30, 2007
- - - -
- -
•
AdvlSer:Tnu~o Captul Managomenr.lnc. r a r a
s3o,oca Praxairlnc. 3.95 Fund Benchmark
Portfolio Manager sza.tas Hewleto-Packard Co. 3.45 Conumer Discretionary 91.3 I5 i 3.b55
+Jceltansam.CFA sES.ota ---- ----------------- ----------------
Portfolio managevsince ?047 _ Precis9on Castparss Corp. 3.1'5 Consumer Supies 91.435 9.b25
Re'o¢n Proacr&GambleCo, 3.9'5 Energy 4,12X, 7.45"»
Objective SsS,o:d'"-- PepsiColnc, 3.9n FnancialServices 91.435 7.41:0
The Funds¢eksapigtapprecixc;onbyemresanggxinnrilyinlarge: sia,o:a BocinaCo. 3.0% Heatd,Care 95.Q4~ iS.4a~
well-euablislced domestic corpaations. Yfae Fund is designed to
compFjwirhguia3elinas tfiacare based principally on Florida taws u•o'Q American Express Ca 3.05; Indusu9als 96.30% 12.895
govemirc5 dre invesunencaf murdoipa9 retiremerr[ plansior fire, Su Csco Systems lnc. 2.93; InformationTethnolap~+ 37.255 ?6.9'55
hce and rxl mmem errs cs. G13al97 SfSa192 4130
si
Po - E~ Sa'o P~'F~ General Electric Cu. ?.Sn Materials 3.4b5 3-045
¦ a[[wm ril[r Muf reireevoen[ or in[anr aM [at+W taim
Suitability Microsok Corp. 2.85 Telecom Senates 4.005 4.875
This Fund issuaible~rirn+estonwliowzntrhevalueoftheir ~mahareg.ophassamaomini6olF,{parhecCOlirresrrncr,;af$fO,OLt7jram l7siliries O.CtlS I~&3ro
investments m grow,bucdo not peed co recara micomeantl~ar 5F30iF7 w 4130101.
im+estmame The perjormanre quotedherein represems post performance.
ra
Aggregate Returns AverageAnnualTotal Returns , ,
Inception Lacesc I 3 5 14 Equiaies 900.0;
Date Quarter YTD Year Year Year Year Cash Equixilent 4.05
Fund 411440 ~ 7.05% 7.835 20.64.°5 &.455 b.b7'k &22:0
Russell94D0°Growthindex{benchmark) ~ GSb; ~ 8.1357 19.44.5' 8.705 4.285 4.3915
S&P 5041nd'ex ~ 6.28 4' b.965 ?0.545 I I.b6>; 10.715 7.13%
"`As ofJune 34.it^47 and v~bjea to change.
pos# performance does rtot guarantee future resufu.The performance data quoted represents pock performance and current returns may $e loweror hfgfrer.Tota! retarrr figums fncfude change
in unit pr6ce,reinvestment of dividends and capita! gains.The investment return and principoV value will fluRUate so that an investor's oaks, When redeemed, nROy be worth more or less thorn
the original cart. ,
~i~YN/%
S[anTrusc BankMemicer FDIC.®SunYrvst Banks, Inc ~T n s~ti~.~7 T~T
SunTruscisafedcallyregisoeredservficemarkafSunTrust83nkslnc. LJl"1111 ~IJ
-
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- ~ - -
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IrnestanentTemts & Index befinitions
CUSIP 490001273 A1p5a -3.T3'g Prico-ta-8aok Ratio a used to compare a stock's market r.>Due
Unit Value ~d7.83 Beta I.00 [oiabookxalue.The3u~hertheraGo.rhehighertheprenuurnrhe
Toul FundAssrts 527,531,743 R•Sguared by,s I markzt isvnllilr~ [o payfor a company afwvc its hard assets.
Sharpe Ratio 0.57 PMe-to-Earnings Ratio ~"PJE') is a valuate riao of a company's
Standardt?eviarion 7.T0°N wrrentunitpricetoittper-uniteamings,Thehlgher[hePlEraoa
- , ~ ~ ~ - t`As of une 311.2033 znd sv6 ect to than the mare the nsuiaet is willing w pay for each dollar of annual
Marko[ Czpicafiution {5611} 574.4{'oj ) 1 8r~ ezrni~tgs.
Price-to-Book 4.3 Alpha measures a fund's risk adjusted perforrrrance and repeesenu :
Prucr-to•Ezmings tI2 mo crailir,,t} 7T 1 thedifferencc becvreeti z funds attual perforaante and is expected
Rewrn an ESuity { I T mo tra~inzl 72.7; prrformance.given its level of risk as measured b'l 9ieta
Beta is a mearss of measuri~ [he+~olatiliry of a security or pordolio
of sewmies io ocatparisxl vrith dte niarlaet as awhole. A beta of I
indicates [[uc [he sewriry vn1l more with [he markcegrea[cr than -
indicates That it's mete volatile than ~e marlaet,and less than. f
indicates rliatRi less volatile than the matket
R-Squmrd measures the porxion of a fund's nwremenc tlm[ is
e
m e explained byrteovemena in the market rand helps indicate the
acwrary of a find's alpiiaand beta.
-0Of a M 4
e { Sharpe Ratio (s arisk-adjusted measure that is calwla[ed using
30% ~ _ o i standard deviation and excess rewm to tie¢ermine reward per unit
of risk. The higlt~ the Sharpe radathebeaer the fund's hisroripl
- ~ o ~- ac risk~a~usted performance.
e ~ _ e _ Sta,adord Reriaeion i3 a stauistical measurement of dispersan
IU.a ~ ~ ~ -~~' ~ ~ a ~ a - aboucanaretagewhichdepiushawvvidelpremurnsvariedovera
_ _ _ _ ~ ~ certanperiodafUmr.
D'.e ~ ~ Russell 1000° GrowUtfndex oBers invrswrs access w the
I { largetap growth segment of [he US, equity universe.The index
• 10°!< ~ ' measures the performance of those Russell t00D companies with
-20°f i ~ _ , { higherpoice-to-bcolc rotas and fdgherfornasted gromh values..
i Standard &Poor's 5001ndrx is an unmamged index of 500
-30'!o sefetted common stocks,mostof+n'hich are lined on ahe fJewYork
- Smtklxchange.andisameasureoftheUSsoockmuketas
¦ CollrttiveTrust Units Russell IL~0°• Growth Index s 5&P 5001ndex avdxile.Enveston amaircrestdireatj in an index.
Post performance does not guarantee fu#ure results. InYes6ment COIIt:21'tl$ -
Egairy securities {stocks} are more voladle algid carry mare risk than
odter formsof imesunersu.indudmg im°rsrme°ar in hi~ti ,;rode foced
income sewrit[rs.The unto value per unit of dris Fund will fluctuate
as thevalue oidle sewriaoes in the portfolio dianges:
Common and Coffettive Funds are administered hp SunTrust Bank os 7rustee and managed by 7n+sco CapitaP ltlanogement, inc. fo registered investment
adviser) in accordance with the lows a f t'ieargio and opplicable banking regulations. Thep are open to investment enfy by trusts for which Suni'rust BonJ, lnc.
serves as trustee arquofi
lied retirement plans which adoptthe terms of o wftective trust Tlrese fonds are not subject to dived regulation dry tJte United States
Securities and Exchange Commission and are exempt from registration ors securities. Fhe Plan and deciarotion documents which govern their operations are
ovailobfe upon request
daformotian contained herein sltoufd not be rePied uipon for anyr other purlboses including separate investment adviser orregistered fund investment advice.Fhe 1j1~~
information is believed to be accurate,bu# Content accuracp cannot be ensured. ~~a T~T
Piease camact pour designoted company representative fur further in formation, a.3 CTRa-IGG-0~6o~
DilO7
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' ' ~ • ~ . ~ ~ Comumar DiscredonacY 12.9~4X ~-----'
alp ._.-----~""`~ -------'a,er~' _._.- F-. ~
ConocoPM"tips ~ 6~ Consumer Sees 3338
+ t General Elects~t Co• Energy ~~~20
~yutnc. Szaooa ATg:71ac. FinancialSernces 11~36~ ~
Manxg 1.9~ yta6t'n Care 60.37%
AaYiser.'irusco Cap Capica6 Onn Financial CarP• V2.S~b _`.~.--^
stfAOe Exxon MobilCorp• ,,,,,_.._-•-- Indusv+als l5.?9~
Po6tfoiioMynager t.8~ tianTed>nologY -- ~
Informa
. ---
CitigrouP 9n:' 1.8% b50a'
. iynes to ~"Ce'~gQ7 f ianoo - . _ _ Flank oFWnerica Core Materials ---2.6~~
PosdO1' _ I,t3~ `felncam5erv~ca ?.46~
gfaot+ COa.,,a,Cor6!~ ~
n,M~asecostdary dt3nN7 1,7~ IJtilieies
Obje4ti'te , t 6136tU2 Intel Care.
Fundseekslangsem'caD'ail~~aricntedirrrewran ge
~ 8f,4NT bt30f02 Pkxer lnG
goaloF currencincomebY ~tocomPlY'~ ~~i~~s¢ncaF srmrsmr's al ~nocs and oPfuti ipnr
~~,76te Fand'ts desi~+ ~k<amt.ilar "'fi' P 0,~ from
arebasod Principally on ~
~fi~re~.Poute and ~rx1€'~re~~ ~itol Ir+pochcrica! imesement of $
reorcr~"yPla'ss 7f;c a4tMe g:aFh assumes an
~n+c resesrts part performance. 14~:RX
~~es, &!30197 to 6130tD7, noted herein rep
_ Fhe performance 4
~ vAto arc 6ootangFor aPi~l E9uiles
SUitabiliCy ;table For im'esto Returns.
This Fug is ~ wish 6ess valatiliq shah Are eAnnvalTotal Since Cas'6 E0.uiualent
aP~~n ~ten,;a1 and some isnorne 5 titan
. + ate Returns Year
chee4uiWmarkecasa.+'heie• A re 6 3 Ince~
Y~ --^.^"""..~ 6 tl 81.E
latest Year 11.61 I~
Inception Quaraer ~ 6~ ~ IIS6n
Date ~- 7.56"ro ~----~ 13.31in
74vro _.^--_.....- 1593% ~ g.62n ! uresinctudechange
bt3~ - ~ „ 2.1,67 ...-----^."" 90.71 ro ._._.-----"_.'_
6,.3h ~---"` 11h6~ ~.-------' or less thou
Fund A93% ~ 2tJ.59°S ~--^" a be lower or higher.7ataF reb ~~ih more
6,enchrnark) _------""~ 6.469; _.-~ ?t returns m Y when redeemed', may
Russe1160D0esYalue Index ( 6~ `--.----'"" a a~tance and curre
ormaace data quoted represents past p ~ uctuote so that or+ lnvestoa's snits,
5&P 5001adex 7 and subj+.+'r. w change.
of June 36.24Y~1 ture results.2'lte pa''f ent retain and priac'apal Yalue wild fd
ains.The invesurt
Past performance does not gua''anCee ~
in urtitprice,re6mtestment of ddvidendsand capital S
the arigirtal cast.
rapMUrn 3rom 6130f02,
Sun"fnnxliarks,inc ks,lnc ~~~~~1 r , t,
~
Sun'FruuBank.Member H)] a markaE Sun7rou Ban
SunTrusc is a federally rcg ~ ~ " . j , 1--~ _.~"`~-
;
raw • ,l
-,r.
r~.'~'ie JJ ~.J
~ • ~ • ~ ~
InvestmentTerms & Index Definititrta
Price~to-Book Ratio is Wised to compar¢ a scocki market value
to itsboo6cvalue.The]uglier the ratio;ttfe higher she premium the
market iswAling ro payfor a compmyabove its curd assets.
CUSIP 490001182 ACpha, 3,T5~ price-ro-EemingsRatio{"P!E'~isareluadonradootaeompanj's
llnitValuc 517.47 Beta 0.88 currem enit priceto leper--unit earnings. The higher the PJE ratio,
Toc7PundASSets 525,432,319 R-Sgyared 9?.24 themeneihemarfretavn7linytopafforeachdollaroEannual
Sharye Ratio 1.54 eunirgs-
Starr7ard liacviauon b.67~ Alpha measures eland's risk-adjustedp~(ormance and represtrm
Market CapitaGration {;bil} 58E 1{1s1 "AsoEJune 34.2D37 and' subject to change, theddfererxe between a fund's acuul periormastce and its expected
PR-e-co-Boa's ~ periormance.given is lerd ofrisk asmeasured by beci.
Prictico•Eamings { 12 trw stating} C 6.9 8ero is a meanzaf meawring the volatility of a seariay or portfolio
RewrnanEquiry(C2n»traili~gi 208X of securities in mrr~arisonwiththemarketasawhofe,.AbetaoFl
indipces that the seturiryvnl[ mo+E +r+ith the nrflaesgreater than
l in~wtes that its more vdatile drari mfie market, and less thus l
indK'acestha~a's lessrotaoie than the crotkei
R•Squared nseasures rise porroirn of a fundi movmterti that is
explzaned ~y maaemerrcs intlte rfiurrke= it~dcx.and helps indiatc the'
accuracyofa (end's alphaand bep.
-~', a Sharpe Ratio is a ris9ca~usted measure drat is cakulaced ufurg
~F0% I ~ I a ~ srzndard deviation and excessremrn to determine reward perunrt.
of risk The higher the Sharpe ratio. the tietcer the Eurxli historical
}0p„ ~ riskadjustedperEonnawe:
.-~`.. - ~ ~ ~-~„ W Standard neriotton is a statistical measurement of dispersion zbrwt
2B% _ ~'~- _ - an arxrage.whchdepiarhowwidelyrrwrnsvarieda+eracercaid
~ = x a- periodaftimr.
- x ~
10"~ _ N _ _ = ~ Russell fOQ11'DValue Index is comprised of the securitius in tire.
~ i ~ ~ RusseUl0001ndexwithaless•than-a~~er.#gegrcrNthoriernation.
8% ~ + Companiesin this index generally Flare Ian price-to•bocSc and
-loo price-to~carning ratias,hfglxr diddend yiejds,and lowerforecasted:.
grrnrth values.
-28"Je ( Standard & Poop's 300 Fndex a m unmanaged index 09500
selected common stocks, mast of whoch arc fated on the New
3Be/ ~ ! YerkStockExchxnge,andisam¢surcaEthe115.stockarzrlrer.asa
.- vrltoteammsrors cannot irrresc d-aealyin an Cndex.
¦ Gollecrire Trust llrSts ~a Russell CC00`~ Value Cndez ®S&P ~'0~ Index ImeStmettt CutleeYnS
Stocks are
mare vdatile and carry more risk and return potential
dun atheriornx tiF inresiments.The unit value per unit cf this Fund
Post performance does not gvamntee future results. vrill flucwateas thevaltse of thesecvriries in the partfdiorhanges. -
Value-tiised investments are subjea to tE,e risk tFwt the broad
nsarloet may not rtxagrrze their invinsi[value.
Common and' [affective Farads are administered fry SunTrust $ank as Trustee and managed by 7rusco CapitaE 141anagemenk Inc. (a registered investment
adviser) in accordance with the laws o{ Georgia and applicable honking regulations. They rare open to investment only by trusts for which SunTrust Bank,. Ent.
serves as trustee argaali~ied retirement plans which adopt the terms o f a catlecifve trust These lands are natsubject to direct regulation fry tike United States
Secarities and Exchange Commission and are exempt from registration as secarities. Fhe Plan and iDeclarafion documents which govern theft operetions are
available upon request.
In formotfan containedlterein should net be retied upon for any other purposes including separate inves#ment adviser or registered fund investment advice.The }I~t~"
in
formation rs believed to be accurate,, but content accumcycannot beensured. -~"
please coniac! your designoted'company representative for {urther inlFormation. ~~13 ~ 1
C'fR•HGRV-0607
Oi~07
'
_ _
- - - -
- =-
~~Q
• - - - - 3 - - - - . . • ~
Adviser:8usco Capi®1 Managemenc]nc ~ ~ ~ ~
S3D,oso GeneralElecuncfa. 3.2~ Fund Bench
~01`tfDifO Manager _ 5?5.457 Exxon Mobil Co 3.IX ~ mark
• M1ts Riddick CFA RS,o:° - 'P• Conurner Discretion b.69°6 &21 m
Portioliomanagersintel993 Ro,oo ------------------- -------------- Gtig"x'p1i't. ?.8~ ComurnerStzpfes 8.T6% T.49~
6ankofAmcricaCorp. 23~ Energy IA.2T;f, E3.16iu
1 ConocoPM'llips 2.3:, Faanciaf Services 24.3T~ 33.7SR
The fund seeks to provide apical appreciatian,and asa secondary Sto,o:° Cheran Corp, 23RD Heahh Care T,53`,S bk5g+
goal.turrenc3ncome,by inresdng primarily in dNidend~paying
seauriaes. The Fupd is designed co complywithguidelines ohac S$'a'0 Procter & Gamble Ca. ?.I'X Indusuials 15.04` i4-37a
arebascdprincipallyatFloridalsxsgdvemingcEieirrrcsuncncof $0 AT&Tlnc 21~ InkDm,atianTechnalo~ 9,95` 3.bl:x,
ar3ar~r arou: nranrm
nwrircipal rcdrarnentplans forfire,police and general ~o~nemmem Johraon & Johnson I ~k Materials S.SDS; 41F9~
em~az; - ¦ auwm rape Mdr reircrcpromr c6 n<ane aM vpeul gvm PGxer the I.B~ Telecom Services 'S.96~ b.51}So
Suitability ?kobaregJOpSassumesanlni~olhrp°d,crical;mrstmeraf$tD,C:h7farca Utilities T.41~ 5.498,
Tha Fund is wita6le for irn+esrors whoare lookinglor apical bF3Di9T to d130,i0T.
apprcriatan potential and wme incarrme with lessvala6lirythan the Fhe performance quoted'leereirt represents past performmrce.
equiq marlce¢ az a t+'hole
.r
AggregateRetarns AverageknnualTatalRetums Equines" 45.2%
Inception Latest 1 3 5 It7 Equivalent 4,0%
Date Qaarter YTD Year Year Year Year
Fund 3131193 ~'I c.9b~5 9.352; ^e6-57% 16-I5~ 12.6T':~ &71m
RusselE IDDO"Value index ~ 4-93m 6.23 28:BF~ 15.93h 13.31`X I 9.87k
~`As oFJune 30.1A7 cod' wbject ¢o change.
Past perfarmance does rtok guarantee future results.Tlte performance tiara quoted represents past perfornraace and current rewrres map be lower or higher.Totalreturn figures incdade change
in wait price, reirrvestment of dividends and capita! gains.The investment return and prlncfpol valae will j4uctuate sa that an investor's amts, wdten redeemed, may be worth more or less thott
the original cast.
SunTrust Bank MemSer FU1C.'v~ SunTeisst Banks.lnc. ~T T~T
SunTruscisafrdcrallyregisccredscrvxemarkofSvn3'rustBanks,lnc- V 4J
~i - _ .:St+
i:< -
~ ,
i~ _
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® _~~:-
Adviser;TruscoCapitalMariageman[,ln[.
5359.990 Fri S,P.A. Ldn Fumd Benchmark
Portfolio Mana ers 53za.lw
g Siemens Npa {regd} 1,5% Japan 21.98% 2Zad%
• CBad Deafdru,CfA 53oo.tloo 7ctai S,s, New 1.3% Gemstny 81.85% 14.83%
Portfolioatanagorsince1999 UnitediCir~dom 61.9x`% 6L49%
5159.tl09 ..- - _ _ _ NlianxSE 1.2%
Frame 61.10% 60.795;
•AndrevrAt6tins SItl9Atlp _--- Eanf~(~rmerlyYelxsAg} 1.2;5 I~ 4.15% 4.a8%
Portfolionranagersimde200$ ToyoaMotor L1k Soain 6.17% 6.05%
559,tlo9 Banca 5antandertemad FfisPxno I.I% Australia 3.98% 3.95%
Ob)eCErve 9a Netherlands 3.85% 3.88%
The fund seeks to ptovideirrvesrmeeic rcwlrs dnc coerespend co Uniuedito Iraliano I.lk
u;argr araaror uaar9r Beleium 1.93% I.9?%
thti aggregate price perlarmaxe of dae securities lnduded is tlu! Daimler CfarysterAG I.a%
P'lorganStanley{apidlrttemadondl Europe, Australasia. Far East ¦Atto~ue +r:~e with reimmenent m[inteme a:d trim gala: Sweden 1,81% 1.92%
Tdefonica I.0% Nprway 1.72% 1.69%
[E4PE}.GDPWe;ghced Index (Price Renvm}.
The oEarcgraph assumes on;ricnl txrp9t4M;cat irrermart a f $d00.00D (ram Sw6txerfand I.7a% 1.85%
Suitabili b130t97 [a 6P30f07. Austria 1.55% 1.59%
tY Grcecc 1.52% LSO%
This Fund is suimfole Eoraggrcssrre inrestorsx'iiowattt erpcssure Fhe performance quoted herein represents past performance. Denmadt 1.38"' I.38%
co foreigi markea and are willing mo aceepc the increased risks of Ireland I.I?,",' 1.18%
faregn imratiurg for the posvbiliry of ls6gher r¢~rra.
Portuza1 1.03% 0.98%
SI1are Class DesCCIPtIOn Raland 0.998; 1,07%
Shares areofEered ezdusively tofnancial instiwdons and Hon¢ SCong 0.49% 0.95%
intern[ed'¢riesfortheirovmaccam[aorfortlteacwunctof Sineaporr 0.58% 0.6?%
rustamersfarwhidttheyaaasfrduciaryagent,investmentadviser. NewZcaland 0.55% 0_SS%
orcuscadianandwhichconsistsofasseesofahonafidetrus[.ar- Other 0.12% 0_IO%
assets oEabs[sinessendrypossessingaax;dendfiadonnuunber. United5taces 0.00% 0.oQ%
ti
r Aggregate Returns Average Annual Total Returns
Inception latest 8 3 5 I,p Gquimes 98.4
Shares'` Date Quarter YTD Year Year Year Year ash Equivaler[ I.S%
1 Gtb,'49 ~ 6.T6n ~ N1.36'% I~' 28.40% 21.9P,b 67;84%' 8.F7%
MSCI EAFE Index GDP Weighted {Price Return} ~ 5.79% ~ 488% g 24.30% 20.6SX Id.43% 7,52%.
MSCI EAFE index G'DP Weighted {Total Return) y 7.08% q 6I 6?y, 1; 24.ISp 23.36K f8:45% 4.40%.
"As of Tune 3fl.2D0?' ar,3 suhjea to -thtn~e.
Past performance does notguamntee future resufts,The perjvrrnance data quoted represenu past performance and current returns may be lower or higher.TotaP return f figures inclade thunge
in share price, reinvestment of dividends ond•capitolgains7he investment return and princrpvV'va+ue w!!0 ftuctuote so that an imestos's shares, when redeemed, may be worth more or less than
the ariginol cost. Far per formartce data current to the most recent month end, visit our website of wwwsticiouicfunds.cam,
The expense ratio for I Shares is O.bi'%,
C1ass~c Fu~.ds P
Y
[ ~ u!n-
i _
,ULUev' TruuoCap2n1N~anagement,lnc. - ~ " [i=-
:oiic ~ -Zna;crs SiB.p;-0 Lfrlited5atesTreasNa 17.1
5[8,866
Perry7roisi United SraresTreas Ncs 7.5~
Porc(clio manager siince 2004 SIS.iee Uaited StacesTreas Ns 7,Swo
+Jchn Basco United SatesTreas Bds 7.3~
Portfolio man ersince2G07 SJO,Ma '
a8 lhiced ScrtesTreas Nu b.8°,6
v o I c;: c lkiced StatesTreas Ns b.3%
The Fund seeks ro provide ro;al rewrns by inresdng in a diversified 55,GE0
Fanrae n
Ixe 4.4°~
pgrtleCro cf fixed incanvc seturides issued yj US.compznies. The
Fund only imteSr3 en assets authorized by sire taws of Florida for Freddie t4ac 4.g°6
FGrefighters ?ensigns and' 19unicipaf Police Pensians. drla~Yr sr3orot ar3a,mr United SraECS7reas Ns 2.g%
r,%muM rarx ~ilh aimrimmt cf is<oac aod' apii>g gain, GE Compaary 2.e"'6
~~u..ti~;iiCr Tho svmr ~:o):b essuntes ore im;iat.FjpouhccroJ irrrcs;mont of Sd0;000 fmm
Th"ss Fund is suia5le for im'esmrs who want cg recei.'e9ncome df3pi9i` to dl30fr1T.
frgm their investment,ai.we71 as an. increase in dre value of the The performance quotedherein represents post performance.
im'e5[ment.
""r CiCiIC S:C;7IFG~ILiOR~'
-'. is ~ -.
_.c.i r: ~,..,tiss•.cj _ Aggregate Returns AverageAnnualTotafReturns 0-C 4,b~
anti Inception Latest I 3 5 [0 1.5 52,g;,
EC+~1ens IS'x Date Quarter YTQ Year Year Year Year
'2.r~Ngr e,c4!d b•Ct! 30.7%
s Evnd 7f74i59 •0.5s5S 0.63Y 5.43."e 3.72,e 4.38 b.05`5. B1.2,0 I2.2n
Merril3 Lynch GovemmenHCredit
it-Rated+Index .0.45 I.a'b% 5.80% 4.35Y, S.gg;n -
us.Trtuu7r s7~-w
_ _
a
~3x:h: A•rerage Cvupa~ 4:67'x.
"As of,June 30,7.007 and subject to change. Yield-ro-Maaricy 5.31
c~-~:t u.=iz`'~- Aast per fbrmaace does not guoraniee future resvPts. 7ne ~er~'ormonce data quoted represents past per formonce and current Duration 5.42Years
returns may be lower er higher, Fotal return figures irrtfude change in unit price, reinvestment of dividends and copita! goirts. b0eighted Jlverage r4awrity 6.3bYears
r ' . ` Po ';'o' I IThe investment return and princ'rpa! value wff! fluctuate so thoi on insnestor`s units,, when redeemed, maybe wartPx mare or less Avcras~e Crcd'a Radng AGY
:.u,scsx than the orfgfnalcost,.
Cuh EGU~akn;s 1,52x Ak 6.e9x
a s.tsx
aS.Trtaury agony iS.SBx
an;rtmm-s S; :SX
SunTrusc Bank, f`temEer Fx^r1C.'9 SunTrusr &anks.lnc. ~.r ~a •FTL~T TST
Sun7rusc is a kderallyregiscered sen're mark of 5onTrusx Banks.lnc. ~Jj'ly~ j lJ
a
E
a
_ - _ _ _
I a; s.rcenCr~rr~erns
CUSIP 95r'~gUt265 Bonds offers refatir.•ely stable lrrcl of income. although bona prices
UnitValue 534.94 will ffucwa[c proriding the po;etetizl for principal gain ar loss.
Total fund Assets 5031,880.725 lacernediace-zern>;h6fiergralicy bonds generally offer less rise
than longer-term 1»nds and a lower race of rexrn.
TF,e Fund is subject co the risk that principal value reacts in
opposition to the memmrnt of interes[ races a~ that a rising
in[crcst rate ernironmen[ inveasrs the risk o(loss of principal.
_ . .
!,.sex L•~;Inltlons
a- Merrill Lynch GovemmentiCredi3 A-Ratedt Gadex is a
157. ~ - ~ ,.~o°, M ~ widely recogn+xed composite made vp of the MerriO Lynch U.B.
e ~ o ~ _ ` _ _ ~ Gorernmen[ Index and the MerrilE Lynch U.S.Credic Index which
(Uic e I 4 ' ~ ° i'. indudcUS.govcrnmen~Treasuryandagencys~uricies,as~rll
' ~ ~ ~ as high grade corporate bonds. Irntsrors cannot in+es[ directly
e
~ _ ~ s ~ ~ in an index.
a
.e
~ ~ ~
_
o
ai ~ ! - i
-s i, ~
i
Collettire Invesunenc Trust . [°wrrill Lynch GarernmenrlCredic A-Faced3Index
Post performance does not guarantee future resuiu.
Common and CoQective Funds are administered by SunTrust Bank os Trustee and managed by Trusco capital h~Eanagement, dnc, (a registered investment
adviser) in accordance with the lows a f Georgia and appficabie banking regulations. They ere open to investment only by trusts for which SunTrust 8anl~ lnc.
serves as trustee orquafified retirement plans which adopt the terms o f a cofiective trust. These funds are not subject to direct regulation by the ~inited States
Securities and Exchange Commiszian and are exempt fmm registrmion as securities. The Plan and i~eclaratioa documenu which govam their opemtrons are
available upon regaest. ~If~r
fnformotion comtainedherein shoufdnot be rePied upon forany other purposes including aeparote investment adviser orregistered fond investment advice.The
information is befieved to be accurate, but content accuracy cannel be ensured. ~~TJ~'I"
Please concoct your designotedcampanyreptesentative for further in formation. CTR-aiG&0607
o~ro~
- L
m
Ir f.'~°'ri~..(^J IID~p4~ • ~ ~ Vii, ~ ~ rj~ ~ ~~.r~~-~
T1 >-_;..
Corporate Governance
? What is CGQ?
Corporate Governance Quotient (CGQ) is a rating system designed to assist
institutional investors in evaluating the quality of corporate boards and the impact
their governance practices may have on performance. The CGQ uses a
comprehensive set of objective and consistently applied criteria to each of the
companies rated.
? What companies are covered in the CGQ database?
• The database features corporate governance ratings on more than 5,500 U. S.
companies.
? How are CGQ scores determined?
Ratings are calculated on the basis of eight core categories:
> Board of Directors
> Audit -
> Charter and bylaw provisions
> Anti-takeover provisions
> Executive and director compensation
> Progressive practices
> Ownership
> Director education
• All scores are expressed on a relative basis compared to a company's industry and
index group. Period Ending June 30, 2007
Please refer to Appendix for full disclosure. I SOUI'Ce: ISS
~ ~®~h^T • ~ Vii, j . ~ 'r - _ r ~ ,.r, rJ
C e j 1 1- i I-
z.:''~._.~.~:".
High Grade Fund's Corporate Governance Ratings
20.0% 17.1
13.9%
22.3%
25.0% 17.2%
25.7%
?7.5
41.5
27.5% 22.3
40.0
Average Score 53.5 Average Score 56.5 Average Score 60.5
.Top Quartile - • • • • •
2nd Quartile ,6.7% zz.,%
18.1 % 37.9 %
3rd Quartile 30.4%
16.8%
Bottom Quartile
Average Score 57.3 23.2% Average Score 56.1
34.8%
• . • i • • • . • ~ • •
0.0
0.0 / 0.0
3.6
0.0
0.0
96.4 % 100.0
Average Score 93.9 Average Score 96.5
Please refer to Appendix for full disclosure. Period Ending June 30, 2007
+-
High Grade Fund's Corporate Governance Ratings
Bottom Quartile CGQ
• ~ • " • Costco Wholesale Corp. 2.50
Coach Inc. 14.60
Danaher Corp. 16.80
zo.o o Walgreen Co. 18.70
Automatic Data Processing Inc. 21.60
QUALCOMM Inc. 22.00
Thermo Fisher Scientific Inc. 22.40
zs.oi Stryker Corp. 24.40
ass r
z~s r
Bottom, Quartile CGQ
Top Quartile • ~ • " - Emerson Electric Co. 0.80
Citadel Broadcasting Corp. 1.10
Abercrombie & Fitch Co. (CIA) 3.70
2nd Quartile Wells Fargo & Co. 6.20
~ Medtronic Inc. 7.20
Eli Li Ily & Co. 9.90
3rd Quartile CBS Corp. CI B 10.70
,~.z=r Hershey Co. 15.20
zs.~i Wachovia Corp. 18.50
Bottom Quartile Jabil Circuit Inc. 19.90
Lennar Corp. (CIA) 22.80
Western Union Co. 23.20
40.0
_ _ Bottom Quartile CGQ
• • • • Mabm Integrated Products Inc. 0.40
Emerson Electric Co. 0.80
~s 9, Thor Industries Inc. 2.00
Brown-Forman Corp. B 2.10
zz.s ~ Apache Corp. 3.70
Bear Stearns Cos. 13.80
Southwest Airlines Co. 14.20
Zions Bancorp 15.40
Wachovia Corp. 18.50
OfficeMax Inc. 19.30
4,.si Jabil Circuit Inc. 19.90
zz s ~ United Parcel Service Inc. (CI B) 22.60
Leggett & Platt Inc. 24.20
Please refer to Appendix for full disclosure. Perlod Ending June 30, 2007
;I ~~;~rr~ ~;J ri to • • e~ • ll r~~ Jr~~i~~ I~l
1 _
High Grade Fund's Corporate Gove_ rnance Ratings
~ ~ Small Cap Bottom Quartile; ~ '.CGQ Mid Cap Bottom Quartile.,, ' CGQ
Palomar Medical Technologies Inc. 2.50 Paccar Inc. 1.80
,s.~~ AmeristarCasinos Inc. 2.70 Marshall & IlsleyCorp. 2.90
+s ~ ~ Skechers USA Inc. (CIA) 3.20 Telephone & Data Systems Inc. 3.20
3o.n^r, Genlyte Group Inc. 3.60 Abercrombie & Fitch Co. (CIA) 3.70
Bankrate Inc. 3.80 Applied Biosystems Group -Appler 4.70
Advanta Corp. (CI B) 4.70 BankUnited Financial Corp. (CIA) 4.80
BankUnited Financial Corp. (CIA) 4.80 Pepsi Bottling Group Inc. 6.40
Zoltek Cos. 5.30 LSI Corp.. 7.60
Silgan Holdings Inc. 8.00 Vishay Intertechnology Inc. 8.30
3h.9~ Immucor Inc. 10.00 Mohawk Industries Inc. 9.00
NetLogic Microsystems Inc. 12.50 Copart Inc. 9.30
_ _ _ Comtech Telecommunications Cort 12.70 Laboratory Corp. of America Holdin 9.70
~ ~ Charlotte Russe Holding Inc. 12.90 Celgene Corp. 10.30
zz, ~ Infocrossing Inc. 13.70 CBS Corp. CI B 10.70
HeaRhExtras Inc. 13.90 Universal Health Senrices Inc. (CI B; 11.00
37.9 a PrivateBancorp Inc. 14.80 Hershey Co. 15.20
Radiant Systems Inc. 15.80 J.M. Smucker Co. 19.00
,s.er ValueClick Inc. 17.30 Jabil Circuit Inc. 19.90
.Top Quartile Varian SemiconductorEquipmentl 21.60 Paychexlnc. 20.10
Trimble Navigation Ltd. 21.80 Thermo Fisher Scientific Inc. 22.40
Oceaneering International Inc. 23.30 Reynolds American Inc. 23.00
2nd Quartile Fossillnc. 23.60
z3.z ' Zumiez Inc. 24.70
3rd Quartile ~ . ~ _ ~ ~ ~
o.o~
Bottom Quartile 3.BYe
a.o i
HG Bond Bottom Quartile CGQ
_
ss.a i None
• • - • •
o.o r o o% HG Int. Bond Bottom Guartle _CGQ
None
0.9 r
, oo.o=r,
Please refer to Appendix for
full disclosure.
Period Ending June 30, 2007
~.~>.-~. i III
• ~ ~J ~ Job • • ~ . ~ ' Q^ ~ ~ I ~ - t] r'_~ l r~J
T .
~ ~ ~ T~ZC~SC®
E
I ~ ~ CAPITAL
t ~ Blake Myton
- i . ~ ~ $ MANAGEMENT Investment Manager
February 14, 2007
Jane Lerner
- Village of North Palm Beach
501 U.S. Highway 1
North Palm Beach, FL 33408
Dear Ms. Lerner:
Periodically, our auditors require that our clients provide written
acknowledgment as to the current investmenfi 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
I~d~ ~r i1~
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 INVESTMENT 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 Tilistees 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.
A. GUIDELINES
Although the equity portion of the portfolio shall not exceed 65°Io of the Fund's total
assets {at cost), there is no limit imposed on the fixed income or cash portions of the
Fund. It shall be the decision of the investment manager(s) to determine the most
appropriate asset nux (within these limits) to achieve the Fund's objectives.
1. EQUITY PORTFOLIO:
Any stock purchased for the portfolio (except mutual fund 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 65°10 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 ar 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 S~I~
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, 90°Io of the securities held in mutual or commingled
fiords 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 10% (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 fiilly 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 Government/Corporate 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
Govei7lment/Corporate 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.
.f
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%) 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 evaluated 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 Tnistees shall be notified.
{
Char an, Board of Tllistee
Village of North Palm Beach General Employees' Pension Plan
Date
t~~~
t
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compan?ed Y sendin pease
cal11.g00-STincluding possib and are distribu
or ac investing or es risk, its services,
receded before rospectus°estmg involy
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be found carefully o Capital M Ital Management" ation and
rospectus Trusc inform
the p advised by Trusco Cap anager with private fit. r-
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gTI ClassiL~ Which is not aff of a p 0 100%~ indicates a p
return The nigher the
M~pSUREI~IIENTS e realized oared °f 1. l
$eN?ces, een the averag stematic risk. class. r sq ortfolioX
S1OTHF•R a ual sy ropriate asset to Dints; an " ent or p e cess return.
MpT STpTIg-(IC e betty ation with q to an app ates real da p of an investor with the varied over a
as the differen0 inform relative roxim erformance associated the returns
efined ublic volatility, line app actual p
Ate- is d based up°nvestments regression redicts the return per unit °f ris icts how widely
strategy of an ow well a Model p excess
pass~Ve measure ensure of h sset Pricing , mutual fund, dep
l3~-'s a a statistical m Capital A Ratio, indicates the which, fora rice
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---g--~"'easures as rmance. ersion about an of calculation by
squared m , alsa known disp on the date
e Rat~° - easurement of
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Sharp eviation - a statistical m are for the er year. too m
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of time- S e ether y
eriod EF1NITlON vestment incom comp idea of wh
certain p ISTICS ~ the net'n aGzed• each s equity.
RpCTER dividing nded annu fives som the shareholder'
pORTFO~'l0 CHA alculated by comp d earnn 9s per Snare growta
ue
Th
s ratio g e it by
30 Da SEC Yield - is The figure ?s to its book d dividing may
that date. five-year reporte arket value er snare. et income an any bank, and
per snare on is the a stock s n' rn;ngs p a company s n uaranteed by
Growth - d to compare t immediately• its historical eab tak?n9 nor are they g
5 Year EpS is use any ent ban
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price-to- left if the - is the price oration's P the Fp1C or any other
would be trail's a measure of a core
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Return °n E the STI Classic Fund
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Important Disclosure Information
INVESTMENT PERFORMANCE
Past performance is not indicative of future results. Performance data related to accounts managed by Trusco represents returns gross of investment
management fees, unless otherwise stated as net-of-fees. See Trusco's Form ADV, Part II for a description of investment advisory fees. The
performance information reported herein may be for a variety of products which have different methods of presenting performance data, i.e. net of fees,
gross of fees, or a combination of these. This information should not be evaluated independent of or without reference to the investment advisory
agreement that more specifically addresses applicable investment advisory fees.
Fees have a compounding effect on cumulative results. For example, assume the account achieves a 10% annual return prior to the deduction of fees
each year for a period of ten years. If an annual fee of 0.5% of assets under management were charged each of the ten years, the resulting annual
average return net of fees would be reduced to 9.48%.
YIELD INFORMATION
Yield information more closely reflects the current earnings of the Fund than the total return.
In the absence of current fee waivers the yield would be reduced.
A SEC Yield relates aggregate net earnings of a fund to its aggregate net assets. In any given period a fund may distribute more or less than its actual
income.
SECTOR WEIGHTINGS AND PORTFOLIO CHARACTERISTICS
The sector weightings and portfolio characteristics are presented as of the date shown in the left-hand corner of this presentation, and may change
without notice. A complete list of sector weightings and individual security positions for any specific period are available upon request.
ECONOMIC AND MARKET REVIEW
This perspective was prepared for clients and prospective clients of Trusco Capital Management, Inc. Neither Trusco nor any affiliations make any
representation or warranties as to the accuracy or merit of this analysis for individual use. Comments and projections are based on information available
at the time of writing and believed to be accurate, are for informational purposes only, and may not be relied upon for future investing. Investors are
advised to consult with their investment professional about their specific circumstances before making any investment decisions.
COMMON AND COLLECTIVE FUNDS
Are operated by SunTrust Bank as Trustee and managed by Trusco Capital Management, in accordance with the laws of Georgia and applicable
banking regulations. They open to investment only by trusts for which SunTrust Bank serves as trustee or qualified retirement plans which adopt the
terms of a collective trust. They are not subject to direct regulation by the United States Securities and Exchange Commission and are exempt from
registration as securities. The Plan and Declaration documents which govern their operations are available upon request.
The sheets should not be used by anyone who is a registered rep absent approval from the compliance office of the broker through whom they are
registered. Recent experience suggests that such approval is unlikely.
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