City of Hallandale Beach DB Plan Update June 16, 2014.

City of Hallandale Beach

DB Plan Update

June 16, 2014

Economy and Market Review

• The very subdued headline market returns for the first quarter of 2014 masked several divergent themes and mixed signals for global equity investors

• In the U.S., the S&P 500 Index gained 1.81% for the quarter

• International markets (as measured by the MSCI All Country World (ex-U.S.) Index) gained 0.51% during the first quarter of 2014

– International developed markets (as measured by the MSCI EAFE Index) rose 0.66% for the quarter

– International emerging markets (as measured by the MSCI Emerging Markets Index) lost 0.43% for the quarter

• Comments during the March U.S. Federal Reserve (Fed) meeting caused some short-term volatility with Treasury yields

– The 10-year Treasury yield finished the quarter at 2.72%, down 31 basis points for the quarter

– The 2-year Treasury yield finished the quarter at 0.42%, up 4 basis points for the quarter

Recap 1st Quarter 2014

Indexes are not available for direct investment.


• U.S. economic data is improving

• Economic growth from China is fading

• Japan adapting to sales tax hike

• Commodity super cycle is over

• Global decoupling occurs

Recap 1st Quarter 2014


Headwinds

Legislative & Fed action impact

Geopolitical turmoil

Trade deficit

Structural headwinds in China

Tailwinds & Headwinds – First Quarter 2014

Tailwinds

Employment improving

Capital spending prepares to ramp up

Housing recovery continues

State budgets are in better shape

• Pent-up demand from U.S. consumers should emerge

• Fed normalizing monetary policy

• Solid prospects for growth

• Emerging nations face headwinds

• Skepticism has grown

Economy and Market ReviewOutlook for the Future

A jump in consumer & capital spending, an uptick in job growth, and the anticipation of a fading of extraordinary policy accommodation should put interest rates in a clear uptrend by year-end.

Our forecast for Treasury yields at the end of 2014 is as follows:

– A Federal Funds Rate target of 0% to 0.25%

– A 10-year Treasury Rate of 3.50%

– A 2-year Treasury Rate of 1.00%

Outlook for the Future


Asset Class Review Three Months Ending March 31, 2014

Fixed Income Real EstateU.S. Equity Int’l Equity

Source: Principal Global Investors Returns are annualized. Indices are unmanaged and do not take into account fees, expenses and transaction costs. Indices are not available for direct investment. Past performance is not a reliable indicator of future performance.

Asset Class Review

Asset Class Review One Year Ending March 31, 2014



Asset Class Review Three Years Ending March 31, 2014



Asset Class Review Five Years Ending March 31, 2014



Asset Class Review Ten Years Ending March 31, 2014



January 1, 1999 – December 31, 2013

Past performance is not a reliable indicator of future performance.

Asset Class Performance

.

Large-cap growth stocks are represented by the annual total returns of the Russell 1000® Growth Index. Large-cap value stocks are represented by the annual total returns of the Russell 1000 ® Value Index. Mid-cap growth stocks are represented by the annual total returns of the Russell Midcap® Growth Index. Mid-cap value stocks are represented by the annual total returns of the Russell Midcap® Value Index. Small-cap growth stocks are represented by the annual total returns of the Russell 2000® Growth Index. Small-cap value stocks are represented by the annual total returns of the Russell 2000® Value Index. International stocks are represented by the annual total returns of the MSCI EAFE® Index. Emerging stocks are represented by the annual total returns of the MSCI Emerging Index. Core bonds are represented by the annual total returns of the Barclay’s Capital Aggregate Index. High Yield bonds

are represented by the annual total returns of the Barclay’s Capital US High Yield Index. Real Estate securities are represented by the annual total returns of the NAREIT Index. Direct Property is represented by the annual total returns of the NCREIF Open End Property Index. The indexes are unmanaged and do not take transaction charges into consideration. It is not possible to invest directly in an index.

Important Information

Investors should carefully consider a mutual fund’s investment objectives, risks, charges, and expenses prior to investing. A prospectus, or summary prospectus if available, containing this and other information can be obtained by contacting a financial professional, visiting principal.com, or calling 1-800-547-7754. Read the prospectus carefully before investing.

Insurance products and plan administrative services are provided by Principal Life Insurance Company a member of the Principal Financial Group® (The Principal®), Des Moines, IA 50392.

Dow Jones Industrial Average is computed by summing the prices of the stocks of 30 companies and then dividing that total by an adjusted value – one which has been adjusted over the years to account for the effect of stock splits on the prices of the 30 companies. Dividends are reinvested to reflect the actual performance of the underlying securities.

Barclays High Yield Index is designed to measure the performance of all domestic and yankee bonds that have a minimum of $100 million outstanding and a maturity of greater than one year.

Barclays US High Yield Index is a total return performance benchmark for fixed income securities having a maximum quality rating of Ba1 (as determined by Moody’s Investors Service).

NCREIF Property Index, a private real estate market proxy that is based on property level returns (after properly level expenses).

MSCI US REIT Index is a capitalization-weighted benchmark index of most actively traded Real Estate Investment Trusts (REITs), designed to measure real estate performance.

S&P 500 Stock Index is a market capitalization-weighted index of 500 widely held stocks often used as a proxy for the stock market.

Russell 2000 Index consists of the smallest 2,000 companies in the Russell 3000 Index, representing approximately 7% of the Russell 3000 total market capitalization.

MSCI EAFE Index (EAFE refers to Europe, Australasia, and Far East) is a widely accepted as a benchmark for international stock performance, the EAFE Index is an aggregate of 21 individual country indexes.

MSCI Emerging Markets is an index composed of companies representative of the market structure of 25 emerging market countries in Europe, Latin America, and the Pacific Basin.

MSCI All Country World Index (ACWI) Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. As of May 27, 2010 the MSCI ACWI consisted of 45 country indices comprising 24 developed and 21 emerging market country indices.


Russell 1000 Index consists of the 1,000 largest companies within the Russell 3000 index. Also know as the Market Oriented Index, because it represents the group of stocks from which most active money managers choose.

Russell MidCap is an index that measures the performance of the 800 smallest companies in the Russell 1000 index, which represents approximately 24% of the total market capitalization of the Russell 1000 Index.

Russell 2000 Index consists of the smallest 2,000 companies in the Russell 3000 Index, representing approximately 7% of the Russell 3000 total market capitalization.

Russell 3000 Value Index is an index that contains those securities in the Russell 3000 Index with a less than average growth orientation. An investment in small-cap stock is subject to more fluctuation in value than investments in stocks of larger, more stable companies.

Russell 3000 Index consists of the largest 3,000 companies registered in the United States and its territories, which represents approximately 98% of the U.S. equity market.

Russell 3000 Growth Index is an index that contains those securities in the Russell 3000 Index with a greater than average growth orientation.

MSCI Latin America Index is designed to measure equity performance in Latin America. It consists of the following seven country indexes: Argentina, Brazil, Chile, Colombia, Mexico, Peru, and Venezuela.

MSCI Europe Index is designed to measure developed market equity performance in Europe. It consists of the following 16 developed country indexes: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom.

MSCI AC Far East ex-Japan Index is designed to measure equity performance in the Far East, excluding Japan. It consists of the following nine developed and emerging market country indexes: China, Hong Kong, Indonesia, Korea, Malaysia, Philippines, Singapore Free, Taiwan, and Thailand.

MSCI Japan Index is designed to measure equity performance in Japan.

Barclays Global Aggregate Index is designed to measure fixed income performance of different regions around the world. It is comprised of the following Lehman Brothers indexes: U.S. Aggregate, Pan-European Aggregate, Global Treasury (ex-U.S. and European Government securities), Eurodollar, U.S. Investment-Grade 144A, and Asian-Pacific Aggregate.

Barclays Aggregate Bond Index is designed to measure the performance of approximately 6,000 publicly traded bonds having an approximate average of maturity of 10 years, including U.S. Government, mortgage-backed, corporate, and yankee bonds.

Barclays Mortgage-Backed (MBS) Index includes 15- and 30-year fixed-rate securities backed by mortgage pools of the Government Mortgage Association (GNMA).

Barclays Commercial Mortgage-Backed Securities (CMBS) Index has been designed to measure the performance of the CMBS market. It consists of four components: CMBS Investment-Grade Index, CMBS High-Yield Index, CMBS Interest-Only Index, and Commercial Conduit Whole Loan Index.

Barclays U.S. Government/Mortgage Index is a broad based, unmanaged index comprised of U.S. government Treasury securities and agency mortgage-backed securities.

MSCI World NDTR D Index includes all 23 MSCI developed market countries. The "ND" indicates that the index is listed in U.S. dollars, with net dividends reinvested.

No investment strategy, such as diversification or asset allocation, can guarantee a profit or protect against loss in periods of declining value.


No part of this presentation may be reproduced or used in any form or by any means, electronic or mechanical, including photocopying or recording, or by any information storage and retrieval system, without prior written consent from the Principal Financial Group.

The information in this document has been derived from sources believed to be accurate as of March 2014. Subject to any contrary provisions of applicable law, no company in the Principal Financial Group® nor any of their employees or directors gives any warranty of reliability or accuracy nor accepts any responsibility arising in any other way (including by reason of negligence) for errors or omissions herein. Information derived from sources other than Principal Global Investors or its affiliates is believed to be reliable; however, we do not independently verify or guarantee its accuracy or validity.

The information in this document contains general information only on investment matters and should not be considered as a comprehensive statement on any matter and should not be relied upon as such nor should it be construed as specific investment advice, an opinion or recommendation. The general information it contains does not take account of any investor's investment objectives, particular needs or financial situation, nor should it be relied upon in any way as a forecast or guarantee of future events regarding a particular investment or the markets in general. All expressions of opinion and predictions in this document are subject to change without notice. Any reference to a specific investment or security does not constitute a recommendation to buy, sell, or hold such investment or security.

Subject to any contrary provisions of applicable law, no company in the Principal Financial Group nor any of their employees or directors gives any warranty of reliability or accuracy nor accepts any responsibility arising in any other way (including by reason of negligence) for errors or omissions in this document.

All figures shown in this document are in U.S. dollars unless otherwise noted.

This document is issued in The United States by Principal Global Investors, LLC, which is regulated by the U.S. Securities and Exchange Commission.

Principal Global Investors is the asset management arm of the Principal Financial Group ® (The Principal ®)¹ and includes the asset management operations of the following subsidiaries of The Principal: Principal Global Investors, LLC; Principal Real Estate Investors, LLC; Principal Enterprise Capital, LLC; Liongate Capital Management LLP; Spectrum Asset Management, Inc.; Post Advisory Group, LLC; Columbus Circle Investors; Edge Asset Management, Inc.; Morley Financial Services Inc.; Finisterre Capital, LLP; Origin Asset Management, LLP; Principal Global Investors (Europe) Limited; Principal Global Investors (Singapore) Ltd.; Principal Global Investors (Australia) Ltd.; Principal Global Investors (Japan) Ltd.; Principal Global Investors (Hong Kong) Ltd.; CIMB-Principal Islamic Asset Management Sdn. Bhd.; and the majority owned affiliates of Principal International, Inc. Assets under management includes assets managed by investment professionals of Principal Global Investors under dual employee arrangements with other subsidiaries of The Principal and assets managed in accordance with investment advice provided by Principal Global Investors through the delivery of a model.

¹"The Principal Financial Group" and "The Principal" are registered trademarks of Principal Financial Services, Inc., a member of the Principal Financial Group.

Sub-Advised Investment Options include Principal Funds, Inc. and Principal Life Separate Accounts. Separate Accounts are available through a group annuity contract with the Principal Life Insurance Company. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Securities are offered through Princor Financial Services Corporation, 800-547-7754, member SIPC and/or independent broker/dealers. Securities sold by a Princor® Registered Representative are offered through Princor. Principal Funds Distributor, Princor, and Principal Life are members of the Principal Financial Group, Des Moines, IA 50392. Certain investment options may not be available in all states or U.S. commonwealths.

Investment options are subject to investment risk. Shares or unit values will fluctuate and investments, when redeemed, may be worth more or less than their original cost.


Copyright © 2014 Principal Financial Services, Inc.

t140415041o – 04/2014

General Employee Plan – Target Allocation By Asset Class

7

General Employee Plan – Target Allocation By Investment Option

8

General Employee Plan – Target Allocation By Investment Option

9

General Employee Plan – Asset Allocation By Asset Class

10

General Employee Plan – Asset Allocation By Investment Option

11


12


13

General Employee Plan International Exposure

14

Investment Option by Style Box

15


16

General Employee Plan Performance – 3/31/2013

17

Professional/Management Plan – Target Allocation by Asset Class

18

Professional/Management Plan – Target Allocation By Investment Option

19

Professional/Management Plan – Target Allocation By Investment Option

20

Professional/Management Plan – Asset Allocation by Asset Class

21

Professional/Management Plan – Asset Allocation By Investment Option

22


23


24

35

Professional/Management PlanInternational Exposure

25


15


16

Professional/Management Plan Performance – 3/31/2014

28

Date post:	16-Jan-2016
Category:	Documents
Upload:	lorraine-owens
View:	216 times
Download:	0 times

City of Hallandale Beach DB Plan Update June 16, 2014.

Documents