Santa Barbara County Employees' Retirement System...Public real estate, as measured by the Wilshire...

Santa Barbara CountyEmployees' Retirement SystemInvestment Performance Analysis

Period Ended: January 31, 2017

nCapital Markets Review As of January 31, 2017

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Economic Indicators Jan-17 Dec-16 Jan-16 10 Yr 20 YrFederal Funds Rate (%) 0.56 ▲ 0.55 0.29 0.79 2.33Breakeven Inflation - 1 Year (%) 2.17 ▲ 1.27 0.84 0.88 N/ABreakeven Inflation - 5 Year (%) 2.03 ▲ 1.86 1.20 1.69 N/ABreakeven Inflation - 10 Year (%) 2.06 ▲ 1.97 1.40 2.01 N/ABreakeven Inflation - 30 Year (%) 2.15 ▲ 2.10 1.61 2.23 N/ABloomberg US Agg Bond Index - Yield (%) 2.61 ─ 2.61 2.34 3.05 4.31Bloomberg US Agg Bond Index - OAS (%) 0.44 ▲ 0.43 0.63 0.73 0.67Bloomberg US Agg Credit Index - OAS (%) 1.16 ▼ 1.18 1.81 1.72 1.52Bloomberg US Corp: HY Index - OAS (%) 3.88 ▼ 4.09 7.34 6.07 5.76Capacity Utilization (%) 75.35 ▼ 75.63 75.72 76.04 77.78 Unemployment Rate (%) 4.8 ▲ 4.7 4.9 7.0 6.0 PMI - Manufacturing (%) 56.0 ▲ 54.5 48.6 52.0 52.2 Baltic Dry Index - Shipping 961 ▼ 1,204 475 2,474 2,297Consumer Conf (Conf Board) 111.80 ▼ 113.30 97.80 74.72 93.11CPI YoY (Headline) (%) 2.5 ▲ 2.1 1.4 1.8 2.2CPI YoY (Core) (%) 2.3 ▲ 2.2 2.2 1.9 2.0PPI YoY (%) 3.0 ▲ 1.9 -1.2 1.9 2.0M2 YoY (%) 6.7 ▼ 7.1 6.2 6.5 6.4US Dollar Total Weighted Index 93.17 ▼ 95.76 95.38 78.75 86.88WTI Crude Oil per Barrel ($) 53 ▼ 54 34 79 56Gold Spot per Oz ($) 1,211 ▲ 1,152 1,118 1,214 788

NCREIF performance is reported quarterly; MTD and QTD returns are shown as "N/A" on interim-quarter months and until available. Data shown is as of most recent quarter-end.Treasury data courtesy of the US Department of the Treasury. Economic data courtesy of Bloomberg Professional Service.Breakeven Inflation does not have 20 years of history; therefore, its 20-year average is shown as "N/A."

2016 quarter-end US GDP data released in January showed a slowdown in US economic growth, with the US economy growing 1.9% during the 4th quarter of 2016

While domestic markets continued the post-election rally with modest returns during the month, international markets outperformed partly due to a drop in the relative

Equity markets posted positive returns in January as the S&P 500 (Cap Wtd) Index returned 1.90% and the MSCI EAFE (Net) Index returned 2.90%.

The Bloomberg US Aggregate Bond Index returned 0.20% in January, performing in line with the 0.20% return by the Bloomberg US Treasury Intermediate Term Index. International fixed income markets returned 1.43%, as measured by the Citi Non-US World Gov't Bond Index.Public real estate, as measured by the Wilshire US REIT Index, returned -0.69% in January and 10.48% over the trailing five-year period.The Cambridge US Private Equity Index returned 8.66% for the trailing one-year period and 13.14% for the trailing five-year period ending September 2016.Absolute return strategies, as measured by the HFRI FOF Comp Index, returned 0.70% for the month and 3.99% over the trailing one-year period.Crude oil's price fell by 1.69% during the month, but has increased by 57.08% YoY.

value of the US dollar. The US Dollar Weighted Index ended the month at $93.17, down from $95.76 in December.

relative to 3.5% during the prior quarter.

Emerging markets returned 5.47% as measured by the MSCI EM (Net) Index.

4.7% to 4.8% as the US workforce expanded.

General Market CommentaryThe US added 227,000 non-farm jobs in January, outpacing economists' projections of 175,000. However, the unemployement rate increased from

Page 1

nCapital Markets Review As of January 31, 2017

Market Performance (%) MTD QTD CYTD 1 Yr 3 Yr 5 Yr 7 Yr 10 Yr Trsy Yld Curve (%) Jan-17 Dec-16 Jan-16 Jan-15 Jan-14

S&P 500 (Cap Wtd) 1.90 1.90 1.90 20.04 10.85 14.09 13.73 6.99 3 Month 0.52 0.51 0.33 0.02 0.02

Russell 2000 0.39 0.39 0.39 33.53 7.89 13.00 13.91 6.93 6 Month 0.64 0.62 0.43 0.07 0.06

MSCI EAFE (Net) 2.90 2.90 2.90 12.03 0.71 6.04 4.91 0.97 1 Year 0.84 0.85 0.47 0.18 0.10

MSCI EAFE SC (Net) 3.53 3.53 3.53 14.82 3.82 9.57 8.51 3.09 3 Year 1.46 1.47 0.97 0.77 0.69

MSCI EM (Net) 5.47 5.47 5.47 25.41 1.44 0.19 2.07 2.49 5 Year 1.90 1.93 1.33 1.18 1.49

Bloomberg US Agg Bond 0.20 0.20 0.20 1.45 2.59 2.09 3.43 4.37 7 Year 2.24 2.25 1.67 1.49 2.13

BofA ML 3 Mo US T-Bill 0.04 0.04 0.04 0.37 0.15 0.13 0.12 0.76 10 Year 2.45 2.45 1.94 1.68 2.67

NCREIF ODCE (Gross) N/A N/A N/A 8.77 12.07 12.21 13.33 5.82 20 Year 2.78 2.79 2.36 2.04 3.35

Wilshire US REIT -0.69 -0.69 -0.69 10.88 12.09 10.48 14.68 3.83 30 Year 3.05 3.06 2.75 2.25 3.61HFRI FOF Comp Index 0.70 0.70 0.70 3.99 1.57 3.20 2.54 1.25

Bloomberg Cmdty Index (TR) 0.14 0.14 0.14 13.81 -11.31 -9.38 -5.28 -5.58

NCREIF performance is reported quarterly; MTD and QTD returns are shown as "N/A" on interim-quarter months and until available. Data shown is as of most recent quarter-end.Treasury data courtesy of the US Department of the Treasury. Economic data courtesy of Bloomberg Professional Service.Breakeven Inflation does not have 20 years of history; therefore, its 20-year average is shown as "N/A."

Treasury Yield Curve (%)

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

3 M 6 M 1 Y 3 Y 5 Y 7 Y 10 Y 20 Y 30 Y

1/31/2017 12/30/2016 1/29/2016 1/30/2015 1/31/2014

Page 2

As of January 31, 2017

Market Trend Portfolio Effect

The market continued to react positively to President Trump's plans for tax cuts and higher infrastructure spending. Large cap stocks outperformed small cap stocks

Composite underperformance was driven by underperformance from the low volatility managers (Analytic, London Company and RhumbLine). Low volatility managers tend to underperform in up markets due to lower average market capitalization.

Growth stocks outperformed value stocks. Driven by outperformance from the technology sector and underperformance from energy and telecom.

The growth managers (Artisan MidCap and RHJ Small Cap) had the highest absolute performance, returning 4.69% and 3.42%, respectively.

A weakening U.S. dollar benefitted most international equity markets, particularly emerging markets which delivered strong returns.

The three highest absolute returns came from the emerging market managers (BlackRock, DFA and RBC) who returned 5.35%, 6.30%, and 5.55%, respectively.

Growth stocks outperformed value stocks. Artisan Non-U.S. Growth had the highest absolute performance of the Developed Non-US managers, returning 5.34%.

Interest rates held steady in January after a large jump in November and December.

The Investment Grade Bonds Composite returned a modest 0.28%, outperforming the Bloomberg US Agg Bond index by 8 basis points.

Emerging Market Debt was a stong performer as currency moves were additive to returns.

Emerging Market Bonds posted the highest return of any fixed income composite, as Stone Harbor returned 2.21%.

Global credit markets advanced in January, with high yield outperforming investment grade.

High Yield Bonds posted the second highest return of any fixed income composite, as Hotchkis & Wiley returned 2.08%.

Commodities excluding energy performed well with agriculture, industrial metals and precious metals all seeing strong gains.

Mount Lucas underperformed the Bloomberg Commodity Index by 298 basis points, driving underperformance from the Commodities Composite.

Real Assets

Monthly Portfolio HighlightsThe Total Fund returned 1.64% for the month of January, net of fees, and outperformed the Policy Benchmark by 15 basis points. All asset classes posted positive performance, with the exception of Foreign Bonds, Commodities, and REITs.

U.S. Equity

Non-U.S. Equity

Fixed Income

Page 3

Schedule of Investable Assets ex Treasury Cash

Allocation

MarketValue ($)

%

Performance(%)

MTD

Emerging Market Bonds Composite 65,758,230 2.48 2.21

Stone Harbor Emerging Market Debt Blend 65,758,230 2.48 2.21

TIPS Composite 180,340,358 6.81 0.85

BlackRock TIPS (CF) 180,340,358 6.81 0.85

High Yield Bonds Composite 66,135,110 2.50 2.08

Hotchkis & Wiley High Yield (SA) 66,135,071 2.50 2.08

Bank Loans Composite 47,439,313 1.79 0.26

Beach Point Leveraged Loan (CF) 47,439,313 1.79 0.26

Commodities Composite 66,130,928 2.50 -1.95

Mount Lucas Commodity Long/Neutral (CF) 46,191,085 1.74 -2.84

BlackRock Dow Jones UBS Commodities Index (CF) 19,939,842 0.75 0.17

Natural Resources Public Composite 77,309,912 2.92 4.84

SSgA Global Natural Resources Stock Index (CF) 77,309,912 2.92 4.84

Natural Resources Private Composite 12,182,626 0.46 0.00

Infrastructure Public Composite 74,441,791 2.81 1.78

RARE Infrastructure Global Value (CF) 74,441,791 2.81 1.78

Infrastructure Private Composite 29,544,689 1.12 0.00

Private Equity Composite 202,288,854 7.64 1.10

Private Real Estate Composite 206,196,718 7.79 0.06

ORG Real Estate 206,196,718 7.79 0.06

REITS Composite 29,153,368 1.10 -0.69

Harrison Street REIT (SA) 29,153,368 1.10 -0.69

Transition Account 654,544 0.02 N/A

Cash Composite 18,880,252 0.71 N/A

Allocation

MarketValue ($)

%

Performance(%)

MTD

Total Fund Composite 2,648,078,425 100.00 1.64

U.S. Equity Composite 628,129,879 23.72 1.64

Analytic U.S. Low Volatility Equity (SA) 143,908,310 5.43 0.29

London Company Income Equity (SA) 99,431,188 3.75 1.72

RhumbLine HEDI (SA) 63,825,946 2.41 1.38

SSgA Russell 1000 Index - NL (CF) 171,446,307 6.47 2.02

RBC MidCap Value (SA) 46,648,683 1.76 2.03

Artisan MidCap Growth (SA) 52,001,933 1.96 4.69

Dimensional U.S. Small Cap Value (CF) 28,520,070 1.08 -0.86

RHJ Small Cap Opportunities (SA) 22,347,441 0.84 3.42

Developed Market Non-U.S. Equity Composite 228,987,924 8.65 3.62

First Eagle International Value Equity (SA) 53,647,817 2.03 3.57

PanAgora Dynamic International Equity (SA) 74,267,618 2.80 3.10

SSgA MSCI World (ex. U.S.) Index - NL (CF) 25,851,580 0.98 2.98

Artisan Non-U.S. Growth (SA) 50,395,306 1.90 5.34

Copper Rock International Small Cap (CF) 24,823,009 0.94 2.50

Emerging Market Equity Composite 243,305,689 9.19 5.80

BlackRock MSCI Emerging Markets Index (CF) 56,612,374 2.14 5.35

DFA Emg Mkts Value;I (DFEVX) 97,362,205 3.68 6.30

RBC Emerging Markets Equity (CF) 89,331,110 3.37 5.55

Frontier Market Equity Composite 23,405,070 0.88 0.10

Aberdeen Frontier Markets Equity (CF) 23,405,070 0.88 0.10

Investment Grade Bonds Composite 349,038,169 13.18 0.28

BlackRock Intermediate Duration (CF) 99,647,308 3.76 0.20

Schroder STW Core Fixed Income (SA) 111,371,390 4.21 0.33

Reams Core Plus Fixed Income (SA) 138,014,157 5.21 0.30

Foreign Bonds Composite 98,755,002 3.73 -0.07

BlackRock Foreign Bond Index (CF) 74,284,315 2.81 -0.91

Brandywine International Fixed Income (CF) 24,470,687 0.92 2.59

Periods EndingBeginning

Market Value ($)Net

Cash Flow ($)Gain/Loss ($)

EndingMarket Value ($)

% Return Unit Value

FYTD 2,534,132,766 -12,980,682 113,640,814 2,634,792,899 4.49 104.49

Santa Barbara County Employees' Retirement SystemAsset Allocation, Performance & Schedule of Investable Assets


Market values and performance shown are preliminary and subject to change. Performance shown is net of fees and provided by BNY Mellon. Allocations shown may not sum up to 100% exactly due to rounding. Total Fund performance excludes Treasury Cash. Schedule of Investable Assets excludes Treasury Cash. The fiscal year ends June 30th.

Page 4

Market Value($)

Allocation(%)

Lower Range

(%)Target

(%)

Upper Range

(%)

2.0

Market values shown are preliminary and subject to change. Allocations shown may not sum up to 100% exactly due to rounding.Market value for the High Yield Bonds Composite includes the Transition Account.

Equi

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xed

Inco

me

Rea

lEs

tate

Cas

h

Santa Barbara County Employees' Retirement System Asset Allocation vs. Target Allocation

628,129,879$

228,987,924$

98,755,002$

349,038,169$

23,405,070$

243,305,689$

47,439,313$

2,648,078,425$

18,880,252$

29,153,368$

206,196,718$

202,288,854$

29,544,689$

74,441,791$

12,182,626$

77,309,912$

66,130,928$

Bank Loans Composite

Commodities Composite

Natural Resources Public Composite

Natural Resources Private Composite

Infrastructure Public Composite

Infrastructure Private Composite

Private Equity Composite

Private Real Estate Composite

REITS Composite

U.S. Equity Composite

Developed Market Non-U.S. Equity Composite

Emerging Market Equity Composite

Frontier Market Equity Composite

Investment Grade Bonds Composite

Foreign Bonds Composite

Emerging Market Bonds Composite

TIPS Composite

High Yield Bonds Composite

100.0 100.0

0.7 0.0 0.0 2.0Cash Composite

Total Fund Composite

1.1 1.0 2.0 3.0

1.1 0.0 2.0 4.0

7.6 4.0 7.0 10.0

1.0 3.0 5.0

2.9 0.0 2.0 5.0


7.8 3.0 6.0 9.0

0.5 0.0 3.0 5.0

2.8 0.0 2.0

23.7 19.0 23.0 27.0

9.2

Rea

l Ass

ets

PE

0.9 0.0 1.0 2.0

8.6 6.0 9.0 12.0

1.8 3.0

3.7 2.0 4.0 6.0

5.0

13.2 5.0 10.0 15.0

11.0

4.0

2.5

1.0

6.0 10.0 14.0

6.066,789,655$ 2.5 2.0 4.0

180,340,358$ 6.8 3.0 7.0

3.01.02.565,758,230$

0% 5% 10% 15% 20% 25% 30%

Actual Target

Page 5

Santa Barbara County Employees' Retirement System

Market Value($)

Allocation(%)

Lower Range

(%)Target

(%)

Upper Range

(%)

8.0 15.0 22.0

10.1

Market values shown are preliminary and subject to change. Allocations shown may not sum up to 100% exactly due to rounding.Market value for the Non-Core Fixed Income Composite includes the Transition Account.

2,648,078,425$

Real Estate Composite

100.0 100.0Total Fund Composite

9.8

Core Fixed Income Composite

Emerging Market Equity Composite

Private Equity Composite

Cash Composite

259,609,946$

179,987,197$

628,133,529$

266,710,759$

U.S. Equity Composite

Developed Market Non-U.S. Equity Composite

Non-Core Fixed Income Composite

Real Return Composite

6.8 8.0 11.0 14.0


23.7 15.0 19.0 23.0

Asset Allocation vs. Target Allocation (Targets Approved in September 2016)

628,129,879$

228,987,924$ 8.6 8.0 11.0 14.0

4.0 7.0 10.0

23.7 14.0 17.0 20.0

2.0

10.05.0 15.0235,350,086$

18,880,252$ 0.7 0.0 0.0

202,288,854$ 7.6 5.0 10.0

8.9

15.0

-5% 5% 15% 25% 35%

Target Actual

Page 6

MTD QTD CYTD FYTD1

Year3

Years5

Years7

Years10

YearsSinceIncep.

InceptionDate

Total Fund Composite 1.64 1.64 1.64 4.49 11.97 4.84 6.28 7.34 4.11 8.20 01/01/1987

SBCERS Policy Benchmark 1.49 1.49 1.49 5.34 15.47 5.54 6.98 7.53 3.92 N/A

Difference 0.15 0.15 0.15 -0.85 -3.50 -0.70 -0.70 -0.19 0.19 N/A

SBCERS Dynamic Policy Benchmark 1.48 1.48 1.48 5.19 13.60 4.80 N/A N/A N/A N/A

Difference 0.16 0.16 0.16 -0.70 -1.63 0.04 N/A N/A N/A N/A

U.S. Equity Composite 1.64 1.64 1.64 7.46 18.32 9.03 12.66 12.80 6.03 10.38 01/01/1987

Russell 3000 Index 1.88 1.88 1.88 10.84 21.73 10.28 13.97 13.82 7.07 10.18

Difference -0.24 -0.24 -0.24 -3.38 -3.41 -1.25 -1.31 -1.02 -1.04 0.20

Developed Market Non-U.S. Equity Composite 3.62 3.62 3.62 5.89 10.44 2.33 N/A N/A N/A 8.41 07/01/2012

MSCI EAFE Index (USD) (Net) 2.90 2.90 2.90 8.74 12.03 0.71 6.04 4.91 0.97 7.14

Difference 0.72 0.72 0.72 -2.85 -1.59 1.62 N/A N/A N/A 1.27

Emerging Market Equity Composite 5.80 5.80 5.80 10.27 22.55 2.32 N/A N/A N/A 1.87 07/01/2012

MSCI Emg Mkts Index (USD) (Net) 5.47 5.47 5.47 10.20 25.41 1.44 0.19 2.07 2.49 1.72

Difference 0.33 0.33 0.33 0.07 -2.86 0.88 N/A N/A N/A 0.15

Frontier Market Equity Composite 0.10 0.10 0.10 1.68 6.23 -5.28 N/A N/A N/A 2.26 09/01/2012

MSCI Frontier Mkts Index (USD) (Net) 6.66 6.66 6.66 10.02 17.54 -0.26 6.40 5.02 -0.21 7.08

Difference -6.56 -6.56 -6.56 -8.34 -11.31 -5.02 N/A N/A N/A -4.82

Investment Grade Bonds Composite 0.28 0.28 0.28 -1.91 2.43 2.48 2.98 4.41 5.47 7.41 01/01/1987

Investment Grade Bonds Blended Index 0.20 0.20 0.20 -2.34 1.45 2.59 2.11 3.50 4.34 N/A

Difference 0.08 0.08 0.08 0.43 0.98 -0.11 0.87 0.91 1.13 N/A

Foreign Bonds Composite -0.07 -0.07 -0.07 -2.67 2.67 2.82 N/A N/A N/A 3.00 07/01/2012

JP Morgan Gbl Govt Bnd Ex US Index 1.39 1.39 1.39 -9.39 2.25 -1.97 -2.05 0.51 3.11 -1.82

Difference -1.46 -1.46 -1.46 6.72 0.42 4.79 N/A N/A N/A 4.82

Emerging Market Bonds Composite 2.21 2.21 2.21 0.42 14.54 1.67 N/A N/A N/A -0.65 08/01/2012

Stone Harbor Blended Benchmark 1.83 1.83 1.83 0.13 12.06 2.40 1.79 4.13 5.60 0.82

Difference 0.38 0.38 0.38 0.29 2.48 -0.73 N/A N/A N/A -1.47

TIPS Composite 0.85 0.85 0.85 -0.61 4.08 1.86 N/A N/A N/A -0.10 06/01/2012

Bloomberg US Trsy: US TIPS Index 0.84 0.84 0.84 -0.64 4.02 1.88 0.61 3.27 4.44 0.16


Santa Barbara County Employees' Retirement SystemComparative Performance


Performance shown is net of fees and provided by BNY Mellon. Performance shown is preliminary and subject to change. Performance is annualized for periods greater than one year. Total Fund performance excludes Treasury Cash. Indices show N/A for since inception returns when the fund contains more history than the corresponding benchmark. The fiscal year ends June 30th.

Page 7



MTD QTD CYTD FYTD1

Year3

Years5

Years7

Years10

YearsSinceIncep.

InceptionDate

High Yield Bonds Composite 2.08 2.08 2.08 8.93 19.61 3.39 N/A N/A N/A 5.64 09/01/2012

Bloomberg US Corp: Hi Yld Index 1.45 1.45 1.45 8.96 20.77 4.92 7.03 8.12 7.49 6.28

Difference 0.63 0.63 0.63 -0.03 -1.16 -1.53 N/A N/A N/A -0.64

Bank Loans Composite 0.26 0.26 0.26 3.04 6.17 3.39 N/A N/A N/A 4.62 10/01/2012

CS Lvg'd Loan Index 0.53 0.53 0.53 5.98 11.27 3.70 5.05 5.29 4.30 4.50

Difference -0.27 -0.27 -0.27 -2.94 -5.10 -0.31 N/A N/A N/A 0.12

Commodities Composite -1.95 -1.95 -1.95 -6.98 -1.28 -7.99 N/A N/A N/A -6.20 07/01/2012

Bloomberg Cmdty Index (TR) 0.14 0.14 0.14 -1.18 13.81 -11.31 -9.38 -5.28 -5.58 -8.96

Difference -2.09 -2.09 -2.09 -5.80 -15.09 3.32 N/A N/A N/A 2.76

Natural Resources Public Composite 4.84 4.84 4.84 14.70 46.42 -1.68 N/A N/A N/A -1.03 07/01/2012

S&P Gbl Lg Mid Cap Cmdty & Res Index (USD) (Gross) 4.84 4.84 4.84 14.98 47.15 -1.41 -2.65 0.88 2.92 -0.79


Natural Resources Private Composite 0.00 0.00 0.00 5.22 6.42 4.57 N/A N/A N/A 3.37 10/01/2013

Consumer Price Index+4% (1 Qtr Lag) 0.45 0.45 0.45 3.86 5.70 5.20 5.37 5.67 5.89 5.09

Difference -0.45 -0.45 -0.45 1.36 0.72 -0.63 N/A N/A N/A -1.72

Infrastructure Public Composite 1.78 1.78 1.78 -0.24 10.61 2.65 N/A N/A N/A 5.82 09/01/2012

DJ Brookfield Gbl Infrastructure Comp Idx 1.51 1.51 1.51 -1.13 16.60 4.00 8.32 11.00 7.25 7.69

Difference 0.27 0.27 0.27 0.89 -5.99 -1.35 N/A N/A N/A -1.87

Infrastructure Private Composite 0.00 0.00 0.00 25.22 10.26 -25.40 N/A N/A N/A -24.80 01/01/2014

Consumer Price Index+4% 0.91 0.91 0.91 3.09 6.60 5.31 5.44 5.71 5.91 5.40


Private Equity Composite 1.10 1.10 1.10 8.90 8.83 11.73 13.25 13.72 8.91 7.79 06/01/2006

Russell 3000 Index+3% (1 Qtr Lag) -1.92 -1.92 -1.92 6.65 7.37 11.37 16.75 16.65 9.96 10.31

Difference 3.02 3.02 3.02 2.25 1.46 0.36 -3.50 -2.93 -1.05 -2.52

Private Real Estate Composite 0.06 0.06 0.06 5.50 10.14 12.04 N/A N/A N/A 11.21 06/01/2012

NCREIF ODCE Index (AWA) (Net) (1 Qtr Lag) 0.00 0.00 0.00 3.77 9.08 11.42 11.34 11.37 5.05 11.55

Difference 0.06 0.06 0.06 1.73 1.06 0.62 N/A N/A N/A -0.34


Page 8



MTD QTD CYTD FYTD1

Year3

Years5

Years7

Years10

YearsSinceIncep.

InceptionDate

REITS Composite -0.69 -0.69 -0.69 -4.26 11.82 9.97 N/A N/A N/A 10.09 06/01/2012

FTSE NAREIT All Eq REITs TR Index 0.17 0.17 0.17 -4.28 12.78 11.51 10.64 14.48 4.24 10.98

Difference -0.86 -0.86 -0.86 0.02 -0.96 -1.54 N/A N/A N/A -0.89


Page 9

MTD QTD CYTD FYTD1

Year3

Years5

Years7

Years10

YearsSinceIncep.

InceptionDate

Total Fund Composite 1.64 1.64 1.64 4.49 11.97 4.84 6.28 7.34 4.11 8.20 01/01/1987

SBCERS Policy Benchmark 1.49 1.49 1.49 5.34 15.47 5.54 6.98 7.53 3.92 N/A

Difference 0.15 0.15 0.15 -0.85 -3.50 -0.70 -0.70 -0.19 0.19 N/A

SBCERS Dynamic Policy Benchmark 1.48 1.48 1.48 5.19 13.60 4.80 N/A N/A N/A N/A

Difference 0.16 0.16 0.16 -0.70 -1.63 0.04 N/A N/A N/A N/A

U.S. Equity Composite 1.64 1.64 1.64 7.46 18.32 9.03 12.66 12.80 6.03 10.38 01/01/1987

Russell 3000 Index 1.88 1.88 1.88 10.84 21.73 10.28 13.97 13.82 7.07 10.18

Difference -0.24 -0.24 -0.24 -3.38 -3.41 -1.25 -1.31 -1.02 -1.04 0.20

Analytic U.S. Low Volatility Equity (SA) 0.29 0.29 0.29 0.53 12.46 N/A N/A N/A N/A 8.14 07/01/2015

Russell 1000 Index 2.01 2.01 2.01 10.19 20.81 10.50 14.06 13.82 7.09 8.28

Difference -1.72 -1.72 -1.72 -9.66 -8.35 N/A N/A N/A N/A -0.14

London Company Income Equity (SA) 1.72 1.72 1.72 5.31 15.96 N/A N/A N/A N/A 6.92 07/01/2015

Russell 1000 Index 2.01 2.01 2.01 10.19 20.81 10.50 14.06 13.82 7.09 8.28

Difference -0.29 -0.29 -0.29 -4.88 -4.85 N/A N/A N/A N/A -1.36

RhumbLine HEDI (SA) 1.38 1.38 1.38 4.98 15.57 N/A N/A N/A N/A 10.03 07/01/2015

Russell 1000 Index 2.01 2.01 2.01 10.19 20.81 10.50 14.06 13.82 7.09 8.28

Difference -0.63 -0.63 -0.63 -5.21 -5.24 N/A N/A N/A N/A 1.75

SSgA Russell 1000 Index - NL (CF) 2.02 2.02 2.02 10.21 20.81 10.52 N/A N/A N/A 12.80 04/01/2012

Russell 1000 Index 2.01 2.01 2.01 10.19 20.81 10.50 14.06 13.82 7.09 12.84


RBC MidCap Value (SA) 2.03 2.03 2.03 18.47 28.78 10.72 N/A N/A N/A 15.49 11/01/2012

Russell Mid Cap Val Index 1.68 1.68 1.68 12.07 29.15 10.69 14.98 15.04 7.44 15.53

Difference 0.35 0.35 0.35 6.40 -0.37 0.03 N/A N/A N/A -0.04

Artisan MidCap Growth (SA) 4.69 4.69 4.69 6.50 16.29 4.06 N/A N/A N/A 12.67 11/01/2012

Russell Mid Cap Grth Index 3.33 3.33 3.33 8.57 19.99 8.18 12.67 14.12 7.80 14.07


Dimensional U.S. Small Cap Value (CF) -0.86 -0.86 -0.86 23.43 36.52 9.48 14.46 15.31 7.06 9.08 04/01/2005

Russell 2000 Val Index -0.71 -0.71 -0.71 23.30 40.22 9.48 13.44 13.51 6.03 7.88

Difference -0.15 -0.15 -0.15 0.13 -3.70 0.00 1.02 1.80 1.03 1.20




Page 10



MTD QTD CYTD FYTD1

Year3

Years5

Years7

Years10

YearsSinceIncep.

InceptionDate

RHJ Small Cap Opportunities (SA) 3.42 3.42 3.42 15.81 N/A N/A N/A N/A N/A 14.87 06/01/2016

Russell 2000 Grth Index 1.62 1.62 1.62 14.96 26.87 6.23 12.47 14.23 7.73 14.43

Difference 1.80 1.80 1.80 0.85 N/A N/A N/A N/A N/A 0.44

Developed Market Non-U.S. Equity Composite 3.62 3.62 3.62 5.89 10.44 2.33 N/A N/A N/A 8.41 07/01/2012


Difference 0.72 0.72 0.72 -2.85 -1.59 1.62 N/A N/A N/A 1.27

First Eagle International Value Equity (SA) 3.57 3.57 3.57 3.96 14.08 N/A N/A N/A N/A 2.31 06/01/2014

MSCI EAFE Index (USD) (Net) 2.90 2.90 2.90 8.74 12.03 0.71 6.04 4.91 0.97 -2.11

Difference 0.67 0.67 0.67 -4.78 2.05 N/A N/A N/A N/A 4.42

PanAgora Dynamic International Equity (SA) 3.10 3.10 3.10 11.82 13.99 3.15 8.53 7.42 N/A 10.19 05/01/2009


Difference 0.20 0.20 0.20 3.08 1.96 2.44 2.49 2.51 N/A 2.20

SSgA MSCI World (ex. U.S.) Index - NL (CF) 2.98 2.98 2.98 9.14 14.01 0.89 N/A N/A N/A 3.46 03/01/2013

MSCI Wrld Ex US Index (USD) (Net) 2.98 2.98 2.98 9.06 13.63 0.76 5.58 4.79 1.10 3.49


Artisan Non-U.S. Growth (SA) 5.34 5.34 5.34 0.83 3.03 -0.55 N/A N/A N/A -0.55 02/01/2014



Copper Rock International Small Cap (CF) 2.50 2.50 2.50 1.08 2.28 1.91 N/A N/A N/A 5.65 03/01/2013

MSCI EAFE Sm Cap Index (USD) (Net) 3.53 3.53 3.53 9.26 14.82 3.82 9.57 8.51 3.09 7.74


Emerging Market Equity Composite 5.80 5.80 5.80 10.27 22.55 2.32 N/A N/A N/A 1.87 07/01/2012


Difference 0.33 0.33 0.33 0.07 -2.86 0.88 N/A N/A N/A 0.15

BlackRock MSCI Emerging Markets Index (CF) 5.35 5.35 5.35 9.34 23.63 1.18 N/A N/A N/A 1.78 07/01/2012

MSCI Emg Mkts IM Index (USD) (Net) 5.37 5.37 5.37 9.57 24.10 1.40 0.43 2.14 2.72 1.90



Page 11



MTD QTD CYTD FYTD1

Year3

Years5

Years7

Years10

YearsSinceIncep.

InceptionDate

DFA Emg Mkts Value;I (DFEVX) 6.30 6.30 6.30 15.51 35.01 2.08 N/A N/A N/A -1.29 05/01/2013

MSCI Emg Mkts Index (USD) (Net) 5.47 5.47 5.47 10.20 25.41 1.44 0.19 2.07 2.49 -1.11


RBC Emerging Markets Equity (CF) 5.55 5.55 5.55 N/A N/A N/A N/A N/A N/A -0.54 09/01/2016


Difference 0.07 0.07 0.07 N/A N/A N/A N/A N/A N/A -2.92

Frontier Market Equity Composite 0.10 0.10 0.10 1.68 6.23 -5.28 N/A N/A N/A 2.26 09/01/2012



Aberdeen Frontier Markets Equity (CF) 0.10 0.10 0.10 1.68 6.23 -5.28 N/A N/A N/A 2.26 09/01/2012



Investment Grade Bonds Composite 0.28 0.28 0.28 -1.91 2.43 2.48 2.98 4.41 5.47 7.41 01/01/1987

Investment Grade Bonds Blended Index 0.20 0.20 0.20 -2.34 1.45 2.59 2.11 3.50 4.34 N/A

Difference 0.08 0.08 0.08 0.43 0.98 -0.11 0.87 0.91 1.13 N/A

BlackRock Intermediate Duration (CF) 0.20 0.20 0.20 -2.26 -0.37 1.33 0.95 N/A N/A 1.83 02/01/2011

Bloomberg US Gov't: Int Trm Bond Index 0.20 0.20 0.20 -2.22 -0.33 1.37 0.98 2.14 3.44 1.85

Difference 0.00 0.00 0.00 -0.04 -0.04 -0.04 -0.03 N/A N/A -0.02

Schroder STW Core Fixed Income (SA) 0.33 0.33 0.33 -1.44 3.64 3.37 3.87 4.57 5.31 10.14 04/01/1980

Bloomberg US Agg Bond Index 0.20 0.20 0.20 -2.34 1.45 2.59 2.09 3.43 4.37 8.10

Difference 0.13 0.13 0.13 0.90 2.19 0.78 1.78 1.14 0.94 2.04

Reams Core Plus Fixed Income (SA) 0.30 0.30 0.30 -2.00 4.12 2.47 3.16 4.89 6.15 5.96 09/01/2002

Bloomberg Universal - Blend 0.35 0.35 0.35 -1.33 3.14 2.95 2.63 3.87 4.60 4.58

Difference -0.05 -0.05 -0.05 -0.67 0.98 -0.48 0.53 1.02 1.55 1.38


Page 12



MTD QTD CYTD FYTD1

Year3

Years5

Years7

Years10

YearsSinceIncep.

InceptionDate

Foreign Bonds Composite -0.07 -0.07 -0.07 -2.67 2.67 2.82 N/A N/A N/A 3.00 07/01/2012

JP Morgan Gbl Govt Bnd Ex US Index 1.39 1.39 1.39 -9.39 2.25 -1.97 -2.05 0.51 3.11 -1.82

Difference -1.46 -1.46 -1.46 6.72 0.42 4.79 N/A N/A N/A 4.82

BlackRock Foreign Bond Index (CF) -0.91 -0.91 -0.91 -2.32 2.23 3.98 N/A N/A N/A 3.86 07/01/2012

Bloomberg Gbl Agg Ex USD Index (Hedged) -0.86 -0.86 -0.86 -2.19 2.38 4.17 4.10 4.01 4.33 4.08


Brandywine International Fixed Income (CF) 2.59 2.59 2.59 -3.70 4.06 -0.87 N/A N/A N/A -0.10 09/01/2012

Citi Non-US Wrld Gov't Bond Index 1.43 1.43 1.43 -9.02 2.24 -2.15 -2.03 0.29 2.86 -2.32

Difference 1.16 1.16 1.16 5.32 1.82 1.28 N/A N/A N/A 2.22

Emerging Market Bonds Composite 2.21 2.21 2.21 0.42 14.54 1.67 N/A N/A N/A -0.65 08/01/2012



Stone Harbor Emerging Market Debt Blend 2.21 2.21 2.21 0.42 14.54 1.67 N/A N/A N/A -0.65 08/01/2012



TIPS Composite 0.85 0.85 0.85 -0.61 4.08 1.86 N/A N/A N/A -0.10 06/01/2012

Bloomberg US Trsy: US TIPS Index 0.84 0.84 0.84 -0.64 4.02 1.88 0.61 3.27 4.44 0.16


BlackRock TIPS (CF) 0.85 0.85 0.85 -0.61 4.08 1.86 N/A N/A N/A -0.52 12/01/2012

Bloomberg US Trsy: US TIPS Index 0.84 0.84 0.84 -0.64 4.02 1.88 0.61 3.27 4.44 -0.51


High Yield Bonds Composite 2.08 2.08 2.08 8.93 19.61 3.39 N/A N/A N/A 5.64 09/01/2012



Hotchkis & Wiley High Yield (SA) 2.08 2.08 2.08 10.59 22.89 3.90 N/A N/A N/A 4.26 12/01/2013




Page 13



MTD QTD CYTD FYTD1

Year3

Years5

Years7

Years10

YearsSinceIncep.

InceptionDate

Bank Loans Composite 0.26 0.26 0.26 3.04 6.17 3.39 N/A N/A N/A 4.62 10/01/2012



Beach Point Leveraged Loan (CF) 0.26 0.26 0.26 3.04 6.17 3.39 N/A N/A N/A 4.62 10/01/2012



Commodities Composite -1.95 -1.95 -1.95 -6.98 -1.28 -7.99 N/A N/A N/A -6.20 07/01/2012



Mount Lucas Commodity Long/Neutral (CF) -2.84 -2.84 -2.84 -9.30 -6.57 -6.00 N/A N/A N/A -6.12 11/01/2012



BlackRock Dow Jones UBS Commodities Index (CF) 0.17 0.17 0.17 -1.13 13.62 -11.44 N/A N/A N/A -9.03 07/01/2012



Natural Resources Public Composite 4.84 4.84 4.84 14.70 46.42 -1.68 N/A N/A N/A -1.03 07/01/2012



SSgA Global Natural Resources Stock Index (CF) 4.84 4.84 4.84 14.70 46.42 -1.68 N/A N/A N/A -1.03 07/01/2012



Natural Resources Private Composite 0.00 0.00 0.00 5.22 6.42 4.57 N/A N/A N/A 3.37 10/01/2013

Consumer Price Index+4% (1 Qtr Lag) 0.45 0.45 0.45 3.86 5.70 5.20 5.37 5.67 5.89 5.09



Page 14



MTD QTD CYTD FYTD1

Year3

Years5

Years7

Years10

YearsSinceIncep.

InceptionDate

Infrastructure Public Composite 1.78 1.78 1.78 -0.24 10.61 2.65 N/A N/A N/A 5.82 09/01/2012



RARE Infrastructure Global Value (CF) 1.78 1.78 1.78 -0.24 10.61 2.65 N/A N/A N/A 5.82 09/01/2012



Infrastructure Private Composite 0.00 0.00 0.00 25.22 10.26 -25.40 N/A N/A N/A -24.80 01/01/2014

Consumer Price Index+4% 0.91 0.91 0.91 3.09 6.60 5.31 5.44 5.71 5.91 5.40


Private Equity Composite 1.10 1.10 1.10 8.90 8.83 11.73 13.25 13.72 8.91 7.79 06/01/2006

Russell 3000 Index+3% (1 Qtr Lag) -1.92 -1.92 -1.92 6.65 7.37 11.37 16.75 16.65 9.96 10.31

Difference 3.02 3.02 3.02 2.25 1.46 0.36 -3.50 -2.93 -1.05 -2.52

Private Real Estate Composite 0.06 0.06 0.06 5.50 10.14 12.04 N/A N/A N/A 11.21 06/01/2012



ORG Real Estate 0.06 0.06 0.06 5.50 10.14 12.04 11.60 11.32 4.04 5.09 04/01/2006


Difference 0.06 0.06 0.06 1.73 1.06 0.62 0.26 -0.05 -1.01 -0.57

REITS Composite -0.69 -0.69 -0.69 -4.26 11.82 9.97 N/A N/A N/A 10.09 06/01/2012


Difference -0.86 -0.86 -0.86 0.02 -0.96 -1.54 N/A N/A N/A -0.89

Harrison Street REIT (SA) -0.69 -0.69 -0.69 -4.26 11.82 9.97 9.94 N/A N/A 11.16 11/01/2011


Difference -0.86 -0.86 -0.86 0.02 -0.96 -1.54 -0.70 N/A N/A -0.43


Page 15

Performance Related CommentsRVK, Inc. began monitoring the assets of the Santa Barbara County Employees' Retirement System in June, 2016. Prior historical data was provided by the

previous investment consultant.Inception dates shown represent the first full month following initial funding.Total Fund performance excludes Treasury Cash.

Market values and performance shown are preliminary and subject to change.

Custom Index CommentsSBCERS Policy Benchmark: RVK began calculating the SBCERS Policy Benchmark on April 1, 2016. Historical performance was provided be the previousconsultant. The passive Policy Benchmark currently consists of 23% Russell 3000 Index, 9% MSCI EAFE Index (USD) (Net), 10% MSCI Emerging MarketsIndex (USD) (Net), 1% MSCI Frontier Markets Index (USD) (Net), 10% Investment Grade Bonds Blended Index, 4% JP Morgan Gbl Govt Bond Ex US Index,3% Stone Harbor Blended Benchmark, 7% Bloomberg US Treasury: US TIPS Index, 4% Bloomberg US Corporate: High Yield Index, 2% Credit SuisseLeveraged Loan Index, 3% Bloomberg Commodity Index (Total Return), 2% S&P Glbl Lg Mid Cap Commodity & Resources Index (USD) (Gross), 3% Consumer Price Index+4% (1 Qtr Lag), 2% Dow Jones Brookfield Global Infrastructure Composite Index, 2% Consumer Price Index +4%, 7% Russell 3000 Index+3% (1Qtr Lag), 6% NCREIF ODCE Index (AWA) (Net) (1 Qtr Lag), and 2% FTSE NAREIT Eq REITs TR Index (1 Qtr Lag).

SBCERS Dynamic Policy Benchmark: The active dynamic policy benchmark is calculated monthly using beginning of month manager weights applied to eachcorresponding primary benchmark return.Stone Harbor Blended Benchmark: The Stone Harbor Blended Benchmark currently consists of 50% JP Morgan GBI-EM Global Diversified Total Return Index

(USD) (Unhedged), 40% JP Morgan EMBI Global Diversified Total Return Index (USD), and 10% JP Morgan CEMBI Broad Diversified Index.Investment Grade Bonds Blended Index: The Investment Grade Bonds Blended Index currently consists of 100% Bloomberg US Aggregate Bond Index. Prior to

June 1, 2012, it was comprised of 100% Bloomberg Universal Bond Index.Bloomberg Universal - Blend: The Bloomberg Universal - Blend currently consists of 100% Bloomberg Universal Bond Index. Prior to April 1, 2004, it wascomprised of 100% Bloomberg US Aggregate Bond Index.

Santa Barbara County Employees' Retirement SystemAddendum


Page 16

Disclaimer of Warranties and Limitation of Liability - This document was prepared by RVK, Inc. (RVK) and may include information and data from some or all of the following sources: client staff; custodian banks; investment managers; specialty investment consultants; actuaries; plan administrators/record-keepers; index providers; as well as other third-party sources as directed by the client or as we believe necessary or appropriate. RVK has taken reasonable care to ensure the accuracy of the information or data, but makes no warranties and disclaims responsibility for the accuracy or completeness of information or data provided or methodologies employed by any external source. This document is provided for the client’s internal use only and does not constitute a recommendation by RVK or an offer of, or a solicitation for, any particular security and it is not intended to convey any guarantees as to the future performance of the investment products, asset classes, or capital markets.

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