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Item 4.2 - City Investment Report as of December 31, 2013OF PO[Y�� J ryP CR.�, IN THE GpJ DATE: TO: FROM: INITIATED BY: SUBJECT: Summary: M=1201 February 18, 2014 APPROVED Total APPROVED AS AMENDED ❑ (SEE MINUTES) 7,906,259 DENIED ❑ REMOVED ❑ CONTINUED 0 Resolution No. 4,189,535 Honorable Mayor and Members of the City Council Tina White, Interim City Manager Scott Edwards, Director of Administrative Services Peter Moote Assistant Director of Administrative S rvice K__ Andrew White, Finance ManagergV City's Investment Report as of December 31, 2013 Quarterly reports of investments are required to be presented to Council. For your information, attached is an investment portfolio report as of December 31, 2013. Recommended Action: It is recommended that the City Council accept and file the attached report. Background: Pursuant to Government Code Sec. 53646(b) and the City's Investment Policy, the Director of Administrative Services (i.e., Treasurer) renders a quarterly investment report to the City Council concerning the investment portfolio's earnings and performance results. In accordance with the Investment Policy, the quarterly report includes information such as the investment type, issuer, date of maturity, par value, amount invested, current market value, and the source of the market value information. Findings: The City is in compliance with its adopted investment policy and the City's investment program provides sufficient liquidity to meet its cash flow requirements for the next six months. The amortized cost value of the City's investment portfolio as of December 31, 2013, was $102,100,976. It consisted of the following:. Investment Portfolio Total Deposits at CaITRUST 42,598,814 Deposits at the Local Agency Investment Fund (LAIF) 7,906,259 Other Cash and Equivalents 0 Commercial Paper 1,995,628 U. S. Treasury Notes 0 U. S. Federal Agency Notes 4,189,535 U. S. Instrumentalities 18,152,843 Corporate Notes 27,257,897 Total Amortized Cost Value of Investment Portfolio as of December 31, 2013 102,100,976 1 of 31 February 18, 2014 Item # 4.2 City's Investment Report February 18, 2014 Page 2 The attached investment report was prepared by the City's investment manager, Cutwater Asset Management, with input from the City's Administrative Services Department. Details on the City's current portfolio follow. Additionally, a "Market Commentary" newsletter prepared by our investment advisor is attached which offers a comprehensive overview of the current investment environment. The funds on deposit at LAIF and at CalTRUST earn interest at variable rates. The interest rate for the month ending December 2013 is estimated at .26% for LAIF, .40% for the CalTRUST short- term fund, and .70% for the CalTRUST medium -term fund. The values of fixed income securities, as legal investment tools authorized under California government codes, are closely tied with interest rates. As interest rates go up, the market values of the securities go down. The difference between amortized cost and fair value is considered an unrealized gain or loss. A realized loss is when the principal of the security is redeemed before its maturity date at a fair value lower than its amortized cost value. The amortized cost value of the investment portfolio is $102,100,976; the fair value is $102,170,989 for an unrealized gain of $70,013 or .06% of the total amortized cost value. The source of the fair value information for the U.S. Treasury Notes, the U.S. Federal Agency Notes, the U.S. Instrumentalities, and the Corporate Notes is Interactive Data Corporation. Also included with this report are recaps of the City's cash and investments held by fiscal agents, non - managed investments, and cash on hand. The total book value of the cash and investments held by our fiscal agents, U.S. Bank and The Bank of New York, at December 31, 2013, was $22,243,488. The source of the market value information for these investments was U.S. Bank and The.Bank of New York. The total book value of the non - managed investments was $147,142 at December 31, 2013. The City's cash on hand at December 31, 2013, totaled $788,212. The December 31, 2013, balance of the City's Library Trust Fund is $239,406. This balance reflects the payment of $652,000 from this fund for the Library remodel project. Through the fiscal year 2013 -2014 period ending December 31, 2013, no transfer of interest earnings has been made to the General Fund. At the close of fiscal year 2013 -14, 90% of the Library Trust Fund's interest earnings will be transferred. Fiscal Impact: The investment portfolio earned $108,449 interest during December 2013 as well as $100,860 during November 2013 and $98,793 during October 2013. Environmental Review: This item is not subject to CEQA review. Public Notification: None. TW:SE:PM:aw 2 of 31 February 18, 2014 Item # 4.2 City's Investment Report February 18, 2014 Page 3 Attachments: A. Investment Statistics B. Investment Report prepared by Cutwater Asset Management C. City of Poway Investments and Cash with Fiscal Agent; General, Payroll, and Petty Cash Report at December 31, 2013 D. December 2013 Market Commentary report prepared by Cutwater Asset Management 3 of 31 February 18, 2014 Item # 4.2 City of Poway Investment Statistics Amortized Cost Value: Deposits at CaITRUST Deposits at the Local Agency Investment Fund (LAIF) Other Cash and Equivalents Commercial Paper U. S. Treasury Notes U. S. Federal Agency Notes U. S. Instrumentalities Corporate Notes Total Amortized Cost Value Fair Value: Deposits at CalTRUST Deposits at the Local Agency Investment Fund (LAIF) Other Cash and Equivalents Commercial Paper U. S. Treasury Notes U. S. Federal Agency Notes U. S. Instrumentalities Corporate Notes Total Fair Value Unrealized Gain (Loss) Accrued Interest Earned One Year Total Yield Book Yield Current Yield Average Days to Maturity Glossary of Yield Terminology December September 2012 2013 58,305,322 14,451,459 0 1,997,000 2,995,411 0 6,225,334 25,848,098 109,822,624 58,419,764 14,451,459 0 1,997,634 3,012,226 0 6,268,828 26,089,927 110,239,838 417,214 92,620 0.70% 0.72% 1.13% 302 49,525,889 14,695,191 0 1,999,070 1,999,038 4,212,812 11,158,342 22,143,076 105,733,41T- 49,544,474 14,695,191 0 1,999,510 2,002,890 4,208,767 11,121,874 22,228,823 105,801,529 68,111 105,579 0.88% 0.90% 1.39% 347 December 2013 42,598,814 7,906,259 0 1,995,628 0 4,189,535 18,152,843 27,257,897 102,100,976 42,628,679 7,906,259 0 1,996,790 0 4,189,119 18,123,187 27,326,955 1029-170,989 70,013 108,449 0.80% 0.83% 0.97% 417 Coupon: A bond's coupon is the periodic interest payment made to the holder of the fixed income security during the life of the bond. Coupon payments can be made monthly, quarterly, or annually. Book Yield: The Book Yield is that rate of return that will make the present value of the future cash flows of a fixed income security equal to the price paid for the security. This assumes that the security will be held to its maturity. Current Yield: Annual rate of return on an investment expressed as a percentage. Current Yield of a fixed income security is the annualized earnings (coupon) divided by the bond's market value as of the valuation date. One Year Total Yield: The One Year Total Yield or One Year Return represents the portfolio's percentage change over a year's time, factoring in interest payments, changes in market value and reinvestment of distributions. Yield to Maturity: The Yield to Maturity (YTM) or Market Yield to Maturity of a fixed icome security is that rate of interest that will make the present value of the future cash flows equal to the market value as of the valuation date, assuming the bond is held to maturity. 4 of 31 Attachment A February 18, 2014 Item # 4.2 CON0(0 O O O T E(V OTO N R 00 O O OY- � U) 000000 CO .: CO M NL j CO CO y (n C N x Q C LL cc L x Uo O rn T d 3 0 a w O H U a Ul LLJ G n a W e Ln M O N M U U U U w M O N i-i U N U ^U I--I 0 U N N A w 0 N Z m 0 2 ca CL m CL m 3 0 0 CL 2 s H 5 of 31 Attachment B February 18, 2014 Item # 4.2 a/ M � N � M O � u u >= u u w 6of31 'O U C C Y U n U U pq O E;4E��, 0 v o C c U U p3 E L o o c c U ° C j E a y O _ E C 06 0 i F.. 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E Y V A o o o a 3 cu IM O = m February 18, 2014 Item # 4.2 m M � � N axM A 13ofI � a C b+ iy U d � U a F- v Q� f �u N 7 V , N 0 C 0 b � u 7 W � R ws U y F U c R .n od E E d 0 U °' a Fri U 'fl d N F rra Q > V td a a �C G L F N G N sy U r CL a L V UC p oo S b m S O SS SS 8O O O O O O O O pp C S C I O � N O O O r T O r O �0 00 O �0 N e 00 n lD ri �c r a o0 O C r h M oC — — N I00 00 0 00 00 Oo 00 00 O o 0 0 7 0Cp M Y1 0. b N V b rM W M O 0 S S N S S O O O O S 0 O� vi O r r1 h oo N "' M r 10 0100 10 O N M 0100 N N O O O 00 O h b b a 10 ppo�� C n r o0 0 T T S O v T S °o o S o g - °o °0 00 Oo C, 0 0 C O C O C 0 0 G 000 t% C 0001 cl C a F1 k O O O O SS SS 8O O O O O O O O pp C S C O S O O O O O O O N U u z u a o w m w m a i ca w o m U � t 2 - it a P m a M h r b O 0 O N O � W � r+i o0 N �p 00 r r � O N 00 o°0 0 N DD O O O 00 M C N J O a T O O O O O eM�l eM�t M O O I vMi < C � — N N �0 N � a0 .N-i• N � O O 7 Or G1 10 0 0 0 0 0 0 o O O O O 0 o O O o 0 0 0 0 0 0 0 0 S 0 0 0 0 0 0 0 r r � 0� N N 7 00 0100 r M �D r O O N h MM Cl r M O O O O O O O O O O p O O O O b V O O O O O O O O O O O O N N O O 0 0 O O N O O O O O O O N M O V M v h N O O O O O �D vi O O O O O vt r O^ h 00 M M N b y a M ao N b O M M N O 00 T O h T 00 b W N? 00 pNp�� M h M M .�• b ^ T P 0000 h W G1 t0�1 O �p appo.. a pa vi r rn G� C v v n V C V •.., I O v O v P v 8 O O O O O O O O O CO q O O O O O O O O O O O S C C pO C C O S O 0 S 0 O 0 0 0 O O 0 — V�i r N O O O O O O O O 0 O — O O O O O O O O O �n 1 O - I - N r O O N N P h r r en "R M oD h O N N N M N M N N N N O O N O O \1 N O CO O O O O O O O O O C CN G C�C ld �y N y Q N U N a x c r+ i aD d February 18, 2014 Item # 4.2 O O O O O O O O O O .D N 1� h 00 tV 00 O N O ^ h O O O U V U U U N U u z u a o w m w m a i ca w o m U � t 2 - it a P m a M h r b O 0 O N O � W � r+i o0 N �p 00 r r � O N 00 o°0 0 N DD O O O 00 M C N J O a T O O O O O eM�l eM�t M O O I vMi < C � — N N �0 N � a0 .N-i• N � O O 7 Or G1 10 0 0 0 0 0 0 o O O O O 0 o O O o 0 0 0 0 0 0 0 0 S 0 0 0 0 0 0 0 r r � 0� N N 7 00 0100 r M �D r O O N h MM Cl r M O O O O O O O O O O p O O O O b V O O O O O O O O O O O O N N O O 0 0 O O N O O O O O O O N M O V M v h N O O O O O �D vi O O O O O vt r O^ h 00 M M N b y a M ao N b O M M N O 00 T O h T 00 b W N? 00 pNp�� M h M M .�• b ^ T P 0000 h W G1 t0�1 O �p appo.. a pa vi r rn G� C v v n V C V •.., I O v O v P v 8 O O O O O O O O O CO q O O O O O O O O O O O S C C pO C C O S O 0 S 0 O 0 0 0 O O 0 — V�i r N O O O O O O O O 0 O — O O O O O O O O O �n 1 O - I - N r O O N N P h r r en "R M oD h O N N N M N M N N N N O O N O O \1 N O CO O O O O O O O O O C CN G C�C ld �y N y Q N U N a x c r+ i aD d February 18, 2014 Item # 4.2 M Q 3 x N rH a = M �I A 14 of; .9 d N O a° U V O � N V1 � N N H ' N . � U r d N C y G 7w N �Oi 7 C�> U .. N_ oQ E Q Q O � U «' C U COL O H �a x Q d id a N Q �U C U N U � t0�1 O n N O T r r r r ry r r r O O O G\ O� O D` � .1 O\ O On N - oo n o � M a oO n N M N M N N M N N N h 00 h \ \ T Q M !f N M ^ N ^ O O O O O O O O C C C O O O O G T N n 0 00 r 00 � h O h X0+1 0.0 ONO N OD O < m v O O N OO O O O O O O O O O O O O 0 0 0 0 0 0 0 0 Or O O M h N n h 00 0�0 .N... h Ov W rl. b % rlr 00 V O; O O O V O T O O N N N N r r N r O O O O�0 pp O O Oo0 O O O O O O O O 000 O N 000 O� 0 000 000 N 0 000 O N 0 000 0 N h n O� 00 N en�l ^ O O O T O O V N N N N ^ N ^ 0 80 O 0 0 0 S C0 O O O O O O O O N N N N N ^ N ^ Off. N 0 _M b n h OC O O O N M h Op O � b � N N � t+1 N ... ' h N N tM�f M b lc eN N O O M e N U .a H O � O , O ' O ,n , n a0 � N , M , OO , R ,n n ' O , N � N , h , h � N � O � a O , O , ^ n � O � N r , C , Q � ' N .o M , M ,r ' N ►a F O H A z February 18, 2014 Item # 4.2 C� G 00 Q N z� U M M a c .d �i Q) a T T g .1 O\ O On N - N M N M N N M N N N h 00 h \ \ T O O ^ O O W U Off. N 0 _M b n h OC O O O N M h Op O � b � N N � t+1 N ... ' h N N tM�f M b lc eN N O O M e N U .a H O � O , O ' O ,n , n a0 � N , M , OO , R ,n n ' O , N � N , h , h � N � O � a O , O , ^ n � O � N r , C , Q � ' N .o M , M ,r ' N ►a F O H A z February 18, 2014 Item # 4.2 C� G 00 Q N z� U M M a c .d �i Q) a T T g .1 Off. N 0 _M b n h OC O O O N M h Op O � b � N N � t+1 N ... ' h N N tM�f M b lc eN N O O M e N U .a H O � O , O ' O ,n , n a0 � N , M , OO , R ,n n ' O , N � N , h , h � N � O � a O , O , ^ n � O � N r , C , Q � ' N .o M , M ,r ' N ►a F O H A z February 18, 2014 Item # 4.2 C� G 00 Q N z� U M M a c .d �i Q) a %.I r� U •.y A a C r, � 0 � � N OW) "0 � M O � � U � � �A 0 A 1 F+�I 15 of 31 ' 00 d y Ld � 0� N � 3� O a w R a O y 6 O cc ax e O C W R V. 0. >+ o c �a a� � n O O O O N M O O O O O O N M E d 0 o a� 5 N N O 7 O O v 01 h m 1IR 00 W b O O M M N O N < < M M Ol 00 h d 73 70 O O v N R n In N N d d d h h O O D\ T N D\ N N n o 0 0 0 O+ O N N O O W O R C` 7 b O a a Ow N R T n 00 h M M 10 a N O O N O O N O Oi N T N S2 M N N M M M O O O O 000 0000 0000 0000 000 O O r r O O O O O O N N N r N m a ¢ a ¢ ¢ a Q Q Q Q Q Q Q 0o s 11 N N vl N O 1 M N O O O r � r 0 0 0 0 N N N N N � O O O O O O O v1 O O O O O N vi vt h a S DO O n r a0 f` 0 DO 0 00 h O r 00 0 0 0 0 O O n r b 0 O O� O r N b O O. O O� h 0 O+ °o m O M O M b N O O O n r r o� O� n O r r N O O� t` r o� Q� r ONO O b N M M O O O 00 M N � 0• N O O O O O O O O O W n T � P � O O o O O o 000 000 O O O a ¢ a Q Q Q 00 O O O O 0 0 0 N N N O O N O O O O O O M O N h a eY R 0 OOO O� P 7 0 0 0 0 O O N N N N N \ vii - > h G C E d N O O 7 O O v 01 h m 1IR 00 W b O O M M N O N Ol 10 �O d �O fi r 00 v vi n In N d d d N O O R V O O o0 Ow N R T d w M N O O N '0 h O N r 7 -+ 0000 a S DO O n r a0 f` 0 DO 0 00 h O r 00 0 0 0 0 O O n r b 0 O O� O r N b O O. O O� h 0 O+ °o m O M O M b N O O O n r r o� O� n O r r N O O� t` r o� Q� r ONO O b N M M O O O 00 M N � 0• N O O O O O O O O O W n T � P � O O o O O o 000 000 O O O a ¢ a Q Q Q 00 O O O O 0 0 0 N N N O O N O O O O O O M O N h a eY R 0 OOO O� P 7 0 0 0 0 O O r w I I v v ON N N N N N \ vii - > h G C E d N O O 7 O O v 01 h m 1IR 00 O b O O M M N O N Ol 10 �O �O O r 00 r r N N d d d N O O R V O O o0 Ow N R T d w M N O O N '0 h O r w I I v v ON N N N N N \ vii - vii h 7 O N O N O O 7 O O v 01 h m 1IR 00 O h N 10 O O M M N O N Ol 10 �O �O O r 00 r r N N R r O O R V O O o0 Ow N R T O N N O O N '0 h O N r 7 -+ 0000 000 0000 000 0000 000 O O r r O O a ¢ a ¢ ¢ a Q Q Q Q Q Q r w I I v v ON N N N N N \ vii - vii h 7 O N O v 01 h m 1IR 00 O h N 10 u v u aci a°i aCi w m "n Q Q O Q m c] a N aC Vl O U W a C7 C7 C7 � Feb�rua � 2bUItem # 4.2 0 m 3< O a W � t o f N 0 / O u O C 4, C O } C _ 0 O C N _7 � R S � V a ,b t O a � a c CL c � a � R td C G o °o oc O O 0 0 o_ O O O O O O O O 1 Q 1 Q Q O N O r M N M v N O W N M II r N 00 N M O O O O O M N °o b 00 r O Cn ON N 0 0 0 O M O m O O O O O O O Q Q Q a ►1 K O O N M N o° b W r O Cn Cn N 0 0 0 O M O M O O O O O O O O O � 0 0 0 0 O O V t1 V O T � C\ O 0 0 0 0 o_ o O 00 O � o O O N O O O O O O O O O O O O O O m � Q Q Q Q 0 N r N N O � r O O N N V 1� N O NO v� O r O 00 O O Cn N N l O 0 r O N CN N 0 0 0 00 O M O O O O O O O O N °o N N N 0 0 0 O 00 M N O O O O O O O Q Q Q O N N O O O h P N 00 0o I � I N 00 N 0 0 0 O M N O O O O O O O O v m O o R1 L m m O 0 N T F V A G w U U J U C 3 F_ 0 O a O 2 F O a v a t c° O U 1 M cn cn Y L m o a `n I O � 0 0 0 0 O O V t1 V O T � C\ O 0 0 0 0 o_ o O 00 O � o O O N O O O O O O O O O O O O O O m � Q Q Q Q 0 N r N N O � r O O N N V 1� N O NO v� O r O 00 O O Cn N N l O 0 r O N CN N 0 0 0 00 O M O O O O O O O O N °o N N N 0 0 0 O 00 M N O O O O O O O Q Q Q O N N O O O h P N 00 0o I � I N 00 N 0 0 0 O M N O O O O O O O O � I b O O O N N N O O � M M O N N N O O O N N N 0 0 0 v � r N N r O N N N O O O O O O O O O O O O N N N Q Q Q Q e 0 N Cn W O _b O O N N h T M O� O O O r N m R1 L m N N N A G Rf C U J U C F F_ 0 O a U c O F 2 Qa R o W a M W � O C 0 0 p g N `n I N o 7 7 U Q N o a U v n Q z M d 0 3 M M U p W �2 MC� C7 M F :D W Q N W O � I b O O O N N N O O � M M O N N N O O O N N N 0 0 0 v � r N N r O N N N O O O O O O O O O O O O N N N Q Q Q Q e 0 N Cn W O _b O O N N h T M O� O O O r N h N 0 N °o W rn W O O N °o 0 r" O N O O O O O O O J Q O F a: W m R1 L m N N N N U U J U C 0 0 O a U c O _ F- Qa R o W a M W � O � 0 0 o g N N N N N Q N o a U v n V] z M 0 0 3 h N 0 N °o W rn W O O N °o 0 r" O N O O O O O O O J Q O F a: W OI I O O O O O v� O T O N N R R1 L N N N N J U C 0 O 18 c O _ F- Qa R o W a M W � a1 rn 0 0 0 o g N N N N N Q N 0 0 0 0 3 M M O r O r W O W O O O N N N N O N O N O N O N 0 00 0 00 0 N 0 N r r O CT N N_ O O N N N N O O O O O O O O O O O O O N O N O N O N N 011 0. M Q Q � w C7 Q OI I O O O O O v� O T O N N R R1 L U %p U J U 0 O 18 c O _ F- Qa R o W a M W � a1 rn F^ o d � o rua .� a , 2014 Item # 4.2 m d> bD � U _ 3� O a w C� o. a. = o ` U 0 Y ro o = C w � o '- a. 3 o ' c3 U y O C _y L x U 3 O � S � V !1. O G O ` e C1. � � N CA C G E— U 1 N N 1� r O O O O o0 00 V R M M � a ro V rn c .o a a O o E oo ao F Z U o o `o 0 `o 0 a, a+ j a U 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 oj R Q O O 3 O M O O S 0 cc oo �o o �0 o 0 rn 0 ao rn 00 rn 00 a 00 00 o_ 00 0 0o 00 ao 0o � r v v W g 0 0 � 1 � 0 0 00 00 �; oo < v �o lo M M O O C, O� G1 a c b Cn N N V] m O O O O O O N �� V] O� O� V] O O O o O O O �ru 8,2014 Item #4.2 0 m V V T O� c� O� Q� O+ ON O� V V O O O O O� C� T N N O O N N 00 OO Q O O t� r b lc lc � \C � h �D \O N N CO O O T O� 17 n C O o � o C ' O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O o O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O N N N N N N N N a Q ¢ Q Q Q C O N r O 0 0 0 0 0 0 0 0 N N N N N N N N — O O N 00 O� N N � a ro V 10 off= E O o F Z U o o `o 0 `o 0 U j a U oj R Q O O 3 O M O O S 0 Q O O O O O Q O w W W g W U O W 0. Q N W �; oo CC W o Q co C� W u a CC W cn d 3 �L Vi Z M M� Cn R m r o� V] m �� cn Z a 00 �� V] L a N �� V] u C �� V] O N Cn cn d �ru 8,2014 Item #4.2 0 m 0 0 0 0 0 r a O N O O O C O I � I � Q I Q^ b N M M r r e Q F O E d U c CIS a m ¢ c� v a February 18, 2014 Item # 4.2 LO �g �Q N Y 3i O U w rn T o 0 o> 0 O O O O N N y N Y�..� 5 00 N 0 00 N o N N O N N O O - O O y = 0 W V 0 0 C� 0 rn 0 o 0 0 0 N_ n. z 0 Q% tC O O O M O O O M 00 O O O V O O O Q N op O M r N o0 O M I� y .V. 0 W W V T A O O O O N N O o C � � N 40 0 o v A a CL cn A o � V 0 0 °- � N N M L O O O (y 7 O O O M O U � � O C N 47 A t ¢ u ¢ a ¢ CIO s n W Q vn 18 of 1 U °" '' cn 0 0 0 0 0 r a O N O O O C O I � I � Q I Q^ b N M M r r e Q F O E d U c CIS a m ¢ c� v a February 18, 2014 Item # 4.2 LO M O N M 'C L L OO O as O y L U � N '� rH V� i.l V O 19 of 3' b _N a V cC U U ¢ y N C 6 U O 5U 0. U C N 7 > r cd � C, U � Q O a U N m V rm 7 Q G O Q U N Q 0. C U > > > > O E > O ro m M s N N c� U M O M O M O \ M O 47 ¢ M O N M O W M O 00 M O N O �" O O N O O O — O �--� O O O U oA E2 U O O O O O O O D\ r N O 00 W > R V U �O r o0 oc . U C G C4 CIS > n N Q O r O� N FN N O O N N Q 00 v1 00 fC uC E C ..1 - O E-I V t 6. E rW o cy M UV cC M O W U E w O O O O U O O U O N o0 Obi W o ,W z cc O O O O O N U U U February 18, 2014 Item # 4.2 m CIS r rn oo M oo — N o 0 0 0 0 0 0 0 N U 00 N r op O r �D N O O O O O O O O N cO L M O v N N r L — — V — V� — C U > > > > O > O ro s c� U M O M O M O \ M O M O D M O N M O W M O 00 M O N O �" O O O O O O — O �--� O O O U oA E2 U A W > R V U s � C G C4 CIS > n fC uC E C ..1 - O E-I V t 6. E rW o cy M UV cC M O W U E w 2 U O O U Fr a� D cd W o ,W z cc U U U February 18, 2014 Item # 4.2 m .D _N �v v N c0 y U U a U w+ Q � N c U O �U a` M O N O M L o � U H 0 7 N V U N >s L E 0 d z �o �U c 0 a O U N c V t ^� a C a N U a U 20of3 a0 O M !� ° 00 O M 1� O O 0 0 — N M M O O N N O O O D\ Ol , p� O O O o0 00 � pp O O O 00 00 � pp M o0 a0 00 pp U 0 0 N NN r o 0 0 ° 00 O M 1� 0 0 N 1� 0 0 N M M O O N N a M O N O O O � M o0 O O U 0 0 N NN r o m U v v o U v O C7 o 0 0 ° 00 O M 1� tV 0 0 N M M O O N N a M O N O O I I O February 18, 2014 Item # 4.2 G N E U bD t6 c Cca G N Q N 7 U OD Q. U V a' a) a c N a � � U A m U v v O U v O C7 February 18, 2014 Item # 4.2 G N E U bD t6 c Cca G N Q N 7 U OD Q. U V a' a) a U r m vs y U V � U 4 Q y 4J G Q N U O CU a`. 0 v C N 3 � c0 c'. cn a O O 7 iC �U C O a O U yUy c� N a O a N U 00 O O� O O O O O N O O N N 00 00 O O r r M M N N N N > > > O O O O 0 M O O O O O a r N O O O O r T O b O O O O M R O oN0 O O O O M O M O O O O O O O 00 M 00 M 00 O O� O O O O O N O O N N 00 00 O O r r M M N N N N r �n 0 0 0 N N N r r N N N N M O O O n � b � Q � b � R b W N r > > > O O O O 0 M O O O O O a r N r T O b O O O O M R O oN0 O O O O M O M O O O O O O O 00 M 00 M 0 N 0 N o N O N r �n 0 0 0 N N N r r N N N N M O O O n � b � Q � b � R b W N r February 18, 2014 Item # 4.2 E CIS Cco G N h Q N 3 U N oD 0. N cG s 3 d v O a > > > 0 0 a r N M O M O M O M O M O O O M O ti A U � � G C 6 2 2 February 18, 2014 Item # 4.2 E CIS Cco G N h Q N 3 U N oD 0. N cG s 3 d v O a M rl O N ^C � L M ra+ y Cd O r V O � 1 O � M U ° � w, N •� rH Vl O V O 22 of 3' � s s N =u T N G Q! G C 4 a .. ti T_ U N C U � V a N ro < U hD y 3 � L ctl y U � N � � t U � a� £ N C � O CO U C C 7E Q Q `a m �r a a �C �L C � C � C � C L N 3 R ; C 7I .0 �tU N M V1 O O O O O O b 0 0 0 e O O 0 N O o0 O O O O r 0 0 0 0 O O .- N N O O O O O O O O O O O O C O O O O O O 0 0 O O O O O O O o0 O O O O r O O O M O N h O — O O .- 0 0 0 0 � W � a 0 ro U O O O O W o rn cOO, °o G O T T O U O N U N O O O O CA O O O r1 O Obi � N O O� CT O O O O O O V R O °o rn rn °o O N N O Q V — e 0 0 0 N b N O O O O O O O O � O O � 0 O pMi O o°0 0 o O 0 O W O O O O O °o O N EL U EQ- O i r .e 0 � N .o ,o ,o � N , N , O � O , C , O � O r � O � � O , O V � N M o 000' , r I � N t aD , NI , N � O oc I , Q ,a a � N E- �O �z February 18, 2014 Item # 4.2 00 ro C ro y is 3 a rn U7 I" lu a 0 0 � N 0 > V M 0 o vl M O N N O O M ° N 00 O U ro J M O N h O — C d � W � a ro U R c U cv F U A c9 e 0 0 0 N b N O O O O O O O O � O O � 0 O pMi O o°0 0 o O 0 O W O O O O O °o O N EL U EQ- O i r .e 0 � N .o ,o ,o � N , N , O � O , C , O � O r � O � � O , O V � N M o 000' , r I � N t aD , NI , N � O oc I , Q ,a a � N E- �O �z February 18, 2014 Item # 4.2 00 ro C ro y is 3 a rn U7 I" lu a � Z � a F LL z y a c a -o Y � z U U C Q U N ,C V ca d C c y oA a � U R o � t U � N � Q O N v Q Cn Q cti C n N � y cO a 3 � ro U C N O ro � �U U 7 CM m is D V) 0. O U U Q r r N N O O O O O O O O °o °o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N 0 0 0 0 °o °o 0 0 0 0 0 0 0 0 0 0 °o °o O o0 N O O O O O O 0 0 0 0 0 0 0 0 0 00 N O O O O O O O O O O 0 0 0 00 N N O O 0 0 N N 00 N O N u Gi 9 R s w w R O °o 0 0 0 0 O 0 0 0 O O 0 0 o°o o° °o 0 O O O °o 0 0 00 N O O O 0 00 ctl L[] U_ H Q N ' O C ti Q ,o U .o ,o ,c ' O 'o 'o ' O o ,0 0 �o0 0 'o 'o 'o , N '0 0 0 0 o , o°o � N a � CIS I O ' O ' O (n , o ,o ' N I � O ' O , O � O 0 ' N c cv �y W U w i6 I O OD � 0 O N N I , � � N U , O � ' A Itl N u a February 18, 2014 Item # 4.2 m C V C C1 Z y a y a c � a v «. y L_ V V � -o d N ,� V td C y o0 a � O r id y U a v c c N � C O U c o S E N Q � O � ( 5 Q N 7 > L U. 0. d 7 C a) C � O O �aJ N 3 CC l�o W � C UQ o �o V N O O °o °o 0 0 O o 0 0 0 0 0 0 0 0 0 06 0 c� O O O O O O O O O O o 0 0 0 0 °o °o 0 00 � O O O � O � CO O O O 0 0 0 0 0 rn M M O� O 00 O O O O O �O O T O M f'1 � O a00 O 00 0 T O M 00 °o 0 0 0 0 0 ao rn <+i O � O O 0 r" � O 00 O o 0 rn l� O b r r W O rn C C C, W c0 U_ Q F O F °o 0 0 0 0 0 0 0 0 O O O � 0 o° N O O O O O o �n 0 O N O N N r O O 0 O M 0 0 N °o 0 M N N N L V R 0. d R N L N U � C e N m °o 0 0 0 0 0 0 0 O O O � 0 °o N O O o 0 O N O N r O O O 0 0 N O. 0. R U_ Q O F 0 0 0 0 0 °o 0 O O O � °o N O O O O b o o° N O t` M W O , O O 0 0 0 O N 0 0 0 0 0 0 O O O � °o N O b o � °o ^ O N M O� W O O O 0 0 O 3 L � o � � a � F � N N Q V ro � C N 0 0 � o 0 M O N M_ O N M �O .o ,o ,o O N O N C � O T R I � ' M 1 r M R r 2 �,- � c U °o 0 0 0 0 0 ao rn <+i O � O O 0 r" � O 00 O o 0 rn l� O b r r W O rn C C C, W c0 U_ Q F O F °o 0 0 0 0 0 0 0 0 O O O � 0 o° N O O O O O o �n 0 O N O N N r O O 0 O M 0 0 N °o 0 M N N N L V R 0. d R N L N U � C e N m °o 0 0 0 0 0 0 0 O O O � 0 °o N O O o 0 O N O N r O O O 0 0 N O. 0. R U_ Q O F 0 0 0 0 0 °o 0 O O O � °o N O O O O b o o° N O t` M W O , O O 0 0 0 O N 0 0 0 0 0 0 O O O � °o N O b o � °o ^ O N M O� W O O O 0 0 O 3 L � o � � a � F � N N Q V ro � cd y Q � o 0 � z .o ,o ,o , M � O T 'o v 'o �o ,m I � ' M 1 r M 1 ' O y C O W U w d a) op fd 1 N ro 0 0 a) 1 � � � � � N 7 V > II a February 18, 2014 Item # 4.2 m o 00 0^ o 0 0 0 0 0 Cl o rn rn a U O M O M O O O O O O O O Do m 00 O M O — O O O O O M M v1 M M M (y V1 V'1 N �/1 V'1 r- �l1 V'7 M M M N N N � f� r M r � � N N n n O an an O' V O V V V V N N O M M M w 00 a, ao 00 00 O O O 00 �C �C �C b m 00 D\ n U Ol 1- M M ro o 00 00 - O o 0 0 0 0 0 o z O M M M M O O O O O O O O G O M M O O O O O O O n O o r- c- O o 0 0- 0 0 0 o v a n v O O n o o n o v n v 0 0 Cl 00 0 r- 'D o a V Cl O Cl O O O O O oo O O o0 C N 7 M v N ry M Q cC F-' O 4 L O oo O — O O O O O O O O O O y O M O M O O O O O O O O O y O M O — O O O O O O O CD O ON — N O O DO ' O O O O O O O O O O Q. O O M O M O O O O O O O O O U O O O O O O O O T O O O O M O O O ,O O O O O O It O O O — O O o0o N O O 0 o0 N N M N N N M rl M 7. O h O o0 O O O O O O O O `- r� r,� rn o v 0 0 0 0 0 0 0 Cl Cl oo t- M Cl M O O O O O O O Cl ,D M [- V O O O O O O O O O U o O, v o 10 0 ao 0 0 Cl 0 Cl Cl Cl C) o r-� o 0C C 0 0 C 0 0 C O M O O O, O O O O O O O o0 O O O O o0 M N N N N M 3 a M i a C N N O � N N N N O O N N U E C-) 0 � a 0 a 0 s. y H � A o o s o o 2 2 2 2 a 2 2a F F F F F U o o w m ro m ro m U d w z z 2 d C CL T F CG CG CL UU U U U U U U UU U UU F F Z U c 0 cC � m° m° � S m° m° 00 0o FM d N `q D a n z N o0 N N U V] T N ,O O o0 00 � 10 C, M M M M M M M M M M M M M M O O O O O O O O O O O O O O N N N N N M 7 ,O 'D v1 v� f� O N N N N N N N N N N N N N N 25of3 ------ ^ - - - - -^ b0 C N d N 3 U � II N a �o .Q L° a s L V y d � c -jH 0 y O 00 O 7 C O � � F M 0 3 L 7 .fl a � 3 � Z z February 18, 2014 Item # 4.2 G N a M O N L H M y.■ N A CC M p � O p N U L o V •� � G L W 26 of 31 C N F C G � � F" r � c� C � (A ti O o n TO r 3 cG o U H F- U N M N 10 O O O O - O O c 3 Cl °o CD °O 60 M � 0 o 0 o a r4 O co m N N N o U U x CD CD U ° G p O N V7 M O r 0 N � N N O U � r LLI M M y � � O N o N O N N m rn m d February 18, 2014 Item # 4.2 m C M 1— O O fl O V G O R C) N O O CD O O O O O O O td W Q\ N M F O O O C. — — N — OM C N N R O O O� w+ w U � moo, „A c U c � 0 Ol N M N iC z� U co O n 0 U c 0 q N a G O U ro N E. N 27 of 39 1 7 O N_ O 0 0 0 0 0 N N N N N n 10 10 O O O r N N O O O o � � O O 00 N � - - o U UO U iA ti y N N N N N C G G G O O O O N N N N N \/1 \ N N O O O O February 18, 2014 Item # 4.2 G v N a N U CQ a U a r U C c 0 D W CL O CD O O fl O V G O O O O O, CD O O O O O O O d t O O O O O O O O C. — — N — N iC z� U co O n 0 U c 0 q N a G O U ro N E. N 27 of 39 1 7 O N_ O 0 0 0 0 0 N N N N N n 10 10 O O O r N N O O O o � � O O 00 N � - - o U UO U iA ti y N N N N N C G G G O O O O N N N N N \/1 \ N N O O O O February 18, 2014 Item # 4.2 G v N a N U CQ a U a r U C c 0 D W CL � � � � � � � � � � S / /Rf \ / /�/ 2 / \k\ \ ƒ /k\ U 2 ($ k =ERLL { 2 7 \ S7 /\/ \7\ // t2y22 o. Zr- »& _� »r±2\ ■ - o .. [ 3 § <e± z m \e # 2 e < e � $ 28 of 31 February 18 2014 Rem * 4. ) N V 7' O L a �C V N C 4) +.1 N C cC to C C O z C a Rf U N_ LL t a..r t N V 0 N ^C W I_ GJ C O V 00 00 jo o aj C; N N N O �� O O �m d ` c � C7 rn rn In Oz N I-� y W oN0 n C7, to If1 .O O N N N . ; L 'I LI CO O� M O� O O� 7 W ^ 1� E Y O N � U to V m > 111 .O C N §§ N rq VAT VT N VNT 01 ^ 9 M w � CNO n rn v m Ln Ln n v 11 .O O N NV? '7 N Vf VT Li L-I Li Li OC CO CEO CO O E 1� n ! O E c v o O N_ O r+�i N •� % moo o N o i o N a+ C M E °i ao ! rn en N r r r Li L (� C N O C 41 Q H a :E C C ro U r h U O On E N L Ln t on Q > C V : w d.1 w H u v E > Q on C Z .< y � Q ; E v' v ru _ s U- ~ c 1 Ll-UULILI 7 o O o o M a0 O O O O N Un W T O N o ll N y V O N n I CO to VT VT VT C^O to LIL UUUU! to i �i f0 a C Y Y Y Y N N M m M M M M � \ CO CO CO M Ca T U r C C C C C : O O O O O O O c .E _E .E .E a H A t r t�6 R R r0 e 0 cp UM U U U U U T - 0 U C +" ar N N 2 Q, dJ 0 a v U v Ca E v o w � 0. N Li- 29 of 31 . Attachment C February 18, 2014 Item # 4.2 Oo 00 n N N O O N 0 e- N vT C7 N C! CD Ln M o a Y 7 CO m Un n v N • V O M I- o s^ Y � O T mM a0 O n N Un N U U LJL N ll � O ;; 3^ 10 CD � a o0 0 m l i > Vf Vf 7VT 3 � 111 CO !A OC C) E M N O M .O O Oo Ln 41 0 a° c a Q Q Ron Z Z 0 v o n O O If1 M C � � E L w M O gg i N N CO O CO O I O U c O T On m r Z C w C OA O O L 20 U CL v 3 Q 3 s N LL L y Q U A CD o E z U +� w :2 O c Ln LLI > N Z c tom i z 1 Ll-UULILI 7 o O o o M a0 O O O O N Un W T O N o ll N y V O N n I CO to VT VT VT C^O to LIL UUUU! to i �i f0 a C Y Y Y Y N N M m M M M M � \ CO CO CO M Ca T U r C C C C C : O O O O O O O c .E _E .E .E a H A t r t�6 R R r0 e 0 cp UM U U U U U T - 0 U C +" ar N N 2 Q, dJ 0 a v U v Ca E v o w � 0. N Li- 29 of 31 . Attachment C February 18, 2014 Item # 4.2 monthly market review market commentary for december 201 ECONOMIC ACTIVITY Real gross domestic product of the United States increased at an annual rate of 4.1% in the third quarter of 2013, according to a "third estimate" by the Bureau of Economic Analysis. This compares to a second quarter advance of 2.5 %.1 The increase in GDP was due primarily to contributions from private inventory investment, PCE, nonresidential fixed investment, exports, and residential fixed investment. This third estimate of GDP growth is based on "more complete source data" than were available for the second estimate of 3.6% GDP growth for the third quarter.2 EMPLOYMENT American non -farm employers added 74,000 jobs in December, bringing the unemployment rate down to 6.7 %.3 The number of new jobs was far below the predictions of economists surveyed by Bloomberg. In fact the 74,000 print was below even the most pessimistic prediction in the Bloomberg survey, with many economists now blaming an unusually cold winter for the slowdown in hiring.4 While only 74,000 jobs were added in December, the number of unemployed persons declined by 490,000 over the month, indicating that the majority of the decline in the unemployment rate was due to many people giving up on job searches rather than increased hiring. The number of unemployed persons was 10.4 million in December. When involuntary part-time workers and discouraged workers are added to the unemployed, the total number of Americans who desire but cannot full -time employment is 2o.6 million.5 The weak hiring in December led to a decline of 0.2 percentage points in the civilian labor force participation rate; it fell to 62.8 %. The employment - population ratio was unchanged at 58.6 %.6 CONSUMERS Consumer confidence, as measured by the Conference Board Consumer Confidence Index, increased in December, after declining in October and November.? "Consumer confidence rebounded in December and is now close to pre - government shutdown levels," remarked Lynn Franco, Director of Economic Indicators at The Conference Board. "Looking ahead," she continued, "consumers expressed a greater degree of confidence in future economic and job prospects, but were moderately more pessimistic about their earning prospects ... consumers are in better spirits today than when [2013] began."' sector review REPO The Fed had been testing a reverse repo facility in December that appears to have been successful. According to J.P. Morgan, the year -end allotment in the reverse repo program totaled about $198 billion across 102 bidders, representing over 1o% of the tri -party repo market. Based on the apparent popularity of the reverse repo program, J.P. Morgan believes the Fed will either extend the test program or launch it outright.14 Regardless ofwhether the Fed continues the program, repo volumes are expected to fall throughout 2014 as higher bank capital requirements push banks to ration their balance sheets and increase repo rates.15 TREASURIES /AGENCIES The FOMC press release in December which announced the reduction in monthly asset purchases also included an assurance that the federal funds rate will be kept 1. "Gross Domestic Product, 3rd Quarter 2013 (third estimate)." Bureau of Economic Analysis. December 2o, 2013. 2. Ibid 3. 'The Employment Situation - December 2o13. " Bureau of Labor Statistics, Department of Labor. January 10, 2014. 4. "Old Man Winter Put Chill on U.S. Payroll Figures in December." Bloomberg Finance LP. January 10, 2014. 5. "The Employment Situation -December 2o13. " Bureau of Labor Statistics, Department of Labor. January 10, 2014. 6. Ibid 7. "U.S. Consumer Confidence Rebounds in December." The Conference Board. December3l, 2013. 8. Ibid 9. "Home Prices Stage Advance According to the S &PrCase- Shiller Home Price 31fie9f inAls expressed above are those of Cutwater Asset Manag, ®0000®® CUTWATER ASSET MANAGEMENT HOUSING Data released in December showed that U.S. home prices exhibited year -over- year gains of 13.6% in October, as measured by the S &P /Case - Shiller Home Price Indices 10- and 20 -city composites. "Both Composites' annual returns have been in double -digit territory since March 2013 and increasing; now up 13.6% in the year ending in October," said David M. Blitzer, Chairman of the Index Committee at S &P Dow Jones Indices. He added a caveat, however, saying "monthly numbers show we are living on borrowed time and the boom is fading. "9 "The key economic question facing housing is the Fed's future course to scale back quantitative easing and how this will affect mortgage rates," continued Mr. Blitzer. "Most forecasts for home prices point to single digit growth in 2014," he added.- MONETARY POLICY The long- awaited "taper ", or a reduction in monthly asset purchases by the Federal Reserve, finally arrived on December 18th. Risk assets rallied in response to the news. The announcement came in the form of a press release following the Federal Open Market Committee's December meeting, which read "in light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions, the Committee decided to modestly reduce the pace of its asset purchases." The statement went on to say that monthly asset purchases would be reduced to $75 billion from the previous $85 billion. Furthermore, the statement announced that the federal funds rate would remain near zero well beyond when unemployment reaches the previously announced 6.5% threshold. On January 6, 2014 the United States Senate confirmed Janet L. Yellen as the next chair of the Federal Reserve, making her the first woman to ever hold the job. Ms. Yellen was approved by a 56 -26 vote, as some opponents to her candidacy were unable to reach Washington on account of flight delays.' Because of a rule change by majority leader Harry Reid, however, only 51 votes were needed for Ms. Yellen's candidacy to succeed. Previously, 6o votes would have been required to overcome the threat of filibuster.'3 near zero "well past" the time when the unemployment rate reaches 6.5% -the level previously announced as a key threshold for winding down extraordinarily accommodative monetary policy.i6 This should keep short-term Treasury and Agency rates reasonably well- anchored. COMMERCIAL PAPER Bank capital requirements are expected to cause many financial CP issuers to trim and term out their short-term unsecured borrowings. As a result, bank CP issuance may only be at reduced levels in 2014.11 Despite this anticipated reduction in financial issuance, J.P. Morgan expects collateralized bank CP outstandings to gradually increase, allowing investors to gain secured bank exposure normally only available in ABCP.B Indices. "S &P DowJones Indices. December3l, 2013. 1o. Ibid 11. "Press Release. " Board of Governors of the Federal Reserve System. December 18, 2013. 12. "Yellen Wins Backing of Senators to Lead Fed." The New York Times. January 7, 2014. 13. "Senate Approves Janet Yellen as Fed Chairwoman." Financial Times. January 6, 2014. 14. "Short Term Market Outlook and Strategy. "J.P. Morgan. January 6, 2014. 15. "2014: The Year of the Transition. " Barclays. November 21, 2013. 16. "Short Term Market Outlook and Strategy. "J.P. Morgan. January 6, 2014. 17. Ibid 18. "2o14: The Year of the Transition." Barclays. November 21, 2013. Attachment D hr ate/ Source: CutwatterAssseetManagement tice. All statistics rrPSY�TflDr�th- �rt�s�riles� DTneIWi52 ndtY� -o a� r •���• monthly market review CUTWATER ASSET MANAGEMENT market summary for december 2013 WEEK - ENDING RATES AND YIELDS 12/o6 12/13 12/20 12/27 4" QTR AVG 3" QTR AVG 2nd QTR AVG ill QTR AVG Overnight Rates Effective Fed Funds 0.07 0.07 0.07 0.07 0.08 o.o8 0.11 0.14 Repurchase Agreements o.o6 0.05 0.02 0.00 0.07 0.04 0.07 0.13 Discount Rates 1 Month Treasury Bill 0.02 0.01 0.00 1 Month Agency Disc. 0.04 0.04 0.05 1 Month Com'I Paper 0.12 0.09 0.12 3 Month Treasury Bill 0.05 0.05 0.04 3 Month Agency Disc. 0.08 0.08 0.09 3 Month Com'l Paper 0.14 0.14 0.15 6 Month Treasury Bill 0.08 0.08 0.07 6 Month Agency Disc. 0.12 0.11 0.12 6 Month Com'l Paper o.16 o.16 o.18 Yields 0.07 0.09 0.10 1 Year Treasury 0.13 0.13 0.13 1 Year Agency 0.14 o.18 0.17 2 Year Treasury 0.30 0.33 0.38 2 Year Agency 0.36 0.42 0.44 5 Year Treasury 1.49 1.53 1.68 5 Year Agency 1.78 1.85 1.96 HISTORICALYIELD CURVE 3mo.6mo. iyr. Syr KEY ECONOMIC INDICATORS Unemployment Rate Consumer Price Index - Less Food and Energy Consumer Confidence FOMC Rate Decision Gross Domestic Product D) IA 31 A4 h Year -to -Date Tyr NASDAQ Month 11/29/13 ioyr. Forthe Period Nov Nov Nov Dec C9 Year -to -Date 0.02 0.04 0.01 0.02 0.05 0.04 o.o6 0.03 0.04 0.05 0.12 0.11 0.12 0.13 0.14 0.04 0.05 0.02 0.04 o.o8 0.09 0.07 0.04 o.o6 o.o8 0.14 0.13 0.15 o.16 0.17 o.o6 o.o6 0.05 0.07 0.10 0.10 0.10 0.07 0.09 0.10 o.18 0.17 0.20 0.20 0.21 0.13 0.12 0.12 0.13 0.15 0.17 o.16 0.22 0.20 0.17 0.39 0.32 0.36 0.27 0.25 0.46 0.40 0.46 0.35 0.30 1.74 1.44 1.51 0.92 0.82 2.04 1.78 1.78 1.11 1.00 Source: Bloomberg Finance LP 5.00 4.00 3.00 2.00 1.00 12/31/13 0.00 3oyr. Source: Bloomberg Finance LP Date of Release Expected Actual Prior 12/o6 7.2% 7.0% 7.3% 12/17 1.3% 1.2% 1.0% 12/17 1.7% 1.7% 1.7% 12/31 76.o 78.1 70.4 12/18 0% -0.25% 0% -0.25% 0% -0.25% 12/05 3.1% 3.6% 2.8% S &P 500 Cutwater Asset Management iii King Street Armonk, NY 10504 - -� 7663 -3030 Month Year- tp,e�i�uary 18, y8�6v�6 LUWitem # 4.2