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Fairfax County Public Schools | Second Quarter 2016
Presentation Materials
Contact Information
James P. Scott Partner
Aon Hewitt Investment Consulting, Inc.
7325 Beaufont Springs Drive | Suite 300
Richmond, VA 23225
t +1 (804) 560-2261
f +1 (804) 320-3711
Gregory J. Fox, CFA Senior Consultant
Aon Hewitt Investment Consulting, Inc.
45 Glover Avenue
Norwalk, CT 06850
t +1 (203) 523-8780
f +1 (847) 953-2192
Matthew C. Stone Senior Investment Analyst
Aon Hewitt Investment Consulting, Inc.
45 Glover Avenue
Norwalk, CT 06850
t +1 (203) 523-8929
f +1 (203) 523-6750
I Third Quarter 2016 Market Environment Page 1
II FCPS Plan Summary Page 11
III Participant Information Page 24
IV Investment Manager Analysis Page 29
V Fee Analysis Page 48
VI Manager Research Page 49
Table Of Contents
Global Equity Markets
Global equities rebounded somewhat after a volatile first quarter. Despite falling on the news of “Brexit” (the decision
by the UK public to leave the EU), central banks responded to the market’s negative reaction to “Brexit” by reassuring
markets that they would maintain accommodative monetary policy helping markets recover quickly; however, much
uncertainty remains.
Global equity markets returned 1.06% in Q2 2016 with notable differences in regional returns. Canada continued to be
the best performer with a return of 4.72% in Q2 2016.
Page 1
USA53.3%
UK6.3%
Canada3.2%
Pacific ex-Japan4.0%
Japan8.1%
Europe ex-UK14.2%
Israel0.3%
Latin America1.3%
Asia7.6%
Eastern Europe, Middle East &
Africa1.6%
Emerging Markets
10.6%
MSCI ALL COUNTRY WORLD IMI INDEXGEOGRAPHIC ALLOCATION AS OF 06/30/2016
Source: MSCISource: MSCI
UK13.6%
Canada6.9%
Pacific ex-Japan8.6%
Japan17.3%
Europe ex-UK30.4%
Israel0.6%
Latin America2.9%
Asia16.3%
Eastern Europe, Middle East &
Africa3.5%
Emerging Markets
22.6%
MSCI ALL COUNTRY WORLD EX-U.S. IMI INDEXGEOGRAPHIC ALLOCATION AS OF 06/30/2016
Source: MSCI
Global Equity Markets
The two exhibits on this slide illustrate the percentage that each country/region represents of the global equity market
as measured by the MSCI All Country World IMI Index and the MSCI All Country World ex-U.S. IMI Index.
Page 2
U.S. Equity Markets
The Russell 3000 Index returned 2.63% during the second quarter and returned 2.14% over the one-year period.
During the second quarter, the energy sector was the strongest performer, posting returns of 10.94%. The technology
and consumer discretionary sectors were the weakest performers, producing returns of -2.06% and -0.88%,
respectively.
Performance across the market capitalization spectrum was positive over the quarter. Medium cap stocks
outperformed both the larger and smaller segments in Value stocks. Small cap stocks outperformed the other
segments in Growth stocks. Value stocks outperformed Growth stocks across the capitalizations.
Page 3
2.21% 2.04%
3.57%
1.11% 1.17%
2.24%
6.00% 6.04%
7.94%
4.34%
2.72%
6.22%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
Barclays Agg.Bond
44.3%Gov't
25.6%Corp.
27.8%MBS
0.5%ABS
1.7%CMBS
BARCLAYS AGGREGATE RETURNS BY SECTORAS OF 6/30/2016
Second Quarter
One-Year
Source: Barclays Live
0.68%1.20% 1.55%
2.72%
6.55%
1.60%
3.72%
4.97%
7.88%
15.70%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
1-3 Yr. 3-5 Yr. 5-7 Yr. 7-10 Yr. >10 Yr.
BARCLAYS AGGREGATE RETURNS BY MATURITYAS OF 6/30/2016
Second Quarter
One-Year
Source: Barclays Live
1.67%
2.61%3.11%
4.30%
5.52%5.35%
7.08%
8.61%
6.91%
1.62%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Aaa Aa A Baa High Yield
BARCLAYS AGGREGATE RETURNS BY QUALITY AND HIGH YIELD RETURNSAS OF 6/30/2016
Second Quarter
One-Year
Source: Barclays Live
U.S. Fixed Income Markets
The Barclays Aggregate Bond Index returned 2.21% in
the second quarter. Corporate bonds were the strongest
performing index segment, returning the most at 3.57%.
High yield bonds outperformed all the other investment
grade corporate bonds in all different credit qualities.
Longer duration bonds outperformed shorter duration
bonds.
Page 4
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
0 5 10 15 20 25 30
Maturity (Years)
U.S. TREASURY YIELD CURVE
12/31/2015
03/31/2016
06/30/2016
Source: U.S. Department of Treasury
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
Jun 06 Jun 07 Jun 08 Jun 09 Jun 10 Jun 11 Jun 12 Jun 13 Jun 14 Jun 15 Jun 16
U.S. 10-YEAR TREASURY AND TIPS YIELDS
10Y TIPS Yield
10Y Treasury Yield
Source: U.S. Department of Treasury
U.S. Fixed Income Markets
The Treasury yield curve shifted downwards over the second quarter with yields falling across most maturities. The
yield curve flattened over the quarter, driven by long maturity bonds falling.
The results of the “Brexit” referendum were the main drivers behind the collapse of yields over the quarter.
The 10-year U.S. Treasury yield ended the quarter at 1.49%, 29 basis points lower than its level at the beginning of the
quarter.
The 10-year TIPS yield fell by 7 basis points over the quarter and ended the period at 0.09%.
Page 5
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
EUROZONE PERIPHERAL BOND SPREADS(10-YEAR SPREADS OVER GERMAN BUNDS)
Spain Italy
Portugal Greece
Ireland
Source: DataStream
European Fixed Income Markets
In the Eurozone, bond spreads widened during the second quarter of 2016 with core bond yields falling and the
peripheral bond yields being mixed. German bund yields fell to negative territory towards the end of the quarter as
investors sought safe haven bonds amid growth concerns caused by Brexit.
Italian government bond yields rose sharply in the beginning of the quarter driven by the country’s troubled banking
sector due to a heavy load of non-performing loans on their balance sheets. Portuguese bond yields rose over
concerns of the country’s sovereign debt losing its last investment grade credit rating, which would result in the
country’s debt being disqualified from the European Central Bank’s asset-purchase program.
Page 6
Spread (bps) 03/31/2016 12/31/2015 03/31/2015 Quarterly Change (bps) 1-Year Change (bps)
U.S. Aggregate 56 56 46 0 10
Long Gov't 4 4 3 0 1
Long Credit 223 225 187 -2 36
Long Gov't/Credit 136 138 118 -2 18
MBS 22 24 20 -2 2
CMBS 109 121 95 -12 14
ABS 74 72 62 2 12
Corporate 163 165 129 -2 34
High Yield 656 660 466 -4 190
Global Emerging Markets 382 389 354 -7 28
Source: Barclays Live
Credit Spreads
During the second quarter, credit spreads fell across all the areas of the bond market with the exception of MBS
spreads.
High yield spreads (-62 basis points) fell by the most over the quarter, followed by Global Emerging Markets spreads
(-37 basis points) and ABS (-13 basis points).
Spread (bps) 06/30/2016 03/31/2016 06/30/2015 Quarterly Change (bps) 1-Year Change (bps)
U.S. Aggregate 55 56 51 -1 4
Long Gov't 3 4 4 -1 -1
Long Credit 215 223 202 -8 13
Long Gov't/Credit 130 136 128 -6 2
MBS 27 22 26 5 1
CMBS 98 109 101 -11 -3
ABS 61 74 62 -13 -1
Corporate 156 163 145 -7 11
High Yield 594 656 476 -62 118
Global Emerging Markets 345 382 328 -37 17
Page 7
Commodities
The Bloomberg Commodity Index rose during the second quarter returning 12.78%.
Over the quarter, the best performing segment was softs with a return 20.46%.
Livestock was the worst performing sector during the quarter with a return of -1.86%.
Page 8
90
95
100
105
110
115
120
125
130
TRADE WEIGHTED U.S. DOLLAR INDEX(1997 = 100)
Source: Federal ReserveSource: Federal Reserve
70
80
90
100
110
120
130
140
150
160
U.S. DOLLAR RELATIVE TO EUR, GBP AND JPYREBASED TO 100 AT 06/30/2011
EUR/USD
GBP/USD
JPY/USD
Source: DataStream
Stronger Dollar
Weaker Dollar
Currency
As measured through the broad trade weighted U.S. dollar index, the U.S. dollar strengthened during the quarter.
The US dollar appreciated sharply against the pound and the euro but depreciated against the yen. The pound
weakened on confirmation of Brexit and ensuing speculation over a cut by the Bank of England (BOE). The yen
appreciated sharply against the dollar as the Bank of Japan (BOJ) kept the monetary policy unchanged over the
quarter, contrary to expectations.
Page 9
U.S. Commercial Real Estate Markets
U.S. real estate is now in a fairly mature stage of its cycle, with sector returns expected to be roughly in line with long-term averages this year. That said, real estate fundamentals remain positive and are
expected to continue to support above average income growth across most property types. Pricing, meanwhile, is experiencing investor uncertainty due to current pricing levels and multiple global events.
Attractive relative net operating income growth is expected to be the leading driver of returns at this point in the U.S. cycle.
U.S. Core real estate returned 2.13%* this quarter, which is roughly in line with first quarter but down 126 bps on a year-over-year (YOY) basis. Year to date performance is now more closely aligned with
the sector’s long run average. The income return (1.12%) again outpaced appreciation (1.01%), illustrating our expectation that net income growth will be a larger driver of returns at this mature point in the
real estate cycle.
Non-Core investments with vintage years of 2009 or more recent are generally performing in line with initial projections. Return expectations for new capital deployed, meanwhile, continue to decline slightly
as the real estate cycle matures further.
The U.S. REIT sector gained 7.0% in second quarter (FTSE NAREIT Equity REIT Index); marking a 13.4% gain year-to-date (YTD). Operating fundamentals and asset values remained strong, with U.S.
REITs ending the quarter trading at premiums to NAVs. This represents an abrupt turnaround from 1Q, when REITs trading at discount to NAVs were signaling a disconnect with private market
fundamentals. The lower global yields following Brexit has made the U.S. property market a favorable place for stability and yield. Significant volatility is expected to remain in public market pricing.
U.S. pricing uncertainty remains elevated as evident by declining property transactions YTD. In second quarter U.S. sales vo lumes continued to post declines (data available through May), at similar levels
to first quarter. While still elevated volume wise, sales are down on average 35% YOY. Pricing, however, continues to hold fairly steady, with cap rates rising only slightly from Q1. The decline in volume
demonstrates differing price expectations between buyers and sellers, which is likely to eventually drive pricing lower. Capital remains plentiful, however, with numerous sources available for debt and
equity capital.
The long term impact of Brexit on U.S. real estate remains uncertain. To date, the fallout from Brexit for the U.S. has been minimal besides the declining risk of rising U.S. interest rates. Brexit could
potentially spur the growth of foreign investment in U.S. real estate, attracted to the market for its perceived stability and liquidity. The UK market, meanwhile, is struggling with uncertainty that has driven
several open-end real estate funds to suspend redemption requests.
At this point in the real estate cycle it is important to incorporate risk mitigation strategies into a portfolio structure. Preferred equity and debt structures are important considerations to help mitigate medium
term cyclical risks.
*Indicates preliminary NFI-ODCE data gross of fees
CRE TRANSACTION VOLUME - QUARTERLY
SOURCE:RCA, AON HEWITT 3/31/2016
Page 10
Fairfax County Public Schools – Summary
This report has been prepared by Aon Hewitt Investment Consulting (AHIC) to provide Fairfax County Public Schools with an
objective, third party review of the historical investment results of the 457(b) Plan.
Asset Allocation
The Fairfax County Public Schools 457(b) Plan currently offers 8 investment options and a series of lifecycle funds. As of June
30, 2016, the Plan had 1 guaranteed interest fund, 1 fixed income fund, 1 inflation-sensitive solution, 2 passively-managed
domestic equity funds, 2 actively-managed domestic equity funds, 1 actively-managed foreign equity fund and a series of actively
managed target date funds. The two passively-managed domestic equity funds cover the following asset classes: large cap core
and mid cap core. The two actively-managed domestic equity funds cover the following asset classes: large cap core and mid
cap growth. Participants may allocate their investments among the funds in accordance with their own personal tolerance for risk.
As of June 30, 2016, the assets of the Plan totaled $173.9 million. The Plan held 16.6% of assets in the guaranteed interest
product, 11.2% in fixed income, 54.3% in domestic equity, 10.0% in foreign equity and 7.1% in target date funds. The Plan’s
asset allocation by fund is detailed later in this report.
Plan Performance
During the second quarter of 2016, global equity markets rebounded after a volatile first quarter. Despite an initial dip due to
“Brexit”, central banks responded to the market’s negative reaction by reassuring markets that they would maintain
accommodative monetary policy helping markets recover quickly. Domestically, the Russell 3000 Index returned 2.63% during
the quarter. Sector results were mostly positive during the second quarter with the exception of information technology and
consumer discretionary, which were down -2.06% and -0.88%, respectively. The top performing sector of the market was energy,
returning 10.94%. Performance was positive across all of the capitalization levels during the quarter. Value outperformed growth
in all capitalization levels. During the second quarter, the developed non-U.S. equity markets generally underperformed domestic
equity markets with the MSCI EAFE Index generating a return of -1.46%. Emerging markets outperformed developed non-U.S.
markets; the MSCI Emerging Markets Index returned 0.66%. The domestic fixed income market, as represented by the Barclays
Aggregate Bond Index, posted a return of 2.21% for the quarter. The strongest performing segment of the domestic bond market
was corporate bonds, which returned 3.57% for the quarter. Longer duration bonds outperformed their shorter duration
counterparts as the yield curve flattened over the second quarter. MBS represented the worst performing sector during the
quarter, with a return of 1.11%. Overall, the global fixed income market outperformed the domestic fixed income market, as
measured by the Citigroup Non-U.S. WGBI, which returned 4.04% for the quarter.
Page 11
Fairfax County Public Schools – Summary
Plan Performance (continued)
Against this backdrop, the Plan’s options had mixed results on a relative basis. Performance for the Plan’s passive strategies closely
tracked their target benchmarks.
Longer-term relative performance of most of the Plan’s active investments remains reasonable for the ten-year period ending June 30,
2016, as the fund’s offerings perform well relative to the benchmarks and peer group. Allowing for the expense ratios of the funds, both
of the Plan’s index options successfully tracked their target Indices for the quarter as well as for longer periods.
Quarterly Fund Attribution
PIMCO Total Return Fund underperformed during the quarter
- U.S. Treasury Inflation-Protected Securities held in lieu of nominal Treasuries
- Long dollar position against the Japanese Yen
+ U.S. rate strategies, including duration, curve positioning and instrument selection
PIMCO Inflation Response Multi-Asset Fund underperformed its benchmark during the quarter
- Underweight duration position, as a flight-to-quality in June pushed rates significantly lower
- Off-benchmark positions (exposure to Japanese and Eurozone equities) detracted
Page 12
Fairfax County Public Schools – Summary
Quarterly Fund Attribution (continued)
Dodge & Cox Stock Fund underperformed during the quarter
- Overweight position in the financials sector (26% versus 16%) (financials down 14% compared to 3% for S&P 500)
- Poor performance in specific holdings in the financials sector (Charles Schwab (-23%), BofA (-21%), GS (-17%))
- Underweight position in defensive segments. Specifically, no exposure to Utilities sector, which were strong performers.
- Exposures in Express Scripts and Cigna, which were both down 13%
Baron Growth Fund outperformed during the quarter
+ Stock selection within the financials, information technology, and health care sectors
+ Exposures in Primerica, Inc., CoStar Group, Inc., and IDEXX Laboratories, Inc.
- Holdings in the consumer discretionary sector
Artisan International Fund outperformed during the quarter
+ Security selection in the financials and consumer staples sectors
+ Top securities were Medtronic, NTT Docomo, and Nestle
- Brexit effects on holdings in UK and Europe
Page 13
Market ValueAs of
04/01/2016
NetTransfers
Contributions DistributionsCapital
Apprec./Deprec.
Market ValueAs of
06/30/2016
U.S. FIXED INCOME
Great West Portfolio Fund 27,734.80 394.84 733.79 -281.58 183.18 28,765.04
PIMCO Total Return Adm 19,235.59 -499.43 419.63 -168.19 415.46 19,403.06
PIMCO Inflation Response MultiAsst Inst 97.89 19.31 4.36 -20.58 4.60 105.56
TARGET DATE
T. Rowe Price Retirement 2005 422.05 -3.17 9.39 -36.59 9.94 401.62
T. Rowe Price Retirement 2010 359.58 - 8.04 - 8.76 376.37
T. Rowe Price Retirement 2015 1,350.57 179.36 41.50 -1.89 35.83 1,605.36
T. Rowe Price Retirement 2020 2,634.54 346.45 74.27 - 59.91 3,115.17
T. Rowe Price Retirement 2025 2,175.92 -26.17 155.22 - 41.35 2,346.32
T. Rowe Price Retirement 2030 932.01 -3.69 76.14 - 16.67 1,021.13
T. Rowe Price Retirement 2035 1,649.04 -7.13 94.87 - 25.88 1,762.66
T. Rowe Price Retirement 2040 568.91 30.91 34.98 -1.58 7.78 641.00
T. Rowe Price Retirement 2045 352.30 20.76 54.25 - 5.36 432.66
T. Rowe Price Retirement 2050 290.32 1.60 17.77 - 4.17 313.87
T. Rowe Price Retirement 2055 252.61 -1.62 23.59 - 3.60 278.18
U.S. EQUITY
BlackRock S&P 500 Stock 21,514.52 65.64 688.81 -142.00 559.95 22,686.92
Dodge & Cox Stock 20,572.89 -30.80 401.33 -159.10 376.49 21,160.82
Columbia Mid Cap Index Z - - - - - -
Vanguard Mid Cap Index 25,559.41 -195.49 540.56 -162.13 631.12 26,373.47
Baron Growth Inst 23,378.54 -149.32 441.26 -254.86 820.73 24,236.35
INTERNATIONAL EQUITY
Artisan International Inv 17,426.63 -142.05 394.93 -154.87 -201.52 17,323.11
OTHER
Loan Fund 1,541.44 - 81.03 -137.93 22.72 1,507.26
Total 457(b) Plan 168,049.54 - 4,295.71 -1,521.31 3,031.98 173,855.93
Fairfax County Public Schools
Financial Reconciliation
($000)
1 Quarter Ending June 30, 2016
Page 14
March 31, 2016 : $168,049,544 June 30, 2016 : $173,855,928
SegmentsMarket Value
($)Allocation
(%)
Domestic Equity 91,025,360.71 54.17¢£
International Equity 17,426,627.95 10.37¢£
Domestic Fixed Income 19,235,590.58 11.45¢£
GIC 27,734,802.75 16.50¢£
Real Return 97,886.41 0.06¢£
Loan Fund 1,541,438.49 0.92¢£
Life Cycle 10,987,837.34 6.54¢£
SegmentsMarket Value
($)Allocation
(%)
Domestic Equity 94,457,556.53 54.33¢£
International Equity 17,323,114.90 9.96¢£
Domestic Fixed Income 19,403,064.79 11.16¢£
GIC 28,765,036.17 16.55¢£
Real Return 105,564.50 0.06¢£
Loan Fund 1,507,259.67 0.87¢£
Life Cycle 12,294,331.43 7.07¢£
Fairfax County Public Schools
457(b) Plan
Asset Allocation by Segment
Page 15
Domestic Equity International Equity Domestic Fixed Income GIC
Real Return Loan Fund Life Cycle
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
Allo
ca
tio
n (%
)
3/10 9/10 3/11 9/11 3/12 9/12 3/13 9/13 3/14 9/14 3/15 9/15 3/16 6/16
Fairfax County Public Schools
Historical Asset Allocation by Segment
April 1, 2010 To June 30, 2016
Total 457(b) Plan
Page 16
Allocation
MarketValue($000)
%
Performance(%)
1Quarter
YearTo
Date
1Year
3Years
5Years
7Years
10Years
Total 457(b) Plan 173,855.93 100.00
U.S. Fixed Income 48,273.67 27.77
Great West Portfolio Fund 28,765.04 16.55 0.50 1.00 2.00 1.88 1.97 2.20 2.53
50% BC Int. Agg/50% 90 day T-Bill 0.75 1.93 2.23 1.65 1.51 1.99 2.83
90 Day U.S. Treasury Bill 0.06 0.12 0.13 0.07 0.07 0.09 1.01
PIMCO Total Return Adm 19,403.06 11.16 2.01 (80) 3.80 (94) 4.05 (88) 3.23 (84) 3.45 (78) 5.08 (51) 6.00 (4)
Barclays Aggregate Index 2.21 (63) 5.31 (39) 6.00 (16) 4.06 (33) 3.76 (48) 4.58 (66) 5.13 (48)
PIMCO Inflation Response MultiAsst Inst 105.56 0.06 4.74 (16) 10.24 (8) 2.21 (26) 1.32 (82) - - -
PIMCO IRMA Benchmark 8.38 (3) 16.99 (1) 7.29 (6) 1.84 (79) 0.12 (91) 4.07 (93) 2.98 (93)
Target Date 12,294.33 7.07
TRP Retirement 2005 401.62 0.23 2.28 (36) 4.75 (26) 2.55 (28) 5.34 (16) 5.27 (21) 8.13 (14) 5.42 (26)
TRP Retirement 2005 Index 1.81 (73) 3.87 (47) 2.45 (30) 5.42 (13) 5.37 (20) 7.59 (27) 5.01 (38)
TRP Retirement 2010 376.37 0.22 2.26 (18) 4.68 (12) 2.27 (22) 5.79 (6) 5.71 (17) 8.90 (1) 5.51 (-)
TRP Retirement 2010 Index 1.81 (83) 3.76 (36) 2.10 (24) 5.82 (5) 5.81 (13) 8.42 (13) 5.16 (-)
TRP Retirement 2015 1,605.36 0.92 2.08 (45) 4.09 (25) 1.46 (43) 6.40 (4) 6.32 (5) 9.81 (1) 5.79 (-)
TRP Retirement 2015 Index 1.82 (88) 3.60 (61) 1.63 (42) 6.41 (4) 6.44 (5) 9.36 (2) 5.42 (-)
TRP Retirement 2020 3,115.17 1.79 1.95 (58) 3.45 (51) 0.56 (55) 6.91 (3) 6.84 (4) 10.56 (1) 5.92 (1)
TRP Retirement 2020 Index 1.83 (78) 3.40 (53) 1.11 (51) 6.88 (3) 6.93 (3) 10.11 (1) 5.56 (8)
TRP Retirement 2025 2,346.32 1.35 1.72 (88) 2.88 (65) -0.28 (55) 7.33 (3) 7.24 (4) 11.14 (1) 6.02 (-)
TRP Retirement 2025 Index 1.84 (76) 3.22 (58) 0.61 (44) 7.30 (3) 7.35 (4) 10.75 (1) 5.68 (-)
TRP Retirement 2030 1,021.13 0.59 1.59 (88) 2.38 (63) -0.95 (52) 7.68 (4) 7.60 (4) 11.65 (1) 6.12 (1)
TRP Retirement 2030 Index 1.84 (66) 3.05 (53) 0.13 (39) 7.61 (5) 7.70 (4) 11.27 (4) 5.76 (1)
TRP Retirement 2035 1,762.66 1.01 1.39 (93) 1.84 (65) -1.69 (48) 7.86 (3) 7.77 (5) 11.93 (1) 6.15 (-)
TRP Retirement 2035 Index 1.81 (61) 2.86 (48) -0.33 (24) 7.79 (3) 7.88 (4) 11.60 (1) 5.81 (-)
Fairfax County Public Schools
Asset Allocation & Performance
As of June 30, 2016
Page 17
Fairfax County Public Schools
Asset Allocation & Performance
As of June 30, 2016
Allocation
MarketValue($000)
%
Performance(%)
1Quarter
YearTo
Date
1Year
3Years
5Years
7Years
10Years
TRP Retirement 2040 641.00 0.37 1.24 (90) 1.37 (79) -2.30 (54) 7.92 (3) 7.88 (6) 12.04 (1) 6.22 (1)
TRP Retirement 2040 Index 1.78 (59) 2.70 (39) -0.75 (25) 7.87 (3) 8.02 (4) 11.71 (3) 5.89 (8)
TRP Retirement 2045 432.66 0.25 1.25 (87) 1.39 (79) -2.29 (49) 7.94 (3) 7.91 (7) 12.03 (1) 6.22 (-)
TRP Retirement 2045 Index 1.78 (51) 2.68 (38) -0.75 (20) 7.87 (3) 8.02 (5) 11.71 (1) 5.89 (-)
TRP Retirement 2050 313.87 0.18 1.25 (83) 1.33 (77) -2.26 (49) 7.92 (5) 7.90 (9) 12.03 (1) -
TRP Retirement 2050 Index 1.78 (56) 2.68 (41) -0.75 (22) 7.87 (6) 8.02 (4) 11.71 (1) -
TRP Retirement 2055 278.18 0.16 1.26 (80) 1.34 (77) -2.29 (47) 7.94 (5) 7.91 (8) 12.04 (-) -
TRP Retirement 2055 Index 1.78 (53) 2.68 (36) -0.75 (18) 7.87 (7) 8.02 (6) 11.71 (-) -
U.S. Equity 94,457.56 54.33
BlackRock S&P 500 Stock 22,686.92 13.05 2.44 (16) 3.80 (16) 3.92 (24) 11.58 (12) 12.00 (24) 14.81 (16) 7.33 (22)
S&P 500 Index 2.46 (10) 3.84 (7) 3.99 (3) 11.66 (1) 12.10 (1) 14.92 (1) 7.42 (3)
Dodge & Cox Stock 21,160.82 12.17 1.70 (60) 0.70 (77) -5.09 (94) 8.28 (82) 10.44 (58) 13.87 (44) 5.13 (93)
S&P 500 Index 2.46 (33) 3.84 (29) 3.99 (24) 11.66 (14) 12.10 (16) 14.92 (14) 7.42 (22)
Vanguard Mid Cap Index 26,373.47 15.17 2.32 (54) 3.53 (40) -0.89 (31) 10.78 (23) 10.57 (21) 16.49 (10) 7.83 (26)
Vanguard Spliced Mid Cap Index 2.34 (53) 3.52 (40) -0.87 (30) 10.82 (21) 10.61 (20) 16.53 (9) 7.84 (26)
Baron Growth Inst 24,236.35 13.94 3.38 (21) 3.70 (15) -3.96 (31) 7.72 (63) 9.22 (37) 14.36 (45) -
Baron Growth Rtl 3.31 (23) 3.57 (15) -4.19 (34) 7.44 (67) 8.94 (39) 14.06 (50) 7.00 (52)
Russell Midcap Growth Index 1.56 (67) 2.15 (26) -2.14 (20) 10.52 (28) 9.98 (27) 15.82 (17) 8.12 (32)
International Equity 17,323.11 9.96
Artisan International Inv 17,323.11 9.96 -1.30 (57) -4.88 (70) -11.87 (67) 2.27 (29) 4.39 (2) 8.42 (3) 3.58 (13)
MSCI EAFE Index (Net) -1.46 (60) -4.42 (65) -10.16 (42) 2.06 (36) 1.68 (34) 5.97 (44) 1.58 (57)
MSCI AC World ex USA Index (Net) -0.64 (43) -1.02 (25) -10.24 (43) 1.16 (54) 0.10 (86) 5.35 (58) 1.87 (42)
Page 18
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
U.S. Fixed Income
Great West Portfolio Fund 2.88 3.26 3.42 3.37 2.67 2.55 2.11 1.53 1.86 2.00
50% BC Int. Agg/50% 90 day T-Bill 4.67 5.97 3.50 3.28 3.11 2.99 1.80 -0.48 2.06 0.62
90 Day U.S. Treasury Bill 4.76 4.91 2.10 0.17 0.13 0.08 0.08 0.05 0.04 0.03
PIMCO Total Return Adm 3.74 (85) 8.82 (1) 4.56 (23) 13.53 (30) 8.57 (16) 3.91 (95) 10.10 (3) -2.16 (72) 4.43 (82) 0.47 (36)
Barclays Aggregate Index 4.34 (41) 6.97 (19) 5.24 (19) 5.93 (84) 6.54 (68) 7.84 (15) 4.21 (76) -2.02 (64) 5.97 (33) 0.55 (27)
IM U.S. Broad Market Core Fixed Income (MF) Median 4.24 6.16 0.61 10.77 7.08 6.98 6.06 -1.64 5.76 0.32
PIMCO Inflation Response MultiAsst Inst - - - - - - 9.56 (65) -9.29 (100) 1.57 (73) -6.77 (78)
PIMCO IRMA Benchmark 5.27 (98) 10.35 (30) -14.42 (14) 17.32 (89) 13.49 (42) 3.82 (14) 4.83 (92) -11.77 (100) -0.46 (82) -7.12 (79)
IM Flexible Portfolio (MF) Median 12.11 7.15 -28.81 25.12 12.56 -1.55 11.02 11.99 3.80 -3.39
Target Date
TRP Retirement 2005 11.50 (7) 6.67 (25) -22.24 (82) 24.55 (17) 11.51 (17) 1.43 (65) 11.35 (17) 9.74 (22) 4.72 (40) -0.75 (37)
TRP Retirement 2005 Index 11.29 (12) 6.79 (23) -19.10 (68) 16.91 (63) 10.22 (42) 2.38 (43) 9.52 (42) 9.86 (21) 5.48 (25) -0.10 (19)
IM Mixed-Asset Target Alloc Consv (MF) Median 8.02 5.65 -17.05 18.88 9.92 2.07 9.06 7.51 4.21 -1.13
TRP Retirement 2010 12.84 (10) 6.65 (48) -26.71 (80) 27.95 (4) 12.70 (4) 0.54 (55) 12.44 (6) 11.93 (8) 4.99 (23) -0.76 (59)
TRP Retirement 2010 Index 12.52 (25) 6.82 (46) -23.19 (34) 19.64 (67) 11.42 (30) 1.81 (25) 10.61 (26) 12.00 (7) 5.77 (12) -0.17 (14)
IM Mixed-Asset Target 2010 (MF) Median 12.02 6.42 -24.07 22.97 10.88 0.90 9.64 9.24 4.49 -0.67
TRP Retirement 2015 13.73 (-) 6.75 (-) -30.22 (86) 31.35 (1) 13.79 (4) -0.32 (81) 13.81 (1) 15.18 (2) 5.37 (31) -0.58 (33)
TRP Retirement 2015 Index 13.44 (-) 6.85 (-) -26.61 (33) 22.08 (65) 12.57 (27) 1.09 (42) 11.94 (25) 14.97 (3) 6.30 (16) -0.28 (17)
IM Mixed-Asset Target 2015 (MF) Median - - -27.68 25.09 11.75 0.93 11.02 11.50 4.87 -0.74
TRP Retirement 2020 14.66 (9) 6.73 (50) -33.48 (82) 34.19 (1) 14.74 (3) -1.20 (84) 15.01 (1) 18.05 (2) 5.63 (37) -0.31 (25)
TRP Retirement 2020 Index 14.37 (11) 6.84 (49) -29.72 (62) 24.20 (58) 13.47 (22) 0.48 (45) 13.04 (20) 17.56 (3) 6.70 (5) -0.41 (32)
IM Mixed-Asset Target 2020 (MF) Median 12.34 6.68 -28.49 24.76 12.79 0.19 11.78 12.98 5.13 -0.80
TRP Retirement 2025 15.44 (-) 6.81 (-) -35.90 (87) 36.29 (1) 15.37 (1) -2.06 (71) 16.00 (1) 20.78 (3) 5.84 (38) -0.17 (13)
TRP Retirement 2025 Index 15.21 (-) 6.84 (-) -32.24 (36) 26.15 (66) 14.12 (26) -0.22 (25) 14.00 (22) 20.01 (4) 7.06 (9) -0.56 (31)
IM Mixed-Asset Target 2025 (MF) Median - - -33.66 27.71 13.67 -1.05 13.27 16.08 5.52 -1.14
TRP Retirement 2030 16.14 (-) 6.83 (56) -37.79 (74) 37.99 (1) 16.01 (3) -2.70 (70) 16.82 (1) 23.09 (4) 6.05 (36) -0.02 (6)
TRP Retirement 2030 Index 16.12 (-) 6.80 (56) -34.16 (45) 27.43 (70) 14.72 (32) -0.79 (21) 14.85 (20) 22.13 (8) 7.29 (7) -0.73 (40)
IM Mixed-Asset Target 2030 (MF) Median - 7.46 -36.24 28.91 13.90 -2.19 14.02 18.20 5.66 -1.05
TRP Retirement 2035 16.18 (-) 6.81 (-) -38.88 (71) 39.04 (1) 16.34 (1) -3.26 (61) 17.35 (1) 24.86 (3) 6.07 (38) 0.13 (4)
TRP Retirement 2035 Index 16.24 (-) 6.74 (-) -35.35 (28) 28.59 (70) 15.10 (42) -1.37 (10) 15.45 (39) 23.76 (12) 7.37 (5) -0.87 (35)
IM Mixed-Asset Target 2035 (MF) Median - - -37.76 30.96 14.59 -3.14 15.13 20.82 5.69 -1.45
TRP Retirement 2040 16.24 (-) 6.77 (63) -38.85 (72) 39.07 (1) 16.51 (9) -3.49 (43) 17.55 (1) 25.93 (8) 6.18 (38) 0.17 (3)
TRP Retirement 2040 Index 16.36 (-) 6.74 (64) -35.35 (14) 28.59 (84) 15.17 (38) -1.46 (9) 15.66 (40) 24.73 (20) 7.43 (7) -1.01 (40)
IM Mixed-Asset Target 2040 (MF) Median - 7.33 -37.62 30.66 14.70 -3.71 15.19 21.74 5.85 -1.23
TRP Retirement 2045 16.15 (-) 6.84 (-) -38.83 (53) 39.10 (1) 16.44 (10) -3.47 (31) 17.62 (1) 25.93 (5) 6.14 (35) 0.17 (3)
TRP Retirement 2045 Index 16.24 (-) 6.74 (-) -35.35 (18) 28.59 (91) 15.17 (44) -1.46 (1) 15.66 (53) 24.73 (22) 7.43 (7) -0.98 (36)
IM Mixed-Asset Target 2045 (MF) Median - - -38.75 31.04 15.01 -3.86 15.69 23.08 5.76 -1.56
Fairfax County Public Schools
Calendar Year Performance
As of June 30, 2016
Returns for periods greater than one year are annualized.Returns are expressed as percentages.
Page 19
Fairfax County Public Schools
Calendar Year Performance
As of June 30, 2016
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
TRP Retirement 2050 - 6.82 (-) -38.80 (58) 38.92 (1) 16.41 (15) -3.36 (26) 17.55 (4) 25.90 (12) 6.19 (36) 0.19 (4)
TRP Retirement 2050 Index - 6.74 (-) -35.35 (6) 28.59 (85) 15.17 (39) -1.46 (5) 15.66 (40) 24.73 (28) 7.43 (8) -0.98 (40)
IM Mixed-Asset Target 2050 (MF) Median - - -38.76 31.10 14.94 -3.96 15.58 23.26 5.95 -1.33
TRP Retirement 2055 - 6.82 (-) -38.89 (-) 38.97 (-) 16.41 (-) -3.35 (16) 17.60 (1) 25.86 (12) 6.18 (40) 0.18 (5)
TRP Retirement 2055 Index - 6.74 (-) -35.35 (-) 28.59 (-) 15.17 (-) -1.46 (1) 15.66 (60) 24.73 (29) 7.43 (10) -0.98 (47)
IM Mixed-Asset Target 2055+ (MF) Median - - - - - -4.33 15.73 23.18 5.72 -1.24
U.S. Equity
BlackRock S&P 500 Stock 15.60 (46) 5.36 (36) -37.01 (30) 26.49 (18) 14.92 (36) 1.98 (41) 15.84 (33) 32.21 (28) 13.61 (14) 1.35 (19)
S&P 500 Index 15.79 (1) 5.49 (11) -37.00 (29) 26.46 (23) 15.06 (1) 2.11 (8) 16.00 (3) 32.39 (3) 13.69 (1) 1.38 (9)
IM S&P 500 Index (MF) Median 15.56 5.28 -37.06 26.39 14.82 1.96 15.77 32.11 13.47 1.23
Dodge & Cox Stock 18.53 (5) 0.14 (93) -43.31 (91) 31.27 (26) 13.49 (54) -4.08 (89) 22.01 (3) 40.55 (1) 10.40 (71) -4.49 (94)
S&P 500 Index 15.79 (29) 5.49 (61) -37.00 (55) 26.46 (55) 15.06 (34) 2.11 (30) 16.00 (44) 32.39 (47) 13.69 (20) 1.38 (29)
IM U.S. Large Cap Core Equity (MF) Median 14.42 6.32 -36.60 27.05 13.83 1.00 15.50 32.26 11.86 -0.12
Vanguard Mid Cap Index 13.78 (40) 6.22 (60) -41.76 (68) 40.51 (33) 25.67 (33) -1.96 (40) 16.01 (43) 35.17 (49) 13.78 (11) -1.33 (38)
Vanguard Spliced Mid Cap Index 13.75 (40) 6.19 (60) -41.80 (68) 40.49 (33) 25.69 (33) -1.91 (39) 16.04 (42) 35.21 (49) 13.83 (10) -1.28 (38)
IM U.S. Mid Cap Equity (MF) Median 12.49 8.99 -39.51 35.02 23.83 -3.28 15.32 34.76 8.11 -2.43
Baron Growth Inst - - - - 24.32 (53) 1.51 (14) 16.74 (23) 38.69 (26) 4.66 (80) -4.06 (80)
Baron Growth Rtl 15.50 (19) 6.59 (84) -39.18 (28) 34.24 (65) 24.01 (54) 1.24 (15) 16.43 (27) 38.32 (27) 4.40 (82) -4.31 (81)
Russell Midcap Growth Index 10.66 (44) 11.43 (74) -44.32 (66) 46.29 (30) 26.38 (41) -1.65 (35) 15.81 (35) 35.74 (49) 11.90 (14) -0.20 (47)
IM U.S. Mid Cap Growth Equity (MF) Median 9.46 17.27 -41.54 41.03 24.38 -2.80 14.61 35.64 7.37 -0.52
International Equity
Artisan International Inv 25.56 (61) 19.73 (10) -46.96 (98) 39.77 (12) 5.91 (73) -7.26 (13) 25.39 (5) 25.18 (9) -0.97 (10) -3.85 (78)
MSCI EAFE Index (Net) 26.34 (42) 11.17 (69) -43.38 (63) 31.78 (53) 7.75 (57) -12.14 (47) 17.32 (66) 22.78 (17) -4.90 (36) -0.81 (39)
MSCI AC World ex USA Index (Net) 26.65 (41) 16.65 (19) -45.53 (83) 41.45 (7) 11.15 (23) -13.71 (76) 16.83 (71) 15.29 (83) -3.87 (24) -5.66 (86)
IM International Large Cap Equity (MF) Median 26.03 12.31 -42.37 32.08 8.69 -12.43 18.62 20.03 -5.37 -1.69
Returns for periods greater than one year are annualized.Returns are expressed as percentages.
Page 20
Great West Portfolio Fund PIMCO Total Return Adm PIMCO Inflation Response MultiAsst Inst
TRP Retirement 2005 TRP Retirement 2010 TRP Retirement 2015
TRP Retirement 2020 TRP Retirement 2025 TRP Retirement 2030
TRP Retirement 2035 TRP Retirement 2040 TRP Retirement 2045
TRP Retirement 2050 TRP Retirement 2055 BlackRock S&P 500 Stock
Dodge & Cox Stock Vanguard Mid Cap Index Baron Growth Inst
Artisan International Inv
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
An
nu
aliz
ed
Re
turn
0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0Annualized Standard Deviation
Fairfax County Public Schools
Risk Profile
3 Years Ending June 30, 2016
Page 21
Fairfax County Public Schools – Watch List Review
Organization/Staff Process Performance Watch List Status
Overall
Manager
Research
Rating
Significant
Organizational
Change
Adverse Change
in Portfolio
Manager
Diverged from
Strategy and/or
Portfolio
Characteristics
Underperformed /
Adverse Tracking
During Trailing 5-
Years
Underperformed /
Adverse Tracking in
3 of 4 Trailing
Calendar Quarters
2nd
Quarter
2016
1st
Quarter
2016
4th
Quarter
2015
3rd
Quarter
2015
U.S FIXED INCOME
Great West Portfolio Fund No No No No Yes N/R Green Green Green Green
PIMCO Total Return Adm No No No Yes Yes Buy Yellow Yellow Green Yellow
PIMCO Inflation Response MultiAsst Inst No No No N/A No Buy Green Green Green Green
TARGET DATE
T. Rowe Price Retirement Series No No No Yes No Buy Green Green Green Green
U.S. EQUITY
BlackRock S&P 500 Stock No No No No No Buy Green Green Green Green
Dodge & Cox Stock Fund No No No Yes Yes Buy Yellow yellow Yellow
Vanguard Mid Cap Index No No No No No Buy Green Green green Green
Baron Growth Instl No No No Yes Yes Qualified Yellow Green yellow Green
INTERNATIONAL EQUITY
Artisan International Inv No No No No No Qualified Green Green Green Green
Status Number of Criteria Met Suggested Action Green 1 or less affirmatives Active – No action required
Yellow 2 to 3 affirmatives Active – On “closely monitored list”
Red 4 or more affirmatives or “Yellow” for 4 consecutive quarters Full fund review and recommendation for action will be
made
Changes in Watch List designations from the previous quarter are highlighted in bold.
Passively managed index funds are expected to track their benchmark within a reasonable margin.
After a detailed fund review of the Dodge & Cox Stock Fund, the committee decided to
retain the strategy and is comfortable removing the “red” watch list status. The fund will
continue to be monitored closely.
Page 22
Watch List Guidelines
AHIC Investment Option Review Criteria
1. If the Fund has underperformed its benchmark over the most recent trailing five-year period
– If passively managed, the fund’s return must be no more than 0.5 percentage points above or below the
return of the benchmark
2. If the fund has underperformed its benchmark in three of the most recent four calendar quarters
3. If the Fund diverged from its strategy and / or portfolio characteristics
4. Adverse change in portfolio manager
5. Merger with another fund
6. Significant organizational change
Suggested Action Triggers
1. When an investment fund is placed on the Red Watch List, a formal fund retention meeting may be
conducted. At this meeting, the fund’s representative would be asked to address all relevant issues and
explain why the fund should be retained. After this retention meeting, the Investment Committee may elect to
either terminate the fund or grant it a one-year extension.
2. If a fund is granted the one-year extension described above and remains on the Watch List for this period, the
fund may be terminated unless the Committee determines that an alternate course of action is appropriate.
Special Circumstances
1. In the event of a major change to the fund (e.g., investments, ownership, and staffing), the Committee retains
the right to immediately terminate any fund without invoking the Watch List criteria in any fashion.
Page 23
Fairfax County Public Schools 457(b) Plan As of June 30, 2016
Investment Option Participants Investment Options Participants
Great West Portfolio 1,038 One 555
PIMCO Total Return 1,136 Two 367
PIMCO Inflation Response MultiAsst 34 Three 270
T Rowe Price Retirement 2005 34 Four 325
T Rowe Price Retirement 2010 12 Five 290
T Rowe Price Retirement 2015 39 Six 263
T Rowe Price Retirement 2020 75 Seven 185
T Rowe Price Retirement 2025 91 Eight 23
T Rowe Price Retirement 2030 65 More than Eight 27
T Rowe Price Retirement 2035 94
T Rowe Price Retirement 2040 66
T Rowe Price Retirement 2045 48
T Rowe Price Retirement 2050 26 Item Result
T Rowe Price Retirement 2055 45 Participation Rate 68.07%
BlackRock S&P 500 Stock 946 Number of Participants with Account Balances 2,305
Dodge & Cox Stock 1,009 Average Deferral Rate 16.82%
Vanguard Mid Cap Index 1,196 Average Number of Funds per Participant 3.57
Baron Growth 1,148 Average Account Balance $74,771.66
Artisan International 1,132
Investment Option Participants
Great-West Portfolio Fund 74 Item Result
PIMCO Total Return Admin 89 Number of Internet Accesses 9,256
PIMCO Inflation Response MultiAsst 4 VRU Calls 170
T Rowe Price Retirement 2015 2
T Rowe Price Retirement 2020 5
T Rowe Price Retirement 2025 11
T Rowe Price Retirement 2030 3
T Rowe Price Retirement 2035 5
T Rowe Price Retirement 2040 4
T Rowe Price Retirement 2045 3
T Rowe Price Retirement 2050 3
BlackRock S & P 500 Stock 57
Dodge & Cox Stock 69
Vanguard Mid Cap Index Ins 74
Baron Growth Instl 75
Artisan International Inv 77
* Information directly provided by Empower Retirement.
Demographic Information
Participants per Investment Option
Participants with Balance in One Investment Option
Administration Statistics
Investment Options per Participant
Other Demographics
Page 24
457(b) Plan Statistics
457(b) 403(b) Contributions June 2014 $ 1,473,000 $ 3.7 million Contributions June 2015 $ 1,406,000 $ 3.7 million Contributions June 2016 $ 1,367,000 $ 3.6 million Contributions July 2016 $ 302,000 $ 757,000 Assets June 30, 2014 $159.5 million Assets June 30, 2015 $169.0 million Assets June 30, 2016 $172.6 million Assets July 31, 2016 $176.8 million Number of Participants June 2014 2286 5601 Number of Participants June 2015 2322 5588 Number of Participants June 2016 2335 5558 Number of Participants July 2016 2305 5505 Average Contribution/Month – June 2014 $ 988/mo; $205/biweek Average Contribution/Month – June 2015 $ 970/mo; $200/biweek Average Contribution/Month – June 2016 $ 952/mo; $224/biweek
403(b) Average Contribution/Month – June 2016 $710/mo; $206/biweek Number of Employees Currently Contributing to 457(b): 1357/mo; 61/biweek Number of Employees Currently Contributing to 403(b): 4979/mo; 526/biweek Number of Employees Currently Contributing to both 457 & 403(b): 420 total
Page 25
403(b) Plan Participants
Age Monthly Bi-Weekly
<21 0 0
21-25 48 4
26-30 376 12
31-35 574 21
36-40 586 40
41-45 681 56
46-50 685 89
51-55 697 94
56-60 697 99
61-65 461 67
66-70 141 20
71-75 30 12
76-80 3 9
81-85 0 3
Total 4979 526
0
100
200
300
400
500
600
700
800
<21 21-25 26-30 31-35 36-40 41-45 46-50 51-55 56-60 61-65 66-70 71-75 76-80 81-85En
rollm
en
t
Age Range
403(b) Monthly Plan Participants
0
20
40
60
80
100
120
<21 21-25 26-30 31-35 36-40 41-45 46-50 51-55 56-60 61-65 66-70 71-75 76-80 81-85
Enro
llme
nt
Age Range
403(b) Bi-Weekly Plan Participants
Page 26
457 Plan Participants
Age Monthly Bi-Weekly
<21 0 0
21-25 11 0
26-30 51 1
31-35 113 3
36-40 117 3
41-45 166 5
46-50 202 17
51-55 244 14
56-60 243 7
61-65 158 7
66-70 42 4
71-75 10 0
Total 1357 61
0
50
100
150
200
250
300
<21 21-25 26-30 31-35 36-40 41-45 46-50 51-55 56-60 61-65 66-70 71-75En
rollm
en
t
Age Range
457 Monthly Plan Participants
0
2
4
6
8
10
12
14
16
18
<21 21-25 26-30 31-35 36-40 41-45 46-50 51-55 56-60 61-65 66-70 71-75
Enro
llme
nt
Age Range
457 Bi-Weekly Plan Participants
Page 27
Fairfax County Public Schools 457(b) Plan
Contribution Analysis
Stable Value17%
Fixed Income10%
Real Return0%
Large Cap Blend (Passive)
16%
Large Cap Blend (Active)
10%
Mid Cap Blend (Passive)13%
Small Cap Growth11%
International9%
Lifecycle14%
2nd Quarter 2016 Contribution Allocation
Stable Value17%
Fixed Income10%
Real Return0%
Large Cap Blend (Passive)
17%Large Cap Blend
(Active)9%
Mid Cap Blend (Passive)13%
Small Cap Growth11%
International9%
Lifecycle14%
1st Quarter 2016 Contribution Allocation
Page 28
Relative Ranking (3 Years Rolling) Relative Performance (07/01/06 to 06/30/16)
Relative Ranking vs. Peers (3 Years Rolling)
Style Map (Since Inception - 36 Months Rolling) Style History (Since Inception - 36 Months Rolling)
PIMCO Total Return Adm Barclays Aggregate Index
0.0
25.0
50.0
75.0
100.0
Re
turn
Pe
rce
nti
le R
an
k
9/11 3/12 9/12 3/13 9/13 3/14 9/14 3/15 9/15 6/16 Cumulative Annualized Over/Under Relative Performance
Over/Under Performance
0.0
3.0
6.0
-3.0
-6.0
Re
turn
(%)
7/06 7/07 7/08 7/09 7/10 7/11 7/12 7/13 7/14 7/15 6/16
Number ofObservations
>=Median Top Quartile Bottom Quartile >PIMCO Total Return Adm >Barclays Aggregate Index
PIMCO Total Return Adm 20 15 5 4 N/A 16
Barclays Aggregate Index 20 4 1 1 4 N/A
Style History Jun-2016 Average Style Exposure
Cap
ital
izat
ion
Manager Style
Barclays Capital Government Index
Barclays Capital U.S. Long Gov/CreditBarclays Capital 1-3yr Gov/Credit
Barclays Capital U.S. Credit Index
Barclays U.S. Credit Index Barclays 1-3yr Gov/Credit
Barclays Government Index Barclays U.S. Long Gov/Credit
0.0
25.0
50.0
75.0
100.0
11/97 5/99 11/00 5/02 11/03 5/05 11/06 5/08 11/09 5/11 11/12 5/14 6/16
PIMCO Total Return Adm 06/30/16
Page 29
Relative Ranking (3 Years Rolling)
Relative Performance (09/01/11 to 06/30/16)
Relative Ranking vs. Peers (3 Years Rolling)
PIMCO Inflation Response MultiAsst Inst PIMCO IRMA Benchmark
0.0
25.0
50.0
75.0
100.0
Re
turn
Pe
rce
nti
le R
an
k
9/11 12/11 3/12 6/12 9/12 12/12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16
Number ofObservations
>=Median Top Quartile Bottom Quartile >PIMCO Inflation Response MultiAsst Inst >PIMCO IRMA Benchmark
PIMCO Inflation Response MultiAsst Inst 8 0 0 8 N/A 7
PIMCO IRMA Benchmark 8 0 0 8 1 N/A
Cumulative Annualized Over/Under Relative Performance Over/Under Performance
0.0
4.0
8.0
-4.0
-8.0
Re
turn
(%)
9/11 12/11 3/12 6/12 9/12 12/12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16
PIMCO Inflation Response MultiAsst Inst 06/30/16
Page 30
Asset Allocation for T. Rowe Price Retirement Funds
As of June 30, 2016
0%
20%
40%
60%
80%
100%
TargetBalanced
Target2005
Target2010
Target2015
Target2020
Target2025
Target2030
Target2035
Target2040
Target2045
Target2050
Target2055
Target2060
Fixed Income US Equity Non-US Equity Specialty Funds*
________________________________
* Specialty Funds include T. Rowe Price Real Assets Fund
Page 31
Asset Allocation: T. Rowe Price Retirement Funds
Balanced Fund
2005 Fund
2010 Fund
2015 Fund
2020 Fund
2025 Fund
2030 Fund
2035 Fund
2040 Fund
2045 Fund
2050 Fund
2055 Fund
2060 Fund
Fixed Income 60.2% 61.3% 55.4% 46.9% 37.3% 29.4% 22.3% 16.3% 11.2% 10.3% 10.3% 10.2% 10.3%
T. Rowe Price Inflation Focused Bond 30.1% 18.0% 15.5% 11.5% 6.6% 3.5% 1.5% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
T. Rowe Price New Income 21.0% 30.2% 27.8% 24.7% 21.5% 18.1% 14.5% 11.4% 7.9% 7.2% 7.2% 7.1% 7.2%
T. Rowe Price High Yield 3.0% 4.3% 4.0% 3.5% 3.1% 2.6% 2.1% 1.6% 1.1% 1.0% 1.0% 1.0% 1.0%
T. Rowe Price Intl Bond 3.1% 4.4% 4.0% 3.6% 3.1% 2.6% 2.1% 1.6% 1.1% 1.0% 1.0% 1.0% 1.0%
T. Rowe Price EM Bond 3.1% 4.4% 4.1% 3.6% 3.2% 2.7% 2.1% 1.7% 1.1% 1.0% 1.0% 1.0% 1.0%
U.S. Equity 25.6% 24.9% 28.7% 34.3% 40.4% 45.6% 50.0% 53.8% 57.1% 57.7% 57.7% 57.8% 57.7%
T. Rowe Price Value 0.0% 0.0% 0.0% 2.4% 6.6% 10.4% 13.5% 16.4% 18.7% 19.1% 19.1% 19.1% 19.1%
T. Rowe Price Equity Index 500 20.4% 19.9% 23.0% 22.0% 18.5% 15.1% 12.4% 9.6% 7.5% 7.3% 7.3% 7.3% 7.3%
T. Rowe Price Growth Stock 0.0% 0.0% 0.0% 3.0% 7.2% 10.9% 14.0% 17.0% 19.3% 19.7% 19.7% 19.6% 19.7%
T. Rowe Price Mid-Cap Value 1.5% 1.4% 1.6% 1.9% 2.3% 2.6% 2.8% 3.0% 3.2% 3.2% 3.2% 3.2% 3.3%
T. Rowe Price Mid-Cap Growth 1.3% 1.3% 1.4% 1.7% 2.0% 2.3% 2.5% 2.7% 2.9% 2.9% 2.9% 3.1% 2.9%
T. Rowe Price Small-Cap Value 0.8% 0.8% 0.9% 1.2% 1.4% 1.6% 1.7% 1.9% 2.0% 2.0% 2.0% 2.0% 2.0%
T. Rowe Price Small-Cap Stock 1.0% 0.9% 1.1% 1.2% 1.4% 1.6% 1.8% 1.9% 2.0% 2.0% 2.0% 2.0% 2.0%
T. Rowe Price New Horizons 0.6% 0.6% 0.7% 0.8% 1.0% 1.1% 1.2% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4%
Non-U.S. Equity 12.7% 12.4% 14.3% 16.9% 19.9% 22.5% 24.8% 26.8% 28.5% 28.7% 28.8% 28.8% 28.7%
T. Rowe Price Intl Growth & Income 3.6% 3.5% 4.1% 4.8% 5.7% 6.4% 7.0% 7.5% 8.0% 8.0% 8.0% 8.0% 8.0%
T. Rowe Price Overseas Stock 3.7% 3.6% 4.2% 4.9% 5.9% 6.6% 7.3% 7.9% 8.4% 8.5% 8.5% 8.5% 8.5%
T. Rowe Price International Stock 3.3% 3.2% 3.7% 4.4% 5.2% 5.8% 6.4% 6.9% 7.3% 7.4% 7.4% 7.4% 7.4%
T. Rowe Price Emerging Markets Stock 2.2% 2.1% 2.3% 2.8% 3.2% 3.6% 4.1% 4.5% 4.8% 4.9% 4.9% 4.9% 4.8%
Real Assets 1.5% 1.4% 1.6% 1.9% 2.3% 2.6% 2.8% 3.0% 3.2% 3.3% 3.3% 3.3% 3.3%
T. Rowe Price Real Assets 1.5% 1.4% 1.6% 1.9% 2.3% 2.6% 2.8% 3.0% 3.2% 3.3% 3.3% 3.3% 3.3%
MM/Short Term Investment 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Summit Cash Reserves 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
As of June 30, 2016
Page 32
Relative Ranking (3 Years Rolling)
Relative Performance (07/01/06 to 06/30/16)
Relative Ranking vs. Peers (3 Years Rolling)
TRP Retirement 2005 TRP Retirement 2005 Index
0.0
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50.0
75.0
100.0
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9/11 12/11 3/12 6/12 9/12 12/12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16
Number ofObservations
>=Median Top Quartile Bottom Quartile >TRP Retirement 2005 >TRP Retirement 2005 Index
TRP Retirement 2005 20 19 15 0 N/A 15
TRP Retirement 2005 Index 20 18 10 1 5 N/A
Cumulative Annualized Over/Under Relative Performance Over/Under Performance
0.0
2.0
4.0
-2.0
-4.0
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(%)
7/06 1/07 7/07 1/08 7/08 1/09 7/09 1/10 7/10 1/11 7/11 1/12 7/12 1/13 7/13 1/14 7/14 1/15 7/15 1/16 6/16
TRP Retirement 2005 06/30/16
Page 33
Relative Ranking (3 Years Rolling)
Relative Performance (07/01/06 to 06/30/16)
Relative Ranking vs. Peers (3 Years Rolling)
TRP Retirement 2010 TRP Retirement 2010 Index
0.0
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50.0
75.0
100.0
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9/11 12/11 3/12 6/12 9/12 12/12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16
Number ofObservations
>=Median Top Quartile Bottom Quartile >TRP Retirement 2010 >TRP Retirement 2010 Index
TRP Retirement 2010 20 20 20 0 N/A 15
TRP Retirement 2010 Index 20 18 14 1 5 N/A
Cumulative Annualized Over/Under Relative Performance Over/Under Performance
0.0
2.0
4.0
-2.0
-4.0
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(%)
7/06 1/07 7/07 1/08 7/08 1/09 7/09 1/10 7/10 1/11 7/11 1/12 7/12 1/13 7/13 1/14 7/14 1/15 7/15 1/16 6/16
TRP Retirement 2010 06/30/16
Page 34
Relative Ranking (3 Years Rolling)
Relative Performance (07/01/06 to 06/30/16)
Relative Ranking vs. Peers (3 Years Rolling)
TRP Retirement 2015 TRP Retirement 2015 Index
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50.0
75.0
100.0
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9/11 12/11 3/12 6/12 9/12 12/12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16
Number ofObservations
>=Median Top Quartile Bottom Quartile >TRP Retirement 2015 >TRP Retirement 2015 Index
TRP Retirement 2015 20 20 20 0 N/A 15
TRP Retirement 2015 Index 20 18 17 0 5 N/A
Cumulative Annualized Over/Under Relative Performance Over/Under Performance
0.0
2.0
4.0
-2.0
-4.0
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(%)
7/06 1/07 7/07 1/08 7/08 1/09 7/09 1/10 7/10 1/11 7/11 1/12 7/12 1/13 7/13 1/14 7/14 1/15 7/15 1/16 6/16
TRP Retirement 2015 06/30/16
Page 35
Relative Ranking (3 Years Rolling)
Relative Performance (07/01/06 to 06/30/16)
Relative Ranking vs. Peers (3 Years Rolling)
TRP Retirement 2020 TRP Retirement 2020 Index
0.0
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50.0
75.0
100.0
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9/11 12/11 3/12 6/12 9/12 12/12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16
Number ofObservations
>=Median Top Quartile Bottom Quartile >TRP Retirement 2020 >TRP Retirement 2020 Index
TRP Retirement 2020 20 20 19 0 N/A 17
TRP Retirement 2020 Index 20 19 18 1 3 N/A
Cumulative Annualized Over/Under Relative Performance Over/Under Performance
0.0
2.0
4.0
-2.0
-4.0
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(%)
7/06 1/07 7/07 1/08 7/08 1/09 7/09 1/10 7/10 1/11 7/11 1/12 7/12 1/13 7/13 1/14 7/14 1/15 7/15 1/16 6/16
TRP Retirement 2020 06/30/16
Page 36
Relative Ranking (3 Years Rolling)
Relative Performance (07/01/06 to 06/30/16)
Relative Ranking vs. Peers (3 Years Rolling)
TRP Retirement 2025 TRP Retirement 2025 Index
0.0
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50.0
75.0
100.0
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9/11 12/11 3/12 6/12 9/12 12/12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16
Number ofObservations
>=Median Top Quartile Bottom Quartile >TRP Retirement 2025 >TRP Retirement 2025 Index
TRP Retirement 2025 20 20 20 0 N/A 19
TRP Retirement 2025 Index 20 19 17 0 1 N/A
Cumulative Annualized Over/Under Relative Performance Over/Under Performance
0.0
2.0
4.0
-2.0
-4.0
-6.0
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7/06 1/07 7/07 1/08 7/08 1/09 7/09 1/10 7/10 1/11 7/11 1/12 7/12 1/13 7/13 1/14 7/14 1/15 7/15 1/16 6/16
TRP Retirement 2025 06/30/16
Page 37
Relative Ranking (3 Years Rolling)
Relative Performance (07/01/06 to 06/30/16)
Relative Ranking vs. Peers (3 Years Rolling)
TRP Retirement 2030 TRP Retirement 2030 Index
0.0
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50.0
75.0
100.0
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9/11 12/11 3/12 6/12 9/12 12/12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16
Number ofObservations
>=Median Top Quartile Bottom Quartile >TRP Retirement 2030 >TRP Retirement 2030 Index
TRP Retirement 2030 20 20 20 0 N/A 20
TRP Retirement 2030 Index 20 19 18 0 0 N/A
Cumulative Annualized Over/Under Relative Performance Over/Under Performance
0.0
2.0
4.0
-2.0
-4.0
-6.0
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7/06 1/07 7/07 1/08 7/08 1/09 7/09 1/10 7/10 1/11 7/11 1/12 7/12 1/13 7/13 1/14 7/14 1/15 7/15 1/16 6/16
TRP Retirement 2030 06/30/16
Page 38
Relative Ranking (3 Years Rolling)
Relative Performance (07/01/06 to 06/30/16)
Relative Ranking vs. Peers (3 Years Rolling)
TRP Retirement 2035 TRP Retirement 2035 Index
0.0
25.0
50.0
75.0
100.0
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9/11 12/11 3/12 6/12 9/12 12/12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16
Number ofObservations
>=Median Top Quartile Bottom Quartile >TRP Retirement 2035 >TRP Retirement 2035 Index
TRP Retirement 2035 20 20 20 0 N/A 20
TRP Retirement 2035 Index 20 20 19 0 0 N/A
Cumulative Annualized Over/Under Relative Performance Over/Under Performance
0.0
2.0
4.0
-2.0
-4.0
-6.0
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7/06 1/07 7/07 1/08 7/08 1/09 7/09 1/10 7/10 1/11 7/11 1/12 7/12 1/13 7/13 1/14 7/14 1/15 7/15 1/16 6/16
TRP Retirement 2035 06/30/16
Page 39
Relative Ranking (3 Years Rolling)
Relative Performance (07/01/06 to 06/30/16)
Relative Ranking vs. Peers (3 Years Rolling)
TRP Retirement 2040 TRP Retirement 2040 Index
0.0
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50.0
75.0
100.0
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9/11 12/11 3/12 6/12 9/12 12/12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16
Number ofObservations
>=Median Top Quartile Bottom Quartile >TRP Retirement 2040 >TRP Retirement 2040 Index
TRP Retirement 2040 20 20 20 0 N/A 19
TRP Retirement 2040 Index 20 20 17 0 1 N/A
Cumulative Annualized Over/Under Relative Performance Over/Under Performance
0.0
2.0
4.0
-2.0
-4.0
-6.0
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7/06 1/07 7/07 1/08 7/08 1/09 7/09 1/10 7/10 1/11 7/11 1/12 7/12 1/13 7/13 1/14 7/14 1/15 7/15 1/16 6/16
TRP Retirement 2040 06/30/16
Page 40
Relative Ranking (3 Years Rolling)
Relative Performance (07/01/06 to 06/30/16)
Relative Ranking vs. Peers (3 Years Rolling)
TRP Retirement 2045 TRP Retirement 2045 Index
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100.0
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Number ofObservations
>=Median Top Quartile Bottom Quartile >TRP Retirement 2045 >TRP Retirement 2045 Index
TRP Retirement 2045 20 20 20 0 N/A 19
TRP Retirement 2045 Index 20 20 18 0 1 N/A
Cumulative Annualized Over/Under Relative Performance Over/Under Performance
0.0
2.0
4.0
-2.0
-4.0
-6.0
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7/06 1/07 7/07 1/08 7/08 1/09 7/09 1/10 7/10 1/11 7/11 1/12 7/12 1/13 7/13 1/14 7/14 1/15 7/15 1/16 6/16
TRP Retirement 2045 06/30/16
Page 41
Relative Ranking (3 Years Rolling)
Relative Performance (01/01/07 to 06/30/16)
Relative Ranking vs. Peers (3 Years Rolling)
TRP Retirement 2050 TRP Retirement 2050 Index
0.0
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100.0
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9/11 12/11 3/12 6/12 9/12 12/12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16
Number ofObservations
>=Median Top Quartile Bottom Quartile >TRP Retirement 2050 >TRP Retirement 2050 Index
TRP Retirement 2050 20 20 20 0 N/A 19
TRP Retirement 2050 Index 20 20 17 0 1 N/A
Cumulative Annualized Over/Under Relative Performance Over/Under Performance
0.0
3.0
6.0
-3.0
-6.0
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1/07 7/07 1/08 7/08 1/09 7/09 1/10 7/10 1/11 7/11 1/12 7/12 1/13 7/13 1/14 7/14 1/15 7/15 1/16 6/16
TRP Retirement 2050 06/30/16
Page 42
Relative Ranking (3 Years Rolling) Relative Performance (07/01/06 to 06/30/16)
Relative Ranking vs. Peers (3 Years Rolling)
Style Map (Since Inception - 36 Months Rolling) Style History (Since Inception - 36 Months Rolling)
BlackRock S&P 500 Stock S&P 500 Index
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9/11 3/12 9/12 3/13 9/13 3/14 9/14 3/15 9/15 6/16 Cumulative Annualized Over/Under Relative Performance
Over/Under Performance
0.0
0.2
0.4
-0.2
-0.4
-0.6
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(%)
7/06 7/07 7/08 7/09 7/10 7/11 7/12 7/13 7/14 7/15 6/16
Number ofObservations
>=Median Top Quartile Bottom Quartile >BlackRock S&P 500 Stock >S&P 500 Index
BlackRock S&P 500 Stock 20 20 10 0 N/A 0
S&P 500 Index 20 20 20 0 20 N/A
Style History Jun-2016 Average Style Exposure
Cap
ital
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ion
Manager Style
Large Cap Growth
Small Cap GrowthSmall Cap Value
Large Cap Value
Russell 1000 Growth Index Russell 1000 Value Index
Russell 2000 Growth Index Russell 2000 Value Index
0.0
25.0
50.0
75.0
100.0
9/96 6/98 3/00 12/01 9/03 6/05 3/07 12/08 9/10 6/12 3/14 6/16
BlackRock S&P 500 Stock 06/30/16
Page 43
Relative Ranking (3 Years Rolling) Relative Performance (07/01/06 to 06/30/16)
Relative Ranking vs. Peers (3 Years Rolling)
Style Map (Since Inception - 36 Months Rolling) Style History (Since Inception - 36 Months Rolling)
Dodge & Cox Stock S&P 500 Index
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100.0
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9/11 3/12 9/12 3/13 9/13 3/14 9/14 3/15 9/15 6/16 Cumulative Annualized Over/Under Relative Performance
Over/Under Performance
0.0
6.0
12.0
-6.0
-12.0
-18.0
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7/06 7/07 7/08 7/09 7/10 7/11 7/12 7/13 7/14 7/15 6/16
Number ofObservations
>=Median Top Quartile Bottom Quartile >Dodge & Cox Stock >S&P 500 Index
Dodge & Cox Stock 20 14 11 2 N/A 11
S&P 500 Index 20 20 8 0 9 N/A
Style History Jun-2016 Average Style Exposure
Cap
ital
izat
ion
Manager Style
Large Cap Growth
Small Cap GrowthSmall Cap Value
Large Cap Value
Russell 1000 Growth Index Russell 1000 Value Index
Russell 2000 Growth Index Russell 2000 Value Index
0.0
25.0
50.0
75.0
100.0
2/82 11/84 8/87 5/90 2/93 11/95 8/98 5/01 2/04 11/06 8/09 5/12 6/16
Dodge & Cox Stock 06/30/16
Page 44
Relative Ranking (3 Years Rolling) Relative Performance (07/01/06 to 06/30/16)
Relative Ranking vs. Peers (3 Years Rolling)
Style Map (Since Inception - 36 Months Rolling) Style History (Since Inception - 36 Months Rolling)
Vanguard Mid Cap Index Vanguard Spliced Mid Cap Index
0.0
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100.0
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Over/Under Performance
0.0
0.1
0.2
-0.1
-0.2
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7/06 7/07 7/08 7/09 7/10 7/11 7/12 7/13 7/14 7/15 6/16
Number ofObservations
>=Median Top Quartile Bottom Quartile >Vanguard Mid Cap Index >Vanguard Spliced Mid Cap Index
Vanguard Mid Cap Index 20 20 11 0 N/A 0
Vanguard Spliced Mid Cap Index 20 20 11 0 20 N/A
Style History Jun-2016 Average Style Exposure
Cap
ital
izat
ion
Manager Style
Large Cap Growth
Small Cap GrowthSmall Cap Value
Large Cap Value
Russell 1000 Growth Index Russell 1000 Value Index
Russell 2000 Growth Index Russell 2000 Value Index
0.0
25.0
50.0
75.0
100.0
7/01 10/02 1/04 4/05 7/06 10/07 1/09 4/10 7/11 10/12 1/14 4/15 6/16
Vanguard Mid Cap Index 06/30/16
Page 45
Relative Ranking (3 Years Rolling) Relative Performance (07/01/06 to 06/30/16)
Relative Ranking vs. Peers (3 Years Rolling)
Style Map (Since Inception - 36 Months Rolling) Style History (Since Inception - 36 Months Rolling)
Baron Growth Rtl Russell Midcap Growth Index
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100.0
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9/11 3/12 9/12 3/13 9/13 3/14 9/14 3/15 9/15 6/16 Cumulative Annualized Over/Under Relative Performance
Over/Under Performance
0.0
6.0
12.0
18.0
-6.0
-12.0
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7/06 7/07 7/08 7/09 7/10 7/11 7/12 7/13 7/14 7/15 6/16
Number ofObservations
>=Median Top Quartile Bottom Quartile >Baron Growth Rtl >Russell Midcap Growth Index
Baron Growth Rtl 20 12 8 1 N/A 6
Russell Midcap Growth Index 20 20 10 0 14 N/A
Style History Jun-2016 Average Style Exposure
Cap
ital
izat
ion
Manager Style
Large Cap Growth
Small Cap GrowthSmall Cap Value
Large Cap Value
Russell 1000 Growth Index Russell 1000 Value Index
Russell 2000 Growth Index Russell 2000 Value Index
0.0
25.0
50.0
75.0
100.0
3/98 9/99 3/01 9/02 3/04 9/05 3/07 9/08 3/10 9/11 3/13 9/14 6/16
Baron Growth Rtl 06/30/16
Page 46
Relative Ranking (3 Years Rolling) Relative Performance (07/01/06 to 06/30/16)
Relative Ranking vs. Peers (3 Years Rolling)
Style Map (Since Inception - 36 Months Rolling) Style History (Since Inception - 36 Months Rolling)
Artisan International Inv
MSCI EAFE Index (Net)
MSCI AC World ex USA Index (Net)
0.0
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100.0
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Cumulative Annualized Over/Under Relative Performance
Over/Under Performance
0.0
5.0
10.0
-5.0
-10.0
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7/06 7/07 7/08 7/09 7/10 7/11 7/12 7/13 7/14 7/15 6/16
Number ofObservations
>=Median Top Quartile Bottom Quartile >Artisan International Inv >MSCI EAFE Index (Net) >MSCI AC World ex USA Index (Net)
Artisan International Inv 20 20 17 0 N/A 20 19
MSCI EAFE Index (Net) 20 17 2 0 0 N/A 14
MSCI AC World ex USA Index (Net) 20 6 2 12 1 6 N/A
Style History Jun-2016 Average Style Exposure
Cap
ital
izat
ion
Manager Style
MSCI EAFE Growth Index
MSCI USA GrowthMSCI USA Value
MSCI EAFE Value Index
MSCI EAFE Value Index MSCI EAFE Growth Index
MSCI USA Growth MSCI USA Value
0.0
25.0
50.0
75.0
100.0
6/01 9/02 12/03 3/05 6/06 9/07 12/08 3/10 6/11 9/12 12/13 3/15 6/16
Artisan International Inv 06/30/16
Page 47
Fairfax County Public Schools As of June 30, 2016
Peer Group $ Weighted $ Weighted
Median Median Average Average Difference2
U.S FIXED INCOME
Great West Portfolio Fund Stable Value 0.89%3
N/A N/A 0.62%4
N/A N/A
PIMCO Total Return Adm US Broad Market Core Fixed 0.71% 0.50% 0.43% 0.54% 0.41% 0.17%
PIMCO Inflation Response MultiAsst Inst Flexible Portfolio 0.77% 0.93% 0.60% 0.99% 0.87% -0.22%
TARGET DATE
T. Rowe Price Retirement 2005 Mixed Asset Target Today5
0.58% 0.56% 0.49% 0.55% 0.52% 0.03%
T. Rowe Price Retirement 2010 Mixed Asset Target 20105
0.58% 0.56% 0.58% 0.57% 0.57% 0.01%
T. Rowe Price Retirement 2015 Mixed Asset Target 20155
0.62% 0.59% 0.62% 0.60% 0.60% 0.02%
T. Rowe Price Retirement 2020 Mixed Asset Target 20205
0.66% 0.62% 0.66% 0.61% 0.63% 0.05%
T. Rowe Price Retirement 2025 Mixed Asset Target 20255
0.69% 0.65% 0.60% 0.64% 0.66% 0.05%
T. Rowe Price Retirement 2030 Mixed Asset Target 20305
0.72% 0.69% 0.72% 0.68% 0.69% 0.04%
T. Rowe Price Retirement 2035 Mixed Asset Target 20355
0.74% 0.70% 0.74% 0.69% 0.70% 0.05%
T. Rowe Price Retirement 2040 Mixed Asset Target 20405
0.75% 0.74% 0.64% 0.70% 0.70% 0.05%
T. Rowe Price Retirement 2045 Mixed Asset Target 20455
0.75% 0.71% 0.75% 0.71% 0.70% 0.04%
T. Rowe Price Retirement 2050 Mixed Asset Target 20505
0.75% 0.74% 0.75% 0.75% 0.70% 0.00%
T. Rowe Price Retirement 2055 Mixed Asset Target 2055+5
0.75% 0.70% 0.64% 0.71% 0.71% 0.04%
U.S. EQUITY
BlackRock S&P 500 Stock S&P 500 Index Funds (Passive) 0.04% 0.20% 0.05% 0.27% 0.08% -0.23%
Dodge & Cox Stock U.S. Large Cap Core Equity 0.52% 0.81% 0.57% 0.84% 0.57% -0.32%
Vanguard Mid Cap Index U.S. Mid Cap Equity 0.07% 0.97% 0.75% 0.99% 0.80% -0.92%
Baron Growth Inst U.S. Mid Cap Growth Equity 1.04% 0.99% 0.62% 0.99% 0.75% 0.05%
INTERNATIONAL EQUITY
Artisan International Inv International Equity All6
1.17% 0.99% 0.10% 0.99% 0.74% 0.18%
Fund NameFund's
Expense
Ratio
1 All information, unless noted otherwise, was created using Morningstar audited expense ratio data as of December 31, 2015. Since mutual fund expense ratios do not
change frequently, AHIC believes this study to be a relevant comparison for up to a year, at which time the data will be updated. For complete information on AHIC
methodologies and additional information on the expense ratio distributions, contact your AHIC consultant. Mutual fund expense peer groups were constructed by
Investment Metrics, and are consistent with the peer groups shown in other exhibits comparing performance, risk-metrics and a multitude of other characteristics.
3 In lieu of an expense ratio, Great West assumes a margin of 89 basis points on the Portfolio Fund. This reflects the gross investment yield of the assets minus the
crediting rate and cost of maintaining regulatory capital requirements.
6 Combines multiple Investment Metrics peer groups.
5 Mixed Asset peer groups utilize prospectus net expense ratio information due to the nature of the asset class
and common use of a Fund of Fund structure.
4 Stable value fund average calculated using Hueler Universe data for a mandate size of $1 million in assets.
Cost Analysis
Expense Ratio Peer Group Data1
2 Difference column represents the difference between the fund's expense ratio and the Peer Group's average expense ratio.
Page 48
Manager Research
Page 49
Aon Hewitt 26 July 2016 Retirement and Investment
Risk. Reinsurance. Human Resources.
Flash Report
Pacific Investment Management Company – Chief Executive Officer Appointment Recommendation On 20 July 2016, Pacific Investment Management Company (PIMCO) announced that Emmanuel Roman would be its next Chief Executive Officer (CEO). Global Investment Management (GIM) conducted a preliminary call with Jared Gross, Head of Institutional Business Development, later that day. It was followed by a conference call with Dan Ivascyn, Group Chief Investment Officer (CIO), and Kimberley Stafford, Global Head of Consultant Relations. Both are members of PIMCO’s Executive Committee. GIM is comfortable with the reasoning, process, and selection of Roman as PIMCO’s next CEO. GIM is recommending that clients take no actions following this announcement, and PIMCO’s current ratings are unchanged.
Background PIMCO’s Managing Directors have appointed Roman as the next CEO, effective 1 November 2016. Following a well-planned transition, Douglas Hodge, current CEO, will assume a new role as Managing Director and Senior Advisor. Hodge will work closely with Roman to ensure a smooth handoff of his executive responsibilities.
As background, PIMCO assessed its strategic business plan earlier this year and identified the need for a senior-level executive, including the possibility of a CEO-level hire. Hodge was in complete agreement with this direction and expressed his willingness to step back from the CEO role at the appropriate time. PIMCO shared this desire with Oliver Bäte, Chairman and CEO of Allianz SE (Allianz). PIMCO had the full support of Allianz in this search, but Allianz did not play a role in PIMCO’s decision to change its CEO or its ultimate hire. PIMCO embarked on a confidential search with the retention of two executive search firms, which eventually led to the appointment of Roman. Roman had worked with numerous PIMCO employees, including Managing Directors Sudi Mariappa and Jamil Baz. There are also numerous ex-PIMCO employees that work at Roman’s current firm. They all had a very positive impression of Roman. In addition, Bäte gave his strong approval for hiring of the candidate. This was not a visible process from the outside but was a rigorous process within PIMCO.
PIMCO has a history of hiring outside CEOs, including Bill Thompson and Mohammed El-Erian. Roman has nearly three decades of experience in the investment industry. He will join PIMCO from Man Group PLC, where he has served as CEO since February 2013. Prior to Man Group, he spent much of his career in executive leadership positions at Goldman Sachs and GLG Partners, Inc. His experience includes the management of absolute return and long-only investment teams across multiple asset classes, sectors, and geographies, as well as work in investment banking and capital markets. PIMCO was not specifically seeking a candidate with mergers and acquisition experience. However, PIMCO did not rule out strategic investment opportunities going forward to grow its product range. Ivascyn has stated that Roman has a deep respect for PIMCO’s diversified global businesses, investment process, and client service. Roman will help lead PIMCO’s continued evolution as a provider of investment solutions. PIMCO is expected to remain bond focused in its product offerings, but it will look to diversify. PIMCO has indicated that it will not sacrifice its culture for growth.
Roman will not have responsibility for the fixed income products or teams and there will continue to be separation of the CEO and CIO roles. The Group CIO, Ivascyn, makes the decisions on changes on the fixed income team.
Aon Hewitt Retirement and Investment
Flash Report – PIMCO 2
Hodge has made many significant leadership contributions in his nearly 30-year PIMCO career. He will remain with the firm as a key resource for the leadership team and is committed through 2017. He will be involved with strategic clients and special projects at the direction of Roman.
Biography
Emmanuel (Manny) Roman joins PIMCO from Man Group PLC, one of the world’s largest publicly traded alternative asset managers and a leader in liquid, high-alpha investment strategies, where he has served as Chief Executive Officer since February 2013. Roman became Co-Chief Executive Officer at GLG Partners, Inc. in 2005 and Chief Operating Officer of Man Group in 2010 following the firm’s acquisition of GLG. He worked for Goldman Sachs for 18 years where he was Co-Head of Worldwide Global Securities and Co-Head of the European Services Division. He has served as a Trustee of the Hedge Fund Standards Board Ltd. as well as a Trustee of the Paris Review of Books, the Royal Marsden NHS Foundation Trust, the Tate Foundation, and the University of Chicago. Roman received an M.B.A. in Finance and Econometrics from the University of Chicago in 1987 and a Bachelor's Degree from the University of Paris IX Dauphine in 1985.
Aon Hewitt Retirement and Investment
Flash Report – PIMCO 3
Disclaimer This document has been produced by Aon Hewitt’s Global Investment Management (GIM) Research Team, a division of Aon plc and is appropriate solely for institutional investors. Nothing in this document should be treated as an authoritative statement of the law on any particular aspect or in any specific case. It should not be taken as financial advice and action should not be taken as a result of this document alone. Consultants will be pleased to answer questions on its contents but cannot give individual financial advice. Individuals are recommended to seek independent financial advice in respect of their own personal circumstances. The information contained herein is given as of the date hereof and does not purport to give information as of any other date. The delivery at any time shall not, under any circumstances, create any implication that there has been a change in the information set forth herein since the date hereof or any obligation to update or provide amendments hereto. The information contained herein is derived from proprietary and non-proprietary sources deemed by Aon Hewitt to be reliable and are not necessarily all inclusive. Aon Hewitt does not guarantee the accuracy or completeness of this information and cannot be held accountable for inaccurate data provided by third parties. Reliance upon information in this material is at the sole discretion of the reader. This document does not constitute an offer of securities or solicitation of any kind and may not be treated as such, i) in any jurisdiction where such an offer or solicitation is against the law; ii) to anyone to whom it is unlawful to make such an offer or solicitation; or iii) if the person making the offer or solicitation is not qualified to do so. If you are unsure as to whether the investment products and services described within this document are suitable for you, we strongly recommend that you seek professional advice from a financial adviser registered in the jurisdiction in which you reside. We have not considered the suitability and/or appropriateness of any investment you may wish to make with us. It is your responsibility to be aware of and to observe all applicable laws and regulations of any relevant jurisdiction, including the one in which you reside. Aon Hewitt Limited is authorized and regulated by the Financial Conduct Authority. Registered in England & Wales No. 4396810. When distributed in the US, Aon Hewitt Investment Consulting, Inc. (“AHIC”) is a registered investment adviser with the Securities and Exchange Commission (“SEC”). AHIC is a wholly owned, indirect subsidiary of Aon plc. In Canada, Aon Hewitt Inc. and Aon Hewitt Investment Management Inc. (“AHIM”) are indirect subsidiaries of Aon plc, a public company trading on the NYSE. Investment advice to Canadian investors is provided through AHIM, a portfolio manager, investment fund manager and exempt market dealer registered under applicable Canadian securities laws. Regional distribution and contact information is provided below. Contact your local Aon representative for contact information relevant to your local country if not included below. Aon plc/Aon Hewitt Limited Registered office The Aon Centre The Leadenhall Building 122 Leadenhall Street London EC3V 4AN
Aon Hewitt Investment Consulting, Inc. 200 E. Randolph Street Suite 1500 Chicago, IL 60601 USA
Aon Hewitt Inc./Aon Hewitt Investment Management Inc. 225 King Street West, Suite 1600 Toronto, ON M5V 3M2 Canada
Copyright © 2016 Aon plc
Aon Hewitt Retirement and Investment Proprietary and Confidential
Risk. Reinsurance. Human Resources.
Aon InBrief: PIMCO Core Plus - Total Return Full Authority
Review Date Overall Rating Previous Overall Rating August 2016 Buy No Change
Overall Rating PIMCO is a substantial and well-resourced fixed income manager with a good long-term record in delivering its performance objectives. PIMCO proactively rewards its top performing staff and has supplemented this with competitive performance related awards. The portfolio managers are of high caliber individuals that we believe will deliver the performance objectives of the strategy going forward.
Component Ratings Relative Performance to 30 Jun 2016
Rating Previous Rating
Aon InForm Assessment
Business 3 No Change
Staff 3 No Change
Process 3 No Change
Risk 4 No Change
ODD Pass No Change -
Performance 3 No Change
T&C 2 No Change
Composite performance (USD) is gross of fees relative to Barclays US Aggregate. CY = calendar year. Source: eVestment
Firm and Strategy Summary
Head Office Location Newport Beach, CA, US Parent Name Allianz SE Firm AUM $1,512.5 billion Investment Staff 708 Fixed Income AUM $1,443.1 billion Fixed Income Staff 694
Team Location Newport Beach, CA, US Team Head Scott Mather, Mark Kiesel, Mihir Worah
Strategy Inception March 1971 Strategy Size $169.0 billion Benchmark Barclays US Aggregate Performance Objective 100-150 bps p.a. Risk Tolerance Target 150-250 bps p.a.
Opportunity Set Government Bonds, Agencies, Municipals, Investment Grade Credit, High Yield, Securitized Assets, EMD, Loans, Cash, Currency and Derivatives
Note: AUM and Staff data as of 30 June 2016. Past performance is no guarantee of future results.
-3.2%
6.1%
0.5%
-0.8%
0.5%
-1.0%-0.1%
0.3%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
CY11 CY12 CY13 CY14 CY15 YTD 3yr(p.a.)
5yr(p.a.)
Aon Hewitt Retirement and Investment
Aon InBrief – PIMCO – Core Plus - Total Return Full Authority 2
Investment Manager Evaluation
Rating Sheet
Factor Rating Previous Rating Comments
Business 3 No Change
PIMCO is majority-owned by Allianz SE. It enjoys significant independence and has remained consistently profitable over time. PIMCO continues to diversify its book of business away from its flagship total return strategies by appealing to specialized fixed income strategies. We believe the departure of Bill Gross from PIMCO in 2014 will accelerate this diversification. We also think that the appointment of Dan Ivascyn as Group CIO reduces uncertainty over the future of PIMCO. The compensation of key senior professionals is at the high end of its peer group but, we believe, is aligned with clients’ interests.
Investment Staff 3 No Change
PIMCO has appointed three managing directors as portfolio managers to this strategy. Scott Mather is the lead portfolio manager and is CIO of US Core Strategies. He is supported by Mark Kiesel (CIO of Global Credit) and Mihir Worah (CIO of Real Return and Asset Allocation). We think that the portfolio management team is highly capable, well-tenured and experienced.
Investment Process 3 No Change
PIMCO operates an Investment Committee (IC) which meets four times a week to formulate the firm’s global investment views and ideas from a top-down and bottom-up perspective. The IC is made up of portfolio managers and the CIOs. Scott Mather and the other two portfolio managers have the flexibility to tailor IC guidelines to suit the core plus strategy.
Risk Management 4 No Change
Bill De Leon is PIMCO’s Head of Risk Management. Risk management is a hallmark of PIMCO and is fully integrated with the investment team. The manager’s focus on managing risk manifests itself in the design of the model portfolios, the portfolio construction process and the implementation phase.
Operational Due Diligence Pass No Change
PIMCO has appropriate control and compliance procedures that are in-line with industry standards. Systems at PIMCO have been developed in-house to meet its specific needs, especially in the area of derivatives usage. Trading is automated and pre-and post-trade compliance checks are in place.
Aon Hewitt Retirement and Investment
Aon InBrief – PIMCO – Core Plus - Total Return Full Authority 3
Rating Sheet
Factor Rating Previous Rating Comments
Performance Analysis 3 No Change
The performance of the strategy compares favorably to the peer group. While the portfolio composition deviates significantly from the benchmark, its statistical risk measures are consistent with the return objective and its investment guidelines. PIMCO has demonstrated the ability to meet or exceed its return objectives on a risk-adjusted basis over most trailing periods.
Terms & Conditions 2 No Change
PIMCO has a large staff of dedicated and knowledgeable client service professionals resulting in positive feedback from clients. PIMCO’s fees are average relative to the peer group.
Overall Rating Buy No Change
PIMCO is a substantial and well-resourced fixed income manager with a good long-term record in delivering its performance objectives. PIMCO proactively rewards its top performing staff and has supplemented this with competitive performance related awards. The portfolio managers are experienced individuals that we believe will deliver the performance objectives of the strategy going forward.
Aon Hewitt Retirement and Investment
Aon InBrief – PIMCO – Core Plus - Total Return Full Authority 4
Aon InForm Assessment to 30 Jun 2016
Business () Value Current Quarter
Movement since last quarter
Employee Ownership 0.0% =
Last Change of Ownership --- - -
Institutional Client Base (Product) 84.8% =
Firm Net Asset Flow -$52.3 billion =
Firm Gross Asset Outflow -2.7% =
Product Net Asset Flow -$24.8 billion =
Product Gross Asset Outflow -2.2% =
Product Importance to Firm 11.2% =
Asset Class Importance to Firm 95.4% =
Investment Staff () Value Current Quarter
Movement since last quarter
Team Size Portfolio Managers: 243
Analysts: 119 =
Staff Turnover Portfolio Managers: 10.9%
Analysts: 10.8% =
Experience Portfolio Managers: 15 years
Analysts: 13 years =
Investment Process () Value Current Quarter
Movement since last quarter
Investment Process Consistency 13.6
Correlation of Excess Return to Benchmark 0.0
Style Consistency – Modified Duration --- - -
Risk Management () Value Current Quarter
Movement since last quarter
Maximum Drawdown 2.1%
Downside Capture Volatility 22.8%
Aon Hewitt Retirement and Investment
Aon InBrief – PIMCO – Core Plus - Total Return Full Authority 5
Aon InForm Assessment to 30 Jun 2016 (Continued)
Performance Analysis () Value Current Quarter
Movement since last quarter
Excess Return 1.2% =
Risk Adjusted Return 0.6 =
Consistency of Outperformance vs Benchmark 95.0% =
Consistency of Outperformance vs Peers 49.2% =
Source: eVestment
Terms & Conditions () Value Current Quarter
Movement since last quarter
Management Fee 44 bps* = *Fee and assessment reflect segregated account sliding schedule at $50 million.
Operations*
Is the firm affiliated with a Broker/Dealer? Yes
GIPS (Global Investment Performance Standards) Compliant? Yes
Errors & Omissions Insurance? Yes
Fiduciary Liability Insurance? Yes
Note: The Aon InForm Assessment is based on data as of 30 June 2016 (obtained on 3 August 2016 from eVestment) unless stated differently. Product data completion is 94.0% and peer group average data completion is 85.9%. Changes in manager or peer group data completion may impact the Aon InForm Assessment. *The output to the questions above (Operations section) is self-reported by the manager and obtained through eVestment and is provided for informational purposes only. Past performance is no guarantee of future results.
-1.0%-0.5%0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Rolling 3-Year Excess Return (p.a.) Over Barclays US Aggregate
Historical Consistency
-0.1%
0.3%
1.2%
-1.0%
-0.4%
0.2%
0.8%
1.4%
2.0%
3 Years 5 Years 7 YearsExcess Return (p.a.) Over
Barclays US Aggregate
Historical Excess Return
-0.1
0.2
0.6
-0.10.00.10.20.30.40.50.60.7
3 Years 5 Years 7 YearsInformation Ratio (p.a.) Against
Barclays US Aggregate
Historical Risk-Adjusted Return
Aon Hewitt Retirement and Investment
Aon InBrief – PIMCO – Core Plus - Total Return Full Authority 6
Glossary – Fixed Income Manager Model Description The below table provides a more detailed description of the factors used in the above Aon InForm Assessment. Consultants will be pleased to answer questions should you require further information in relation to this report.
Factor Business
Description
Employee Ownership Percentage of firm ownership held by staff
Last Change of Ownership Date of most recent ownership change
Institutional Client Base (Product)
Percentage of assets under management (“AUM”) held by institutional investors (pension funds, sovereign wealth funds, insurance companies, endowments, foundations etc.) at the product level
Firm and Product Net Asset Flow
Net asset flow over the last three years at the firm and product level. Product level factor incorporates an assessment relating to the strategy’s capacity.
Firm and Product Gross Asset Outflow
Average gross asset outflow over the last three years at the firm and product level
Product and Asset Class Importance to Firm
The asset class and product AUM in relation to the firm level AUM
Investment Staff
Team Size The manager’s investment related resources across various functions
Staff Turnover Percentage of investment staff turnover (average over the last three years)
Experience Number of years’ worth of investment experience across various functions
Investment Process
Investment Process Consistency
Volatility of the product’s performance relative to its peer group
Correlation of Excess Return to Benchmark
Correlation of product’s excess return (alpha) to its benchmark.
Style Consistency – Modified Duration
The Modified Duration of a product indicates how sensitive the product is relative to a change in interest rates. Our measure of Style Consistency measures the modified duration of the manager's portfolio relative to the product's stated mandate.
Risk Management
Maximum Drawdown Measures the distance between the peak and trough of the product’s performance relative to its benchmark
Downside Capture Volatility Degree of volatility of the product's long term downside capture. Downside capture relates to the manager's losses when its benchmark is down
Aon Hewitt Retirement and Investment
Aon InBrief – PIMCO – Core Plus - Total Return Full Authority 7
Performance Analysis
Excess Return Compares the excess return of the product against the manager’s benchmark (longest available of 1, 2, 3, 5 or 7-years)
Risk Adjusted Return Displays the Information Ratio against the manager’s benchmark (longest available of 1, 2, 3, 5 or 7-years). Information Ratio is a way of assessing the product’s return after adjusting for the level of risk taken.
Consistency of Outperformance
Looks at long term consistency of excess return in relation to the product’s benchmark and peers
Terms & Conditions
Management Fee Management fee level relative to the product’s peer group
Operations
Operations Factors These factors look across a number of non-investment related areas such as operational infrastructure, compliance and industry best practice
Aon Hewitt Retirement and Investment
Aon InBrief – PIMCO – Core Plus - Total Return Full Authority 8
Ratings Explanation Below we describe the criteria which we use to rate fund management organizations and their specific investment products. Our manager research process assesses each component using both our qualitative and Aon InForm criteria. With the exception of Operational Due Diligence ("ODD"), each component is assessed as follows:
Qualitative Outcome
Aon InForm Outcome
1 = Weak
2 = Average
3 = Above Average
4 = Strong
Pass: This component in isolation meets or exceed our desired criteria
Alert: This component in isolation does not meet our desired criteria, or the lack of data on this component means that we are not able to judge whether it meets our desired criteria
- Not assessed: There is a lack of data, which means that we are not able to assess this component, however we do not consider this in isolation to justify an Alert
Component has improved over the quarter
= Component remains broadly unchanged over the quarter
Component has worsened over the quarter
The ODD factor is assigned a rating and can be interpreted as follows: Overall ODD Rating What does this mean?
A1 No material operational concerns – the firm’s operations largely align with a well-controlled operating environment.
A2 The firm’s operations largely align with a well-controlled operating environment, with
limited exceptions – managers may be rated within this category due to resource limitations or where isolated areas do not align with best practice.
Conditional Pass (“CP”)
Specific operational concerns noted that the firm has agreed to address in a reasonable timeframe; upon resolution, we will review the firm’s rating.
F Material operational concerns that introduce the potential for economic or reputational
exposure exist – we recommend investors do not invest and/or divest current holdings.
Aon Hewitt previously assigned ODD ratings of pass, conditional pass, or fail for the ODD factor. We are in the process of refreshing all ODD ratings to the new terminology. During the transition period, the prior ratings, as follows, may persist in some deliverables until the ODD factor rating is converted to the above noted letter ratings.
Pass – Our research indicates that the manager has acceptable operational controls and procedures in place.
Conditional Pass – We have specific concerns that the manager needs to address within a reasonable established timeframe.
Fail – Our research indicates that the manager has critical operational weaknesses and we recommend that clients formally review the appointment.
Aon Hewitt Retirement and Investment
Aon InBrief – PIMCO – Core Plus - Total Return Full Authority 9
An overall rating is then derived taking into account both the above outcomes for the product. The overall rating can be interpreted as follows:
Overall Rating What does this mean?
Buy We recommend clients invest with or maintain their existing allocation to our Buy rated high conviction products
Buy (Closed) We recommend clients invest with or maintain their existing allocation to our Buy rated high conviction products, however it is closed to new investors
Qualified A number of criteria have been met and we consider the investment manager to be qualified to manage client assets
Sell We recommend termination of client investments in this product
In Review The rating is under review as we evaluate factors that may cause us to change the current rating
The comments and assertions reflect our views of the specific investment product and our opinion of its quality. Differences between the qualitative and Aon InForm outcome can occur and if meaningful these will be explained within the Key Monitoring Points section. Although the Aon InForm Assessment forms a valuable part of our manager research process, it does not automatically alter the overall rating where we already have a qualitative assessment. Overall rating changes must go through our qualitative manager vetting process. Similarly, we will not issue a Buy recommendation before fully vetting the manager on a qualitative basis.
Aon Hewitt Retirement and Investment
Aon InBrief – PIMCO – Core Plus - Total Return Full Authority 10
Disclaimer
This document has been produced by Aon Hewitt’s Global Investment Management (GIM) Research Team, a division of Aon plc and is appropriate solely for institutional investors. Nothing in this document should be treated as an authoritative statement of the law on any particular aspect or in any specific case. It should not be taken as financial advice and action should not be taken as a result of this document alone. Consultants will be pleased to answer questions on its contents but cannot give individual financial advice. Individuals are recommended to seek independent financial advice in respect of their own personal circumstances. The information contained herein is given as of the date hereof and does not purport to give information as of any other date. The delivery at any time shall not, under any circumstances, create any implication that there has been a change in the information set forth herein since the date hereof or any obligation to update or provide amendments hereto. The information contained herein is derived from proprietary and non-proprietary sources deemed by Aon Hewitt to be reliable and are not necessarily all inclusive. Aon Hewitt does not guarantee the accuracy or completeness of this information and cannot be held accountable for inaccurate data provided by third parties. Reliance upon information in this material is at the sole discretion of the reader. This document does not constitute an offer of securities or solicitation of any kind and may not be treated as such, i) in any jurisdiction where such an offer or solicitation is against the law; ii) to anyone to whom it is unlawful to make such an offer or solicitation; or iii) if the person making the offer or solicitation is not qualified to do so. If you are unsure as to whether the investment products and services described within this document are suitable for you, we strongly recommend that you seek professional advice from a financial adviser registered in the jurisdiction in which you reside. We have not considered the suitability and/or appropriateness of any investment you may wish to make with us. It is your responsibility to be aware of and to observe all applicable laws and regulations of any relevant jurisdiction, including the one in which you reside. Aon Hewitt Limited is authorized and regulated by the Financial Conduct Authority. Registered in England & Wales No. 4396810. When distributed in the US, Aon Hewitt Investment Consulting, Inc. (“AHIC”) is a registered investment adviser with the Securities and Exchange Commission (“SEC”). AHIC is a wholly owned, indirect subsidiary of Aon plc. In Canada, Aon Hewitt Inc. and Aon Hewitt Investment Management Inc. (“AHIM”) are indirect subsidiaries of Aon plc, a public company trading on the NYSE. Investment advice to Canadian investors is provided through AHIM, a portfolio manager, investment fund manager and exempt market dealer registered under applicable Canadian securities laws. Regional distribution and contact information is provided below. Contact your local Aon representative for contact information relevant to your local country if not included below. Aon plc/Aon Hewitt Limited Registered office The Aon Centre The Leadenhall Building 122 Leadenhall Street London EC3V 4AN
Aon Hewitt Investment Consulting, Inc. 200 E. Randolph Street Suite 1500 Chicago, IL 60601 USA
Aon Hewitt Inc./Aon Hewitt Investment Management Inc. 225 King Street West, Suite 1600 Toronto, ON M5V 3M2 Canada
Copyright © 2016 Aon plc