Fort Walton Beach Council agenda — 08-27-13--regular — reading text

quarter of 2013 volatility in marestic bonds increased shamly resulting In a 2. 3% decline In the Barclays Aggregate Index ( the worst quarterly return since 2004). Despite somewhat disappointing aw economic news, the quarter began with the market name 1. 0% in April. The aW key driver of returns was a continuation of lower quality. Iorger dated bonds leading the market. In May, mixed signals from Fed Chairman Ben Barracks zw focused attennor on reduction (' tapering ") of the central bank' s asset Purchases . As a results bond markets reversed course resulting in a sharp 21 had in interest rates and a widening In spreads, On June 19, Chairman demand released an optimistic statement on the US. a any which 1. W served to further heighten concern that the Fed would taper their asset purchases sooner than expected Bemanks s comments served to increase I the pressure on band prices leading to a t 6% decline during the month of May w Though rates rase sharply during the second quarter, the shift was uneven o. W across the yield curve wiO short rates virtually unchanged and intermediate and long -dated bonds moving the most. The absclute change In yield levels use Is below.: aq 2- Year J. S. Treasury, + 11 bps lu112 Aa. 11 Sep12 Oul11 l 4 neclp Jan -11 lkb- 13yar- 13 q,, 13 May -13 Jun -11 5Y J S T asury + 64 bps 1- Year U. S. Treasury + 72 bps s.W 10 - Year J. S. Treasury , 65 bps 4W4W For several quaders, investors have faced a market charadenzed by 4O abnormally low yields and little income to cushion any measurable price 4O decline. Those pace declines, via higher rates, a coed in the second 3W quarter. The result was a decline In the Barclays Aggregate Index not seen In almost en rears. aW Even though markets now offer yields higher than those of the past several 2 2WW quarters, the overall level of Interest rate risk continues to be much higher 2' W than the potential return . Going forward, we believe volatility will likely 2' W persist. As painful as the second quarter was for many market participants, t' W flat to negative returns could persist over the near -term. O. cO O.cO Iry cme erne 1y 2y Syr svr 2yr mv, vayr Wyr Sowce US Oesvit — 1 ol' wswy, FR17 " s. worrov ul Sl. COmSf Iffy Tnt  Aaeet Allocation Total FUntl AuMANMYla69YaaPaMau of AwINMCMbI By BepNnt stW YvM JJ• JatJ: J] 5$ N,0.t1 Jun Jq 3NJ: N6. 1N61a C Y 7 m0 3z di on aepinnia Merkel Value Albcetim egme MarkNValue Alloeelion 0 Oame9m Equity 1x065632 553 0DunasnoEquity 19 W2W p. 9 4u lotimememil Egwly 4193017 119 0162910 Oamiced Fixetl lnmme 9] 9 3625 R6 Inlemellena. Eq Wy DwoeYlc Fixed Income 991 M7 118 R2 E Caen Equwalenl 1 76 55] 50 ii Cwh Equivalent 2100214 6. 1 Q  Asset Allocatio ase. FMRE AseefaleeMbe Mf MMM00rasd AwatN atlm9YW^ivuaf Ill a1, 3013: fX,L1, B] 1 Fuw fq 9Na: MISIN36 Y s u` m" o 3 z aleceum nnmwwl alo[ atlnn M10377O ue 16250613 291 MAnUp All Cap Value M10 All20l Mal' r All OlAl Cal 6256613 1]] M MIS Cal AIICap GmwN 1013063] Q< 26. M 299 alc 0ap11el AlI AOmwIM1 M GUCa Mami11on6Aamc A 6205195 176 G.— Hamlllw 6An- 5919. 125 1fl3 166 A Alliance 6emclein( Fled) 42959] 5 12. 2 ME —Pxpic GmwM FUnd RERFX) 4162310 1is P—ennryWani Growth FUne ) Ill PacIllc a ) PENNX) 4, 193017 l07 l3 11. 9 Bfi Alta — leash(, ( Foal) Pannrybania( PENNX) 4, 121, 265 34.], 9] 0 11] p E RflD 552, 582 16 Rail 624235 10 Q  Asset Alloca Total Fund AaaMNlocWmlM6Mypy Palftlb Jun- M13 Me, . 1 Des- 2012 Sep2012 Jurv3013 IA IA 151