Fort Walton Beach Council agenda — 09-25-12 regular — reading text

1 1 In yet another reversal of last quarter, the growth -based Include results 3000GmwIL A % underperformed the value -based indices returns at all capitalization levels for the quarter. The dispersion between the style indices was greatest in the mid- cap space followed by the larger capitalization indices an the lead in small cap. 1000 III alowm The second quarter was a continuation of the nsk- onlrfsk -off trade the 11% markets have seen since the start of the Great Recession. The quarter e stoned off in April with a slight se6off in all the style Indices with the aidcee cod.. smaller capitalization indices selling off the greatest. May was accompanied with fears in Europe and a slowing word economy. M dc. ec,ewm 11% Following the broad selbfl In May, which saw most 0 the style based indices down 6 0 - %, markets continued to slide until policy makers' intervention around the world provided a supportive backdrop for the zoreInto Van codex F— z000Gr, wi 9 codify markets. June ended on a positive note, but it was not enough to EA% JJ1% - 0Ax gain back the losses from May. In general, the top performing sectors across the various capitalizations 1 - Year Performance - Russell Style Series and styles were defensive in nature. Consumer Staples, Healthcare and Telecom were among the best performing sectors through out capitalization. More cyclical sectors such as Energy, Materials, Industrials and Information Technology were among the hardest hit in May and did wwcndwl Iso0o' ll codeIdd I not fully recover in June. These trends were almost the complete reverse of last quarter. For the one -year period, growth outpaced value in the larger 1o0i 1000 mm capitalizations and lagged value in the smaller capitalization indices, The larger indices remain positive In all styles while the small Indices are all now In the ran for the trailing one year mmcee Itueep velliddo Despite the negative quarter, all the style indices are up over high single wugep Gnwl digits year -to-date through June. The Russell 1000 Growth remains atop the leader bead, returning 10. 1% thus far this year While not an insignificant realm, the Russell Midi Value has performed the worst 2DOOz000 V, ae ear-to-date (+ 7, 8%) mw: e: momlmsem owBn Page 4  The Market Env 6.1. a GICS Sector Performance & ( Quarter -End Sector Weight) ou. nn o+ - rae Russ all 1000 • In the Russell 1000 Intlex, only fear of the ten GIGS sectors were ponts a sn• gy poi " 1 for the quarter - Consumer Staples, Health Care, Telecom Services, and Utilities. These four sectors are generally considered the more defensive m• mo° m ( is % 1 qrue sectors. The best performing sector was Telecom Services ( +131 %) and I° a °, van Irr x) the primary contributor was AT &T, which returned + 15 8% and accounts for approximately 50% of the sector. Utilities, which was the worst e°° °erne, pi sxl performing sector In the second quarter with a mtum of - 1. 6 %, rebounded as investor sentiment became more risk averse in the quarter. c°n ° rime, Stm -( 102 %) Information Technology was the worst performing sector. Eight of the top n° °, m c °aryvsw,l ten holdings in the sector were negative, with only Oracle ( + 21 %) and Visa ( + 5. 0 %) generating a positive return . Apple, the largest position in r 54 %) s nx the index, returned 50.6 percentage points less in the second quarter than In the first quarter (- 26 % vs. +48. 0 %). Within Financials, the big money inm To, hnoNy ( 1 s o% 1 center banks appeared to have been adversely imparted by fear of a potential contagion from the European debt crisis. Each of the five big Tdemm same ° (3 .px) banks were down double -digits', JPMoMan (- 21, 8 %), Cltlgmup (- 25. 0 %), arii - Ge %1 Bank of Amenca ( -14 4 %), Goldman Sachs ( -22 6 %), and Morgan Stanley 25. 5 %). Compared to the fast quarter, the dispersion of performance among the ten sectors was less ( 20. 2 percentage paints vs. 228 o• n°. ow° er percentage points). Russell 2000 • en° rm is 9% l For the trailing twelve month period six of the ten sectors were positive: only the Energy, Materials, Industrials, and Financials sectors had a Ali ul a%) negative return. With the double -digit gain in the quarter, Tali Services ( +143 %)was the best performing sector for the trailing twelve l a, irf. p51Y.1 months. With a return of - 8 8 %, Energy was the worst performer for the rte -year period: fears over the potential impact from a slow down in c° n° u— of ° c 11," 1 econone" rowth globally has impacted this cyclical sector mnir., i( SS%) rs In As was the case for the large cap Russell 1000 Index, only four sailors ticl ern C, m ( 135 %) the small cap Russell 2000 Index managed to post positive return for the 1— ir°( rr 51) quarter. Three of the four sectors were the same, but Financials replaced Telecom Services for the fourth spot. The disperslon of quertedy performance within the sectors ( 20. 5 percentage points) was anal lar to the mw T °° nn oiosy pr n%) Russell 1000 Index, However, unlike the Russell 1000 Intlex, the Energy The— s° n•ia: Ioa %1 sector was the worst performer on a quarter and one- year basis. Health urn" Iao %) Care was the best performing sector for the quarter ( +4.9 %) and for the year ( +9.1%- g ir mo, M,y ° r °, mv, e„ am— lo- PacketPacket Pg.Pg. 1010 Page 5  The Market Env Top 10 Index Weights& Quarterly Performance for the Russell 1000 82000 7NR en Cempue COmmumtiea, In OD% PPPL YJYry Peary COganbn NRG 03M < 6% FmYr=rob Epm Mtil COmwAm 3N% aMLprpwctlm µ A6Ei mT' e —ft y me PropaNes, Me. X1.£ Oz3x FNwmY1e