Presentation Materials - Fairfax County, Virginia · 2019-12-18 · and mid cap core. The two actively-managed domestic equity funds cover the following asset classes: large cap core

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Fairfax County Public Schools | First 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

[email protected]

Gregory J. Fox Senior Consultant


45 Glover Avenue

Norwalk, CT 06850

t +1 (203) 523-8780

f +1 (847) 953-2192

[email protected]

Matthew C. Stone Senior Investment Analyst


45 Glover Avenue

Norwalk, CT 06850

t +1 (203) 523-8929

f +1 (203) 523-6750

[email protected]

mailto:[email protected]



I First 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 got off to a rocky start in 2016 as renewed concerns over subdued Chinese economic growth,

deteriorating economic data globally and falling commodity prices spooked equity market investors. However, markets

reversed their losses in the second-half of the quarter following rebound in energy prices. Further easing moves and

dovish statements by the major central banks also helped. Global equity markets returned 0.30% in Q1 2016 with

notable differences in regional returns.

Canada was the best performer with a return of 11.85%. The stronger Canadian dollar pushed up the returns for US

investors.

Page 1

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 0.97% during the first quarter and returned -0.34% over the one-year period.

During the first quarter, Utilities was the strongest performer, posting returns of 15.23%. The Healthcare and Financial

Services sectors were the weakest performers, producing returns of -7.05% and -3.30% respectively.

Performance across the market capitalization spectrum was positive over the quarter except for the Small cap growth

stocks. Medium cap stocks outperformed both the larger and smaller segments of the markets. Value stocks

outperformed Growth stocks across the capitalizations except for the larger segment.

Page 3

U.S. Fixed Income Markets

The Barclays Aggregate Bond Index returned 3.03% in

the first quarter. Corporate bonds were the strongest

performing index segment, returning the most at 3.97%.

Medium credit quality investment grade corporate bonds

outperformed High yield bonds.

Longer duration bonds outperformed shorter duration

bonds.

Page 4

U.S. Fixed Income Markets

The Treasury yield curve flattened over the first quarter with yield spreads narrowing between shorter and medium

maturities and spreads widening between medium and longer maturities. However, yields rose at the shortest

maturities.

The 10-year U.S. Treasury yield ended the quarter at 1.78%, 49 basis points lower than its level at the beginning of the

quarter.

The 10-year TIPS yield fell by 57 basis points over the quarter and ended the period at 0.16%.

Page 5

European Fixed Income Markets

In the Eurozone, bond spreads widened during the first quarter of 2016 with the core bond yields falling and the

peripheral bond yields being mixed. European government bond yields (except Portugal and Greece) fell over the

quarter due to additional monetary stimulus from the European Central Bank (ECB) and dovish statement by the US

Federal Reserve (Fed).

Portuguese government bond yields had a volatile quarter with yields rising sharply in February on the back of

concerns of uncertain fiscal outlook, political instability, health of banking system and chances of the country losing its

last investment grade credit rating. Greek bond yields rose over the uncertainty for a third financial bailout.

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 first quarter, credit spreads were mixed across all areas of the bond market.

CMBS spreads (-12 basis points) fell by the most over the quarter, followed by Global Emerging Markets spreads (-7

basis points) and High Yield spreads (-4 basis points). ABS spreads was the only bond to rise by 2 basis points

Page 7

Commodities

The Bloomberg Commodity Index rose during the first quarter returning 0.42%.

Over the quarter, the best performing segment was Precious Metals with a return 15.29%.

Energy was the worst performing sector of the market during the quarter with a return of -9.31%.

Page 8

Currency

As measured through the broad trade weighted U.S. dollar index, the U.S. dollar weakened during the quarter.

The US dollar depreciated sharply against the euro and the yen but appreciated against the pound. The pound

weakened due to uncertainty over the Brexit and downgrade of economic growth forecasts. Despite the Bank of

Japan’s easing measures, the yen appreciated sharply against the dollar.

Page 9

U.S. Commercial Real Estate Markets

2016 Theme: The U.S. property cycle is mature, with expectations of moderating, albeit still healthy—and relatively attractive—returns. Expect more volatile quarter-to-

quarter movements in market indicators, however, as the cycle is now more susceptible to bumps along the road, from economic, capital markets, or political factors. At

this point in the cycle, appropriate risk mitigation measures should be a staple in all real estate investment portfolios.

In the first quarter, U.S. Core real estate returns moderated to 2.2%*, which is 71 bps lower than the fourth quarter and down 119 bps on a year-over-year basis. This

quarter’s performance is more closely aligned with the sector’s long run average, and marks the first time in 3 years that the income return (1.12%) outpaced appreciation

(1.09%), illustrating our expectation that net income growth will be a larger driver of returns as the cycle matures further.

U.S. property sales also moderated in the first quarter, with preliminary data showing deal volume down 27% from a year earlier. Pricing, however, appeared to hold fairly

steady, with cap rates generally in line with 1Q15 levels. The slowing in volume suggests the continuation of elevated market uncertainty that was present in 2H15, with

buyers and sellers moving apart on pricing expectations.

The U.S. REIT market continued to display market volatility over the quarter, rallying in March, after declining more than 10% through mid-February, to end the quarter up

6.0%. Fears of weaker economic growth and credit markets plagued the sector, and broader equities in general, during the first half of the quarter. Additionally, concerns

that asset pricing may have peaked or are even poised to decline after significant appreciation also attributed to the sector’s volatility. REITs, meanwhile, outperformed

the broader equity market during the quarter, which gained 1.4% (S&P 500). Despite all the public market volatility, U.S. REITs ended the quarter trading at

approximately 5% premium to private market net asset values. Income from real estate remains attractive, especially versus other asset classes, helping to continue to

drive robust capital flows to the sector. REITs’ dividends of 3.8% are 203 bps over the 10-Year U.S. Treasury yield.

Strong underlying sector fundamentals, meanwhile, are expected to support healthy income growth and high occupancies across most property types in 2016. This solid

foundation should help real estate offset rising interest rates, though the offset is not expected to be complete. At this point in the cycle it is important to focus on going

forward underwriting assumptions, especially rent growth expectations, new supply impacts, and exit cap rate, as well as monitor use of leverage. Preferred equity and

debt structures are also important considerations to help mitigate medium term cyclical risks.

*Indicates preliminary NFI-ODCE data gross of fees

RETURN INDEX CPPI BY PROPERTY SECTOR

SOURCE:MOODYS/RCA, AON HEWITT 2/29/2016

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 March

31, 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 small

cap growth. Participants may allocate their investments among the funds in accordance with their own personal tolerance for risk.

As of March 31, 2016, the assets of the Plan totaled $168.0 million. The Plan held 16.5% of assets in the guaranteed interest

product, 11.5% in fixed income, 54.2% in domestic equity, 10.4% in foreign equity and 6.5% in target date funds. The Plan’s

asset allocation by fund is detailed later in this report.

Plan Performance

During the first quarter of 2016, global equity markets slightly increased in value after a rocky start to the quarter. Markets were

negatively effected by renewed concerns over subdued Chinese economic growth, deteriorating economic data globally and

falling commodity prices. In the second half of the quarter, markets recovered following a rebound in energy prices. Domestically,

the Russell 3000 Index returned 0.97% during the quarter. Sector results were mostly positive during the quarter with the

exception of health care and financial services, which were down -7.05% and -3.30%, respectively. The top performing sector of

the market was utilities, returning 15.23%. Overall, performance was positive across all of the capitalization levels during the

quarter with the exception of small cap growth. Value outperformed growth in the small and mid capitalization levels. During the

quarter, the developed non-U.S. equity markets generally underperformed domestic equity markets with the MSCI EAFE Index

generating a return of -3.01%. Emerging markets performed significantly better than developed non-U.S. markets; the MSCI

Emerging Markets Index returned 5.71%. The domestic fixed income market, as represented by the Barclays Aggregate Bond

Index, posted a return of 3.04% for the quarter. The strongest performing segment of the domestic bond market was corporate

bonds, which returned 3.97% for the quarter. Longer duration bonds outperformed their shorter duration counterparts as the yield

curve flattened over the first quarter. ABS represented the worst performing sector during the quarter, with a return of 1.36%.

Overall, the global fixed income market outperformed the domestic fixed income market, as measured by the Citigroup Non-U.S.

WGBI, which returned 9.10% for the quarter. The domestic fixed income market, as measured by the Barclays Aggregate Index,

returned 3.04% for the quarter.

Page 11


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 March 31,

2016, as the fund’s offerings perform well relative to the benchmarks and peer group. PIMCO IRMA has a shorter track record but has

outperformed its custom benchmark since inception in 2011. 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

- Underweight duration in the U.S.

- Credit positioning, including underweight to investment-grade corporates

+ Duration exposure in the Eurozone

PIMCO Inflation Response Multi-Asset Fund underperformed its benchmark during the quarter

- Currency positioning, specifically short exposure in the Euro and several Asian currencies vs. the U.S. dollar

- Underweight to duration for most of the quarter

+ Overweight to real estate

Page 12


Quarterly Fund Attribution (continued)

Dodge & Cox Stock Fund underperformed during the quarter

- Holdings in the financials sector (-11% compared to benchmark -5%) were biggest detractors

- Exposures in Bank of America (-19%), Charles Schwab (-15%), and Goldman Sachs (-13%)

- The Fund’s lack of exposure to the utilities sector (0% compared to the overall sector in the benchmark 3%) as this segment

of the market returned +16%.

+ Holdings in the Consumer Discretionary sector (+8% compares to benchmark 2%)

Baron Growth Fund outperformed during the quarter

+ Stock selection within healthcare and consumer discretionary

+ Exposures in Dick’s Sporting Goods, Inc. and Under Armour Inc.

- Holdings in the industrials and information technology sectors

Artisan International Fund underperformed during the quarter

- Underweight to energy sector

- Currency exposures

Page 13

Market ValueAs of

01/01/2016

NetTransfers

Contributions DistributionsCapital

Apprec./Deprec.

Market ValueAs of

03/31/2016

U.S. FIXED INCOME

Great West Portfolio Fund 26,561.50 1,030.74 695.99 -686.51 133.08 27,734.80

PIMCO Total Return Adm 18,771.95 97.70 420.37 -380.53 326.10 19,235.59

PIMCO Inflation Response MultiAsst Inst 89.16 -0.06 4.21 -0.26 4.85 97.89

TARGET DATE

T. Rowe Price Retirement 2005 449.45 -49.87 11.40 -0.07 11.14 422.05

T. Rowe Price Retirement 2010 343.91 -0.45 7.73 - 8.39 359.58

T. Rowe Price Retirement 2015 1,330.85 -0.46 41.49 -48.68 27.36 1,350.57

T. Rowe Price Retirement 2020 2,457.32 72.37 66.18 -3.73 42.39 2,634.54

T. Rowe Price Retirement 2025 1,922.13 108.66 114.61 - 30.52 2,175.92

T. Rowe Price Retirement 2030 816.44 40.94 65.35 - 9.27 932.01

T. Rowe Price Retirement 2035 1,429.96 85.45 117.47 - 16.16 1,649.04

T. Rowe Price Retirement 2040 480.07 49.00 36.49 - 3.35 568.91



T. Rowe Price Retirement 2055 310.42 -82.65 26.37 - -1.53 252.61

U.S. EQUITY

BlackRock S&P 500 Stock 20,689.14 -17.41 698.84 -151.62 295.58 21,514.52

Dodge & Cox Stock 20,725.73 -204.41 402.82 -149.56 -201.68 20,572.89

Columbia Mid Cap Index Z 24,349.44 -25,377.71 360.56 -196.83 864.53 -

Vanguard Mid Cap Index - 25,244.09 169.39 - 145.93 25,559.41

Baron Growth Inst 23,719.32 -684.86 458.48 -144.22 29.82 23,378.54

INTERNATIONAL EQUITY

Artisan International Inv 18,097.52 -294.53 385.26 -102.64 -658.99 17,426.63

OTHER

Loan Fund 1,497.72 - 168.65 -122.56 -2.38 1,541.44

Total 457(b) Plan 164,632.71 - 4,316.54 -1,987.20 1,087.49 168,049.54

Fairfax County Public Schools

Financial Reconciliation

($000)

1 Quarter Ending March 31, 2016

Page 14

December 31, 2015 : $164,632,713 March 31, 2016 : $168,049,544

SegmentsMarket Value

($)Allocation

(%)

Domestic Equity 89,483,630.42 54.35¢£

International Equity 18,097,519.92 10.99¢£

Domestic Fixed Income 18,771,951.85 11.40¢£

GIC 26,561,504.06 16.13¢£

Real Return 89,159.73 0.05¢£

Loan Fund 1,497,723.41 0.91¢£

Life Cycle 10,131,224.00 6.15¢£

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¢£


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


Historical Asset Allocation by Segment

April 1, 2010 To March 31, 2016

Total 457(b) Plan

Page 16

Allocation

MarketValue($000)

%

Performance(%)

1Quarter

1Year

3Years

5Years

7Years

10Years

Total 457(b) Plan 168,049.54 100.00

U.S. Fixed Income 47,068.28 28.01

Great West Portfolio Fund 27,734.80 16.50 0.50 2.00 1.84 1.99 2.25 2.55

50% BC Int. Agg/50% 90 day T-Bill 1.18 1.14 1.10 1.58 2.01 2.82

90 Day U.S. Treasury Bill 0.06 0.08 0.05 0.06 0.09 1.12

PIMCO Total Return Adm 19,235.59 11.45 1.75 (97) 0.06 (91) 1.28 (95) 3.41 (77) 5.47 (45) 5.75 (4)

Barclays Aggregate Index 3.03 (28) 1.96 (15) 2.50 (21) 3.78 (47) 4.52 (72) 4.90 (44)

PIMCO Inflation Response MultiAsst Inst 97.89 0.06 5.25 (4) -3.67 (44) -3.43 (93) - - -

PIMCO IRMA Benchmark 7.94 (1) -0.75 (19) -3.83 (94) -1.34 (95) 3.87 (95) 2.31 (94)

Target Date 10,987.84 6.54

TRP Retirement 2005 422.05 0.25 2.41 (19) 0.03 (14) 4.13 (21) 5.01 (20) 9.68 (11) 5.06 (28)

TRP Retirement 2005 Index 2.03 (32) 0.15 (13) 4.45 (10) 5.20 (19) 8.74 (28) 4.74 (37)

TRP Retirement 2010 359.58 0.21 2.37 (16) -0.16 (20) 4.68 (9) 5.42 (22) 10.73 (1) 5.14 (-)

TRP Retirement 2010 Index 1.91 (29) -0.11 (19) 4.93 (4) 5.62 (13) 9.82 (16) 4.88 (-)

TRP Retirement 2015 1,350.57 0.80 1.97 (22) -0.67 (28) 5.49 (3) 6.04 (9) 11.91 (1) 5.41 (-)


TRP Retirement 2020 2,634.54 1.57 1.47 (50) -1.32 (40) 6.14 (3) 6.52 (4) 12.90 (1) 5.54 (1)

TRP Retirement 2020 Index 1.54 (48) -0.95 (25) 6.21 (3) 6.69 (3) 11.96 (6) 5.26 (1)

TRP Retirement 2025 2,175.92 1.29 1.14 (62) -1.85 (44) 6.78 (3) 6.95 (5) 13.71 (1) 5.65 (-)


TRP Retirement 2030 932.01 0.55 0.78 (59) -2.26 (32) 7.27 (4) 7.29 (4) 14.35 (1) 5.75 (-)


TRP Retirement 2035 1,649.04 0.98 0.44 (61) -2.69 (27) 7.62 (3) 7.49 (5) 14.74 (1) 5.79 (-)



Asset Allocation & Performance

As of March 31, 2016

Page 17


Asset Allocation & Performance


Allocation

MarketValue($000)

%

Performance(%)

1Quarter

1Year

3Years

5Years

7Years

10Years

TRP Retirement 2040 568.91 0.34 0.13 (60) -3.06 (30) 7.78 (3) 7.63 (7) 14.87 (1) 5.88 (-)


TRP Retirement 2045 352.30 0.21 0.13 (59) -3.09 (28) 7.78 (3) 7.64 (7) 14.86 (1) 5.89 (-)


TRP Retirement 2050 290.32 0.17 0.08 (60) -3.06 (27) 7.79 (3) 7.65 (9) 14.86 (1) -

TRP Retirement 2050 Index 0.88 (31) -2.35 (11) 7.49 (6) 7.71 (5) 13.99 (8) -

TRP Retirement 2055 252.61 0.15 0.08 (56) -3.09 (24) 7.78 (4) 7.64 (8) 14.88 (-) -

TRP Retirement 2055 Index 0.88 (29) -2.35 (11) 7.49 (7) 7.71 (7) 13.99 (-) -

U.S. Equity 91,025.36 54.17

BlackRock S&P 500 Stock 21,514.52 12.80 1.33 (29) 1.74 (22) 11.74 (17) 11.47 (25) 16.86 (13) 6.91 (20)

S&P 500 Index 1.35 (12) 1.78 (5) 11.82 (1) 11.58 (3) 16.97 (1) 7.01 (4)

Dodge & Cox Stock 20,572.89 12.24 -0.99 (82) -4.29 (87) 9.51 (68) 10.14 (55) 17.02 (18) 5.04 (86)

S&P 500 Index 1.35 (33) 1.78 (22) 11.82 (16) 11.58 (19) 16.97 (20) 7.01 (24)

Vanguard Mid Cap Index 25,559.41 15.21 1.19 (42) -4.26 (37) 10.80 (20) 10.05 (24) 18.93 (12) 7.27 (30)

Vanguard Spliced Mid Cap Index 1.16 (43) -4.27 (37) 10.84 (19) 10.08 (22) 18.97 (12) 7.28 (30)

Baron Growth Inst 23,378.54 13.91 0.31 (5) -8.13 (33) 7.18 (50) 8.63 (36) - -

Baron Growth Rtl 0.25 (5) -8.35 (33) 6.91 (56) 8.35 (43) 16.63 (51) 6.23 (23)

Russell 2000 Growth Index -4.68 (59) -11.84 (53) 7.91 (42) 7.70 (49) 17.23 (45) 6.00 (25)

International Equity 17,426.63 10.37

Artisan International Inv 17,426.63 10.37 -3.63 (76) -11.11 (80) 2.71 (23) 5.24 (2) 11.88 (3) 3.61 (14)

MSCI EAFE Index (Net) -3.01 (66) -8.27 (48) 2.23 (34) 2.29 (35) 9.69 (36) 1.80 (52)

MSCI AC World ex USA Index (Net) -0.38 (27) -9.19 (58) 0.32 (85) 0.31 (85) 9.18 (48) 1.94 (45)

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 (22) 13.53 (33) 8.57 (17) 3.91 (94) 10.10 (4) -2.16 (73) 4.43 (81) 0.47 (40)

Barclays Aggregate Index 4.34 (41) 6.97 (19) 5.24 (19) 5.93 (84) 6.54 (69) 7.84 (16) 4.21 (79) -2.02 (66) 5.97 (37) 0.55 (32)

IM U.S. Broad Market Core Fixed Income (MF) Median 4.24 6.16 0.05 10.86 7.24 6.95 6.21 -1.60 5.82 0.34

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 (31) -14.42 (15) 17.32 (90) 13.49 (43) 3.82 (14) 4.83 (91) -11.77 (100) -0.46 (82) -7.12 (79)

IM Flexible Portfolio (MF) Median 12.10 7.15 -28.42 25.33 12.77 -1.35 10.90 11.81 3.80 -3.44

Target Date

TRP Retirement 2005 11.50 (7) 6.67 (25) -22.24 (83) 24.55 (17) 11.51 (17) 1.43 (66) 11.35 (15) 9.74 (21) 4.72 (40) -0.75 (38)

TRP Retirement 2005 Index 11.29 (10) 6.79 (24) -19.10 (69) 16.91 (63) 10.22 (41) 2.38 (44) 9.52 (42) 9.86 (21) 5.48 (25) -0.10 (19)

IM Mixed-Asset Target Alloc Consv (MF) Median 8.01 5.69 -16.60 18.78 9.80 2.10 9.04 7.51 4.22 -1.12

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)


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 (80) 31.35 (1) 13.79 (4) -0.32 (78) 13.81 (1) 15.18 (2) 5.37 (30) -0.58 (31)

TRP Retirement 2015 Index 13.44 (-) 6.85 (-) -26.61 (30) 22.08 (68) 12.57 (26) 1.09 (40) 11.94 (24) 14.97 (3) 6.30 (15) -0.28 (16)

IM Mixed-Asset Target 2015 (MF) Median - - -28.21 24.82 11.67 0.84 11.10 11.54 4.85 -0.86

TRP Retirement 2020 14.66 (8) 6.73 (46) -33.48 (83) 34.19 (1) 14.74 (3) -1.20 (81) 15.01 (1) 18.05 (2) 5.63 (37) -0.31 (25)


IM Mixed-Asset Target 2020 (MF) Median 12.77 6.25 -28.89 24.89 12.70 0.03 11.79 13.00 5.12 -0.81

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 (12) 6.83 (51) -37.79 (75) 37.99 (1) 16.01 (3) -2.70 (67) 16.82 (1) 23.09 (4) 6.05 (35) -0.02 (6)

TRP Retirement 2030 Index 16.12 (12) 6.80 (51) -34.16 (42) 27.43 (71) 14.72 (30) -0.79 (20) 14.85 (20) 22.13 (8) 7.29 (7) -0.73 (39)

IM Mixed-Asset Target 2030 (MF) Median 14.22 6.87 -36.25 28.88 13.88 -2.21 13.92 18.21 5.66 -1.04

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 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)




Calendar Year Performance


Returns for periods greater than one year are annualized.Returns are expressed as percentages.

Page 19


Calendar Year Performance


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)


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 (6) 0.14 (92) -43.31 (91) 31.27 (25) 13.49 (54) -4.08 (88) 22.01 (3) 40.55 (1) 10.40 (72) -4.49 (94)

S&P 500 Index 15.79 (30) 5.49 (60) -37.00 (55) 26.46 (55) 15.06 (33) 2.11 (30) 16.00 (43) 32.39 (46) 13.69 (22) 1.38 (29)

IM U.S. Large Cap Core Equity (MF) Median 14.51 6.20 -36.60 27.05 13.83 1.00 15.46 32.17 11.95 -0.14

Vanguard Mid Cap Index 13.78 (40) 6.22 (61) -41.76 (67) 40.51 (34) 25.67 (31) -1.96 (40) 16.01 (42) 35.17 (49) 13.78 (12) -1.33 (39)

Vanguard Spliced Mid Cap Index 13.76 (40) 6.20 (61) -41.80 (67) 40.49 (34) 25.69 (31) -1.91 (39) 16.04 (41) 35.21 (49) 13.83 (11) -1.28 (39)

IM U.S. Mid Cap Equity (MF) Median 12.31 9.95 -39.35 35.32 23.75 -3.28 15.30 34.68 8.44 -2.41

Baron Growth Inst - - - - 24.32 (73) 1.51 (28) 16.74 (10) 38.69 (81) 4.66 (16) -4.06 (72)

Baron Growth Rtl 15.50 (26) 6.59 (60) -39.18 (26) 34.24 (53) 24.01 (77) 1.24 (28) 16.43 (11) 38.32 (83) 4.40 (18) -4.31 (77)

Russell 2000 Growth Index 13.35 (38) 7.05 (58) -38.54 (19) 34.47 (51) 29.09 (27) -2.91 (61) 14.59 (20) 43.30 (50) 5.60 (13) -1.38 (50)

IM U.S. Small Cap Growth Equity (MF) Median 11.35 8.18 -42.12 34.56 27.16 -1.61 12.93 43.17 1.76 -1.73

International Equity

Artisan International Inv 25.56 (56) 19.73 (10) -46.96 (96) 39.77 (16) 5.91 (74) -7.26 (14) 25.39 (4) 25.18 (9) -0.97 (12) -3.85 (78)

MSCI EAFE Index (Net) 26.34 (37) 11.17 (72) -43.38 (62) 31.78 (56) 7.75 (60) -12.14 (49) 17.32 (64) 22.78 (17) -4.90 (39) -0.81 (39)

MSCI AC World ex USA Index (Net) 26.65 (36) 16.65 (19) -45.53 (84) 41.45 (11) 11.15 (23) -13.71 (78) 16.83 (69) 15.29 (82) -3.87 (27) -5.66 (86)

IM International Large Cap Equity (MF) Median 25.86 12.63 -42.43 32.33 8.82 -12.35 18.57 20.27 -5.35 -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 2050 TRP Retirement 2055 BlackRock S&P 500 Stock

Dodge & Cox Stock Vanguard Mid Cap Index Baron Growth Inst

Artisan International Inv

-12.0

-9.0

-6.0

-3.0

0.0

3.0

6.0

9.0

12.0

15.0

18.0

An

nu

aliz

ed

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turn

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0Annualized Standard Deviation


Risk Profile

3 Years Ending March 31, 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

1st

Quarter

2016

4th

Quarter

2015

3rd

Quarter

2015

2nd

Quarter

2015

U.S FIXED INCOME

Great West Portfolio Fund No No No No No N/R Green Green Green Green

PIMCO Total Return Adm No No No Yes Yes Buy Yellow Green Yellow Red

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 No 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 Green

Vanguard Mid Cap Index No No No No No Buy Green green Green Green

Baron Growth Instl No No No No No Qualified Green yellow Green Yellow


Artisan International Inv No No No No Yes 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.

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 March 31, 2016

Investment Option Participants Investment Options Participants

Great West Portfolio 1,046 One 551

PIMCO Total Return 1,140 Two 361

PIMCO Inflation Response MultiAsst 30 Three 270

T Rowe Price Retirement 2005 36 Four 330

T Rowe Price Retirement 2010 12 Five 285

T Rowe Price Retirement 2015 35 Six 271

T Rowe Price Retirement 2020 73 Seven 188

T Rowe Price Retirement 2025 84 Eight 23

T Rowe Price Retirement 2030 65 More than Eight 26

T Rowe Price Retirement 2035 92



T Rowe Price Retirement 2050 25 Item Result

T Rowe Price Retirement 2055 45 Participation Rate 60.22%

BlackRock S&P 500 Stock 950 Number of Participants with Account Balances 2,305

Dodge & Cox Stock 1,017 Average Deferral Rate 16.07%

Vanguard Mid Cap Index 1,200 Average Number of Funds per Participant 3.59

Baron Growth 1,163 Average Account Balance $72,237.79

Artisan International 1,147

Investment Option Participants

Great West Portfolio 223 Item Result

PIMCO Total Return 48 Number of Internet Accesses 9,456

T Rowe Price Retirement 2005 1 VRU Calls 167











BlackRock S&P 500 Stock 63

Dodge & Cox Stock 26

Vanguard Mid Cap Index 25

Baron Growth 29

Artisan International 12

* 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 Mar. 2014 $ 1,664,000 $ 3.7 million Contributions Mar. 2015 $ 1,439,000 $ 3.7 million Contributions Mar. 2016 $ 1,361,000 $ 3.8 million Assets Mar. 31, 2014 $152.3 million Assets Mar. 31, 2015 $167.0 million Assets Mar. 31, 2016 $167.0 million Assets Apr. 25, 2016 $168.6 million Number of Participants Mar. 2014 2278 5501 Number of Participants Mar. 2015 2261 5499 Number of Participants Apr. 2016 2236 5468 Average Contribution/Month – Mar. 2014 $ 988/mo; $205/biweek Average Contribution/Month – Mar. 2015 $ 979/mo; $227/biweek Average Contribution/Month – Mar. 2016 $ 945/mo; $215/biweek

403(b) Average Contribution/Month – Mar. 2016 $737/mo; $209/biweek Number of Employees Currently Contributing to 457(b): 1376/mo; 59/biweek Number of Employees Currently Contributing to 403(b): 4969/mo; 499/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 61 4

26-30 394 10

31-35 569 21

36-40 581 39

41-45 693 52

46-50 669 80

51-55 705 94

56-60 680 93

61-65 457 59

66-70 128 22

71-75 30 12

76-80 2 10

81-85 0 3

Total 4969 499

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

10

20

30

40

50

60

70

80

90

100

<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 12 0

26-30 51 0

31-35 119 4

36-40 124 3

41-45 167 4

46-50 195 18

51-55 268 12

56-60 235 7

61-65 161 7

66-70 34 4

71-75 10 0

Total 1376 59

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

20

<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)

17%

Large Cap Blend (Active)

9%

Mid Cap Blend (Passive)13%

Small Cap Growth11%

International9%

Lifecycle14%

1st Quarter 2016 Contribution Allocation

Stable Value15%

Fixed Income9%

Real Return0%

Large Cap Blend (Passive)

17%

Large Cap Blend (Active)

9%

Mid Cap Blend (Passive)13%

Small Cap Growth12%

International10%

Lifecycle15%

4th Quarter 2015 Contribution Allocation

Page 28

Relative Ranking (3 Years Rolling) Relative Performance (04/01/06 to 03/31/16)

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

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6/11 12/11 6/12 12/12 6/13 12/13 6/14 12/14 6/15 3/16 Cumulative Annualized Over/Under Relative Performance

Over/Under Performance

0.0

3.0

6.0

-3.0

-6.0

Re

turn

(%)

4/06 4/07 4/08 4/09 4/10 4/11 4/12 4/13 4/14 4/15 3/16

Number ofObservations

>=Median Top Quartile Bottom Quartile >PIMCO Total Return Adm >Barclays Aggregate Index

PIMCO Total Return Adm 20 14 6 3 N/A 17

Barclays Aggregate Index 20 3 1 2 3 N/A

Style History Mar-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 3/16

PIMCO Total Return Adm 03/31/16

Page 29

Relative Ranking (3 Years Rolling)

Relative Performance (09/01/11 to 03/31/16)


PIMCO Inflation Response MultiAsst Inst PIMCO IRMA Benchmark

0.0

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>=Median Top Quartile Bottom Quartile >PIMCO Inflation Response MultiAsst Inst >PIMCO IRMA Benchmark

PIMCO Inflation Response MultiAsst Inst 7 0 0 7 N/A 7

PIMCO IRMA Benchmark 7 0 0 7 0 N/A

Cumulative Annualized Over/Under Relative Performance Over/Under Performance

0.0

4.0

8.0

-4.0

-8.0

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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

PIMCO Inflation Response MultiAsst Inst 03/31/16

Page 30

Asset Allocation for T. Rowe Price Retirement Funds


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 59.2% 60.2% 54.1% 45.4% 36.0% 28.1% 21.3% 15.4% 10.5% 9.9% 9.9% 10.0% 10.1%

T. Rowe Price Inflation Focused Bond 29.9% 17.6% 15.1% 11.0% 6.5% 3.3% 1.4% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5%

T. Rowe Price New Income 20.0% 29.2% 26.8% 23.6% 20.2% 17.1% 13.7% 10.3% 7.0% 6.5% 6.5% 6.6% 6.7%

T. Rowe Price High Yield 3.1% 4.5% 4.1% 3.7% 3.1% 2.6% 2.1% 1.5% 1.0% 1.0% 1.0% 1.0% 1.0%

T. Rowe Price Intl Bond 3.1% 4.4% 4.0% 3.6% 3.0% 2.5% 2.0% 1.5% 1.0% 1.0% 1.0% 1.0% 1.0%

T. Rowe Price EM Bond 3.1% 4.5% 4.1% 3.7% 3.1% 2.6% 2.1% 1.6% 1.0% 1.0% 1.0% 1.0% 1.0%

U.S. Equity 25.9% 25.2% 29.0% 34.6% 40.6% 45.8% 50.1% 53.9% 57.1% 57.5% 57.5% 57.4% 57.3%

T. Rowe Price Value 0.0% 0.0% 0.0% 2.7% 7.0% 10.7% 13.8% 16.7% 19.0% 19.3% 19.3% 19.2% 19.1%

T. Rowe Price Equity Index 500 21.0% 20.4% 23.5% 22.3% 18.4% 15.1% 12.2% 9.2% 7.4% 7.2% 7.2% 7.3% 7.2%

T. Rowe Price Growth Stock 0.0% 0.0% 0.0% 3.0% 7.6% 11.3% 14.6% 17.7% 19.8% 20.0% 20.0% 20.1% 20.0%

T. Rowe Price Mid-Cap Value 1.5% 1.5% 1.7% 2.0% 2.3% 2.6% 2.9% 3.2% 3.4% 3.4% 3.4% 3.4% 3.3%

T. Rowe Price Mid-Cap Growth 1.3% 1.3% 1.4% 1.7% 2.1% 2.3% 2.5% 2.7% 2.9% 2.9% 2.9% 2.9% 2.9%

T. Rowe Price Small-Cap Value 0.7% 0.7% 0.8% 1.0% 1.2% 1.4% 1.5% 1.7% 1.7% 1.8% 1.7% 1.7% 1.7%

T. Rowe Price Small-Cap Stock 0.8% 0.8% 1.0% 1.0% 1.2% 1.4% 1.5% 1.6% 1.7% 1.7% 1.7% 1.7% 1.7%

T. Rowe Price New Horizons 0.6% 0.6% 0.6% 0.8% 0.9% 1.0% 1.1% 1.2% 1.3% 1.3% 1.3% 1.3% 1.3%

Non-U.S. Equity 13.2% 13.0% 14.9% 17.6% 20.6% 23.1% 25.3% 27.2% 28.8% 28.9% 28.9% 28.9% 29.0%

T. Rowe Price Intl Growth & Income 3.7% 3.7% 4.3% 5.0% 5.9% 6.6% 7.2% 7.8% 8.2% 8.3% 8.3% 8.3% 8.3%

T. Rowe Price Overseas Stock 3.8% 3.7% 4.3% 5.1% 5.9% 6.7% 7.3% 7.9% 8.3% 8.3% 8.3% 8.3% 8.3%

T. Rowe Price International Stock 3.3% 3.3% 3.8% 4.4% 5.2% 5.8% 6.4% 6.9% 7.3% 7.3% 7.3% 7.3% 7.3%

T. Rowe Price Emerging Markets Stock 2.4% 2.3% 2.6% 3.1% 3.6% 4.0% 4.4% 4.7% 5.0% 5.1% 5.1% 5.0% 5.1%

Real Assets 1.7% 1.7% 1.9% 2.3% 2.7% 3.0% 3.3% 3.5% 3.6% 3.7% 3.7% 3.7% 3.7%

T. Rowe Price Real Assets 1.7% 1.7% 1.9% 2.3% 2.7% 3.0% 3.3% 3.5% 3.6% 3.7% 3.7% 3.7% 3.7%

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%


Page 32




TRP Retirement 2005 TRP Retirement 2005 Index

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>=Median Top Quartile Bottom Quartile >TRP Retirement 2005 >TRP Retirement 2005 Index

TRP Retirement 2005 20 19 14 0 N/A 16

TRP Retirement 2005 Index 20 17 9 1 4 N/A


0.0

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TRP Retirement 2005 03/31/16

Page 33





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Page 34





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Page 35





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Page 36





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BlackRock S&P 500 Stock S&P 500 Index

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>=Median Top Quartile Bottom Quartile >BlackRock S&P 500 Stock >S&P 500 Index

BlackRock S&P 500 Stock 20 20 9 0 N/A 0

S&P 500 Index 20 20 20 0 20 N/A


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


0.0

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9/96 6/98 3/00 12/01 9/03 6/05 3/07 12/08 9/10 6/12 3/14 3/16

BlackRock S&P 500 Stock 03/31/16

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Dodge & Cox Stock S&P 500 Index

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>=Median Top Quartile Bottom Quartile >Dodge & Cox Stock >S&P 500 Index

Dodge & Cox Stock 20 14 11 1 N/A 11

S&P 500 Index 20 20 7 0 9 N/A


Cap

ital

izat

ion

Manager Style

Large Cap Growth


Large Cap Value



0.0

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2/82 11/84 8/87 5/90 2/93 11/95 8/98 5/01 2/04 11/06 8/09 5/12 3/16

Dodge & Cox Stock 03/31/16

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Vanguard Mid Cap Index Vanguard Spliced Mid Cap Index

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>=Median Top Quartile Bottom Quartile >Vanguard Mid Cap Index >Vanguard Spliced Mid Cap Index

Vanguard Mid Cap Index 20 20 12 0 N/A 1

Vanguard Spliced Mid Cap Index 20 20 12 0 19 N/A


Cap

ital

izat

ion

Manager Style

Large Cap Growth


Large Cap Value



0.0

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7/01 10/02 1/04 4/05 7/06 10/07 1/09 4/10 7/11 10/12 1/14 4/15 3/16

Vanguard Mid Cap Index 03/31/16

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Baron Growth Rtl Russell 2000 Growth Index

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Baron Growth Rtl 20 13 0 2 N/A 8

Russell 2000 Growth Index 20 19 3 0 12 N/A


Cap

ital

izat

ion

Manager Style

Large Cap Growth


Large Cap Value



0.0

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3/98 9/99 3/01 9/02 3/04 9/05 3/07 9/08 3/10 9/11 3/13 9/14 3/16

Baron Growth Rtl 03/31/16

Page 46




Artisan International Inv

MSCI EAFE Index (Net)

MSCI AC World ex USA Index (Net)

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Cumulative Annualized Over/Under Relative Performance


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>=Median Top Quartile Bottom Quartile >Artisan International Inv >MSCI EAFE Index (Net) >MSCI AC World ex USA Index (Net)

Artisan International Inv 20 19 17 0 N/A 20 18

MSCI EAFE Index (Net) 20 15 2 0 0 N/A 13

MSCI AC World ex USA Index (Net) 20 7 2 12 2 7 N/A


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

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6/01 9/02 12/03 3/05 6/06 9/07 12/08 3/10 6/11 9/12 12/13 3/15 3/16

Artisan International Inv 03/31/16

Page 47

Fairfax County Public Schools As of March 31, 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%


0.62% 0.59% 0.62% 0.60% 0.60% 0.02%


0.66% 0.62% 0.66% 0.61% 0.63% 0.05%


0.69% 0.65% 0.60% 0.64% 0.66% 0.05%


0.72% 0.69% 0.72% 0.68% 0.69% 0.04%


0.74% 0.70% 0.74% 0.69% 0.70% 0.05%


0.75% 0.74% 0.64% 0.70% 0.70% 0.05%


0.75% 0.71% 0.75% 0.71% 0.70% 0.04%


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 0.08% 0.97% 0.75% 0.99% 0.80% -0.91%

Baron Growth Inst U.S. Small Cap Growth Equity 1.04% 1.21% 1.25% 1.26% 1.18% -0.22%


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 15 March 2016 Retirement and Investment

Risk. Reinsurance. Human Resources.

Flash Report

BlackRock Passive Equity (Beta Strategies) Team Departure of Nimish Patel, Institutional and Retail Senior Portfolio Manager

Recommendation We are retaining our "Buy” rating on BlackRock Passive Equity strategies. The BlackRock Beta Strategies team is well-resourced and we do not envisage any impact on clients invested in these funds. Having said that, we will monitor the Beta Strategies team to make sure that the resource is adequate and a suitable replacement is found. BlackRock has indicated this could come from existing internal candidates or sourced externally.

Patel was the named Portfolio Manager (“PM”) in the EMEA team on a number of key strategies, but his responsibilities also included business management and application of best practice, such as in IT, across the business. From a day-to-day point of view the management of the funds already involved the three portfolio managers who have been named as taking over his responsibilities. All these PMs have over 15 years experience in the industry, and between 5 and 12 years' experience at BlackRock. Where Nimish Patel was the named PM on a fund, Kieran Doyle is likely to be the nominated replacement.

BlackRock has indicated that Nimish Patel is leaving for a career break rather than joining a competitor (at least in the short term) and he has offered to assist his colleagues in a transitionary period, although it is not yet clear when he will be leaving the firm.

Background BlackRock has announced that Nimish Patel, Managing Director, intends to leave the firm to take a break from the asset management industry. Nimish was responsible for the institutional portfolio management team (who manage pooled funds and segregated portfolios). He has offered to help other team members in the transition period after which he will leave the firm. As from today, Kieran Doyle, Dharma Laloobhai and Harvey Sidhu will manage Nimish's portfolios and report to Eleanor de Freitas, Head of Beta Strategies, EMEA.

Aon Hewitt Retirement and Investment

Flash Report – BlackRock Passive Equity

Disclaimer This document has been produced by the Global Investment Management Team of Aon plc. 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 Aon Centre The Leadenhall Building 122 Leadenhall Street London EC3V 4AN

Copyright © 2016 Aon plc

Aon Hewitt January 2016 Retirement and Investment


Flash Report

Changes to the Investment Policy Committee (IPC) and the Global Stock Investment Policy Committee (GSIPC) Background Dodge & Cox has informed us of a number of role changes that pertain to the Investment Policy Committee (IPC) and the Global Stock Investment Policy Committee (GSIPC).

- Kathleen G. McCarthy, Vice President, joins the IPC effective January 15, 2016. Ms. McCarthy joined Dodge & Cox in 2007 and is a shareholder of the firm.

- David C. Hoeft, Director, joins the GSIPC effective January 15, 2016. Mr. Hoeft joined the Firm in 1993, is also a shareholder of the Firm and has been a member of the IPC since 2002.

- Roger Kuo has been elected to the Dodge & Cox, Inc. Board of Directors. Mr. Kuo joined the Firm in 1998 and is a member of the firm’s International Investment Policy Committee and GSIPC.

The changes appear incremental in nature and take place as a result of the pending retirements of Greg Serrurier, effective June 30, 2016, and John Gunn, effective December 31, 2016, both of whom are stepping off the IPC effective March 31, 2016 and May 31, 2016 respectively. Recommendation The Global Investment Management team recommends clients take no action with respect to both the US Equity and Global Equity strategies, both of which remain Buy-rated. We have historically noted and continue to believe that Dodge & Cox’s investment team contains a large number of high quality, experienced and tenured individuals. Following these changes, the IPC and GSIPC will have average tenures of 23 years and 20 years. Please reach out to your local GIM contact if you have any questions.

Aon Hewitt Retirement and Investment Proprietary and Confidential

Flash Report:– Dodge & Cox 2




Aon Hewitt 2 May 2016 Retirement and Investment


Flash Report

Vanguard Group Inc. – Passive Equity Team Announcements Recommendation

Vanguard announced portfolio manager changes that involve the Vanguard Equity Index Group on 27 April 2016. There were no departures from the firm and the portfolio manager changes made were a rotation of internal staff. Some of the individuals who were named portfolio managers on the index funds have now taken on broader leadership positions at the firm and gave up their day-to-day portfolio management of the funds. In addition, some of the changes were promotions of existing staff to portfolio manager. After further review we believe that the team changes will have no impact on the passive equity strategies at Vanguard including the investment process and trading of the strategies. Our rating for the Vanguard Passive Equity Platform remains Buy-rated and we recommend that clients take no action at this time.

Background

We conducted a conference call with Vanguard to discuss the portfolio manager changes in more detail. We learned that no one is leaving the firm as a result of this news and it was just a rotation of staff that happens at times. There will be no impact to the investment process or trading of the funds listed below as a result of the team changes. The portfolio management duties for an equity index portfolio manager include monitoring cash flows, submitting trades when needed, and implementing trading around index holding changes when they occur. These duties contrast greatly with that of active equity portfolio managers who are actively making stock purchase and sell decisions by conducting qualitative and/or quantitative research on companies. Details of the portfolio manager changes are below: Vanguard 500 Index Fund Former manager: Michael H. Buek, CFA New managers: Donald M. Butler, CFA and Scott E. Geiger Vanguard Extended Market Index Fund Continuing manager: Donald M. Butler, CFA New manager: Scott E. Geiger Vanguard Growth Index Fund Continuing manager: Gerard C. O'Reilly New manager: Walter Nejman Vanguard Institutional Index Fund Continuing manager: Donald M. Butler, CFA New manager: Scott E. Geiger Vanguard Institutional Total Stock Market Index Fund Former manager: Michael Perre New managers: Gerard C. O'Reilly and Walter Nejman Vanguard Large-Cap Index Fund


Flash Report: Vanguard Group – Passive Equity Team Announcements 2

Former manager: Ryan E. Ludt New managers: Michael A. Johnson and Walter Nejman Vanguard Mid-Cap Growth Index Fund Continuing manager: Donald M. Butler, CFA New manager: Michael A. Johnson Vanguard Mid-Cap Index Fund Continuing manager: Donald M. Butler, CFA New manager: Michael A. Johnson Vanguard Mid-Cap Value Index Fund Continuing manager: Donald M. Butler, CFA New manager: Michael A. Johnson Vanguard Small-Cap Growth Index Fund Continuing manager: Gerard C. O'Reilly New manager: William Coleman Vanguard Small-Cap Index Fund Former manager: Michael H. Buek, CFA New managers: Gerard C. O'Reilly and William Coleman Vanguard Small-Cap Value Index Fund Former manager: Michael H. Buek, CFA New managers: Gerard C. O'Reillyand William Coleman Vanguard Total Stock Market Index Fund Continuing manager: Gerard C. O'Reilly New manager: Walter Nejman Vanguard Value Index Fund Continuing manager: Gerard C. O'Reilly New manager: Walter Nejman


Flash Report: Vanguard Group – Passive Equity Team Announcements 3




Documents

Presentation Materials - Fairfax County, Virginia · 2019-12-18 · and mid cap core. The two actively-managed domestic equity funds cover the following asset classes: large cap core