Endowment Trustees Report

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Barbra Barker
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2016 17 ET #6.4 2016 17 EBD #13.2 2016-2017 CD#16.

1 ET # EBD # CD#16.0 (2017 Midwiter Meetig) Edowmet Trustees Report (Log-Term Ivestmet/Edowmet Fud) Rod Hersberger Seior Trustee Saturday Jauary 21,

2 Issues Impactig the Market Exhibit #1 Uexpected post-electio rally i stock market The outcome of Brexit referedum Reflatio by the US was the domiate driver of global asset returs Markets experiecig the highest level of volatility sice 2011 Negative rates by cetral baks illustrated the limits of moetary policy as zero or egative iterest rates i Japa ad Europe had mixed results Secular ati-globalizatio political risks were o display Ucertaity o the timig of a iterest rate icrease by Federal Reserve icreasig volatility i market Federal Reserve lowered its forward rate hike guidace to be more gradual ad is ow i lie with market expectatios i.e. 4 to 2 Expectatio ad outcome of the Presidetial electio 2

3 Exhibit #2 Market Expectatios Positive gais i the geeral market (1.6% % with a projected average of 4.4%) Ucertaity ad volatility i the market expected to remai costat Exposure ad allocatios to Alterative ivestmets expected to icrease Iflatio sesitive assets should get a closer look Protectioism (ati-trade) expected to rise based o pre-electio talkig poits - Will put pressure o emergig market ecoomies - Trigger a possible trade war, which is iflatioary i ature Ucertaity over the reality of a Trump admiistratio Prospects of quatitative easig i the US could reduce the burde o US moetary policy The search for upside potetial will have ivestors movig away from developed markets 3

4 World Market Performace - Caledar Year Market Exhibit #3-12.3% S&P 500 DAX ML US Broad Market Bods NASDAQ Euro Stoxx Hag Seg Dow Joes Citi World Big Bods FTSE 100 CAC - 40 Shaghai Comp 0.4% Nikkei % 0.4% 2.6% 2.0% 4.9% 6.9% 7.5% 9.5% 13.4% 14.4% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 4

5 Market Value ad $40,016,349 Exhibit #4 $45,000,000 $40,000, % 7.7% -2.9% 6.8% $35,000, % $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,

6 Time Weighted Rate of Retur Exhibit #5 Opeig Cotribu.os Iterest Apprecia.o Closig ROR* ROR* Balace (Withdrawals) Divideds (Deprecia.o) Balace Period Cumula.ve December $ 39,503,423 $ (11,887) $ 468,994 $ 56,319 $ 40,016, % 6.67% November 2016 $ 39,360,901 $ 0 $ 128,814 $ 13,708 $ 39,503, % 4.79% October 2016 $ 39,975,839 $ 0 $ 55,794 $ (670,732) $ 39,360,901 (1.54%) 4.41% September 2016 $ 40,016,169 $ (136,760) $ 102,527 $ (6,097) $ 39,975, % 6.04% August $ 40,071,641 $ 0 $ 53,518 $ (108,989) $ 40,016,169 (0.14%) 5.79% July 2016 $ 38,856,503 $ 0 $ 57,882 $ 1,157,255 $ 40,071, % 5.93% Jue 2016 $ 39,036,116 $ (245,500) $ 96,284 $ ( 30,396) $ 38,856, % 2.72% May $ 38,777,713 $ 0 $ 52,029 $ 206,374 $ 39,036, % 2.54% April 2016 $ 38,445,594 $ 0 $ 56,864 $ 275,254 $ 38,777, % 1.86% March $ 36,454,834 $ 18,825 $ 108,752 $ 1,900,883 $ 38,445, % 0.98% February $ 37,233,216 $ (627,004) $ 41,405 $ (192,783) $ 36,454,834 (0.39%) (4.25%) Jauary 2016 $ 38,724,962 $ 9,342 $ 30,994 $ (1,532,082) $ 37,233,216 (3.87%) (3.87%) Total $ 38,723,216 $ (999,922) $ 599,302 $ 1,651,497 $ 39,975,839 NA 6.67% *Rate of Retur 6

7 Maager Allocatio ad Style Exhibit #6 Maager Value % Clearbridge ESG - Large Cap Core $ 8,051, % Merrill Lych Persoal Advisor* - (MLPA) $ 15,668, % The Edowmet Fud/KKR/Blackstoe - Alteratives $ 2,487, % Capital Group - Iteratioal $ 1,619, % Equity Icome & Growth - ETF $ 8,155, % Loomis Sayles - Fixed Icome $ 4,034, % Total $ 40,016, % *MLPA is a platform uder which ALA ca access differet maagers i the form of mutual fuds ad ETF s. There are 10 differet maagers. 7

8 Edowmet Fud Maagemet Fiscal 2016 Exhibit #7 As a result of the fud s growth over the previous 20 quarters, a spedig/payout rate of 5% was approved for the fiscal year This resulted i approximately $1.7 millio beig made available durig the year i support of awards, scholarships, uit iitiatives, geeral operatios ad the Associatio s Strategic Directios.

Exhibit #8 Why are Available Edowmet Fuds Importat? - What are they used for?

$ 46,000 - Spectrum Family: $397,000 Spectrum Scholarships i FY16 61 -

Divisios, Roud Tables ad Offices - Geeral Fud: $810,000 - Divisios: $109,000*

iitiatives - $250,000 i FY16 to support improvemets i ALA Iformatio Techology

9 Exhibit #8 Why are Available Edowmet Fuds Importat? - What are they used for? - Icreases the amout of $$$ s available for scholarships ad awards - Divisios: $ 46,000 - Spectrum Family: $397,000 Spectrum Scholarships i FY Approximately 1,001 sice iceptio Helps to support the geeral operatios of Divisios, Roud Tables ad Offices - Geeral Fud: $810,000 - Divisios: $109,000* Supports the Associatio s Missio ad Strategic Directios, as well as, uit iitiatives - $250,000 i FY16 to support improvemets i ALA Iformatio Techology systems *Divisios also trasferred $250,000 from their operatig et asset balaces to their idividual edowmets 9

10 Evirometal, Social ad Exhibit #9 Goverace (ESG) - Impact Ivestig The membership has idicated over the years that socially resposible ivestig is importat. The Trustees believe that compaies with positive evirometal, social ad goverace attributes ca perform comparably to their peers over the log term provided you have the right ivestmet maager Clearbridge ESG. As a result of their approach to ivestig their returs are very comparable to o SRI portfolios. Trustees have a strog belief i the power of active maagemet vs screeig hece the hirig of Clearbridge ESG Clearbridge combies active maagemet with active advocacy (owership) via proxy votig ad egagemet ESG ow makes up 20% of the Edowmet, up from 1% Clearbridge fits withi the overall asset allocatio strategy of the portfolio 10

11 Thak you 11

Endowment Trustees Report

Endowment Trustees Report 2015 16 ET #6.4 2015 16 CD #16.0 2015 16 EBD #13.2 (2016 Midwiter Meetig) Edowmet Trustees Report (Log-Term Ivestmet/Edowmet Fud) Rod Hersberger Seior Trustee Saturday Jauary 9, 2016 1 How Does the Edowmet