Fund Performance Summary as of December 31, 2017

Transcription

1 Supplemental Income at Retirement Plan (SIRP) Fund Performance Summary as of December 31, 2017 Fund YTD 1 Year 2 Years 3 Years 5 Years 10 Years General Fixed Income % 3.58% 3.71% 3.83% 4.07% 4.90% High Yield Bonds Liberty Portfolio 6.85% 6.85% 10.37% 6.08% 5.81% 7.85% Benchmark Returns % 6.95% 10.31% 5.78% 5.43% 7.33% Domestic Public Equities Liberty Portfolio % 21.04% 16.48% 11.20% 15.66% 8.43% S&P % 21.83% 16.79% 11.41% 15.79% 8.50% Foreign Public Equities Liberty Portfolio 29.07% 29.07% 14.34% 11.53% 9.55% 4.73% Benchmark Returns % 27.73% 15.82% 8.29% 7.88% 2.36% Private Equity % 16.07% 11.44% 10.83% 11.80% 8.24% All returns are compound average annual returns except for the year to date (YTD) returns. 1 General fixed income returns are based on the taxable equivalent book yield of Liberty's bond holdings. 2 As of Jan 1, 2017, the LMI high yield benchmark is a custom blend of the Merrill Lynch double B Index and Merrill Lynch single B Index (Q938 Index on BBG) portfolio's ability to replicate the index. Starting in Q4 2017, due to changes in Portfolio Management approved by the Board, we will be reporting the return of the SPDR S&P 500 ETF Trust (SPY) Blackrock ETF in place of the actual portfolio returns. 3 Liberty portfolio seeks to match the performance of the S&P 500. Tracking error is introduced by tax constraints that limit the portfolio's ability to replicate the index. Starting in Q4 2017, due to changes in Portfolio Management approved by the Board, we will be reporting the return of the SPDR S&P 500 ETF Trust (SPY) Blackrock ETF in place of the actual portfolio returns. 4 Benchmark foreign equity returns consist of 75% MSCI Europe Index and 25% MSCI Far East ex Japan Index prior to 12/31/2013 and to MSCI All Country World Index ex US after 12/31/2013. Starting in Q4 2017, due to changes in Portfolio MSCI ACWI-ex U.S. ETF (ACWX) State Street ETF in place of the actual portfolio returns. 5 Private equity is return of the seasoned portion of the Liberty private equity portfolio. "Seasoned" means holdings that have had at least 4 years to mature. All returns are compound average annual returns except for the year to date (YTD) returns.

2 Description of Asset Classes General Fixed Income General Fixed Income is a broadly diversified portfolio of longer-term investment grade bonds consisting primarily of corporate, U.S. government, federal agency, municipal debt obligations and securitized assets (residential mortgage backed securities, (RMBS), commercial mortgage backed securities (CMBS) and other asset backed securities (ABS). The majority of these securities are rated BBB and higher and denominated in U.S. dollars. Historically, the overall average credit rating of the portfolio has been A to AA. High Yield Bonds Investments are maintained in a diversified portfolio of below investment grade debt instruments with the securities primarily rated BB or B. These investments are potentially higher in both risk and return than investment grade bonds. The portfolio is actively managed with an objective of enhancing total return while mitigating risk of principal loss. Domestic Public Equity Investment returns will seek to closely track the Standard and Poor s (S&P) 500, a diversified index of larger capitalized stocks accounting for approximately 80% of the value of publicly traded U.S. common stocks. Foreign Public Equity Investments are broadly diversified by geography, investment style (growth vs. value), capitalization (small- to large-cap), and industry. Geographically, investments have been historically allocated to Europe and Asia. The investments are made in their respective local currencies. Both the performance of the underlying stocks and changes in value of the U.S. dollar relative to foreign currencies will affect returns. Private Equities Private Equities are investments primarily in venture capital and buy-out limited partnerships. The limited partnerships generally invest in non-publicly traded, illiquid equity securities where returns are eventually realized through the issuance of public stock or via sale or merger to another company. Liberty s holdings are broadly diversified among limited partnerships sponsors, industry, stage of investment and geography, with up to 25% invested outside the U.S. Private Equity returns can generally be characterized as longer term with potentially higher return and greater risk than public equity investments, such as the Standard and Poor s 500 Index. Pre-mixed Portfolio This is designed to reflect the approximate asset allocation attributable to Liberty s surplus and will be comprised, as noted below, of all the aforementioned asset types. The allocation will be reviewed and adjusted periodically to reflect meaningful changes in the Company s asset allocation. General Fixed Income (40%) High Yield Bonds (15%) Domestic Public Equities (30%) Foreign Public Equities (5%) Private Equities (10%) 1 1 Due to the nature of private equity investment, results are not available until the close of the following quarter. As a result, investment crediting for private equity only will reflect the prior quarter s results (e.g first quarter crediting will be based on results from the fourth quarter of 2011).

3 Description of Crediting Rate The crediting rate for General Fixed Income is equal to the taxable equivalent book yield of Liberty s bond holdings. This is a basically measure of interest income and does not reflect changes in the market value of the underlying bond portfolio. The crediting rate for the other asset classes is equal to the total return earned by Liberty. e u All returns are compound average annual returns, except for the year to date (YTD) numbers. 3.58% 3.58% 3.71% 3.83% 4.07% 4.90%

4 io 6.85% 6.85% 10.37% 6.08% 5.81% 7.85% B 6.95% 6.95% 10.31% 5.78% 5.43% 7.33% As of Jan 1, 2017, the LMI high yield benchmark is a custom blend of the Merrill Lynch double B Index and Merrill Lynch single B Index (Q938 Index on BBG) portfolio's ability to replicate the index. Starting in Q4 2017, due to changes in Portfolio Management approved by the Board, we will be reporting the return of the SPDR S&P 500 ETF Trust (SPY) Blackrock ETF in place of the actual portfolio returns. Liberty Portfolio 21.04% S 21.83% 21.04% 21.83% 16.48% 11.20% 15.66% 8.43% 16.79% 11.41% 15.79% 8.50% Liberty portfolio seeks to match the performance of the S&P 500. Tracking error is introduced by tax constraints that limit the portfolio's ability to replicate the index. Starting in Q4 2017, due to changes in Portfolio Management approved by the Board, we will be reporting the return of the SPDR S&P 500 ETF Trust (SPY) Blackrock ETF in place of the actual portfolio returns.

5 29.07% 29.07% 14.34% 11.53% 9.55% 4.73% e 27.73% 27.73% 15.82% 8.29% 7.88% 2.36% Benchmark foreign equity returns consist of 75% MSCI Europe Index and 25% MSCI Far East ex Japan Index prior to 12/31/2013 and to MSCI All Country World Index ex US after 12/31/2013. Starting in Q4 2017, due to changes in Portfolio MSCI ACWI-ex U.S. ETF (ACWX) State Street ETF in place of the actual portfolio returns. D r 16.07% 16.07% 11.44% 10.83% 11.80% 8.24% Private equity is return of the seasoned portion of the Liberty private equity portfolio. "Seasoned" means holdings that have had at least 4 years to mature.