03-31-2014 Investment Performance ReviewVillage of North Palm Beach, Florida
'�;
it/ "�
North F .l
Investment Performance Review
Quarter Ended March 31, 2014
Investment Advisors PFM Asset Management LLC
Steven Alexander, CTP, CGFO, Managing Director
D. Scott Stitcher, CFA, Senior Managing Consultant
Richard Pengelly, CFA, Senior Managing Consultant
Gregg Manjerovic, CFA, Portfolio Manager
Rebecca Geyer, CTP, Senior Analyst
One Keystone Plaza, Suite 300
North Front & Market Streets
Harrisburg, PA 1 71 01 -2044
717 - 232 -2723 • 717 - 233 -6073 fax
300 S. Orange Avenue, Suite 1170
Orlando, FL 32801
(407) 648 -2208
(407) 648 -1323 fax
Village of North Palm Beach, Florida
Table of Contents
&T. om
Section A Market Review
Investment Report - Quarter Ended March 31, 2014
Tab II.
Section A Quarterly Summary Report
Section B Investment Portfolio & Performance
Asset Allocation Chart as of March 31, 2014
Tab III. March 31, 2014 PFM Month -End Statement
(statements are available online at www.pfm.com)
This material is based on information obtained from sources generally believed to be reliable and available to the public,
however PFM Asset Management LLC cannot guarantee its accuracy, completeness or suitability. This material is for general
information purposes only and is not intended to provide specific advice or recommendation. The information contained in this
report is not an offer to purchase or sell any securities.
Table of Contents Section i
Village of North Palm Beach, Florida Investment Report - Quarter Ended March 31, 2014
TAB I
Village of North Palm Beach, Florida
Summary
■ Many economists attribute the relative weakness of economic data
released during the first quarter to severe winter weather during the
period. As temperatures warm, growth is expected to reaccelerate.
■ First - quarter economic data was not weak enough to deter the Federal
Reserve (Fed) from a third round of tapering asset purchases. At its
meeting on March 19, the Fed reduced its monthly purchases of
Treasuries and agency mortgage- backed securities by another $10
billion to a revised total of $55 billion per month.
■ Geopolitical uncertainty caused by Russia's annexation of the Crimean
peninsula jeopardized growth in Europe and sparked a brief rally in
U.S. Treasuries, which temporarily pushed yields lower. The markets
quickly refocused on forward growth prospects and Fed action.
Economic Snapshot
• Fourth - quarter U.S. gross domestic product (GDP) expanded at a 2.6%
annual pace, as consumer spending reached its highest level in three
years. Slower— than - expected economic growth was attributed in part
to the large amounts of ice and snow that blanketed the country for
much of the winter. This was an improvement from the previous year,
when GDP expanded by 2.0 %.
• The U.S. employment situation continued to improve, as the economy
created a monthly average of 182,000 new jobs in the first quarter,
only slightly behind the 2013 average of 197,000. The unemployment
rate has averaged 6.7% for the quarter.
• According to CoreLogic, prices for existing homes rose 12.2% year -
over -year in February due to tighter supply. Although the housing
market is still moving forward, sales and construction were slowed
down by the winter weather.
Investment Report — Quarter Ended March 31, 2014
Interest Rates
During a press conference after the March 18 -19 meeting of the
Federal Open Market Committee (FOMC), Fed Chair Janet Yellen
commented that the federal funds target rate could rise as soon as
six months after the Fed completed its bond - buying program.
However, Ms. Yellen softened her message at the end of the
quarter, stating that the Fed would remain accommodative for
"some time" to help those who are currently unemployed.
• The majority of FOMC participants indicated that 2015 is the
appropriate time to begin increasing the federal funds target rate.
• Interest rates continued to normalize from record lows. The
Treasury yield curve became more humped, as intermediate -term
maturity yields rose, while short -term rates remained low and
longer- maturity yields fell modestly.
Sector Performance
• Portfolios benefited from conservative duration management, as
intermediate term yields surged after the March Fed meeting.
• Portfolios also benefited from the extra yield provided by holdings
of corporate bonds, especially in the financial sector.
• Strong demand outpaced supply and continued to narrow yield
spreads on corporate and municipal debt, which somewhat
reduced their future attractiveness.
PFM Asset Management LLC Section A -1
Village of North Palm Beach, Florida
Investment Report - Quarter Ended March 31, 2014
Economic Snapshot
Labor
•
Unemployment Rate
Mar'14
6.7%
6.7%
7.5%
Unemployment Rate (left) vs. Change in Nonfarm Payrolls(right)
Change In Non -Farm Payrolls
192,000
0
o Ch.ngeln Non -Farm Payrdls
- UnemploymentRate 350K
8% 300K
0K
22550K
Average Hourly Earnings (YoY)
Mar'14
2.1%
1.9%
1.9%
6%
Personal Income
3.1%
150K
4% 100K
50K
2% 0
Initial Jobless Claims (week)
Mar 28
326,000
344,000
375,000
3/31/11 9/30/11 3/31/12 9/30/12 3/31/13 9/30/13 3/31/14
•
Real GDP (QoQ SAAR)
2013Q4
2.6%
4.1 %1
1.1% z
Real GDP (QoQ)
6.0%
5.0%
GDP Personal Consumption (QoQ SAAR)
2013Q4
3.3%
4.0%
-
3.0%
Retail Sales (YoY)
Feb'14
1.5%
3.4%
3.2%
2.0%
1.0%
0.0%
I anufacturing Survey (month)
-1.0%
-2.0%
Existing Home Sales SAAR (month)
Feb'14
4.60 mil.
4.87 mil.
4.96 mil.
12/31/10 6/30/11 12/31/11 6/30/12 12/31/12 6/30/13 12/31/13
Inflation
Personal Consumption Expenditures (YoY)
Feb'14
0.9%
1.2%
1.2%
Cons u mer Price Index
5.0%
C um� er Price Index (Yo
Feb'
1.1%
�
CPI (YoY) - Core CPI (YoY)
4.0%
3.0%
Consumer Price Index Core (YoY)
Feb'14
1.6%
1.7%
1.90/0
2.0%
Crude Oil Futures (WTI, per barrel)
Mar
$101.58
$98.42
1.0%
on
Gold Futures (oz.)
Mar 31
$1,283
$1,202
$1,595
2/28/11 8/31/11 2/29/12 8/31/12 2/28/13 8/31/13 2/28/14
1. Data as of ThirdQuarter2013 2. Data as of FirstQuarter2013
Source: Bloomberg
3. Note: YoY =year overyear, QoQ = quarter
over quarter,
SAAR = seasonally adjusted annual rate, WTI = Vest
Texas Intermediate crude oil
PFM Asset Management LLC Section A -2
Village of North Palm Beach, Florida
U.S. Treasury Note Yields
3.5%
3.0%
2.5%
2.0%
d ..
1.5% ..
1.0% —
0.5%
0.0%
12/31/13
1/31/14 2/28/14
2 -Year • • • • • • • • 5 -Year
U.S. Treasury Yields
Investment Report — Quarter Ended March 31, 2014
Investment Rate Overview
10 -Year
3/31/14
3 -month
0.03%
0.07%
Change
Quarter
(0.04 %)
0.07%
Change
(0.04 %)
1 -year
0.11%
0.11%
0.00%
0.12%
(0.01%)
2 -year
0.42%
0.38%
0.04%
0.24%
0.18%
5 -year
1.72%
1.74%
(0.02 %)
0.77%
0.95%
10 -year
2.72%
3.03%
1^ °' °/
1.85%
0.87%
30 -year
3.56%
3.97%
3.10%
0.46%
Source: Bloomberg
U.S. Treasury Yield Curve
5.0%
4.0%
3.0%
2.0%
1.0%
/
0.0%
W N W U7 v W
3 O O
O
M atu ri ty
March 31, 2014 December 31, 2013 — — March 31, 2013
Yield Curves as of 3/31/2014
5.0%
4.0%
3.0% / /
2 /
2.0% /
1.0% /
0.0%
W N W U1 �l N W
3 O U1 O
M atu ri ty
U.S. Treasury — Federal Agency — — Industrial Corporates, A Rated
PFM Asset Management LLC Section A -3
Village of North Palm Beach, Florida
Investment Report - Quarter Ended March 31, 2014
BofA Merrill Lynch Index Returns
As of 3/31/2014
Returns for Periods ended 3/31/2014
9. Duration and yield are after the indices were rebalanced at month end.
2 Returns are rolling returns. Returns forperiodsgnater than one-year are annuali .Zed.
Source: BofA Merrill Lynch Indices
PFM Asset Management LLC Section A -4
Duration
Yield
3 Month
1 Year
3 Years
Year •
U.S. Treasury
1.92
0.44%
0.14%
0.38%
0.81%
Federal Agency
1.84
0.49%
0.94%
U.S. Corporates, A -AAA rated
1.96
0.94%
0.42%
1.38%
2.28%
Agency MBS (0 to 3 years)
1.70
0
0.25%
1.09%
1.75%
Municipals
1.75
0.52%
0.25%
0.87%
1.35%
Year •
U.S. Treasury
2.72
0.82%
0.26%
0.09 %)
1.43%
Feder y
0.34%
11111i=
1.35%
U.S. Corporates, A -AAA rated
2.88
1.47%
0.76%
3.12%
Agency MBS (0 to 5 years)
3.35
2.43%
0.94%
0.96%
2.58%
Municipals
2.48
0.85%
0.41%
0.99%
2.05%
Indices Master
or
U.S. Treasury
5.78
1.60%
1.63%
(1.53 %)
3.33%
Federal Agency
4.04
1.45%
1.24%
2.24%
U.S. Corporates, A -AAA rated
6.66
2.75%
2.58%
0.84%
5.35%
Agency MBS (0 to 30 years)
5.26
3.01%
1.58%
0.23%
2.75%
Municipals
7.59
3.10%
3.80%
0.28%
6.22%
9. Duration and yield are after the indices were rebalanced at month end.
2 Returns are rolling returns. Returns forperiodsgnater than one-year are annuali .Zed.
Source: BofA Merrill Lynch Indices
PFM Asset Management LLC Section A -4
Village of North Palm Beach, Florida
Disclosures
Investment Report — Quarter Ended March 31, 2014
The views expressed within this material constitute the perspective and judgment of PFM Asset Management LLC ( PFMAM) at the time of distribution
and are subject to change. Information is obtained from sources generally believed to be reliable and available to the public; however, PFMAM
cannot guarantee its accuracy, completeness, or suitability. This material is for general information purposes only and is not intended to provide
specific advice or recommendation. The information contained in this report is not an offer to purchase or sell any securities.
Further distribution is not permitted without prior written consent.
PFM Asset Management LLC Section A -5
Village of North Palm Beach, Florida Investment Report - Quarter Ended March 31, 2014
TAB II
Village of North Palm Beach, Florida Investment Report - Quarter Ended March 31, 2014
Quarterly Summary Report
Total Portfolio Value March 31,2014' December 31, 2013
Market Value $9,081,914.94 $8,347,147.80
Amortized Cost $9,083,838.98 $8,343,686.08
I oral hceturn comparison omce Inception as of
Quarter Ended 03/31/14
Investment Portfolio ML 1 -3 Year U.S. Treasury Index
1.15% *01.18%
1.50 2.00
Effective Duration (Years)
Quarterly Return
Last
P Last
Last
Last
Since Inception
Total Return•'•°
March 31, 2014
6 Months
12 Months
2 Years
3 Years
June 30, 2009
Investment Portfolio
0.13%
0.22%
0.37%
0.51%
0.80%
1.15%
Merrill Lynch 1 -3 Year U.S. Treasury Index
0.14%
0.20%
0.38%
0.51%
0.81%
1.18%
$47,790.99
Current Quarter
Previous Quarter
Current Quarter
Previous Quarter
Current Quarter
Previous Quarter
Effective Duration(Years) s
March 31, 2014
December 31, 2013
December 31, 2013
Yields
March 31, 2014
December 31, 2013
Investment Portfolio
1.76
1.69
Investment Portfolio
Yield at Market
0.52%
0.42%
Merrill Lynch 1 -3 Year U.S. Treasury Index
1.84
1.83
Yield at Cost
0.52%
0.48%
Portfolio Duration % of Benchmark Duration
96%
93%
I oral hceturn comparison omce Inception as of
Quarter Ended 03/31/14
Investment Portfolio ML 1 -3 Year U.S. Treasury Index
1.15% *01.18%
1.50 2.00
Effective Duration (Years)
Quarter Total Return Comparison
Previous Quarter
Quarter Ended 03/31/14
0.75%
Fiscal Year 2013
0.50%
March 31, 2014
0.25%
Fiscal Year Interest Income
E
�
Investment Portfolio ML 1 -3 Year U.S. Treasury Index
0.13% +00.14%
Q-' 0.00%
$14,331.94
-0.25%
Investment Portfolio
$47,788.74
$76,459.33
-0.50%
1.51
0.50 1.00 1.50 2.00 2.50 3.00
TD Bank Money Market Fund
Effective Duration (Years)
I oral hceturn comparison omce Inception as of
Quarter Ended 03/31/14
Investment Portfolio ML 1 -3 Year U.S. Treasury Index
1.15% *01.18%
1.50 2.00
Effective Duration (Years)
Notes:
1. In order to comply with GASB accrual accounting reporting requirements. End of quarter trade -date market values of portfolio holdings, including accrued interest.
2. Performance on trade date basis, gross (i.e., before fees), is in accordance with The CFA Institute's Global Investment Performance Standards (GIPS). Quarterly returns are presented on an unannualized basis. Returns presented for 12 months or longer are presented on an annual basis. Past performance is not indicative of future results.
3. Since inception the benchmark has been the Merrill Lynch 1 -3 Year U.S. Treasury Note Index.
4. Merrill Lynch Indices provided by Bloomberg Financial Markets.
5. Includes money market fund /cash in performance and duration computations.
PFM Asset Management LLC Section A - 1
Current Quarter ,
Previous Quarter
Fiscal Year 2014
Fiscal Year 2013
Quarterly Interest Income
March 31, 2014
December 31, 2013
Fiscal Year Interest Income
Year to Date
Year to Date
Investment Portfolio
$14,331.94
$33,456.80
Investment Portfolio
$47,788.74
$76,459.33
TD Bank Money Market Fund
1.51
0.74
TD Bank Money Market Fund
2.25
5.96
Total
$14,333.45
$33,457.54
Total
$47,790.99
$76,465.29
Current Quarter
Previous Quarter
Fiscal Year 2014
Fiscal Year 2013
Quarterly Realized Gain /Loss on Cost
March 31, 2014
December 31, 2013
Fiscal Year Realized Gain /Loss on Cost
Year to Date
Year to Date
Investment Portfolio
($14,801.39)
$3,284.80
Investment Portfolio
($11,516.59
(15,189.44)
Notes:
1. In order to comply with GASB accrual accounting reporting requirements. End of quarter trade -date market values of portfolio holdings, including accrued interest.
2. Performance on trade date basis, gross (i.e., before fees), is in accordance with The CFA Institute's Global Investment Performance Standards (GIPS). Quarterly returns are presented on an unannualized basis. Returns presented for 12 months or longer are presented on an annual basis. Past performance is not indicative of future results.
3. Since inception the benchmark has been the Merrill Lynch 1 -3 Year U.S. Treasury Note Index.
4. Merrill Lynch Indices provided by Bloomberg Financial Markets.
5. Includes money market fund /cash in performance and duration computations.
PFM Asset Management LLC Section A - 1
Village of North Palm Beach, Florida Investment Report - Quarter Ended March 31, 2014
Executive Summary
PORTFOLIO STRATE
➢ The Village's Investment Portfolio is of high credit quality and invested in U.S. Treasury, Federal Agency, commercial paper,
municipal obligations and high quality corporate securities.
➢ PFM continued to actively manage the Investment Portfolio during the first quarter and found value in the market, taking
advantage of market inefficiencies or changes in economic outlook. As a result the Portfolio realized $6,633 in gains on
sales (based on amortized cost) during the quarter. PFM is continually in the market monitoring for opportunities to add
value to the Portfolio.
➢ The Investment Portfolio's quarterly total return performance was 0.13 %, underperforming the benchmark's performance of
0.14 %, by 0.01%. This slight underperformance is due to the fact that yields continued to move higher and the curve
steepened as the Federal Reserve continued to reduce asset purchases. Further, Federal Reserve Chair put a timeline on
the increase of the overnight rate, defining an extended period as around six months after the end of asset purchases. This
commentary surprised the market and the curve steepened. Our shorter duration strategy was the right one, but the
steepening of the yield curve in response to the commentary reduced the portfolio return, because of the Portfolio's
exposure to the portion of the curve that steepened considerably during the quarter. Over time the additional yield and
rolldown potential of the structure should add incremental return in the Portfolio. Our main goal is to preserve the principal of
the Portfolio and in this volatile market we will continue to diligently manage the Portfolio.
➢ The past 5 years is not a good roadmap for the next 5 years. During the past 5 years extraordinarily aggressive Fed policy
has been driving bond prices higher. The advantage of holding bonds has been two -fold: interest earnings and positive price
returns. As the FOMC exits their stimulus programs, the prices of bonds will almost assuredly move lower. In this transition
period, the earnings advantage of holding bonds will need to be balanced against the disadvantage of periodic negative
price returns.
➢ Investment strategies generally consist of two parts: strategic and tactical. These two parts reflect the fact that an investor's
long -term evaluation of a market can be completely opposite to their short -term evaluation. Longer term PFM expects
interest rates will normalize and move higher leading to capital losses, and thus our strategic plan is to keep the portfolio's
duration shorter relative to the benchmark's duration. In the near term, however, we may find periods of market quiescence
when the steepness of the yield offers high rolldown return, and we will capitalize on these opportunities as they arise.
➢ With the end of the bull market in bonds and the beginning of the bear market, or at least the anticipation of a coming bear
market, investment strategy has turned defensive. PFM looks to add value through superior timing of monthly extensions
intra- month, and to mitigate market downturns via tactical underweighting of interest rate exposure.
➢ A sea change has arrived and we aim to steer the portfolio safely between the shoals of under - investment on the one side,
and the jagged rocks of over - investment on the other. Through prudence derived from experience and being diligent in
monitoring research and market conditions we strive to optimize the balance between higher income return and smaller
price declines. Safeauardina principal and purchasina power are our hiahest aoals.
PFM Asset Management LLC Section B - 1
Village of North Palm Beach, Florida Investment Report - Quarter Ended March 31, 2014
Investment Portfolio Composition and Credit Quality Characteristics
Security Type'
March 31, 2014
% of Portfolio
December 31, 2013
% of Portfolio
U.S. Treasuries
$4,968,964.69
54.7%
$5,752,042.72
68.9%
Federal Agencies
915,516.42
10.1%
1,300,746.92
15.6%
Commercial Paper
999,513.00
11.0%
399,690.20
4.8%
Certificates of Deposit
0.00
0.0%
0.00
0.0%
Bankers Acceptances
0.00
0.0%
0.00
0.0%
Repurchase Agreements
0.00
0.0%
0.00
0.0%
Municipal Obligations
121,094.33
1.3%
120,599.33
1.4%
Corporate Notes /Bonds
1,998,899.55
22.0%
723,907.88
8.7%
Corporate Notes /Bonds - FDIC Insured
0.00
0.0%
0.00
0.0%
Mortgage Backed
0.00
0.0%
0.00
0.0%
Money Market Fund /Cash
77,926.95
0.9%
50,160.75
0.6%
Totals
$9,081,914.94
100.0%
$8,347,147.80
100.0%
Portfolio Composition
as of 03/31/14
Federal Agency
Obligations
10.08%
Commercial
Paper
11.01%
I----Municipal
Obligations
1.33%
Corporate
Notes /Bonds
22.01%
Money Market
Fund /Cash
n Rao/
A -1+ (Shnrt-
term
2.221
/
3.8
A
7.37%
F
5.F
Notes:
1. End of quarter trade -date market values of portfolio holdings, including accrued interest.
2. Credit rating of securities held in portfolio, exclusive of money market fund /LGIP. Standard & Poor's is the source of the credit ratings.
A -1 (Short- Credit Quality Distribution
term) as of 03/31/14
8.88 %_
3.90% 1 12%
AA+
67.04%
PFM Asset Management LLC Section B - 2
Village of North Palm Beach, Florida
Investment Report - Quarter Ended March 31, 2014
Investment Portfolio Maturity Distribution
Maturity Distribution' March 31, 2014
December 31, 2013
Overnight (Monedy Market Fund)
$77,926.96
$50,160.75
Under 6 Months
999,613.00
399,690.20
6 - 12 Months
201,016.33
956,717.69
1 - 2 Years
2,960,699.98
3,549,192.22
2 - 3 Years
4,466,860.39
3,391,386.94
3 - 4 Years
396,998.29
0.00
4 - 5 Years
0.00
0.00
5 Years and Over
0.00
0.00
Totals $9,081,914.94 $8,347,147.80
1 -1I V1- 11-1 Ily ✓- IA/ 1-1
■March 31, 2014
■December 31, 2013
5% 2% _
Under 6 Months 6 - 12 Months
Notes:
1. Callable securities in portfolio are included in the maturity distribution analysis to their stated maturity date, although they may be called prior to maturity.
PFM Asset Management LLC Section B - 3
Village of North Palm Beach, Florida Investment Report - Quarter Ended March 31, 2014
Investment Portfolio Maturity Distribution versus the Benchmark'
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
ti� �O 00 r.�O 1P _� 00 00
IV IV N
Years to Maturity
■ Investment Portfolio ■ Merrill Lynch 1 -3 Year U.S. Treasury Note Index
Notes:
1. Due to the nature of the security, Mortgage- Backed Securities are represented based on their average life maturity rather than their final maturity.
PFM Asset Management LLC Section B - 4
State and /or Local
Government Debt
and /or Tax Exei
Debt
0.56%
Corporate Notes
9.21%
Money Market
Mutual Funds
Interest Bearing
Checking or Savings
Account
55.13%
State and /or Local Government Debt
121,095.37
0.56%
Florida SBA Prime
YES
and /or Tax Exempt Debt
Commercial Paper
Fund and Fund B
Money Market Mutual Funds
228,850.31
1.06%
4.61%
Federal
United
2.26%
States
-
0.00%
Instrumentalities
4.22%
Treasury Securities
22.96%
Interest Bearing Checking or Savings Account
11,947,266.93
55.13% 2
Amortized Cost
Allocation
Permitted
In
Security Type
(Includes Interest)
Percentage Notes
by Policy
Compliance
Florida SBA Prime Fund and Fund B
490,083.92
2.26% 2
25%
YES
United States Treasury Securities
4,975,181.38
22.96%
100%
YES
United States Government Agency Securities
-
0.00%
50%
YES
Federal Instrumentalities
914,073.33
4.22%
50%
YES
Mortgage- Backed Securities
-
0.00%
0%
YES
Certificates of Deposit
-
0.00%
100%
YES
Commercial Paper
999,443.72
4.61%
15%
YES
Corporate Notes
1,996,118.23
9.21%
25%
YES
State and /or Local Government Debt
121,095.37
0.56%
20%
YES
and /or Tax Exempt Debt
Money Market Mutual Funds
228,850.31
1.06%
50%
YES
Intergovernmental Investment Pool
-
0.00%
25%
YES
Interest Bearing Checking or Savings Account
11,947,266.93
55.13% 2
100%
YES
Village Managed
$12,588,274.24
58.09%
PFM Managed
9,083,838.95
41.91%
Total
$21,672,113.19
100.00%
Notes:
1. All Assets.
2. These Accounts are managed by the Village.
'PFM managed securities are shown on Amortized Cost plus Accrued Interest basis
Individual Issuer Breakdown
Government National Mortgage Association (GNMA)
Federal Farm Credit Bank (FFCB)
Federal Home Loan Bank (FHLB)
Federal National Mortgage Association (FNMA)
Federal Home Loan Mortgage Corporation (FHLMC)
Rabobank USA Fin Corp Commercial Paper
Bank of Nova Scotia Commercial Paper
Bank of Tokyo Mitsubishi Commercial Paper
HSBC USA Inc. Commercial Paper
Wells Fargo & Company Commercial Paper
Bank of New York Mellon Corporate Notes
Toyota Corporate Notes
Wells Fargo & Company Corporate Notes
General Electric Corporate Notes
Berkshire Hathaway Corporate Notes
American Honda Corporate Notes
John Deere Corporate Notes
Coca -Cola Corporate Notes
AT &T Corporate Notes
IBM Corporate Notes
PepsiCo Corporate Notes
JP Morgan Chase & Co. Corporate Notes
Walt Disney Corporate Notes
California State Taxable GO Bonds
Interest Bearing Checking /Savings Acct -Wells Fargo
Interest Bearing Checking /Savings Acct -Chase
Money Market Fund - TD Bank Sweep Account
Money Market Fund - Wells Fargo Advantage Fund
Amortized Cost
(Includes Interest)
200,137.14
713, 936.19
199, 956.56
199, 877.50
199, 943.06
199, 828.77
199, 837.83
281,410.92
100,268.71
150,220.40
150,286.07
99, 962.23
70,169.02
100, 388.76
50,106.67
200, 960.19
200, 081.03
149, 956.73
218,411.00
223, 896.50
121, 095.37
9, 435, 669.90
2,511,597.03
77, 926.92
150, 923.39
Florida Prime 422,328.05
SBA Fund B 67,755.87
ivoies:
1. All Assets.
2. These Accounts are managed by the Village.
'PFM managed securities are shown on Amortized Cost plus Accrued Interest basis.
Allocation
Percentage
I
Notes
Permitted
by Policy
In
Compliance
0.00%
100%
YES
0.00%
10%
YES
0.92%
10%
YES
3.29%
10%
YES
0.00%
10%
YES
0.92%
5%
YES
0.92%
5%
YES
0.92%
5%
YES
0.92%
5%
YES
0.92%
5%
YES
1.30%
5%
YES
0.46%
5%
YES
0.69%
5%
YES
0.69%
5%
YES
0.46%
5%
YES
0.32%
5%
YES
0.46%
5%
YES
0.23%
5%
YES
0.93%
5%
YES
0.92%
5%
YES
0.69%
5%
YES
1.01%
5%
YES
1.03%
5%
YES
0.56%
5%
YES
43.54%
2
50%
YES
11.59%
2
50%
YES
0.36%
33%
YES
0.70%
2
33%
YES
1.95%
2
25%
YES
0.31%
2
N/A
YES
Village of North Palm Beach, Florida Investment Report - Quarter Ended March 31, 2014
TAB III
VPF Customer Service
PO Box 11813
Harrisburg, PA 17108 -1813
ACCOUNT STATEMENT
Client Management Team
Steven Alexander, CTP, CGFO
Managing Director
300 South Orange Avenue, Suite 1170
Orlando, FL 32801
407 - 648 -2208
alexanders @pfm.com
Gregg Manjerovic, CFA
Director
One Keystone Plaza, Suite 300
Harrisburg, PA 17101
717 - 232 -2723
manjerovicg @pfm.com
Rebecca Geyer, CTP
Senior Analyst
300 South Orange Street, Suite 1170
Orlando, FL 32801
407 - 648 -2208
geyerr @pfm.com
Contents
Cover /Disclosures
Summary Statement
Individual Accounts
Accounts included in Statement
61350001 NORTH PALM BEACH INVESTMENT PORTFOLIO
VILLAGE OF NORTH PALM BEACH
SAMIA JANJUA
501 US HIGHWAY 1
NORTH PALM BEACH, FL 33408
Online Access http: / /www.pfm.com Customer Service 1- 717 - 232 -2723
�P1 MT
This statement is for general information purposes only and is not
intended to provide specific advice or recommendations. PFM Asset
Management LLC ( "PFM ") is an investment advisor registered with the
Securities and Exchange Commission, and is required to maintain a
written disclosure statement of our background and business experience.
If you would like to receive a copy of our current disclosure statement,
please contact Service Operations at the address below.
Proxy Voting PFM does not normally receive proxies to vote on behalf of
its clients. However, it does on occasion receive consent requests. In the
event a consent request is received the portfolio manager contacts the
client and then proceeds according to their instructions. PFM's Proxy
Voting Policy is available upon request by contacting Service Operations
at the address below.
Questions About an Account PFM's monthly statement is intended to
detail our investment advisory activity as well as the activity of any
accounts held by clients in pools that are managed by PFM. The custodian
bank maintains the control of assets and executes (i.e., settles) all
investment transactions. The custodian statement is the official record of
security and cash holdings and transactions. PFM recognizes that clients
may use these reports to facilitate record keeping and that the custodian
bank statement and the PFM statement should be reconciled and
differences resolved. Many custodians use a settlement date basis which
may result in the need to reconcile due to a timing difference.
Account Control PFM does not have the authority to withdraw funds from
or deposit funds to the custodian. Our clients retain responsibility for their
internal accounting policies; implementing and enforcing internal controls
and generating ledger entries or otherwise recording transactions.
Market Value Generally, PFM's market prices are derived from closing bid
prices as of the last business day of the month as supplied by Interactive
Data, Bloomberg or Telerate. Where prices are not available from
generally recognized sources the securities are priced using a yield -based
matrix system to arrive at an estimated market value. Prices that fall
between data points are interpolated. Non - negotiable FDIC - insured bank
certificates of deposit are priced at par. Although PFM believes the prices
to be reliable, the values of the securities do not always represent the
prices at which the securities could have been bought or sold. Explanation
of the valuation methods for money market and TERM funds is contained
in the appropriate fund information statement.
Amortized Cost The original cost of the principal of the security is
adjusted for the amount of the periodic reduction of any discount or
premium from the purchase date until the date of the report. Discount or
premium with respect to short term securities (those with less than one
year to maturity at time of issuance) is amortized on a straightline basis.
Such discount or premium with respect to longer term securities is
amortized using the constant yield basis.
Imuortant Disclosures
Tax Reporting Cost data and realized gains / losses are provided for
informational purposes only. Please review for accuracy and consult your
tax advisor to determine the tax consequences of your security transactions.
PFM does not report such information to the IRS or other taxing authorities
and is not responsible for the accuracy of such information that may be
required to be reported to federal, state or other taxing authorities.
Financial Situation In order to better serve you, PFM should be promptly
notified of any material change in your investment objective or financial
situation.
Callable Securities Securities subject to redemption prior to maturity may
be redeemed in whole or in part before maturity, which could affect the yield
represented.
Portfolio The securities in this portfolio, including shares of mutual funds,
are not guaranteed or otherwise protected by PFM, the FDIC (except for
certain non - negotiable certificates of deposit) or any government agency.
Investment in securities involves risks, including the possible loss of the
amount invested.
Rating Information provided for ratings is based upon a good faith inquiry of
selected sources, but its accuracy and completeness cannot be guaranteed.
Shares of some money market and TERM funds are marketed through
representatives of PFM's wholly owned subsidiary, PFM Fund Distributors,
Inc. PFM Fund Distributors, Inc. is registered with the SEC as a
broker /dealer and is a member of the Financial Industry Regulatory
Authority ( "FINRA') and the Municipal Securities Rulemaking Board
( "MSRB "). You may reach the FINRA by calling the FINRA Regulator Public
Disclosure Hotline at 1- 888 - 289 -9999 or at the FINRA Regulation Internet
website address www.nasd.com. A brochure describing the FINRA
Regulation Public Disclosure Program is also available from the FINRA
upon request.
Key Terms and Definitions
Dividends on money market funds consist of interest earned, plus any
discount ratably amortized to the date of maturity, plus all realized gains and
losses on the sale of securities prior to maturity, less ratable amortization of
any premium and all accrued expenses to the fund. Dividends are accrued
daily and may be paid either monthly or quarterly. The monthly earnings on
this statement represent the estimated dividend accrued for the month for
any program that distributes earnings on a quarterly basis. There is no
guarantee that the estimated amount will be paid on the actual distribution
date.
Current Yield is the net change, exclusive of capital changes and income
other than investment income, in the value of a hypothetical fund account
with a balance of one share over the seven -day base period including the
statement date, expressed as a percentage of the value of one share
(normally $1.00 per share) at the beginning of the seven -day period. This
resulting net change in account value is then annualized by multiplying it by
365 and dividing the result by 7. The yields quoted should not be considered
a representation of the yield of the fund in the future, since the yield is not
fixed.
Account Statement
For the Month Ending March 31, 2014
Average maturity represents the average maturity of all securities and
investments of a portfolio, determined by multiplying the par or
principal value of each security or investment by its maturity (days or
years), summing the products, and dividing the sum by the total
principal value of the portfolio. The stated maturity date of mortgage
backed or callable securities are used in this statement. However the
actual maturity of these securities could vary depending on the level or
prepayments on the underlying mortgages or whether a callable
security has or is still able to be called.
Monthly distribution yield represents the net change in the value of one
share (normally $1.00 per share) resulting from all dividends declared
during the month by a fund expressed as a percentage of the value of
one share at the beginning of the month. This resulting net change is
then annualized by multiplying it by 365 and dividing it by the number of
calendar days in the month.
YTM at Cost The yield to maturity at cost is the expected rate of return,
based on the original cost, the annual interest receipts, maturity value
and the time period from purchase date to maturity, stated as a
percentage, on an annualized basis.
YTM at Market The yield to maturity at market is the rate of return,
based on the current market value, the annual interest receipts,
maturity value and the time period remaining until maturity, stated as a
percentage, on an annualized basis.
Managed Account A portfolio of investments managed discretely by
PFM according to the client's specific investment policy and
requirements. The investments are directly owned by the client and
held by the client's custodian.
Unsettled Trade A trade which has been executed however the final
consummation of the security transaction and payment has not yet
taken place.
Please review the detail pages of this statement carefully. If you think
your statement is wrong, missing account information, or if you need
more information about a transaction, please contact PFM within 60
days of receipt. If you have other concerns or questions regarding your
account you should contact a member of your client management team
or PFM Service Operations at the address below.
PFM Asset Management LLC
Attn: Service Operations
One Keystone Plaza, Suite 300
N. Front & Market Sts
Harrisburg, PA 17101
PFM'
ivManaged Account Summary Statement
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Opening Market Value $8,277,975.45
Maturities/Calls
0.00
Principal Dispositions
(397,901.33)
Principal Acquisitions
395,848.63
Unsettled Trades
717,183.00
Change in Current Value
(15,829.47)
Closing Market Value $8,977,276.28
Interest /Dividends /Coupons Received 4,525.84
Less Purchased Interest Related to Interest /Coupons (1,866.48)
Plus Net Realized Gains /Losses (2,330.48)
Total Cash Basis Earnings $328.88
Ending Amortized Value of Securities
8,979,200.32
Ending Accrued Interest
26,711.71
Plus Proceeds from Sales
398,626.70
Plus Proceeds of Maturities /Calls /Principal Payments
0.00
Plus Coupons /Dividends Received
3,800.47
Less Cost of New Purchases
(1,121,433.53)
Less Beginning Amortized Value of Securities
(8,267,249.06)
Less Beginning Accrued Interest
(15,800.57)
Total Accrual Basis Earnings $3,856.04
For the Month Ending March 31, 2014
Maturities/Calls
0.00
Sale Proceeds
398,626.70
Coupon /Interest /Dividend Income
3,800.47
Principal Payments
0.00
Security Purchases
(397,715.11)
Net Cash Contribution
0.00
Reconciling Transactions
0.00
Closing Cash Balance $77,926.95
�PF1I
Account 61350001 Page i
PFM Asset Management LLC
Portfolio Summa ry and Statistics
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Description
Par Value
Market Value
Percent
U.S. Treasury Bond / Note
4,865,000.00
4,952,252.31
55.17
Municipal Bond / Note
120,000.00
120,486.00
1.34
Federal Agency Bond / Note
915,000.00
915,049.69
10.19
Corporate Note
1,941,000.00
1,989,975.28
22.17
Commercial Paper
1,000,000.00
999,513.00
11.13
Managed Account Sub -Total
8,841,000.00
8,977,276.28
100.00%
Accrued Interest
26,711.71
Total Portfolio
8,841,000.00
9,003,987.99
Unsettled Trades
44.41%
671,000.00 716,447.35
0 - 6 Months 6 - 12 Months 1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years Over 5 Years
US TSY Bond /
55.17%
For the Month Ending March 31, 2014
Commercial Paper
11.13%
Corporate Note
22.17%
Fed Agy Bond /
Note
10.19%
Muni Bond / Note
1.34%
Yield to Maturity at Cost 0.52%
Yield to Maturity at Market 0.52%
Duration to Worst 1.88
Weighted Average Days to Maturity 698
Account 61350001 Page 2
PFM Asset Management LLC
PFM'
Managed Account Issuer Summary
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Total $8,977,276.28 100.000/0
AA-
3.90%
AA+
67.03%
For the Month Ending March 31, 2014
.33%
.58%
.90%
-1
.91%
-1+
.23%
A
.12%
• Account 61350001 Page 3
�PF1I
PFM Asset Management LLC
Market Value
Issuer
of Holdings
Percent
AMERICAN HONDA FINANCE
70,442.33
0.78
AT &T
200, 783.00
2.24
BANK OF NEW YORK
279,677.15
3.12
BANK OF NOVA SCOTIA
199,908.80
2.23
BERKSHIRE HATHAWAY INC
100,515.00
1.12
COCA -COLA COMPANY
49,872.65
0.56
DEERE & COMPANY
100,348.10
1.12
FANNIE MAE
715,456.89
7.96
FEDERAL HOME LOAN BANKS
199,592.80
2.22
GENERAL ELECTRIC CO
151,392.15
1.69
HSBC HOLDINGS PLC
199,868.80
2.23
IBM CORP
200,109.40
2.23
JP MORGAN CHASE & CO
213,664.60
2.38
MITSUBISHI UFJ FINANCIAL GROUP INC
199,958.40
2.23
PEPSI CO.
149,239.95
1.66
RABOBANK NEDERLAND
199,979.20
2.23
STATE OF CALIFORNIA
120,486.00
1.34
THE WALT DISNEY CORPORATION
223,105.60
2.49
TOYOTA MOTOR CORP
100,377.00
1.12
UNITED STATES TREASURY
4,952,252.31
55.15
WELLS FARGO & COMPANY
350,246.15
3.90
Total $8,977,276.28 100.000/0
AA-
3.90%
AA+
67.03%
For the Month Ending March 31, 2014
.33%
.58%
.90%
-1
.91%
-1+
.23%
A
.12%
• Account 61350001 Page 3
�PF1I
PFM Asset Management LLC
= PFM'
Managed Account Detail of Securities Held For the Month Ending March 31, 2014
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Security Type/ Description S &P Moody's Trade Settle Original YTM Accrued Amortized Market
Dated Date /Coupon /Maturity CUSIP Par Rating Rating Date Date Cost at Cost Interest Cost Value
30/20110.875% 11/30/2016
• Account 61350001 Page 4
PFM Asset Management LLC
a_
Managed Account Detail of Securities Held
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Security Type/ Description S &P Moody's Trade Settle Original YTM Accrued
Dated Date /Coupon /Maturity CUSIP Par Rating Rating Date Date Cost at Cost Interest
U.S. Treasury Bond / Note
US TREASURY NOTES
09/2010 2.500% 01/15/2016
�PF1I
quPFM Asset Management LLC
Account 61350001 Page 5
a_
Managed Account Detail of Securities Held For the Month Ending March 31, 2014
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Security Type/ Description
S &P
Moody's
Trade
Settle
Original
YTM
Accrued
Amortized
Market
Dated Date /Coupon /Maturity
Corporate
CUSIP
Par
Rating
Rating
Date
Date
Cost
at Cost
Interest
Cost
Value
NOVA SCOTIA NY COMM PAPER
06416KG87
200,000.00
A -1
P -1
01/09/14
01/10/14
199,776.25
0.23
0.00
199,877.50
199,908.80
-- 0.000% 07/08/2014
,I. Account 61350001 Page 6
quPFM Asset Management LLC
= PFM'
Managed Account Detail of Securities Held
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
For the Month Ending March 31, 2014
Security Type/ Description
S &P
Moody's
Trade
Settle
Original
YTM
Accrued
Amortized
Market
Dated Date /Coupon /Maturity
Commercial Paper
CUSIP Par Rating
Rating
Date
Date
Cost
at Cost
Interest
Cost
Value
FARGO & COMPANY COMM PAPER
9497F1HJ2 200,000.00 A -1
P -1
02/19/14
02/21/14
199,792.33
0.21
0.00
199,837.83
199,797.80
-- 0.000% 08/18/2014
Security Type Sub -Total
1,000,000.00
998,867.52
0.23
0.00
999,443.72
999,513.00
Managed Account Sub -Total
8,841,000.00
9,016,040.26
0.52
26,711.71
8,979,200.32
8,977,276.28
Securities Sub -Total
$8,841,000.00
$9,016,040.26
0.52%
$26,711.71
$8,979,200.32
$8,977,276.28
Accrued Interest
$26,711.71
Total Investments
$9,003,987.99
Bolded items are forward settling trades
=PF1I
Account 61350001 Page 7
PFM Asset Management LLC
Managed Account Fair Market Value & Analytics For the Month Ending March 31, 2014
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Security Type/ Description Next Call Market Market Unreal G/L Unreal G/L Effective Duration YTM
Dated Date /Coupon /Maturity CUSIP Par Broker Date Price Value On Cost Amort Cost Duration to Worst at Mkt
31/2012 1.000% 03/31/2017
Security Type Sub -Total 4,865,000.00 4,952,252.31 (44,203.93) (6,216.69) 2.14 2.14 0.53
e:- Account 61350001 Page 8
�PF1I
quPFM Asset Management LLC
Managed Account Fair Market Value & Analytics
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Security Type/ Description Next Call Market Market
Dated Date /Coupon /Maturity CUSIP Par Broker Date Price Value
For the Month Ending March 31, 2014
Unreal G/L Unreal G/L Effective Duration YTM
On Cost Amort Cost Duration to Worst at Mkt
CA ST TAXABLE GO BONDS
12/2013 0.892% 07/12/2016
,I. Account 61350001 Page 9
quPFM Asset Management LLC
Managed Account Fair Market Value & Analytics For the Month Ending March 31, 2014
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Security Type/ Description Next Call Market Market Unreal G/L Unreal G/L Effective Duration YTM
Dated Date /Coupon /Maturity CUSIP Par Broker Date Price Value On Cost Amort Cost Duration to Worst at Mkt
FARGO & COMPANY COMM PAPER
9497F1HJ2
200,000.00 WELLSFAR
99.90
199,797.80
5.47
(40.03)
0.38
0.38
0.26
-- 0.000% 08/18/2014
Security Type Sub -Total
1,000,000.00
999,513.00
645.48
69.28
0.25
0.25
0.18
�PF1I
Account 61350001 Page 10
PFM Asset Management LLC
= PFM'
Managed Account Fair Market Value & Analytics
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
For the Month Ending March 31, 2014
Security Type/ Description Next Call Market Market Unreal G/L Unreal G/L Effective Duration YTM
Dated Date /Coupon /Maturity CUSIP Par Broker Date Price Value On Cost Amort Cost Duration to Worst at Mkt
Managed Account Sub -Total 8,841,000.00 8,977,276.28 (38,763.98) (1,924.04) 1.76 1.88 0.52
Securities Sub -Total
Accrued Interest
Total Investments
Bolded items are forward settling trades.
$8,841,000.00
$8,977,276.28 ($38,763.98) ($1,924.04) 1.76 1.88 0.52%
$26,711.71
$9,003,987.99
=PF1I
Account 61350001 Page 11
PFM Asset Management LLC
Managed Account Security Transactions & Interest For the Month Ending March 31, 2014
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Transaction Type Principal Accrued Realized G/L Realized G/L Sale
Trade Settle Security Description CUSIP Par Proceeds Interest Total Cost Amort Cost Method
03/19/14 03/21/14 US TREASURY NOTES
15,000.00 15,216.80 88.60 15,305.40 (195.70) 10.37 SPEC LOT
DTD 09/30/2010 1.250% 09/30/2015
,I. Account 61350001 Page 12
quPFM Asset Management LLC
= PFM'
Managed Account Security Transactions & Interest For the Month Ending March 31, 2014
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Transaction Type Principal Accrued Realized G/L Realized G/L Sale
Trade Settle Security Description CUSIP Par Proceeds Interest Total Cost Amort Cost Method
03/20/14 03/21/14 FEDERAL HOME LOAN BANK GLOBAL 240,000.00 240,240.00 57.50 240,297.50 249.60 246.73 SPEC LOT
NOTES
DTD 08/09/2013 0.375% 08/28/2015
Transaction Type Sub -Total 395,000.00 397,901.33 725.37 398,626.70 (2,330.48) 432.27
Managed Account Sub -Total (715,130.30) (3,876.06) (719,006.36) (2,330.48) 432.27
Total Security Transactions
Bolded items are forward settling trades.
=PF1I
PFM Asset Management LLC
($715,130.30) ($3,876.06) ($719,006.36) ($2,330.48) $432.27
Account 61350001 Page 13