Investment Performance
December 31, 2009

Most asset classes rose in the fourth quarter of 2009, ending a turbulent year that resulted in significant gains in most markets. Large cap stocks jumped 6% in the fourth quarter and rose 26.5% in 2009. Small cap stocks trailed large cap stocks in the fourth quarter but ended the year with slightly higher gains over large cap stocks. International equities and emerging markets benefited most from increasing risk appetite among investors in 2009. International equities were up 31.8% in 2009 and emerging markets were up 78.5% for the year. In the bond markets, the riskier high yield market posted extraordinary gains with the Merrill Lynch High Yield Master Index returning 57.5% for the year. Treasuries, on the other hand, slipped -1.3% in the fourth quarter and were down -3.7% in 2009.

Historical Annualized Returns

Asset allocations to fixed income and alternative investments reflect a decision by the Finance/Investment Committee to invest $500,000 in a portfolio of real assets. The Committee is concerned about future inflation and this new investment class will provide some protection in that event. The real asset investment is allowed by policy as part of alternative investments. This investment was funded with assets from the fixed income portion of the pool.

Revised February 2010

Investment Managers:

Franklin Management
Symphony Asset Management
MFS Investment Management
Tradewinds NWQ Investment Management
Wedge Capital Management
Aletheia Research & Management
Janus Capital Management
Neuberger Berman

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