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Diversification
A Message from
your Chairman
Everyone has heard of the saying, "do not put all of your
eggs in one basket".
When it comes to investing, never has there been a truer
statement. The City of Pompano Beach General Employee
Pension Board trustees make it a point to ensure that the
pension fund is well diversified. The process begins by
fulfilling our fiduciary responsibility of trustee
education. It is this beginning that we learn the importance
of a well-diversified portfolio and the concepts of
portfolio management.
The next step in our role of fiduciary
responsibilities is to rely on the expertise of a
professional investment advisor. This is a person who has
many years of experience and resources that monitors and
tracks our team of money managers. He assists us in
interviewing new managers and constantly reviewing the ones
we have now. He advises us on selecting a proper allocation
strategy and advises when it is time to adjust that
strategy.
We meet with our advisor a minimum of once a
quarter and more often when necessary. He is responsible for
continually monitoring the success of the managers and gives
us a report card for each manager. We have a face to face
meeting with the managers a minimum of once a year.
Currently we have a dozen managers that manage and invest
our pension and DROP money.
The first in the list of managers is DePrince, Race, and
Zollo who manages our Large Cap Value Equity portfolio. A
slightly opposing style would be Large Cap Neutral Equity
portfolio and is managed by Stralem and Company. The
strategy here would be that slightly opposing styles would
suggest that one style may be in favor when the other is not
and vice versa. Moving along with this same concept we have
our Small/Mid Cap Equity portfolio managed by Atlanta
Capital and our Mid Cap Growth portfolio managed by Munder
Capital.
We have an index fund made up of the Russell 1000
which is considered a Large Neutral Equity portfolio managed
by Rhumbline. In order to capture the international exposure
we have invested into three international mutual funds which
are American Funds EuroPacific Growth Fund, Oakmark
International Fund and Oppenheimer International Growth
Fund.
Moving away from the equity sector and into the
fixed income sector we have a Core Bond fund managed by
Richmond Capital. We are further diversified in the area of
real assets by two funds managed by J. P. Morgan which are
the Maritime Fund and the Infrastructure Fund. Completing
our diversified portfolio also in the area of real assets we
have The Principal U.S. Property Fund which invests in
commercial real estate.
So as you can see we do have our eggs divided up into many
baskets. We have a well-diversified portfolio in order to
ride out the many ebbs and flows in the financial markets.
George Mitchell, Chairman
June 3, 2013
Subsequent
articles will be posted on our website
www.pompgers.org
from time to time.
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