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HomeMy WebLinkAbout05.a. Receive HighMark OPEB and Pension Prefudning sub-trust reports for Fourth Quarter of Calendar Year 2022 Page 1 of 24 Item 5.a. CENTRAL SAN February 21, 2023 TO: FINANCE COMMITTEE FROM: KEVIN MIZUNO, FINANCE MANAGER REVIEWED BY: PHILIP LEIBER, DIRECTOR OF FINANCE AND ADMINISTRATION ROGER S. BAILEY, GENERAL MANAGER SUBJECT: RECEIVE HIGHMARK OTHER POST-EMPLOYMENT BENEFITS (OPEB) AND PENSION PREFUNDING SUB-TRUST REPORTS FOR THE FOURTH QUARTER OF CALENDAR YEAR 2022 Attached for review is a trust performance overview provided by Highmark, as well as OPEB and Pension Pre-funding sub-trust investment reports for the quarter ending December 31, 2022. Central San's Investment Manager at Highmark, has provided an in-depth written analysis of market and fund performance attached to this memo (Attachment 1). In summary, this quarter's report reflects year-to- date losses of -14.53% and -13.96% for Central San's OPEB and Pension Pre-funding sub-trusts, respectively. The long-term targeted annual returns are 5.75% for the OPEB trust and 5.14% for the Pension Pre-funding trust. In comparison, the inception-to-date annual returns have been 7.74% and 2.51% for the OPEB and Pension Pre-funding sub-trusts respectively. A presentation of financial highlights comparing quarterly results to historical results as well as benchmarks is also included (Attachment 2). As approved by the Board, nearly the entire balance of the Pension Pre-funding trust was liquidated to help finance the payoff of Central San's unfunded actuarial accrued liability (UAAL)totaling approximately $70.8 million. Following the payoff of the UAAL in June 2021, a residual amount of $41,450 remained in the trust as of December 31, 2022. While not a new issue, staff emphasizes that a Public Agency Retirement Services (PARS) system limitation results in "Contributions" and "Withdrawals" for the OPEB Trust appearing significantly overstated on page 2 of 18 in Attachment 2. This is caused by two issues: (1) a change in account number related to the establishment of the Pension Pre-funding Trust in 2017, and (2) several changes to mutual fund investment share classes where movements of funds were reflected as withdrawals and contributions. Consistent with the Board-approved FY 2022-23 budget plan (and the year prior), the excess of OPEB costs above and beyond the actuarially determined contribution (ADC)will be claimed from the OPEB trust following the close of FY 2022-23. With total FY 2022-23 pay-go retiree OPEB premiums estimated to be approximately$4.6 million, it is estimated Central San will claim a reimbursement of$1.3 million from the OPEB trust in July 2023. Additionally, to augment the plan against losses due to adverse market conditions in calendar year 2022, the Finance Committee and staff recommended the Board contribute an additional $1.0 million to the OPEB trust in FY 2022-23 from favorable prior year budgetary variances at February 21, 2023 Regular FINANCE Committee Meeting Agenda Packet- Page 170 of 198 Page 2 of 24 last month's Finance Committee meeting. The $1.0 million in additional FY2022-23 contributions are being contributed on a monthly basis utilizing a dollar cost averaging approach, with the first contribution completed in November 2022. Strategic Plan Tie-In GOAL FOUR: Governance and Fiscal Responsibility Strategy 1 - Promote and uphold ethical behavior, openness, and accessibility, Strategy 3- Maintain financial stability and sustainability ATTACHMENTS: 1. Highmark Overview, 4th Quarter 2022 2. PARS Investment Report, 4th Quarter 2022 February 21, 2023 Regular FINANCE Committee Meeting Agenda Packet- Page 171 of 198 Page 3 of 24 Attachment 1 JHIGHMARKD CAPITAL MANAGEMENT January 20, 2023 Phil Leiber Director of Finance and Administration Central Contra Costa Sanitary District 5019 Imhoff Place Martinez, CA 94553-4392 RE: 4Q Quarter 2022 OPEB/Pension Report Dear Mr. Leiber, Market Commentary Investors found nowhere to hide in 2022: it was the worst year for equities since the Great Financial Crisis of 2008 and bonds recorded their lowest annual return since 1976.' January 3, 2022, saw the S&P 500 Index hit a record high capping a rally that began when Barack Obama was still president. But the first day of trading in 2022, was the end of over a decade-long stock market rally with the S&P 500 rising more than 800 percent since the first quarter of 2009.2 Diversification, the investors' ally, proved ineffective as the dominant market narrative broke down; namely that low inflation, low interest rates and unprecedented government intervention in markets and the economy would continue ad-infinitum and carry no consequences or tradeoffs. The fact that diversifying between bonds and equities did little to protect investor portfolios is symptomatic of just how unnatural market conditions were in 2022. Looking under the hood, investors were simultaneously hit by demand and supply shocks that sparked runaway inflation. Markets mistook inorganic "sugar-high" COVID-era fiscal and monetary stimulus for real demand and extrapolated trends inappropriately into risk asset valuations making them highly vulnerable to a reset after equity markets rallied in 2020 and 2021, and bond yields reached multi-decade lows.3 2022 saw markets recalibrate and re-price risk assets with concerns mounting as to whether a more hawkish Federal Reserve (Fed) had the potential for a policy mistake: overtightening just as growth stalls and driving the economy into recession. To fight against inflation at its highest point since 1983, the Fed would rather trigger a shallow recession now verses a deeper one later despite the potential for collateral damage to the economy and markets. We believe we are currently in the eye of the hurricane. Exiting the eye will likely result in more turbulence ahead for financial assets. 2022 saw the first phase of the storm revolving around inflation, interest rates and asset valuation compression from peak levels. For 2023, unfortunately, the second phase might be about higher unemployment, declining corporate profits, and falling economic output, which can be a challenging investment backdrop. We do see opportunities emerging following some of this downside potential in capital markets, rewarding patient investors during a year likely to be rife with change. 1 The S&P 500 returned negative 37 percent in 2008 and negative 18 percent in 2022.The inception date of the Bloomberg Barclay's Aggregate index,a diversified U.S.bond index,is 1976 and the index returned negative 13 percent in 2022 z The S&P 500 had a cumulative total return of 817.8%between March 9,2009,and January 3,2022. 3 The S&P 500 rose 18.4 percent in 2020 and 28.7 percent in 2021.The yield on the Bloomberg Barclay's Aggregate index was 4.68 percent at year-end 2022 versus a low of 1.03 percent on August 4,2020,and the 10-year U.S.Treasury Note closed at a yield of 0.51%on the same day--the lowest yield dating back to 1962.Source:Bloomberg. February 21, 2023 Regular FINANCE Committee Meeting Agenda Packet- Page 172 of 198 Page 4 of 24 Attachment 1 Watching the Fed The Fed and most global central banks began the process of tightening central bank policy rates in 2022 with resulting economic growth slowdowns in China, Europe, and the U.S. The Fed raised their target Federal Funds Rate from a range of 0 percent to 0.25 percent, to 4.25 percent to 4.5 percent, as it sought to counter a combination of multi-decade high inflation and multi- decade low unemployment. The Fed also began the process of "quantitative tightening" or shrinking its near $9 trillion balance sheet by not reinvesting roughly $95 billion per month of maturing agency mortgage-backed securities and Treasuries. As a result, Treasury prices plummeted in 2022 and yields soared with the two-year yield rising by 370 basis points and the 10-year yield up 237 basis points. Predictably, the two-year minus 10-year Treasury yield gap entered a sustained yield curve inversion4 early in Q3. By the end of 2022, the gap stood at 55 basis points and fears of a 2023 recession rose accordingly. For the year, the diversified Bloomberg Barclays Aggregate bond index fell by 13.01 percent. Equity Market Overview The speed of equity market resets has taken investors by surprise but, overall, we believe it has been an orderly and rational process in terms of where we stand at the start of 2023. Most of the damage has been a negative 25 percent compression in asset valuations due to higher real interest rates which reduce the future value of earnings. While corporate earnings have been resilient so far, we expect earnings to struggle going forward. U.S. equity market valuations hit 21 times forward earnings at the beginning of 20225 but, by year-end, had re-rated to the 15-16 times long-term average and a 30 percent valuation premium had been removed. We believe the re-rating back to long-term valuation levels is a healthy development despite the pain of equity market contractions because lower valuations carry lower expectations and a better risk/reward proposition after speculative excesses have been removed. In 2022, markets were priced for perfection and investors were complacent—extrapolating easy money as a sustainable "new normal". In terms of corporate earnings, consensus market expectations for 20236 appear optimistic based on the macro challenges ahead. We expect significant ongoing downward revisions to 2023 estimates based on demand destruction from higher prices, mean reversion from outsized earnings during the COVID pandemic, operating leverage exhaustion, and negative impacts from a strong U.S. dollar. Additionally, we expect that lower margins will result from higher labor and input costs, lingering supply chain issues, and weaker productivity. We believe consensus expectations for 2023 are too optimistic based on macro challenges and we remain cautious regarding equity risk assets as prices have yet to reach the point to fully compensate for risk despite 2022's pullback. The fundamental earnings backdrop is still too optimistic and needs to be reset. An earnings recession as economic growth slows, could lead to further downside movements in equity markets. 4 Yield curve inversion,where yields on shorter term Treasuries exceed those of longer-term Treasuries,is often a leading indicator of future recessionary periods. s Source:FactSet;httPs:Hinsight.factset.com/sp-500-forward-p/e-ratio-falls-below-10-year-average-for-the-first-time-since-q2-2020. e According to FactSet,S&P 500 earnings per share are forecast to be$232 for 2023 versus$221 for 2022 and price/earnings multiples are forecast to be 17.2 times versus 18.1 times for 2022. February 21, 2023 Regular FINANCE Committee Meeting Agenda Packet- Page 173 of 198 Page 5 of 24 Attachment 1 The Year ahead 2023 While we believe a "garden variety" recession is mostly priced into current market levels,7 we still need to overcome significant challenges, including the risk of a deeper recession due to Fed overtightening as growth stalls. Because fighting inflation is the Fed's top priority, the Fed is unlikely to support asset markets through looser monetary policy as it did in 2020 and 2021 when they cut rates to near zero percent. Markets are in the process of adjusting to a new environment: the need to stand on their own without government support via cheap subsidized credit which severely distorted market prices, misdirected capital allocation, and led to unsustainable asset levels. 2022's market jolt and reset are the resulting withdrawal symptoms. While the typical economic growth/recession/recovery cycle averages around ten years, we are experiencing a mere two-year cycle as the COVID-spawned sugar high from fiscal and monetary stimulus measures wanes and the hangover period plays out. On the good news front, employment levels remain healthy$ and declining shipping prices are helping unclog supply chains9. Unlike the 2008 crisis, corporations and consumers are flush with excess cash and the banking system is well-capitalized10 In terms of risk asset allocation, we believe it is best to stay defensive and wait for better entry points to re-engage after we get past some key clearing events and/or when much cheaper asset prices emerge. We are tactically cautious amid tightening financial conditions, escalation of geopolitical risks from Ukraine to Taiwan, and a challenged growth versus inflation outlook. Fixed income, where yields are near their highest point in a decade or more, may offer investors a chance to "get paid to wait" for new reentry points for equity risk assets. For each of the short, intermediate, and longer maturity fixed income options, we suggest a focus on higher credit quality issues, specifically U.S. Treasuries, Agencies, and Agency mortgage-backed securities; highly rated investment grade corporate bonds and commercial paper; and highly rated taxable and tax-exempt municipal bonds. Performance and Positioning The Central Contra Costa Sanitary District OPEB Plan gained 5.0% gross of investment fees for the fourth quarter, which trailed the Plan's benchmark target of 5.29%. Equities generated a positive 8.96% return, and fixed income rallied by 1.82%, after a very difficult first nine months of the year. The underweight position the Plan continues to maintain to equities served as a slight negative in this risk-on environment, and is the primary reason behind the slight underperformance versus the benchmark in the fourth quarter. The gains from the equity segment were broad-based with international equity markets the leading category as represented by the MSCI EAFE Index gaining 17.34% and the MSCI Emerging Market Index returning 9.7%. Europe is facing similar challenges as the United States is facing with respect to strong inflation readings, hawkish central bank rate hikes, and tight labor 'From peak to trough S&P 500 fell 25 percent in 2022 which approximates the average decline in a"typical/garden variety recession"marked by an aging business cycle,higher inflation,and rising rates versus either a structural or an event-driven recession. $There are more than 1.5 jobs available for every person looking for work according to Bloomberg. 9 The cost of shipping a container from Shanghai to Los Angeles fell from$10,221 at the end of 2021 to$1,992 by late December 2022.Source:Drewry Supply Chain Advisors. 10 Source:Federal Reserve Bank of St.Louis. February 21, 2023 Regular FINANCE Committee Meeting Agenda Packet- Page 174 of 198 Page 6 of 24 Attachment 1 markets. That said, the U.S. dollar's weaking in the quarter was seen as a catalyst for the rally in most international markets. Moreover, markets embraced the potential re-opening of the Chinese economy as it appeared that China would relax their stringent zero-Covid policies that they have embraced since the crisis began in 2020. That said, the reported recent outbreaks of Covid cases in the country provide some tension for investors wagering on a full reopening of the economy. The international equity segment for the OPEB Plan returned 14.16%. The Vanguard FTSE Developed Markets ETF was the top performer, gaining 17.11% but lagged slightly the MSCI-EAFE Index target. The Hartford Schroders Emerging Market Fund (+10.5%) outperformed the benchmark, but dragged down slightly the international equity component of the Plan as emerging market equity returns trailed international equity market returns in the quarter. While international equity markets were the top performing segment in the quarter, domestic equity markets posted broad-based gains led by the Russell Mid-Cap Index up 9.18%, followed closely by the S&P500 Index 7.56%, and the Russell 2000 Small Cap Index which gained 6.23%. From a relative standpoint, the small cap segment provided the strongest contribution in the quarter outperforming the benchmark (8.2%vs. 6.23%). While the domestic large cap segment is invested in passive oriented index funds, returns were slightly ahead of the S&P500 index benchmark in the quarter (7.71% vs. 7.56% for the S&P500). Our slight tilt to large cap value added modest gains to Plan returns. The Federal Open Market Committee (FOMC) met twice in the quarter and increased rates by 75 basis points in November and 50 basis points in December. These increases were highly telegraphed in advanced and did not surprise the bond market in the least. The Federal Funds rate ended the year with a targeted range of between 4.25% to 4.50%. Accompanying the increase in rates was a projection by the Fed that rates would continue in an upward trajectory in 2023, with a possible three rate hike forecast as implied by the Fed's 'dot plot'. In the quarter, the Plan's fixed income segment gained 1.82%, slightly less than the Bloomberg U.S. Aggregate Bond Index return of 1.87°/x. Most of the fixed income manager returns were in-line with the benchmark with the negative outlier being the Pimco Total Return Fund gaining 1.77%, while the PGIM Total Return Bond Fund gained 2.31% Our modest allocation to high yield helped, with the Pimco High Yield Fund gaining 4.19%. We maintain our underweight to equities in the Plan's asset allocation. While we do see inflation easing over the course of 2023, the lagged impact of the Fed hiking rates by over 400 basis points in 2022, will be felt in the upcoming year, and we believe that a recession is highly likely. But as we highlighted last quarter, if the Federal Reserve continues to hike rates beyond levels that the market anticipates (north of 5%), we believe equity and bond markets will trade lower. We ended the quarter with a target asset allocation position for the OPEB Plan of 48% equities, 49.5% fixed income, and 2.5% cash/money market. The Central Contra Costa Sanitary District Pension Pre-Funding Plan gained 3.73% in the quarter, gross of investment fees, which slightly lagged the District's Plan benchmark target of 3.9%. The Pension Plan also maintained an underweight allocation to equities, and ended the quarter at a targeted allocation of 28% equities, 68% fixed income, and 4% cash/money market. Drew Brown February 21, 2023 Regular FINANCE Committee Meeting Agenda Packet- Page 175 of 198 Attachment 2 PARS: Central Contra Costa Sanitary District OPEB and Pension Plan Fourth Quarter 2022 Presented by Andrew Brown, CFA JHIGHMARKO CAPITAL MANAGEMENT Attachment 2 Investment Summary Since Inceptiori CCCSD - OPEB Beginning Value 566,683.26 Asset Allocation Contributions 108,621,739.00 Withdrawals -65,813,833.93 Total Assets: $75,235,724 Gain (Loss) 9,629,474.96 Interest and Dividends 22,231,660.74 Period Ending: 12-31-2022 Net Accrued Income 185,976.50 4Q22 Return: 5.00% Ending Market Value $75,421,700.53"'- 1 75,421,700.53*1 Year Return: -14.53% Inception-to-Date Return: 7.74% Cash Inception Date:4-1-2009 $1,799 20 2.390/, Plan target rate of return: 5.75% Equity $36,230,991 48.160/, I Fixed Income $37,205,213 49.45T, * Ending Market Value differs from total market value on page 3 due to differences in reporting methodology. The above ending market value includes accruals. JH IGHMARK® PARS: Central Contra Costa Sanitary District 2 CAPITAL MANAGEMENT Meeting Attachment 2 Asset Allocation - Central Contra Costa Sanitary District OPEB As of Fourth Quarter 2022 Current Asset Allocation Equity 48.16% Range: 40%-60% 36,230,991 Large Cap Core 9.37% IVV iShares Core S&P 500 ETF 7,047,564 7.05% VGIAX Vanguard Growth & Income Adm 5,302,568 Large Cap Value 5.60% IVE iShares S&P 500 Value ETF 4,214,429 Large Cap Growth 4.53% IVW iShares S&P 500 Growth ETF 3,409,439 Mid Cap Core 4.82% IWR iShares Russell Mid-Cap ETF 3,624,223 Small Cap Value 3.59% UBVFX Undiscovered Managers Behavioral Val R6 2,700,456 Small Cap Growth 3.54% VBK Vanguard Small-Cap Growth ETF 2,665,578 International Core 3.02% VEA Vanguard FTSE Developed Markets ETF 2,274,228 International Value 1.03% DODFX Dodge & Cox International Stock 1 773,507 International Growth 1.03% MGRDX MFS International Growth R6 773,012 Emerging Markets 2.55% HHHFX Hartford Schroders Emerging Mkts Eq F 1,920,355 Real Estate 2.03% VNQ Vanguard Real Estate ETF 1,525,633 Fixed Income 49.45% Range: 40%-60% 37,205,213 28.68% Core Fixed Income Portfolio 21,575,804 Short-Term 4.00% VFSUX Vanguard Short-Term Investment-Grade Adm 3,013,064 Intermediate-Term 7.91% PTTRX PIMCO Total Return Instl 5,948,027 8.36% PTRQX PGIM Total Return Bond R6 6,292,471 High Yield 0.50% PHIYX PIMCO High Yield Instl 375,847 Cash 2.39% Range: 0%-20% 1,799,520 2.39% FGZXX First American Government Oblig Z 1,799,520 TOTAL 100.00% $75,235,724 JHIGHMARK PARS: Central Contra Costa Sanitary District 3 CAPITAL MANAGEMENT Meeting Attachment 2 Selected Period Performance CCCSD - OPEB Period Ending: 12/31/2022 Year Inception to Date to Date 3 Months (1 Year) 1 Year 3 Years 5 Years 10 Years 04/01/2009 Cash Equivalents .86 1.48 1.48 .62 1.12 .67 .53 Lipper Money Market Funds Index .87 1.51 .63 1.10 .63 .47 Fixed Income ex Funds 1.65 -12.41 -12.41 -2.29 .40 Total Fixed Income 1.82 -12.44 -12.44 -2.21 .40 1.27 3.11 Bloomberg US Aggregate Bd Index 1.87 -13.01 -13.01 -2.71 .02 1.06 2.52 Total Equities 8.96 -17.02 -17.02 5.35 6.79 9.93 12.22 Large Cap Funds 7.71 -17.42 -17.42 7.57 9.12 12.17 13.55 S&P 500 Composite Index 7.56 -18.11 -18.11 7.66 9.42 12.56 14.36 Mid Cap Funds 9.20 -17.42 -17.42 5.75 6.92 9.61 Russell Midcap Index 9.18 -17.32 -17.32 5.88 7.10 10.96 14.36 Small Cap Funds 8.20 -16.19 -16.19 4.25 5.80 10.95 14.36 Russell 2000 Index 6.23 -20.44 -20.44 3.10 4.13 9.01 12.44 International Equities 14.16 -16.34 -16.34 .08 1.02 3.59 7.16 MSCI EAFE Index 17.34 -14.45 -14.45 .87 1.54 4.67 7.45 MSCI EM Free Index 9.70 -20.09 -20.09 -2.69 -1.40 1.44 6.37 RR:REITS 4.54 -26.14 -26.14 -1.08 3.28 Wilshire REIT Index 4.05 -26.81 -26.81 -.49 3.35 6.31 13.82 Total Managed Portfolio 5.00 -14.53 -14.53 1.91 3.87 5.65 7.74 CCCSD OPEB Benchmark 5.29 -13.74 -13.74 2.12 3.90 5.78 7.75 Account Inception:4/2009 From April 1, 2009 to July 31,2017,the portfolio was invested in account 6746030600, PARS/Central Contra Costa Sant PRHCP. The portfolio then moved to account 6746055900, PARS/CCCSD 115 - OPEB. CCCSD OPEB Benchmark consists of: 26.5% of S&P 500, 5% Russell Midcap, 7.5% Russell 2000, 1.75% Wilshire REIT, 3.25% MSCI EM Free, 6% MSCI EAFE, 33.5% BC Aggregate, 10% ML 1-3 Yr US Corp/Govt, 1.5% ML US High Yield Mstr II, and 5%Citigroup 1 Month T-Bill Indexes. Returns are gross-of-fees unless otherwise noted. Returns for periods over one year are annualized. The information presented has been obtained from sources believed to be accurate and reliable. Past performance is not indicative of future returns. Securities are not FDIC insured, have no bank guarantee, and may lose value. J HIGHMARK® PARS: Central Contra Costa Sanitary District 4 CAPITAL MANAGEMENT Attachment 2 Fixed Income Portfolio: Statistics As of Fourth Quarter 2022 CCCSD BC Aggregate Bond OPEB Index Weighted Average Maturity 9.39 years 8.50 years I Effective Duration 5.15 years 6.13 years Average Coupon 3.82% 3.03% I Yield to Maturity 5.14% 4.68% Average Quality Aa2 Aa2 JHIGHMARK PARS: Central Contra Costa Sanitary District 5 CAPITAL MANAGEMENT Source: BondEdge Meeting Attachment 2 Fixed Income Portfolio: Sectors As of Fourth Quarter 2022 45.0% 40.0% — 35.0% 30.0% 25.0% 20.0% 15.0% — 10.0% — 5.0% — 0.0% Cash Treasury Agency Corp Non-Corp MBS CM❑ ABS CMBS ■CCCS❑❑PEB 0.8% 24.0% 0.0% 27.0% 2.1% 33.6% 0.0% 11.4% 1.1% ■Barclays U.S.Aggregate Bond Index 0.0% 40.4% 1.2% 23.8% 3.8% 28.6% 0.0% 0.4% 1.9% JHIGHMARK PARS: Central Contra Costa Sanitary District 6 CAPITAL MANAGEMENT Source: BondEdge Attachment 2 Fixed Income Portfolio: Effective Duration and Effective Maturity As of Fourth Quarter 2022 Effective Duration Effective Maturity 40% 35°/0 35% 30°fo 30% 25°fo 25% 20°fo 20% 15% 100/0 10% 00/0 0-1 Yrs. 1-3 Yrs. 3-5 Yrs. 5-7 Yrs. 7-10 10+ 0% Yrs. Yrs. 0-1 Yr. 1-3 Yrs. 3-5 Yrs. 5-7 Yrs. 7-10 Yrs. 10+Yrs. ■CCC5D OP EB 11.91c/lo 15.61% 22.69c/lo 20.09c/lo 10.56% 19.15% ■CCCSD OPEB 8.47% 15.09% 12.72% 6.04% 34.81% 22.88% BC Aggregate Bond Index 0.14% 23.28% 23.71% 29.65% 8.13% 15.08% BC Aggregate Bond Index 0.04% 21.06% 15.83% 15.53% 30.74% 16.79% JHIGHMARK PARS: Central Contra Costa Sanitary District 7 CAPITAL MANAGEMENT Source: BondEdge Attachment 2 Holdings-Reporting as of Trade Date Account:xxxxxx5900-PARS/CCCSD 115P-OPEB As of:31-Dec-2022 Asset Type Asset Name Ticker Shares/Units Price Market Value Equities DODGE&COX INTL STOCK FD(CLSD)#1048 DODFX 17,942.6450 $43.1100 $773,507.43 Equities HARTFORD SCHRODERS EMRG MKT FD#3150 HHHFX 132,073.9070 $14.5400 $1,920,354.61 Equities ISHARES RUSSELL MIDCAP ETF IWR 53,732.0000 $67.4500 $3,624,223.40 Equities ISHARES S&P 500 GROWTH ETF IVW 58,281.0000 $58.5000 $3,409,438.50 Equities ISHARES S&P 500 VALUE ETF IVE 29,051.0000 $145.0700 $4,214,428.57 Equities ISHARES TR CORE S&P500 ETF IVV 18,343.0000 $384.2100 $7,047,564.03 Equities MFS INTERNATIONAL GROWTH R6#4805 MGRDX 21,460.6240 $36.0200 $773,011.68 Equities UNDISCOVERED MGRS BEHAVL R6#3467 UBVFX 35,635.4690 $75.7800 $2,700,455.84 Equities VANGUARD FTSE DEVELOPED MARKETS ETF VEA 54,187.0000 $41.9700 $2,274,228.39 Equities VANGUARD GRO&INC ADMIRAL SHRS#593 VGIAX 67,411.2440 $78.6600 $5,302,568.45 Equities VANGUARD REAL ESTATE ETF VNQ 18,497.0000 $82.4800 $1,525,632.56 Equities VANGUARD SMALL CAP GR VIPERS VBK 13,292.0000 $200.5400 $2,665,577.68 Fixed Income PIMCO HIGH YIELD,INSTL #108 PHIYX 50,046.1780 $7.5100 $375,846.80 Fixed Income PIMCO TOTAL RETURN INSTL #35 PTTRX 703,076.5180 $8.4600 $5,948,027.34 Fixed Income PRUDENTIAL TOTAL RTRN BD CLQ PTRQX 535,985.5920 $11.7400 $6,292,470.85 Fixed Income VNGRDSTTERMINVMTGRADEADM #539 VFSUX 302,820.5000 $9.9500 $3,013,063.97 Fixed Income EXETER ATMOBILE REC 1.050% 5/15/26 EAR0026A 80,000.0000 97.550% $78,040.00 Fixed Income GM FIN CONS ATMBTR 0.450% 7/16/25 GFC0025B 78,821.2100 97.972% $77,222.72 Fixed Income UNITED STATES TREAS 0.125% 9/15/23 UST0123C 120,000.0000 96.863% $116,235.60 Fixed Income ACACN 2015-1A NTS 3.600% 9/15/28 A21\13627 157,626.0900 90.215% $142,202.38 Fixed Income AERCAP IRELAND CAPIT 3.300% 1/30/32 AIC3332 95,000.0000 78.176% $74,267.20 Fixed Income ALASKAAIRLINES EQ 4.800% 2/15/29 AAE4829 109,619.0400 95.177% $104,332.11 Fixed Income AT&T INC GLBL NT 3.500% 6/01/41 AIG3541 140,000.0000 74.573% $104,402.20 Fixed Income ATT 2013-1-2 2A 3.070% 3/15/48 A233048 235,000.0000 99.440% $233,684.00 Fixed Income AVIS BUD RENTAL FDG 2.970% 3/20/24 ABR2924 87,499.9900 99.662% $87,204.24 Fixed Income BOEING CO CR SEN SR 2.196% 2/04/26 BCC2126 95,000.0000 90.856% $86,313.20 Fixed Income BRITISHAIRWAYS 20134.625%12/20/25 BA24625 72,429.2100 97.084% $70,317.17 Fixed Income BROA DSTONE NET LEASE 2.600% 9/15/31 BNL2631 130,000.0000 74.936% $97,416.80 Fixed Income BRUNSWICK CORP 2.400% 8/18/31 BC22431 85,000.0000 73.520% $62,492.00 Fixed Income CALIFORNIA HEALTH FA 4.353% 6/01/41 CHF4341 135,000.0000 88.436% $119,388.60 JHIGHMARK PARS: Central Contra Costa Sanitary District 8 CAPITAL MANAGEMENT Attachment 2 Holdings-Reporting as of Trade Date Account:xxxxxx5900- PARS/CCCSD 115P-OPEB As of:31-Dec-2022 Asset Type Asset Name Ticker Shares/Units Price Market Value Fixed Income CAPITALONE PRIMETR2.670% 6/16/25 COP2625 105,243.6500 98.689% $103,863.91 Fixed Income CARVA NA AUTO RECS TR 0.660% 6/12/28 CAR0628 59,984.3500 92.687% $55,597.69 Fixed Income CITIGROUP INC SR FLT 1.330% 2/24/28 CIS0028 85,000.0000 96.580% $82,093.00 Fixed Income CREDIT ACCP AUTO LN 2.390% 4/15/29 CAA2329 159,856.5600 99.606% $159,226.73 Fixed Income CROWN CASTLE TOWERS 3.663% 5/15/45 CCT3645 175,000.0000 96.872% $169,526.00 Fixed Income CVS HEALTH CORP 5.050% 3/25/48 CHC5048 57,000.0000 89.755% $51,160.35 Fixed Income DALLAS FT WORTH TEX 4.507%11/01/51 DFW4551 150,000.0000 89.882% $134,823.00 Fixed Income DARDEN RESTAURANTS 4.550% 2/15/48 DR44548 70,000.0000 77.013% $53,909.10 Fixed Income DICKS SPORTING GOODS 4.100% 1/15/52 DSG4152 105,000.0000 64.468% $67,691.40 Fixed Income DNKN 2017-1AA211 4.030%11/20/47 D2A4047 176,212.5000 90.899% $160,175.40 Fixed Income DRIVE AUTO REC TR 200.580%12/15/25 DAR0025 167,764.0900 98.741% $165,651.94 Fixed Income DRIVE AUTO REC TR 204.300% 4/15/26 DAR4326 115,238.6700 99.910% $115,134.96 Fixed Income DRIVE AUTO RECV TR 2.700% 5/15/27 DAR2727 205,000.0000 98.146% $201,199.30 Fixed Income ENERGY TRANSFER OPER 5.800% 6/15/38 ETO5838 125,000.0000 91.551% $114,438.75 Fixed Income ENTERGY TEXAS INC 1M 5.000% 9/15/52 ETI5052 65,000.0000 91.414% $59,419.10 Fixed Income EXETER AUTO RECV TR 0.690% 1/15/26 EAR0826 253,993.8000 98.414% $249,965.46 Fixed Income EXETER AUTO RECV TR 3.710% 3/17/25 EAR3725 92,099.4100 98.971% $91,151.71 Fixed Income F&G GLOBAL FUNDING 2.000% 9/20/28 FGF2028 130,000.0000 82.430% $107,159.00 Fixed Income FAIRFAX US INC 4.875% 8/13/24 FU14824 115,000.0000 97.542% $112,173.30 Fixed Income FGLMC#E03097 2.500% 3/01/27 E03097F 53,471.5000 95.898% $51,278.10 Fixed Income FGLMC#G60453 3.000% 1/01/46 G60453F 100,550.7300 90.132% $90,628.38 Fixed Income FGLMC#J30401 3.000% 1/01/30 J30401F 61,671.4300 96.273% $59,372.94 Fixed Income FGLMC#Q13204 3.000% 11/01/42 Q13204F 73,950.6300 91.041% $67,325.39 Fixed Income FHLMC#SD8230 4.500% 6/01/52 SD8230A 397,839.8200 96.256% $382,944.70 Fixed Income FHLMC#SD8258 5.000% 10/01/52 SD8258A 347,507.6500 98.617% $342,701.62 Fixed Income FHLMC G08823 3.500% 7/01/48 G08823F 55,573.3000 92.564% $51,440.87 Fixed Income FHLMC G14702 2.5000%3/1/2023 G14702F 1,510.7800 99.720% $1,506.55 Fixed Income FHLMC G15252 3.000%12/01/29 G15252F 54,967.2500 96.271% $52,917.52 Fixed Income FHLMC Q38373 3.500% 1/01/46 Q38373F 54,058.0300 93.029% $50,289.64 Fixed Income FHLMC RB5091 2.500%11/01/40 RB5091A 275,450.0100 87.955% $242,272.06 JHIGHMARK PARS: Central Contra Costa Sanitary District 9 CAPITAL MANAGEMENT Attachment 2 Holdings-Reporting as of Trade Date Account:xxxxxx5900- PARS/CCCSD 115P-OPEB As of:31-Dec-2022 Asset Type Asset Name Ticker Shares/Units Price Market Value Fixed Income FHLMC SB0380 3.500% 2/01/34 SB0380A 74,522.7200 96.666% $72,038.13 Fixed Income FHLMC SB8006 3.000% 9/01/34 SB8006A 62,760.7300 93.863% $58,909.10 Fixed Income FHLMCSD8221 3.500% 6/01/52 SD8221A 588,825.4700 90.879% $535,118.70 Fixed Income FHLMCSD8222 4.000% 6/01/52 SD8222A 477,175.3000 93.804% $447,609.52 Fixed Income FHLMC SD8237 4.000% 8/01/52 SD8237A 210,469.4800 93.804% $197,428.79 Fixed Income FHLMC V60586 3.0000%8/1/2029 V60586F 58,897.0200 96.272% $56,701.34 Fixed Income FIRST HORIZON CORPOR4.000% 5/26/25 FHC4025 145,000.0000 97.163% $140,886.35 Fixed Income FIN MA#CB3630A 4.000% 5/01/52 CB3630A 634,936.4400 93.805% $595,602.13 Fixed Income FNMA#MA4626 4.000% 6/01/52 MA4626A 458,917.5500 93.804% $430,483.02 Fixed Income FNMA#MA3238 3.500%11/01/47 MA3238A 38,060.7500 92.729% $35,293.35 Fixed Income FNMA#MA4492 2.000%12/01/51 MA4492A 1,005,871.3300 81.529% $820,076.84 Fixed Income FNMA AL8174 3.5000%2/1/2046 AL8174A 122,490.1700 92.946% $113,849.71 Fixed Income F N MA A L8924 3.0000%12/1/2030 AL8924A 93,420.7500 95.920% $89,609.18 Fixed Income FN MA AL9376 3.0000%8/1/2031 AL9376A 53,247.6500 95.419% $50,808.38 Fixed Income FN MAAL9861 3.000% 8/01/30 AL9861A 126,137.2700 95.691% $120,702.02 Fixed Income FN MAAS4916 3.000% 5/01/30 AS4916A 86,919.6300 95.664% $83,150.79 Fixed Income FNMA AS7729 3.0000%8/1/2046 AS7729A 99,318.7100 89.632% $89,021.35 Fixed Income FNMA AT0293 3.0000%3/1/2043 AT0293A 68,987.2100 90.991% $62,772.15 Fixed Income FNMA BC1486 3.0000%8/1/2046 BC1486A 90,842.5700 89.631% $81,423.10 Fixed Income FNMA BM4913 3.000% 5/01/46 BM4913A 54,004.6100 90.997% $49,142.57 Fixed Income FNMA CA6348 2.500% 7/01/50 CA6348A 185,173.6300 85.300% $157,953.11 Fixed Income FNMA CA6638 2.500% 8/01/50 CA6638A 225,707.8400 85.279% $192,481.39 Fixed Income FNMA CA6801 2.500% 8/01/50 CA6801A 254,471.7600 85.140% $216,657.26 Fixed Income FNMA CA7231 2.500%10/01/50 CA7231A 230,335.7900 85.135% $196,096.37 Fixed Income FNMA FM3494 2.500% 4/01/48 FM3494A 101,121.4400 86.216% $87,182.86 Fixed Income FNMA MA2730 2.500% 8/01/46 MA2730A 216,373.2100 85.844% $185,743.42 Fixed Income FNMA MA27792.0000%10/1/2026 MA2779A 34,059.9300 95.041% $32,370.90 Fixed Income FNMA MA2895 3.000% 2/01/47 MA2895A 59,165.4000 89.383% $52,883.81 Fixed Income FNMA MA3210 3.500% 11/01/47 MA3210A 35,891.5100 92.490% $33,196.06 Fixed Income FNMA MA3313 3.500% 3/01/33 MA3313A 27,194.3800 96.180% $26,155.55 JHIGHMARK PARS: Central Contra Costa Sanitary District 10 CAPITAL MANAGEMENT Attachment 2 Holdings- Reporting as of Trade Date Account:xxxxxx5900- PARS/CCCSD 115P-OPEB As of:31-Dec-2022 Asset Type Asset Name Ticker Shares/Units Price Market Value Fixed Income FNMA MA3332 3.500% 3/01/48 MA3332A 48,246.2300 92.475% $44,615.70 Fixed Income FNMA MA3489 3.500% 10/01/33 MA3489A 24,885.8800 96.173% $23,933.50 Fixed Income FNMA MA3536 4.000% 12/01/48 MA3536A 12,206.2600 95.349% $11,638.55 Fixed Income FNMA MA4123 2.000% 9/01/35 MA4123A 168,516.4100 89.197% $150,311.58 Fixed Income FNMA SUPER LNG 30 YE 3.000% 4/01/52 FS3275A 453,588.6400 87.797% $398,237.22 Fixed Income FNMA UMBS INT 2.000% 8/01/36 CB1446A 182,810.4600 89.193% $163,054.13 Fixed Income FORD CR AUTO OWN TR 1.870% 3/15/24 FCA0024 7,205.9300 99.865% $7,196.20 Fixed Income GOLDMAN SACHS GROUP 1.948% 10/21/27 GSG1927 95,000.0000 87.439% $83,067.05 Fixed Income HARLEY-DAVIDSON MTR 2.450% 5/15/25 HM22425 71,213.2800 99.135% $70,597.29 Fixed Income HILTON GRAND VACA TR 3.540% 2/25/32 HGV3532 174,559.0700 96.647% $168,706.10 Fixed Income HSBC HOLDINGS PLC 1.480% 3/10/26 HHP1426 200,000.0000 98.743% $197,486.00 Fixed Income MAGALLANES INC 5.141% 3/15/52 M155152 165,000.0000 72.697% $119,950.05 Fixed Income MINNESOTA MUT LIFE 8.250% 9/15/25 MML8225 100,000.0000 105.523% $105,523.00 Fixed Income MVW 2020-1 1.740%10/20/37 M211737 108,194.8700 91.066% $98,528.74 Fixed Income NORTHERN TR CORP SUB 6.125% 11/02/32 NTC6132 100,000.0000 105.444% $105,444.00 Fixed Income OKLAHOMA DEV FIN AUT 4.135% 12/01/33 ODF4133 70,000.0000 96.345% $67,441.50 Fixed Income ONE GAS INC SR NT 1.100% 3/11/24 OG11124 121,000.0000 95.886% $116,022.06 Fixed Income PACIFIC GAS&ELEC 3.150% 1/01/26 PGE3126 85,000.0000 92.921% $78,982.85 Fixed Income PACIFIC LIFECORP SR 5.400% 9/15/52 PLS5452 130,000.0000 95.211% $123,774.30 Fixed Income PENN MUTUAL LIFE INS 3.800% 4/29/61 PML3861 175,000.0000 65.951% $115,414.25 Fixed Income PHYSICIANS RLTY LP 3.950% 1/15/28 PRL3928 110,000.0000 91.337% $100,470.70 Fixed Income PRIMERICA INC SR NT 2.800% 11/19/31 PIS2831 70,000.0000 81.395% $56,976.50 Fixed Income SANTANDER AUTO REC 0.890% 12/15/25 SAR0825 122,609.2400 99.250% $121,689.67 Fixed Income SANTANDER RENG AT LN 2.800% 1/26/32 RA2832 230,000.0000 93.285% $214,555.50 Fixed Income SBA TOWER TRUST 1.631% 5/15/51 STT1651 140,000.0000 84.928% $118,899.20 Fixed Income SCHWAB CHARLES F/R 4.000% SCC0049 65,000.0000 86.750% $56,387.50 Fixed Income SOUTHERN CALIF EDISO4.700% 6/01/27 SCE0027 70,000.0000 97.920% $68,544.00 Fixed Income SOUTHERN CALIF GAS 6.350% 11/15/52 SCG6352 100,000.0000 109.390% $109,390.00 Fixed Income SPRINT SPECTRUM CO 4.738% 9/20/29 SSC4729 112,500.0000 98.821% $111,173.63 Fixed Income STANDARD CHARTERED 2.02201% 3/30/26 SC22026 200,000.0000 98.365% $196,730.00 JHIGHMARK PARS: Central Contra Costa Sanitary District 11 CAPITAL MANAGEMENT Attachment 2 Holdings- Reporting as of Trade Date Account:xxxxxx5900- PARS/CCCSD 115P-OPEB As of:31-Dec-2022 Asset Type Asset Name Ticker Shares/Units Price Market Value Fixed Income TIME WARNER CABLE NT 7.300% 7/01/38 TWC7338 105,000.0000 99.197% $104,156.85 Fixed Income TRI-STATE GENERATION 6.000% 6/15/40 TG66040 115,000.0000 90.424% $103,987.60 Fixed Income UNITEDAIRI4-2A 3.750% 9/03/26 UA13726 91,190.1800 92.014% $83,907.73 Fixed Income UNITED STATES TREAS 2.375% 2/15/42 UST2342 785,000.0000 76.352% $599,363.20 Fixed Income UNITED STATES TREAS 3.000% 8/15/52 UST3052 1,170,000.0000 82.391% $963,974.70 Fixed Income UNITED STATES TREAS 3.875% 11/30/27 UST3827 587,000.0000 99.453% $583,789.11 Fixed Income UNITED STATES TREAS 4.000%11/15/42 UST4042 1,455,000.0000 97.906% $1,424,532.30 Fixed Income UNITED STATES TREAS 4.125% 11/15/32 UST4132 825,000.0000 102.047% $841,887.75 Fixed Income UNITED STATES TREAS 4.500% 11/30/24 UST4524 700,000.0000 100.004% $700,028.00 Fixed Income UN IV CALIF REGTS MED 4.132% 5/15/32 UCR4132 140,000.0000 93.156% $130,418.40 Fixed Income UNTD AIR 2013-1 4.300% 8/15/25 UA24325 150,776.8900 93.021% $140,254.17 Fixed Income VERIZON OWNER TR 1.940% 4/20/24 VOT0024 13,963.8200 99.825% $13,939.38 Fixed Income WELLS FARGO&CO F/R 2.393% 6/02/28 WFC2328 110,000.0000 88.259% $97,084.90 Fixed Income WEYERHAEUSER CO DEB 7.375% 3/15/32 WCD7332 105,000.0000 110.538% $116,064.90 Fixed Income WORLD OMNI AUTO RECV 0.870% 10/15/26 WOA0826 115,000.0000 91.789% $105,557.35 Fixed Income BLOCK FINL CORP BDS 5.250% 10/01/25 HRB/25 50,000.0000 99.767% $49,883.50 Fixed Income COMMONWEALTH EDISON 5.875% 2/01/33 EXC/33 115,000.0000 103.000% $118,450.00 Fixed Income HESS CORP HES/33 95,000.0000 107.705% $102,319.75 Fixed Income ASSOCIATED BANC-CORP 4.250% 1/15/25 ASB25 115,000.0000 97.246% $111,832.90 Fixed Income CONSOLIDATED EDISON 5.700% 12/01/36 ED36B 80,000.0000 96.640% $77,312.00 Fixed Income MOTOROLA SOLUTIONS 2.750% 5/24/31 MSI31 150,000.0000 79.954% $119,931.00 Fixed Income PLAINS ALLAMERN PIP 6.700% 5/15/36 PAA36 95,000.0000 96.983% $92,133.85 Fixed Income VERIZON COMMUNICATIO 4.400% 11/01/34 VZ34B 145,000.0000 91.826% $133,147.70 Fixed Income BANK OF AMERICA CORP 4.375% 65,000.0000 84.693% $55,050.45 Fixed Income BANK OF NOVA SCOTIA 90,000.0000 95.875% $86,287.50 Fixed Income BANK OF NY MELLON 3.750% 135,000.0000 80.546% $108,737.10 Fixed Income BRITISH AIRWAYS PLC 3.300% 6/15/34 97,963.4200 84.845% $83,117.06 Fixed Income DELTA AIR LINES 2.500% 12/10/29 92,892.3500 85.024% $78,981.07 Fixed Income FEDERAL EX CORP 1.875% 8/20/35 129,492.9600 81.957% $106,128.55 Fixed Income JPMORGAN CHASE&CO 3.650% 65,000.0000 85.625% $55,656.25 JHIGHMARK PARS: Central Contra Costa Sanitary District 12 CAPITAL MANAGEMENT Attachment 2 Holdings- Reporting as of Trade Date Account:xxxxxx5900- PARS/CCCSD 115P-OPEB As of:31-Dec-2022 Asset Type Asset Name Ticker Shares/Units Price Market Value Fixed Income PNC FINLSVCS GROUP 3.400% 135,000.0000 79.250% $106,987.50 Fixed Income SPIRITAIRLINES 2017-1 82,919.5600 80.911% $67,091.05 Fixed Income STORE CAP CORP 4.500% 3/15/28 115,000.0000 90.190% $103,718.50 Fixed Income TRUIST FINL CORP F/R 5.125% 115,000.0000 81.259% $93,447.85 Cash&Cash Equivalents CASH (56,147.2100) $1.0000 ($56,147.21) Cash&Cash Equivalents FIRSTAMERN GOVTOBLIG FID CLZ#3676 FGZXX 1,855,667.1100 $1.0000 $1,855,667.11 SUBTOTALS Cash&Cash Equivalents $1,799,519.90 Equities $36,230,991.14 Fixed Income $37,205,212.99 TOTALS $75,235,724.03 JHIGHMARK PARS: Central Contra Costa Sanitary District 13 CAPITAL MANAGEMENT Attachment 2 Investment Summary Since Inceptiori CCCSD - Pension Beginning Value 3,359,081.81 Asset Allocation Contributions 7,245,356.09 Withdrawals -12,944,477.21 Total Assets: $41 ,373 Gain (Loss) 1,446,749.66 Interest and Dividends 934,662.17 Period Ending: 12-31-2022 Net Accrued Income 77.63 4Q22 Return: 3.73% Ending Market Value $41,450.15* 1 Year Return: -13.96% Inception-to-Date Return: 2.51 % Inception Date:9-1-2017 Cash Equity Plan target rate of return: 5.14% $1,470 $11,662 3.55T, 1 4 Fixed Income $28,241 68.267, * Ending Market Value differs from total market value on page 15 due to differences in reporting methodology. The above ending market value includes accruals. HIGHMARK® PARS: Central Contra Costa Sanitary District 14 CAPITAL MANAGEMENT Meeting Attachment 2 Asset Allocation - Central Contra Costa Sanitary District Pension As of Fourth Quarter 2022 Current Asset Allocation Equity 28.19% Range: 20%-40% 11,662 Large Cap Core 4.64% IVV iShares Core S&P 500 ETF 1,921 4.28% VGIAX Vanguard Growth & Income Adm 1,773 Large Cap Value 3.51% IVE iShares S&P 500 Value ETF 1,451 1.02% DODFX Dodge & Cox International Stock 1 420 Large Cap Growth 2.97% IVW iShares S&P 500 Growth ETF 1,229 Mid Cap Core 2.61% IWR iShares Russell Mid-Cap ETF 1,079 Small Cap Value 2.06% UBVFX Undiscovered Managers Behavioral Val R6 851 Small Cap Growth 1.94% VBK Vanguard Small-Cap Growth ETF 802 International Core 1.42% VEA Vanguard FTSE Developed Markets ETF 588 International Growth 1.06% MGRDX MFS International Growth R6 439 Emerging Markets 1.29% HHHFX Hartford Schroders Emerging Mkts Eq F 532 Real Estate 1.40% VNQ Vanguard Real Estate ETF 577 Fixed Income 68.26% Range: 50%-80% 28,241 Short-Term 5.03% VFSUX Vanguard Short-Term Investment-Grade Adm 2,082 21.80% AGG iShares Core US Aggregate Bond ETF 9,020 Intermediate-Term 18.98% PTTRX PIMCO Total Return Instl 7,851 21.95% PTRQX PGIM Total Return Bond R6 9,080 High Yield 0.50% PHIYX PIMCO High Yield Instl 207 Cash 3.55% Range: 0%-20% 1,470 3.55% FGZXX First American Government Oblig Z 1,470 TOTAL 100.00% $41,373 JHIGHMARK PARS: Central Contra Costa Sanitary District 15 CAPITAL MANAGEMENT Meeting Attachment 2 Selected Period Performance PARS/CCCSD 115P - PENSION Account xxxxxx5901 Period Ending: 12/31/2022 Year Inception to Date to Date 3 Months (1 Year) 1 Year 3 Years 5 Years 09/01/2017 Cash Equivalents .86 1.48 1.48 .62 1.13 1.11 Lipper Money Market Funds Index .87 1.51 1.51 .63 1.10 Total Fixed Income 1.87 -13.31 -13.31 -2.74 .10 .09 Bloomberg US Aggregate Bd Index 1.87 -13.01 -13.01 -2.71 .02 .00 Total Equities 9.15 -16.93 -16.93 4.27 6.05 7.14 Large Cap Funds 7.76 -17.64 -17.64 6.39 8.41 9.56 S&P 500 Composite Index 7.56 -18.11 -18.11 7.66 9.42 10.55 Mid Cap Funds 9.07 -17.14 -17.14 4.82 6.45 7.64 Russell Midcap Index 9.18 -17.32 -17.32 5.88 7.10 8.38 Small Cap Funds 8.65 -15.97 -15.97 3.01 4.87 6.45 Russell 2000 Index 6.23 -20.44 -20.44 3.10 4.13 5.70 International Equities 14.33 -15.54 -15.54 .19 1.17 2.20 MSCI EAFE Index 17.34 -14.45 -14.45 .87 1.54 2.71 MSCI EMFree Index 9.70 -20.09 -20.09 -2.69 -1.40 -.05 RR:REITS 4.90 -26.12 -26.12 -1.11 3.38 3.33 Wilshire REITlndex 4.05 -26.81 -26.81 -.49 3.35 3.45 Total Managed Portfolio 3.73 -13.96 -13.96 .05 2.28 2.51 CCCSD Pension Benchmark 3.90 -12.35 -12.35 .54 2.52 2.82 Performance Inception: 09/2017 CCCSD Pension Benchmark consists of: 15.5%of S&P 500,3% Russell Midcap,4.5% Russell 2000, 1%Wilshire REIT,2%MSCI EM Free,4% MSCI EAFE,49.25%BC Aggregate, 14%ML 1-3 Yr US Corp/Govt, 1.75% ML US High Yield Mstr II, and 5% Citigroup 1 Month T-Bill Indexes. Returns are gross-of-fees unless otherwise noted. Returns for periods over one year are annualized.The information presented has been obtained from sources believed to be accurate and reliable. Past performance is not indicative of future returns. Securities are not FDIC insured, have no bank guarantee, and may lose value. JHIGHMARK@ PARS: Central Contra Costa Sanitary District 16 CAPITAL MANAGEMENT Attachment 2 Holdings- Reporting as of Trade Date Account:xxxxx5901- PARS/CCCSD 115P- PENSION As of: 31-Dec-2022 Asset Type Asset Name Ticker Shares/Units Price Market Value Cash &Cash Equivalents CASH (73.1200) $1.0000 ($73.12) Cash &Cash Equivalents FI RST AMERN GOVT OBLIG FID CLZ#3676 FGZXX 1,543.1800 $1.0000 $1,543.18 Equities DODGE&COX INTL STOCK FD(CLSD)#1048 DODFX 9.7480 $43.1100 $420.24 Equities HARTFORD SCHRODERS EMRG MKT FD#3150 HHHFX 36.6130 $14.5400 $532.35 Equities ISHARES RUSSELL MIDCAP ETF IWR 16.0000 $67.4500 $1,079.20 Equities ISHARES S&P 500 GROWTH ETF IVW 21.0000 $58.5000 $1,228.50 Equities ISHARES S&P 500 VALUE ETF IVE 10.0000 $145.0700 $1,450.70 Equities ISHARES TR CORE S&P500 ETF IVV 5.0000 $384.2100 $1,921.05 Equities MFS INTERNATIONALGROWTH R6#4805 MGRDX 12.1890 $36.0200 $439.05 Equities UNDISCOVERED MGRS BEHAVL R6#3467 UBVFX 11.2260 $75.7800 $850.71 Equities VANGUARD FTSE DEVELOPED MARKETS ETF VEA 14.0000 $41.9700 $587.58 Equities VANGUARD GRO&INCADMIRAL SHRS#593 VGIAX 22.5360 $78.6600 $1,772.68 Equities VANGUARD REAL ESTATE ETF VNQ 7.0000 $82.4800 $577.36 Equities VANGUARD SMALL CAP GR VIPERS VBK 4.0000 $200.5400 $802.16 Fixed Income ISHARES CORE US AGGREGATE BD ETF AGG 93.0000 $96.9900 $9,020.07 Fixed Income PIMCO HIGH YIELD,INSTL #108 PHIYX 27.5960 $7.5100 $207.25 Fixed Income PI MCO TOTAL RETURN INSTL #35 PTTRX 928.0720 $8.4600 $7,851.49 Fixed Income PRUDENTIAL TOTAL RTRN BD CL Q PTRQX 773.4530 $11.7400 $9,080.34 Fixed Income VNGRDSTTERMINVMTGRADEADM #539 VFSUX 209.2200 $9.9500 $2,081.74 SUBTOTALS Cash&Cash Equivalents $1,470.06 Equities $11,661.58 Fixed Income $28,240.89 TOTALS $41,372.53 JHIGHMARK PARS: Central Contra Costa Sanitary District 17 CAPITAL MANAGEMENT Meeting Attachment 2 CENTRAL CONTRA COSTA SANITARY DISTRICT December 31 , 2022 LARGE CAP EQUITY FUNDS 3-Month YTD 1-Year 3-Year 5-Year 10-Year Fund Name Inception Return Rank Return Rank Return Rank Return Rank Return Rank Return Rank Shares Core S&P 500 ETF (4/17) 7.55 59 -18.13 51 -18.13 51 7.63 33 9.39 24 12.52 14 iShares S&P 500 Value ETF (4/17) 13.55 36 -5.41 46 -5.41 46 6.09 66 7.41 46 10.67 39 Vanguard Growth&Income Adm (12/16) 7.21 69 -17.11 42 -17.11 42 8.11 22 9.36 26 12.60 10 iShares S&P 500 Growth ETF (4/17) 1.41 68 -29.51 50 -29.51 50 7.35 26 10.08 26 13.39 17 S&P 500 TR USD 7.56 -18.11 -- -18.11 -- 7.66 -- 9.42 -- 12.56 -- IL MID CAP iShares Russell Mid-Cap ETF (3/16) 9.14 65 -17.43 78 -17.43 78 5.71 66 6.95 40 10.78 24 Russell Mid Cap TR USD 9.18 -- -17.32 -- -17.32 -- 5.88 -- 7.10 -- 10.96 -- SMALL CAP • Undiscovered Managers Behavioral Val R6 (9/16) 13.77 15 -1.10 7 -1.10 7 11.29 14 7.59 10 11.57 3 Russell 2000 Value TR USD 8.42 -- -14.48 -- -14.48 -- 4.70 -- 4.13 -- 8.48 -- Vanguard Small-Cap Growth ETF (1/22) 3.02 68 -28.40 56 -28.40 56 0.80 80 5.10 71 9.27 73 Russell 2000 Growth TR USD 4.13 -26.36 -- -26.36 -- 0.65 -- 3.51 -- 9.20 -- �!R INTERNATIONAL EQUITY Dodge&Cox International Stock 1 16.01 80 -6.78 29 -6.78 29 1.85 34 1.25 29 4.81 11 Vanguard FTSE Developed Markets ETF (9/18) 17.11 37 -15.35 47 -15.35 47 1.35 28 1.68 34 4.93 20 MFS International Growth R6 14.24 48 -15.02 4 -15.02 4 2.57 16 4.62 14 6.38 23 MSCI EAFE NR USD 17.34 -- -14.45 -- -14.45 -- 0.87 -- 1.54 -- 4.67 -- Hartford Schroders Emerging Mkts Eq F 10.50 39 -22.14 61 -22.14 61 -2.87 52 -1.06 40 1.85 33 IMSCI EM NR USD 9.70 -20.09 -20.09 -2.69 -1.40 1.44 REIT EQUITY Vanguard Real Estate ETF (4/17) 4.32 38 -26.20 61 -26.20 61 -0.43 58 3.66 51 6.41 34 Wilshire REIT Index 4.05 -- -26.81 -- -26.81 -- -0.49 -- 3.35 -- 6.31 -- :• . FUNDS or Shares Core US Aggregate Bond ETF (6/21) 1.69 45 -13.06 34 -13.06 34 -2.80 49 -0.05 39 1.00 39 PIMCO Total Return Instl 1.77 53 -14.09 65 -14.09 65 -2.48 50 0.03 57 1.11 65 PGIM Total Return Bond R6 (5/16) 2.31 22 -14.86 84 -14.86 84 -3.10 78 0.09 52 1.80 15 Vanguard Short-Term Investment-Grade Adm 1.72 16 -5.75 72 -5.75 72 -0.38 46 1.10 34 1.45 19 Bloomberg US Agg Bond TR USID 1.87 -- -13.01 -- -13.01 -- -2.71 -- 0.02 -- 1.06 -- PIMCO High Yield Instl (12/20) 4.19 35 -10.78 51 -10.78 51 -0.75 64 1.85 47 3.55 31 ICE BofA US High Yield Mstr II Index 3.98 -- -11.22 -- -11.22 -- -0.23 -- 2.12 -- 3.98 -- Data Source:Morningstar, SEI Investments Returns less than one year are not annualized. Past performance is not indicative of future returns. The information presented has been obtained from sources believed accurate and reliable. Securities are not FDIC insured, have no bank guarantee and may lose value. JHIGHMARK PARS: Central Contra Costa Sanitary District 18 CAPITAL MANAGEMENT