AGENDA - Wisconsin Board of Commissioners of Public Lands Documents/Board Meeting... ·...

AGENDA July 25, 2016

2:00 P.M. Board of Commissioners of Public Lands

101 E. Wilson Street, 2nd Floor Madison, Wisconsin

Routine Business: 1) Call to Order

2) Approve Minutes – July 5, 2016 (Attachment)

3) Approve Loans (Attachment)

Old Business:

None

New Business:

None

Routine Business: 4) Future Agenda Items

5) Executive Secretary’s Report

• Investment Report – 2nd Quarter 2016

6) Adjourn

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Board of Commissioners of Public Lands Board Meeting - July 25, 2016 of 12

State of Wisconsin Board of Commissioners of Public Lands

BOARD MEETING JULY 25, 2016

AGENDA ITEM 2

APPROVE MINUTES

Attached for approval are the minutes from the July 5, 2016, board meeting.



Board Meeting Minutes July 5, 2016

Present were: Doug La Follette, Commissioner Secretary of State Matt Adamczyk, Commissioner State Treasurer Brad Schimel, Board Chair Attorney General Jonathan Barry, Executive Secretary Board of Commissioners of Public Lands Tom German, Deputy Secretary Board of Commissioners of Public Lands Richard Sneider, Loan Analyst and Board of Commissioners of Public Lands Chief Investment Officer Vicki Halverson, Office Manager Board of Commissioners of Public Lands Brian Hellmer UW – Madison School of Business Mark Ready UW – Madison School of Business

ITEM 1. CALL TO ORDER Board Chair Schimel called the meeting to order at 2:02 p.m. ITEM 2. APPROVE MINUTES – JUNE 20, 2016 MOTION: Board Chair Schimel moved to approve the minutes; Commissioner La Follette seconded the motion. DISCUSSION: None. VOTE: The motion passed 3-0. ITEM 3. APPROVE LOANS Executive Secretary Barry reported that the loans had been reviewed for proper public purpose. Municipality Municipal Type Loan Type Loan Amount 1. Bayfield City General Obligation $101,706.79 Bayfield County Rate: 3.50% Application #: 02016207 Term: 20 years Purpose: Finance water main and street projects 2. Bayfield City General Obligation $140,000.00 Bayfield County Rate: 3.50% Application #: 02016208 Term: 20 years Purpose: Finance water main project 3. Bayfield City General Obligation $90,138.36 Bayfield County Rate: 3.50% Application #: 02016209 Term: 13 years Purpose: Refinance BCPL loan #2016020


Minutes July 5, 2016 Page 2 of 5 Board of Commissioners of Public Lands

4. Bayfield City General Obligation $94,693.72 Bayfield County Rate: 3.50% Application #: 02016210 Term: 18 years Purpose: Refinance BCPL loan #2016023 5. Bayfield City General Obligation $712,599.10 Bayfield County Rate: 3.50% Application #: 02016211 Term: 19 years Purpose: Refinance BCPL loan #2016017 6. Green Lake City General Obligation $175,000.00 Green Lake County Rate: 2.50% Application #: 02016214 Term: 5 years Purpose: Purchase industrial park land 7. Harrison Village General Obligation $250,000.00 Calumet and Outagamie Counties Rate: 2.50% Application #: 02016213 Term: 5 years Purpose: Purchase snow plow truck 8. Ontario Village General Obligation $25,000.00 Vernon County Rate: 2.50% Application #: 02016206 Term: 5 years Purpose: Finance street project 9. Pleasant Springs Town General Obligation $75,000.00 Dane County Rate: 2.50% Application #: 02016217 Term: 1 years Purpose: Finance road projects 10. Waupaca City General Obligation $545,000.00 Waupaca County Rate: 3.00% Application #: 02016212 Term: 6 years Purpose: Finance 2016 capital projects 11. West Allis - West Milwaukee, Et. Al. School General Obligation $3,000,000.00 Milwaukee and Waukesha Counties Rate: 3.00% Application #: 02016215 Term: 10 years Purpose: Finance capital improvement projects TOTAL $5,209,137.97 MOTION: Board Chair Schimel moved to approve the loans; Commissioner La Follette seconded the motion. DISCUSSION: Commissioner Adamczyk expressed concern that loan customers are allowed to refinance existing State Trust Fund Loans (STFL) with a new loan in order to capture lower interest rates. Commissioner La Follette asked if this has to be allowed and if a STFL can be refinanced more than once. Executive Secretary Barry replied that it does not have to be allowed and loans can be refinanced more than once. He added that customers are required to borrow additional funds in order to refinance an existing loan. While the


Minutes July 5, 2016 Board of Commissioners of Public Lands Page 3 of 5 policy could be reviewed and evaluated, not allowing STFLs to be refinanced in-house could result in a loss of income to the portfolio if customers refinance with another lending institution. VOTE: The motion passed 2-1. Commissioner La Follette and Board Chair Schimel voted aye; Commissioner Adamczyk voted no. ITEM 4. DISCUSS DRAFT INVESTMENT POLICY AND ASSET ALLOCATION MODEL Board Chair Schimel introduced Brian Hellmer and Mark Ready from the UW-Madison School of Business and thanked them for their input and assistance in helping the Board’s staff develop an investment policy and asset allocation model. Executive Secretary Barry said that BCPL was granted prudent investment authority by the legislature in 2015. In order to utilize this authority in a careful and prudent manner, the Board must adopt an investment policy. He added that staff was not asking for the Board’s approval at the meeting but rather allow time for them to review the draft policy and submit questions and suggestions. Perhaps within a month the Board would be ready to approve a final policy. Richard Sneider explained that an investment policy would:

• guide future investment decision-making because the Prudent Investment Standard allows for more investment options;

• provide a guide for all future investments and ensure long-term prudence by current and future Commissioners and agency staff;

• create the opportunity for the Board to earn capital gains while reducing risk by establishing a “smoothing fund;” and

• put more Trust Fund principal to work, thereby increasing earnings for the beneficiaries. The draft investment policy presented to the Board was developed with the following in mind:

• beneficiaries rely on a stable, sustainable income distribution to support K-12 public school libraries; • distributions to beneficiaries can only be made from income earnings as the State Constitution requires

School Trust Fund principal be retained in the trust; and • the rate of growth of the Common School Fund’s principal from unclaimed property and fees, fines and

forfeitures has declined, which impacts the amount of monies available for investing. Executive Secretary Barry said that minimum annual earnings distributions of 3.5% of trust fund principal balances had been established as a target to meet beneficiaries’ expectations. He asked Mr. Sneider to explain the smoothing fund. Mr. Sneider said that a segregated fund (i.e., smoothing fund) would be established using income earnings above the targeted 3.5%. These funds could then be used to supplement distributions during years when income does not meet the targeted annual distribution. Commissioner La Follette inquired about the timing of the earnings distribution and whether retaining the earnings in the smoothing fund was permitted. Deputy Secretary German replied that the while the state constitution requires that fund earnings be distributed annually, the distribution occurs mid-year so any earnings received after that time would be retained for future distribution. Mr. Sneider added that once the smoothing fund becomes fully developed, the distributable earnings might very well exceed the 3.5% target and would be based on distributions over the last five years. The Commissioners, staff and professionals from the UW-Madison School of Business discussed the risk/return characteristics surrounding the expanded investment authority and how to mitigate the risks while generating returns.


Minutes July 5, 2016 Page 4 of 5 Board of Commissioners of Public Lands Commissioner Adamczyk expressed his desire that SWIB (State of Wisconsin Investment Board) invest a portion of School Trust Funds for the Board and cited information indicating that their average return on investments over the past 20 years was 7.4%. His preference would be to limit investments in State Trust Fund Loans (STFL) and allow SWIB to invest those funds. Executive Secretary Barry said that the Board was providing a service to local governments and school districts with competitive rate loans while earning a good rate of return with very low risk. He added that the investment policy was necessary whether the School Trust Funds are invested by staff or SWIB. Commissioner La Follette noted that there were two aspects to the July 5 meeting and those included whether the Board agreed with the draft investment policy and, if adopted, establishing an asset allocation model for investments. He asked staff what action the Board needed to take, if any. Board Chair Schimel replied that no action would be taken on the matter at this time and the Commissioners should review the policy further. The Board could take action at a future meeting, perhaps in a month. Commissioner La Follette asked Brian Hellmer and Mark Ready for their comments. Mr. Hellmer said the draft policy takes advantage of the new investment opportunities allowed by the legislation while establishing a fund with limited earnings volatility from year-to-year. In regards to State Trust Fund Loans, the relationship between the earnings and risk in this investment is very favorable and having a portion of the portfolio’s assets in this investment is desirable. While deposits to the Common School Fund from fees, fines and forfeitures, and unclaimed property have not kept pace with inflation, investing in instruments that result in capital gains would help to increase the principal of the Trust Funds. The Commissioners discussed how best to diversify the fund investments and whether that would be managed by staff or an outside entity. Mr. Sneider said that cost is an important factor when retaining an investment firm to manage the Board’s assets but a passively-managed index fund could be a cost effective alternative. Board Chair Schimel noted that staff had record investment earnings over the last couple years in spite of the low interest rate environment. He asked what type of activity, other than low interest rates, would trigger the use of the smoothing account. Mr. Sneider replied that investing a significant portion of Trust Funds in non-incoming producing assets. Deputy Secretary German noted that 10-year Treasury bond interest rates are at an all-time low and the expanded investment authority provides additional options for investing in instruments that earn higher rates of return. Commissioner Adamczyk said statutes allow for the sale of State Trust Fund Loans and asked about the logistics involved should the Board choose to sell them. Mr. Sneider said the loans could be packaged into a security and sold to an investor. Commissioner Adamczyk said he had talked to officials in the Governor’s office and Legislature about the possibility of BCPL investing in real estate; specifically, constructing or purchasing buildings that would house state agencies and then leasing the building to state agencies. Board Chair Schimel noted that any lease revenues would be offset by building maintenance costs. Asked if legislation had been drafted, Commissioner Adamczyk said no but he had discussions with a Legislator who would be willing to assist with that. The Commissioners and staff discussed the pros and cons of such a venture. ITEM 5. FUTURE AGENDA ITEMS None. ITEM 6. EXECUTIVE SECRETARY’S REPORT Nothing to report.


Minutes July 5, 2016 Board of Commissioners of Public Lands Page 5 of 5 ITEM 7. ADJOURN MOTION: Commissioner Adamczyk moved to adjourn the meeting; Commissioner La Follette seconded the motion. The meeting adjourned at approximately 3:35 p.m. Jonathan B. Barry, Executive Secretary These minutes have been prepared from a recording of the meeting. The summaries have not been transcribed verbatim. Link to audio recording: ftp://doaftp1380.wi.gov/doadocs/BCPL/2016-07-05_BCPL-BoardMtgRecording.mp3


ftp://doaftp1380.wi.gov/doadocs/BCPL/2016-07-05_BCPL-BoardMtgRecording.mp3

State of Wisconsin Board of Commissioners of Public Lands BOARD MEETING JULY 25, 2016 AGENDA ITEM 3 APPROVE LOANS Municipality Municipal Type Loan Type Loan Amount

1. Brandon Village General Obligation $50,000.00 Fond Du Lac County Rate: 3.00% Application #: 02017008 Term: 10 years Purpose: Purchase sewer jetter 2. Grant Town General Obligation $218,200.00 Clark County Rate: 3.00% Application #: 02016218 Term: 10 years Purpose: Purchase road grader 3. Liberty Town General Obligation $234,000.00 Manitowoc County Rate: 2.50% Application #: 02017001 Term: 3 years Purpose: Finance road construction and repair 4. Marion City General Obligation $250,000.00 Shawano and Waupaca Rate: 3.00% Counties Application #: 02017009 Term: 10 years Purpose: Purchase property and reconstruct alley/parking lot 5. Menasha School General Obligation $3,000,000.00 Calumet, Outagamie and Rate: 3.00% Winnebago Counties Application #: 02017003 Term: 10 years Purpose: Finance property acquisition and facility improvements 6. Mishicot Village General Obligation $25,500.00 Manitowoc County Rate: 2.50% Application #: 02017007 Term: 5 years Purpose: Finance road maintenance 7. Richfield Village General Obligation $1,000,000.00 Washington County Rate: 3.50% Application #: 02017002 Term: 20 years Purpose: Construct municipal building 8. Shiocton Village General Obligation $45,000.00 Outagamie County Rate: 3.00% Application #: 02017005 Term: 7 years Purpose: Finance fire hall updates


Board of Commissioners of Public Lands Board Meeting – July 25, 2016 Agenda Item 3 – Approve Loans Page 2 Municipality Municipal Type Loan Type Loan Amount 9. Summit Village General Obligation $325,000.00 Waukesha County Rate: 2.50% Application #: 02017004 Term: 5 years Purpose: Finance 2016 capital improvements 10. Whiting Village General Obligation $70,000.00 Portage County Rate: 2.50% Application #: 02017006 Term: 2 years Purpose: Finance street improvements TOTAL $5,217,700.00



BOARD MEETING JULY 25, 2016

AGENDA ITEM 5 EXECUTIVE SECRETARY’S REPORT

BCPL Trust Fund Investment Management Investment Report - Second Quarter 2016

Q2 Investment Highlights and Outlook Interest rates continued to plummet during the second quarter, with the yield on the benchmark 10 year Treasury declining from 1.77% to 1.47%. Immediately following the end of the quarter, rates plunged to a record low of 1.323% (nearly 1% lower than seen at the end of 2015), and have since recovered to around 1.58%. Treasury securities continue to provide a safe haven for institutional investors worldwide, while growing concerns about a slowdown in global economic activity continues to provide downward pressure on market interest rates. Brexit and further acts of terrorism have contributed to interest rate volatility. Loan demand remains strong and relative yields on the loan portfolio continue to impress. The average interest rate on loans is 3.85% with an average maturity of slightly less than 6.5 years. A comparable Treasury security yielded only 1.17% at the end of the second quarter. With interest rates remaining near historic lows (causing bond prices to be relatively high), staff finds it difficult to uncover good values in the current municipal and farm credit bond markets. Approval of a new investment policy may provide additional opportunities for investment of cash reserves and increasing expected investment returns. Summary and Benchmark Comparison The overall expected yield of funds managed by BCPL was 3.39% at the end of second quarter, a slight increase against the backdrop of plummeting worldwide interest rates. This result was primarily due to our investment in Wisconsin Center District bonds and an increase in the total BCPL State Trust Fund Loan portfolio, which have excellent yields relative to cash held within the State Investment Fund. The best measure for comparing investment performance against our benchmark is the SEC yield, which provides a standard methodology that is available for the mutual funds and bond market indexes that comprise our benchmark. Adjustments to account for our better average credit rating and longer maturity increase the BCPL yield to 1.22 % greater than benchmark returns. Attachment – BCPL Investment Summary 2nd Quarter 2016

Executive Summary

BCPL investment performance continues to exceed benchmark returns. After adjusting returns for differences in both credit quality and average maturity, BCPL-managed portfolios had a yield 1.22% more than our benchmark. This difference in yield means that beneficiaries earned $3.27 million more than would have been generated by an investment in the benchmark portfolio during the second quarter. This investment performance equates to an annualized $13.1 million in interest earnings above benchmark returns that is attributable to the BCPL asset management team. Not included in the above income calculations is a 19.6% increase in total unrealized gains within the bond portfolio during the second quarter. Total unrealized gains now total over $23 million, an increase of 4.6% above the initial cost of these investments.


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ee re

ason

s: B

CPL

inve

sts d

irect

ly in

tax-

exem

pt b

onds

whe

n av

aila

ble

at a

ccep

tabl

e te

rms;

a si

gnifi

cant

por

tion

of lo

ans m

ade

thro

ugh

the

BCPL

Sta

te T

rust

Fun

d Lo

an P

rogr

am fu

nd p

roje

cts t

hat w

ould

qua

lify

as ta

x-ex

empt

; and

cur

rent

tax-

exem

pt b

ond

yiel

ds a

re a

n im

port

ant f

acto

r in

the

cons

truc

tion

of lo

an p

rogr

am in

tere

st ra

tes.

The

re a

re th

ree

bond

m

utua

l fun

ds th

at in

vest

prim

arily

in W

iscon

sin S

tate

and

Mun

icip

al B

onds

, inv

estm

ents

that

are

sim

ilar t

o th

e se

curit

ies a

ppro

ved

for B

CPL

inve

stm

ent.

Thes

e fu

nds a

re sp

onso

red

by W

ells

Farg

o, N

uvee

n an

d N

atio

nwid

e Zi

egle

r, an

d th

ere

are

signi

fican

t diff

eren

ces b

etw

een

the

man

agem

ent o

f the

se m

utua

l fun

ds a

nd B

CPL

trus

t fun

ds.

All t

hree

mut

ual f

unds

are

lim

ited

to ta

x-ex

empt

inve

stm

ents

, a u

nive

rse

of se

curit

ies t

hat g

ener

ally

pro

vide

low

er y

ield

s tha

n th

e ta

xabl

e in

stru

men

ts fa

vore

d by

BCP

L. O

n th

e ot

her h

and,

all

thre

e of

thes

e fu

nds i

nves

t sub

stan

tial a

mou

nts i

n bo

nds t

hat h

ave

cons

ider

able

def

ault

risk

incl

udin

g bo

nds i

ssue

d by

the

Com

mon

wea

lth o

f Pue

rto

Rico

, com

mun

ity d

evel

opm

ent

reve

nue

bond

s, ho

spita

l rev

enue

bon

ds, a

nd o

ther

bon

ds ty

pes n

ot a

vaila

ble

with

in th

e ris

k pa

ram

eter

s of t

he B

CPL

inve

stm

ent a

utho

rity.

Ove

rall,

a w

eigh

ting

of 3

0% fo

r thi

s ben

chm

ark

com

pone

nt is

app

ropr

iate

giv

en th

e le

vel o

f Tru

st

Fund

inve

stm

ent i

n ta

x-ex

empt

inst

rum

ents

and

the

influ

ence

of t

ax-e

xem

pt b

ond

rate

s on

the

inte

rest

rate

s cha

rged

with

in th

e lo

an p

rogr

am.

5 Cas

h - C

ash

and

cash

equ

ival

ents

incl

udes

all

inve

stm

ents

in th

e St

ate

Inve

stm

ent F

und

and

Farm

Cre

dit a

djus

tabl

e ra

te n

otes

, and

all

fund

s man

aged

by

ADM

in F

DIC-

insu

red

depo

sit a

ccou

nts.

7 S&

P U

.S. T

reas

ury

Bill

Inde

x - T

he U

.S. T

reas

ury

Bill

Inde

x re

pres

ents

the

aver

age

cash

pos

ition

hel

d by

the

Trus

t Fun

ds th

roug

hout

the

year

, and

is in

clud

ed b

ecau

se B

CPL

mai

ntai

ns si

gnifi

cant

leve

ls of

liqu

idity

nee

ded

to fu

nd e

xpec

ted

trus

t fun

d lo

an d

eman

d ov

er th

e ne

xt 3

-6 m

onth

s. T

he a

mou

nt o

f por

tfol

io li

quid

ity (c

ash)

var

ies s

igni

fican

tly th

orou

ghou

t the

yea

r, an

d is

impa

cted

by

fact

ors i

nclu

ding

the

inte

rest

rate

env

ironm

ent,

the

abse

nce

of p

repa

ymen

t pen

altie

s w

ithin

the

loan

pro

gram

, and

the

stat

utor

y pa

ymen

t str

uctu

re re

quiri

ng a

nnua

l loa

n pa

ymen

ts o

n M

arch

15

each

yea

r. Th

e S&

P U

.S T

reas

ury

Bill

inde

x is

a m

arke

t wei

ghte

d in

dex

that

incl

udes

all

U.S

. Tre

asur

y Bi

lls w

ith m

atur

ities

rang

ing

from

0-1

2 m

onth

s. B

ecau

se a

n in

dex

is no

t a m

anag

ed p

ortf

olio

, but

onl

y a

colle

ctio

n of

secu

ritie

s with

in a

spec

ific

set o

f crit

eria

, man

agem

ent e

xpen

ses a

re n

ot in

clud

ed.

Ove

rall,

a w

eigh

ting

of 1

0% fo

r thi

s ben

chm

ark

com

pone

nt is

ap

prop

riate

giv

en th

e av

erag

e le

vels

of c

ash

held

by

the

Trus

t Fun

ds th

roug

hout

the

year

.

9 Tot

al R

etur

n An

alys

is -

A to

tal r

etur

n an

alys

is in

clud

ing

the

perio

dic

chan

ge in

ass

et v

alue

s in

addi

tion

to e

arni

ngs w

ould

pro

vide

a m

ore

com

preh

ensiv

e an

d ac

cura

te c

ompa

rison

bet

wee

n th

e re

turn

s gen

erat

ed b

y BC

PL m

anag

ed fu

nds

and

our b

ench

mar

k. H

owev

er, t

otal

retu

rn a

naly

sis re

quire

s acc

urat

e as

set v

alua

tion

in o

rder

to p

rovi

de a

reas

onab

le b

asis

for m

easu

ring

man

agem

ent p

erfo

rman

ce.

A sig

nific

ant p

ortio

n of

BCP

L m

anag

ed a

sset

s are

inve

sted

in lo

ans t

o m

unci

palit

ies a

nd sc

hool

dist

ricts

thro

ugh

the

BCPL

Sta

te T

rust

Fun

d Lo

an P

rogr

am.

BCPL

has

nev

er so

ld a

trus

t fun

d lo

an a

nd h

as a

lway

s hel

d th

ese

inve

stm

ents

to m

atur

ity.

Ther

e is

curr

ently

no

form

ula

or m

odel

ava

ilabl

e to

det

erm

ine

an a

ccur

ate

mar

ket v

alue

of t

he lo

an p

ortf

olio

. Sh

ould

BCP

L se

ll lo

ans i

n th

e fu

ture

and

est

ablis

h a

seco

ndar

y m

arke

t in

BCPL

Sta

te T

rust

Fun

d Lo

ans,

tota

l ret

urn

anal

ysis

may

pro

vide

an

impr

ovem

ent o

ver t

he c

urre

nt m

etho

d of

yie

ld

com

paris

on a

s the

mod

el fo

r mea

surin

g B

CPL

inve

stm

ent p

erfo

rman

ce a

gain

st th

e ap

prop

riate

ben

chm

arks

.

2 SE

C Yi

eld

- The

SEC

yie

ld sh

ould

not

be

conf

used

with

the

expe

cted

yie

ld o

n in

vest

ed fu

nds.

The

SEC

yie

ld w

ill v

ary

subs

tant

ially

with

mar

ket c

ondi

tions

bec

ause

it is

cal

cula

ted

usin

g th

e cu

rren

t mar

ket v

alue

of a

sset

s, an

d th

e va

lue

of

fixed

inco

me

asse

ts fl

uctu

ates

with

mar

ket i

nter

est r

ates

. Fo

r exa

mpl

e, a

lthou

gh in

tere

st p

aym

ents

pro

duce

d by

an

indi

vidu

al b

ond

rem

ain

cons

tant

follo

win

g th

e iss

uanc

e of

the

bond

, the

SEC

yie

ld o

n th

is bo

nd w

ill in

crea

se w

ith m

arke

t in

tere

st ra

tes s

olel

y be

caus

e th

e va

lue

of th

e bo

nd d

ecre

ases

(yie

ld =

inco

me/

valu

e).

If al

l bon

ds a

re h

eld

to m

atur

ity, t

he a

ctua

l ret

urn

to th

e in

vest

or w

ould

equ

al th

e "y

ield

to m

atur

ity a

t cos

t ".

This

calc

ulat

ion

is no

t pro

vide

d fo

r be

nchm

ark

com

pone

nts a

nd is

ther

efor

e no

t inc

lude

d in

this

com

paris

on.

Man

y in

vest

ors p

refe

r to

use

"yie

ld to

wor

st",

whi

ch c

alcu

late

s the

retu

rn u

sing

the

low

er o

f the

"yie

ld to

cal

l" an

d "y

ield

to m

atur

ity".

The

mos

t app

ropr

iate

m

etho

d to

com

pare

bon

d po

rtfo

lios i

s to

look

at T

otal

Ret

urn ,

whi

ch c

ombi

nes b

oth

inco

me

and

chan

ges i

n th

e m

arke

t val

ue o

f the

und

erly

ing

asse

ts (s

ee n

ote

8 be

low

). B

CPL

does

not

hav

e th

e ab

ility

to u

se T

otal

Ret

urn

as a

met

hod

of

com

paris

on b

ecau

se th

e Tr

ust F

und

Loan

Por

tfol

io h

as n

ever

bee

n va

lued

. Ra

ther

, the

SEC

Yie

ld is

use

d fo

r com

paris

on b

ecau

se it

is a

stan

dard

ized

met

hodo

logy

for c

alcu

latin

g yi

eld

as re

quire

d by

the

Secu

ritie

s and

Exc

hang

e Co

mm

issio

n fo

r all

mut

ual f

unds

and

pro

vide

s a m

eans

to c

ompa

re B

CPL

man

aged

fund

s to

a sim

ple

benc

hmar

k. T

he S

EC y

ield

is a

clo

se a

ppro

xim

atio

n to

the

net y

ield

to m

atur

ity o

f the

fund

usin

g th

e cu

rren

t mar

ket v

alue

of t

he fu

nd, a

nd is

ca

lcul

ated

as t

he y

ield

to th

e in

vest

or (a

fter

fund

exp

ense

s and

fees

) dur

ing

the

prev

ious

30

days

ass

umin

g al

l bon

ds a

re h

eld

to m

atur

ity.

The

SEC

Yie

ld fo

r the

Sta

te In

vest

men

t Fun

d is

for t

he m

ost r

ecen

t mon

th a

vaila

ble.

Not

es to

BCP

L Be

nchm

ark

Com

paris

on:


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