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4th Quarter
City of Sebastian Police Officers' Retirement Systemas of December 31, 2018Quarterly Summary of Relevant FactsDistribution of Assets:Other Important Facts:Equity Total Portfolio $14,063,687 -Large Cap. Value $3,049,901Total Gain/(Loss) - Gross-of-Fees ($1,567,789) -Large Cap. Growth $2,705,756Total Fees ($19,222) -SMID Cap. Value $595,894Total Gain/(Loss) - Net-of-Fees ($1,587,010) -SMID Cap. Growth $677,766 -International Value $651,002Highland - Large Cap Value Highland - Large Cap Growth -International Growth $952,867Total Assets $3,049,901 Total Assets $2,705,756 Total Equity$8,633,186 Gain or (Loss) - Gross-of-Fees ($410,726) Gain or (Loss) - Gross-of-Fees ($533,433)Fixed$3,609,110 Fees$0 Fees$0MLPs$544,330 Gain or (Loss) - Net-of-Fees ($410,726) Gain or (Loss) - Net-of-Fees ($533,433)Private Real Estate$696,012Cash$581,049Boston Partners - SMID Value Fiera Capital - SMID GrowthTotal Portfolio$14,063,687Total Assets $595,894 Total Assets $677,766Gain or (Loss) - Gross-of-Fees ($145,244) Gain or (Loss) - Gross-of-Fees ($158,731)Distribution by Percentages:Policy Current RangeFees($1,859) Fees ($1,572)Equity BreakdownGain or (Loss) - Net-of-Fees ($147,103) Gain or (Loss) - Net-of-Fees ($160,304) -Large Cap. Value 21.25% 21.69% 15.00 - 25.00% -Large Cap. Growth 21.25% 19.24% 15.00 - 25.00%Highland - Intl Value Renaissance - International Growth -SMID Cap. Value 5.00% 4.24% 2.50 - 7.50% Total Assets $651,002 Total Assets $952,867 -SMID Cap. Growth 5.00% 4.82% 2.50 - 7.50% Gain or (Loss) - Gross-of-Fees ($110,237) Gain or (Loss) - Gross-of-Fees ($188,624) -International Value 5.00% 4.63% 2.50 - 7.50% Fees$0 Fees ($1,876) -International Growth 7.50%6.78%5.00 - 10.00%Gain or (Loss) - Net-of-Fees ($110,237) Gain or (Loss) - Net-of-Fees ($190,500) Total Equity 65.00% 61.39%40.00 - 70.00%Fixed25.00% 25.66%20.00 - 35.00%Highland - Fixed Income Center Coast - MLPMLPs5.00% 3.87%0.00 - 10.00%Total Assets $3,609,110 Total Assets $544,330Private Real Estate 5.00% 4.95%0.00 - 10.00%Gain or (Loss) - Gross-of-Fees $60,579 Gain or (Loss) - Gross-of-Fees ($102,885)Cash0.00%4.13%Fees$0 Fees ($817)Total Portfolio 100.00% 100.00%Gain or (Loss) - Net-of-Fees $60,579 Gain or (Loss) - Net-of-Fees ($103,702)Receipt & Disbursement Intercontinental - Private Real EstateTotal Assets $581,049 Total Assets $696,012Gain or (Loss) - Gross-of-Fees $1,497 Gain or (Loss) - Gross-of-Fees $20,015Fees($7,767) Fees ($5,330)Gain or (Loss) - Net-of-Fees ($6,271) Gain or (Loss) - Net-of-Fees $14,685The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results.Page 1 City of Sebastian Police Officers' Retirement Systemas of December 31, 2018Breakdown of ReturnsDOMESTIC EQUITYGross-of-Fees Net-of-FeesHighland - Large Cap ValueReturn Return Russell 1000 Value PSN Money ManagersQuarter (11.86) (11.86) (11.72) (12.70)1 Year (7.33) (8.01) (8.27) (7.95)Since 7/31/2017 0.53 0.00 (1.19) NAHighland - Large Cap GrowthRussell 1000 Growth PSN Money ManagersQuarter (16.47) (16.47) (15.89) (15.14)1 Year (4.67) (5.15) (1.51) (2.19)Since 7/31/2017 4.10 3.73 6.66 NABoston Partners - SMID ValueRussell 2500 Value PSN Money ManagersQuarter (19.58) (19.80) (17.12) (16.37)1 Year (18.49) (19.53) (12.36) (12.41)Since 7/31/2017 (9.00) (9.95) (4.17) NAFiera Capital - SMID GrowthRussell 2500 Growth PSN Money ManagersQuarter (18.96) (19.13) (20.08) (17.54)1 Year (8.71) (9.40) (7.47) (4.96)Since 7/31/2017 1.79 1.15 1.91 NAINTERNATIONAL EQUITYHighland - Intl Value MSCI EAFE (net)Quarter (14.48) (14.48) (12.54)1 Year (14.43) (15.01) (13.79)Since 7/31/2017 (6.89) (7.33) (5.66)Renaissance - International GrowthMSCI AC Wd x US (net)Quarter (16.51) (16.66) (11.46)1 Year (19.49) (20.02) (14.19)Since 7/31/2017 (11.69) (12.18) (5.52)FIXED INCOMEHighland - Fixed Income BC AggQuarter 1.71 1.71 1.641 Year 0.13 (0.52) 0.01Since 7/31/2017 0.73 0.27 0.58ALTERNATIVESCenter Coast - MLPAlerian MLP IndexQuarter (15.89) (16.00) (17.30)1 Year (14.23) (14.67) (12.42)Since 7/31/2017 (13.23) (13.60) (12.28)The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results.Page 2 City of Sebastian Police Officers' Retirement Systemas of December 31, 2018Breakdown of ReturnsIntercontinental - Private Real EstateNCREIF Index NCREIF ODCE BC AggQuarter 2.15 1.36 1.37 1.76 1.641 Year 11.46 9.74 6.71 8.35 0.01Since 9/30/2017 11.51 9.89 6.85 8.39 0.32TOTAL RETURNTime-Weighted Returns (TWR)Policy Index (1) Policy Index (2)Quarter (10.20) (10.32) (9.72) (9.72)1 Year (6.31) (7.07) (4.90) (4.90)3 Year 4.86 4.18 5.42 5.63 5 Year 4.51 3.91 5.18 5.72Since 1/31/2011 5.82 5.23 6.94 7.5516 Years 5.55 4.89 6.27TOTAL RETURNDollar-Weighted Returns (IRR)Actuary Rate CPI +4Quarter (10.33) 1.77 1.221 Year (7.24) 7.30 5.993 Year 4.06 7.30 6.035 Year 3.83 7.30 5.53Since 1/31/2011 5.18 7.30 5.73Policy Index (1) Composition Policy Index (2) Composition - 21.25% Russell 1000 Value / 21.25% Russell 1000 Growth / 5% Russell 2500 Value / 5% Russell 2500 Growth / 5% MSCI EAFE (net) / 7.5% MSCI AC Wd x US (net) / 25% BC Aggregate / 5% Alerian MLP / 5% NCREIF for periods since 7/31/2017- 60% S&P 500 / 40% BC Aggregate for periods since 12/31/2015- 60% S&P 500 / 40% BC Aggregate for periods since 6/30/2011- 48% S&P 500 / 49% BC Gov/Credit / 3% Citi 3 Month T-Bill for periods prior to 6/30/2011- 21.25% Russell 1000 Value / 21.25% Russell 1000 Growth / 5% Russell 2500 Value / 5% Russell 2500 Growth / 5% MSCI EAFE (net) / 7.5% MSCI AC Wd x US (net) / 25% BC Aggregate / 5% Alerian MLP / 5% NCREIF for periods since 7/31/2017- 50% S&P 500 / 10% MSCI EAFE (net) / 40% BC Aggregate for periods since 12/31/2015- 50% S&P 500 / 10% MSCI EAFE (net) / 40% BC Aggregate for periods since 6/30/2011- 48% S&P 500 / 49% BC Gov/Credit / 3% Citi 3 Month T-Bill for periods prior to 6/30/2011The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results.Page 3 City of Sebastian Police Officers' Retirement Systemas of December 31, 2018Trailing ReturnsManager vs Benchmark: Return through December 2018(not annualized if less than 1 year)Return-10-505101 quarter 1 year 3 years 5 years 10 years 16 yearsSebastian Police (Gross)Sebastian Police (Net)Sebastian Police Policy IndexManager vs Benchmark: Return through December 2018(not annualized if less than 1 year)Sebastian Police (Gross)Sebastian Police (Net)Sebastian Police Policy Index1 quarter1 year3 years5 years10 years16 years-10.20%-6.31%4.86%4.51%7.17%5.55%-10.32%-7.07%4.18%3.91%6.54%4.89%-9.72%-4.90%5.42%5.18%8.20%6.27%The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results.Page 4 City of Sebastian Police Officers' Retirement Systemas of December 31, 2018Risk/Return - 5 Year AnalysisManager Performance20-Quarter Moving Windows, Computed QuarterlyJanuary 2014 - December 2018100105110115120125130135140145Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018Sebastian Police (Gross)Sebastian Police Policy IndexManager Risk/ReturnSingle ComputationJanuary 2014 - December 2018Return0%1%2%3%4%5%6%Standard Deviation0% 1% 2% 3% 4% 5% 6% 7% 8%Sebastian Police (Gross)Market Benchmark:Sebastian Police Policy IndexCash Equivalent:Citigroup 3-month T-billReturn & Risk MeasurementsJanuary 2014 - December 2018: Summary StatisticsSebastian Police (Gross)Sebastian Police Policy IndexReturnExcessReturnvs.MarketStandardDeviationBetavs.MarketMaximumDrawdownUpCapturevs.MarketDownCapturevs.MarketAlphavs.MarketSharpeRatioR-Squaredvs.Market4.51%-0.66%6.97%1.02-10.20%96.70%110.88%-0.73%0.5693.87%5.18%0.00%6.61%1.00-9.72%100.00%100.00%0.00%0.69100.00%The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results.Page 5 City of Sebastian Police Officers' Retirement Systemas of December 31, 2018Risk/Return - 16 Year AnalysisManager Performance20-Quarter Moving Windows, Computed QuarterlyJanuary 2003 - December 2018100150200250300Q4 2002 Q4 2005 Q4 2007 Q4 2009 Q4 2011 Q4 2013 Q4 2015 Q4 2018Sebastian Police (Gross)Sebastian Police Policy IndexManager Risk/ReturnSingle ComputationJanuary 2003 - December 2018Return0%1%2%3%4%5%6%7%Standard Deviation0% 1% 2% 3% 4% 5% 6% 7% 8% 9%Sebastian Police (Gross)Market Benchmark:Sebastian Police Policy IndexCash Equivalent:Citigroup 3-month T-billReturn & Risk MeasurementsJanuary 2003 - December 2018: Summary StatisticsSebastian Police (Gross)Sebastian Police Policy IndexReturnExcessReturnvs.MarketStandardDeviationBetavs.MarketMaximumDrawdownUpCapturevs.MarketDownCapturevs.MarketAlphavs.MarketSharpeRatioR-Squaredvs.Market5.55%-0.71%7.84%1.02-22.97%96.75%110.09%-0.78%0.5595.65%6.27%0.00%7.52%1.00-21.59%100.00%100.00%0.00%0.67100.00%The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results.Page 6 City of Sebastian Police Officers' Retirement Systemas of December 31, 2018IPS Compliance Check ListGUIDELINESOBJECTIVESEquity PortfolioTotal Portfolio5 yearsSince InceptionListed on recognized exchangeExceed Target Index No NoSingle issue not to exceed 5% at market value forExceed Target Rate of Return (7.3%)* No No each equity in each separately managed portfolioExceed CPI + 4% *No NoTotal equity portfolio < 70.00% & > 40.00% of total fund *Performance compared to dollar-weighted net returns at marketHighland Capital Large Cap ValueRenaissance International GrowthLarge Capitalization Value Equity PortfolioInternational Growth Portfolio Market Value < 25.00% & > 15.00% of total fund Market Value < 10.00% & > 5.00% of total fund Performance (Since 8/31/2017)3 yearsSince Inception Performance (Since 8/31/2017)5 yearsSince Inception Rank in the Top 50% of manager universe N/A Yes Return > MSCI World Ex US (Net) N/A No Return > Russell 1000 Value N/A YesHighland Capital Large Cap GrowthHighland Fixed IncomeLarge Capitalization Growth Equity PortfolioFixed Income Portfolio Market Value < 25.00% & > 15.00% of total fund Market Value < 35.00% & > 20.00% of total fund Performance (Since 8/31/2017)3 yearsSince Inception Performance (Since 3/31/2014)3 yearsSince Inception Rank in the Top 50% of manager universe N/A No Return > BC AggN/A Yes Return > Russell 1000 Growth N/A No U.S. Government / Agency or U.S. Corporations Bonds rated "A" or betterBoston Partners SMID Cap Value Single corporate issuer not exceed 10% of bond portfolioSMID Capitalization Value Equity Portfolio (except U.S. Government/Agency) Market Value < 7.50% & > 2.50% of total fund Performance (Since 8/31/2017)3 yearsSince InceptionCenter Coast MLPs Rank in the Top 50% of manager universe N/A NoMaster Limited Partnerships Return > Russell Mid Value N/A No Market Value < 10.00% & > 0.00% of total fund Performance (Since 8/31/2017)5 yearsSince InceptionFiera Capital SMID Cap Growth Return > Alerian MLPN/ANoSMID Capitalization Growth Equity Portfolio Market Value < 7.50% & > 2.50% of total fundIntercontinental Performance (Since 8/31/2017)5 yearsSince InceptionCore Private Real Estate Rank in the Top 50% of manager universe N/A No Market Value < 10.00% & > 0.00% of total fund Return > Russell Mid Growth N/A No Performance (Inception 10/31/2017)3 yearsSince Inception Return > NCREIF Property Index N/A YesHighland Capital International Value Return > NCREIF ODCE Index N/A YesInternational Value Equity Portfolio Return > BC Agg IndexN/A Yes Market Value < 7.50% & > 2.50% of total fund Performance (Since 8/31/2017)3 yearsSince Inception Return > MSCI EAFE (Net) N/A NoIn ComplianceIn ComplianceYesYesYesYesYesYesYesYesYesYesYesYesYesYesYesThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results.Page 7 City of Sebastian Police Officers’ Retirement SystemQUARTERLY PERFORMANCE EVALUATIONPrepared for:Charles H. Mulfinger, II, CIMA®Managing Director, Wealth ManagementInstitutional Consulting DirectorAlternative Investment Director100 North Tampa Street, Suite 3000Tampa, FL 33602800-282-0655, ext. 2061 / 813-227-2061Graystone Consulting TampaAs of December 31, 2018David A. Wheeler, CFP®, CIMA®Senior Vice PresidentInstitutional Consulting DirectorInstitutional ConsultantScott Owens, CFA®, CIMA®Associate Vice PresidentInstitutional Consultant Table of Contents Capital Markets OverviewTab 1 Performance ReportsTab 2 Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. This slide sourced from Market Performance section. WEALTH MANAGEMENT INVESTMENT RESOURCES | CHARTBOOK | MARKET PERFORMANCE Capital Markets Overview: 4Q 2018 Introduction As of 4Q 2018 Source: FactSet, Bloomberg, Morgan Stanley & Co. Research, Morgan Stanley Wealth Management GIC •To close out 2018, the S&P 500 recorded its worst quarter since 2011, and in December, its worst month since February 2009. From its peak close of 2930 on September 20, the index fell as much as 19.78%, nearly ending the historic bull market that began in 2009. International markets fared slightly better than the US, but overall it was a dismal quarter for markets. CIO and MS & Co.’s Chief US Equity Strategist, Mike Wilson, has maintained his price target of 2,750 for the S&P 500 into 2019 and expects range-bound trading over the next year, as financial conditions continue to tighten and corporate earnings growth decelerates. •US equities fell significantly in the fourth quarter, as the S&P 500 dropped 13.52% and all but one of the 11 sectors finished in the red. Utilities was the exception, gaining 1.36% as defensive leadership prevailed in difficult market conditions. Other outperformers included Real Estate and Consumer Staples, which fell 3.84% and 5.22%, respectively. Energy was hit the hardest, falling 23.78%. Tech, Industrials, and Consumer Discretionary all underperformed significantly as well, falling 17.34%, 17.32%, and 16.42%, respectively. Other major US indices were negative on the quarter; the Dow Jones lost 11.31% and the NASDAQ erased 17.28%. •International outperformed slightly in the fourth quarter, as divergences in US and world faded in the face of US poor performance. However, international markets remain under pressure as investors weigh weakening economic data in China, Europe, and Japan. The MSCI EAFE Index (a benchmark for international developed markets) fell 12.50% for US-currency investors. The MSCI Europe Index fell 12.68% for US-currency investors, while the MSCI Japan dropped 14.20%. Japanese equity indices, the Nikkei and TOPIX, both dropped more than 20% during the quarter in local currency terms. •The bond market posted mild gains in the fourth quarter during an equity market route. The Bloomberg Barclays US Aggregate Bond Index, a general measure of the bond market, rose 1.64%. •Morgan Stanley & Co. economists expect US real GDP will be 2.9% in 2018 amid an environment of 3.8% global GDP growth, though they expect that pace to taper slightly in 2019 to rates of 1.9% and 3.6%, respectively. •Commodities were down in the fourth quarter; the Bloomberg Commodity Index lost 12.99%. Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. This slide sourced from Market Performance section. WEALTH MANAGEMENT INVESTMENT RESOURCES | CHARTBOOK | MARKET PERFORMANCE Capital Markets Overview: 4Q 2018 Source: FactSet, Bloomberg, Morgan Stanley & Co. Research, Federal Reserve Bank of St. Louis, Morgan Stanley Wealth Management GIC The Bureau of Economic Analysis estimated that real Gross Domestic Product increased at an annualized rate of 3.4% in 3Q18, in comparison to a 4.2% increase in 2Q18. Morgan Stanley & Co. economists forecast US Real GDP growth will be 2.9% in 2018 and 2.3% in 2019. The seasonally adjusted unemployment rate for November 2018 was 3.7%. Job gains occurred in professional and business services, health care, accommodation and food services, and retail. The number of unemployed was 6.0 million in November, down slightly from 6.2 million in August of this year. The number of long-term unemployed (those jobless for 27 weeks or more) was 1.3 million, a decrease of around 79,000 from August. These individuals accounted for 21.0% of the unemployed vs. 21.5% at the end of last quarter. According to the most recent data from the Federal Reserve Bank of St. Louis, corporate profits increased 3.5% quarter over quarter and are up 19.6% year over year as of Q3 2018. Inflation was generally steady in the US, according to the Bureau of Labor Statistics. The year-over-year Consumer Price Index was 2.2% in November, down from the 2.7% figure in August. Morgan Stanley & Co. economists forecast a 2.4% annual inflation rate for 2018 and 1.8% for 2019. The Census Bureau reported that the number of new private-sector housing starts in November 2018 was at a seasonally adjusted annual rate of 1,256,000—3.6% below housing starts this time last year. The Census Bureau also reported that seasonally adjusted retail and food services sales increased at 4.2% year over year in November. Consumer confidence fell in 4Q18, with Conference Board Consumer Confidence reading 128.1 in December, down from October’s peak of 137.9 but still historically elevated. In November, the Institute for Supply Management’s (ISM) Purchasing Managers Index (PMI), a manufacturing sector index, came in at 59.3, down from August’s reading of 61.3. Generally speaking, a PMI or NMI (ISM Non-Manufacturing Index) over 50 indicates that the sector is expanding, and a PMI below 50 but over 43 indicates that the sector is shrinking but the overall economy is expanding. PMI has registered above 50 for 32 out of the last 35 months, indicating an expansion in manufacturing since March 2016. Overall, PMI has been above 43 for 113 consecutive months, indicating overall economic recovery and expansion since June 2009. The ISM’s Non-Manufacturing Index (NMI) for August was 60.7—2.2 points higher than in August 2018. The index has now been above 50 for 103 consecutive months, indicating non-manufacturing expansion since February 2010. The US Economy As of 4Q 2018 (with most recent data available) Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. This slide sourced from Market Performance section. WEALTH MANAGEMENT INVESTMENT RESOURCES | CHARTBOOK | MARKET PERFORMANCE Capital Markets Overview: 4Q 2018 Source: FactSet, Bloomberg, Morgan Stanley Wealth Management GIC INDEX IN USDQuarter 12 Months5-Years (Annualized)7-Years (AnnualizedS&P 500-13.52% -4.38% 8.58% 12.70%Dow Jones-11.31% -3.48% 9.79% 12.43%Russell 2000-20.20% -11.01% 4.46% 10.44%Russell Midcap-15.37% -9.06% 6.33% 11.49%Russell 1000-13.82% -4.78% 8.29% 12.63%Key US Stock Market Index Returns (%) for the Period Ending 12/31/2018US Equity Markets As of 4Q 2018 The Dow Jones Industrial Average lost 11.31% in the fourth quarter, while the NASDAQ Composite Index was down 17.28%. The S&P 500 Index fell 13.52% over the same period. Most sectors fell on a total return basis in 4Q18. Utilities was the exception, gaining 1.36% as defensive leadership prevailed in difficult market conditions. Other outperformers included Real Estate and Consumer Staples, which fell 3.84% and 5.22%, respectively. Energy was hit the hardest, falling 23.78%. Tech, Industrials, and Consumer Discretionary all underperformed significantly as well, falling 17.34%, 17.32%, and 16.42%, respectively. The Russell 1000, a large-cap index, fell 13.82% for the quarter, as large-cap value (-11.72% ) outperformed large-cap growth (-15.89%). The Russell Midcap lost 15.37% on the quarter, with mid-cap value (-14.95%) mildly outperforming mid-cap growth (-15.99%). The Russell 2000, a small-cap index, dropped 20.20% for the quarter, with small-cap value (-18.67%) outperforming small-cap growth (-21.65%). Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. This slide sourced from Market Performance section. WEALTH MANAGEMENT INVESTMENT RESOURCES | CHARTBOOK | MARKET PERFORMANCE S&P 500 Sectors Source: Bloomberg YTD 2018 Total Return As of December 31, 2018 6.5%4.1%0.8%-0.3%-2.2%-8.4%-12.5%-13.0%-13.3%-14.7%-18.1%-20% -15% -10% -5% 0% 5% 10%Health CareUtilitiesDiscretionaryTechnologyReal EstateStaplesCommunication ServicesFinancialsIndustrialsMaterialsEnergy Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. This slide sourced from Market Performance section. WEALTH MANAGEMENT INVESTMENT RESOURCES | CHARTBOOK | MARKET PERFORMANCE Capital Markets Overview: 4Q 2018 Source: FactSet, Bloomberg, Morgan Stanley Wealth Management GIC INDEX IN USDQuarter 12 Months5-Years (Annualized)7-Years (Annualized)MSCI EAFE-12.50% -13.36% 1.02% 6.14%MSCI EAFE Growth-13.30% -12.48% 2.02% 6.78%MSCI EAFE Value-11.65% -14.26% -0.03% 5.43%MSCI Europe-12.68% -14.32% -0.01% 5.89%MSCI Japan-14.20% -12.58% 3.38% 7.24%S&P 500-13.52% -4.38% 8.58% 12.70%MSCI Emerging Markets-7.40% -14.25% 2.04% 3.60%Key Global Stock Market Index Returns (%) for the Period Ending 12/31/2018International outperformed slightly in the fourth quarter, as divergences in US and world faded in the face of US poor performance. However, international markets remain under pressure as investors weigh weakening economic data in China, Europe, and Japan. The MSCI EAFE Index (a benchmark for international developed markets) fell 12.50% for US-currency investors. In the fourth quarter, the MSCI Emerging Markets Index fell 7.40% for US-currency investors as risk-off sentiment and continued weakness in China was reinforced by the further strengthening of the dollar. The MSCI Europe Index fell 12.68% for US-currency investors, while the MSCI Japan dropped 14.20%. Japanese equity indices the Nikkei and TOPIX both dropped more than 20% during the quarter in local currency terms. The S&P 500 Index lost 13.52% for the quarter. Emerging economy equity market indices were down further in the fourth quarter. The MSCI BRIC (Brazil, Russia, India and China) Index fell 5.28% in US dollar terms, while the MSCI EM Asia Index was down 9.50%. Global Equity Markets As of 4Q 2018 Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. This slide sourced from Market Performance section. WEALTH MANAGEMENT INVESTMENT RESOURCES | CHARTBOOK | MARKET PERFORMANCE Capital Markets Overview: 4Q 2018 INDEX IN USDQuarter 12 Months5-Years (Annualized)7-Years (Annualized)Bloomberg Barclays Capital US Aggregate 1.64% 0.01% 2.50% 2.10%Bloomberg Barclays Capital High Yield -4.53% -2.08% 3.84% 5.98%Bloomberg Barclays Capital Government/Credit 1.49% -0.45% 2.46% 2.10%Bloomberg Barclays Capital Government 2.57% 0.86% 1.98% 1.31%Bloomberg Barclays Capital Intermediate Govt/Credit1.66% 0.86% 1.84% 1.74%Bloomberg Barclays Capital Long Govt/Credit 0.78% -4.68% 5.26% 3.68%Bloomberg Barclays Capital Mortgage Backed Securities 2.08% 0.99% 2.52% 1.96%Bloomberg Barclays Capital Muni 1.69% 1.28% 3.82% 3.30%Key US Bond Market Index Returns (%) for the Period Ending 12/31/2018The bond market posted mild gains in the fourth quarter during an equity market route. The Bloomberg Barclays US Aggregate Bond Index, a general measure of the bond market, rose 1.64%. Interest rates fell during the fourth quarter, as the yield on the 10-year US Treasury note dropped to a quarter-end 2.68% from 3.06% at the end of September. This sharp move downward in yields followed brief cycle peaks in October and November, during which the yield touched 3.23%, the highest levels seen since 2011. Riskier parts of the bond market such as US high yield debt were harder hit in the fourth quarter. The Bloomberg Barclays Capital High Yield Index, a measure of lower-rated corporate bonds, lost 4.53%. Mortgage-backed showed modest gains in the fourth quarter. The Bloomberg Barclays Capital Mortgage-Backed Securities Index rose 2.08%. Municipal bonds were also up; the Bloomberg Barclays Capital Muni Index saw gains of 1.69%. The US Bond Market As of 4Q 2018 Source: FactSet, Bloomberg, Morgan Stanley & Co. 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-.)D#+$8 >,/6# $(6" . ’&./ ,/7%&7#$ 6%/+,/(%($ ,/7#$+-#/+ ,/ $#6(),+,#$ )#;.)1&#$$ %* [(6+(.+,/; ’),6# #&$ %* $(6" $#6(),+,#$0 +"# ,/7#$+%) $"%(&1 6%/$,1#) ",$ K/./6,.& .4,&,+3 +% 6%/+,/(# ",$ ’()6".$#$ +")%(;" ’#),%1$ %* &%2 ’),6# #&$8!",$ -.+#),.& ,$ 1,$$#-,/.+#1 ,/ +"# _/,+#1 >+.+#$ %* :-#),6. 43 =%);./ >+./ >-,+" C.)/#3 EEF8 =%);./ >+./ ?#.&+" =./.;#-#/+ ,$ /%+ .6+,/; .$ . -(/,6,’.& .17,$%) +% ./3 -(/,6,’.& #/+,+3 %) %4&,;.+#1 ’#)$%/ 2,+",/ +"# -#./,/; %* >#6+,%/ ibC %* +"# >#6(),+,#$ G<6"./;# :6+ A+"# M=(/,6,’.& :17,$%) \(&#PB ./1 +"# %’,/,%/$ %) 7,#2$ 6%/+.,/#1 "#)#,/ .)# /%+ ,/+#/1#1 +% 4#0 ./1 1% /%+ 6%/$+,+(+#0 .17,6# 2,+",/ +"# -#./,/; %* +"# =(/,6,’.& :17,$%) \( !",$ -.+#),.&0 %) ./3 ’%)+,%/ +"#)#%*0 -.3 /%+ 4# )#’),/+#10 $%&1 %) )#1,$+),4(+#1 2,+"%(+ +"# 2),++#/ 6%/$#/+ %* =%);./ >+./ >-,+" C.)/#3 EEF8 s jdie =%);./ >+./ >-,+" C.)/#3 EEF8 =#-4#) >9LF8 !"#$%"&’(" AllocationMarketValue($)%Performance(%)CurrentQuarterFiscalYTD1Year3Years5Years7YearsSinceInceptionInceptionDateTotal Fund 14,063,687 100.00 -10.20 -10.20 -6.31 4.86 4.51 6.96 5.82 02/01/2011Policy Index 1-9.72 -9.72 -4.90 5.42 5.18 7.64 6.94Domestic EquityHighland - Large Cap Value 3,049,901 21.69 -11.86 -11.86 -7.33 N/A N/A N/A 0.53 08/01/2017Russell 1000 VL-11.72 -11.72 -8.27 N/A N/A N/A -1.19Highland - Large Cap Growth 2,705,756 19.24 -16.47 -16.47 -4.67 N/A N/A N/A 4.10 08/01/2017Russell 1000 Gr-15.89 -15.89 -1.51 N/A N/A N/A 6.66Boston Partners - SMID Value 595,894 4.24 -19.58 -19.58 -18.49 N/A N/A N/A-9.00 08/01/2017Russell 2500 VL-17.12 -17.12 -12.36 N/A N/A N/A -4.17Fiera Capital - SMID Growth 677,766 4.82 -18.96 -18.96 -8.71 N/A N/A N/A 1.7908/01/2017Russell 2500 GR-20.08 -20.08 -7.47 N/A N/A N/A 1.91International EquityHighland - Intl Value 651,002 4.63 -14.48 -14.48 -14.43 N/A N/A N/A -6.89 08/01/2017MSCI EAFE Net-12.54 -12.54 -13.79 N/A N/A N/A -5.66Renaissance - International Growth 952,867 6.78 -16.51 -16.51 -19.49 N/A N/A N/A -11.69 08/01/2017MSCI AC World ex US Net-11.46 -11.46 -14.19 N/A N/A N/A -5.52Fixed IncomeHighland - Fixed Income 3,609,110 25.66 1.71 1.71 0.13 N/A N/A N/A 0.73 08/01/2017Barclays Aggregate1.64 1.64 0.01 N/A N/A N/A 0.58Alternative InvestmentsCenter Coast - MLP 544,330 3.87 -15.89 -15.89 -14.23 N/A N/A N/A -13.23 08/01/2017Alerian MLP Index-17.30 -17.30 -12.42 N/A N/A N/A -12.28City of Sebastian Police Officers' Retirement PlanAsset Allocation & Time Weighted Performanceas of December 31, 2018The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 1 City of Sebastian Police Officers' Retirement PlanAsset Allocation & Time Weighted Performanceas of December 31, 2018AllocationMarketValue($)%Performance(%)CurrentQuarterFiscalYTD1Year3Years5Years7YearsSinceInceptionInceptionDateIntercontinental - Private Real Estate 696,012 4.95 2.15 2.15 11.46 N/A N/A N/A 11.51 10/01/2017NCREIF Property Idx1.37 1.37 6.71 N/A N/A N/A 6.85CashReceipt & Disbursement 581,049 4.13 0.39 0.39 1.33 N/A N/A N/A 1.61 08/01/201790-Day T-Bills0.57 0.57 1.86 N/A N/A N/A 1.63The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 2 %CurrentQuarterFiscalYTD1Year3Years5Years7YearsSinceInceptionInceptionDateTotal Fund 100.00 -10.33 -10.33 -7.24 4.06 3.83 6.19 5.1801/31/2011Domestic EquityHighland - Large Cap Value 21.69 -11.86 -11.86 -7.84 N/A N/A N/A 2.1807/31/2017Highland - Large Cap Growth 19.24 -16.47 -16.47 -6.22 N/A N/A N/A 0.0707/31/2017Boston Partners - SMID Value 4.24 -19.80 -19.80 -20.05 N/A N/A N/A -10.4007/31/2017Fiera Capital - SMID Growth 4.82 -19.13 -19.13 -9.38 N/A N/A N/A 1.1807/31/2017International EquityHighland - Intl Value 4.63 -14.48 -14.48 -15.31 N/A N/A N/A -7.6307/31/2017Renaissance - International Growth 6.78 -16.66 -16.66 -21.01 N/A N/A N/A -13.2407/31/2017Fixed IncomeHighland - Fixed Income 25.66 1.71 1.71 -0.54 N/A N/A N/A 0.3007/31/2017Alternative InvestmentsCenter Coast - MLP 3.87 -16.00 -16.00 -14.66 N/A N/A N/A -13.5807/31/2017Intercontinental - Private Real Estate 4.95 1.36 1.36 10.12 N/A N/A N/A 10.2110/15/2017CashReceipt & Disbursement 4.13 -1.86 -1.86 -3.71 N/A N/A N/A -2.5207/31/2017City of Sebastian Police Officers' Retirement PlanAsset Allocation & Net Dollar Weighted Performance (IRR)as of December 31, 2018The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 3 Manager Performance ChartManager Risk & ReturnModern Portfolio StatisticsHistoric Asset GrowthManager Annualized Performance0.08.016.0-8.0-16.0-24.0ReturnCurrent QuarterFiscal YTD1Year3Years5Years7YearsSinceInceptionTotal Fund Policy Index 190-Day T-Bills-4.0-2.00.02.04.06.08.010.0Return (%)-4.0-2.00.02.04.06.08.010.0 12.0Risk (Standard Deviation %)CurrentQuarterFiscalYTD1Year3Years5Years7YearsInception02/01/2011Total Fund -10.20 -10.20 -6.31 4.86 4.51 6.965.82Policy Index 1 -9.72 -9.72 -4.90 5.42 5.18 7.646.94Differences -0.48 -0.48 -1.41 -0.56 -0.67 -0.68-1.12CurrentQuarterFiscalYTD1Year3Years5Years7YearsInception02/01/2011Total FundBeginning Market Value 15,167 15,167 14,445 11,928 10,641 7,992 7,730Net Contributions 489 489 678 621 1,145 1,569 2,047Fees/Expenses -19 -19 -118 -260 -369 -468 -500Income 96 96 354 995 1,487 1,921 2,114Gain/Loss -1,669 -1,669 -1,295 779 1,160 3,050 2,673Ending Market Value 14,064 14,064 14,064 14,064 14,064 14,064 14,064ReturnStandardDeviationBetaMaximumDrawdownUpMarketCaptureDownMarketCaptureAlphaSharpeRatioR-SquaredInceptionDateTotal Fund 5.82 7.42 1.02 -10.71 96.83 109.40 -1.14 0.74 0.9402/01/2011Policy Index 1 6.94 7.08 1.00 -9.78 100.00 100.00 0.00 0.92 1.0002/01/201190-Day T-Bills 0.41 0.18 0.00 0.00 2.16 -1.77 0.43 N/A 0.0202/01/2011as of December 31, 2018Total Fund - Executive SummaryCity of Sebastian Police Officers' Retirement PlanThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 4 Historic Change in AssetsDistribution of ReturnsQuarterly Change in AssetsTotal Fund Policy Index 1Net Cash Flow$4.0$8.0$12.0$16.0$20.0Market Value In Millions1/117/111/127/121/137/131/147/141/157/151/167/161/177/171/187/1812/18$9.3$15.2$14.1Market ValueAs of10/01/2018NetTransfersContributions Distributions Fees Expenses IncomeReturn OnInvestmentMarket ValueAs of12/31/2018Total Fund 15,167.32 - 5,419.24 -4,930.53 -19.22 - 96.35 -1,573.12 14,063.69010203040Frequency< -5-5 To -4-4 To -3-3 To -2-2 To -1-1 To 00 To 11 To 22 To 33 To 44 To 5> 5Returns (%)2243101120259621City of Sebastian Police Officers' Retirement Planas of December 31, 2018Total Fund - Change in Assets & Distribution of ReturnsThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 5 Manager Performance ChartManager Risk & ReturnModern Portfolio StatisticsHistoric Asset GrowthManager Annualized Performance0.06.0-6.0-12.0-18.0ReturnCurrent QuarterFiscal YTD1YearSinceInceptionHighland - Large Cap ValueRussell 1000 VL90-Day T-Bills-2.8-2.1-1.4-0.70.00.71.42.12.8Return (%)-6.0-3.00.03.06.09.012.015.0 18.0Risk (Standard Deviation %)CurrentQuarterFiscalYTD1YearInception08/01/2017Highland - Large Cap Value -11.86 -11.86 -7.330.53Russell 1000 VL -11.72 -11.72 -8.27-1.19Differences -0.14 -0.14 0.941.72CurrentQuarterFiscalYTD1YearInception08/01/2017Highland - Large Cap ValueBeginning Market Value 3,481 3,481 3,7614,342Net Contributions -20 -20 -446-1,397Fees/Expenses - - -26-26Income 34 34 96137Gain/Loss -445 -445 -334-6Ending Market Value 3,050 3,050 3,0503,050ReturnStandardDeviationBetaMaximumDrawdownUpMarketCaptureDownMarketCaptureAlphaSharpeRatioR-SquaredInceptionDateHighland - Large Cap Value 0.53 12.21 1.00 -11.86 106.69 95.60 1.74 -0.03 0.9808/01/2017Russell 1000 VL -1.19 12.16 1.00 -11.72 100.00 100.00 0.00 -0.17 1.0008/01/201790-Day T-Bills 1.63 0.13 0.00 0.00 7.28 -3.14 1.63 N/A 0.1308/01/2017as of December 31, 2018Highland - Large Cap Value - Executive SummaryCity of Sebastian Police Officers' Retirement PlanThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 6 Historic Change in AssetsDistribution of ReturnsQuarterly Change in AssetsHighland - Large Cap ValueRussell 1000 VLNet Cash Flow$1.6$2.4$3.2$4.0$4.8$5.6Market Value In Millions7/178/179/1710/1711/1712/171/182/183/184/185/186/187/188/189/1810/1811/1812/18$2.9$3.0$3.0Market ValueAs of10/01/2018NetTransfersContributions Distributions Fees ExpensesReturn OnInvestmentMarket ValueAs of12/31/2018Highland - Large Cap Value 3,480,884.09 - 451,811.33 -472,068.55 - - -410,725.883,049,900.990246Frequency< -5-5 To -4-4 To -3-3 To -2-2 To -1-1 To 00 To 11 To 22 To 33 To 44 To 5> 5Returns (%)120101423300City of Sebastian Police Officers' Retirement Planas of December 31, 2018Highland Large Cap Value - Change in Assets & Distribution of ReturnsThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 7 AllocationHighland - Large Cap ValueRussell 1000 VL0.06.012.018.024.030.0 36.0UtilitiesReal EstateMaterialsInformation TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer DiscretionaryCommunication ServicesPerformanceHighland - Large Cap ValueRussell 1000 VL0.015.0 30.0-15.0-30.0-45.0UtilitiesReal EstateMaterialsInformation TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer DiscretionaryCommunication ServicesTotal Attribution0.00.30.60.91.2 1.5-0.3-0.6-0.9-1.2-1.5-1.8-2.1UtilitiesReal EstateMaterialsInformation TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer DiscretionaryCommunication ServicesCity of Sebastian Police Officers' Retirement PlanHighland - Large Cap Value - Quarterly Performance Attributesas of December 31, 2018The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 8 Allocation - 10/01/2018Portfolio BenchmarkPerformance - Quarter EndingDecember 31, 2018Portfolio BenchmarkAttributionSector Stock Interaction TotalCommunication Services 4.93 6.75 -4.64 -5.66 -0.11 0.07 -0.02 -0.06Consumer Discretionary 2.25 5.25 -0.84 -12.80 0.04 0.63 -0.36 0.30Consumer Staples 6.48 7.19 -0.77 -4.00 -0.05 0.23 -0.02 0.16Energy 12.71 10.78 -24.61 -23.96 -0.24 -0.07 -0.01 -0.32Financials 23.67 22.85 -18.84 -13.46 -0.02 -1.23 -0.04 -1.29Health Care 16.69 15.22 -4.70 -6.96 0.07 0.34 0.03 0.45Industrials 8.11 8.08 -19.22 -19.19 0.00 0.00 0.00 0.00Information Technology 12.74 9.77 -13.44 -12.37 -0.02 -0.10 -0.03 -0.16Materials 2.75 3.89 -19.22 -14.16 0.03 -0.20 0.06 -0.11Real Estate 3.04 4.64 -1.57 -6.53 -0.08 0.23 -0.08 0.07Utilities 6.63 5.57 4.89 1.08 0.13 0.21 0.04 0.39Total 100.00 100.00 -12.19 -11.61 -0.25 0.11 -0.44 -0.58City of Sebastian Police Officers' Retirement PlanHighland - Large Cap Value - Quarterly Performance Attributesas of December 31, 2018All the values for Allocation, Performance and Attribution are expresssed in Percentage(%) termsThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 9 Portfolio CharacteristicsPortfolio BenchmarkWtd. Avg. Mkt. Cap ($000) 138,674,367.42 119,165,529.28Median Mkt. Cap ($000) 44,977,823.44 8,313,076.20Price/Earnings ratio12.61 13.70Price/Book ratio1.98 2.065 Yr. EPS Growth Rate (%) 8.46 8.60BetaN/A 1.00Number of Stocks84 725Debt to Equity1.08 0.87Top Ten Equity HoldingsPortfolioWeight(%)BenchmarkWeight(%)ActiveWeight(%)QuarterlyReturn(%)JPMorgan Chase & Co 4.33 2.74 1.59 -12.89Cisco Systems Inc 3.11 1.67 1.44 -10.33Pfizer Inc 3.00 2.15 0.85 -0.19Exxon Mobil Corp 2.79 2.45 0.34 -18.98Bank of America Corp 2.60 1.91 0.69 -15.88Intel Corp 2.54 1.82 0.72 -0.13Wells Fargo & Co 2.41 1.66 0.75 -11.62Johnson & Johnson 2.26 2.41 -0.15 -6.01Chevron Corp 2.26 1.76 0.50 -10.18Procter & Gamble Co (The) 2.10 1.94 0.16 11.43% of Portfolio 27.40 20.51 6.89Ten Best PerformersPortfolioWeight(%)BenchmarkWeight(%)ActiveWeight(%)QuarterlyReturn(%)Procter & Gamble Co (The) 2.10 1.94 0.16 11.43Omega Healthcare Investors 0.60 0.05 0.55 9.39Duke Energy Corp 1.36 0.52 0.84 9.01Merck & Co Inc. 1.22 1.57 -0.35 8.49McDonald's Corp 1.25 0.94 0.31 6.80Verizon Communications Inc 2.01 1.97 0.04 6.46American Electric Power Co Inc 1.31 0.31 1.00 6.40PulteGroup Inc 1.05 0.04 1.01 5.38NextEra Energy Inc 1.22 0.70 0.52 4.36Exelon Corp 1.79 0.37 1.42 4.09% of Portfolio 13.91 8.41 5.50Ten Worst PerformersPortfolioWeight(%)BenchmarkWeight(%)ActiveWeight(%)QuarterlyReturn(%)DXC Technology Company 0.21 0.13 0.08 -42.97Schlumberger Ltd 0.95 0.42 0.53 -40.10Marathon Oil Corp 1.03 0.10 0.93 -38.21Valero Energy Corp 0.84 0.27 0.57 -33.44Perspecta Inc 0.03 0.00 0.03 -32.89General Electric Co 0.63 0.55 0.08 -32.86Apple Inc 1.00 0.00 1.00 -29.88Micron Technology Inc. 0.30 0.07 0.23 -29.85Helmerich & Payne Inc. 1.01 0.04 0.97 -29.50Murphy Oil Corp 0.40 0.03 0.37 -29.27% of Portfolio 6.40 1.61 4.79City of Sebastian Police Officers' Retirement PlanHighland - Large Cap Value - Portfolio Characteristicsas of December 31, 2018Page 10 Manager Performance ChartManager Risk & ReturnModern Portfolio StatisticsHistoric Asset GrowthManager Annualized Performance0.010.020.0-10.0-20.0-30.0ReturnCurrent QuarterFiscal YTD1YearSinceInceptionHighland - Large Cap GrowthRussell 1000 Gr90-Day T-Bills-1.50.01.53.04.56.07.59.0Return (%)-6.0-3.00.03.06.09.012.015.018.0 21.0Risk (Standard Deviation %)CurrentQuarterFiscalYTD1YearInception08/01/2017Highland - Large Cap Growth -16.47 -16.47 -4.67 4.10Russell 1000 Gr -15.89 -15.89 -1.51 6.67Differences -0.58 -0.58 -3.16 -2.57CurrentQuarterFiscalYTD1YearInception08/01/2017Highland - Large Cap GrowthBeginning Market Value 3,240 3,240 2,644 1,523Net Contributions -1 -1 232 1,181Fees/Expenses - - -14 -14Income 10 10 38 47Gain/Loss -544 -544 -194 -31Ending Market Value 2,706 2,706 2,706 2,706ReturnStandardDeviationBetaMaximumDrawdownUpMarketCaptureDownMarketCaptureAlphaSharpeRatioR-SquaredInceptionDateHighland - Large Cap Growth 4.10 14.52 0.99 -16.47 92.82 104.68 -2.38 0.24 1.00 08/01/2017Russell 1000 Gr 6.67 14.60 1.00 -15.89 100.00 100.00 0.00 0.41 1.00 08/01/201790-Day T-Bills 1.63 0.13 0.00 0.00 5.00 -2.70 1.66 N/A 0.18 08/01/2017as of December 31, 2018Highland - Large Cap Growth - Executive SummaryCity of Sebastian Police Officers' Retirement PlanThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 11 Historic Change in AssetsDistribution of ReturnsQuarterly Change in AssetsHighland - Large Cap GrowthRussell 1000 GrNet Cash Flow$0.0$1.0$2.0$3.0$4.0$5.0Market Value In Millions7/178/179/1710/1711/1712/171/182/183/184/185/186/187/188/189/1810/1811/1812/18$2.7$2.8$2.7Market ValueAs of10/01/2018NetTransfersContributions Distributions Fees ExpensesReturn OnInvestmentMarket ValueAs of12/31/2018Highland - Large Cap Growth 3,240,361.10 - 3,248,094.45 -3,249,266.67 - - -533,432.73 2,705,756.1502468Frequency< -5-5 To -4-4 To -3-3 To -2-2 To -1-1 To 00 To 11 To 22 To 33 To 44 To 5> 5Returns (%)201100513211City of Sebastian Police Officers' Retirement Planas of December 31, 2018Highland Large Cap Growth - Change in Assets & Distribution of ReturnsThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 12 AllocationHighland - Large Cap GrowthRussell 1000 Gr0.010.020.030.040.0 50.0Real EstateMaterialsInformation TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer DiscretionaryCommunication ServicesPerformanceHighland - Large Cap GrowthRussell 1000 Gr-60.0-45.0-30.0-15.0 0.0Real EstateMaterialsInformation TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer DiscretionaryCommunication ServicesTotal Attribution0.00.10.20.3 0.4-0.1-0.2-0.3-0.4-0.5-0.6Real EstateMaterialsInformation TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer DiscretionaryCommunication ServicesCity of Sebastian Police Officers' Retirement PlanHighland - Large Cap Growth - Quarterly Performance Attributesas of December 31, 2018The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 13 Allocation - 10/01/2018Portfolio BenchmarkPerformance - Quarter EndingDecember 31, 2018Portfolio BenchmarkAttributionSector Stock Interaction TotalCommunication Services 11.82 12.04 -17.27 -17.30 0.00 0.00 0.00 0.01Consumer Discretionary 14.80 15.38 -16.80 -17.13 0.01 0.05 0.00 0.06Consumer Staples 5.38 5.45 -7.48 -6.81 -0.01 -0.04 0.00 -0.04Energy 0.87 0.90 -42.27 -28.84 0.00 -0.12 0.00 -0.11Financials 3.76 4.18 -17.11 -11.96 -0.02 -0.22 0.02 -0.21Health Care 14.43 13.79 -11.99 -12.06 0.02 0.01 0.00 0.03Industrials 12.22 12.00 -19.40 -16.56 0.00 -0.34 -0.01 -0.35Information Technology 33.70 32.63 -18.69 -18.83 -0.03 0.05 0.00 0.02Materials 1.59 1.65 -11.72 -11.84 0.00 0.00 0.00 0.00Real Estate 1.43 1.99 -6.73 -1.84 -0.08 -0.10 0.03 -0.15Total 100.00 100.00 -16.62 -15.87 -0.10 -0.69 0.05 -0.75City of Sebastian Police Officers' Retirement PlanHighland - Large Cap Growth - Quarterly Performance Attributesas of December 31, 2018All the values for Allocation, Performance and Attribution are expresssed in Percentage(%) termsThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 14 Portfolio CharacteristicsPortfolio BenchmarkWtd. Avg. Mkt. Cap ($000) 248,116,402.24 241,404,618.08Median Mkt. Cap ($000) 26,377,905.97 10,324,998.70Price/Earnings ratio19.82 22.71Price/Book ratio5.22 6.125 Yr. EPS Growth Rate (%) 26.23 23.58BetaN/A 1.00Number of Stocks101 546Debt to Equity1.63 0.10Top Ten Equity HoldingsPortfolioWeight(%)BenchmarkWeight(%)ActiveWeight(%)QuarterlyReturn(%)Apple Inc 7.25 6.48 0.77 -29.88Microsoft Corp 6.47 6.31 0.16 -10.80Amazon.com Inc 5.46 5.28 0.18 -25.01Alphabet Inc 3.05 2.73 0.32 -13.23Facebook Inc 2.79 2.70 0.09 -20.29Alphabet Inc 2.72 2.70 0.02 -13.43Visa Inc 2.28 2.01 0.27 -11.94Boeing Co 2.16 1.49 0.67 -12.88Unitedhealth Group Inc 2.13 2.06 0.07 -6.06Home Depot Inc. (The) 2.10 1.71 0.39 -16.57% of Portfolio 36.41 33.47 2.94Ten Best PerformersPortfolioWeight(%)BenchmarkWeight(%)ActiveWeight(%)QuarterlyReturn(%)Starbucks Corp 1.21 0.67 0.54 13.91Keurig Dr Pepper Inc 0.54 0.04 0.50 11.40Exelixis Inc 0.94 0.05 0.89 11.00American Tower Corp 0.69 0.60 0.09 9.45Omnicom Group Inc. 0.96 0.09 0.87 8.57Herbalife Nutrition Ltd 0.68 0.01 0.67 8.07Broadcom Inc 1.28 0.54 0.74 4.15Coca-Cola Co (The) 0.75 1.22 -0.47 3.33US Foods Holding Corp 0.65 0.00 0.65 2.66Deere & Co 0.99 0.42 0.57 -0.25% of Portfolio 8.69 3.64 5.05Ten Worst PerformersPortfolioWeight(%)BenchmarkWeight(%)ActiveWeight(%)QuarterlyReturn(%)NVIDIA Corp 0.70 0.67 0.03 -52.45Newfield Exploration Co 0.17 0.01 0.16 -49.15Neurocrine Biosciences Inc 0.41 0.05 0.36 -41.92Alliance Data Systems Corp 0.57 0.06 0.51 -36.27Halliburton Co 0.26 0.20 0.06 -34.02Garrett Motion Inc 0.01 0.00 0.01 -33.30FedEx Corp. 0.36 0.34 0.02 -32.78Best Buy Co Inc 0.56 0.03 0.53 -32.75Diamondback Energy Inc 0.29 0.02 0.27 -31.35First Data Corp. 0.38 0.08 0.30 -30.89% of Portfolio 3.71 1.46 2.25City of Sebastian Police Officers' Retirement PlanHighland - Large Cap Growth - Portfolio Characteristicsas of December 31, 2018Page 15 Manager Performance ChartManager Risk & ReturnModern Portfolio StatisticsHistoric Asset GrowthManager Annualized Performance-32.0-24.0-16.0-8.00.0ReturnCurrent QuarterFiscal YTD1YearSinceInceptionBoston Partners - SMID ValueRussell 2500 VL90-Day T-Bills-15.0-12.0-9.0-6.0-3.00.03.06.0Return (%)-6.0-3.00.03.06.09.012.015.018.0 21.0Risk (Standard Deviation %)CurrentQuarterFiscalYTD1YearInception08/01/2017Boston Partners - SMID Value -19.58 -19.58 -18.49 -9.00Russell 2500 VL -17.12 -17.12 -12.36 -4.17Differences -2.46 -2.46 -6.13 -4.83CurrentQuarterFiscalYTD1YearInception08/01/2017Boston Partners - SMID ValueBeginning Market Value 743 743 720672Net Contributions - - 2121Fees/Expenses -2 -2 -9-10Income 3 3 1117Gain/Loss -148 -148 -148-104Ending Market Value 596 596 596596ReturnStandardDeviationBetaMaximumDrawdownUpMarketCaptureDownMarketCaptureAlphaSharpeRatioR-SquaredInceptionDateBoston Partners - SMID Value -9.00 14.97 1.02 -21.25 81.10 109.80 -4.84 -0.65 0.9708/01/2017Russell 2500 VL -4.17 14.36 1.00 -18.42 100.00 100.00 0.00 -0.33 1.0008/01/201790-Day T-Bills 1.63 0.13 0.00 0.00 6.67 -2.68 1.62 N/A 0.1808/01/2017as of December 31, 2018Boston Partners - SMID Value - Executive SummaryCity of Sebastian Police Officers' Retirement PlanThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 16 Historic Change in AssetsDistribution of ReturnsQuarterly Change in AssetsBoston Partners - SMID ValueRussell 2500 VLNet Cash Flow$0.5$0.6$0.7$0.8$0.9Market Value In Millions7/178/179/1710/1711/1712/171/182/183/184/185/186/187/188/189/1810/1811/1812/18$0.7$0.6$0.6Market ValueAs of10/01/2018NetTransfersContributions Distributions Fees ExpensesReturn OnInvestmentMarket ValueAs of12/31/2018Boston Partners - SMID Value 743,288.37 - 180,178.42 -180,470.39 -1,858.84 - -145,243.83 595,893.730246Frequency< -5-5 To -4-4 To -3-3 To -2-2 To -1-1 To 00 To 11 To 22 To 33 To 44 To 5> 5Returns (%)210202332101City of Sebastian Police Officers' Retirement Planas of December 31, 2018Boston SMID Value - Change in Assets & Distribution of ReturnsThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 17 AllocationBoston Partners - SMID ValueRussell 2500 VL0.08.016.024.032.040.0 48.0UtilitiesReal EstateMaterialsInformation TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer DiscretionaryCommunication ServicesPerformanceBoston Partners - SMID ValueRussell 2500 VL0.0 20.0-20.0-40.0-60.0UtilitiesReal EstateMaterialsInformation TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer DiscretionaryCommunication ServicesTotal Attribution0.00.30.60.9 1.2-0.3-0.6-0.9-1.2-1.5-1.8UtilitiesReal EstateMaterialsInformation TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer DiscretionaryCommunication ServicesCity of Sebastian Police Officers' Retirement PlanBoston Partners - SMID Value - Quarterly Performance Attributesas of December 31, 2018The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 18 Allocation - 10/01/2018Portfolio BenchmarkPerformance - Quarter EndingDecember 31, 2018Portfolio BenchmarkAttributionSector Stock Interaction TotalCommunication Services 1.41 3.05 -18.24 -14.67 -0.04 -0.11 0.06 -0.09Consumer Discretionary 5.43 8.51 -11.29 -18.96 0.06 0.65 -0.24 0.48Consumer Staples 1.65 3.27 -18.13 -7.19 -0.16 -0.36 0.18 -0.34Energy 9.84 7.27 -38.74 -39.63 -0.58 0.06 0.02 -0.50Financials 30.03 22.53 -15.92 -15.33 0.12 -0.13 -0.04 -0.06Health Care 6.29 5.45 -15.97 -21.14 -0.04 0.28 0.04 0.29Industrials 16.30 14.02 -19.66 -20.73 -0.09 0.15 0.02 0.09Information Technology 17.14 8.84 -18.05 -16.30 0.05 -0.15 -0.15 -0.25Materials 9.62 6.13 -25.32 -21.30 -0.15 -0.25 -0.14 -0.54Real Estate 1.49 14.83 -18.16 -9.65 -0.96 -1.26 1.14 -1.09Utilities 0.79 6.10 3.18 -0.15 -0.89 0.20 -0.18 -0.86Total 100.00 100.00 -19.75 -16.88 -2.68 -0.91 0.72 -2.87City of Sebastian Police Officers' Retirement PlanBoston Partners - SMID Value - Quarterly Performance Attributesas of December 31, 2018All the values for Allocation, Performance and Attribution are expresssed in Percentage(%) termsThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 19 Portfolio CharacteristicsPortfolio BenchmarkWtd. Avg. Mkt. Cap ($000) 4,123,272.76 4,351,919.01Median Mkt. Cap ($000) 3,060,481.47 914,063.88Price/Earnings ratio10.88 13.13Price/Book ratio1.71 1.735 Yr. EPS Growth Rate (%) 10.27 10.87BetaN/A 1.00Number of Stocks161 1,748Debt to Equity2.27 0.71Top Ten Equity HoldingsPortfolioWeight(%)BenchmarkWeight(%)ActiveWeight(%)QuarterlyReturn(%)Graphic Packaging Holding Co 1.84 0.13 1.71 -23.53KAR Auction Services Inc 1.56 0.02 1.54 -19.47Two Harbors Investment Corp 1.55 0.14 1.41 -10.91SLM Corp 1.52 0.17 1.35 -25.47Walker & Dunlop Inc 1.49 0.05 1.44 -17.77Arrow Electronics Inc 1.47 0.28 1.19 -6.47EnerSys 1.45 0.05 1.40 -10.73World Fuel Services Corp 1.38 0.07 1.31 -22.45National General Holdings Corp 1.37 0.03 1.34 -9.65SYNNEX Corp 1.34 0.15 1.19 -4.12% of Portfolio 14.97 1.09 13.88Ten Best PerformersPortfolioWeight(%)BenchmarkWeight(%)ActiveWeight(%)QuarterlyReturn(%)EVERTEC Inc 0.42 0.01 0.4119.30Cooper Tire & Rubber Co 0.44 0.07 0.3714.59TTEC Holdings Inc 0.87 0.00 0.8711.51Ciena Corp 1.21 0.22 0.998.55Navigant Consulting Inc. 0.59 0.05 0.544.50AES Corporation (The) 0.63 0.00 0.634.21Huron Consulting Group Inc 0.84 0.05 0.793.87Portland General Electric Co 0.35 0.19 0.161.35Aspen Insurance 0.31 0.11 0.200.45MAXIMUS Inc. 0.25 0.00 0.250.43% of Portfolio 5.91 0.70 5.21Ten Worst PerformersPortfolioWeight(%)BenchmarkWeight(%)ActiveWeight(%)QuarterlyReturn(%)Ferroglobe PLC 0.06 0.00 0.06 -80.54Superior Energy Services Inc. 0.18 0.02 0.16 -65.61Extraction Oil & Gas Inc 0.18 0.02 0.16 -62.00Forum Energy Technologies Inc 0.18 0.02 0.16 -60.10Kosmos Energy Ltd 0.50 0.04 0.46 -56.47QEP Resources Inc 0.26 0.06 0.20 -50.27Newfield Exploration Co 0.51 0.09 0.42 -49.15CommScope Holding Co Inc 0.24 0.14 0.10 -46.72Parsley Energy Inc 0.78 0.06 0.72 -45.37Cambrex Corp 0.23 0.03 0.20 -44.80% of Portfolio 3.12 0.48 2.64City of Sebastian Police Officers' Retirement PlanBoston Partners - SMID Value - Portfolio Characteristicsas of December 31, 2018Page 20 Manager Performance ChartManager Risk & ReturnModern Portfolio StatisticsHistoric Asset GrowthManager Annualized Performance0.010.0-10.0-20.0-30.0ReturnCurrent QuarterFiscal YTD1YearSinceInceptionFiera Capital - SMID GrowthRussell 2500 GR90-Day T-Bills1.51.61.71.81.92.02.1Return (%)-8.0-4.00.04.08.012.016.020.024.0 28.0Risk (Standard Deviation %)CurrentQuarterFiscalYTD1YearInception08/01/2017Fiera Capital - SMID Growth -18.96 -18.96 -8.71 1.79Russell 2500 GR -20.08 -20.08 -7.47 1.92Differences 1.12 1.12 -1.24 -0.13CurrentQuarterFiscalYTD1YearInception08/01/2017Fiera Capital - SMID GrowthBeginning Market Value 839 839 750669Net Contributions - - -2-3Fees/Expenses -2 -2 -6-7Income 1 1 46Gain/Loss -160 -160 -6912Ending Market Value 678 678 678678ReturnStandardDeviationBetaMaximumDrawdownUpMarketCaptureDownMarketCaptureAlphaSharpeRatioR-SquaredInceptionDateFiera Capital - SMID Growth 1.79 16.35 0.94 -20.38 96.27 96.93 -0.05 0.09 0.9708/01/2017Russell 2500 GR 1.92 17.15 1.00 -21.25 100.00 100.00 0.00 0.11 1.0008/01/201790-Day T-Bills 1.63 0.13 0.00 0.00 4.55 -2.80 1.65 N/A 0.1908/01/2017as of December 31, 2018Fiera Capital SMID Growth - Executive SummaryCity of Sebastian Police Officers' Retirement PlanThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 21 Historic Change in AssetsDistribution of ReturnsQuarterly Change in AssetsFiera Capital - SMID GrowthRussell 2500 GRNet Cash Flow$0.4$0.6$0.8$1.0Market Value In Millions7/178/179/1710/1711/1712/171/182/183/184/185/186/187/188/189/1810/1811/1812/18$0.7$0.7$0.7Market ValueAs of10/01/2018NetTransfersContributions Distributions Fees ExpensesReturn OnInvestmentMarket ValueAs of12/31/2018Fiera Capital - SMID Growth 838,516.92 - 287,712.25 -288,159.47 -1,572.12- -158,731.47677,766.110246Frequency< -5-5 To -4-4 To -3-3 To -2-2 To -1-1 To 00 To 11 To 22 To 33 To 44 To 5> 5Returns (%)200032031402City of Sebastian Police Officers' Retirement Planas of December 31, 2018Fiera Capital SMID Growth - Change in Assets & Distribution of ReturnsThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 22 AllocationFiera Capital - SMID GrowthRussell 2500 GR0.08.016.024.032.040.0 48.0UtilitiesReal EstateMaterialsInformation TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer DiscretionaryCommunication ServicesPerformanceFiera Capital - SMID GrowthRussell 2500 GR0.0 20.0-20.0-40.0-60.0UtilitiesReal EstateMaterialsInformation TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer DiscretionaryCommunication ServicesTotal Attribution0.00.20.40.60.81.01.21.4 1.6-0.2-0.4-0.6-0.8UtilitiesReal EstateMaterialsInformation TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer DiscretionaryCommunication ServicesCity of Sebastian Police Officers' Retirement PlanFiera Capital - SMID Growth - Quarterly Performance Attributesas of December 31, 2018The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 23 Allocation - 10/01/2018Portfolio BenchmarkPerformance - Quarter EndingDecember 31, 2018Portfolio BenchmarkAttributionSector Stock Interaction TotalCommunication Services 4.95 3.33 -4.69 -17.66 0.04 0.43 0.21 0.68Consumer Discretionary 18.74 15.26 -15.67 -19.73 0.01 0.62 0.14 0.77Consumer Staples 0.00 1.96 0.00 -13.43 -0.13 0.00 0.00 -0.13Energy 3.74 1.60 -27.41 -42.83 -0.49 0.25 0.33 0.09Financials 6.66 6.87 -19.64 -16.51 -0.01 -0.22 0.01 -0.22Health Care 18.31 22.95 -23.48 -23.21 0.15 -0.06 0.01 0.10Industrials 14.66 16.89 -20.01 -20.14 0.00 0.02 0.00 0.02Information Technology 28.94 23.81 -15.06 -18.43 0.08 0.80 0.17 1.06Materials 3.99 4.65 -13.79 -19.92 0.00 0.28 -0.04 0.24Real Estate 0.00 2.47 0.00 -10.82 -0.23 0.00 0.00 -0.23Utilities 0.00 0.20 0.00 1.74 -0.04 0.00 0.00 -0.04Total 100.00 100.00 -17.64 -19.99 -0.62 2.13 0.83 2.34City of Sebastian Police Officers' Retirement PlanFiera Capital - SMID Growth - Quarterly Performance Attributesas of December 31, 2018All the values for Allocation, Performance and Attribution are expresssed in Percentage(%) termsThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 24 Portfolio CharacteristicsPortfolio BenchmarkWtd. Avg. Mkt. Cap ($000) 6,935,522.32 4,611,086.96Median Mkt. Cap ($000) 5,590,705.30 1,026,286.25Price/Earnings ratio18.90 20.30Price/Book ratio4.01 4.095 Yr. EPS Growth Rate (%) 22.33 18.88BetaN/A 1.00Number of Stocks72 1,508Debt to Equity0.91 0.82Top Ten Equity HoldingsPortfolioWeight(%)BenchmarkWeight(%)ActiveWeight(%)QuarterlyReturn(%)Fortinet Inc 2.79 0.54 2.25 -23.67Live Nation Entertainment Inc 2.73 0.37 2.36 -9.58Nutanix Inc 2.52 0.31 2.21 -2.64Broadridge Fin. Solutions 2.49 0.00 2.49 -26.69Splunk Inc 2.42 0.00 2.42 -13.28Total System Services Inc. 2.37 0.00 2.37 -17.54Copart Inc 2.37 0.00 2.37 -7.28Dolby Laboratories Inc 2.33 0.00 2.33 -11.38MercadoLibre Inc 2.30 0.00 2.30 -13.99Icon PLC 2.28 0.00 2.28 -15.96% of Portfolio 24.60 1.22 23.38Ten Best PerformersPortfolioWeight(%)BenchmarkWeight(%)ActiveWeight(%)QuarterlyReturn(%)Exelixis Inc 1.63 0.31 1.32 11.00TripAdvisor Inc 1.80 0.30 1.50 5.62ACI Worldwide Inc 1.68 0.16 1.52 -1.67Berry Global Group Inc 2.11 0.17 1.94 -1.78Reinsurance Group of Amer. 2.24 0.00 2.24 -2.59Nutanix Inc 2.52 0.31 2.21 -2.64Power Integrations Inc 0.98 0.09 0.89 -3.26Entegris Inc 1.86 0.21 1.65 -3.39Bright Horizons Family Solutions Inc 0.92 0.29 0.63 -5.42Wright Medical Group NV 1.71 0.18 1.53 -6.20% of Portfolio 17.45 2.02 15.43Ten Worst PerformersPortfolioWeight(%)BenchmarkWeight(%)ActiveWeight(%)QuarterlyReturn(%)Veoneer Inc 0.59 0.00 0.59 -57.20Viking Therapeutics Inc 0.48 0.02 0.46 -56.08Helix Energy Solutions 0.47 0.00 0.47 -45.24GrubHub Inc 0.71 0.37 0.34 -44.59WPX Energy Inc 0.91 0.00 0.91 -43.59Teladoc Health Inc 0.46 0.18 0.28 -42.59WildHorse Resource Development Corp 0.86 0.02 0.84 -40.31Apergy Corp 0.79 0.00 0.79 -37.83United Rentals Inc. 1.75 0.00 1.75 -37.33Arrowhead Pharmaceuticals Inc 0.85 0.06 0.79 -35.21% of Portfolio 7.87 0.65 7.22City of Sebastian Police Officers' Retirement PlanFiera Capital - SMID Growth - Portfolio Characteristicsas of December 31, 2018Page 25 Manager Performance ChartManager Risk & ReturnModern Portfolio StatisticsHistoric Asset GrowthManager Annualized Performance-20.0-15.0-10.0-5.00.0ReturnCurrent QuarterFiscal YTD1YearSinceInceptionHighland - Intl Value MSCI EAFE Net90-Day T-Bills-12.0-10.0-8.0-6.0-4.0-2.00.02.04.06.0Return (%)-6.0-3.00.03.06.09.012.015.0 18.0Risk (Standard Deviation %)CurrentQuarterFiscalYTD1YearInception08/01/2017Highland - Intl Value -14.48 -14.48 -14.43 -6.89MSCI EAFE Net -12.54 -12.54 -13.79 -5.68Differences -1.94 -1.94 -0.64 -1.21CurrentQuarterFiscalYTD1YearInception08/01/2017Highland - Intl ValueBeginning Market Value 761 761 740701Net Contributions - - 2626Fees/Expenses - - -5-5Income 3 3 1621Gain/Loss -113 -113 -126-92Ending Market Value 651 651 651651ReturnStandardDeviationBetaMaximumDrawdownUpMarketCaptureDownMarketCaptureAlphaSharpeRatioR-SquaredInceptionDateHighland - Intl Value -6.89 12.07 1.07 -18.83 99.22 105.98 -0.79 -0.66 0.9308/01/2017MSCI EAFE Net -5.68 10.90 1.00 -17.91 100.00 100.00 0.00 -0.62 1.0008/01/201790-Day T-Bills 1.63 0.13 -0.01 0.00 5.38 -5.47 1.60 N/A 0.2508/01/2017as of December 31, 2018Highland - International Value - Executive SummaryCity of Sebastian Police Officers' Retirement PlanThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 26 Historic Change in AssetsDistribution of ReturnsQuarterly Change in AssetsHighland - Intl Value MSCI EAFE NetNet Cash Flow$0.6$0.7$0.8$0.9Market Value In Millions7/178/179/1710/1711/1712/171/182/183/184/185/186/187/188/189/1810/1811/1812/18$0.7$0.7$0.7Market ValueAs of10/01/2018NetTransfersContributions Distributions Fees ExpensesReturn OnInvestmentMarket ValueAs of12/31/2018Highland - Intl Value 761,476.27 - 3,183.23 -3,420.45 - - -110,236.67 651,002.380246Frequency< -5-5 To -4-4 To -3-3 To -2-2 To -1-1 To 00 To 11 To 22 To 33 To 44 To 5> 5Returns (%)300033221201City of Sebastian Police Officers' Retirement Planas of December 31, 2018Highland - International Value - Change in Assets & Distribution of ReturnsThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 27 AllocationHighland - Intl Value MSCI EAFE Net0.08.016.024.032.040.0 48.0UtilitiesReal EstateMaterialsInformation TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer DiscretionaryCommunication ServicesPerformanceHighland - Intl Value MSCI EAFE Net0.0 15.0-15.0-30.0-45.0UtilitiesReal EstateMaterialsInformation TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer DiscretionaryCommunication ServicesTotal Attribution0.00.30.60.91.21.5 1.8-0.3-0.6-0.9-1.2-1.5-1.8-2.1-2.4UtilitiesReal EstateMaterialsInformation TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer DiscretionaryCommunication ServicesCity of Sebastian Police Officers' Retirement PlanHighland - Intl Value - Quarterly Performance Attributesas of December 31, 2018The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 28 Allocation - 10/01/2018Portfolio BenchmarkPerformance - Quarter EndingDecember 31, 2018Portfolio BenchmarkAttributionSector Stock Interaction TotalCommunication Services 7.84 5.52 -2.18 -9.64 0.07 0.41 0.17 0.65Consumer Discretionary 28.23 11.02 -18.58 -14.68 -0.37 -0.43 -0.67 -1.47Consumer Staples 11.20 11.17 -11.58 -8.84 0.00 -0.31 0.00 -0.31Energy 9.79 6.16 -27.47 -17.33 -0.17 -0.62 -0.37 -1.17Financials 10.20 19.66 -22.73 -13.64 0.10 -1.79 0.86 -0.82Health Care 10.70 11.11 -15.71 -10.01 -0.01 -0.63 0.02 -0.62Industrials 7.31 14.51 -11.18 -14.64 0.15 0.50 -0.25 0.40Information Technology 9.70 6.14 -20.97 -16.48 -0.14 -0.28 -0.16 -0.58Materials 4.13 8.09 -14.87 -15.21 0.11 0.03 -0.01 0.12Real Estate 0.00 3.38 0.00 -5.22 -0.25 0.00 0.00 -0.25Utilities 0.90 3.24 -5.64 0.03 -0.29 -0.18 0.13 -0.35Total 100.00 100.00 -16.92 -12.54 -0.80 -3.30 -0.27 -4.38City of Sebastian Police Officers' Retirement PlanHighland - Intl Value - Quarterly Performance Attributesas of December 31, 2018All the values for Allocation, Performance and Attribution are expresssed in Percentage(%) termsThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 29 Portfolio CharacteristicsPortfolio BenchmarkWtd. Avg. Mkt. Cap ($000) 80,342,720.10 55,193,733.25Median Mkt. Cap ($000) 37,229,134.56 9,371,617.18Price/Earnings ratio11.33 12.27Price/Book ratio2.20 2.125 Yr. EPS Growth Rate (%) 15.68 9.78BetaN/A 1.00Number of Stocks40 920Debt to Equity1.10 1.08Top Ten Equity HoldingsPortfolioWeight(%)BenchmarkWeight(%)ActiveWeight(%)QuarterlyReturn(%)Sony Corp 9.46 0.49 8.97 -20.40Philips Electronics NV 6.53 0.27 6.26 -22.85SAP AG 5.82 0.78 5.04 -19.07Royal Caribbean Cruises Ltd 5.81 0.00 5.81 -24.23Siemens AG 5.75 0.68 5.07 -13.14BP PLC 4.69 1.01 3.68 -16.52Anheuser-Busch InBev SA/NV 4.62 0.40 4.22 -23.95Honda Motor Co Ltd 4.54 0.34 4.20 -12.07Intercontinental Hotels Group PLC 4.20 0.08 4.12 -13.06Unilever NV 4.09 0.67 3.42 -2.35% of Portfolio 55.51 4.72 50.79Ten Best PerformersPortfolioWeight(%)BenchmarkWeight(%)ActiveWeight(%)QuarterlyReturn(%)Barrick Gold Corp 1.44 0.00 1.44 23.11Petrobras 2.05 0.00 2.05 8.42BT Group PLC 4.03 0.20 3.83 4.95Twenty-First Century Fox Inc 3.03 0.00 3.03 4.28Smith & Nephew PLC 1.31 0.13 1.18 1.56Diageo PLC 3.18 0.70 2.48 0.09Copa Holdings SA 1.00 0.00 1.00 -0.38Unilever NV 4.09 0.67 3.42 -2.35Glaxosmithkline PLC 3.02 0.75 2.27 -3.72National Grid plc 1.01 0.26 0.75 -5.64% of Portfolio 24.16 2.71 21.45Ten Worst PerformersPortfolioWeight(%)BenchmarkWeight(%)ActiveWeight(%)QuarterlyReturn(%)McDermott International Inc. 0.46 0.00 0.46 -64.51Encana Corp 1.30 0.00 1.30 -55.81Arcelormittal SA 1.34 0.11 1.23 -33.02Baidu Inc0.93 0.00 0.93 -30.65Deutsche Bank AG 0.52 0.13 0.39 -28.26Aegon NV0.66 0.07 0.59 -27.68Credit Suisse Group 1.85 0.22 1.63 -27.31Invesco Ltd1.06 0.00 1.06 -25.79Bright Scholar Education Holdings Limited 0.45 0.00 0.45 -25.67Royal Caribbean Cruises Ltd 5.81 0.00 5.81 -24.23% of Portfolio 14.38 0.53 13.85City of Sebastian Police Officers' Retirement PlanHighland - Intl Value - Portfolio Characteristicsas of December 31, 2018Page 30 Manager Performance ChartManager Risk & ReturnModern Portfolio StatisticsHistoric Asset GrowthManager Annualized Performance-32.0-24.0-16.0-8.00.0ReturnCurrent QuarterFiscal YTD1YearSinceInceptionRenaissance - International GrowthMSCI AC World ex US Net90-Day T-Bills-18.0-15.0-12.0-9.0-6.0-3.00.03.06.09.0Return (%)-6.0-3.00.03.06.09.012.015.0 18.0Risk (Standard Deviation %)CurrentQuarterFiscalYTD1YearInception08/01/2017Renaissance - International Growth -16.51 -16.51 -19.49 -11.69MSCI AC World ex US Net -11.46 -11.46 -14.19 -5.53Differences -5.05 -5.05 -5.30 -6.16CurrentQuarterFiscalYTD1YearInception08/01/2017Renaissance - International GrowthBeginning Market Value 1,144 1,144 1,056 1,016Net Contributions -1 -1 130 129Fees/Expenses -2 -2 -7 -8Income4 4 25 31Gain/Loss -192 -192 -251 -215Ending Market Value 953 953 953 953ReturnStandardDeviationBetaMaximumDrawdownUpMarketCaptureDownMarketCaptureAlphaSharpeRatioR-SquaredInceptionDateRenaissance - International Growth -11.69 12.32 1.06 -24.31 69.86 114.52 -6.06-1.07 0.9308/01/2017MSCI AC World ex US Net -5.53 11.17 1.00 -18.72 100.00 100.00 0.00 -0.59 1.0008/01/201790-Day T-Bills 1.63 0.13 -0.01 0.00 6.58 -4.25 1.61 N/A 0.2408/01/2017as of December 31, 2018Renaissance - International Growth - Executive SummaryCity of Sebastian Police Officers' Retirement PlanThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 31 Historic Change in AssetsDistribution of ReturnsQuarterly Change in AssetsRenaissance - International GrowthMSCI AC World ex US NetNet Cash Flow$0.8$1.0$1.2$1.4Market Value In Millions7/178/179/1710/1711/1712/171/182/183/184/185/186/187/188/189/1810/1811/1812/18$1.1$1.0$1.0Market ValueAs of10/01/2018NetTransfersContributions Distributions Fees ExpensesReturn OnInvestmentMarket ValueAs of12/31/2018Renaissance - International Growth 1,143,884.00 - 168,418.90 -168,936.12 -1,876.41 - -188,623.71 952,866.6602468Frequency< -5-5 To -4-4 To -3-3 To -2-2 To -1-1 To 00 To 11 To 22 To 33 To 44 To 5> 5Returns (%)211203250001City of Sebastian Police Officers' Retirement Planas of December 31, 2018Renaissance - International Growth - Change in Assets & Distribution of ReturnsThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 32 AllocationRenaissance - International GrowthMSCI AC World ex US Net0.06.012.018.024.030.0 36.0UtilitiesReal EstateMaterialsInformation TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer DiscretionaryCommunication ServicesPerformanceRenaissance - International GrowthMSCI AC World ex US Net0.0 15.0-15.0-30.0-45.0UtilitiesReal EstateMaterialsInformation TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer DiscretionaryCommunication ServicesTotal Attribution0.00.30.60.91.2 1.5-0.3-0.6-0.9-1.2-1.5-1.8-2.1UtilitiesReal EstateMaterialsInformation TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer DiscretionaryCommunication ServicesCity of Sebastian Police Officers' Retirement PlanRenaissance - International Growth - Quarterly Performance Attributesas of December 31, 2018The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 33 Allocation - 10/01/2018Portfolio BenchmarkPerformance - Quarter EndingDecember 31, 2018Portfolio BenchmarkAttributionSector Stock Interaction TotalCommunication Services 8.43 7.46 -16.80 -8.14 0.03 -0.65 -0.08 -0.70Consumer Discretionary 16.39 10.45 -20.68 -13.81 -0.15 -0.72 -0.41 -1.27Consumer Staples 4.16 9.54 3.15 -7.77 -0.19 1.04 -0.59 0.26Energy 5.78 7.64 -9.98 -16.05 0.09 0.46 -0.11 0.44Financials 16.95 22.01 -12.10 -10.65 -0.04 -0.32 0.07 -0.28Health Care 10.34 8.45 -21.71 -10.74 0.01 -0.93 -0.21 -1.12Industrials 16.10 11.91 -16.72 -13.64 -0.10 -0.37 -0.13 -0.59Information Technology 12.10 8.40 -16.64 -15.30 -0.15 -0.11 -0.05 -0.31Materials 9.74 8.12 -25.00 -13.38 -0.03 -0.94 -0.19 -1.16Real Estate 0.00 3.05 0.00 -3.74 -0.23 0.00 0.00 -0.23Utilities 0.00 2.97 0.00 0.59 -0.35 0.00 0.00 -0.35Total 100.00 100.00 -16.69 -11.36 -1.11 -2.53 -1.69 -5.33City of Sebastian Police Officers' Retirement PlanRenaissance - International Growth - Quarterly Performance Attributesas of December 31, 2018All the values for Allocation, Performance and Attribution are expresssed in Percentage(%) termsThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 34 Portfolio CharacteristicsPortfolio BenchmarkWtd. Avg. Mkt. Cap ($000) 31,452,472.33 58,116,104.70Median Mkt. Cap ($000) 19,477,882.99 7,297,808.30Price/Earnings ratio9.99 12.03Price/Book ratio1.98 2.155 Yr. EPS Growth Rate (%) 17.68 10.64BetaN/A 1.00Number of Stocks54 2,136Debt to Equity0.61 1.06Top Ten Equity HoldingsPortfolioWeight(%)BenchmarkWeight(%)ActiveWeight(%)QuarterlyReturn(%)Oil Co LUKOIL PJSC 2.96 0.19 2.77 -4.17Teck Resources Ltd 2.72 0.06 2.66 -10.18Bridgestone Corp 2.67 0.13 2.54 2.15Eni SpA 2.66 0.22 2.44 -16.36Credicorp Ltd 2.60 0.08 2.52 -0.63WH Group Ltd 2.59 0.04 2.55 9.38Sanofi 2.56 0.53 2.03 -2.82CRH PLC 2.41 0.12 2.29 -19.47Sony Corp 2.35 0.33 2.02 -20.40Taiwan Semiconductor 2.34 0.98 1.36 -16.42% of Portfolio 25.86 2.68 23.18Ten Best PerformersPortfolioWeight(%)BenchmarkWeight(%)ActiveWeight(%)QuarterlyReturn(%)WH Group Ltd 2.59 0.04 2.55 9.38Bridgestone Corp 2.67 0.13 2.54 2.15Credicorp Ltd 2.60 0.08 2.52 -0.63Seven & I Holdings Co Ltd 2.25 0.18 2.07 -2.14Sanofi 2.56 0.53 2.03 -2.82Scor SE 2.14 0.04 2.10 -3.06SK Telecom Co Ltd 2.23 0.03 2.20 -3.87Oil Co LUKOIL PJSC 2.96 0.19 2.77 -4.17Smc Corp 2.15 0.09 2.06 -5.36Steris Plc 2.13 0.00 2.13 -6.32% of Portfolio 24.28 1.31 22.97Ten Worst PerformersPortfolioWeight(%)BenchmarkWeight(%)ActiveWeight(%)QuarterlyReturn(%)Stora Enso OYJ, Helsinki 1.78 0.03 1.75 -39.75Fresenius Medical Care 1.62 0.08 1.54 -37.01AerCap Holdings NV 1.88 0.03 1.85 -31.15Arkema 2.14 0.03 2.11 -30.86Baidu Inc 1.80 0.24 1.56 -30.65Astellas Pharma Inc 1.92 0.13 1.79 -26.80Jazz Pharmaceuticals Plc 1.82 0.00 1.82 -26.27Ryanair Holdings PLC 1.79 0.01 1.78 -25.72Carnival PLC 2.02 0.04 1.98 -22.10Capgemini SE 1.97 0.09 1.88 -21.19% of Portfolio 18.74 0.68 18.06City of Sebastian Police Officers' Retirement PlanRenaissance - International Growth - Portfolio Characteristicsas of December 31, 2018Page 35 Manager Performance ChartManager Risk & ReturnModern Portfolio StatisticsHistoric Asset GrowthManager Annualized Performance0.00.71.42.12.8ReturnCurrent QuarterFiscal YTD1YearSinceInceptionHighland - Fixed Income Barclays Aggregate90-Day T-Bills0.00.30.60.91.21.51.82.1Return (%)-0.8-0.40.00.40.81.21.62.02.42.83.2 3.6Risk (Standard Deviation %)CurrentQuarterFiscalYTD1YearInception08/01/2017Highland - Fixed Income 1.71 1.71 0.13 0.73Barclays Aggregate 1.64 1.64 0.01 0.58Differences 0.07 0.07 0.12 0.15CurrentQuarterFiscalYTD1YearInception08/01/2017Highland - Fixed IncomeBeginning Market Value 3,549 3,549 3,9043,980Net Contributions - - -275-387Fees/Expenses - - -23-23Income 30 30 114174Gain/Loss 31 31 -111-135Ending Market Value 3,609 3,609 3,6093,609ReturnStandardDeviationBetaMaximumDrawdownUpMarketCaptureDownMarketCaptureAlphaSharpeRatioR-SquaredInceptionDateHighland - Fixed Income 0.73 2.58 0.96 -2.20 99.51 95.30 0.17 -0.34 0.9808/01/2017Barclays Aggregate 0.58 2.67 1.00 -2.46 100.00 100.00 0.00 -0.38 1.0008/01/201790-Day T-Bills 1.63 0.13 0.01 0.00 21.64 -20.56 1.63 N/A 0.0808/01/2017as of December 31, 2018Highland - Fixed Income - Executive SummaryCity of Sebastian Police Officers' Retirement PlanThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 36 Historic Change in AssetsDistribution of ReturnsQuarterly Change in AssetsHighland - Fixed Income Barclays AggregateNet Cash Flow($8.0)$0.0$8.0$16.0$24.0Market Value In Millions1/117/111/127/121/137/131/147/141/157/151/167/161/177/171/187/1812/18($1.4)$0.6$3.6Market ValueAs of10/01/2018NetTransfersContributions Distributions Fees ExpensesReturn OnInvestmentMarket ValueAs of12/31/2018Highland - Fixed Income 3,548,783.36 - 223,757.17 -224,009.41 - - 60,578.853,609,109.97010203040Frequency< -5-5 To -4-4 To -3-3 To -2-2 To -1-1 To 00 To 11 To 22 To 33 To 44 To 5> 5Returns (%)0233101724208521City of Sebastian Police Officers' Retirement Planas of December 31, 2018Highland - Fixed Income - Change in Assets & Distribution of ReturnsThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 37 Manager Performance ChartManager Risk & ReturnModern Portfolio StatisticsHistoric Asset GrowthManager Annualized Performance-24.0-18.0-12.0-6.00.0ReturnCurrent QuarterFiscal YTD1YearSinceInceptionCenter Coast - MLPAlerian MLP Index90-Day T-Bills-20.0-16.0-12.0-8.0-4.00.04.08.0Return (%)-8.0-4.00.04.08.012.016.020.024.0 28.0Risk (Standard Deviation %)CurrentQuarterFiscalYTD1YearInception08/01/2017Center Coast - MLP -15.89 -15.89 -14.23 -13.23Alerian MLP Index -17.30 -17.30 -12.42 -12.30Differences 1.41 1.41 -1.81 -0.93CurrentQuarterFiscalYTD1YearInception08/01/2017Center Coast - MLPBeginning Market Value 648 648 639672Net Contributions - - -1-2Fees/Expenses -1 -1 -3-4Income 11 11 4669Gain/Loss -114 -114 -137-191Ending Market Value 544 544 544544ReturnStandardDeviationBetaMaximumDrawdownUpMarketCaptureDownMarketCaptureAlphaSharpeRatioR-SquaredInceptionDateCenter Coast - MLP -13.23 18.78 0.96 -18.96 94.48 99.54 -1.51 -0.74 0.9708/01/2017Alerian MLP Index -12.30 19.17 1.00 -18.59 100.00 100.00 0.00 -0.67 1.0008/01/201790-Day T-Bills 1.63 0.13 0.00 0.00 2.80 -2.87 1.63 N/A 0.0108/01/2017as of December 31, 2018Center Coast - MLP - Executive SummaryCity of Sebastian Police Officers' Retirement PlanThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 38 Historic Change in AssetsDistribution of ReturnsQuarterly Change in AssetsCenter Coast - MLPAlerian MLP IndexNet Cash Flow$0.4$0.5$0.6$0.7$0.8Market Value In Millions7/178/179/1710/1711/1712/171/182/183/184/185/186/187/188/189/1810/1811/1812/18$0.7$0.6$0.5Market ValueAs of10/01/2018NetTransfersContributions Distributions Fees ExpensesReturn OnInvestmentMarket ValueAs of12/31/2018Center Coast - MLP 648,363.93 - 173,335.25 -173,667.47 -817.12 - -102,884.71 544,329.880246Frequency< -5-5 To -4-4 To -3-3 To -2-2 To -1-1 To 00 To 11 To 22 To 33 To 44 To 5> 5Returns (%)420111111113City of Sebastian Police Officers' Retirement Planas of December 31, 2018Center Coast - MLP - Change in Assets & Distribution of ReturnsThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 39 Manager Performance ChartManager Risk & ReturnModern Portfolio StatisticsHistoric Asset GrowthManager Annualized Performance0.05.010.015.020.0ReturnCurrent QuarterFiscal YTD1YearSinceInceptionIntercontinental - Private Real EstateNCREIF Property Idx90-Day T-Bills-3.00.03.06.09.012.015.018.0Return (%)-1.4-0.70.00.71.42.12.83.54.24.95.6 6.3Risk (Standard Deviation %)CurrentQuarterFiscalYTD1YearInception10/01/2017Intercontinental - Private Real Estate 2.15 2.15 11.4611.51NCREIF Property Idx 1.37 1.37 6.716.85Differences 0.78 0.78 4.754.66CurrentQuarterFiscalYTD1YearInception10/01/2017Intercontinental - Private Real EstateBeginning Market Value 691 691 115 112Net Contributions -5 -5 519 519Fees/Expenses -5 -5 -11 -11Income- - - -Gain/Loss 15 15 73 76Ending Market Value 696 696 696 696ReturnStandardDeviationBetaMaximumDrawdownUpMarketCaptureDownMarketCaptureAlphaSharpeRatioR-SquaredInceptionDateIntercontinental - Private Real Estate 11.51 4.29 1.02 0.00 165.14 N/A 4.29 2.180.4310/01/2017NCREIF Property Idx 6.85 2.75 1.00 0.00 100.00 N/A 0.00 1.82 1.0010/01/201790-Day T-Bills 1.71 0.12 0.00 0.00 25.45 N/A 1.68 N/A 0.0110/01/2017as of December 31, 2018Intercontinental - Private Real Estate - Executive SummaryCity of Sebastian Police Officers' Retirement PlanThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 40 Historic Change in AssetsDistribution of ReturnsQuarterly Change in AssetsIntercontinental - Private Real EstateNCREIF Property IdxNet Cash Flow($0.3)$0.0$0.3$0.6$0.9$1.2Market Value In Millions10/1711/1712/171/182/183/184/185/186/187/188/189/1810/1811/1812/18$0.6$0.7$0.7Market ValueAs of10/01/2018NetTransfersContributions Distributions Fees ExpensesReturn OnInvestmentMarket ValueAs of12/31/2018Intercontinental - Private Real Estate 691,372.00 - - -4,715.00 -5,330.00 - 14,685.00 696,012.000481216Frequency< -5-5 To -4-4 To -3-3 To -2-2 To -1-1 To 00 To 11 To 22 To 33 To 44 To 5> 5Returns (%)0000001004000City of Sebastian Police Officers' Retirement Planas of December 31, 2018Intercontinental - Private Real Estate - Change in Assets & Distribution of ReturnsThe prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not aguarantee of future results.Page 41 Portfolio NameYTD1Year3Years5Years10YearsSinceInceptionInceptionDatePerformance AppendixQTDPerformance Data below is net of fees. Please see the Morgan Stanley Smith Barney LLC Form ADV Part 2 Brochure for advisory accounts and/or any applicable brokerage account trade confirmation statements fora full disclosure of the applicable charges, fees and expenses. Your Financial Advisor will provide those documents to you upon request.Boston Partners - SMID Value-19.53 -19.53 -- -- -- -9.6807/01/2017-19.80Center Coast - MLP-14.67 -14.67 -- -- -- -13.2007/01/2017-16.00Fiera Capital - SMID Growth-9.40 -9.40 -- -- -- 0.4907/01/2017-19.13Highland - Fixed Income-0.52 -0.52 5.10 4.46 -- 5.4601/01/20111.71Highland - Intl Value-15.01 -15.01 -- -- -- -5.5407/01/2017-14.48Highland - Large Cap Growth-5.15 -5.15 -- -- -- 3.7207/01/2017-16.47Highland - Large Cap Value-8.01 -8.01 -- -- -- 0.1707/01/2017-11.86Intercontinental - Private Real Estate9.74 9.74 -- -- -- 9.8910/01/20171.36Receipt & Disbursement-4.87 -4.87 -- -- -- -2.6507/01/2017-2.04Renaissance - International Growth-20.02 -20.02 -- -- -- -11.3407/01/2017-16.66 Glossary of TermsActive Contribution Return: The gain or loss percentage of an investment relative to the performance ofthe investment benchmark.Active Exposure: The percentage difference in weight of the portfolio compared to its policy benchmark.Active Return: Arithmetic difference between the manager’s return and the benchmark’s return over aspecified time period.Actual Correlation: A measure of the correlation (linear dependence) between two variables X and Y, witha value between +1 and -1 inclusive. This is also referred to as coefficient of correlation.Alpha: A measure of a portfolio's time weighted return in excess of the market’s return, both adjusted forrisk. A positive alpha indicates that the portfolio outperformed the market on a risk-adjusted basis, and anegative alpha indicates the portfolio did worse than the market.Best Quarter: The highest quarterly return for a certain time period.Beta: A measure of the sensitivity of a portfolio’s time weighted return (net of fees) against that of themarket. A beta greater than 1.00 indicates volatility greater than the market.Consistency: The percentage of quarters that a product achieved a rate of return higher than that of itsbenchmark. The higher the consistency figure, the more value a manager has contributed to the product’sperformance.Core: Refers to an investment strategy mandate that is blend of growth and value styles without apronounced tilt toward either style.Cumulative Selection Return (Cumulative Return): Cumulative investment performance over a specifiedperiod of time.Distribution Rate: The most recent distribution paid, annualized, and then divided by the current marketprice. Distribution rate may consist of investment income, short-term capital gains, long-term capital gains,and/or return of capital.Down Market Capture: The ratio of average portfolio returns over the benchmark during periods ofnegative benchmark return. Lower values indicate better product performance.Downside Risk: A measure similar to standard deviation, but focuses only on the negative movements ofthe return series. It is calculated by taking the standard deviation of the negative quarterly set of returns. Thehigher the value, the more risk the product has.Downside Semi Deviation:A statistical calculation that measures the volatility of returns below aminimum acceptable return. This return measure isolates the negative portion of volatility: the larger thenumber, the greater the volatility.Drawdown:A drawdown is the peak-to-trough decline during a specific period of an investment, fund orcommodity.Excess over Benchmark: The percentage gain or loss of an investment relative to the investment'sbenchmark.Excess Return: Arithmetic difference between the manager’s return and the risk-free return over aspecified time period.Growth: A diversified investment strategy which includes investment selections that have capitalappreciation as the primary goal, with little or no dividend payouts. These strategies can includereinvestment in expansion, acquisitions, and/or research and development opportunities.Growth of Dollar: The aggregate amount an investment has gained or lost over a certain time period, alsoreferred to as Cumulative Return, stated in terms of the amount to which an initial dollar investment wouldhave grown over the given time period.Investment Decision Process (IDP): A model for structuring the investment process and implementing thecorrect attribution methodologies. The IDP includes every decision made concerning the division of theassets under management over the various asset categories. To analyze each decision‘s contribution to thetotal return, a modeling approach must measure the marginal value of every individual decision. In thisrespect, the hierarchy of the decisions becomes very important. We therefore use the IDP model, whichserves as a proper foundation for registering the decisions and relating them to each other.Information Ratio: Measured by dividing the active rate of return by the tracking error. The higher theInformation Ratio, the more value-added contribution by the manager.Jensen’s Alpha: The Jensen's alpha measure is a risk-adjusted performance measure that represents theaverage return on a portfolio or investment above or below that predicted by the capital asset pricing model(CAPM) given the portfolio's or investment's beta and the average market return. This metric is alsocommonly referred to as alpha..Kurtosis: A statistical measure that is used to describe the distribution, or skewness, of observed dataaround the mean, sometimes referred to as the volatility of volatility.Maximum Drawdown: The drawdown is defined as the percent retrenchment from a fund's peak to thefund's trough value. It is in effect from the time the fund's retrenchment begins until a new fund high isreached. The maximum drawdown encompasses both the period from the fund's peak to the fund's valley(length), and the time from the fund's valley to a new fund high (recovery). It measures the largestpercentage drawdown that has occurred in any fund's data record.Modern Portfolio Theory (MPT):An investment analysis theory on how risk-averse investors canconstruct portfolios to optimize or maximize expected return based on a given level of market risk,emphasizing that risk is an inherent part of higher reward.Mutual Fund (MF):An investment program funded by shareholders that trade in diversified holdings andis professionally managed.Peer Group: A combination of funds that share the same investment style combined as a group forcomparison purposes.Peer/ Plan Sponsor Universe: A combination of asset pools of total plan investments by specific sponsorand plan types for comparison purposes.Performance Ineligible Assets: Performance returns are not calculated for certain assets because accuratevaluations and transaction data for these assets are not processed or maintained by us. Common examples ofthese include life insurance, some annuities and some assets held externally. these include life insurance, some annuities and some assets held externally.Performance Statistics: A generic term for various measures of investment performance measurementterms.Portfolio Characteristics: A generic term for various measures of investment portfolio characteristics.Preferred Return:A term used in the private equity (PE) world, and also referred to as a “Hurdle Rate.” Itrefers to the threshold return that the limited partners of a private equity fund must receive, prior to the PEfirm receiving its carried interest or "carry."Ratio of Cumulative Wealth: A defined ratio of the Cumulative Return of the portfolio divided by theCumulative Return of the benchmark for a certain time period.Regression Based Analysis:A statistical process for estimating the relationships among variables. Itincludes many techniques for modeling and analyzing several variables, when the focus is on therelationship between a dependent variable and one or more independent variablesResidual Correlation: Within returns-based style analysis, residual correlation refers to the portion of astrategy’s return pattern that cannot be explained by its correlation to the asset-class benchmarks to which itis being compared.Return: A rate of investment performance for the specified period.Rolling Percentile Ranking:A measure of an investment portfolio’s ranking versus a peer group for aspecific rolling time period (i.e. Last 3 Years, Last 5 years, etc.).R-Squared: The percentage of a portfolio's performance explained by the behavior of the appropriatebenchmark. High R-Squared means a higher correlation of the portfolio's performance to the appropriatebenchmark.SA/CF (Separate Account/Comingled Fund): Represents an acronym for Separate Account andCommingled Fund investment vehicles.Sector Benchmark: A market index that serves as a proxy for a sector within an asset class.Sharpe Ratio:Represents the excess rate of return over the risk free return divided by the standarddeviation of the excess return. The result is the absolute rate of return per unit of risk. The higher the value,the better the product’s historical risk-adjusted performance results in.Standard Deviation: A statistical measure of the range of a portfolio's performance; the variability of areturn around its average return over a specified time period.Total Fund Benchmark:The policy benchmark for a complete asset pool that could consist of multipleinvestment mandates.Total Fund Composite: The aggregate of multiple portfolios within an asset pool or household.Tracking Error: A measure of standard deviation for a portfolio's investment performance, relative to theperformance of an appropriate market benchmark.Treynor Ratio: A ratio that divides the excess return (above the risk free rate) by the portfolio’s beta toarrive at a unified measure of risk adjusted return. It is generally used to rank portfolios, funds andbenchmarks. A higher ratio is indicative of higher returns per unit of market risk. This measurement canhelp determine if the portfolio is reaching its goal of increasing returns while managing market risk.Up Market Capture: The ratio of average portfolio returns over the benchmark during periods of positivebenchmark return. Higher values indicate better product performance.Upside Semi Deviation: A statistical calculation that measures the volatility of returns above an acceptablereturn. This return measure isolates the positive portion of volatility: the larger the number, the greater thevolatility.Value: A diversified investment strategy that includes investment selections which tend to trade at a lowerprice relative to its dividends, earnings, and sales. Common attributes are stocks that include high dividend,low price-to-book ratio, and/or low price-to-earnings ratio.Worst Quarter: The lowest rolling quarterly return for a certain time period.Information DisclosuresPerformance results are annualized for time periods greater than one year and include all cash and cashequivalents, realized and unrealized capital gains and losses, and dividends, interest and income. Theinvestment results depicted herein represent historical performance. As a result of recent market activity,current performance may vary from the figures shown. Past performance is not a guarantee of futureresults.Please see the Morgan Stanley Smith Barney LLC Form ADV Part 2 Brochure for advisory accountsand/or any applicable brokerage account trade confirmation statements for a full disclosure of theapplicable charges, fees and expenses. Your Financial Advisor will provide those documents to you uponrequest.Benchmark indices and blends included in this material are for informational purposes only, areprovided solely as a comparison tool and may not reflect the underlying composition and/or investmentobjective(s) associated with the account(s). Indices are unmanaged and not available for directinvestment. Index returns do not take into account fees or other charges. Such fees and charges wouldreduce performance.The performance data shown reflects past performance, which does not guarantee future results.Investment return and principal will fluctuate so that an investor’s shares when redeemed may be worthmore or less than original cost. Please note, current performance may be higher or lower than theperformance data shown. For up to date month-end performance information, please contact yourFinancial Advisor or visit the funds’ company website.Investors should carefully consider the fund’s investment objectives, risks, charges and expenses beforeinvesting. The prospectus and, if available the summary prospectus, contains this and other informationthat should be read carefully before investing. Investors should review the information in the prospectuscarefully. To obtain a prospectus, please contact your Financial Advisor or visit the funds’ companywebsite.Past performance is no guarantee of future results.Investing involves market risk, including possible loss of principal.Growth investing does not guarantee aprofit or eliminate risk. The stocks of these companies can have relatively high valuations. Because of thesehigh valuations, an investment in a growth stock can be more risky than an investment in a company withmore modest growth expectations.Value investing involves the risk that the market may not recognize thatsecurities are undervalued and they may not appreciate as anticipated.Small and mid-capitalizationcompanies may lack the financial resources, product diversification and competitive strengths of largercompanies. The securities of small capitalization companies may not trade as readily as, and be subject to companies. The securities of small capitalization companies may not trade as readily as, and be subject tohigher volatility than those of larger, more established companies.Bond funds and bond holdings have thesame interest rate, inflation and credit risks that are associated with the underlying bonds owned by thefunds. The return of principal in bond funds, and in funds with significant bond holdings, is not guaranteed.International securities’ prices may carry additional risks, including foreign economic, political, monetaryand/or legal factors, changing currency exchange rates, foreign taxes and differences in financial andaccounting standards. International investing may not be for everyone. These risks may be magnified inemerging markets.Alternative investments, including private equity funds, real estate funds, hedge funds,managed futures funds, and funds of hedge funds, private equity, and managed futures funds, arespeculative and entail significant risks that can include losses due to leveraging or\other speculativeinvestment practices, lack of liquidity, volatility of returns, restrictions on transferring interests in a fund,potential lack of diversification, absence and/or delay of information regarding valuations and pricing,complex tax structures and delays in tax reporting, less regulation and higher fees than mutual funds andrisks associated with the operations, personnel and processes of the advisor.Master Limited Partnerships(MLPs) are limited partnerships or limited liability companies that are taxed as partnerships and whoseinterests (limited partnership units or limited liability company units) are traded on securities exchanges likeshares of common stock. Currently, most MLPs operate in the energy, natural resources or real estatesectors. Investments in MLP interests are subject to the risks generally applicable to companies in theenergy and natural resources sectors, including commodity pricing risk, supply and demand risk, depletionrisk and exploration risk; and MLP interests in the real estate sector are subject to special risks, includinginterest rate and property value fluctuations, as well as risks related to general and economic conditions.Because of their narrow focus, MLPs maintain exposure to price volatility of commodities and/orunderlying assets and tend to be more volatile than investments that diversify across many sectors andcompanies. MLPs are also subject to additional risks including: investors having limited control and rightsto vote on matters affecting the MLP, limited access to capital, cash flow risk, lack of liquidity, dilutionrisk, conflict of interests, and limited call rights related to acquisitions.Mortgage backed securities also involve prepayment risk, in that faster or slower prepayments thanexpected on underlying mortgage loans can dramatically alter the yield-to-maturity of a mortgage-backedsecurity and prepayment risk includes the possibility that a fund may invest the proceeds at generally lowerinterest rates.Tax managed funds may not meet their objective of being tax-efficient.Real estate investments are subject to special risks, including interest rate and property value fluctuations,as well as risks related to general and economic conditions.High yield fixed income securities, also knownas “junk bonds”, are considered speculative, involve greater risk of default and tend to be more volatile thaninvestment grade fixed income securities.Credit quality is a measure of a bond issuer’s creditworthiness, or ability to repay interest and principal tobondholders in a timely manner. The credit ratings shown are based on security rating as provided byStandard & Poor’s, Moody’s and/or Fitch, as applicable. Credit ratings are issued by the rating agencies forthe underlying securities in the fund and not the fund itself, and the credit quality of the securities in thefund does not represent the stability or safety of the fund. Credit ratings shown range from AAA, being thehighest, to D, being the lowest based on S&P and Fitch’s classification (the equivalent of Aaa and C,respectively, by Moody(s). Ratings of BBB or higher by S&P and Fitch (Baa or higher by Moody’s) areconsidered to be investment grade-quality securities. If two or more of the agencies have assigned differentratings to a security, the highest rating is applied. Securities that are not rated by all three agencies arelisted as “NR”.“Alpha tilt strategiescomprise a core holding of stocks that mimic a benchmark type index such as theS&P 500 to which additional securities are added to help tilt the fund toward potentially outperforming theS&P 500 to which additional securities are added to help tilt the fund toward potentially outperforming themarket in an effort to enhance overall investment returns. Tilt strategies are subject to significant timingrisk and could potentially expose investors to extended periods of underperformance.”Custom Account Index:The Custom Account Index is an investment benchmark based on your historicaltarget allocations and/or manager selection that you may use to evaluate the performance of your account.The Custom Account index does take into consideration certain changes that may have occurred in yourportfolio since the inception of your account, i.e., asset class and/or manager changes. However, in somecircumstances, it may not be an appropriate benchmark for use with your specific account composition. Fordetailed report of the historical composition of this blend please contact your Financial Advisor.Peer GroupsPeer Groups are a collection of similar investment strategies that essentially group investment products thatshare the same investment approach. Peer Groups are used for comparison purposes to compare andillustrate a clients investment portfolio versus its peer across various quantitative metrics like performanceand risk. Peer Group comparison is conceptually another form of benchmark comparison whereby theactual investment can be ranked versus its peer across various quantitative metrics.All Peer Group data are provided by Investment Metrics, LLC.The URL below provides all the definitions and methodology about the various Peer Groupshttps://www.invmetrics.com/style-peer-groupsPeer Group Ranking MethodologyA percentile rank denotes the value of a product in which a certain percent of observations fall within a peergroup. The range of percentile rankings is between 1 and 100, where 1 represents a high statistical value and100 represents a low statistical value.The 30th percentile, for example, is the value in which 30% of the highest observations may be found, the65th percentile is the value in which 65% of the highest observations may be found, and so on.Percentile rankings are calculated based on a normalized distribution ranging from 1 to 100 for all productsin each peer group, where a ranking of 1 denotes a high statistical value and a ranking of 100 denotes a lowstatistical value. It is important to note that the same ranking methodology applies to all statistics, implyingthat a ranking of 1 will always mean highest value across all statistics.For example, consider a risk/return assessment using standard deviation as a measure of risk. A percentileranking equal to 1 for return denotes highest return, whereas a percentile ranking of 1 for standard deviationdenotes highest risk among peers.In addition, values may be used to demonstrate quartile rankings. For example, the third quartile is alsoknown as the 75th percentile, and the median is the 50th percentile.AlternativesGraystone Consulting is a business of Morgan Stanley Smith Barney LLC. (“Morgan Stanley”) Thismaterial is not to be reproduced or distributed to any other persons (other than professional advisors of theinvestors) and is intended solely for the use of the persons to whom it has been delivered. This material isnot for distribution to the general public. The sole purpose of this material is to inform, and it in no way is intended to be an offer or solicitation topurchase or sell any security, other investment or service, or to attract any funds or deposits. Investmentsmentioned may not be suitable for all clients. Any product discussed herein may be purchased only after aclient has carefully reviewed the offering memorandum and executed the subscription documents. MorganStanley has not considered the actual or desired investment objectives, goals, strategies, guidelines, orfactual circumstances of any investor in any fund(s). Before making any investment, each investor shouldcarefully consider the risks associated with the investment, as discussed in the applicable offeringmemorandum, and make a determination based upon their own particular circumstances, that the investmentis consistent with their investment objectives and risk tolerance.This information is being provided as a service of your Graystone Institutional Consultant and does notsupersede or replace your Morgan Stanley customer statement. The information is as of the date(s) notedand subject to daily market fluctuation. Your interests in Alternative Investments, which may have beenpurchased through us, are generally not held here, and are generally not covered by SIPC. The informationprovided to you: 1) is included as a service to you, valuations for certain Alternative Investments may notbe available; 2) is derived from you or another external source for which we are not responsible, and mayhave been modified to take into consideration capital calls or distributions to the extent applicable; 3) maynot reflect actual shares, share prices or values; 4) may include invested or distributed amounts in additionto a fair value estimate; and 5) should not be relied upon for tax reporting purposes. Notwithstanding theforegoing, 1) to the extent this report displays Alternative Investment positions within a Morgan StanleyIndividual Retirement Account (“IRA”), such positions are held by Morgan Stanley Smith Barney LLC asthe custodian of your Morgan Stanley IRA; and 2) if your Alternative Investment positon(s) is held by usand is registered pursuant to the Securities Act of 1933, as amended, your Alternative Investment position(s) is covered by SIPC.Alternatives may be either traditional alternative investment vehicles or non-traditional alternative strategyvehicles. Traditional alternative investment vehicles may include, but are not limited to, Hedge Funds,Fund of Funds (both registered and unregistered), Exchange Funds, Private Equity Funds, Private CreditFunds, Real Estate Funds, and Managed Futures Funds. Non-traditional alternative strategy vehicles mayinclude, but are not limited to, Open or Closed End Mutual Funds, Exchange-Traded and Closed-EndFunds, Unit Investment Trusts, exchange listed Real Estate Investment Trusts (REITs), and Master LimitedPartnerships (MLPs). These non-traditional alternative strategy vehicles also seek alternative-like exposurebut have significant differences from traditional alternative investment vehicles. Non-traditional alternativestrategy vehicles may behave like, have characteristics of, or employ various investment strategies andtechniques for both hedging and more speculative purposes such as short-selling, leverage, derivatives, andoptions, which can increase volatility and the risk of investment loss. Characteristics such as correlation totraditional markets, investment strategy, and market sector exposure can play a role in the classification of atraditional security being classified as alternative.Traditional alternative investment vehicles are illiquid and usually are not valued daily. The estimatedvaluation provided will be as of the most recent date available and will be included in summaries of yourassets. Such valuation may not be the most recent provided by the fund in which you are invested. Norepresentation is made that the valuation is a market value or that the interest could be liquidated at thisvalue. We are not required to take any action with respect to your investment unless valid instructions arereceived from you in a timely manner. Some positions reflected herein may not represent interests in thefund, but rather redemption proceeds withheld by the issuer pending final valuations which are not subjectto the investment performance of the fund and may or may not accrue interest for the length of thewithholding. Morgan Stanley does not engage in an independent valuation of your alternative investmentassets. Morgan Stanley provides periodic information to you including the market value of an alternativeinvestment vehicle based on information received from the management entity of the alternative investmentvehicle or another service provider.Traditional alternative investment vehicles often are speculative and include a high degree of risk. .Investors should carefully review and consider potential risks before investing. Certain of these risks mayinclude but are not limited to:• Loss of all or a substantial portion of the investment due to leveraging, short-selling, or other speculative practices;• Lack of liquidity in that there may be no secondary market for afund;• Volatility of returns;• Restrictions on transferring interests in a fund;• Potential lack of diversificationand resulting higher risk due to concentration of trading authority when a single advisor is utilized;•and resulting higher risk due to concentration of trading authority when a single advisor is utilized;•Absence of information regarding valuations and pricing;• Complex tax structures and delays in taxreporting;• Less regulation and higher fees than mutual funds; and• Risks associated with the operations,personnel, and processes of the manager. As a diversified global financial services firm, Morgan StanleyWealth Management engages in a broad spectrum of activities including financial advisory services,investment management activities, sponsoring and managing private investment funds, engaging in broker-dealer transactions and principal securities, commodities and foreign exchange transactions, researchpublication, and other activities. In the ordinary course of its business, Morgan Stanley Wealth Managementtherefore engages in activities where Morgan Stanley Wealth Management’s interests may conflict with theinterests of its clients, including the private investment funds it manages. Morgan Stanley WealthManagement can give no assurance that conflicts of interest will be resolved in favor of its clients or anysuch fund.Indices are unmanaged and investors cannot directly invest in them. Composite index results are shown forillustrative purposes and do not represent the performance of a specific investment. Past performance is noguarantee of future results. Actual results may vary. Diversification does not assure a profit or protectagainst loss in a declining market. Any performance or related information presented has not been adjustedto reflect the impact of the additional fees paid to a placement agent by an investor (for Morgan Stanleyplacement clients, a one-time upfront Placement Fee of up to 3%, and for Morgan Stanley investmentadvisory clients, an annual advisory fee of up to 2.5%), which would result in a substantial reduction in thereturns if such fees were incorporated.For most investment advisory clients, the program account will be charged an asset-based wrap fee everyquarter (“the Fee”). In general, the Fee covers investment advisory services and reporting. In addition to theFee, clients will pay the fees and expenses of any funds in which their account is invested. Fund fees andexpenses are charged directly to the pool of assets the fund invests in and impact the valuations. Clientsmust understand that these fees and expenses are an additional cost and will not be included in the Feeamount in the account statements.As fees are deducted quarterly, the compounding effect will be to increase the impact of the fees by anamount directly related to the gross account performance. For example, for an account with an initial valueof $100,000 and a 2.5% annual fee, if the gross performance is 5% per year over a three year period, thecompounding effect of the fees will result in a net annual compound rate of return of approximately 2.40%per year over a three year period, and the total value of the client’s portfolio at the end of the three yearperiod would be approximately $115,762.50 without the fees and $107,372.63 with the fees. Please see theapplicable Morgan Stanley Smith Barney LLC Form ADV Part 2A for more information including adescription of the fee schedule. It is available atwww.morganstanley.com/ADV<http://www.morganstanley.com/ADV> <http://www.morganstanley.com/ADV> or from your FinancialAdvisor/Private Wealth Advisor.Alternative investments involve complex tax structures, tax inefficient investing, and delays in distributingimportant tax information. Individual funds have specific risks related to their investment programs that willvary from fund to fund. Clients should consult their own tax and legal advisors as Morgan Stanley does notprovide tax or legal advice. Interests in alternative investment products are offered pursuant to the terms ofthe applicable offering memorandum, are distributed by Morgan Stanley Smith Barney LLC and certain ofits affiliates, and (1) are not FDIC-insured, (2) are not deposits or other obligations of Morgan Stanley orany of its affiliates, (3) are not guaranteed by Morgan Stanley and its affiliates, and (4) involve investmentrisks, including possible loss of principal. Morgan Stanley Smith Barney LLC is a registered broker-dealer,not a bank.SIPC insurance does not apply to precious metals, other commodities, or traditional alternative investments.© 2018 Morgan Stanley Smith Barney LLC. Member SIPC.Money Market FundsYou could lose money in Money Market Funds. Although MMFs classified as government funds (i.e.,MMFs that invest 99.5% of total assets in cash and/or securities backed by the U.S government) and retail MMFs that invest 99.5% of total assets in cash and/or securities backed by the U.S government) and retailfunds (i.e., MMFs open to natural person investors only) seek to preserve value at $1.00 per share, theycannot guarantee they will do so. The price of other MMFs will fluctuate and when you sell shares they maybe worth more or less than originally paid. MMFs may impose a fee upon sale or temporarily suspend salesif liquidity falls below required minimums. During suspensions, shares would not be available forpurchases, withdrawals, check writing or ATM debits. A MMF investment is not insured or guaranteed bythe Federal Deposit Insurance Corporation or other government agency.