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06-15-2021 Agenda
anOF HOME OF PELICAN ISLAND PUBLIC NOTICE — POLICE PENSION BOARD MEETING June 15, 2021 THE POLICE PENSION BOARD WILL HOLD A REGULAR QUARTER MEETING ON TUESDAY, June 15, 2021 AT 10:00 A.M. A QUOREM OF THREE BOARD MEMBERS MUST BE PHYSICALLY PRESENT. PARTICIPANTS MAY ATTEND USING ZOOM. THE PUBLIC CAN ACCESS THE MEETING VIRTUALLY VIA ZOOM USING THE DIRECTIONS SHOWN AT THE BOTTOM OF THIS AGENDA. HOWEVER THE PUBLIC IS ADVISED TO CHECK THE CITY WEBSITE FOR UP-TO-DATE INFORMATION ON ANY CHANGES TO THE MANNER IN WHICH THE MEETING WILL BE HELD AND THE LOCATION. AGENDA A. CALL TO ORDER Acting Chairperson B. ROLL CALL Acting Chairperson C. VOTE TO EXCUSE ABSENT BOARD MEMBER(S) Acting Chairperson D. VOTE TO CERTIFY ELECTION OF KEN MCDONOUGH Acting Chairperson E. VOTE TO ELECT A CHAIRMAN Acting Chairperson F. VOTE TO ELECT A SECRETARY Chairperson G. APPROVAL OF MINUTES: 1. March 16, 2021 Workshop Meeting Chairperson H. OLD BUSINESS 1. Approval of Payments: Ken Killgore, Plan Administrator a. Highland Capital — January to March — Fixed Income $ 3,341.48 b. Highland Capital — January to March —Value, ADR $ 6,523.86 c. Fiera Capital — January to March $ 3,112.95 d. Renaissance — January to March $ 2,474.71 e. Polen Capital — March 18, 2021 to March 31, 2021 $ 418.11 f. Foster & Foster — Annual State Report and Disclosures $ 7,075.00 g. Klausner, Kaufman, Jensen & Levinson — Mar./Apr./May $ 1,825.00 h. City of Sebastian — Janet Graham 3/16/2021 Meeting $ 126.00 i. City of Sebastian— January to March $ 6,000.00 j. Salem Trust — January to March $ 8,865.00 2. Presentation of Study on the Anticipated Long-term Rate of Return Douglas Lozen, Foster & Foster I. PUBLIC INPUT Chairperson 1. The Public can comment in person or submit questions or comments prior to the meeting to the Plan Administrator's at kkillgore _ ciiyofsebastian.org. Emails will be read aloud during this time. J. NEW BUSINESS 1. Report from Investment Monitor Andy McIlvaine/Scott Owens, Morgan Stanley 2. Report from Investment Manager Todd Wishnia, Highland Capital K. LEGAL UPDATES — Klausner, Kaufman, Jensen & Levinson Bonni S. Jensen, Board Attorney 1. Plan Amendment to define Life with 10 years of benefits guaranteed L. BOARD MEMBER REPORTS AND COMMENTS Chairperson M. PLAN ADMINISTRATOR REPORTS AND COMMENTS Ken Killgore, Plan Administrator 1. Sergeant Steve Marcinik elected the Deferred Retirement Option Program (DROP) 2. Budget Report, Calendar of Board Activities and Other Administrative Matters N. NEXT SCHEDULED OUARTERLY MEETING: September 21, 2021 Chairperson ADJOURN Note: In accordance with Florida Statue 286.0105: any person who desires to appeal any decision at this meeting will need a record of the proceedings and may need to ensure a verbatim record of the proceedings is made which includes testimony and evidence upon which the appeal is based. In accordance with Florida Statute 286.26: Persons with disabilities needing assistance to participate in any of these proceedings should contact Ken Killgore at least 48 hours prior to the meeting at killgore(cr�,cityofsebastian.or¢ or 772-388-8205. Please click the link below to join the meeting: httDsy/us02web.zoom. usli/84973782664?owd=bXlxeHJLYmRWdEVLbUDzbOJ2Rn N 13Zz09 Meeting ID: 849 7378 2664 Passcode: 208761549 One tap mobile +19294362866„84973782664#.... *208761549# US (New York) +13017158592„84973782664#.... *208761549# US (Washington DC) Dial by your location +1929 436 2866 US (New York) +1301715 8592 US (Washington DC) +1312 626 6799 US (Chicago) +1669 900 6833 US (San Jose) +1253 215 8782 US (Tacoma) +1346 248 7799 US (Houston) Meeting ID: 849 7378 2664 Passcode: 208761549 Find your local number: https:/IusO2web.zoom.us/u/kbdm5cUmFz DRAFT CITY OF SEBASTIAN POLICE PENSION BOARD MINUTES OF WORKSHOP MARCH 16, 2021 Call to Order -- Acting Chairman Tim Wood called the meeting to order at 10:10 a.m. II. Roll Call Present: Board Members: Tim Wood Paul Williamson (Zoom) Not Present: Andrea Ring -- Absent Albert lovino -- Absent Also Present: Bonni Jensen, Klausner, Kaufman, Jensen & Levinson, Attorney for the Board of Trustees (Zoom) Ken Killgore, Plan Administrator Cynthia Watson, Human Resources Manager (Zoom) Andy Mcllvaine, Morgan Stanley (Zoom) Scott Owens, Morgan Stanley Doug Lozen, Foster & Foster Todd Wishnia, Highland Capital (Zoom) Barbara Brooke -Reese, MIS Manager Janet Graham, Technical Writer (Zoom) III. Since there is not a quorum present due to the COVID-19 pandemic, Ms. Jensen stated that there are two choices for the Board: (1) Stop the meeting now and reschedule it for another day; or (2) In a workshop fashion take in the reports that are available right now and not take any motions on those reports. Acting Chairman Wood suggested the second choice, as there are some who traveled to attend this meeting, and he does not want them to have traveled here for nothing. Ms. Jensen stated that there would be a workshop meeting today and the reports will be accepted. IV. Old Business B. Presentation of Study on the Anticipated Long -Term Rate of Return POLICE PENSION BOARD PAGE 2 MINUTES OF WORKSHOP DATED MARCH 16, 2021 Mr. Lozen stated that he did not plan to ask the Board to make a decision on the investment assumption at this meeting. He will plan to come to the June meeting, and he will resume the discussion on this matter. Acting Chairman Wood suggested this is an important subject, and he would like everyone to be present in order to hear the presentation. Mr. Williamson agreed. V. Public Inr)ut There being no one present in chambers who wished to speak and no one on Zoom, Acting Chairman Wood moved to the next item on the agenda. VI. New Business A. Report from Investment Monitor Mr. Owens stated his counterpart, Mr. Mcllvaine, is attending via Zoom, and he will have Mr. Mcllvaine talk about some of the action items that have taken place since the last meeting. There have been some manager changes, some asset allocation changes, and then Mr. Owens will talk about the market and the economy as well as the portfolio. Mr. Mcllvaine addressed the action items since last quarter: (1) They needed to get the IPS filed, which was done. The reason for the changes in the IPS is that they were implementing a new mix, which included infrastructure and getting out of MLPs. That has been done, and they have moved forward with the Lazard infrastructure purchase on January 4, 2021. (2) During the last quarter, the Board approved a motion to get out of Highland Large -Cap Growth and replace it with a mix of both Polen and a Russell 1000 Growth Passive Index. There has been a lot of work that has been done behind the scenes, both from Ms. Jensen and Mr. Killgore, and he is grateful for all their help. The authorization letters to terminate Highland were sent on March 8, 2021. The transition letters have been sent to Mr. Killgore. That should be completed sometime this week or next for them to officially take over the money. He then called on Mr. Owens for his report. Mr. Owens stated that this is a great quarter to report on. It is one of the best quarters that has ever been experienced. The year-to-date number is really good, and 2021 looks really good. He reviewed that the year 2020 is going to be a year that is going to be studied for decades to come. It is going to be studied by economists, by analysts, by market participants, by health care professionals, by policy makers across the board. Last year at this time the discussion was about how the market was at all-time highs, the unemployment rate was at all-time lows, and then the pandemic happened. At the beginning of the pandemic there was a lot of uncertainty. Consequently, governments across the globe decided to shut everything down, which caused a recession. The 6- 1 - a-- POLICE PENSION BOARD PAGE 3 MINUTES OF WORKSHOP DATED MARCH 16, 2021 uniqueness about that recession is that it was not an economic recession; it was a policy recession, and the market collapsed somewhere around the end of March 2020. His point is that the market is a leading indicator. The market goes in a direction before the economy goes. Even when the market low was the end of March, the market bounced right back. That is when everything was shut down. The reason the market bounced back is because the government intervened and said it was going to provide stimulus. So it was a policy recovery; it was not an economic recovery. The market came back, and the unemployment rate is still about 6.3, which is a lot better than at the peak when it was about 14.5. The election of 2020 had an impact. There was a lot of uncertainty in the market, but then came the vaccines. He went on to say that presently the market and the economy fundamentally is doing pretty well. The unemployment rate is moving in the right direction. Inflation right now is practically nonexistent. There is a big expectation that inflation is going to increase at approximately the rate of 2.5%. He stated that most analysts believe that it is going to be a really good environment for the market over the next year or so. He described the possible scenarios and their impacts on the market. It is expected that active investments are going to do well going forward, and it is also expected that value is going to be the clear winner. Mr. Owens reviewed the Summary Repots which were attached to the agenda packet (SEE ATTACHED). He then called on Highland for their report. Mr. Todd Wishnia reported that his firm was in touch with Salem Trust yesterday. All their trades have settled, and they have ceased trading. That should be taking place in the next day or so with the transition. A. ReQort from Investment Manager -- Highland Capital Mr. Wishnia reviewed Highland's activity. He agreed with what Mr. Owens had reported on what was happening within the market environment. He stated that everything that had been hurting the portfolio over the last year or several years is now starting to help financials. They are up 26% in the index. Energy was up 28% in the value index. They . underperformed by about 3% in the industrial sector. He described what has been happening in the international markets. For this quarter, internationals are outperforming 7.1 % against the index at 3.7%. Fixed income also had a nice quarter, outperforming just over 1 % against the index at 0.67%. He opined that it is going to be a challenging year in the fixed income sector, as rates will be going up and down. He called for questions from the Board. w POLICE PENSION BOARD PAGE 4 MINUTES OF WORKSHOP DATED MARCH 16, 2021 Acting Chairman Wood asked if there are issues with rising gas prices, cost of lumber or anything like that. Mr. Owens stated that is the inflation that he spoke about. C. Election Process to Replace the Police Officer Board Member Ms. Jensen said that the Board can talk about the election process, since there is not any action that the Board needs to take with regard to that. She reviewed that there is a policy that already exists in the rules. She suggested that she and Mr. Killgore could work together to flesh it out. But for the police officer trustee election, the police officer is elected from among the members of the fund. So there would need to be notification gotten out to them. There should be some place where notice can be posted stating that we are looking for someone who is interested in running. Then we can get candidates, people who are interested. If there is only one person who is interested in running after a stated period of time to sign up, they are elected, and there is no need to go through the election process. If more than one person signs up, we would put together a ballot. She stated she would defer to Mr. Killgore as to the best way to do that. There can be an in -person election with a ballot box. That means that someone would need to man the ballot box for the period of time for which it is available. When there is shiftwork involved, either a 24-hour period or successive days is the plan that works the best in order to capture everyone. The policy provides that the election is by a majority vote. If there is no majority, if it is a tie, or if the votes are spread out so that no one gets a majority, then a runoff election would be held. There can be a mail ballot which would be sent out to everybody. She has had some funds who have done email ballots. Mr. Killgore added that the operating rules require, if there is a balloting, that the Board actually approves the ballot and certifies it. This might tie in with the need to have a special meeting of the Board. Depending on what the results are of our process, he would poll the consultants as far as during what time there could be a special meeting between now and the June 15th meeting. Officer Wood stated that that is assuming that there is more than one person interested. Mr. Killgore stated that is correct; if there is only one person interested, there would be no need for a special meeting. Mr. Killgore stated he will coordinate with Officer Wood to see what works best. Officer Wood suggested sending an email out to all members would be the most efficient way to solicit candidates. He suggested that Mr. Killgore or himself would be a point of contact if anyone has questions regarding what the position entails. Mr. Killgore stated that the reason for having this election is because Jason Gillette, the Chairman, had resigned, and so the Board is left with a vacancy. Officer Wood clarified that Jason resigned from his job as a police officer with the City and went on to the private sector. VIII. Legal Ucdates C/- Y POLICE PENSION BOARD PAGE 5 MINUTES OF WORKSHOP DATED MARCH 16, 2021 Ms. Jensen stated she has a few items, none of which requires a vote by the Board of Trustees: A. There is a new law that is applicable to public employers and requires them to register with and use E-Verify. The definition of public employers is more than just where someone is a governmental entity and hires people. They actually apply this law to entities that enter into contracts with persons or entities for services for money. So, because this Board enters into contracts with all of their service providers, it is subject to this law. So there are three things that have to happen: 1. The Board needs to be registered with the E-Verify system. 2. The service providers who work with the Board will need to be notified that, by virtue of entering into a contract with you, they are subject to this particular law. 3. Any future contracts will have to have the language in them that the individual manager is required to register with and use the E-Verify system. It was added to the Polen contract, so that contract is in compliance with the law. She has put together a packet which contains the information needed to register with the E-Verify system, as well as a letter that can be provided to the service providers, letting them know that they need to register with and use the E-Verify system. Her firm has provided Mr. Killgore with a letter indicating that the firm is registered with the E-Verify system. Highland is registered, and she thinks that Foster & Foster is working on it. She does not know about Graystone. She will reach out to everyone to make sure that everyone is aware. Officer Wood asked about the process when new officers become employed and will a packet be provided to them during an orientation period. Ms. Jensen stated that new officers will be checked by the City. This is really just for purposes of tying in all of the people that this Board enters into contracts with. So all of those who work for this Board will have to verify the work authorization status. Mr. Killgore stated that the City already is using E-Verify for all employee hires. Ms. Watson verified what Mr. Killgore stated. Ms. Jensen stated that the Pension Board will have to register as the Pension Board, even though the City administers the contracts on behalf of the Board. That means that they are a separate entity from the City. She further stated that the Board will have to get an EIN number in order to register. If the Board is using the City's EIN number for the purpose of paying the pension benefits, paying the taxes, and reporting on the W-9s, then that is a separate matter. She suggested she and Mr. Killgore talk about this. 61- POLICE PENSION BOARD PAGE 6 MINUTES OF WORKSHOP DATED MARCH 16, 2021 B. The next item she covered was the fact that her firm put together a statement on best practices concerning locating missing or nonresponsive participants. There is a memo attached to the agenda that describes how to find people. This comes up with refunds of contributions. Members in this pension fund plan are permitted to leave their contributions in the plan for five years, even if they are not vested, pending the ability to rehire. But then the money is supposed to be distributed at that point. If the City has lost track of that person during the five-year period, this helps to find them, especially participants who are vested and have terminated and whom the City has lost track of between the time that they leave and the time that they are entitled to a benefit, particularly as they are approaching the age of 72. Then any kind of DROP distributions that need to be made once people reach age 72 is explained. C. She has attached a memo to the agenda packet which covers the IRS mileage rate. It has decreased this year to 56 cents per mile. She stated as the gas prices go up, the IRS may make a change. Ms. Jensen spoke regarding an item that is not on the agenda, which is the matter of Jack Grimmich. She was contacted by the mother of the minor wanting to move this forward. Ms. Jensen stated she had reached out to Mr. Killgore and Ms. Watson to see if they were able to find some contact information for the daughter who is now at the age of majority. She thinks Mr. Grimmich's brother works for the Police Department, and maybe he is able to contact her. Agreements from those parties will be needed. The minor's mother indicated to Ms. Jensen that she would like to take a refund of contributions without going through the whole process for the forfeiture determination. That is the question that Ireland will be asked in order to find out if she is agreeable. If they are not both agreeable, then it will be necessary to go through the whole process. Ms. Watson stated that she did reach out to Officer Grimmich regarding this situation. She has not heard back from him. Officer Wood stated he will reach out to Officer Grimmich as well. Ms. Jensen stated that if it is possible to contact Ireland, then Ireland should reach out to Ms. Jensen. IX. Board Member Reports and Comments -- None X. Plan Administrator Report and Comments A. Annual State Pension Report was filed Mr. Killgore updated the Board that, with the help of Foster & Foster, the Annual State Pension report has been filed. 61-�. POLICE PENSION BOARD PAGE 7 MINUTES OF WORKSHOP DATED MARCH 16, 2021 B. Ordinance 0-21-02 on IRS Plan Amendments was approved by City Council Mr. Killgore described the IRS changes that were adopted finally by City Council during this last quarter. C. Budget report, Calendar of Board Activities and Other Administrative Matters Mr. Killgore stated the budget report is in the agenda packets. There were no serious concerns or issues. The Calendar of Activities is being adhered to as scheduled. He stated there was nothing else he needed to report on. X. Next Scheduled Quarterly Meeting -- June 15, 2021 Officer Wood asked Ms. Jensen if there would need to be a special meeting regarding the vote. Ms. Jensen stated she has a call in to the state to determine what they are requiring in this COVID period. She thinks that this workshop could count, but the Board will definitely need to approve the report that it was given today from Graystone for the quarterly report as well as Highland in order to be sure that we have gotten that accomplished. Unless she hears differently from the state, she is taking the position that we say we had a workshop for this quarter's meeting and it was stated in the Minutes that we were unable to get a quorum. XI. Adiourn There being no further business, the meeting was adjourned by Acting Chairman Wood at 11:02 a.m.. LIM Jg Date: Hi bland Capital MANAGEMENT, LLC April2, 2021 Invoice Number: 27527 MANAGEMENT FEE: SEBASTIAN POLICE OFFICERS' RETIREMENT FIXED INCOME 3/31/2021 Portfolio Value: $ 4,455,303.10 Quarterly Fee Based On: $ 4,455,303 @ 0.30% per annum $ 3,341.48 Quarterly Fee: $ 3,341.48 For the Period 1/1/2021 through 3/31/2021 Mailing Check: Highland Capital Management, LLC 6075 Poplar Ave, Suite 703 Memphis, TN 38119 Paid by Debit Direct ($ 0.00) Please Remit $ 3.341.48 Wiring Instructions: Contact: srunvan(a7hieblandcan.corn *****Note new checking account number******* HighMANAGEMENT, LLC land Capital April2, 2021 Invoice Number: 27528 MANAGEMENT FEE: SEBASTIAN POLICE OFFICERS' RETIREMENT 3/31/2021 Portfolio Value: $ 5,219,091.59 Quarterly Fee Based On: $ 5,219,092 @ 0.50% per annum $ 6,523.86 Quarterly Fee: $ 6,523.86 For the Period 1/1/2021 through 3/31/2021 Paid by Debit Direct ($ 0.00) Please Remit $ 6,523.86 Account Account Value Ouarteriv'Fee (sebast0l) SEBASTIAN POLICE OFFICERS' RETIREMENT VALUE $ 4,180,858.52 $ 5,226.07 (sebasti4) SEBASTIAN POLICE OFFICERS' RETIREMENT ADR $ 1,038,233,06 $ 1,297.79 Total $ 5,219,091.59 $ 6,523.86 Mailing Check: Highland Capital Management, LLC 6075 Poplar Ave, Suite 703 Memphis, TN 38119 Wiring Instructions: Contact: srunvan(&hi¢hlandcau.com *****Note new checking account number******* H/- b I .U'I"1A April 14, 2021 Ken Killgore 1225 Main Street Sebastian, FL 32958 City of Sebastian Police Officer's Retirement System - 0740001516 FIERA CAPITAL INC. SUMMARY OF MANAGEMENT FEES For The Period January 1st thru March 31st, 2021 Portfolio Value as of 03-31-21 $ 1,660,241.79 1,660,242 @ 0.75 % per annum 3,112.95 Quarterly Management Fee $ 3,112.95 TOTAL DUE AND PAYABLE $ 3,112.95 Gl° �/anal As per SEC Rule 206(4)-2, we urge you to compare this report with your custodian statements. It is the client's responsibility to verify the accuracy of the computation. The custodian will not do an independent verification of the accuracy of the computation of fees. ACH Instructions: BMO Harris Bank ill West Monroe Chicago, IL 60603 ABA Number: 071000288 Swift Code: HATRUS44 Account Name: Fiera Capital Inc. Account Number: 2553816 To pay by check: Payable to Fiera Capital Inc. Attn: Myron Charas 10050 Innovation Dr, Suite 120 Dayton, OH 45342 Billing inquiries should be directed to: Myron Charas and BillingFCI@fleracapital.com 937-3RR-1437 naffs anee' Investment Management April 05, 2021 Mr. Kenneth W. Killgore Administrative Services Director City of Sebastian 1225 Main Street Sebastian, FL 32958 Billing Period: FROM 01/01/2021 TO 03/31/2021 Custodian Account No: 0740001532 Account #: IE0496 - City of Sebastian Police Officers Retirement System Portfolio Value ................................................... $1,544,047.37 Amount Due, PAYABLE UPON RECEIPT: ........................... $2,474.71 FEE CALCU LATION '(Rate x Portfolio Value) x (# of days in quarter / # of days in year) Rate ADnlied: For Assets Under Management Amount Due 0.6500 % On the remainder: 1,544,047 2,474.71 Total Fee: 2,474.71 Please compare this fee bill prepared by our firm to your custodial account statement for any discrepancies. Minor variations may occur because of reporting dates, accrual methods of interest and dividends, and other factors. Your custodial statement is the official record of your account. Ifyou are not receiving statements from your custodian at ,cast quarterly, if there have been any changes in your financial situation, investment objectives, or if you wish to initiate or modify any reasonable restrictions on the management of your account, please notify Mary Meiners at 513-7234554 or mcm@reninv.com. Y Return this section with your fee to the address below or in the enclosed envelope: RENAISSANCE INVESTMENT MANAGEMENT 3551 Solutions Center #773551 Chicago, IL 60677-3005 Acct: IE0496 Custodian Account No: 0740001532 Hl- I 50 LAST RIVERCLNTER HOULEVARI) ■ SUITH 1200 COVINGTON, KY 41011 800.837.3863 0 513.723.4500 2 FAX 513.723.4511 At www rcninv com olen capita [ ..l : �..?:I" , vtww.poteEicapital.eom Kenneth Killgore NA April 21, 2021 STATEMENT OF MANAGEMENT FEES Initial Fee calculated for assets under management as of March 31, 2021 For the billing period from March 18, 2021 to March 31, 2021 Custodian Account no: 0740007216 Account no: CITY0162 Account name: CITY OF SEBASTIAN POLICE OFFICERS RETIREMENT SYSTEM Management Fee Calculation Detail Total Portfolio: Total Please remit the total fee amount to Polen Capital at the address indicated below. Payment for this invoice can be sent via mail or wire: By Mail Check payable to: Polen Capital Management P.O. Box 919766 Orlando, FL 32891-9766 Breakpoints Balance Overnight Address: REMITTANCE COPY Annual Rate Account Assets Fee 0.650% $1,677,028 $418.11 $1,677,028 $418.11 EIS Lockbox/Gust Svc Attn: Polen Capital Management LLC #919766 2290 Premier Row Orlando, FL 32809 Please contact us if your financial situation or investment objectives have changed. By Wire SunTrust Bank 1000 Peachtree St., N.E., Atlanta, GA ABA: 061 000 104 Account Name: Polen Capital Management LLC Account#:1000214295577 SEC RULE 204.3 REQUIRES US TO OFFER IN WRITING TO DELIVER TO YOU UPON REQUEST A WRITTEN DISCLOSURE STATEMENT CONTAINING INFORMATION CONCERNING OUR BACKGROUND AND BUSINESS PRACTICES. Keep a copy of this invoice for tax purposes. OSTER & FOSTEr Phone: (239) 433-5500 Fax: (239) 481-0634 data@foster-foster.com www.foster-foster.com City of Sebastian Police Officers' Retirement System 1225 Main Street Sebastian_ FT. 32959 Invoice 0 6/4/2021 20173 Preparation of the 2020 Annual Report for the Division of Retirement. 3,000.00 Special actuarial analysis and letter report dated March 10, 2021 to determine the impact on the Plan's liabilities and funding requirements associated with decreasing the investment return assumption to 7.00%. Preparation of DROP account balance schedules: MARCINIK, Steven Preparation of the 2020 Chapter 112.664 compliance disclosure. Thank you for your business! Most preferred method of payment is a bank transfer: • Account Title: Foster & Foster, Inc. • Account Number: 6100000360 • Routing Number: 063114661 • Bank Name: Cogent Bank For payment via a mailed check, please remit to: Foster & Foster, Inc. 13420 Parker Commons Blvd, Suite 104 Fort Myers, FL 33912 500.00 75.00 3,500.00 Balance Due $79075.00 /0 lausner, Kaufman, Jensen & Levinson A Partnership of Professional Associations Attorneys At Law 7080 N.W. 4th Street Plantation, Florida 33317 Tel. (954) 916-1202 Fax (954) 916-123:2 SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM Attn: KEN KILLGORE 1225 MAIN STREET SEBASTIAN, FL 32958 CLIENT: SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM MATTER: SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM CURRENT BILL TOTAL AMOUNT DUE Past Due Balance "ITFORI1-A-011A www.kiausnerkaufman.com Tax I.D.: 45-4083636 May 31, 2021 Bill # 28530 -170042 � 170042 0.00 $1,825.00 6LO lausner, Kaufman, Jensen & Levinson. A Partnership of Professional Associations Attorneys At Law 7080 N.W. 4th Street Plantation, Florida 33317 Tel. (954) 916-1202 wwwAlausnerkaufman.com Fax (954) 916-1232 Tax 1.D.: 45-4083636 SEBASTIAN POLICE OFFICERS` RETIREMENT SYSTEM April 30, 2021 Attn: KEN KILLGORE Bill # 28357 1225 MAIN STREET SEBASTIAN, FL 32958 CLIENT: SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM 170042 MATTER: SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM 170042 Professional Fees Date Attorney Description Hours Amount 04/05/21 BSJ REVIEW AND RESPOND TO EMAIL 0.50 212.50 FROM CYNTHIA WATSON; REVIEW PENSION PLAN DOCUMENT 04/08/21 BSJ TELEPHONE CALL WITH DOUG LOZEN 1.00 425.00 REGARDING NORMAL FORM OF BENEFIT; DRAFT AMENDMENT TO PLAN; EMAIL AMENDMENT TO DOUG LOZEN; EMAIL TO KEN KILLGORE FOR MEETING Total for Services 1.50 $637.50 CURRENT BILL TOTAL AMOUNT DUE $ 637.50 Past Due Balance AMOUNT DUE 1,187.50 $1,825.00 lausner, Kaufinan, Jensen & Levinson A Partnership of Professional Associations Attorneys At Law 7080 N.W. 4th Street Plantation, Florida 33317 Tel. (954) 916-1202 Fax (954) 916-1232 SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM Attn: KEN KILLGORE 1225 MAIN STREET SEBASTIAN, FL 32958 CLIENT: SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM MATTER: SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM Date Attorney 03/16/21 BSJ 03/16/21 BSJ 03/16/21 BSJ 03/16/21 PARA 03/25/21 BSJ Professional Fees Description PREPARE FOR MEETING; REVIEW AGENDAAND MEETING BACK UP, INCLUDING MINUTES ATTEND WORKSHOP (VIRTUALLY) (NO QUORUM) TELEPHONE CALL WITH STEVE BARDIN REGARDING MEETINGS PREPARATION OF MEETING MATERIALS FOR THE UPCOMING MEETING. REVIEW AND REVISE ELECTION PROCESS; REVIEW PLAN AND OPERATING RULES; EMAIL TO KEN KILLGORE Total for Services CURRENT BILL TOTAL AMOUNT DUE Past Due Balance AMOUNT DUE www.kiausnerkauftnan.com Tax 1.D.: 454083636 March 31, 2021 Bill # 28163 :170042 :170042 Hours Amount 0.50 212.50 1.20 510.00 0.10 42.50 1.00 125.00 0.70 297.50 3.50 $1,187.50 $ 1,187.50 0.00 $1,187.60 Y/-� 13 3/2 2 JANET M. GRAHAM 97 OVERLOOK DRIVE SEBASTIAN, FL 32976 MARCH 18, 2021 INVOICE FOR POLICE PENSION BOARD WORKSHOP Date: 3-16-2021 7 pages $126.00 06J001. n- 0o w- -41 z6 - ji 14/ � afm 9AASTL HOME OF PELICAN ISLAND City of Sebastian 1225 Main Street Sebastian, Florida 32958 INVOICE TO: I Sebastian Police Pension Trust Fund 11225 Main Street Sebastian, FL 32958 DESCRIPTION INVOICE: Date: Amount: Agreement With City of Sebastian Dated June 14, 2017 for Plan Administrator Services for April, May and June 2021. IV15�: 1&,- 1 ,7;'4 PAYMENT DUE UPON RECEIPT. PLEASE RETURN COPY OF INVOICE WITH PAYMENT THANK YOU. TOTAL AMOUNT DUE Remit To: City of Sebastian - Attention Ken Killgore 1225 Main Street Sebastian, Florida 32958 Account Code 001501-349620 6/8/2021 $6,000.00 AMOUNT DUE $6,000.00 $6,000.00 1411 ity of Sebastian Debbie Krueger 1225 Main Street Sebastian, FL 32958 Sr Fee Advice for Period January 1, 2021 Detail of Calculation: Flat Fee $500 for 7 additional accounts April 9, 2021 M 70870 Sebastian Police to March 31, 2021 Annual Fee Quarterly Fee $5,000.00 $1,250.00 $3,000.00 $875.00 $5.00 Security Transactions Current Period Year To Date 9/30/2020 705 705 12/31/2020 1094 1799 3131 /2021 1348 3147 6/30/2021 (300 included in annual fee) Total Transaction Charges Total Amount Due These fees will automatically be charged to your account. If you have any questions, please contact Mindy Johnson at 813.288.4990 1715 N. WESTSHORE BLVD., SUITE 750 TAWA, FL 33607 TEL (877) 382-5268 FAX (813) 301-1295 wurw.salemtrust.cam $6,740.00 $8,865.00 N f j I r FOSTER & FOSTER March 10, 2021 Board of Trustees City of Sebastian Police Officers' Retirement System Re: City of Sebastian Police Officers' Retirement System Actuarial Analysis of Investment Return Dear Board: As requested, we have performed a special actuarial analysis to determine the impact on the Plan's liabilities and funding requirements associated with decreasing the investment return assumption to 7.00%. The impact on the City's funding requirements, determined as of October 1, 2020 (using results of the October 1, 2020 Actuarial Valuation), is shown on the attached schedule. Please note that all assumptions and methods used are the same as in the October 1, 2020 valuation except for the reduction in the investment return assumption. The increase in the Unfunded Actuarial Accrued Liability is amortized as a level percentage of pay (using the current 1.51% payroll growth assumption) over 15 years. Future actuarial measurements may differ significantly from the current measurements presented in this report for a variety of reasons including: changes in applicable laws, changes in plan provisions, changes in assumptions, or plan experience differing from expectations. Due to the limited scope of the analysis, we did not perform an analysis of the potential range of such future measurements. The undersigned is familiar with the immediate and long-term aspects of pension valuations, and meets the Qualification Standards of the American Academy of Actuaries necessary to render the actuarial opinions contained herein. In addition to this document (with attachment), all the sections of the October 1, 2020 actuarial valuation report are considered an integral part of the actuarial opinion. If you have any questions, please let me know. Sincerely, 1 �Dougl H. Lo 4n,E�MAAA Enclosure 13420 Parker Commons Blvd., Suite 104 Fort Myers, FL 33912 • (239) 433-5500 • Fax (239) 481-0634 www.foster-foster.com Ha -I City of Sebastian Police Officers' Retirement System Actuarial Analysis of Proposed Assumption Change Determined as of October 1, 2020 GASB 67 Net Pension Assumption Liability (est.) Funded Ratio 2 7.20% Investment Return 4,056,050 81.7% 7.00% Investment Return 4,579,422 79.8% Annual City Contribution (est.) % Payroll Dollars ' Increase/(Decrease) 24.7% 633,000 n/a 27.4% 703,000 70,000 ' Estimated City dollar requirement based on payroll under the assumed retirement age. 2 Actuarial Asset Value divided by Entry Age Normal Actuarial Accrued Liability. Foster & Foster, Inc. 3/10/2021 " Kenneth Killvore From: Bonni Jensen <bonni@robertdklausner.com> Sent: Thursday, April 08, 2021 4:16 PM To: Kenneth Killgore Cc: Cynthia Watson; bsjteam; Douglas Lozen Subject: Sebastian Police Officers' Retirement System - Normal Form of Retirement Benefit Attachments: draft amendment to Sec._58_51._Benefit_amounts_and_eligibility to add Normal Form (00184702x BC 171). DOCX CAUTION: This email originated from outside your organization. Exercise caution when opening attachments or clicking links, especially from unknown senders. Ken, When I answered the optional forms of benefit question for Cindy, I noticed that the normal form of benefit — Life with 10 years of benefits guaranteed — was not defined in the Plan. I have drafted some language to amend the Plan to add it. Please add to the agenda for the next meeting. I sent to Doug Lozen for his review. He had no additional comments. There should be no cost associated with the clarification because it is the normal form that the Plan already uses. To expedite the handling of your email, please be sure to copy bsiteam@robertdklausner.com on your emails. Bonni S. Jensen Klausner, Kaufman, Jensen & Levinson 7080 N.W. 4th Street Plantation, Florida 33317 Telephone: 954-916-1202 Facsimile: 954-916-1232 bonniArobertdklausner.com website—www.klausnerkaufman.com CONFIDENTIALITY NOTICE: This communication is confidential, may be privileged and is meant only for the intended recipient. If you are not the intended recipient, please notify the sender ASAP and delete this message from your system. IRS CIRCULAR 230 NOTICE: To the extent that this message or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Ki._1 City of Sebastian Police Officers' Retirement System Proposed Amendment to Describe Normal Form of Retirement Benefit Sec. 58-51. - Benefit amounts and eligibility. (a) Normal retirement age and date. A member's normal retirement age is the earlier of the attainment of age 55 and the completion of ten years of credited service or the attainment of age 52 and the completion of 25 years of credited service. Each member shall become 100 percent vested in his accrued benefit at normal retirement age. A member's normal retirement date shall be the first day of the month coincident with or next following the date the member retires from the city after attaining normal retirement age. (b) Normal retirement benefit. (1) The amount of the monthly retirement income payable to a member hired prior to October 1, 2011 who retires on or after his normal retirement date shall be an amount equal to the number of years of credited service multiplied by three percent of his average final compensation. (2) For members hired on or after October 1, 2011, the amount of the monthly retirement income payable to a member who retires on or after his normal retirement date shall be an amount equal to the number of years of credited service multiplied by two percent of his average final compensation for the years of credited service beginning on or after April 11, 2012 and ending October 1, 2016 and three percent of average final compensation for all credited service before April 11, 2012 and after October 1, 2016. (3) The monthly benefit will commence on the first day of the month coincident with or next following his retirement and be continued for member's lifetime. ceasing upon death or the 1201" navment whichever is later. At the time of retirement. member will designate a beneficiary to receive the remainder of the 120 oavments. if the member/retiree dies before 120 oavments have been made. This is the normal form of benefit; a member may also choose an optional form of benefit as orovided in Section 58-55 of this Plan. (c) Early retirement date. A member may retire on his early retirement date which shall be the first day of any month coincident with or next following the attainment of age 50 and the completion of ten years of credited service. Early retirement under the system is retirement from employment with the city on or after the early retirement date and prior to the normal retirement date. (d) Early retirement benefit. A member retiring hereunder on his early retirement date may receive either a deferred or an immediate monthly retirement benefit payable in the same form as for normal retirement as follows: 100184702. DOCX;1} (1) A deferred monthly retirement benefit which shall commence on what would have been his normal retirement date had he continued employment as a police officer and shall be continued on the first day of each month thereafter. The amount of each such deferred monthly retirement benefit shall be determined in the same manner as for retirement on his normal retirement date except that credited service and average final compensation shall be determined as of his early retirement date; or (2) An immediate monthly retirement benefit which shall commence on his early retirement date and shall be continued on the first day of each month thereafter. The benefit payable shall be as determined in paragraph (1) above, determined as if he had remained employed, reduced by three percent for each year by which the commencement of benefits precedes the date which would have been the police officer's normal retirement date had he continued employment as a police officer. (e) Required distribution date. The member's benefit under this section must begin to be distributed to the member no later than April 1 of the calendar year following the later of the calendar year in which the member attains age 70Y2 or the calendar year in which the member terminates employment with the city. (f) Cost -of -living adjustment. Future retirees with a minimum of 15 years of credited service shall receive a one percent automatic cost -of -living adjustment beginning on the first October 1 following the attainment of age 58. The COLA is applicable to all forms of retirement, including normal and early retirement, terminated vested, disability retirees and pre -retirement death beneficiaries. (Ord. No. 0-15-01, § 1(Att.), 2-25-15; Ord. No. 0-16-07, § 4, 9-28-16; Ord. No. 0-17-03, § 4, 8-23-17) {00184702.DOUJI 1 3 Annual Onaratina Exnen= Investment Managers: Highland Capital Boston Parners Fiera Capital (APEX) Renaissance Center Coast (Brookfield) Intercontinental Polen Capital (from March 18, 2021) Performance Manager- Graystone Salem Trust Company ADR Agent Fee - Foreign Dividends Sub -total Investment Expense Actuarial - Foster & Foster Experience Study Update - Foster & Foster State Reports Preparation - Foster $ Foster Legal Services Administrative Fee to City Insurance Miscellaneous: Minutes Preparation Codification of Approved Ordinance(s) Functional Capacity Assessments Travel Contingency Sub -total Administrative Expense Total Operating Expenses CITY OF SEBASTIAN, FLORIDA POLICE PENSION FUND - 2020/2022 BUDGET As of March 8, 2022 Amended Total Previous Year's Annual Totals 2020/2022 Actual/Estimated 2020/2021 Payments 2020/2021 2019/2020 2018/2019 2017/2018 2016/2017 2015/2016 2014/2015 2013/2014 Budget 10/1- 12/31 1 1- 3 31 4/1-6/3 7 1- 9 30 Actual Est. Actual Actual Actual Actual Actual Actual Actual $ 55,000 $ 14,051.25 $ 11,346.84 $ 9,865.34 $ 35,263.43 $ 52,688.82 $ 34,621.51 $ 67,754.39 $ 60,479.85 $ 42,352.99 $ 64,402.32 $ 58,710.23 8,000 1,821.93 2,448.37 4,270.30 7,553.21 6,885.81 6,763.47 - - _ _ 6,500 1,908.87 2,969.75 3,112.95 7,991.57 6,056.53 5,943.76 5,386.84 7,000 1,701.10 2,445.13 2,474.71 6,620.94 6,489.11 6,874.16 6,451.11 3,000 434.27 537.98 Terminated 972.25 2,427.00 3,113.51 2,909.69 - 418.11 418,111 13,500 - 6,750.00 6,750.00 13,500.00 13,500,00 13,500.00 13,500.00 13,500.00 16,875.00 15,000.00 26,000 4,025.00 7,470.00 8,865.00 20,360.00 24,655.00 26,480.00 28,250.00 7,245.00 6,265.00 6,615.00 5,295.00 1,500 - 1,140.85 1,643.74 581.24 451.80 141.44 186.69 $ 120,500 $ 23,942.42 $ 33,969.07 $ 24,736.11 $ $ 82,646.60 $ 113,369.67 $ 98,559.60 $ 132,659.24 $ 81,806.09 $ 62,569.79 $ 88,033.76 $ 79,191.92 18,000 14,415.00 575.00 14,990.00 17,464.00 16,756.00 17,834.00 13,331.00 14,765.00 21,398.00 15,544.00 - - 7,500.00 - - - _ _ - 3,000 6,500.00 6,500.00 3,000.00 3,000.00 - - 40,000 3,610.00 7,582.50 1,825.00 13,017.50 19,565.00 39,362.45 25,138.80 29,011.01 18,294.60 17,189.16 7,623.64 24,000 6,000.00 6,000.00 6,000.00 18,000.00 24,000.00 24,000.00 24,000.00 2,600 2,991.00 2,991.00 2,585.00 2,585.00 2,585.00 3,021.05 3,121.05 3,121.05 3,000.00 1,000 126.00 162.00 126.00 414.00 636.00 694.00 1,042.00 600 - - 598.20 1,222.07 1,646.76 - 2,700.00 1,344.00 - - - 695.50 101.90 - 15,000 - - _ $ 104,200 $ 12,727.00 $ 28,159.50 $ 15,026.00 $ $ 55,912.50 $ 74,750.00 $ 89,097.45 $ 72,542.00 45,363.06 $ 36,876.15 $ 43,032.18 $ 27,914.40 $ 224,700 $ 36,669.42 $ 62,127.57 $ 39,762.11 $ $ 138,559.10 $ 188,119.67 $ 187,657.05 $ 205,201.24 127,169.15 $ 99,445.94 $ 131,065.94 $ 107,006.32 CITY OF SEBASTIAN POLICE OFFICERS' PENSION PLAN CALENDAR OF BOARD ACTIVITIES — Updated December 2020 JANUARY: No Board activity. FEBRUARY: No Board activity. MARCH: 1st Quarter Board Meeting: • Update and Review Calendar of Activities. • Request update of Summary Plan Description (every two years). • Investment Report and Performance Review. • Receive Annual Report to Division of Retirement. APRIL: No Board activity. MAY: No Board activity. JUNE: 2"d Quarter Board Meeting: • Review Calendar of Board Activities. • Investment Report and Performance Review. • Select Board Chairperson and Secretary (every two years). • Approve and Distribute to Members the Summary Plan Description (if needed). JULY: Board Members should file Financial Disclosure forms by Julylst. AUGUST: Receive State premium tax monies. SEPTEMBER: • 3`d Quarter Board Meeting: • Establish Quarterly Meeting dates for following year. • Review Calendar of Board Activities • Approve Election Process for Police Officer Members (if needed). • Select Board appointed Member and request City Council confirmation (if needed). • Investment Report and Performance Review. • Report on year-to-date expenses and approve budget for the next year. OCTOBER: No Board activity. NOVEMBER: No Board activity. DECEMBER: • 4th Quarter Board Meeting: • Review Calendar of Board Activities. • Consider changes to Operating Rules (if needed). • Report on Actual Operating Expenses for the year. • Investment Report and Performance Review. • Update Investment Policy and Allocation Strategy. • Accept the Actuarial Report. • Approve Expected Rate of Return. • Confirm renewal of Liability Insurance Policy. Page 1 of 1 Ni �- - 2- Important Notes About This Report PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. ACTUAL INDIVIDUAL ACCOUNT RESULTS WILL DIFFER FROM THE PERFORMANCE SHOWN IN THIS REPORT. INVESTMENT DECISIONS: Do not use this report as the sole basis for investment decisions_ Do not select an allocation, investment disciplines or investment managers4unds based on performance alone_ Consider, in addition to performance results, other relevant information about each investment manager or fund, as well as matters such as your investment objectives, risk tolerance and investment time horizon_ SOURCE OF PERFORMANCE INFORMATION FOR INVESTMENT MANAGERS AVAILABLE IN CONSULTING AND EVALUATION SERVICES OR SELECT UM,A_ Each investment manager included in this report that participates in one or more of the Consulting and Evaluation Services or Select UPJA programs ("Programs") has a track record of investing assets in the relevant investment discipline_ The investment manager's gross perform ancetrack record shown in this report consists of its gross performance in either the Morgan Stanley or the Smith Barney} form of the Select UMA program (if that investment manager was in the Select UMA program) for periods for which sufficient data is available_ If the strategy or similar strategies are available in both the Morgan Stanley and Smith Barney forms of the program, this profile presents the composite for the strategy that is closest to the strategy c u rrently offered in the Select UMA program_ If both strategies are equally close, the profile shows the longer of the two composites_ For other periods, the gross perform ancetrack record is provided by the investment manager and consists of accounts managed by the investment manager in the same or a similar investment discipline whether at Morgan Stanley or elsewhere {and may include institutional accounts_ retail accounts and/or pooled investment vehicles such as mutual funds}_ Page 23 Graystone Consulting'" Page 24 Important Notes About This Report (Cont"d) There maybe differences between the performance in the different forms of the Select UNIA program. indifferent Programs, and between the performance in Programs and performance outside the Programs, due to among other things- investment and operational differences- For exam ple= • Institutional accounts included in related performance may hold more securities than the Program accounts, participate in initial public offerings (IPOs) and invest directly in foreign securities (rather than in ADRs)- • Mutual funds included in related performance may hold more securitiesthan the Program accounts, may participate in IPOs, may engage in options and futures transactions. and are subject to certain regulatory limitations. • Performance results in Select UMA accounts could differ from that in Consulting and Evaluation Services accounts because Select UMA accounts may hold fewer securities, and have automatic rebalancing, wash sale loss and tax harvesting features - You should read the investment manager profile accompanying this report for each investment manager- The investment manager profile gives further details on the sources of performance information for a particular investment manager, as well as other calculations of the manager's performance returns (such a.s performance net of fees and expenses) - SOURCE OF PERFORMANCE INFORMATION FOR GLOBAL INVESTMENT SOLUTION STRATEGIES: In the Global Investment Solutions program, dedicated portfolio managers employed by Morgan Stanley orthird party subadvisors make day-to-day investment decisions for clients' accounts invested in various investment strategies- Thetrack record shown in this reportfor Global Investment Solutions strategies consists of the portfolio management team's gross performance in that strategy in the Global Investment Solutions program (or a predecessor program) - SOURCE OF PERFORMANCE INFORMATION FOR OTHER INVESTMENT MANAGERS: For any investment managers shown in this report that are not available in the Consulting and Evaluation Services or Select UMA programs, the performance data is obtained from databases maintained by parties outside Morgan Stanley. This data has been included for your information, and has not been verified by Morgan Stanley in any way- See "Sources of Information': below- The gross performance shown in this report for these managers could differ materially from their gross performance in investment advisory programs offered by firms other than I'd organ Stanley- If you have invested with any such manager through another firm, we recommend that you seek information from that firm on the managers gross and net performance in its programs- Graystone Consulting'" Important Notes About This Report (Cont"d) SOURCE OF PERFORMANCE INFORMATION FOR FUNDS: For any fund shoe n in this report_ the performance data is obtained from databases maintained by parties outside Morgan Stanley_ This data has been included for your information, and has not been verified by Morgan Stanley in any way. See "Sources of Information': belol . BENCHMARK INDICES- Depending on the composition of your account and your investment objectives, the indices shown in this report may not be appropriate measures for comparison purposes and are therefore presented for illustration only. The indices used in this report may not be the same indices used for comparative purposes in the profile for each investment manager, mutual fund andior ETF that accompanies this report_ Indices are unmanaged_ They do not reflect any management, custody, transaction or other expenses, and generally assume reinvestment of dividends, accrued income and capital gains_ Performance of selected indices may be more or less volatile than that of any investment manager4und shown in this report_ Past performance of indices does not guarantee future results_ You cannot invest directly in an index_ MANAGERS AND FUNDS APPROVED IN MORGAN STANLEY WEALTH MANAGEMENT PROGRAMS: Morgan Stanley Wealth Management approves certain managers and funds offered in its investment advisory programs: • Morgan Stanley Wealth Management's Global Investment Manager Analysis ("GIMA") team approves managers and funds offered in Consulting and Evaluation Services and Select UMA. • Managers and funds offered in Institutional Consulting Group and Graystone Consulting programs may be approved by LIMA, approved by Morgan Stanley Wealth Management using another process, or not approved by Morgan Stanley 'Alealth Management_ • Morgan Stanley Wealth Management does not approve managers in the Investment Management Services consulting program_ • Managers in the Global Investment Solutions (GIS) program are not evaluated by LIMA. Page 25 Graystone Consulting'" Page 26 Important Notes About This Report (Cont"d) If you invest in a manager or fund that is not approved by Morgan Stanley Wealth Management, you are responsible for selecting and. or retaining that manager orfund. and Morgan Stanley Wealth Management does not recommend or monitor that manager or fund For more information on the approval process in any program, seethe applicable ADV brochure, available at }rr}rr}rx I'd organ StanIey.comfADV or from your Financial advisor or Private 1 ealth Advisor. If you have any questions about },%fhether or hoix Morgan Stanley Wealth Management has approved a manager or fund shown in this report. please ask our Financial Advisor or Private Wealth Advisor_ SHARE CLASSES OF FUNDS SHOWN IN THIS REPORT: The shareclass of a fund sholxn in this report may differ from the share class available in any Morgan Stanley Wealth Management investment advisory program in 1xhich you invest_ The performance of the share class in which you invest may differ from that of the share class sho7,vn in this report_ REINVESTMENT: The performance results shown in this report assume that all dividends, accrued income and capital gains were reinvested_ SOURCES OF INFORMATION: Although the statements of fact in this report have been obtained from_ and are based on, sources that Morgan Stanley believes to be reliable, Morgan Stanley makes no representation asto the accuracy or completeness of the information from sources outside Morgan Stanley_ Any such information may be incomplete and you should not use it as the sole basis for investment decisions - It is important to consider a fund's investment objectives. risks, charges and expenses carefully before investing. The prospectus contains this and other information about the fund. A copy of the prospectus may be obtained from your Financial Advisor or Private Wealth Advisor. Please read the prospectus carefully before investing In the fund. Graystone Consulting'" Important Notes About This Report (Cont"d) KEY ASSET CLASS RISC{ CONSIDERATIONS: Investing insecurities entails risk including the risk of losing principal_ There is no a ssu rance th at the investment disciplines and investment m a n a g ers4u n d s selected will meet their intended objectives_ Commodities — Diversified: The commodities markets may fluctuate widely based on a variety of factors including changes in supply and demand relationships; governmental programs and policies; national and international political and economic events: war and terrorist events; changes in interest and exchange rates; trading activities in commodities and related contracts: pestilence: weather: technological change; and the pricevol at! Iity of acommodity. In addition to commodity risk. commodity -linked notes may be subject to special risks, such as risk of loss of interest and principal, lack of a secondary market and risk of greater volatility that do not affect traditional equity and debt securities_ Commodities - Precious Metals: The prices of Commodities - Precious Metals tend to fluctuate widely and in an unpredictable manner_ and have historically experienced extended periods of flat or declining prices_ The prices of Commodities - Precious Metals are affected by several factors, including global supply and demand, investors' expectations with respect to the rate of inflation_ currency exchange rates, interest rates investment and trading activities of hedge funds and -commodity funds, and global or regional political_ economic or financial events and situations_ Fixed Income: Fixed income securities are subject to certain inherent risks such as credit risk. reinvestment risk, call risk, and interest rate risk_ Fixed income securities are sensitive to changes in prevailing interest rates_ When interest rates rise, the value of fixed income securities generally declines. Accordingly, managers or funds that invest in fixed income securities are subject to interest rate risk and portfolio values can decline in value as interest rates rise and an investor can lose principal_ High Yield Fixed Income: As 1,veII as being subject to risks relating to fixed income generally {see "Fixed Income' }, high yield or "junk" bonds are considered speculative, have significantly higher credit and default risks (including loss of principal), and may be less liquid and more volatile than investment grade bonds_ Clients should only invest in high yield strategies if this is consistent with their risk tolerance, and high yield investments should comprise only a limited part of a balanced portfolio. Page 27 Graystone Consulting'" Important Notes About This Report (Cont"d) InternationaIJEmerging Market: International investing (including investing in particular countries orgroups of countries) should be considered only one component of a complete and diversified investment program_ Investing in foreign markets may entail greater risks than those normally associated with domestic markets, such as foreign political, currency, economic and market risks_ In addition the securities markets of many emerging markets are substantially smaller, less developed, less liquid and more volatile than the securities markets of the U__ and other more developed countries_ Further, a portfolio that focuses on a single country may be subject to higher volatility than one that is more diversified_ Preferred Securities: Preferred securities are generally subject to the same risks as apply to fixed income securities. (See "Fixed Income_") However, preferred securities (especially equity preferred securities) may rank below traditional forms of debtforthe purposes of repayment in the event of bankruptcy_ Many preferred securities are "callable' meaning that the issuer may retirethe securities at specific prices and dates prior to maturity_ If a preferred security is called, the investor bears the risk of reinvesting proceeds at a potentially lower return_ Investors may not receive regular distributions on preferred securities_ For example, dividends on equity preferred securities may only be declarable in the discretion of the issuer's board and may not be cumulative_ Similarly, interest payments on certain debt preferred securities may be deferred by the issuer for periods of up to 10 years or more, in which case the investor }mould still have income tax liability even though payments would not have been received. Real Estate: Real estate investments are subject to special risks. including interest rate and property value fluctuations as well as risks related to general and local conditions_ Small and Mid Cap: Investments in small4o medium-sized corporations aregenerally more vulnerable to financial risks and other risks than larger corporations and may involve a higher degree of price volatility than investments in the broad equity market_ Hedged and Alternatives Strategies: In most Consulting Group investment advisory program, alternative investments are limited to U S registered open-end mutual funds separate account strategies, and E T F s that seek to pursue alternative investment strategies or returns utilizing publicly traded securities_ Investment products in this category may employ various investment strategies and techniques for both hedging and more speculative purposes such as short selling, leverage, derivatives, and options, which can i n c rea se vol ati I ity and the risk of investment loss_ Alternative Investments are not suitable for all investors_ Page 28 Graystone Consulting'" Important Notes About This Report (Cont"d) Managed Futures: Involve a high degree of risk, often involve leveraging and other speculative investment practicesthat may increase the risk of investment loss, can be highly illiquid, are not required to provide periodic pricing orvaluation information to investors, may involve complex tax structures and delays in distributing important tax information, are not subject to the same regulatory requirements as mutual funds, often charge high fees which may offset any trading profits, and in many cases the underlying investments are nottransparent and are known only tothe investment manager_ Master Limited Partnerships {MLPs} are limited partnerships or limited liability companies whose interests (limited partnership or limited liability company units) are generally traded on securities exchanges like shares of common stock. Investment in MLPs entails different risks, including tax risks, than is the case for other types of investments_ Currently. most MLIP s operate in the energy, natural resources or real estate sectors and are subject to the risks generally applicable to companies in those sectors, including commodity pricing risk, supply and demand risk, depletion risk and exploration risk_ Depending on the ownership vehicle, MLP interests are subject to varying tax treatment_ Page 29 Graystone Consulting'" Glossary ALPHA: Synonym of'value added', linearly similar to the way beta is computed, alpha is the incremental return on a portfolio when the market is stationary_ In other words, it is the extra expected return due to non -market factors_ This risk -adjusted measurement takes into account both the performance of the market as a whole and th e vol ati I ity of the portfolio_ A positive alpha indicates that a portfolio has produced returns above the expected level at that Ievel of risk, and vice versa for a negative alpha_ ANNUALIZED RETURN: The constant rate of return that, compounded annually, would }Meld the same overall return for a period of more than oneyear as the actual return observed for that period_ ANNUALIZED EXCESS RETURN: Excess return represents the difference between the manager's return and the return of a benchmark forthat manager. Annualized excess return is calculated by taking the annualized return of the original series and forming the difference bet~,veen thetwo_ A positive annualized excess return implies thatthe manager outperformed the benchmark overthe time period sho7,xin_ BEST AND WORST PERIOD RETURNS: The best period return for a time window is simply the maximum of the returns forthat period inside this 1xindow_ Similarly theworst period return for a time window is the minimum of the returns forthat period inside this window_ To calculate the best one-year return for a return series, the program moves a one-year time window along the series and calculates the compound return for each of these windows_ The best one -}rear return is the maximum of the returns thus found_ Similarly_ thelxorst one-year return is the minimum of the returns thus found_ Therefore, best and worst one-year returns do not refer to calendar years. BETA The measure of a portfolio's risk in relation to the market (for eti:ample, the S&P 500) or to an alternative benchmark or factors Roughly speaking a portfolio with a beta of 1.5 will have moved. on average, 1.5 times the market return_ According to asset pricing theory beta represents the type of risk, systematic risk_ which cannot be d iversifi ed away_ When using beta, there are a number of issues that you need to be aware of: (1) betas may change through time; () betas may be different depending on the direction of the market (i_e_ betas may be greater for down moves in the market rather than up moves): (3)the estimated beta will be biased if the portfolio does notfrequentlytrade; and (4)the beta is not necessarily a complete measure of risk (you may need multiple betas)_ Also, note that the beta is a measure of co movement, not volatility_ It is possible for a security to have a zero beta and h i g her vol ati I ity than the market_ Page 30 Graystone Consulting'" Glossary (Cont"d) CORRELATION: Statistical method to measure how closely related the variances of bxo series are Assets that are highly correlated would be expected to react in similar ways to changing market conditions CUMULATIVE RETURN: The total return on an investment over a specified time period CUMULATIVE EXCE S S RETURN: Excess return represents the difference between the managers return and the return of a benchmark for that manager- Cumulative excess return is calculated by taking the cumulative return of the original series and forming the difference between the two. A positive cumulative excess return implies that the manager outperformed the benchmark over the time periodshown - DOWNSIDE CAPTURE RATIO For each portfolio, this is calculated by (1) identifying the calendar quarters in which the portfolio's benchmark index had negative returns and then ()for those quarters- dividing the portfolios annualized net performance by the benchmark index's performance For investors, the lower the downside capture ratio, the better- For example, a downside capture ratio of 9 0 % means that the porkfolio's losses were only 9 0 % of the markets losses (as represented by the benchmark index)- DO'4"/NSIDE DEVIATION: Similar to Standard Deviation- but Dolxnside Deviation captures the range of expected returns only on the doixn side [1xhen the returns fall beloix the minimum acceptable return jJAR)]- DRAWDOWN (MAXIMUM DRAWDOWN): The Maximum loss (compounded not annualized) that the manager incurred during any sub -period ofthetime period shown- DRAWDOWN BEGIN DATE: the first date of the sub -period used to calculate the maximum dra),xdo}xn DRAWDOWN END DATE: The last date of the sub period used to calculate the matiimum dra"Worvn DRAWDOWN LENGTH: The number of periods (months orquarters depending on the periodicity ofthe data)the sub -period used tocalculate the maximum drawdown DRAWDOWN RECOVERY DATE: Date at which the compounded returns regain the peak level thatwas reached beforethe drawdown began DRAWDOWN RECOVERY LENGTH: Number of periods it takes to reach the recovery level from maximum drawdown end date Page 31 Graystone Consulting'" Glossary (Cont"d) EXCE S S RETURN: The difference between the returns of two portfolios_ Usually excess return is the difference between a portfolio's return and the return of a benchmark for that portfolio_ GAIN TO LOSS RATIO: Divides the average gain in an up period by the average loss in a down period_ A higher Gain to Loss Ratio is more favorable_ HIGH WATERMARK: The High Water Mark represents the peak level of them an ager's return, as represented by the peak of the cumulative return series_ HIGH WATER MARK DATE: The date which the High Water Bark was reached. UNDER WATER LOSS: Loss incurred between the high water mark date and the end of the period analyzed UNDER WATER LENGTH: Length of the time interval that begins 1xrith the high }rater mark and ends 1xith the analysis period TO HIGH WATER MARK: The percentage of gain that the manager.+fund needs to regain the peak level of the cumulative return series INF0RPVIATION RATIO: Measures the active return of the manager divided by the manager's active risk_ Active return is the annualized differences of the manager and the benchmark index, while active risk is measured by tracking error The higher the information ratio, the better_ An information ratio of 0 implies that a managertfund (or benchmark index if applicable) has provided a return that is equivalent to the risk of the benchmark return. PdAR Stands for:,I'd inimum Acceptable Return_' This represents the lowest return possible that could be considered a successful result of the investment_ In most cases, the MAR will either be defined as 0 (meaning no negative return) or as the return of a cash benchmark (meaning the investment had a higher return that simply keeping the investment amount in the relatively safe investment of money market funds)_ Please referto the specific charUstatistic to see the specific MAR used in the illustration_ Page 32 Graystone Consulting'" Glossary (Cont"d) MANAGER STILE (FZETURN S BASED STYLE ANALY I )- A measure for analyzing the style of a portfolio'& returns when compared with the quarterly returns on a number of selected style indices (the "Style Basis"). These style indices represent distinct investment styles or asset classes such as large cap value, large cap growth, small cap growth, small cap value, government bonds, or cash equivalents asset classes- Style analysis uses a calculation procedurethatfinds th e c om bi n ati on of selected indices that best tracks (i-e- that has the highest correlation to) a given manager's return series- This allows the advisor to capture an accurate picture of the investment style of the manager without viewing the underlying holdings - OMEGA: A measure of volatility designed to c a ptu re the enti re return distribution {useful for investments that do not have normal return distributions), the Omega is tied to a MAR (see above) and shoixs the ratio of the entire upside performance to the entire downside, with the MAR representing the dividing line between upside and downside- (e-g- If MAR = 0-00%, any positive return is captured in the upside and any negative return is captured in the do7,xinside)- PAIN INDE : Represents the frequency, the depth and the 1xidth of the managerlfund's drawdown s- The Pain Indeti: captures the information for every period in which the manager!fund is negative- A higher Pain Index indicates that the managerlfund had a more negative result when considering not just the depth (Ioixest return) but also the frequency of negative returns (ire quencyl and the amount oftime that the return remained negative (1xidth).- PAIN RATIO: A risklreturn ratio which uses the Pain Index as the measure of risk- The higher the Pain Ratio, the better the risk - adjusted return of the portfolio - ROLLING WINDOW: Indicates that the chart or statistic was evaluated using periodic smaller windows of data on a rolling basis - As an example, a 20 Quarter Rolling Window (Annual Roll) over a 10 year period indicates that 5 year (0 quarter) periods of time were evaluated from the startdate, moving forward one year at a time, for the duration of the 10 year period.. resulting in 5 "windows'- Evaluating data this way allows unto remove end point bias and determine a measure of consistency in per-formanfe- R-S QUARED. Used to show how much of a portfolia's variability can be accounted for by the market- For example, if a portfolio's R-Squared is 0-79, then 7 9 % of the portfolio's variability is due to market conditions- As R-Squared approaches 10D%, the portfolio is more closely correlated with the market - Page 33 Graystone Consulting'" Page 34 Glossary (Cont"d) HARPE RATIO: Developed by William F- Sharpe, this calculation measures a ratio of return to volatility- It is useful in comparing bxo portfolios or stocks in terms of risk -adjusted return- The higher the Sharpe Ratio- the betkerthe risk -adjusted return of the portfolio- It is calculated by first subtracting the risk free rate (Citigroup 3-month T -bill) from the return of the portfolio. then dividing by the standard deviation of the portfolio- Using Sharpe ratios to compare and select among investment alternatives can be difficult because the measure of risk (standard deviation) penalizes portfolios for positive upside returns as much as the undesirable doixnside returns. SINGLE COMPUTATION For a single computation chart StyleADVISOR calculates the information over the entire time period sho)xn as a single data point- AS an example in a chart sho}xing 1.0 years of performance, a "Single Computation': would represent the statistic sholxn o ve r th e enti re 10 yea r 1xi n d oix. TANDARR DEVIATION: A statistical measure ofthe degree to which the performance of a portfoliovaries from its average performance during a specified period- The higher the standard deviation, the greater the volatility of the portfolio's performance returns relative to its average return. A portfolio's returns can be expected to fall within plus or minus one standard deviation, relative to its average return, two-thirds of the time, and fall within plus or minus two standard deviations relative to its average return, 95% of the time- For example, if a portfolio had a return of 5% and a standard deviation of 13% then, if future volatility of returns is similar to historical volatility (which may not be the case): About two-thirds of the time, the future returns could be expected to fall between -8% and 18% (being 5% +/- 13%) About 9 5 % of the time, the future returns could be expected to fall between -91 % and 31 % (being 5% +1- 26%)- In performance measurement, it is generally assumed that a larger standard deviation means that great risk was taken to achieve the return. Graystone Consulting'" Glossary (Cont"d) STYLE BASIS: A set of indices that represent the broad asset category being utilized_ The Style Basis is used in the equation that calculates the Manager Style (see definition)_ The "Manager Style': chart shows the specific benchmarks utilized in the Style Basis_ The following Style Bases would be appropriate for the asset classes shown below: Domestic Equity: Russell Generic Corners; Russell ,6 Way Style basis; S&P Pure Style Basis International Equity: MBCI Regional Style Basis; MBCI World Ex USA Style Basis: MBCI International Equity Style Basis: B&P Regional International Indexes, S&P International 4 Way Style Basis - Global Equity: MBCI World Style Basin MBCI World Regional Indexes; MBCI Global Equity Style Basis - Fixed income: Citigroup Corporate Bond Indexes; BofA Merrill Lynch Fixed Income Indexes; Oitigroup GDvt Fixed Income Indexes; Global Bond Indexes STYLE BENCHMARK: A unique benchmark calculated for each manager. fund based on the Returns Based Style Analysis described above_ The "Asset Allocation" chart in Zephyr shows the specific 1,veightings used for the Style Benchmark foreach manager or fund_ TRAC KIN0 ERROR: A measurement that indicates the standard deviation of the difference between a selected market index and a portfolio's returns_ The portfolio's returns are then compared to the index's returns to determine the amount of excess return, which produces a tracking error_ A low tracking error indicates that the portfolio is tracking the selected index closely or has roughly the same returns as the index_ UPSIDE CAPTURE RATIO: For each portfolio, this is calculated by (1 ) identifying thecalendar quarters in which the portfolio's benchmark index had positive returns and then ( )forthose quarters, dividing the portfolio's annualized net performance by the benchmark index's performance_ A percentage less than 100% indicates that the portfolio "captured' less performance than the benchmark index, while a percentage greater than 100% indicates the portfolio captured more performance than the benchmark index_ For investors, the higher the upside capture ratio, the better_ For example_ if the annualized performance of an benchmark index during "up': markets (when Its returns were zero or positive) is 20.8% and the portfolio's annualized performance during the same period is 16_8%, then the portfolio's upside capture ratio is 16.8%/20-8% = 80_7%- meaning the portfolio "captured" 80.7% of the upside performance of the index. Stated another way. the portfolio in this example performed almost 0 worse than the market during up periods_ VARIANCE- A measure of how spread out a distribution is It is computed as the average squared deviation of each number from its mean Page 35 Graystone Consulting'" Performance Appendix Performance Data below is net of fees. Please seethe Morgan Stanley Smith Barney LLC Form ADV Part 2 Brochure for advisory accounts and/or any applicable brokerage account trade confirmation statements for a full disclosure of the applicable charges, fees and expenses. Your Financial Advisor will provide those documents to you upon request. or 3 5 10 Since Inception Account Name QTD YTDM Years Years Years Inception 1 Date Boston Partners - SMID Value 19.06 19.06 101.41 10.02 -- -- 9.17 07/14/2017 Fiera Capital - SMID Growth 6.80 6.80 97.50 20.45 -- -- 20.76 07/20/2017 Highland - Fixed Income -1.64 -1.64 3.28 4.99 5.56 5.62 5.59 01/31/2011 Highland - Intl Value 5.32 5.32 56.75 5.92 -- -- 6.57 07/17/2017 Highland - Large Cap Value 13.88 13.88 57.12 10.28 -- -- 9.69 07/17/2017 Intercontinental - Private Real Estate 2.27 2.27 3.10 5.98 -- -- 6.66 10/01/2017 Lazard - Global Infrastructure 3.55 3.55 -- -- -- -- 3.55 12/31/2020 Polen - Large Cap Growth -- -- -- -- -- -- -- 04/01/2021 Receipt & Disbursement -22.16 -22.16 -24.57 -13.32 -- -- -10.77 08/01/2017 Renaissance - International Growth 4.27 4.27 56.81 2.53 -- -- 3.42 07/17/2017 iShares - Russell 1000 Growth ETF 1.50 1.50 -- -- -- -- 1.50 12/31/2020 All performance above are Time Weighted(TWR) performance Glossary of Terms Active Contribution Return: The gain or loss percentage of an investment relative to the performance of the 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 a specified time period. Actual Correlation: A measure of the correlation (linear dependence) between two variables X and Y, with a 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 for risk. A positive alpha indicates that the portfolio outperformed the market on a risk -adjusted basis, and a negative 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 the market. 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 its benchmark. The higher the consistency figure, the more value a manager has contributed to the product's performance Core: Refers to an investment strategy mandate that is blend of growth and value styles without a pronounced tilt toward either style. Cumulative Selection Return (Cumulative Return): Cumulative investment performance over a specified period of time. Distribution Rate: The most recent distribution paid, annualized, and then divided by the current market price. 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 of negative benchmark return. Lower values indicate better product performance. Downside Risk: A measure similar to standard deviation, but focuses only on the negative movements of the return series. It is calculated by taking the standard deviation of the negative quarterly set of returns. The higher the value, the more risk the product has. Downside Semi Deviation: A statistical calculation that measures the volatility of returns below a minimum acceptable return. This return measure isolates the negative portion of volatility: the larger the number, the greater the volatility. Drawdown: A drawdown is the peak -to -trough decline during a specific period of an investment, fund or commodity. Excess over Benchmark: The percentage gain or loss of an investment relative to the investment's benchmark. Excess Return: Arithmetic difference between the manager's return and the risk -free return over a specified time period. Growth: A diversified investment strategy which includes investment selections that have capital appreciation as the primary goal, with little or no dividend payouts. These strategies can include reinvestment 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, also referred to as Cumulative Return, stated in terms of the amount to which an initial dollar investment would have grown over the given time period. Investment Decision Process (IDP): A model for structuring the investment process and implementing the correct attribution methodologies. The IDP includes every decision made concerning the division of the assets under management over the various asset categories. To analyze each decisions contribution to the total return, a modeling approach must measure the marginal value of every individual decision. In this respect, the hierarchy of the decisions becomes very important. We therefore use the IDP model, which serves 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 the Information 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 the average 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 also commonly referred to as alpha.. Kurtosis: A statistical measure that is used to describe the distribution, or skewness, of observed data around 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 the fund's trough value. It is in effect from the time the fund's retrenchment begins until a new fund high is reached. 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 largest percentage drawdown that has occurred in any fund's data record. Modern Portfolio Theory (MPT): An investment analysis theory on how risk -averse investors can construct 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 and is professionally managed. Peer Group: A combination of funds that share the same investment style combined as a group for comparison purposes. Peer/ Plan Sponsor Universe: A combination of asset pools of total plan investments by specific sponsor and plan types for comparison purposes. Performance Ineligible Assets: Performance returns are not calculated for certain assets because accurate valuations and transaction data for these assets are not processed or maintained by us. Common examples of these include life insurance, some annuities and some assets held externally. Performance Statistics: A generic term for various measures of investment performance measurement terms. 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." It refers to the threshold return that the limited partners of a private equity fund must receive, prior to the PE firm receiving its carried interest or "carry." Ratio of Cumulative Wealth: A defined ratio of the Cumulative Return of the portfolio divided by the Cumulative Return of the benchmark for a certain time period. Regression Based Analysis: A statistical process for estimating the relationships among variables. It includes many techniques for modeling and analyzing several variables, when the focus is on the relationship between a dependent variable and one or more independent variables Residual Correlation: Within returns -based style analysis, residual correlation refers to the portion of a strategy's return pattern that cannot be explained by its correlation to the asset -class benchmarks to which it is 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 a specific 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 appropriate benchmark. High R-Squared means a higher correlation of the portfolio's performance to the appropriate benchmark. SA/CF (Separate Account/Comingled Fund): Represents an acronym for Separate Account and Commingled 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 standard deviation 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 a return around its average return over a specified time period. Total Fund Benchmark: The policy benchmark for a complete asset pool that could consist of multiple investment 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 the performance of an appropriate market benchmark. Treynor Ratio: A ratio that divides the excess return (above the risk free rate) by the portfolio's beta to arrive at a unified measure of risk adjusted return. It is generally used to rank portfolios, funds and benchmarks. A higher ratio is indicative of higher returns per unit of market risk. This measurement can help 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 positive benchmark return. Higher values indicate better product performance. Upside Semi Deviation: A statistical calculation that measures the volatility of returns above an acceptable return. This return measure isolates the positive portion of volatility: the larger the number, the greater the volatility. Value: A diversified investment strategy that includes investment selections which tend to trade at a lower price 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 Disclosures Performance results are annualized for time periods greater than one year and include all cash and cash equivalents, realized and unrealized capital gains and losses, and dividends, interest and income. The investment 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 future results. 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 for a full disclosure of the applicable charges, fees and expenses. Your Financial Advisor will provide those documents to you upon request. Benchmark indices and blends included in this material are for informational purposes only, are provided solely as a comparison tool and may not reflect the underlying composition andlor investment objective(s) associated with the account(s). Indices are unmanaged and not available for direct investment. Index returns do not take into account fees or other charges. Such fees and charges would reduce 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 worth more or less than original cost. Please note, current performance may be higher or lower than the performance data shown. For up to date month -end performance information, please contact your Financial Advisor or visit the funds' company website. Investors should carefully consider the fund's investment objectives, risks, charges and expenses before investing. The prospectus and, if available the summary prospectus, contains this and other information that should be read carefully before investing. Investors should review the information in the prospectus carefully. To obtain a prospectus, please contact your Financial Advisor or visit the funds' company website. Past performance is no guarantee of future results. Investing involves market risk, including possible loss of principal. Growth investing does not guarantee a profit or eliminate risk. The stocks of these companies can have relatively high valuations. Because of these high valuations, an investment in a growth stock can be more risky than an investment in a company with more modest growth expectations. Value investing involves the risk that the market may not recognize that securities are undervalued and they may not appreciate as anticipated. Small and mid -capitalization companies may lack the financial resources, product diversification and competitive strengths of larger companies. The securities of small capitalization companies may not trade as readily as, and be subject to higher volatility than those of larger, more established companies. Bond funds and bond holdings have the same interest rate, inflation and credit risks that are associated with the underlying bonds owned by the funds. 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, monetary and/or legal factors, changing currency exchange rates, foreign taxes and differences in financial and accounting standards. International investing may not be for everyone. These risks may be magnified in emerging 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, are speculative and entail significant risks that can include losses due to leveraging or\other speculative investment 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 and risks 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 whose interests (limited partnership units or limited liability company units) are traded on securities exchanges like shares of common stock. Currently, most MLPs operate in the energy, natural resources or real estate sectors. Investments in MLP interests are subject to the risks generally applicable to companies in the energy and natural resources sectors, including commodity pricing risk, supply and demand risk, depletion risk and exploration risk; and MLP interests in the real estate sector are subject to special risks, including interest 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/or underlying assets and tend to be more volatile than investments that diversify across many sectors and companies. MLPs are also subject to additional risks including: investors having limited control and rights to vote on matters affecting the MLP, limited access to capital, cash flow risk, lack of liquidity, dilution risk, conflict of interests, and limited call rights related to acquisitions. Mortgage backed securities also involve prepayment risk, in that faster or slower prepayments than expected on underlying mortgage loans can dramatically alter the yield -to -maturity of a mortgage -backed security and prepayment risk includes the possibility that a fund may invest the proceeds at generally lower interest 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 known as "junk bonds", are considered speculative, involve greater risk of default and tend to be more volatile than investment grade fixed income securities. Credit quality is a measure of a bond issuer's creditworthiness, or ability to repay interest and principal to bondholders in a timely manner. The credit ratings shown are based on security rating as provided by Standard & Poor's, Moody's and/or Fitch, as applicable. Credit ratings are issued by the rating agencies for the underlying securities in the fund and not the fund itself, and the credit quality of the securities in the fund does not represent the stability or safety of the fund. Credit ratings shown range from AAA, being the highest, 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) are considered to be investment grade -quality securities. If two or more of the agencies have assigned different ratings to a security, the highest rating is applied. Securities that are not rated by all three agencies are listed as "NR". "Alpha tilt strategies comprise a core holding of stocks that mimic a benchmark type index such as the S&P 500 to which additional securities are added to help tilt the fund toward potentially outperforming the market in an effort to enhance overall investment returns. Tilt strategies are subject to significant timing risk and could potentially expose investors to extended periods of underperformance." Custom Account Index: The Custom Account Index is an investment benchmark based on your historical target 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 your portfolio since the inception of your account, i.e., asset class and/or manager changes. However, in some circumstances, it may not be an appropriate benchmark for use with your specific account composition. For detailed report of the historical composition of this blend please contact your Financial Advisor. Peer Groups Peer Groups are a collection of similar investment strategies that essentially group investment products that share the same investment approach. Peer Groups are used for comparison purposes to compare and illustrate a clients investment portfolio versus its peer across various quantitative metrics like performance and risk. Peer Group comparison is conceptually another form of benchmark comparison whereby the actual 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 Groups https://www.invmetrics.com/style-peer-groups Peer Group Ranking Methodology A percentile rank denotes the value of a product in which a certain percent of observations fall within a peer group. The range of percentile rankings is between 1 and 100, where 1 represents a high statistical value and 100 represents a low statistical value. The 30th percentile, for example, is the value in which 30% of the highest observations may be found, the 65th 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 products in each peer group, where a ranking of 1 denotes a high statistical value and a ranking of 100 denotes a low statistical value. It is important to note that the same ranking methodology applies to all statistics, implying that 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 percentile ranking equal to 1 for return denotes highest return, whereas a percentile ranking of 1 for standard deviation denotes highest risk among peers. In addition, values may be used to demonstrate quartile rankings. For example, the third quartile is also known as the 75th percentile, and the median is the 50th percentile. Alternatives Graystone Consulting is a business of Morgan Stanley Smith Barney LLC. ("Morgan Stanley") This material is not to be reproduced or distributed to any other persons (other than professional advisors of the investors) and is intended solely for the use of the persons to whom it has been delivered. This material is not 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 to purchase or sell any security, other investment or service, or to attract any funds or deposits. Investments mentioned may not be suitable for all clients. Any product discussed herein may be purchased only after a client has carefully reviewed the offering memorandum and executed the subscription documents. Morgan Stanley has not considered the actual or desired investment objectives, goals, strategies, guidelines, or factual circumstances of any investor in any fund(s). Before making any investment, each investor should carefully consider the risks associated with the investment, as discussed in the applicable offering memorandum, and make a determination based upon their own particular circumstances, that the investment is consistent with their investment objectives and risk tolerance. This information is being provided as a service of your Graystone Institutional Consultant and does not supersede or replace your Morgan Stanley customer statement. The information is as of the date(s) noted and subject to daily market fluctuation. Your interests in Alternative Investments, which may have been purchased through us, are generally not held here, and are generally not covered by SIPC. The information provided to you: 1) is included as a service to you, valuations for certain products may not be available; 2) is derived from you or another external source for which we are not responsible, and may have been modified to take into consideration capital calls or distributions to the extent applicable; 3) may not reflect actual shares, share prices or values; 4) may include invested or distributed amounts in addition to a fair value estimate; and 5) should not be relied upon for tax reporting purposes. Notwithstanding the foregoing, 1) to the extent this report displays Alternative Investment positions within a Morgan Stanley Individual Retirement Account ("IRA"), such positions are held by Morgan Stanley Smith Barney LLC as the custodian of your Morgan Stanley IRA; and 2) if your Alternative Investment positon(s) is held by us and 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 strategy vehicles. 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 Credit Funds, Real Estate Funds, and Managed Futures Funds. Non-traditional alternative strategy vehicles may include, but are not limited to, Open or Closed End Mutual Funds, Exchange -Traded and Closed -End Funds, Unit Investment Trusts, exchange listed Real Estate Investment Trusts (REITs), and Master Limited Partnerships (MLPs). These non-traditional alternative strategy vehicles also seek altemative-like exposure but have significant differences from traditional alternative investment vehicles. Non-traditional alternative strategy vehicles may behave like, have characteristics of, or employ various investment strategies and techniques for both hedging and more speculative purposes such as short -selling, leverage, derivatives, and options, which can increase volatility and the risk of investment loss. Characteristics such as correlation to traditional markets, investment strategy, and market sector exposure can play a role in the classification of a traditional security being classified as alternative. Traditional alternative investment vehicles are illiquid and usually are not valued daily. The estimated valuation provided will be as of the most recent date available and will be included in summaries of your assets. Such valuation may not be the most recent provided by the fund in which you are invested. No representation is made that the valuation is a market value or that the interest could be liquidated at this value. We are not required to take any action with respect to your investment unless valid instructions are received from you in a timely manner. Some positions reflected herein may not represent interests in the fund, but rather redemption proceeds withheld by the issuer pending final valuations which are not subject to the investment performance of the fund and may or may not accrue interest for the length of the withholding. Morgan Stanley does not engage in an independent valuation of your alternative investment assets. Morgan Stanley provides periodic information to you including the market value of an alternative investment vehicle based on information received from the management entity of the alternative investment vehicle 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 may include 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 a fund;- Volatility of returns;- Restrictions on transferring interests in a fund;- Potential lack of diversification 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 tax reporting;- 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 Stanley Wealth 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, research publication, and other activities. In the ordinary course of its business, Morgan Stanley Wealth Management therefore engages in activities where Morgan Stanley Wealth Management's interests may conflict with the interests of its clients, including the private investment funds it manages. Morgan Stanley Wealth Management can give no assurance that conflicts of interest will be resolved in favor of its clients or any such fund. Indices are unmanaged and investors cannot directly invest in them. Composite index results are shown for illustrative purposes and do not represent the performance of a specific investment. Past performance is no guarantee of future results. Actual results may vary. Diversification does not assure a profit or protect against loss in a declining market. Any performance or related information presented has not been adjusted to reflect the impact of the additional fees paid to a placement agent by an investor (for Morgan Stanley placement clients, a one-time upfront Placement Fee of up to 3%, and for Morgan Stanley investment advisory clients, an annual advisory fee of up to 2.5%), which would result in a substantial reduction in the returns if such fees were incorporated. For most investment advisory clients, the program account will be charged an asset -based wrap fee every quarter ("the Fee"). In general, the Fee covers investment advisory services and reporting. In addition to the Fee, clients will pay the fees and expenses of any funds in which their account is invested. Fund fees and expenses are charged directly to the pool of assets the fund invests in and impact the valuations. Clients must understand that these fees and expenses are an additional cost and will not be included in the Fee amount in the account statements. As fees are deducted quarterly, the compounding effect will be to increase the impact of the fees by an amount directly related to the gross account performance. For example, for an account with an initial value of $100,000 and a 2.5% annual fee, if the gross performance is 5% per year over a three year period, the compounding 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 year period would be approximately $115,762.50 without the fees and $107,372.63 with the fees. Please see the applicable Morgan Stanley Smith Barney LLC Form ADV Part 2A for more information including a description of the fee schedule. It is available at www.moreanstanlev.com/ADV <httn://www.mor2anstanlev.com/ADV> <http://www.morganstanley.com/ADV> or from your Financial Advisor/Private Wealth Advisor. Alternative investments involve complex tax structures, tax inefficient investing, and delays in distributing important tax information. Individual funds have specific risks related to their investment programs that will vary from fund to fund. Clients should consult their own tax and legal advisors as Morgan Stanley does not provide tax or legal advice. Interests in alternative investment products are offered pursuant to the terms of the applicable offering memorandum, are distributed by Morgan Stanley Smith Barney LLC and certain of its affiliates, and (1) are not FDIC -insured, (2) are not deposits or other obligations of Morgan Stanley or any of its affiliates, (3) are not guaranteed by Morgan Stanley and its affiliates, and (4) involve investment risks, 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 Funds You 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 funds (i.e., MMFs open to natural person investors only) seek to preserve value at $1.00 per share, they cannot guarantee they will do so. The price of other MMFs will fluctuate and when you sell shares they may be worth more or less than originally paid. MMFs may impose a fee upon sale or temporarily suspend sales if liquidity falls below required minimums. During suspensions, shares would not be available for purchases, withdrawals, check writing or ATM debits. A MMF investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or other government agency. WEALTH MANAGEMENT Morgan Stanley Capital Markets Overview: 1Q 2021 Introduction Quarterly Update as of March 31, 2021 and Forecasts as of March 26, 2021 • To kick off 2021, the S&P Soo saw continued gains, the fourth consecutive quarter of strong returns following the one-year anniversary of the March 2020 lows. Equities rallied 6.2% on the quarter, following a quarter in which they gained 12.1%. Equities continued to rally as investors cheered the much -anticipated si.g trillion stimulus package and continued vaccine distribution, as well as robust economic data and easy monetary policy. US equities outperformed both international developed and emerging market equities in the first quarter. Morgan Stanley & Co. U.S. Equity Strategy has a 3,9oo price target on the S&P Soo to December 2021. • After the S&P Soo sectors finished the fourth quarter posting a strong performance, the sectors finished the first quarter with moderate returns. Energy, Financials, and Industrials outperformed for the second consecutive quarter, returning 30.8%, i5.9%, and 11.4%, compared to gozo, returning 27.8%, 23.2%, and i5.7%. Laggards included Utilities, Info Tech, and Consumer Staples, coming in at 2.8%, 2.0%, 1.2%, respectively. Other major US indices were also up for the quarter: The Dow Jones Industrial Average rose 8.3%and the NASDAQ Composite rose 3.o%. • The MSCI EAFE Index (a benchmark for international developed markets) rose 3.6%while the MSCI Emerging Markets Index rose 2.3%for the quarter. US equities outperformed International developed and emerging market equities by 257 and 383 basis points, respectively, in iQ. • The US aggregate bond market fell in the first quarter, and the Bloomberg Barclays US Aggregate Bond Index, a general measure of the bond market, fell 3.37%. • Morgan Stanley & Co. economists expect US GDP will be 12.4% in Qz 2021, and forecast positive GDP growth for 2021 as economic recovery continues, with an estimate of 8.1%GDP growth in Q4 2021. • Commodities were up in the third quarter; the Bloomberg Commodity Index rose by 6.9%and Gold fell by-1o.o%. Source: FactSet, Bloomberg, Morgan Stanley & Co. Research, Morgan Stanley Wealth Management GIC Past performance is no guarantee offuture results. Estimates offuture performance are based on assumptionsthat may not be realized. This material is not a solicitation of any offerto b financial instrument orto participate in anytrading strategy. Please referto important information, disclosures and qualifications atthe end ofthis material. This slide sourced from Mark Pa9ALTH MANAGEMENT GLOBAL INVESTMENT OFFICE I CHARTBOOK I MARKET PERFORMANCE Graystone Consukings" WEALTH MANAGEMENT Morgan Stanley Capital Markets Overview: 1Q 2021 The US Economy Quarterly Update as of March 31, 2021 and Forecasts as of March 26, 2021 Awaiting finalized Qi data, the Bureau of Economic Analysis estimated that real Gross Domestic Product increased at an annualized rate of 4.3% in 4Q20, in comparison to a 33.4% increase in 3Q20. With Global GDP output having already fully recovered, US economy should be back to pre- COVID levels by 21021, and pre-COVID trend by 41021. Having expected a deceleration of growth in late Q4 into 1021, MS & Co. projects 1.2%year- on-year average growth for 1021, with a ramp -up to 12.4% in zQzi. The seasonally adjusted unemployment rate for February 2021 was 6.2%, steadily decreasing each month after peaking in April at 14.7%. In February, total nonfarm payrolls were +379K.The improvements in the labor market reflect the continued resumption in economic activity to curtail effects of the pandemic. The number of long-term unemployed (those jobless for 27 weeks or more) was 4.1 million, changed little over the month but is up by 3.o million over the year. According to the most recent data from the Federal Reserve Bank of St. Louis from 4Q20, corporate profits decreased -3.3% quarter over quarter and decreased -2.4%year over year. The Bureau of Labor Statistics has reported a +o.4% MOM price increase, and a 1.7% price increase for the year ending February 2021. Morgan Stanley & Co. economists forecast a 1.8% inflation rate for 1021, and a 2.3% inflation rate for 41021. The Census Bureau reported that the number of new private -sector housing starts in February was at a seasonally adjusted annual rate of 1,421,000—down 9.3%from February of last year. The Census Bureau also reported that seasonally adjusted retail and food services sales declined 3.0%from the previous month, but increased 6.3% above February zozo. Consumer confidence increased in February, with the Conference Board Consumer Confidence Index reading 90.4, after reading 88.9 in January. Despite the decline, the US National Economy Expectations Diffusion Index increased from 39.S in January to 48.S in February. In September, the Institute for Supply Management's (ISM) Purchasing Managers Index (PMI), a manufacturing sector index, registered 64.7% in March, up 6.4%from February. Overall, this figure indicates expansion in the overall economy after a major contraction in April, which had been the lowest since 2008. Generally speaking, a PMI or NMI (ISM Non -Manufacturing Index) over So indicates that the sector is expanding, and a PMI below So indicates that the sector is shrinking. The ISM's Non -Manufacturing Index (NMI), which represents growth in the services sector, was SS-3%f or February, down -S.8%from January. Source- FactSet, Bloomberg, Morgan Stanley & Co Research, Federal Reserve Bank of St. Louis, Morgan Stanley Wealth Management GIC Past performance is no guarantee of future results. Estimates of future performance are based on assumptionsthat may not be realized. This material is not a solicitation of any offerto b Graystone financial instrument orto participate in anytrading strategy. Please referto important information, disclosures and qualifications at the end ofthis material. This slide sourced from Mark Pa9dA,3ALTH MANAGEMENT GLOBAL INVESTMENT OFFICE I CHARTBOOK I MARKET PERFORMANCE Consukings°" WEALTH MANAGEMENT Morgan Stanley Capital Markets Overview: 1Q 2021 US Equity Markets As of 1Q 2021 The Dow Jones Industrial Average gained 8.3% in the first quarter of 2021, while the NASDAQ Composite Index gained 3.o%. The S&P Soo Index climbed 6.2%over the same time period. All ii sectors of the S&P Soo gained in the fourth quarter with Energy the top performer, having gained 30.8%, and Consumer Staples the laggard, with a return of 1.2%. Energy, Financials, and Industrials outperformed for the second consecutive quarter, returning 30.8%, iS.g%, and 11.4%, compared to 402o, returning 27.8%, 23.2%, and i5.7%. Laggards included Utilities, Info Tech, and Consumer Staples, coming in at 2.8%, 2.0%, 1.2%, respectively. The Russell Midcap gained 8.1%on the quarter, with mid -cap value (13.1%) outperforming mid -cap growth (-o.6%). The Russell z000, a small -cap index, gained 12.7%for the quarter, with small -cap value (21.2%) outperforming small -cap growth (4.9%) INDEX IN USD Quarter lz Months 5-Years 7-Years (Annualized) (Annualized S&P5oo 6.17% 56.351/o 16.28% 13.58% Dow Jones 8.29% 53.781/o 15.98% 13.10% Russell z000 12.70% 94.851/o 16.34% 11.04% Russell Midcap 8.14% 73.649/0 14.67% 11.64% Russell i000 5.91% 6o.59% 16.65% 13.63% Source: FactSet, Bloomberg, Morgan Stanley Wealth Management GIC Past performance is no guarantee offuture results. Estimates offuture performance are based on assumptions that may not be realized. This material is not a solicitation of any offerto b Graystone financial instrument orto participate in any trading strategy. Please referto important information, disclosures and qualifications at the end ofthis material. This slide sourced from Mark Pa96AALTH MANAGEMENT GLOBAL INVESTMENT OFFICE I CHARTBOOK I MARKET PERFORMANCE Consukings°" WEALTH MANAGEMENT S&P Soo Sectors YTDTotaI Return As of March 31, 2021 Staples Technology Utilities Discretionary Health Care Communication Services Real Estate Materials Industrials Financials Energy 2.0% _ 2.8% 3.1% 3.2% - 8.1% 9.0% 9.1% 11.4% 15.9% 0% 10% 20% 30% 30.8% Morgan Stanley 40% Source: Bloomberg Past performance is no guarantee offuture results. Estimates offuture performance are based on assumptionsthat may not be realized. This material is not a solicitation of any offerto b Graystone financial instrument orto participate in anytrading strategy. Please referto important information, disclosures and qualifications atthe end ofthis material. This slide sourced from Mark PagdASALTH MANAGEMENT GLOBAL INVESTMENT OFFICE I CHARTBOOK I MARKET PERFORMANCE Consulting" WEALTH MANAGEMENT Morgan Stanley Capital Markets Overview: 1Q 2021 Global Equity Markets As Of iQ 2021 US equities outperformed International in the first quarter of 2021 .The MSCI EAFE Index (a benchmark for international developed markets) advanced 3.6%for US -currency investors. In the first quarter, the MSCI Emerging Markets Index gained 2.3%for US -currency investors. The MSCI Europe Index advanced 4.2%for US - currency investors, while the MSCI Japan underperformed, gaining i.S%. The S&P Soo Index rallied 6.2%for the quarter. Emerging economy equity market indices saw muted returns in the first quarter. The MSCI BRIC (Brazil, Russia, India and China) Index fell -o.i% in US dollar terms, while the MSCI EM Asia Index rose 2.1%. INDEX IN LISD Quarter 12 Months 5-Years (Annualized) MSCI EAFE 3.6o0A 45-15°% 9-37°% MSCI EAFE Growth -0.49% 43-000A 11.25% MSCI EAFE Value 7.6o0A 46.480A 7.200A MSCI Europe 4.210A 4S.680A 8.830 MSCI Japan 1 47% 39.67% io 839/0 S&P Sao 6.17% 56.35% 16 28% MSCI Emerging Markets 2.34% 58.92% 12 47% 7-Years (Annualized) 5.29°/ 7.610A 2.770A 4.300A 8.32% 13 58% 6.96% Source: FactSet, Bloomberg, Morgan Stanley Wealth Management GIC Past performance is no guarantee offuture results. Estimates offuture performance are based on assumptions that may not be realized. This material is not a solicitation of any offerto b Graystone financial instrument orto participate in any trading strategy. Please referto important information, disclosures and qualifications at the end ofthis material. This slide sourced from Mark Pa9EASALTH MANAGEMENT GLOBAL INVESTMENT OFFICE I CHARTBOOK I MARKET PERFORMANCE Consukings°" WEALTH MANAGEMENT Morgan Stanley Capital Markets Overview: 1Q 2021 The US Bond Market As of iQ 2023. The bond market fell for the first time in the past three quarters.The Bloomberg Barclays US Aggregate Bond Index, a general measure of the bond market, fell -3.4%. The yield on the io-year US Treasury note notably increased, closing the quarter above 1.7%, up from the fourth quarter but still down from 1.92% at the end of zoig. The shortest end of the curve fell in 1Q2o as the Fed cut its Fed funds target rate, with the yield on 3-month Treasury bills falling to 0.02% as of iQzi, from i.54% at the start of the zozo. Riskier parts of the bond market, such as US high yield debt, gained the most in the fourth quarter, buoyed by the market's risk -on sentiment. The Bloomberg Barclays HighYield Index, a measure of lower -rated corporate bonds, gained o.85%. Mortgage -backed securities fell in the first quarter. The Bloomberg Barclays Mortgage -Backed Securities Index fell -i.i%. Municipal bonds fell slightly less; the Bloomberg Barclays Municipal Index fell-Cl INDEX IN USD Quarter 12 Months 5-Years 7-Years (Annualized) (Annualized) Bloomberg Barclays US Aggregate -337% 0.71% 3150/o 3.31% Bloomberg Barclays High Yield o.85% 23.720/0 8.i10/6 5.420/0 Bloomberg Barclays Government/Credit -4 35% 0.700/o 3.410/0 3 480/6 Bloomberg Barclays Government -4 25% -4.430/0 z 27% 2.69% Bloomberg Barclays IntermediateGovt/Credit -2.89% 1.02% 2.80% 2.780/0 Bloomberg Barclays LongGovt/Credit -10.41% -2.050/o S-591/o 6.1.20/o B I oo m berg B arc I ays Mo rtgage B acked Secu riti es -1.300/6 -0.090/o 2.4S% 2.86% Bloomberg Barclays Muni -0 35% 5.51% 3.52% 4.00% Source- FactSet, Bloomberg, Morgan Stanley & Co Research, Morgan Stanley Wealth Management GIC 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 b Graystone financial instrument orto participate in any trading strategy. Please referto important information, disclosures and qualifications at the end ofthis material. This slide sourced from Mark Consukings°" Page"ALTH MANAGEMENT GLOBAL INVESTMENT OFFICE I CHARTBOOK I MARKET PERFORMANCE WEALTH MANAGEMENT Morgan Stanley Morgan Stanley Wealth Management is the trade name of Morgan Stanley Smith Barney LLC, a registered broker -dealer in the United States. The sole purpose of this material is to inform, and it in no way is intended to be an offer or solicitation to purchase or sell any security, other investment or service, or to attract any funds or deposits. Investments mentioned may not be appropriate for all clients. Any product discussed herein may be purchased only after a client has carefully reviewed the offering memorandum and executed the subscription documents. Morgan Stanley Wealth Management has not considered the actual or desired investment objectives, goals, strategies, guidelines, orfactual circumstances of any investor in anyfund(s). Before making any investment, each investor should carefully consider the risks associated with the investment, as discussed in the applicable offering memorandum, and make a determination based upon their own particular circumstances, that the investment is consistent with their investment objectives and risk tolerance. Morgan Stanley Smith Barney LLC offers investment program services through a variety of investment programs, which are opened pursuant to written client agreements. Each program offers investment managers, funds and features that are not available in other programs; conversely, some investment managers, funds or investment strategies may be available in more than one program. Morgan Stanley's investment advisory programs may require a minimum asset level and, depending on your specific investment objectives and financial position, may not be appropriate for you. Please see the Morgan Stanley Smith Barney LLC program disclosure brochure (the "Morgan Stanley ADV") for more information in the investment advisory programs available. The Morgan Stanley ADV is available at www.moraanstanlev.com/ADV. Sources of Data. Information in this material in this report has been obtained from sources that we believe to be reliable, but we do not guarantee its accuracy, completeness or timeliness. Third -party data providers make no warranties or representations relating to the accuracy, completeness ortimeliness ofthe data they provide and are not liable for any damages relating to this data. All opinions included in this material constitute the Firm'sjudgment as ofthe date of this material and are subject to change without notice. This material was not prepared by the research departments of Morgan Stanley & Co. LLC or Morgan Stanley Smith Barney LLC. Some historical figures may be revised due to newly identified programs, firm restatements, etc. Global Investment Manager Analysis (GIMA) Focus List, Approved List and Tactical Opportunities List; Watch Policy. GIMA uses two methodsto evaluate investment products in applicable advisory programs: Focus (and investment products meeting this standard are described as being on the Focus List) and Approved (and investment products meeting this standard are described as being on the Approved List). In general, Focus entails a more thorough evaluation of an investment product than Approved. Sometimes an investment product may be evaluated using the Focus List process but then placed on the Approved List instead ofthe Focus List. Investment products may move from the Focus List to the Approved List, or vice versa. GIMA may also determine that an investment product no longer meets the criteria under either process and will no longer be recommended in investment advisory programs (in which case the investment product is given a "Not Approved" status). GIMA has a `Watch" policy and may describe a Focus List or Approved List investment product as being on "Watch" if GIMA identifies specific areas that (a) merit further evaluation by GIMA and (b) may, but are not certain to, result in the investment product becoming "Not Approved." The Watch period depends on the length of time needed for GIMA to conduct its evaluation and for the investment manager or fund to address any concerns. Certain investment products on eitherthe Focus List or Approved List may also be recommended forthe Tactical Opportunities List based in part on tactical opportunities existing at a given time. The investment products on the Tactical Opportunities List change over time. For more information on the Focus List, Approved List, Tactical Opportunities List and Watch processes, please see the applicable Form ADV Disclosure Document for Morgan Stanley Wealth Management. Your Financial Advisor or Private Wealth Advisor can also provide upon request a copy of a publication entitled "Manager Selection Process." The Global Investment Committee is a group of seasoned investment professionals who meet regularly to discuss the global economy and markets. The committee determines the investment outlook that guides our advice to clients. They continually monitor developing economic and market conditions, review tactical outlooks and recommend model portfolio weightings, as well as produce a suite of strategy, analysis, commentary, portfolio positioning suggestions and other reports and broadcasts. The GIC Asset Allocation Models are not available to be directly implemented as part of an investment advisory service and should not be regarded as a recommendation of any Morgan Stanley investment advisory service. The GIC Asset Allocation Models do not represent actual trading or any type of account or any type of investment strategies and none ofthe fees or other expenses (e.g. commissions, mark-ups, mark-downs, advisory fees, fund expenses) associated with actual trading or accounts are reflected in the GIC Asset Allocation Models which , when compounded over a period ofyears, would decrease returns. Adverse Active AlphaSM 2.0 is a patented screening and scoring process designed to help identify high -quality equity and fixed income managers with characteristics that may lead to future outperformance relative to index and peers. While highly ranked managers performed well as a group in our Adverse Active Alpha model back tests, not all ofthe managers will outperform. Please note that this data may be derived from back -testing, which has the benefit of hindsight. In addition, highly ranked managers can have differing risk profiles that might not be appropriate for all investors. Our view is that Adverse Active Alpha is a good starting point and should be used in conjunction with other information. Morgan Stanley Wealth Management's qualitative and quantitative investment manager due diligence process are equally important factors for investors when considering managers for use through an investment advisory program. Factors including, but not limited to. manaaer Graystone DISCLOSURES Consult ng' Page 8 WEALTH MANAGEMENT Morgan Stanley turnover and changes to investment process can partially or fully negate a positive Adverse Active Alpha ranking. Additionally, highly ranked managers can have differing risk profiles that might not be appropriate for all investors. The proprietary Value Score methodology considers an active investment strategies'value proposition relative to its costs. From a historical quantitative study of several quantitative markers, Value Score measures perceived forward -looking benefit and computes (2) "fair value" expense ratios for most traditional investment managers across yo categories and (z) managers' perceived "excess value" by comparing the fair value expense ratios to actual expense ratios. Managers are then ranked within each category by their excess value to assign a Value Score. Our analysis suggests that greater levels of excess value have historically corresponded to attractive subsequent performance. For more information on the ranking models, please see Adverse Active AlphaSM 2.0: Scoring Active Managers According to Potential Alpha and Value Score: Scoring Fee Efficiency by Comparing Managers' "Fair Value" and Actual Expense Ratios. The whitepapers are available from your Financial Advisor or Private Wealth Advisor. ADVERSE ACTIVE ALPHA is a registered service mark of Morgan Stanley and/or its affiliates. U.S. Pat. No. 8,756,o98 applies to the Adverse Active Alpha system and/or methodology. Additionally, highly ranked managers can have differing risk profiles that might not be appropriate for all investors. For more information on AAA, please see the Adverse Active Alpha Ranking Model and Selecting Managers with Adverse Active Alpha whitepapers. The whitepaper are available from your Financial Advisor or Private Wealth Advisor. ADVERSE ACTIVE ALPHA is a registered service mark of Morgan Stanley and/or its affiliates. U.S. Pat. No. 8,756,o98 applies to the Adverse Active Alpha system and/or methodology. The Global Investment ManagerAnalysis (GIMA) Services Only Apply to Certain Investment Advisory Programs GIMA evaluates certain investment products for the purposes of some — but not all — of Morgan Stanley Smith Barney LLC's investment advisory programs (as described in more detail in the applicable Form ADV Disclosure Document for Morgan Stanley Wealth Management). If you do not invest through one of these investment advisory programs, Morgan Stanley Wealth Management is not obligated to provide you notice of any GIMA Status changes even though it may give notice to clients in other programs. Strategy May Be Available as a Separately Managed Account or Mutual Fund Strategies are sometimes available in Morgan Stanley Wealth Management investment advisory programs both in the form of a separately managed account ("SMA") and a mutual fund. These may have different expenses and investment minimums. Your Financial Advisor or Private Wealth Advisor can provide more information on whether any particular strategy is available in more than one form in a particular investment advisory program. Generally, investment advisory accounts are subject to an annual asset -based fee which is payable monthly in advance (some account types may be billed differently). (The "Fee"). In general, the Fee covers Morgan Stanley investment advisory services, custody of securities with Morgan Stanley, trade execution with orthrough Morgan Stanley or its affiliates, as well as compensation to any Morgan Stanley Financial Advisor. In addition, each account that is invested in a program that is eligible to purchase certain investment products, such as mutual funds, will also pay a Platform Fee (which is subject to a Platform Fee offset) as described in the applicable ADV brochure. Accounts invested in the Select UMA program will also pay a separate Morgan Stanley Overlay Manager Fee and any applicable Sub -Manager fees. If your account is invested in mutual funds or exchange traded funds (collectively "funds"), you will pay the fees and expenses of any funds in which your account is invested. Fees and expenses are charged directly to the pool of assets the fund invests in and are reflected in each fund's share price. These fees and expenses are an additional cost to you and would not be included in the Fee amount in your account statements. Overlay Managers or Executing Sub -Managers ("managers") in some of Morgan Stanley's Separately Managed Account ("SMA") programs may affect transactions through broker -dealers other than Morgan Stanley or our affiliates. Ifyour managertrades with another firm, you may be assessed costs by the otherfirm in addition to Morgan Stanley'sfees. Those costs will be included in the net price ofthe security, not separately reported on trade confirmations or account statements. Certain managers have historically directed most, if not all, of theirtrades to outside firms. Information provided by managers concerning trade execution away from Morgan Stanley is summarized at: www.morganstanley.com/wealth/investmentsolutions/pdfs/adv/sotresponse.pdf. For more information, please referto the ADV Brochure for your program(s), available at www.morganstanley.com/ADV or contact your Financial Advisor/Private Wealth Advisor. For example, on an advisory account with a 32.5%annual fee, ifthe gross annual performance is 6.00%, the compounding effect ofthe fees will result in a net performance of approximately 3.38%after one year, io.5o% after three years, and i8.io%afterfive years. Conflicts of Interest: GIMA's goal is to provide professional, objective evaluations in support ofthe Morgan Stanley Wealth Management investment advisory programs. We have policies and procedures to help us meet this goal. However, our business is subject to various conflicts of interest. For example, ideas and suggestions for which investment products should be evaluated by GIMA come from a variety of sources, including our Morgan Stanley Wealth Management Financial Advisors and their direct or indirect managers, and other business persons within Morgan Stanley Wealth Management or its affiliates. Such persons may have an ongoing business relationship with certain investment managers or mutual fund companies whereby they, Morgan Stanley Wealth Management or its affiliates receive compensation from, or otherwise related to, those investment managers or mutual funds. For example, a Financial Advisor may suggest that GIMA evaluates an investment manager or fund in which a portion of his or her clients' assets are already invested. While such a recommendation is permissible, GIMA is responsible for the opinions expressed by GIMA. See the conflicts of interest section in the applicable Form ADV Disclosure Document for Morgan Stanley Wealth Management for a discussion of other tvoes of Graystone DISCLOSURES Consult ngs°" Page 9 WEALTH MANAGEMENT Morgan Stanley conflicts that maybe relevant to GIMA's evaluation of managers and funds. In addition, Morgan Stanley Wealth Management, MS & Co., managers and their affiIiates provide a variety of services (including research, brokerage, asset management, trading, lending and investment banking services) for each other and for various clients, including issuers of securities that may be recommended for purchase or sale by clients or are otherwise held in client accounts, and managers in various advisory programs. Morgan Stanley Wealth Management, managers, MS & Co., and their affiliates receive compensation and fees in connection with these services. Morgan Stanley Wealth Management believes that the nature and range of clients to which such services are rendered is such that it would be inadvisable to exclude categorically all of these companies from an account. Morgan Stanley charges each fund family we offer a mutual fund support fee, also called a "revenue -sharing payment," on client account holdings in fund families according to a tiered rate that increases along with the management fee of the fund so that lower management fee funds pay lower rates than those with higher management fees. ConsiderYour Own Investment Needs: The model portfolios and strategies discussed in the material are formulated based on general client characteristics including risk tolerance. This material is not intended to bean analysis of whether particular investments or strategies are appropriate for you or a recommendation, or an offer to participate in any investment. Therefore, clients should not use this material as the sole basis for investment decisions. They should consider all relevant information, including their existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon. Such a determination may lead to asset allocation results that are materially different from the asset allocation shown in this profile. Talk to your Financial Advisor about what would bean appropriate asset allocation for you, whether CGCM is an appropriate program for you. No obligation to notify — Morgan Stanley Wealth Management has no obligation to notify you when the model portfolios, strategies, or any other information, in this material changes. Please consider the investment objectives, risks, fees, and charges and expenses of mutual funds, ETFs, closed end funds, unit investment trusts, and variable insurance products carefully before investing. The prospectus contains this and other information about each fund. To obtain a prospectus, contact your Financial Advisor or Private Wealth Advisor or visit the Morgan Stanley website at www.moroanstaniev.com. Please read it carefully before investing. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value ofyour investment at si.00 per share, it is possible to lose money by investing in the fund. The type of mutual funds and ETFs discussed in this presentation utilizes nontraditional or complex investment strategies and/or derivatives. Examples of these types of funds include those that utilize one or more of the below noted investment strategies or categories or which seek exposure to the following markets: (i) commodities (e.g., agricultural, energy and metals), currency, precious metals; (z) managed futures; (3) leveraged, inverse or inverse leveraged; (q) bear market, hedging, long -short equity, market neutral; (5) real estate; (6) volatility (seeking exposure to the CBOE VIX Index). Investors should keep in mind that while mutual funds and ETFs may, at times, utilize nontraditional investment options and strategies, they should not be equated with unregistered privately offered alternative investments. Because of regulatory limitations, mutual funds and ETFs that seek alternative -like investment exposure must utilize a more limited investment universe. As a result, investment returns and portfolio characteristics of alternative mutual funds and ETFs may vary from traditional hedge funds pursuing similar investment objectives. Moreover, traditional hedge funds have limited liquidity with long "lock -up" periods allowing them to pursue investment strategies without having to factor in the need to meet client redemptions and ETFs trade on an exchange. On the other hand, mutual funds typically must meet daily client redemptions. This differing liquidity profile can have a material impact on the investment returns generated by a mutual fund or ETF pursuing an alternative investing strategy compared with a traditional hedge fund pursuing the same strategy. Nontraditional investment options and strategies are often employed by a portfolio manager to further a fund's investment objective and to help offset market risks. However, these features may be complex, making it more difficult to understand the fund's essential characteristics and risks, and how it will perform in different market environments and over various periods of time. They may also expose the fund to increased volatility and unanticipated risks particularly when used in complex combinations and/or accompanied by the use of borrowing or"leverage." The Morgan Stanley Digital Vault ("Digital Vault") is accessible to clients with dedicated Financial Advisors. Documents shared via the Digital Vault should be limited to those relevant to your Morgan Stanley account relationship. Uploading a document to the Digital Vault does not obligate us to review or take any action on it, and we will not be liable for any failure to act upon the contents of such document. Please contact your Financial Advisor or Branch Management to discuss the appropriate process for providing the document to us for review. If you maintain a Trust or entity account with us, only our certification form will govern our obligations for such account. Please refer to the Morgan Stanley Digital Vault terms and conditions for more information. Information related to your external accounts is provided for informational purposes only. It is provided by third parties, including the financial institutions where your external accounts are held. Graystone DISCLOSURES Consulting" Page 10 WEALTH MANAGEMENT Morgan Stanley Morgan Stanley does not verify that the information is accurate and makes no representation or warranty as to its accuracy, timeliness, or completeness. Additional information about the features and services offered through Total Wealth View are available on the Total Wealth View site on Morgan Stanley Online and also in the Total Wealth View Terms and Conditions of Use. Mobile check deposits are subject to certain terms and conditions. Checks must be drawn on a U.S. Bank. Send Money with Zelle® is available on the Morgan Stanley Mobile App for iPhone and Android and on Morgan Stanley Online. Enrollment is required and dollar and frequency limits may apply. Domestic fund transfers must be made from an eligible account at Morgan Stanley Smith Barney LLC (Morgan Stanley) to a US -based account at another financial institution. Morgan Stanley maintains arrangements with JP Morgan Chase Bank, N.A. and UMB Bank, N.A. as NACHA-participating depository financial institutions for the processing of transfers on Zelle®. Data connection required, and message and data rates may apply, including those from your communications service provider. Must have an eligible account in the U.S. to use Zelle®. Transactions typically occur in minutes when the recipient's email address or U.S. mobile number is already enrolled with Zelle. See the Morgan Stanley Send Money with Zelle® terms for details. Zelle and the Zelle related marks are wholly owned by Early Warning Services, LLC and are used herein under license. Morgan Stanley is not affiliated with Zelle®. Electronic payments arrive to the payee within 1-2 business days, check payments arrive to the payee within 5 business days. Same -day and overnight payments are available for an additional fee within the available payment timeframes. KEY ASSET CLASS CONSIDERATIONS AND OTHER RISKS Investing in the markets entails the risk of market volatility. The value of all types of investments, including stocks, mutual funds, exchange -traded funds ("ETFs"), closed -end funds, and unit investment trusts, may increase or decrease over varying time periods. To the extent the investments depicted herein represent international securities, you should be aware that there may be additional risks associated with international investing, including foreign economic, political, monetary and/or legal factors, changing currency exchange rates, foreign taxes, and differences in financial and accounting standards. These risks may be magnified in emerging markets and frontier markets. Small- and mid -capitalization companies may lack the financial resources, product diversification and competitive strengths of larger companies. In addition, the securities of small- and mid -capitalization companies may not trade as readily as, and be subject to higher volatility than, those of larger, more established companies. The value of fixed income securities will fluctuate and, upon a sale, may be worth more or less than their original cost or maturity value. Bonds are subject to interest rate risk, call risk, reinvestment risk, liquidity risk, and credit risk of the issuer. High yield bonds are subject to additional risks such as increased risk of default and greater volatility because of the lower credit quality of the issues. In the case of municipal bonds, income is generally exempt from federal income taxes. Some income may be subject to state and local taxes and to the federal alternative minimum tax. Capital gains, if any, are subject to tax. Treasury Inflation Protection Securities' (TIPS) coupon payments and underlying principal are automatically increased to compensate for inflation by tracking the consumer price index (CPI). While the real rate of return is guaranteed, TIPS tend to offer a low return. Because the return ofTIPS is linked to inflation, TIPS may significantly underperform versus conventional U.S. Treasuries in times of low inflation. There is no guarantee that investors will receive par if TIPS are sold prior to maturity. The returns on a portfolio consisting primarily of environmental, social, and governance -aware investments ("ESG") may be lower or higher than a portfolio that is more diversified or where decisions are based solely on investment considerations. Because ESG criteria exclude some investments, investors may not be able to take advantage of the same opportunities or market trends as investors that do not use such criteria. The companies identified and investment examples are for illustrative purposes only and should not be deemed a recommendation to purchase, hold or sell any securities or investment products. They are intended to demonstrate the approaches taken by managers who focus on ESG criteria in their investment strategy. There can be no guarantee that a client's account will be managed as described herein. Options and margin trading involve substantial risk and are not appropriate for all investors. Besides the general investment risk of holding securities that may decline in value and the possible loss of principal invested, closed -end funds may have additional risks related to declining market prices relative to net asset values (NAVs), active manager underperformance and potential leverage. Closed -end funds, unlike open-end funds, are not continuously offered. There is a one-time public offering and once issued, shares of closed -end funds are sold in the open market through a stock exchange. Shares of closed -end funds frequently trade at a discount from their NAV which may increase investors' risk of loss. The risk of loss due to this discount may be greater for investors expecting to sell their shares in a relatively short period after completion of the public offering. This characteristic is a risk separate and distinct from the risk that a closed -end fund's net asset value may decrease as a result of investment activities. NAV is total assets less total liabilities divided by the number of shares outstanding. At the time an investor purchases or sells shares of a closed -end fund, shares may have a market price that is above or below NAV. Portfolios that invest a large percentage of assets in only one industry sector (or in only a few sectors) are more vulnerable to price fluctuation than those that diversify among a broad range of sectors. Alternative investments often are speculative and include a high degree of risk. Investors could lose all or a substantial amount of their investment. Alternative investments are appropriate only for eligible, long-term investors who are willing to forgo liquidity and put capital at risk for an indefinite period oftime. They may be highly illiquid and can engage in leveraae and other speculative Graystone DISCLOSURES Consult ngs°" Page 11 WEALTH MANAGEMENT Morgan Stanley practices that may increase the volatility and risk of loss. Alternative Investments typicaIly have higher fees than traditional investments. Investors should carefully review and consider potential risks before investing. Certain of these risks may include 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 maybe no secondary market for a fund; Volatility of returns; Restrictions on transferring interests in a fund; Potential lack of diversification 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 tax reporting; Less regulation and higher fees than mutual funds; Risks associated with the operations, personnel, and processes of the manager; and Risks associated with cybersecurity. Asa diversified global financial services firm, Morgan Stanley Wealth Management engages in abroad spectrum of activities including financial advisory services, investment management activities, sponsoring and managing private investment funds, engaging in broker-dealertransactions and principal securities, commodities and foreign exchange transactions, research publication, 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 the interests of its clients, including the private investment funds it manages. Morgan Stanley Wealth Management can give no assurance that conflicts of interest will be resolved in favor of its clients or any such fund. All expressions of opinion are subject to change without notice and are not intended to be a forecast of future events or results. Further, opinions expressed herein may differ from the opinions expressed by Morgan Stanley Wealth Management and/or other businesses/affiliates of Morgan Stanley Wealth Management. This is not a "research report" as defined by FINRA Rule 2241 or a "debt research report" as defined by FINRA Rule 2242 and was not prepared by the Research Departments of Morgan Stanley Smith Barney LLC or Morgan Stanley & Co. LLC or its affiliates. Certain information contained herein may constitute forward -looking statements. Due to various risks and uncertainties, actual events, results or the performance of a fund may differ materially from those reflected or contemplated in such forward -looking statements. Clients should carefully consider the investment objectives, risks, charges, and expenses of a fund before investing. While the HFRI indices are frequently used, they have limitations (some of which are typical of other widely used indices). These limitations include survivorship bias (the returns of the indices may not be representative of all the hedge funds in the universe because ofthe tendency of lower performing funds to leave the index); heterogeneity (not all hedge funds are alike or comparable to one another, and the index may not accurately reflect the performance of a described style); and limited data (many hedge funds do not report to indices, and the index may omit funds, the inclusion of which might significantly affect the performance shown. The HFRI indices are based on information self -reported by hedge fund managers that decide on their own, at anytime, whether or not they want to provide, or continue to provide, information to HFR Asset Management, L.L.C. Results for funds that go out of business are included in the index until the date that they cease operations. Therefore, these indices may not be complete or accurate representations of the hedge fund universe, and maybe biased in several ways. Composite index results are shown for illustrative purposes and do not represent the performance of a specific investment. Individual funds have specific tax risks related to their investment programs that will vary from fund to fund. Clients should consult their own tax and legal advisors as Morgan Stanley Wealth Management does not provide tax or legal advice. Interests in alternative investment products are offered pursuant to the terms of the applicable offering memorandum , are distributed by Morgan Stanley Wealth Management and certain of its affiliates, and (i) are not FDIC -insured, (2) are not deposits or other obligations of Morgan Stanley Wealth Management or any of its affiliates, (3) are not guaranteed by Morgan Stanley Wealth Management and its affiliates, and (y) involve investment risks, including possible loss of principal. Morgan Stanley Wealth Management is a registered broker -dealer, not a bank. This material is not to be reproduced or distributed to any other persons (other than professional advisors of the investors or prospective investors, as applicable, receiving this material) and is intended solely for the use of the persons to whom it has been delivered. This material is not for distribution to the general public. Past performance is no guarantee of future results. Actual results may vary. SIPC insurance does not apply to precious metals, other commodities, or traditional alternative investments. In Consulting Group's advisory programs, alternative investments are limited to US -registered mutual funds, separate account strategies and exchange -traded funds (ETFs) that seek to pursue alternative investment strategies or returns utilizing publicly traded securities. Investment products in this category may employ various investment strategies and techniques for both hedging and more speculative purposes such as short -selling, leverage, derivatives and options, which can increase volatility and the risk of investment loss. Alternative investments are not appropriate for all investors. As a diversified global financial services firm, Morgan Stanley Wealth Management engages in a broad spectrum of activities including financial advisory services, investment management activities, sponsoring and managing private investment funds, engaging in broker-dealertransactionsand principal securities, commodities and foreign exchange transactions, research publication, and other activities. In the ordinary course of its business, Morgan Stanley Wealth Management therefore engages in activities where Morgan Stanley Wealth Management's interests may conflict with the interests of its clients, including the private investment funds it manages. Morgan Stanley Wealth Management can give no assurance that conflicts of interest will be resolved in favor of its clients or any such fund. Alternative investments involve complex tax structures, tax inefficient investing, and delays in distributing important tax information. Individual funds have specific risks related to their investment programs that will vary from fund to fund. Clients should consult their own tax and legal advisors as Morgan Stanley Wealth Management does not provide tax or legal advice. A majority of Alternative Investment managers reviewed and selected by GIMA pay or cause to be paid an ongoing fee for distribution from their management fees to Morgan Stanley Wealth Management in connection with Morgan Stanley Wealth Management clients that purchase an interest in an Alternative Investment and in some instances pay these fees on the investments held by investments held by brokerage clients. Morgan Stanley Wealth Management has a conflict of interest in offering alternative investments because Morgan Stanley Wealth Management or our affiliates, in most instances, earn more money in your account from your investments in alternative investments than from other investment options. It should be noted that the majority of hedge fund indexes are comprised of hedge fund manager returns. This is in contrast to traditional indexes, which are comprised of individual securities in the Graystone DISCLOSURES Consult ngs°" Page 12 WEALTH MANAGEMENT Morgan Stanley various market segments they represent and offer complete transparency as to membership and construction methodology. As such, some believe that hedge fund index returns have certain biases that are not present in traditional indexes. Some of these biases inflate index performance, while others may skew performance negatively. However, many studies indicate that overall hedge fund index performance has been biased to the upside. Some studies suggest performance has been inflated by up to 26o basis points or more annually depending on the types of biases included and the time period studied. Although there are numerous potential biases that could affect hedge fund returns, we identify some of the more common ones throughout this paper. Self-selection bias results when certain manager returns are not included in the index returns and may result in performance being skewed up or down. Because hedge funds are private placements, hedge fund managers are able to decide which fund returns they want to report and are able to opt out of reporting to the various databases. Certain hedge fund managers may choose only to report returns forfunds with strong returns and opt out of reporting returns for weak performers. Other hedge funds that close may decide to stop reporting in order to retain secrecy, which may cause a downward bias in returns. Survivorship bias results when certain constituents are removed from an index. This often results from the closure of funds due to poor performance, "blow ups," or other such events. As such, this bias typically results in performance being skewed higher. As noted, hedge fund index performance biases can result in positive or negative skew. However, it would appearthat the skew is more often positive. While it is difficult to quantify the effects precisely, investors should be aware that idiosyncratic factors may be giving hedge fund index returns an artificial `lift" or upwards bias. Hedge Funds of Funds and many funds of funds are private investment vehicles restricted to certain qualified private and institutional investors. They are often speculative and include a high degree of risk. Investors can lose all or a substantial amount of their investment. They may be highly illiquid, can engage in leverage and other speculative practices that may increase volatility and the risk of loss, and may be subject to large investment minimums and initial lockups. They involve complex tax structures, tax -inefficient investing and delays in distributing important tax information. Categorically, hedge funds and funds of funds have higher fees and expenses than traditional investments, and such fees and expenses can lowerthe returns achieved by investors. Funds of funds have an additional layer of fees over and above hedge fund fees that will offset returns. An investment in an exchange -traded fund involves risks similar to those of investing in a broadly based portfolio of equity securities traded on an exchange in the relevant securities market, such as market fluctuations caused by such factors as economic and political developments, changes in interest rates and perceived trends in stock and bond prices. An investment in a target date portfolio is subject to the risks attendant to the underlying funds in which it invests, in these portfolios the funds are the Consulting Group Capital Market funds. A target date portfolio is geared to investors who will retire and/or require income at an approximate year. The portfolio is managed to meet the investor's goals by the pre -established year or "target date."A target date portfolio will transition its invested assets from a more aggressive portfolio to a more conservative portfolio as the target date draws closer. An investment in the target date portfolio is not guaranteed at any time, including, before or afterthe target date is reached. Managed futures investments are speculative, involve a high degree of risk, use significant leverage, are generally illiquid, have substantial charges, subject investors to conflicts of interest, and are appropriate only forthe risk capital portion of an investor's portfolio. Managed futures investments do not replace equities or bonds but rather may act as a complement in a well diversified portfolio. Managed Futures are complex and not appropriate for all investors. Rebalancing does not protect against a loss in declining financial markets. There may be a potential tax implication with a rebalancing strategy. Asset allocation and diversification do not assure a profit or protect against loss in declining financial markets. Past performance is no guarantee of future results. Actual results may vary Tax laws are complex and subject to change. Morgan Stanley Smith Barney LLC ("Morgan Stanley"), its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice and are not "fiduciaries" (under ERISA, the Internal Revenue Code or otherwise) with respect to the services or activities described herein except as otherwise provided in writing by Morgan Stanley and/or as described at www.moraanstanley.com/disclosures/dol. Individuals are encouraged to consult their tax and legal advisors (a) before establishing a retirement plan or account, and (b) regarding any potential tax, ERISA and related consequences of any investments made under such plan or account. Annuities and insurance products are offered in conjunction with Morgan Stanley Smith Barney LLC's licensed insurance agency affiliates. Indices are unmanaged and investors cannot directly invest in them. They are not subject to expenses orfees and are often comprised of securities and other investment instruments the liquidity of which is not restricted. A particular investment product may consist of securities significantly different than those in any index referred to herein. Composite index results are shown for illustrative purposes only, generally do not represent the performance of a specific investment, may not, for a variety of reasons, be an appropriate comparison or benchmark for a particular investment and may not necessarily reflect the actual investment strategy or objective of a particular investment. Consequently, comparing an investment to a particular index may be of limited use. This material is not a financial plan and does not create an investment advisory relationship between you and your Morgan Stanley Financial Advisor. We are not your fiduciary either underthe Employee Retirement Income Security Act of 1974 (ERISA) or the Internal Revenue Code of 1986, and any information in this report is not intended to form the primary basis for any investment decision by you, or an investment advice or recommendation for either ERISA or Internal Revenue Code purposes. Morgan Stanley Private Wealth Management will only prepare a financial Dian at vour specific Graystone DISCLOSURES Consult ngs" Page 13 WEALTH MANAGEMENT request using Private Wealth Management approved financial planning signature. Morgan Stanley We may act in the capacity of a broker or that of an advisor. As your broker, we are not your fiduciary and our interests may not always be identical to yours. Please consult with your Private Wealth Advisor to discuss our obligations to disclose to you any conflicts we may from time to time have and our duty to act in your best interest. We maybe paid both by you and by others who compensate us based on what you buy. Our compensation, including that of your Private Wealth Advisor, may vary byproduct and overtime. Investment and services offered through Morgan Stanley Private Wealth Management, a division of Morgan Stanley Smith Barney LLC, Member SIPC. For index, indicator and survey definitions referenced in this report please visit the following: httos://www.morganstanlev.com/wealth-investmentsoIutions/wmi r-defnitions GLOBAL INVESTMENT COMMITTEE (GIC) ASSET ALLOCATION MODELS: The Asset Allocation Models are created by Morgan Stanley Wealth Management's GIC. HYPOTHETICAL MODEL PERFORMANCE (GROSS): Hypothetical model performance results do not reflect the investment or performance of an actual portfolio following a GIC Strategy, but simply reflect actual historical performance of selected indices on a real-time basis over the specified period of time representing the G I C'sstrategic and tactical allocations as of the date ofthis report. The past performance shown here is simulated performance based on benchmark indices, not investment results from an actual portfolio or actual trading. There can be large differences between hypothetical and actual performance results achieved by a particular asset allocation or trading strategy. Hypothetical performance results do not represent actual trading and are generally designed with the benefit of hindsight. Actual performance results of accounts vary due to, for example, market factors (such as liquidity) and client -specific factors (such as investment vehicle selection, timing of contributions and withdrawals, restrictions and rebalancing schedules). Clients would not necessarily have obtained the performance results shown here if they had invested in accordance with any GIC Asset Allocation Model for the periods indicated. Despite the limitations of hypothetical performance, these hypothetical performance results allow clients and FinancialAdvisorsto obtain a sense of the risk/return trade-off of different asset allocation constructs. The hypothetical performance results in this report are calculated using the returns of benchmark indices for the asset classes, and not the returns of securities, fund or other investment products. Models may contain allocations to Hedge Funds, Private Equity and Private Real Estate. The benchmark indices for these asset classes are not issued on a daily basis. When calculating model performance on a day for which no benchmark index data is issued, we have assumed straight line growth between the index levels issued before and after that date. FEES REDUCE THE PERFORMANCE OF ACTUAL ACCOUNTS: None of the fees or other expenses (e.g. commissions, mark-ups, mark-downs, fees) associated with actual trading or accounts are reflected in the GIC Asset Allocation Models. The GIC Asset Allocation Models and any model performance included in this presentation are intended as educational materials. Were a client to use these models in connection with investing, any investment decisions made would be subject to transaction and other costs which, when compounded over a period of years, would decrease returns. Information regarding Morgan Stanley's standard advisory fees is available in the Form ADV Part 2, which is available at www.morganstanley.com/adv. The following hypothetical ill ustrates the compound effect fees have on investment returns: For example, if a portfolio's annual rate of return is 3.5%for 5 years and the account pays 5o basis points in fees per annum, the gross cumulative five-year return would be ioi.l%and the five-year return net of fees would be 96.8%. Fees and/or expenses would apply to clients who invest in investments in an account based on these asset allocations, and would reduce clients' returns. The impact of fees and/or expenses can be material. Variable annuities are long-term investments designed for retirement purposes and maybe subject to market fluctuations, investment risk, and possible loss of principal. All guarantees, including optional benefits, are based on the financial strength and claims -paying ability of the issuing insurance company and do not apply to the underlying investment options. Optional riders may not be able to be purchased in combination and are available at an additional cost. Some optional riders must be elected at time of purchase. Optional riders maybe subject to specific limitations, restrictions, holding periods, costs, and expenses as specified by the insurance company in the annuity contract. If you are investing in a variable annuity through a tax -advantaged retirement plan such as an IRA, you will get no additional tax advantage from the variable annuity. Under these circumstances, you should only consider buying a variable annuity because of its other features, such as lifetime income payments and death benefits protection. Taxable distributions (and certain deemed distributions) are subject to ordinary income tax and, if taken prior to age 591h, maybe subject to a io%federal income tax penalty. Early withdrawals will reduce the death benefit and cash surrender value. Equity securities may fluctuate in response to news on companies, industries, market conditions and general economic environment. Ultrashort-term fixed income asset class is comprised of fixed income securities with high quality, very short maturities. They are therefore subject to the risks associated with debt securities such as credit and interest rate risk. Master Limited Partnerships (MLPs) are limited partnerships or limited liability companiesthat are taxed as partnerships and whose interests (limited partnership units or limited liability company units) are traded on securities exchanges like shares of common stock. Currently, most MI -Ps operate in the energy, natural resources or real estate sectors. Investments in MLP interests are subiect to Graystone DISCLOSURES Consult ngs°" Page 14 WEALTH MANAGEMENT Morgan Stanley the risks generally applicable to companies in the energy and natural resources sectors, including commodity pricing risk, supply and demand risk, depletion risk and exploration risk. Individual MLPs are publicly traded partnerships that have unique risks related to their structure. These include, but are not limited to, their reliance on the capital markets to fund growth, adverse ruling on the current tax treatment of distributions (typically mostly tax deferred), and commodity volume risk. The potential tax benefits from investing in MLPs depend on their being treated as partnerships for federal income tax purposes and, if the MLP is deemed to be a corporation, then its income would be subject to federal taxation at the entity level, reducing the amount of cash available for distribution to the fund which could result in a reduction of the fund's value. MLPs carry interest rate risk and may underperform in a rising interest rate environment. MLP funds accrue deferred income taxes for future tax liabilities associated with the portion of MLP distributions considered to be a tax -deferred return of capital and for any net operating gains as well as capital appreciation of its investments; this deferred tax liability is reflected in the daily NAV, and, as a result, the MLP fund's after-tax performance could differ significantly from the underlying assets even if the pre-tax performance is closely tracked. Investing in commodities entails significant risks. Commodity prices may be affected by a variety offactors at anytime, including but not limited to, (i) changes in supply and demand relationships, (ii) governmental programs and policies, (iii) national and international political and economic events, war and terrorist events, (iv) changes in interest and exchange rates, (v)trading activities in commodities and related contracts, (vi) pestilence, technological change and weather, and (vii) the price volatility of a commodity. In addition, the commodities markets are subject to temporary distortions or other disruptions due to various factors, including lack of liquidity, participation of speculators and government intervention. Physical precious metals are non -regulated products. Precious metals are speculative investments, which may experience short-term and long term price volatility. The value of precious metals investments may fluctuate and may appreciate or decline, depending on market conditions. Unlike bonds and stocks, precious metals do not make interest or dividend payments. Therefore, precious metals may not be appropriate for investors who require current income. Precious metals are commodities that should be safely stored, which may impose additional costs on the investor. REITs investing risks are similar to those associated with direct investments in real estate: property value fluctuations, lack of liquidity, limited diversification and sensitivityto economic factors such as interest rate changes and market recessions. Risks of private real estate include: illiquidity; a long-term investment horizon with a limited or nonexistent secondary market; lack of transparency; volatility (risk of loss); and leverage. Principal is returned on a monthly basis overthe life of a mortgage -backed security. Principal prepayment can significantly affect the monthly income stream and the maturity of any type of MBS, including standard MBS, CMOs and Lottery Bonds. Asset -backed securities generally decrease in value as a result of interest rate increases, but may benefit less than other fixed -income securities from declining interest rates, principally because of prepayments. Yields are subject to change with economic conditions. Yield is only one factor that should be considered when making an investment decision. Credit ratings are subject to change. Duration, the most commonly used measure of bond risk, quantifies the effect of changes in interest rates on the price of a bond or bond portfolio. The longer the duration, the more sensitive the bond or portfolio would be to changes in interest rates. The majority of s25 and si000 par preferred securities are "callable" meaning that the issuer may retire the securities at specific prices and dates prior to maturity. Interest/dividend payments on certain preferred issues may be deferred by the issuer for periods of up to 5 to io years, depending on the particular issue. The investor would still have income tax liability even though payments would not have been received. Price quoted is per $ay or si,000 share, unless otherwise specified. Current yield is calculated by multiplying the coupon by par value divided by the market price. The initial interest rate on a floating-rate security may be lowerthan that of a fixed-rate security of the same maturity because investors expect to receive additional income due to future increases in the floating security's underlying reference rate. The reference rate could be an index or an interest rate. However, there can be no assurance that the reference rate will increase. Some floating-rate securities may be subject to call risk. The market value of convertible bonds and the underlying common stock(s) will fluctuate and after purchase may be worth more or less than original cost. If sold prior to maturity, investors may receive more or less than their original purchase price or maturity value, depending on market conditions. Callable bonds may be redeemed by the issuer priorto maturity. Additional call features may exist that could affect yield. Some $ay or si000 par preferred securities are QDI (Qualified Dividend Income) eligible. Information on QDI eligibility is obtained from third party sources. The dividend income on QDI eligible preferreds qualifies for a reduced tax rate. Many traditional dividend paying' perpetual preferred securities (traditional preferreds with no maturity date) are QDI eligible. In order to qualify for the preferential tax treatment all qualifying preferred securities must be held by investors fora minimum period —gs days during a i8o day window period, beginning go days before the ex -dividend date. Companies paying dividends can reduce or cut payouts at any time. Nondiversification: For a portfolio that holds a concentrated or limited number of securities, a decline in the value of these investments would cause the portfolio's overall value to decline to a greater degree than a less concentrated portfolio. The indices selected by Morgan Stanley Wealth Managementto measure performance are representative of broad asset classes. Morgan Stanley Wealth Management retains the right to change representative indices at anytime. Because oftheir narrow focus, sector investments tend to be more volatile than investments that diversify across many sectors and companies. Growth investing does not guarantee a profit or eliminate risk. The stocks ofthese companies can have relatively high valuations. Because of these high valuations, an investment in a growth stock can be more risky than an investment in a company with more modest growth expectations. Value investing does not guarantee a profit or eliminate risk. Not all companies whose stocks are considered to be value stocks are able to turn their business around or successfully employ corrective strategies which would result in stock prices that do not rise as initiallv expected . Graystone DISCLOSURES Consult ngs°" Page 15 WEALTH MANAGEMENT Morgan Stanley Any type of continuous or periodic investment plan does not assure a profit and does not protect against loss in declining markets. Since such a plan involves continuous investment in securities regardless of fluctuating price levels of such securities, the investor should consider his financial ability to continue his purchases through periods of low price levels. This material is disseminated in the United States of America by Morgan Stanley Smith Barney LLC. Morgan Stanley Wealth Management is not acting as a municipal advisor to any municipal entity or obligated person within the meaning of Section i5B of the Securities Exchange Act (the "Municipal Advisor Rule") and the opinions or views contained herein are not intended to be, and do not constitute, advice within the meaning of the Municipal Advisor Rule. This material, or any portion thereof, may not be reprinted, sold or redistributed without the written consent of Morgan Stanley Smith Barney LLC. © zozi Morgan Stanley Smith Barney LLC. Member SIPC. DISCLOSURES Page 16 Graystone Consukings" Performance Appendix Performance Data beloic 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 for a fill disclosure of the applicable charges, fees and expenses. Your Financial Advisor will provide those documents to you upon request. 3 5 IF 10 Since W inception Account Name ear Years Years Years inception Date Boston Partners - SMID Value 19.06 19.06 101.41 10.02 9.17 07/14/2017 Fiera Capital - SMiD Growth 6.80 6.90 97.50 20.45 20.76 07/20/2017 Highland - Fixed Income -1.64 -1.64 3.29 4.99 5.56 5.62 5.59 01/31/2011 Highland - Intl Value 5.32 5.32 56.75 5.92 6.57 07/17/2017 Highland - Large Cap Value 13.88 13.88 57.12 10.28 9.69 07/17/2017 Intercontinental - Private Real Estate 2.27 2.27 3.10 5.98 6.66 10/01 /2017 Lazard - Global Infrastructure 3.55 3.55 3.55 12/31/2020 Polen - Large Cap Growth 04/01/2021 Receipt & Disbursement -22.16 -22.16 -24.57 -13.32 -10.77 09/01/2017 Renaissance - International Growth 4.27 4.27 56.91 2.53 3.42 07/17/2017 iShares - Russell 1000 Growth ETF 1.50 1.50 1.50 12/31/2020 All performance above are Time Weighted(TWR) performance Glossary of Terms performance. Active Contribution Return: The gain or loss percentage of an investment relative to the performance of Core: Refers to an investment strategy mandate that is blend of growth and value styles without a the investment benchmark. pronounced tilt toward either style. 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 a specified time period. Actual Correlation: A measure of the correlation (linear dependence) between two variables X and Y, with a 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 for risk. A positive alpha indicates that the portfolio outperforined the market on a risk -adjusted basis, and a negative 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 the market. 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 its benchmark. The higher the consistency figure, the more value a manager has contributed to the product's Cumulative Selection Return (Cumulative Return): Cumulative investment performance over a specified period of time. Distribution Rate: The most recent distribution paid, annualized, and then divided by the current market price. 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 of negative benchmark return. Lower values indicate better product performance. Downside Risk! A measure similar to standard deviation, but focuses only on the negative movements of the return series. Tt is calculated by taking the standard deviation of the negative quarterly set of returns. The higher the value, the more risk the product has. Downside Semi Deviation: A statistical calculation that measures the volatility of retums below a minimum acceptable return. This return measure isolates the negative portion of volatility: the larger the number, the greater the volatility. Drawdown: A drawdown is the peak -to -trough decline during a specific period of an investment, fund or commodity. Excess over Benchmark: The percentage gain or loss of an investment relative to the investment's benchmark. Excess Return: Arithmetic difference between the manager's return and the risk -free return over a specified time period. Growth: A diversified investment strategy which includes investment selections that have capital appreciation as the primary goal, with little or no dividend payouts. These strategies can include reinvestment 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, also referred to as Cumulative Return, stated in terms of the amount to which an initial dollar investment would have grown over the given time period. Investment Decision Process (IDP): A model for structuring the investment process and implementing the correct attribution methodologies. The IDP includes every decision made concerning the division of the assets under management over the various asset categories. To analyze each decisions contribution to the total return, a modeling approach must measure the marginal value of every individual decision. In this respect, the hierarchy of the decisions becomes very important. We therefore use the TDP model, which serves 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 the Information 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 the average 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 also commonly referred to as alpha.. Kurtosis: A statistical measure that is used to describe the distribution, or skewness, of observed data around 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 the fund's trough value. Tt is in effect from the time the fund's retrenchment begins until a new fund high is reached. 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). Tt measures the largest percentage drawdown that has occurred in any fund's data record. Modern Portfolio Theory (MPT): An investment analysis theory on how risk -averse investors can construct portfolios to optimize or maximize expected return based on a given level of market risk, emphasizing that risk is an inherent pan of higher reward. Mutual Fund (MF): An investment program funded by shareholders that trade in diversified holdings and is professionally managed. Peer Group: A combination of funds that share the same investment style combined as a group for comparison purposes. Peer/ Plan Sponsor Universe: A combination of asset pools of total plan investments by specific sponsor and plan types for comparison purposes. Performance Ineligible Assets: Performance returns are not calculated for certain assets because accurate valuations and transaction data for these assets are not processed or maintained by us. Common examples of these include life insurance, some annuities and some assets held externally. Performance Statistics: A generic term for various measures of investment performance measurement terms. 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." Tt refers to the threshold return that the limited partners of a private equity fund must receive, prior to the PE firm receiving its carried interest or "carry." Ratio of Cumulative Wealth: A defined ratio of the Cumulative Return of the portfolio divided by the Cumulative Return of the benchmark for a certain time period. Regression Based Analysis: A statistical process for estimating the relationships among variables. It includes many techniques for modeling and analyzing several variables, when the focus is on the relationship between a dependent variable and one or more independent variables Residual Correlation: Within returns -based style analysis, residual correlation refers to the portion of a strategy's return pattern that cannot be explained by its correlation to the asset -class benchmarks to which it is being compared. Return: A rate of investment performance for the specified period. Rolling Percentile Ranking: A measure of an investment portfcho's ranking versus a peer group for a specific rolling time period (i.e. Last 3 Years, Last 5 years, etc.). R-Squared: The percentage of a ponfolio's performance explained by the behavior of the appropriate benchmark. High R-Squared means a higher correlation of the portfolio's performance to the appropriate benchmark. SA/CF (Separate Account/Comingled Fund)! Represents an acronym for Separate Account and Commingled 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 standard deviation 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 a return around its average return over a specified time period. Total Fund Benchmark: The policy benchmark for a complete asset pool that could consist of multiple investment 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 the performance of an appropriate market benchmark. Treynor Ratio: A ratio that divides the excess return (above the risk free rate) by the portfolio's beta to arrive at a unified measure of risk adjusted return. Tt is generally used to rank portfolios, funds and benchmarks. A higher ratio is indicative of higher returns per unit of market risk. This measurement can help 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 positive benchmark return. Higher values indicate better product performance. Upside Semi Deviation: A statistical calculation that measures the volatility of returns above an acceptable return. This return measure isolates the positive portion of volatility: the larger the number, the greater the volatility. Value: A diversified investment strategy that includes investment selections which tend to trade at a lower price 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 Disclosures Perfornnance results are annualized for time periods greater than one year and include all cash and cash equivalents, realized and unrealized capital gains and losses, and dividends, interest and income. The investment results depicted herein represent historical performance. As a result of recent market activhy, current performance may vary from the figures shown. Past performance is not a guarantee of future results. 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 for a fidl disclosure of the applicable charges, fees and expenses. Your Financial Advisor will provide those documents to you upon request. Benchmark indices and blends included in this material are for informational purposes only, are provided solely as a comparison tool and may not reflect the underlying composition and/or investment objective(s) associated with the account(s). Indices are unmanaged and not available for direct investment Index returns do not take into account fees or other charges. Such fees and charges would reduce performance. The performance data shown reflects past performance, which does not guarantee f tune results. Investment return and principal will fluctuate so that an investor's shares when redeemed may be worth more or less than original cost. Please note, current performance may be higher or lower than the performance data shown. For up to date month -end performance information, please contact your Financial Advisor or visit the funds' company website. Investors should carefully consider the ftnd's investment objectives, risks, charges and expenses before investing. The prospectus and, if available the summary prospectus, contains this and other information that should be read carefully before investing. Investors should review the information in the prospectus carefully. To obtain a prospectus, please contact your Financial Advisor or visit the funds' company website. Past performance is no guarantee of future results. Investing involves market risk, including possible loss of principal. Growth investing does not guarantee a profit or eliminate risk. The stocks of these companies can have relatively high valuations. Because of these high valuations, an investment in a growth stock can be more risky than an investment in a company with more modest growth expectations. Value investing involves the risk that the market may not recognize that securities are undervalued and they may not appreciate as anticipated. Small and mid -capitalization companies may lack the financial resources, product diversification and competitive strengths of larger companies. The securities of small capitalization companies may not trade as readily as, and be subject to higher volatility than those of larger, more established companies. Bond funds and bond holdings have the same interest rate, inflation and credit risks that are associated with the underlying bonds owned by the funds. 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, monetary and/or legal factors, changing currency exchange rates, foreign taxes and differences in financial and accounting standards. International investing may not be for everyone. These risks may be magnified in emerging 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, are speculative and entail significant risks that can include losses due to leveraging or\other speculative investment practices, lack of liquidiry, 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 and risks 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 whose interests (limited partnership units or limited liability company units) are traded on securities exchanges like shares of common stock. Currently, most MLPs operate in the energy, natural resources or real estate sectors. Investments in MLP interests are subject to the risks generally applicable to companies in the energy and natural resources sectors, including commodity pricing risk, supply and demand risk, depletion risk and exploration risk; and MLP interests in the real estate sector are subject to special risks, including interest 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/or underlying assets and tend to be more volatile than investments that diversify across many sectors and companies. MLPs are also subject to additional risks including: investors having limited control and rights to vote on matters affecting the MLP, limited access to capital, cash flow risk, lack of liquidity, dilution risk, conflict of interests, and limited call rights related to acquisitions. Mortgage backed securities also involve prepayment risk, in that faster or slower prepayments than expected on underlying mortgage loans can dramatically alter the yield -to -maturity of a mortgage -backed security and prepayment risk includes the possibility that a fund may invest the proceeds at generally lower interest 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 known as "junk bonds", are considered speculative, involve greater risk of default and tend to be more volatile than investment grade fixed income securities. Credit quality is a measure of a bond issuer's creditworthiness, or ability to repay interest and principal to bondholders in a timely manner. The credit ratings shown are based on security rating as provided by Standard & Poor's, Moody's and/or Fitch, as applicable. Credit ratings are issued by the rating agencies for the underlying securities in the fund and not the fund itself, and the credit quality of the securities in the fund does not represent the stability or safety of the fund. Credit ratings shown range from AAA, being the highest, 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) are considered to be investment grade -quality securities. Tf two or more of the agencies have assigned different ratings to a security, the highest rating is applied. Securities that are not rated by all three agencies are listed as `NR". "Alpha tilt strategies comprise a core holding of stocks that mimic a benchmark type index such as the S&P 500 to which additional securities are added to help tilt the fund toward potentially outperforming the market in an effort to enhance overall investment returns. Tilt strategies are subject to significant timing risk and could potentially expose investors to extended periods of underperformance." Custom Account Index: The Custom Account Index is an investment benchmark based on your historical target 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 your portfolio since the inception of your account, i.e., asset class and/or manager changes. However, in some circumstances, it may not be an appropriate benchmark for use with your specific account composition. For detailed report of the historical composition of this blend please contact your Financial Advisor. Peer Groups Peer Groups are a collection of similar investment strategies that essentially group investment products that share the same investment approach. Peer Groups are used for comparison purposes to compare and illustrate a clients investment portfolio versus its peer across various quantitative metrics like performance and risk. Peer Group comparison is conceptually another form of benchmark comparison whereby the actual 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 Groups https://www.invmetries.com/style-peer-groups Peer Group Ranking Methodology A percentile rank denotes the value of a product in which a certain percent of observations fall within a peer group. The range of percentile rankings is between 1 and 100, where I represents a high statistical value and 100 represents a low statistical value. The 30th percentile, for example, is the value in which 30% of the highest observations may be found, the 65th 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 products in each peer group, where a ranking of 1 denotes a high statistical value and a ranking of 100 denotes a low statistical value. It is important to note that the same ranking methodology applies to all statistics, implying that 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 percentile ranking equal to 1 for return denotes highest return, whereas a percentile ranking of 1 for standard deviation denotes highest risk among peers. In addition, values may be used to demonstrate quartile rankings. For example, the third quartile is also known as the 75th percentile, and the median is the 50th percentile. Alternatives Graystone Consulting is a business of Morgan Stanley Smith Barney LLC. ("Morgan Stanley") This material is not to be reproduced or distributed to any other persons (other than professional advisors of the investors) and is intended solely for the use of the persons to whom it has been delivered. This material is not 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 to purchase or sell any security, other investment or service, or to attract any funds or deposits. Investments mentioned may not be suitable for all clients. Any product discussed herein may be purchased only after a client has carefully reviewed the offering memorandum and executed the subscription documents. Morgan Stanley has not considered the actual or desired investment objectives, goals, strategies, guidelines, or factual circumstances of any investor in any fund(s). Before making any investment, each investor should carefully consider the risks associated with the investment, as discussed in the applicable offering memorandum, and make a determination based upon their own particular circumstances, that the investment is consistent with their investment objectives and risk tolerance. This information is being provided as a service of your Graystone Tnstitutional Consultant and does not supersede or replace your Morgan Stanley customer statement. The information is as of the date(s) noted and subject to daily market fluctuation. Your interests in Alternative Investments, which may have been purchased through us, are generally not held here, and are generally not covered by STPC. The information provided to you: 1) is included as a service to you, valuations for certain products may not be available; 2) is derived from you or another external source for which we are not responsible, and may have been modified to take into consideration capital calls or distributions to the extent applicable; 3) may not reflect actual shares, share prices or values; 4) may include invested or distributed amounts in addition to a fair value estimate; and 5) should not be relied upon for tax reporting purposes. Notwithstanding the foregoing, 1) to the extent this report displays Alternative Investment positions within a Morgan Stanley Individual Retirement Account ("TRA"), such positions are held by Morgan Stanley Smith Barney LLC as the custodian of your Morgan Stanley TRA; and 2) if your Alternative Investment positon(s) is held by us and is registered pursuant to the Securities Act of 1933, as amended, your Alternative Investment position(s) is covered by STPC. Alternatives may be either traditional alternative investment vehicles or non-traditional alternative strategy vehicles. 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 Credit Funds, Real Estate Funds, and Managed Futures Funds. Non-traditional alternative strategy vehicles may include, but are not limited to, Open or Closed End Mutual Funds, Exchange -Traded and Closed -End Funds, Unit Investment Trusts, exchange listed Real Estate Investment Trusts (REITs), and Master Limited Partnerships (MLPs). These non-traditional alternative strategy vehicles also seek alternative -like exposure but have significant differences from traditional alternative investment vehicles. Non-traditional alternative strategy vehicles may behave like, have characteristics of, or employ various investment strategies and techniques for both hedging and more speculative purposes such as short -selling, leverage, derivatives, and options, which can increase volatility and the risk of investment loss. Characteristics such as correlation to traditional markets, investment strategy, and market sector exposure can play a role in the classification of a traditional security being classified as alternative. Traditional alternative investment vehicles are illiquid and usually are not valued daily. The estimated valuation provided will be as of the most recent date available and will be included in summaries of your assets. Such valuation may not be the most recent provided by the fund in which you are invested. No representation is made that the valuation is a market value or that the interest could be liquidated at this value. We are not required to take any action with respect to your investment unless valid instructions are received from you in a timely manner. Some positions reflected herein may not represent interests in the fund, but rather redemption proceeds withheld by the issuer pending final valuations which are not subject to the investment performance of the fund and may or may not accrue interest for the length of the withholding. Morgan Stanley does not engage in an independent valuation of your alternative investment assets. Morgan Stanley provides periodic information to you including the market value of an alternative investment vehicle based on information received from the management entity of the alternative investment vehicle 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 may include 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 a fund;- Volatility of returns;- Restrictions on transferring interests in a fund;- Potential lack of diversification 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 tax reporting;- 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 Stanley Wealth Management engages in abroad 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, research publication, and other activities. In the ordinary course of its business, Morgan Stanley Wealth Management therefore engages in activities where Morgan Stanley Wealth Management's interests may conflict with the interests of its clients, including the private investment funds it manages. Morgan Stanley Wealth Management can give no assurance that conflicts of interest will be resolved in favor of its clients or any such fund. Indices are unmanaged and investors cannot directly invest in them. Composite index results are shown for illustrative purposes and do not represent the performance of a specific investment. Past performance is no guarantee of future results. Actual results may vary. Diversification does not assure a profit or protect against loss in a declining market. Any performance or related information presented has not been adjusted to reflect the impact of the additional fees paid to a placement agent by an investor (for Morgan Stanley placement clients, a one-time upfront Placement Fee of up to 3%, and for Morgan Stanley investment advisory clients, an annual advisory fee of up to 25%), which would result in a substantial reduction in the returns if such fees were incorporated. For most investment advisory clients, the program account will be charged an asset -based wrap fee every quarter ("the Fee"). In general, the Fee covers investment advisory services and reporting. In addition to the Fee, clients will pay the fees and expenses of any funds in which their account is invested. Fund fees and expenses are charged directly to the pool of assets the fund invests in and impact the valuations. Clients must understand that these fees and expenses are an additional cost and will not be included in the Fee amount in the account statements. As fees are deducted quarterly, the compounding effect will be to increase the impact of the fees by an amount directly related to the gross account performance. For example, for an account with an initial value of S100,000 and a 2.5% annual fee, if the gross performance is 5% per year over a three year period, the compounding 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 year period would be approximately Sl 15,762.50 without the fees and S 107,372.63 with the fees. Please see the applicable Morgan Stanley Smith Barney LLC Form ADV Part 2A for more information including a description of the fee schedule. It is available at www.moreanstanlev.com/ADV <httn://www.mor¢anstanlev.com/ADV> <http!//www.morganstanley.com/ADV> or from your Financial Advisor/Private Wealth Advisor. Alternative investments involve complex tax structures, tax inefficient investing, and delays in distributing important tax information. Individual funds have specific risks related to their investment programs that will vary from fund to fund. Clients should consult their own tax and legal advisors as Morgan Stanley does not provide tax or legal advice. Tmerests in alternative investment products are offered pursuant to the terms of the applicable offering memorandum, are distributed by Morgan Stanley Smith Barney LLC and certain of its affiliates, and (1) are not FDTC-insured, (2) are not deposits or other obligations of Morgan Stanley or any of its affiliates, (3) are not guaranteed by Morgan Stanley and its affiliates, and (4) involve investment risks, including possible loss of principal. Morgan Stanley Smith Barney LLC is a registered broker -dealer, not a bank. STPC insurance does not apply to precious metals, other commodities, or traditional alternative investments. 2018 Morgan Stanley Smith Barney LLC. Member SIPC. Money Market Funds You 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 funds (i.e., MMFs open to natural person investors only) seek to preserve value at S1.00 per share, they cannot guarantee they will do so. The price of other MMFs will fluctuate and when you sell shares they may be worth more or less than originally paid. MMFs may impose a fee upon sale or temporarily suspend sales if liquidity falls below required minimums. During suspensions, shares would not be available for purchases, withdrawals, check writing or ATM debits. A MMF investment is not insured or guaranteed by the Federal Deposit Tnsurance Corporation or other government agency. Sebastian Police Officers' Pension Fund 1Q21 Equity Commentary Period Ending 3/31/2021 After a strong year for the equity market in 2020, the market continued its It is our view that market returns in 2021 will be a battle between strong move higher in the new year by gaining another 6.17% in Q1. The move earnings growth and potential valuation compression driven by higher was primarily driven by improving earnings outlooks (estimates are up interest rates. The markets have benefited from low rates which increase 5.7% since 12/31), rising consumer confidence, and building optimism for the present value of cash flows, but that tide is beginning to turn. Inflation stronger GDP as the economy re -opens and more Americans receive the expectations influence interest rates, and commodity prices have moved Covid 19 vaccines. The roughly 75% gain off the Covid induced market lows higher in the new year with WTI crude up 25%, copper +13%, and lumber of 3/23/2020 caps the best 12-month market rally in 75 years. The +32%. Supply chains were disrupted by Covid, and we continue to see economy has entered a better place as evidenced by the 33% GDP growth supply chain pressures as evidenced by semiconductor shortages for the of Q3 and the 4.3% GDP growth in Q4. With the $1.9 Trillion Covid relief auto business, and the recent container ship blockage of the Suez Canal. bill being passed in March, and the additional payments hitting most Americans bank accounts, economists have upped their forecasts for 2021 The first quarter market returns continued to show the cyclical rotation that GDP. The Conference Board consensus forecast is now for growth of 5.5%. That number could prove to be low as it is not uncommon now to see full year GDP estimates of 8% or better. With infrastructure bills being discussed, the likelihood of even further government stimulus is highly plausible. The jobs picture also continues to show meaningful signs of improvement as the unemployment rate has fallen to 6% as of the March jobs report. There are still approximately 9.5 million jobs that have not been recovered, but the Fed is intent on delivering on their employment mandate. As such, we continue to see the Fed as being very accommodative in their monetary policy, and even while inflation and interest rates are on the rise, the Fed sees those issues as transient. As a result of the Covid crisis the Fed balance sheet has ballooned to $7.7 trillion, and the national debt has risen to $28 trillion, or roughly $224,000 per taxpayer. While the crisis was an unprecedented situation and required unusual actions to combat an economic disaster, we continue to feel that we will look back at this time as a watershed event that changed the secular trend of abnormally depressed interest rates. began in earnest in Q4 of 2020 as Value outperformed Growth, and small cap bested large cap. The Russell 1000 Value index gained 11.2% in Q1 versus the Growth index at 0.94%, and the small cap index returned 12.69% versus the S&P 500 return of 6.17%. The best performing sectors in the quarter were cyclicals with Energy (+29.3%), Financials (+15.4%), and Industrials (+11.0%). The poorest performing sectors were Consumer Staples (+0.5%), Technology (+1.7%), and Utilities (+1.9%). An improving economic outlook and rising rates favors the value and cyclical sectors. The market was in a "risk on" mode in Q1 as defensive sectors such as Staples and Utilities were out of favor. Previously high -flying names such as Apple, Tesla, and Amazon detracted from market returns in Q1, while more pedestrian names like Exxon, JP Morgan, and Bank of America were additive to index returns. Market volatility did pickup somewhat in the quarter and was driven by both retail investors (Robinhood) and institutional hedge funds (Archegos). It's a testament to the markets resiliency that the liquidation of over $30 billion in stocks from an over leveraged Archegos did not result in any major market disruption. Hnhland Capital MANAGEMENT, LLC An Argent Compary Sebastian Police Officers' Pension Fund 1Q21 Equity Commentary What can we expect in the months ahead? It is now consensus thinking that we will see the strongest economy in our generation over the next several months. The pent-up demand after a year of restrictions, income replacement provided by the government, and now the additional Period Ending 3/31/2021 But it is also possible for rates and the market to rise simultaneously. Since 1990 there have been 7 periods of rising interest rates with the average rate increase being 1.8% and the current increase so far being 1.17%. We should see rates move higher. However, during those periods of stimulus of fiscal spending will result in tremendous demand for goods and rising rates, the S&P 500 produced positive returns in all periods, ranging services. We are already seeing high frequency indicators such as Open Table seated diners showing strong improvement with late March in person diners just 21% below the comparable period in 2019. Airports are also coming back to life with TSA daily numbers showing travelers at 1.4 million daily versus roughly 810,000 in early January of 2021. Demand will not be lacking but will the supply chain be able to keep up with that demand, and what will be the subsequent impact on inflation and thereby interest rates? Both the rate of increase in Treasury yields as well as the absolute level of rates will matter. The markets would prefer a more orderly rise in interest rates. A sudden jump tends to portend that the Fed is behind the curve and will have to move to catch up. Where we land on interest rates will determine how well markets do over the remainder of 2021. We know that supplier deliveries are facing longer lead times, and this historically leads to higher prices. The US trade weighted dollar has declined roughly 6% over the past year. This makes imports more expensive and import prices are up 3% over the past year, the largest 12- month advance since October of 2018. And don't forget the previously mentioned increases in commodity prices. All of this points to at least modestly higher interest rates over the coming months, and the potential that rising interest rates will cap or possibly compress market valuations. We all know that lower inflation rates are associated with higher price earnings multiples for the market. Historically inflation rates of 0-2% have given rise to stock market P/E multiples just over 18X earnings. An inflation rate of 2-4% has led to a slightly lower multiple of 17.4X. Current inflation numbers are still below 2%, but the markets P/E ratio is over 20X. from a low of 1.8% to a high of 28.3%, and averaging 17%. The real risk to financial assets is not the specter of higher inflation itself, but when central banks make it clear they are ready to stop it. We are far from that with the Fed publicly stating they are willing to allow inflation to run hot for some time, keeping in mind that since the Great Recession the Fed has been trying to increase inflation unsuccessfully. Higher interest rates do increase the risk in the equity market, but with a market awash in liquidity (M2 growing at 24%) we still expect the strength of earnings growth in 2021 to trump the impact of higher rates. As such, we would continue to expect the more cyclical areas of the market such as Energy, Financials, Industrials and Consumer Discretionary to lead, while the more defensive sectors such as Consumer Staples and Utilities should lag. Where does the Technology sector fit into this? Higher rates could be a headwind for Tech as their valuations have benefited from values being discounted at near zero rates. But we think this could be similar to 2013 when rates rose and Tech also participated in the market rise, but just not to the same degree as the more cyclical sectors. Valuation: The market is currently trading at a P/E multiple of 21.6X forward 12-month earnings, above both the 5 and 10 year averages of 17.8X and 15.9X respectively. The current price to cash flow multiple of 15.9X is well above the long-term average of 10.8X. Valuation metrics continue to look stretched, which creates impetus for the market to produce the robust earnings growth that is expected in order to lower those Hnhland Capital MANAGEMENT, LLC An Argent Compary Sebastian Police Officers' Pension Fund 1Q21 Equity Commentary valuation multiples. We expect this to occur. Earnings are now beginning to lap the weak periods of early Covid lockdowns, and Q12021 earnings are projected to grow by over 23%. Full year 2021 eps are now expected to increase by 25.4%. This is impressive given that in the early months of the pandemic it was believed that it would take several years for the market to recover to 2019 pre -Pandemic earnings levels. If the 2021 earnings materialize, then we will eclipse 2019 earnings by 7%. The picture should continue to improve into 2022 as well, with earnings growing another 15%. One of the risks to achievement of these earnings could be the new potential tax hikes outlined in the infrastructure plan. This could serve as a drag on growth in 2022 as infrastructure money tends to be spent more slowly over time, whereas new taxes are paid in the year enacted. This will bear careful watching over the next several months as higher corporate tax rates could result in negative earnings revisions, and 2022 earnings that are not as robust as currently projected. Period Ending 3/31/2021 Like most of you, we are encouraged by the improving availability of vaccines for the US population. We are hopeful that we can reach a level of "herd immunity" perhaps by this summer. While it will still take some time for things to return to normal or whatever the new normal might look like, we are nevertheless making progress. We are hopeful that we can return to meeting with many of you in person, and we will begin to reach out to you in the upcoming months. Hnhland Capital MANAGEMENT, LLC An Argent Compary Sebastian Police Officers' Pension Fund 1Q21 Large Cap Value Equity Commentary Large Cap Value returns continued their strong pace during the first quarter as the strategy of aligning portfolios toward the forthcoming economic recovery proved to be profitable. Characteristics like interest rate sensitivity, economic cyclicality and favoring small cap companies within a benchmark all were consistent paths to outperformance. Beginning in the fall, we strategically began rotating our portfolio market cap downward in response to our model. At the time of this writing, the weighted market cap stands at $133 Billion versus $1516illion for the Index. As another marker of where we are in the business cycle, the future outlook for the cyclical companies, as measured by forward 12 month profit growth shows that the Value index currently has higher Growth projections than the Growth index. Bloomberg Forward 12 Month Average Profit Growth Ests. Sector Russ1000Value Russ1000Growth Energy 417.00% 53.60% Comm Servs 2869.00% 4287.00% Cons Discr 1.40% 84.20% Materials 96.00% 13.80% Financials 43.90% 71.30% Real Estate 41.70% 28.10% Industrials 37.30% 16.50% Consumer Staples 26.70% 14.40% Info Technology 20.60% -12.40% Health Care 5.80% 16.80% Utilities 3.90% 48.50% Universe Average 70.10% 39.80% Period Ending 3/31/2021 In response to the table, we took the opportunity during the quarter to increase our position in the Energy sector with purchases of ConocoPhillips. We took a new position in Freeport McMoRan Copper and FMC corporation to take advantage of favorable outlook in the Materials sector. Lastly, we took positions in 1-31-larris and United Airlines to fill out our weighting in the Industrial sector. To fund the rotation, we took profits in Alliance Data, Cisco, DXC Technologies and Thermo Fisher to reflect the deteriorating outlook for Technology. We think it likely that cyclical conditions will continue to improve throughout the summer and would continue to rotate even more aggressively in response to a subsequent change in the model. 4 Hi�hland Capital MANAGEMENT, LLC An Argent Compary Sebastian Police Officers' Pension Fund Period Ending 3/31/2021 1Q21 Fixed Income Portfolio Manager Commentary Treasury yields rose sharply in the first quarter, largely related to many goods has already created pockets of inflation. the brightening economic outlook due to the improving COVID-19 backdrop and further fiscal stimulus. Since the pandemic hit the markets in 2020, the last concern on investors' minds was the potential of inflation. At various points in 2020, the market was The Federal Reserve met on March 17th and kept short term interest rates unchanged along with the Fed's asset purchase program of Treasuries and mortgage -backed securities. Seven of 18 officials predicted higher interest rates by the end of 2023 compared with pricing in close to zero inflation for the next five years. After positive only five during the last meeting in December of 2020. In the developments related to vaccines and increased government forecasts released, Fed policy makers projected that the economy stimulus the bond market is finally pricing in the risk of inflation. Between the $935 billion spending bill passed in late December and the $1.9 trillion package in March, the US economy should see a would grow 6.5% in 2021. That would be the fastest increase since 1983. Additionally, the global economy is expected to grow 6.4% in 2021 after contracting 3.3% in 2020, the worst global recession since stunning 15% (of GDP) worth of fiscal support. This does not include World War II. Europe appears to be somewhat of a wild card, as the the multi trillion CARES act passed in 2020. Federal Reserve recovery is slower due to vaccination delays and fiscal stimulus that is Chairman Jerome Powell believes prices will rise this year. However, less aggressive compared to the United States. Heading into the he has played down the risk of inflation getting to unwanted levels. second quarter of 2021, households have accumulated excess savings According to Powell, "Our best view is that the effect on inflation of as much as 8-10% of GDP. Some of the excess savings is related to will be neither particularly large nor persistent." New York President transfer of payments from the US government. However, a large part John Williams has a similar sentiment as Powell.. He said, "I see the US economy recovering really nicely over the next couple of years" but "I don't see inflationary pressures really building during that time." The Fed is essentially saying 2021 will be a transitory year for inflation and upcoming years will trend back towards acceptable levels. Even though recent inflation data paints a picture in which investors need to pay close attention going forward. The February Institute for Supply Management (ISM) increased to a very solid reading of 60.8 which was the highest reading in three years. However, the price component was the highest level since July 2008. Indicating that supply chain disruptions and the shortage of is related to the widespread lockdowns creating downward pressure on consumption. From the 3rd quarter of 2019 to 3Q 2020, US household net worth increased approximately $5.2 trillion. Currency and savings deposits rose $2.3 trillion which was the fastest three- month gain in history. The 10-year Treasury ended 2020 yielding only 0.93% and increased 81 basis points during the first three months of the year to reach 1.74%. Front end rates have been anchored close to zero as the Treasury curve continued to steepen. The 2-year Treasury increased only 3 basis points during the quarter ending at 0.16%. Another reason for the increase in rates in 2021 is the amount of supply HnWand Capital MANAGEMENT, LLC An Argent Compary Sebastian Police Officers' Pension Fund Period Ending 3/31/2021 1Q21 Fixed Income Portfolio Manager Commentary hitting the markets. According to Bloomberg, global government Last quarter we wrote about the distinct possibility of negative issuance is up 79% year-to-date as the US has already issued $4.1 returns in the Treasury market in 2021. We believe yields are rising trillion this year. Most bond indices generated negative returns in the quarter. The Bloomberg Barclays Aggregate decreased -3.37% during the quarter. The Bloomberg Barclays Intermediate US for the right reasons, based on an improved economic outlook. Riskier assets in the bond market face a 'Goldilocks' scenario with a combination of strong economic growth and massive policy support Gov/Credit index decreased -1.86% during the quarter. The Treasury (both fiscal and monetary). The US government has a vested interest index was down -1.54% in March and finished the quarter down - to keep short term interest rates low for the foreseeable future. 4.25%, the largest quarterly decline since 1980. Verizon's $25 billion Thirty-four percent of US outstanding debt matures every single year 9-part deal to purchase spectrum assets was the largest corporate and 56% rolls off in three years. The US has shed approximately 9 deal of the quarter and tied Boeing for the sixth largest deal on record. The Biden administration is considering increasing corporate taxes from 21% to 28%. After corporate taxes were recently lowered, banks and some insurance companies decreased exposure to municipal bonds. Higher tax rates will incentivize these investor groups to increase exposure to the space. As Treasury yields have moved up in 2021, the muni market has been very resilient. The Bloomberg Barclays Muni index was only down -0.35% during the quarter outperforming most other bond markets. Historically, tax- exempt bonds outperform when Treasuries are selling off which happened this quarter. Additionally, in light of fiscal support, S&P has upgraded its sector view of the muni market. The rating agency said that "The revision of sector views back to stable from negative reflects a marked improvement in economic conditions as well as the receipt of additional federal stimulus." million jobs since the start of the pandemic and the Federal Reserve will remain highly accommodative until the employment gap has been closed. This leaves longer term inflation expectations as the key unknown variable for fixed income returns in 2021. Hnhland Capital MANAGEMENT, LLC An Argent Compary Sebastian Police Officers' Pension Fund CASH AND EQUIVALENTS (USD) CASH COMMON STOCK (USD) Energy 709 CHEVRON CORP 1148 CONOCOPHILLIPS 2072 MARATHON OIL CORP 480 MURPHY OIL CORP 390 OCCIDENTAL PETE CORP DEL Materials 198 CORTEVA INC 390 EASTMAN CHEMICAL CO 190 FMC CORPORATION 1660 FREEPORT McMORAN COPPER & GOLD INC 465 LYONDELLBASELL INDUSTRIES N V 360 NEWMONT MINING CORPORATION 941 OLIN CORP 660 WESTROCK COMPANY Industrials 260 BOEING CO 295 CARRIER GLOBAL CORP 245 CUMMINS INC 380 EATON CORP PLC 250 FORTIVE CORP 250 HONEYWELL INTL INC 240 L3HARRIS TECHNOLOGIES INC 310 MASTEC INC 233 NORFOLK SOUTHERN CORP 113 NORTHROP GRUMMAN CORP 152 OTIS WORLDWIDE CORPORATION 657 RAYTHEON TECHNOLOGIES CORP 905 UNITED AIRLINES HOLDINGS INC Portfolio Holdings 753,403.80 753,403.80 7.8 1.7 112.62 79,849.09 104.79 74,296.11 0.8 4.9 48.49 55,668.26 52.97 60,809.56 0.6 3.2 19.89 41,206.49 10.68 22,128.96 0.2 1.1 39.28 18,855.02 16.41 7,876.80 0.1 3.0 61.30 23,906.83 26.62 10,381.80 0.1 0.2- 219,485.70 175,493.20 1.8 3.5 35.05 6,940.87 46.62 9,230.76 0.1 1.1 83.28 32,478.65 110.12 42,946.80 0.4 2.5 108.92 20,694.71 110.61 21,015.90 0.2 0.6 27.95 46,398.99 32.93 54,663.80 0.6 0.9 90.18 41,934.18 104.05 48,383.25 0.5 4.0 63.65 22,914.05 60.27 21,697.20 0.2 3.7 18.33 17,248.03 37.97 35,729.77 0.4 2.1 38.85 ------------------------------------------------------------------------- 25,641.47 52.05 34,353.00 0.4 1.5 214,251.00 268,020.50 2.8 2.2 165.12 42,930.63 254.72 66,227.20 0.7 0.0 24.25 7,154.50 42.22 12,454.90 0.1 1.1 177.22 43,417.97 259.11 63,481.95 0.7 2.1 70.94 26,957.64 138.28 52,546.40 0.5 2.2 61.23 15,306.99 70.64 17,660.00 0.2 0.4 157.07 39,268.73 217.07 54,267.50 0.6 1.7 180.01 43,202.28 202.68 48,643.20 0.5 2.0 54.13 16,778.85 93.70 29,047.00 0.3 0.0 113.09 26,349.93 268.52 62,565.16 0.6 1.5 298.17 33,692.74 323.64 36,571.32 0.4 1.8 65.38 9,938.23 68.45 10,404.40 0.1 1.2 65.91 43,305.07 77.27 50,766.39 0.5 2.5 53.03 47,995.25 57.54 52,073.70 0.5 0.0 ---------------------------------------------556,ij---------------------- 396,298.80 556,709.10 5.8 1.4 Period Ending 3/31/2021 Hihlmd Capital 17 MANAGEMENT, LLC An Argent Com pary Sebastian Police Officers' Pension Fund Consumer Discretionary 100 CAPRI HOLDINGS LTD 1380 FORD MOTOR CO 725 GENERAL MOTORS CO 335 HILTON WORLDWIDE HOLDINGS INC 180 HOME DEPOT INC 909 LAS VEGAS SANDS CORP 921 PULTE GROUP INC 178 TARGET CORP Consumer Staples 305 INGREDION INC 303 PEPSICO INC 571 PROCTER & GAMBLE CO 1397 US FOODS HOLDING CORP 885 WALGREENS BOOTS ALLIANCE INC Health Care 430 ABBVIE INC 190 ANTHEM INC 761 BRISTOL-MYERS SQUIBB CO 75 CIGNA CORP 596 CVS HEALTH CORPORATION 200 HCA HEALTHCARE INC 220 JAZZ PHARMACEUTICALS PLC 596 JOHNSON & JOHNSON 190 LABRATORY CORPORATION OF AMERICA HOL[ 35 THERMO FISHER SCIENTIFIC INC 68 UNITEDHEALTH GROUP INC Financials 235 AMERICAN EXPRESS CO 1126 AMERICAN INTERNATIONAL GROUP INC Portfolio Holdings 34.68 3,468.17 51.00 5,100.00 0.1 0.0 12.18 16,803.49 12.25 16,905.00 0.2 0.0 39.00 28,272.69 57.46 41,658.50 0.4 0.0 81.40 27,267.90 120.92 40,508.20 0.4 0.0 229.55 41,319.29 305.25 54,945.00 0.6 2.2 55.86 50,774.56 60.76 55,230.84 0.6 0.0 31.70 29,193.93 52.44 48,297.24 0.5 1.1 102.67 18,275.62 198.07 35,256.46 0.4 1.4 ------------------------------------------------------------------------- 215,375.60 297,901.20 3.1 0.7 93.48 28,511.59 89.92 27,425.60 0.3 2.8 120.35 36,466.54 141.45 42,859.35 0.4 2.9 92.60 52,872.75 135.43 77,330.53 0.8 2.3 25.99 36,304.92 38.12 53,253.64 0.6 0.0 45.11 39,919.71 54.90 48,586.50 0.5 3.4 ------------------------------------------------------------------------- 194,075.50 249,455.60 2.6 2.2 112.16 48,226.95 108.22 46,534.60 0.5 4.8 253.17 48,101.72 358.95 68,200.50 0.7 1.3 48.67 37,038.88 63.13 48,041.93 0.5 3.1 43.43 3,256.88 241.74 18,130.50 0.2 1.7 56.22 33,504.92 75.23 44,837.08 0.5 2.7 90.19 18,038.92 188.34 37,668.00 0.4 0.0 155.35 34,177.55 164.37 36,161.40 0.4 0.0 138.23 82,383.10 164.35 97,952.60 1.0 2.5 195.85 37,211.03 255.03 48,455.70 0.5 0.0 323.24 11,313.46 456.38 15,973.30 0.2 0.2 292.35 19,879.88 372.07 25,300.76 0.3 1.3 ------------------------------------------------------------------------- 373,133.30 487,256.40 5.0 1.8 106.19 24,955.64 141.44 33,238.40 0.3 1.2 40.17 45,226.27 46.21 52,032.46 0.5 2.8 18 Period Ending 3/31/2021 Hihlmd Capital MANAGEMENT, LLC An Argent Corn pary Sebastian Police Officers' Pension Fund Portfolio Holdings 260 AMERIPRISE FINANCIAL INC 165.21 42,955.20 232.45 60,437.00 0.6 1.8 2492 BANK OF AMERICA CORP 24.34 60,665.74 38.69 96,415.48 1.0 1.9 370 BERKSHIRE HATHAWAY INC 180.49 66,779.58 255.47 94,523.90 1.0 0.0 60 BLACKROCK INC 643.15 38,589.02 753.96 45,237.60 0.5 2.2 235 CHUBB LIMITED 144.98 34,070.08 157.97 37,122.95 0.4 2.0 982 CITIGROUP INC 56.56 55,545.96 72.75 71,440.50 0.7 2.8 756 CITIZENS FINANCIAL GROUP INC 35.47 26,814.20 44.15 33,377.40 0.3 3.5 183 CME GROUP INC 171.27 31,341.93 204.23 37,374.09 0.4 1.8 210 GOLDMAN SACHS GROUP INC 232.98 48,924.91 327.00 68,670.00 0.7 1.5 268 HANOVER INSURANCE GROUP 126.59 33,926.27 129.46 34,695.28 0.4 2.2 829 JP MORGAN CHASE & CO 87.35 72,415.64 152.23 126,198.70 1.3 2.4 340 LINCOLN NATL CORP IND 51.90 17,647.09 62.27 21,171.80 0.2 2.7 320 NASDAQ STK MKT INC 98.06 31,378.07 147.46 47,187.20 0.5 1.3 2525 REGIONS FINANCIAL CORP 15.14 38,234.34 20.66 52,166.50 0.5 3.0 666 TRUIST FINANCIAL CORP 42.28 28,157.87 58.32 38,841.12 0.4 3.1 851 US BANCORP 46.15 39,270.45 55.31 47,068.81 0.5 3.0 1407 WELLS FARGO CO 53.78 ------------------------------------------------------- 75,675.30 39.07 54,971.49 ------ 0.6 --------- 1.0 --• 812,573.60 1,052,171.00 10.9 2.0 Information Technology 50 ACCENTURE PLC 420 ALLIANCE DATA SYSTEMS CORP 100 BROADCOM INC 1094 CORNING INC 365.9998 DELL TECHNOLOGIES INC 233 FIDELITY NATIONAL INFORMATION SERVICES 2586 HEWLETT PACKARD ENTERPRISE CO 265 MICRON TECHNOLOGY INC 363 ORACLE CORP 240 QORVO INC 230 SKYWORKS SOLUTIONS INC 250 TEXAS INSTRUMENTS INC Communication Services 405 ACTIVISION BLIZZARD INC 1384 AT&T INC 203.40 10,170.13 276.25 13,812.50 0.1 1.3 71.30 29,944.91 112.09 47,077.80 0.5 0.7 377.97 37,796.92 463.66 46,366.00 0.5 3.1 28.74 31,439.63 43.51 47,599.94 0.5 2.2 68.15 24,941.08 88.15 32,262.88 0.3 0.0 118.60 27,633.62 140.61 32,762.13 0.3 1.1 13.15 33,995.12 15.74 40,703.64 0.4 3.0 44.23 11,721.40 88.21 23,375.65 0.2 0.0 50.23 18,234.12 70.17 25,471.71 0.3 1.4 174.67 41,921.56 182.70 43,848.00 0.5 0.0 109.09 25,090.52 183.48 42,200.40 0.4 1.1 154.12 38,529.37 188.99 47,247.50 0.5 2.2 ------------------------------------------------------------------------- 331,418.40 442,728.20 4.6 1.5 58.95 23,874.24 93.00 37,665.00 0.4 1.6 35.96 49,764.83 30.27 41,893.68 0.4 6.9 19 Period Ending 3/31/2021 Hi bland Capital MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund Portfolio Holdings 698 COMCAST CORP 42.26 29,499.52 54.11 37,768.78 0.4 1.8 250 ELECTRONIC ARTS INC 131.45 32,861.30 135.37 33,842.50 0.3 0.5 125 FOX CORP 91.78 11,472.05 34.93 4,366.25 0.0 1.3 1120 VERIZON COMMUNICATIONS INC 56.32 63,077.45 58.15 65,128.00 0.7 4.3 564.9995 WALT DISNEY CO 117.12 ------------------------------------------------------------------------- 66,170.05 184.52 104,253'70 1.1 0.0 276,719.50 324,917.90 3.4 2.2 Utilities 370 AMERICAN ELEC PWR INC 73.40 27,156.24 84.70 31,339.00 0.3 3.5 398 DOMINION ENERGY INC 85.44 34,004.98 75.96 30,232.08 0.3 3.3 441 DUKE ENERGY CORP 77.68 34,258.40 96.53 42,569.73 0.4 4.0 1080 EXELON CORP 40.95 44,229.67 43.74 47,239.20 0.5 3.5 520 NEXTERA ENERGY INC 57.20 29,744.88 75.61 39,317.20 0.4 2.0 ------------------------------------------------------------------------- 169,394.20 190,697.20 2.0 3.3 Real Estate 210 BOSTON PROPERTIES INC 95.72 20,101.52 101.26 21,264.60 0.2 3.9 470 GAMING AND LEISURE PROPERTIES INC 41.61 19,554.87 42.43 19,942.10 0.2 6.1 220 JONES LANG LASALLE INC 137.35 30,218.04 179.04 39,388.80 0.4 0.0 183 PROLOGIS INC 71.92 13,162.03 106.00 19,398.00 0.2 2.4 900 WEYERHAEUSER CO 29.18 26,263.01 35.60 32,040.00 0.3 1.9 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 109,299.50 132,033.50 1.4 2.4 3,312,025.00 4,177,383.00 43.2 1.9 INTERNATIONAL EQUITY (USD) Energy 635 BP PLC SPONSORED ADR 300 OVINTIV INC 200 ROYAL DUTCH SHELL PLC - ADR B Materials 183 ARCELORMITTAL S A 545 BARRICK GOLD CORP 285 CRH PLC ADR ONE ADR REPSTG ONE ORD SHS 50 LINDE PLC 34.28 21,766.94 24.35 15,462.25 0.2 5.1 58.09 17,428.01 23.82 7,146.00 0.1 1.6 65.08 13,016.36 36.83 7,366.00 0.1 3.6 ------------------------------------------------------------------------- 52,211.31 29,974.25 0.3 3.9 45.61 8,346.23 29.17 5,338.11 0.1 0.0 12.43 6,774.45 19.80 10,791.00 0.1 1.8 24.24 6,908.05 46.98 13,389.30 0.1 0.9 177.60 --------------8,87------------------------------------------------------- 8,879.80 280.14 14,007.00 0.1 1.5 30,908.53 43,525.41 0.4 1.2 Period Ending 3/31/2021 Hihlmd Capital 20 MANAGEMENT, LLC An Argent Com pary Sebastian Police Officers' Pension Fund Period Ending 3/31/2021 Portfolio Holdings Industrials 150 ATLAS COPCO AB 52.69 7,902.95 61.12 9,168.00 0.1 1.2 65 COPA HOLDINGS SA CL A 110.89 7,207.68 80.79 5,251.35 0.1 0.0 714 KONINKLIJKE PHILIPS ELECTRS N V SPON ADR 29.15 20,816.10 57.03 40,719.42 0.4 1.5 125 SENSATA TECHNOLOGIES HOLDING PLC 55.53 6,940.82 57.95 7,243.75 0.1 0.0 530 SIEMENS AG SPONS ADR 58.17 30,831.74 82.30 43,616.88 0.5 1.9 ------------------------------------------------------------------------- 73,699.29 105,999.40 1.1 1.5 Consumer Discretionary 320 DAIMLERAG 85.24 27,277.20 89.49 28,636.80 0.3 1.5 830 HONDA MOTOR CO LTD ADR 35.59 29,542.69 30.20 25,066.00 0.3 2.9 325 INTERCONTINENTAL HOTELS ADR 47.83 15,544.12 68.90 22,392.50 0.2 0.0 200 JD.COM INC 29.85 5,969.90 84.33 16,866.00 0.2 0.0 255 ROYAL CARIBBEAN CRUISES LTD 76.38 19,477.89 85.61 21,830.55 0.2 0.0 705 SONY GROUP CORPORATION - ADR 24.17 17,041.84 106.01 74,737.05 0.8 0.4 200 YUM CHINA HOLDINGS INC 46.71 9,342.82 59.21 11,842.00 0.1 0.8 ------------------------------------------------------------------------- 124,196.50 201,370.90 2.1 0.8 Consumer Staples 360 ANHEUSER-BUSCH INBEV NV SPN ADR 113.80 40,968.23 62.85 22,626.00 0.2 0.0 115 DIAGEO PLC SPONSORED ADR NEW 123.61 14,214.91 164.21 18,884.15 0.2 1.9 120 MOWI ASA 13.64 1,637.10 24.78 2,973.60 0.0 0.0 290 UNILEVER PLC 41.32 11,982.90 55.83 16,190.70 0.2 3.7 ------------------------------------------------------------------------- 68,803.14 60,674.45 0.6 1.6 Health Care 750 GLAXOSMITHKLINE PLC ADR 39.62 29,712.45 35.69 26,767.50 0.3 6.9 100 NOVARTIS AG ADR 93.04 9,303.78 85.48 8,548.00 0.1 2.6 180 SMITH AND NEPHEW PLC SPON ADR 37.47 ------------------------------------------------------------------------- 6,743:93 37.90 6,822.00 0.1 2.4 45,760.16 42,137.50 0.4 5.3 Financials 675 AEGON N V ORD AMER REG ADR 7.54 5,090.47 4.73 3,192.75 0.0 0.0 1175 CREDIT SUISSE GROUP 20.20 23,739.87 10.60 12,455.00 0.1 1.1 325 DEUTSCHE BANK AG 31.91 10,370.74 12.00 3,900.00 0.0 0.0 1035 ING GROEP N V 14.40 14,900.70 12.23 12,658.05 0.1 2.0 21 Hihlmd Capital MANAGEMENT, LLC An Argent Corn pary Sebastian Police Officers' Pension Fund 325 INVESCO LTD 200 PRUDENTIAL PLC SPON ADR 250 TORONTO DOMINION BK ONT NEW (USD) 775 UBS GROUP AG Information Technology 400 HITACHI LIMITED 490 KYOCERA CORP 50 NXP SEMICONDUCTOR NV 200 SAP SE 1420 STMICROELECTRONICS NV -NY SHS 250 TAIWAN SEMICONDUCTOR MFG Portfolio Holdings 36.72 11,934.53 25.22 8,196.50 0.1 2.5 40.02 8,004.00 42.69 8,538.00 0.1 0.5 57.17 14,291.29 65.21 16,302.50 0.2 4.8 20.09 ----------------------------------------------- 15,570.50 15.53 12,035.75 -------- 0.1 ------ 1.2 103,902.10 77-,---278.55--- 0.8 2--.0- 62.76 25,104.00 92.45 36,980.00 0.4 1.8 49.36 24,184.21 64.08 31,399.20 0.3 1.6 100.56 5,028.22 201.34 10,067.00 0.1 0.7 80.33 16,065.47 122.79 24,558.00 0.3 1.0 8.84 12,559.46 38.33 54,428.60 0.6 0.4 52.56 13,138.83 118.28 29,570.00 0.3 1.2 ------------------------------------------------------------------------- 96,080.19 187,002.80 1.9 1.1 Communication Services 50 ALIBABA GROUP HOLDING ADR 170.99 8,549.50 226.73 11,336.50 0.1 0.0 80 BAIDU INC ADR 176.84 14,146.81 217.55 17,404.00 0.2 0.0 1501QIYIINC 22.09 3,313.98 16.62 2,493.00 0.0 0.0 770 NIPPON TELEG & TEL CORP 14.45 11,125.70 25.91 19,950.70 0.2 3.1 300 SOFTBANK GROUP CORP 23.41 7,023.74 42.56 12,768.00 0.1 0.4 264 VODAFONE GROUP PLC 35.25 9,305.84 18.43 4,865.52 0.1 5.8 ------------------------------------------------------------------------- 53,465.57 68,817.72 0.7 1.4 Utilities 158 NATIONAL GRID GROUP PLC SPONSORED ADR Equitys ETF 350 iSHARES MSCI EMERGING MKT IN CORPORATE BONDS (USD) 70.86 11,195.37 59.24 9,359.92 0.1 3.8 43.43 15,202.25 53.34 18,669.00 0.2 1.9 ------------------------------------------------------------------------- 675,424.40 844,809.90 8.7 1.6 Period Ending 3/31/2021 20000 SUMITOMO MITSUI FINL GRP 100.00 20,000.00 100.50 20,100.90 0.2 2.0 Al 55000 BANK OF MONTREAL 99.81 54,896.05 100.68 55,371.58 0.6 1.9 Aa2 35000 AMERICAN HONDA FINANCE 99.80 34,930.00 100.63 35,220.08 0.4 1.7 A3 25000 BLACKROCK INC 103.95 25,987.75 103.60 25,899.52 0.3 3.3 Aa3 40000 CANADIAN IMPERIAL BK COMM SR NT 100.58 40,230.80 102.69 41,077.84 0.4 2.5 Aa2 22 2.060% 7/14/21 1.900% 8/27/21 1.700% 9/9/21 3.380% 6/1/22 2.550% 6/16/22 Hihlmd Capital MANAGEMENT, LLC An Argent Corn pary Sebastian Police Officers' Pension Fund Portfolio Holdings Period Ending 3/31/2021 35000 GILEAD SCIENCES INC 101.83 35,639.45 103.45 36,207.57 0.4 3.1 A3 3.250% 9/1/22 20000 FRANKLIN RES INC SR NT 102.16 20,431.60 103.45 20,690.06 0.2 2.7 A2 2.800% 9/15/22 40000 PECO ENERGY CO 98.84 39,538.00 102.36 40,943.40 0.4 2.3 Aa3 2.380% 9/15/22 35000 GOLDMAN SACHS GROUP INC 100.00 35,000.00 100.34 35,117.88 0.4 1.0 A2 0.990% 10/31/22 40000 PNC FINANCIAL SERVICES GROUP INC 101.59 40,638.00 103.83 41,532.76 0.4 2.7 A3 2.850% 11/9/22 30000 AT&T BROADBAND CORP 134.68 40,403.70 114.66 34,398.06 0.4 8.2 A3 9.460% 11/15/22 35000 WESTPAC BANKING CORP 100.00 35,000.00 100.45 35,157.50 0.4 2.2 Aa3 2.220% 1/13/23 50000 ATHENE GLOBAL FUNDING 144A 99.97 49,985.50 100.92 50,460.50 0.5 1.2 NR 1.200% 10/13/23 25000 XCEL ENERGY INC 99.91 24,976.50 99.90 24,974.72 0.3 0.5 Baal 0.500% 10/15/23 25000 PROASSURANCE CORP 107.50 26,875.00 108.25 27,061.60 0.3 4.9 Baa3 5.300% 11/15/23 35000 BANK OF AMERICA CORP 100.00 35,000.00 100.98 35,344.29 0.4 1.0 A2 1.020% 3/5/24 40000 ATHENE GLOBAL FUNDING 100.78 40,314.00 105.34 42,134.16 0.4 2.6 NR 2.750% 6/25/24 45000 GA GLOBAL FUNDING TRUST 144A 99.89 44,949.60 99.83 44,923.05 0.5 1.0 NR 1.000% 7/8/24 10000 EMERSON ELECTRIC CO 99.68 9,968.40 107.63 10,763.27 0.1 2.9 A2 3.150% 6/1/25 25000 BOEING CO 129.16 32,291.25 118.32 29,579.55 0.3 6.1 Baal 7.250% 6/15/25 40000 CUMMINS INC 99.82 39,927.20 98.39 39,356.36 0.4 0.8 A2 0.750% 9/1/25 35000 NORTHERN TRUST CORP 104.64 36,624.35 111.51 39,026.85 0.4 3.5 A2 3.950% 10/30/25 20000 STATE STREET CORP 100.00 20,000.00 105.16 21,031.64 0.2 2.2 Al 2.350% ll/1/25 25000 FS KKR CAPITAL CORP 98.83 24,707.50 99.15 24,786.30 0.3 3.4 Baa3 3.400% 1/15/26 40000 FIDUS INVESTMENT CORP 100.00 40,000.00 101.56 40,624.40 0.4 4.7 NR 4.750% 1/31/26 25000 MONROE CAPITAL CORP 99.44 24,860.50 101.12 25,279.05 0.3 4.7 NR 4.750% 2/15/26 70000 WELLS FARGO & CO 105.20 73,640.00 111.12 77,781.90 0.8 3.7 A3 4.100% 6/3/26 40000 NATIONAL AUSTRLIA BK/NY 99.27 39,709.20 104.96 41,982.12 0.4 2.4 Aa3 2.500% 7/12/26 40000 SUMITOMO MITSUI FINANCIAL GROUP INC 100.00 40,000.00 104.81 41,925.20 0.4 2.5 Al 2.630% 7/14/26 54000 JPMORGAN CHASE & CO 100.00 54,000.00 97.63 52,719.28 0.5 1.1 A2 1.050% 11/19/26 38000 RELIANCE STAND LIFE II 99.72 37,894.36 104.60 39,747.43 0.4 2.6 A2 2.750% 1/21/27 40000 BLACKROCK INC 99.59 39,838.00 109.07 43,626.56 0.5 2.9 Aa3 3.200% 3/15/27 40000 BANK OF AMERICA CORP 110.40 44,161.60 107.46 42,982.16 0.4 3.0 A2 3.250% 10/21/27 40000 MANULIFE FINANCIAL CORP 100.00 40,000.00 109.81 43,924.28 0.5 3.7 NR 4.060% 2/24/32 20000 FIRST UNION CORP 123.80 24,759.40 131.94 26,388.90 0.3 5.0 A3 6.550% 10/15/35 50000 MICROSOFT CORP 99.61 49,806.50 110.71 55,355.30 0.6 3.1 Aaa 3.450% 8/8/36 35000 JOHNSON AND JOHNSON SR BIND CALL 99.70 34,896.05 108.49 37,971.01 0.4 3.1 Aaa 3.400% 1/15/38 13000 SOUTHERN CALIF EDISON CO 140.26 18,234.45 129.73 16,865.28 0.2 4.7 A3 6.050% 3/15/39 8000 MANULIFE FINANCIAL CORP SR 99.64 7,971.60 130.61 10,448.54 0.1 4.1 NR 5.380% 3/4/46 6000 DUKE ENERGY CAROLINAS LLC 99.65 5,978.82 107.61 6,456.47 0.1 3.6 Aa2 3.880% 3/15/46 16000 SAN DIEGO GAS & ELECTRIC CO 99.55 15,928.64 105.87 16,938.93 0.2 3.5 A2 3.750% 6/1/47 30000 COMMONSPIRIT HEALTH 100.00 30,000.00 105.44 31,631.85 0.3 3.6 A2 3.820% 10/1/49 Hihlmd Capital 23 MANAGEMENT, LLC An Argent Com pary Sebastian Police Officers' Pension Fund Portfolio Holdings Period Ending 3/31/2021 40000 MEMORIAL SLOAN-KETTERING 100.00 40,000.00 95.47 38,186.76 0.4 3.1 Aa3 2.960% 1/1/50 20000 KKR GROUP FINANCE CO VII 99.47 19,894.80 98.98 19,796.64 0.2 3.7 NR 3.630% 2/25/50 29000 PRUDENTIAL FINANCIAL INC 99.76 28,931.27 115.40 33,465.91 0.3 3.8 A3 4.350% 2/25/50 43000 CALIFORNIA ENDOWMENT 100.00 43,000.00 91.67 39,417.76 0.4 2.7 Aaa 2.500% 4/1/51 35000 ENTERGY ARKANSAS LLC 99.60 34,861.75 88.15 30,853.69 0.3 3.0 A2 2.650% 6/15/51 40000 INTEL CORP 99.34 39,736.40 94.08 37,632.40 0.4 3.3 Al 3.100% 2/15/60 Accrued Interest ------------------------------------------------------------------------- 7,594.58 0.1 1,636,418.00 1,670,756.00 17.3 2.9 MUNICIPAL BONDS (USD) 35000 WASHINGTON ST 109.51 38,328.15 105.84 37,045.05 0.4 4.4 Aaa 4.640% 8/1/22 30000 UNIV OF NC CHAPEL HIL 101.04 30,312.00 102.50 30,750.90 0.3 1.9 Aaa 2.000% 12/1/22 25000 COMMONWEALTH FING AUTH PA 100.00 25,000.00 107.32 26,829.25 0.3 5.3 Al 5.650% 6/1/24 15000 SAN FRANCISCO CA CITY & CNTY PUB UTILS 100.00 15,000.00 108.83 16,324.95 0.2 3.4 Aa2 3.700% 11/1/32 6000 METRO GOVT NASH & DAVD CNTY TN WTR & : 134.47 8,067.96 145.21 8,712.54 0.1 4.5 Aa2 6.570% 7/1/37 35000 SAN FRANCISCO CALIF CITY & CNTY CMNTY 97.21 34,023.85 105.43 36,899.10 0.4 3.6 NR 3.750% 9/1/37 20000 MIAMI-DADE CNTY FLA AVIATION 100.00 20,000.00 104.45 20,891.00 0.2 3.6 NR 3.730% 10/1/37 10000 VIRGINIA PORT AUTH PORT FAC 100.00 10,000.00 103.40 10,340.20 0.1 4.3 Al 4.480% 7/1/45 25000 UNIV OF TEXAS TX PERM UNIV FND REV 100.00 25,000.00 109.94 27,485.25 0.3 3.1 Aaa 3.380% 7/1/47 Accrued Interest 211.00 0.0 ------------------------------------------------------------------------- 205,732.00 215,489.20 2.2 3.7 GOVERNMENT BONDS (USD) 12000 US TREASURY N/B 96.18 11,541.09 94.41 11,328.74 0.1 1.2 Aaa 1.130% 2/15/31 Accrued Interest 17.25 0.0 ------------------------------------------------------------------------- 11,541.09 11,345.99 0.1 1.2 GOVERNMENT SPONSORED BOND (USD) 40000 PROVINCE OF QUEBEC 99.74 39,897.60 101.77 40,706.40 0.4 2.3 Aaa 2.380% 1/31/22 40000 MANITOBA PROV OF 99.23 39,692.80 104.65 41,858.80 0.4 2.0 Aa2 2.130% 6/22/26 18000 FNMA 135.47 24,384.95 146.90 26,442.27 0.3 3.8 Aaa 5.630% 7/15/37 43000 TENNESSEE VALLEY AUTH 137.08 58,943.80 150.33 64,641.08 0.7 3.6 Aaa 5.380% 4/1/56 Accrued Interest 1,761.46 0.0 ------------------------------------------------------------------------- 162,919.20 175,410.00 1.8 3.0 Hihlmd Capital 24 MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund Portfolio Holdings Period Ending 3/31/2021 MORTGAGE POOLS (LISD) 0.46 FGCI #G12205 96.88 0.45 104.90 0.48 0.0 4.3 Aaa 4.500% 6/15/21 35000 FHMS KBX1 Al 99.69 34,890.63 106.80 37,380.29 0.4 2.7 Aaa 2.920% 9/25/24 9335.81 FN AD4398 106.25 9,919.30 106.42 9,935.25 0.1 3.8 Aaa 4.000% 6/1/25 31650.19 FN AM9049 102.66 32,491.06 103.18 32,656.43 0.3 3.0 Aaa 3.050% 6/25/25 19407.91 FHMS KJ 17 A2 102.00 19,796.01 107.28 20,819.87 0.2 2.8 Aaa 2.980% 11/25/25 75000 FHMS KCO3 A2 102.01 76,510.15 106.79 80,092.23 0.8 3.3 Aaa 3.500% 1/25/26 35000 FHMS KGO1 A7 103.00 36,048.64 107.33 37,566.07 0.4 2.7 Aaa 2.880% 4/25/26 33562.34 FHMS K068 Al 102.00 34,233.32 106.79 35,842.89 0.4 2.8 Aaa 2.950% 2/25/27 57000 FHMS K068 A2 103.00 58,708.12 110.41 62,935.69 0.7 2.9 Aaa 3.240% 8/25/27 50000 FHMS KHG1 A3 110.48 55,242.19 108.26 54,128.45 0.6 3.1 Aaa 3.340% 12/25/27 9014.02 FN MA1387 103.69 9,346.41 106.03 9,557.98 0.1 2.8 Aaa 3.000% 3/25/28 40000 FN AN9038 100.66 40,262.50 109.76 43,903.94 0.5 3.2 Aaa 3.460% 5/1/28 100000 SUET 2021-1A A3 100.00 99,998.35 99.25 99,250.40 1.0 0.8 Aaa 0.830% 8/21/28 30000 FN 109515 104.34 31,303.13 111.20 33,359.56 0.3 3.6 Aaa 3.990% 9/1/28 20000 FN 387873 102.66 20,531.25 112.00 22,399.47 0.2 3.3 Aaa 3.750% 11/1/28 32000 FN BL0484 105.99 33,917.50 112.21 35,905.95 0.4 3.8 Aaa 4.220% 11/1/28 18000 FHMS K088 A2 103.00 18,539.21 113.64 20,454.31 0.2 3.2 Aaa 3.690% 1/25/29 43547.85 FN BL1409 103.84 45,221.68 110.32 48,041.09 0.5 3.4 Aaa 3.800% 1/25/29 37000 FHLMC MF KG01 103.00 38,109.45 107.88 39,914.88 0.4 2.7 Aaa 2.940% 4/25/29 8410.19 FHR 4823 LV 103.31 8,688.79 99.99 8,409.68 0.1 4.0 Aaa 4.000% 10/15/29 18782.11 FG J34676 105.50 19,815.13 105.74 19,860.08 0.2 2.8 Aaa 3.000% 7/1/31 23220.94 FN A57986 103.06 23,932.08 104.07 24,166.54 0.2 2.4 Aaa 2.500% 9/1/31 12348.2 FG G30701 111.00 13,706.50 113.19 13,976.65 0.1 4.4 Aaa 5.000% 11/1/31 28033.72 FN AS8448 99.50 27,893.71 102.88 28,841.30 0.3 1.9 Aaa 2.000% 12/25/31 9630.82 FN MA0976 103.12 9,931.71 106.94 10,299.10 0.1 3.3 Aaa 3.500% 2/25/32 20380.68 G2 784739 102.12 20,813.57 106.26 21,656.84 0.2 3.8 Aaa 4.000% 5/20/34 19317.24 FHR 3342 PZ 104.94 20,271.03 112.02 21,639.80 0.2 4.5 Aaa 5.000% 6/15/37 15000 FNR 2017 134VD 94.00 14,100.00 106.80 16,019.54 0.2 2.8 Aaa 3.000% 4/20/38 2354.72 FN 889579 109.39 2,575.84 118.88 2,799.33 0.0 5.0 Aaa 6.000% 5/1/38 2858.44 G2 4194 106.13 3,033.52 113.26 3,237.37 0.0 4.9 Aaa 5.500% 7/20/38 1133.4 GNMA 4195 99.89 1,132.16 117.73 1,334.33 0.0 5.1 Aaa 6.000% 7/20/38 8334.01 GNMA4447 104.81 8,735.08 113.96 9,497.80 0.1 4.4 Aaa 5.000% 5/20/39 12738.58 G2 4496 109.58 13,958.70 113.07 14,403.75 0.1 4.4 Aaa 5.000% 7/20/39 42567.66 HINTT 2020-AA 99.98 42,561.19 100.90 42,949.89 0.4 1.4 Aaa 1.390% 10/9/39 6345.17 F N R 2010-64 KA 103.05 6,538.46 105.64 6,702.92 0.1 4.3 Aaa 4.500% 6/25/40 5225.76 FG A95828 104.89 5,481.10 112.41 5,874.31 0.1 4.0 Aaa 4.500% 12/15/40 Hi bland Capital 25 MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund Portfolio Holdings Period Ending 3/31/2021 13916.78 FN 783307 101.38 14,108.18 110.65 15,398.58 0.2 3.6 Aaa 4.000% 4/15/41 825.6 FHR 4667 DA 103.70 856.17 100.00 825.63 0.0 3.5 Aaa 3.500% 6/15/41 14229.76 FNR 2012-6 MA 103.41 14,714.46 101.77 14,481.78 0.1 3.9 Aaa 4.000% 10/25/41 4538.37 GN AW7430 104.65 4,749.27 112.08 5,086.77 0.1 4.0 Aaa 4.500% 1/25/42 5253.67 FNR 2012 110K1 99.00 5,201.13 103.27 5,425.44 0.1 2.9 Aaa 3.000% 3/20/42 23497.65 FNR 2012-90 DA 100.31 23,571.08 100.22 23,548.41 0.2 1.5 Aaa 1.500% 3/25/42 16901.77 FN MA 3024 102.16 17,266.01 104.43 17,651.19 0.2 3.4 Aaa 3.500% 6/1/42 3866.19 FN MA1136 102.12 3,948.30 104.31 4,032.88 0.0 3.4 Aaa 3.500% 8/25/42 10000 FNR 2013-111 PL 102.12 10,212.50 102.67 10,266.95 0.1 1.9 Aaa 2.000% 12/25/42 11773.03 GNR 2013-100 ME 99.11 11,668.38 103.23 12,153.29 0.1 2.2 Aaa 2.250% 2/20/43 1549.84 FN 2017 13 CA 100.09 1,551.31 100.18 1,552.58 0.0 2.5 Aaa 2.500% 10/25/43 21254.41 FN 2015 2PA 98.92 21,025.26 103.27 21,949.79 0.2 2.2 Aaa 2.250% 3/25/44 4544.55 FHR 4710 QA 102.16 4,642.51 101.25 4,601.35 0.0 3.5 Aaa 3.500% 4/15/44 18758.23 FHR 4388 MC 99.50 18,664.84 104.30 19,564.21 0.2 2.4 Aaa 2.500% 7/15/44 637.3 FHR 4832 DA 103.17 657.52 100.26 638.95 0.0 4.5 Aaa 4.500% 11/15/44 12012.69 FNR 2016-90 CA 96.25 11,562.21 103.49 12,432.13 0.1 2.9 Aaa 3.000% 2/25/45 13121.15 FNR 2016 31 PC 97.45 12,786.54 103.93 13,636.70 0.1 2.9 Aaa 3.000% 3/25/45 10962.43 FHR 4546 TH 95.41 10,458.85 103.43 11,338.12 0.1 2.4 Aaa 2.500% 12/15/45 8257.16 FNR 2017 56 PA 98.84 8,161.67 104.60 8,636.80 0.1 2.9 Aaa 3.000% 12/25/45 100000 CLIF 2021-1A A 100.00 99,998.12 97.66 97,657.06 1.0 1.7 NR 1.640% 2/18/46 99329.41 TMCL 21-1A 99.97 99,299.10 97.02 96,373.19 1.0 2.7 Aaa 2.620% 2/20/46 5799.52 GNR 2017 59P 97.97 5,681.67 101.27 5,873.30 0.1 3.0 Aaa 3.000% 4/20/46 10195.45 G2 MA3725 98.06 9,997.82 102.98 10,499.37 0.1 2.9 Aaa 3.000% 6/20/46 11434.66 FN MA2743 101.31 11,584.57 102.54 11,725.41 0.1 2.9 Aaa 3.000% 9/25/46 2839.04 FN MA2777 101.00 2,867.45 102.55 2,911.29 0.0 2.9 Aaa 3.000% 10/25/46 30000 FNR 2017-55 HW 93.47 28,040.63 103.93 31,179.51 0.3 2.9 Aaa 3.000% 11/25/46 4380.42 FN BE2951 101.81 4,459.68 103.48 4,532.94 0.0 2.9 Aaa 3.000% 1/25/47 5873.98 FHR 4682 LD 94.86 5,571.88 104.77 6,154.14 0.1 2.6 Aaa 2.750% 5/15/47 4962.21 FNR 2018 69 PA 99.32 4,928.45 101.42 5,032.57 0.1 3.5 Aaa 3.500% 5/25/47 5400.49 GNR 2017 991E 100.31 5,417.48 104.44 5,640.39 0.1 2.6 Aaa 2.750% 6/20/47 13090.31 FHR 4713 YH 93.94 12,296.71 103.12 13,499.05 0.1 2.4 Aaa 2.500% 7/15/47 18855.3 FHR 2017 72 GH 99.19 18,702.10 99.00 18,666.36 0.2 2.5 Aaa 2.500% 8/25/47 21816.65 GNR 2017 134PT 98.31 21,448.22 105.62 23,043.34 0.2 2.4 Aaa 2.500% 9/20/47 4519.56 FG T65441 98.94 4,471.56 104.10 4,704.74 0.0 2.9 Aaa 3.000% 10/1/47 40000 FNR 2018 1 HB 95.66 38,262.50 101.77 40,707.82 0.4 2.5 Aaa 2.500% 1/20/48 16029.54 FNR 2018-11 KE 98.84 15,844.27 102.73 16,467.52 0.2 1.9 Aaa 2.000% 3/25/48 28000 FNR 2018 59D 94.75 26,530.00 107.78 30,177.49 0.3 2.8 Aaa 3.000% 4/20/48 Hi bland Capital 26 MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund 36000 GNR 2019-133 EB 10015.93 GNR 2019-162 GA 26603.02 GNMA 18-26 AD 14145.48 GNR 2013-17 AC 100000 MHELA 20211 A1A 34000 SORT 2021-1A Al Accrued Interest TOTAL PORTFOLIO Portfolio Holdings 92.50 33,300.00 98.43 35,434.92 0.4 2.0 100.00 10,015.93 102.20 10,236.63 0.1 2.9 98.56 26,220.94 102.89 27,372.37 0.3 2.4 98.25 13,897.95 101.37 14,338.82 0.1 1.8 99.95 99,951.12 96.52 96,517.00 1.0 1.8 99.98 33,993.53 99.60 33,864.87 0.4 1.5 ------------------------------------------------------------------------- 4,150.26 0.0 1,766,826.00 1,825,796.00 18.9 2.6 ------------------------------------------------------------------------- 8,524,289.00 9,674,395.00 100.0 2.2 8,524,289.00 9,674,395.00 100.0 2.2 Period Ending 3/31/2021 Aaa 2.000% 4/20/49 Aaa 3.000% 10/20/49 Aaa 2.500% 3/16/52 Aaa 1.790% 5/16/53 Aaa 1.750% 1/25/61 Aaa 1.530% 3/15/61 Hihlmd Capital 27 MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund Purchases Period Ending 3/31/2021 BAC 2/11/21 2/18/21 100,000.00 MHELA 20211 A1A 99.95 99,951.12 0.00 0.00 1.750% Due 01-25-61 2/10/21 2/22/21 100,000.00 SCFET 2021-1A A3 100.00 99,998.35 0.00 0.00 0.830% Due 08-21-28 199,949.50 0.00 0.00 BANK OF AMERICA BB 2/8/21 2/23/21 200,000.00 KENNAMETAL INC 99.94 199,878.00 0.00 0.00 2.800% Due 03-01-31 BARCLAYS-EQ 1/29/21 2/2/21 39.00 CROWDSTRIKE HOLDINGS INC 216.28 8,435.03 0.04 1.56 2/26/21 3/2/21 110.00 QORVO INC 174.76 19,223.66 0.04 4.40 3/11/21 3/15/21 130.00 QORVO INC 174.60 22,697.90 0.04 5.20 1/22/21 1/26/21 37.00 QUIDEL CORP 233.68 8,646.15 0.04 1.48 --------- -------------------- 59,002.74 ---------------- 0.04 ----• 12.64 GS 3/15/21 3/18/21 300,000.00 CHARLES SCHWAB CORP 100.00 300,000.00 0.00 0.00 4.000% Due 06-01-26 3/5/21 3/31/21 100,000.00 LPSLT 2021-2GS A 99.99 99,991.04 0.00 0.00 2.220% Due 03-20-48 3/16/21 3/24/21 300,000.00 SBIC 2021-10A 1 100.00 300,000.00 0.00 0.00 1.667% Due 01-10-31 3/10/21 3/18/21 34,000.00 SORT 2021-1A Al 99.98 33,993.53 0.00 0.00 1.530% Due 03-15-61 -------------------------------------------------- 733,984.60 0.00 0.00 Jones Trading 2/17/21 2/19/21 286.00 BRISTOL-MYERS SQUIBB CO 60.55 17,316.36 0.01 2.86 1/5/21 1/7/21 500.00 CONOCOPHILLIPS 42.40 21,200.15 0.01 5.00 3/11/21 3/15/21 190.00 FMC CORPORATION 108.92 20,694.71 0.01 1.90 2/2/21 2/4/21 1,296.00 FREEPORT McMORAN COPPER & GOLD II` 28.02 36,319.36 0.01 12.96 2/3/21 2/5/21 240.00 L3HARRIS TECHNOLOGIES INC 180.01 43,202.28 0.01 2.40 1/22/21 1/26/21 647.00 SLM CORP 13.25 8,571.84 0.01 6.47 1/21/21 1/25/21 480.00 UNITED AIRLINES HOLDINGS INC 42.76 20,523.94 0.01 4.80 -------------------------------------------------• 167,828.60 0.01 36.39 28 Hihlmd Capital MANAGEMENT, LLC An Argent Com pary Sebastian Police Officers' Pension Fund Purchases 1P MORGAN BB 3/2/21 3/5/21 40,000.00 BRIXMOR OPERATING PART 2.250% Due 04-01-28 3/4/21 3/5/21 12,000.00 US TREASURY N/B 1.125% Due 02-15-31 JP MORGAN_O 1/13/21 1/21/21 46,000.00 AVOLON HOLDINGS FNDG LTD 2.125% Due 02-21-26 1/20/21 1/27/21 43,000.00 CALIFORNIA ENDOWMENT 2.498% Due 04-01-51 JPMORGAN 2/16/21 3/3/21 350,000.00 EXPEDIA GROUP INC 2.950% Due 03-15-31 MORGAN STANLEY 3/2/21 3/15/21 100,000.00 BJETS 2021-1A A 2.162% Due 04-15-36 MUFG SECURITIES AMER 2/17/21 2/25/21 100,000.00 CLIF 2021-1A A 1.640% Due 02-18-46 RAYMOND JAMES 1/15/21 1/25/21 45,000.00 MONROE CAPITAL CORP 4.750% Due 02-15-26 REDI 12/31/20 1/5/21 88.00 CIGNA CORP 2/17/21 2/19/21 95.00 CLOUDFLARE INC 3/9/21 3/11/21 36.00 SQUARE INC 29 Period Ending 3/31/2021 99.82 39,926.80 0.00 0.00 96.18 11,541.09 0.00 0.00 ------------ ------------------------------------- 51,467.89 0.00 0.00 98.80 45,447.54 0.00 0.00 100.00 43,000.00 0.00 0.00 ---------------- ------------- 88,447.54 ----------------- 0.00 ---- 0.00 99.08 346,783.50 0.00 0.00 100.00 99,999.09 0.00 0.00 100.00 99,998.12 0.00 0.00 99.44 44,748.90 0.00 0.00 207.52 18,261.83 0.01 0.88 82.84 7,869.41 0.01 0.95 224.80 8,092.65 0.01 0.36 -------------------------------------------------- 34,223.89 0.01 2.19 Hihlmd Capital MANAGEMENT, LLC An Argent Com pary Sebastian Police Officers' Pension Fund Royal Bank of Canada 2/2/21 STEPHENS 3/23/21 STIFEL BB 2/5/21 strategas 1/14/21 2/2/21 WELLS 3/31/21 1/19/21 PURCHASESSUBTOTAL Purchases 2/10/21 100,000.00 TMCL 21-1A 2.620% Due 02-20-46 3/26/21 67,000.00 RBB BANCORP 4.000% Due 04-01-31 2/9/21 25,000.00 PROASSURANCE CORP 5.300% Due 11-15-23 1/19/21 430.00 ABBVIE INC 2/4/21 364.00 FREEPORT McMORAN COPPER & GOLD II` 4/8/21 45,000.00 GA GLOBAL FUNDING TRUST 144A 1.000% Due 07-08-24 1/26/21 50,000.00 NATIONAL HEALTH INVESTOR 3.000% Due 02-01-31 30 Period Ending 3/31/2021 99.97 99,969.49 0.00 0.00 100.00 67,000.00 0.00 0.00 107.50 26,875.00 0.00 0.00 112.16 48,226.95 0.03 12.90 27.69 -------------------------------------------------- 10,079.63 0.03 10.92 58,306.58 0.03 23.82 99.89 44,949.60 0.00 0.00 99.20 49,598.00 0.00 0.00 ------------ ------------------------------------- 94,547.60 0.00 0.00 -------------------------------------------------- -------------------------------------------------- 2,473,011.00 0.00 75.04 0.00 75.04 Hihlmd Capital MANAGEMENT, LLC An Argent Com pary Sebastian Police Officers' Pension Fund Sales 3/1/21 3/1/21 40,000.00 BURLINGTON NORTH SANTA FE LLC SE BC 100.00 40,000.00 4.100% Due 06-01-21 1/8/21 1/8/21 150,000.00 FNMA 100.00 150,000.00 0.750% Due 07-08-25 190,000.00 BAC 1/20/21 1/21/21 35,000.00 US TREASURY N/B 125.26 43,840.23 3.000% Due 05-15-45 BARCLAYS-EQ 2/2/21 2/4/21 75.00 AXON ENTERPRISE INC 166.10 12,457.30 2/2/21 2/4/21 78.00 DUPONT DE NEMOURS INC 72.92 5,688.11 2/2/21 2/4/21 10.00 DUPONT DE NEMOURS INC 72.92 729.24 1/12/21 1/14/21 110.00 DXC TECHNOLOGY CO 28.29 3,111.93 2/2/21 2/4/21 170.00 MCDONALDS CORP 211.65 35,980.02 2/2/21 2/4/21 10.00 MCDONALDS CORP 211.65 2,116.47 1/14/21 1/19/21 310.00 PFIZER INC 36.77 11,398.48 1/14/21 1/19/21 53.00 PFIZER INC 36.77 1,948.77 2/17/21 2/19/21 30.00 SERVICENOW INC 576.63 17,298.95 1/5/21 1/7/21 200.00 TARGET CORP 180.54 36,108.26 2/3/21 2/5/21 60.00 THERMO FISHER SCIENTIFIC INC 501.52 30,091.02 2/17/21 2/19/21 21.00 TWILIO INC 403.43 8,472.11 165,400.70 BARCLAYS MARKET AXESS 3/26/21 3/30/21 40,000.00 HONEYWELL INTERNATIONAL 100.09 40,035.20 0.483% Due 08-16-22 CITICORP 3/3/21 3/15/21 100,000.00 BJETS 2021-1A A 100.20 100,203.10 2.162% Due 04-15-36 COWEN & CO 3/9/21 3/11/21 215.00 MEDALLIA INC 28.96 6,226.12 31 Period Ending 3/31/2021 0.00 0.00 0.00 0.00 0.04 3.00 0.04 3.12 0.04 0.40 0.04 4.40 0.04 6.80 0.04 0.40 0.04 12.40 0.04 2.12 0.04 1.20 0.04 8.00 0.04 2.40 0.04 0.84 0.04 45.08 0.00 0.00 0.00 0.00 0.03 6.45 Hihlmd Capital MANAGEMENT, LLC An Argent Com pary Sebastian Police Officers' Pension Fund Sales Period Ending 3/31/2021 FTN FINANCIAL 3/16/21 3/24/21 300,000.00 SBIC 2021-1OA 1 100.22 300,656.30 0.00 0.00 1.667% Due 01-10-31 GS 3/16/21 3/31/21 100,000.00 LPSLT 2021-2GS A 100.20 100,199.20 0.00 0.00 2.220% Due 03-20-48 Jefferies LLC 2/8/21 2/23/21 200,000.00 KENNAMETAL INC 100.94 201,882.00 0.00 0.00 2.800% Due 03-01-31 Jones Trading 12/31/20 1/5/21 111.00 BRIGHT SCHOLAR EDUCATION HOLDINGS 5.79 642.77 0.01 1.11 1/4/21 1/6/21 91.00 BRIGHT SCHOLAR EDUCATION HOLDINGS 5.79 526.84 0.01 0.91 1/4/21 1/6/21 100.00 BRIGHT SCHOLAR EDUCATION HOLDINGS 5.79 578.95 0.01 1.00 2/26/21 3/2/21 155.00 CISCO SYS INC 45.52 7,056.17 0.01 1.55 2/26/21 3/2/21 450.00 CISCO SYS INC 45.52 20,485.65 0.01 4.50 2/26/21 3/2/21 76.00 CISCO SYS INC 45.52 3,459.80 0.01 0.76 3/11/21 3/15/21 150.00 GRAPHIC PACKAGING HOLDING CO 17.41 2,612.19 0.01 1.50 3/11/21 3/15/21 185.00 GRAPHIC PACKAGING HOLDING CO 17.41 3,221.70 0.01 1.85 3/11/21 3/15/21 1,100.00 GRAPHIC PACKAGING HOLDING CO 17.41 19,156.08 0.01 11.00 3/11/21 3/15/21 603.00 GRAPHIC PACKAGING HOLDING CO 17.41 10,501.01 0.01 6.03 3/11/21 3/15/21 240.00 GRAPHIC PACKAGING HOLDING CO 17.41 4,179.51 0.01 2.40 1/27/21 1/29/21 215.00 MEDALLIA INC 47.48 10,208.55 0.01 2.15 3/10/21 3/12/21 180.00 OSHKOSH CORP 112.89 20,320.74 0.01 1.80 3/10/21 3/12/21 18.00 OSHKOSH CORP 112.89 2,032.07 0.01 0.18 3/10/21 3/12/21 20.00 OSHKOSH CORP 112.89 2,257.86 0.01 0.20 1/14/21 1/19/21 547.00 PFIZER INC 36.82 20,141.90 0.01 5.47 1/14/21 1/19/21 350.00 PFIZER INC 36.82 12,887.87 0.01 3.50 1/14/21 1/19/21 169.00 PFIZER INC 36.82 6,223.00 0.01 1.69 1/14/21 1/19/21 50.00 PFIZER INC 36.82 1,841.12 0.01 0.50 1/7/21 1/11/21 89.00 PROOFPOINT 134.33 11,955.60 0.01 0.89 ------------------------------------------------- 160,289.40 0.01 48.99 32 Hihlmd Capital MANAGEMENT, LLC An Argent Com pary Sebastian Police Officers' Pension Fund Sales Period Ending 3/31/2021 MARKET AXESS MARKET AXE55 1/14/21 1/21/21 46,000.00 AVOLON HOLDINGS FNDG LTD 98.94 45,512.86 0.00 0.00 2.125% Due 02-21-26 2/19/21 2/23/21 30,000.00 BLACKSTONE/GSO SECURED 104.50 31,349.10 0.00 0.00 3.650% Due 07-14-23 3/3/21 3/5/21 40,000.00 BRIXMOR OPERATING PART 99.84 39,937.20 0.00 0.00 2.250% Due 04-01-28 3/19/21 3/23/21 25,000.00 FS KKR CAPITAL CORP 99.25 24,811.75 0.00 0.00 3.400% Due 01-15-26 1/20/21 1/26/21 50,000.00 NATIONAL HEALTH INVESTOR 100.01 50,004.00 0.00 0.00 3.000% Due 02-01-31 191,614.90 0.00 0.00 REDI 3/26/21 3/30/21 100.00 ALLIANCE DATA SYSTEMS CORP 116.15 11,615.04 0.01 1.00 2/17/21 2/19/21 88.00 DATADOG INC 102.63 9,031.34 0.01 0.88 3/10/21 3/12/21 37.00 QUIDEL CORP 129.61 4,795.42 0.01 0.37 1/12/21 1/14/21 90.00 VONTIER CORPORATION 34.47 3,101.95 0.01 0.90 1/12/21 1/14/21 10.00 VONTIER CORPORATION 34.47 344.66 0.01 0.10 ---------------------------- 28,888.41 ----------------- 0.01 ---• 3.25 SEELAUS 3/15/21 3/18/21 300,000.00 CHARLES SCHWAB CORP 100.25 300,750.00 0.00 0.00 4.000% Due 06-01-26 2/5/21 2/9/21 20,000.00 MONROE CAPITAL CORP 100.87 20,175.00 0.00 0.00 4.750% Due 02-15-26 320,925.00 0.00 0.00 STIFEL 2/16/21 3/3/21 350,000.00 EXPEDIA GROUP INC 99.65 348,761.00 0.00 0.00 2.950% Due 03-15-31 STIFEL BB 3/24/21 3/26/21 67,000.00 RBB BANCORP 100.87 67,586.25 0.00 0.00 4.000% Due 04-01-31 33 Hihlmd Capital MANAGEMENT, LLC An Argent Com pary Sebastian Police Officers' Pension Fund Sales Period Ending 3/31/2021 strategas 1/12/21 1/14/21 32.95 VIATRIS INC 18.36 605.13 0.03 0.99 1/12/21 1/14/21 74.45 VIATRIS INC 18.36 1,367.16 0.03 2.23 1/12/21 1/14/21 43.43 VIATRIS INC 18.36 797.51 0.03 1.30 1/12/21 1/14/21 20.97 VIATRIS INC 18.36 385.08 0.03 0.63 1/12/21 1/14/21 6.20 VIATRIS INC 18.36 113.93 0.03 0.19 -------------------------------------------------- 3,268.81 0.03 5.34 WELLS FARGO MARKET AXESS 3/24/21 3/26/21 39,000.00 AMERICAN HONDA FINANCE 100.32 39,125.58 0.00 0.00 0.576% Due 05-10-23 SALES SUBTOTAL 2,308,902.00 0.00 109.11. 0.00 109.11 Hihlmd Capital 34 MANAGEMENT, LLC An Argent Com pary