HomeMy WebLinkAbout08-15-2024 IOC Agenda PacketINVESTMENT OVERSIGHT COMMITTEE
AGENDA
AUGUST 15, 2024, 3:00PM
COUNCIL ROOM #6, 990 PALM STREET, SAN LUIS OBISPO
The Investment Oversight Committee holds in-person meetings. Zoom participation will
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meeting):
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Office at 990 Palm Street, San Luis Obispo, California, 93401.
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In the body of your email, please include the date of the meeting and the item
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1
City of San Luis Obispo, Agenda, Planning Commission
Investment Oversight Committee Agenda for Thursday, August 15, 2024 Page 1
Thursday, August 15, 2024
3:00 p.m. REGULAR MEETING Council Hearing Room
990 Palm Street
San Luis Obispo
CALL TO ORDER: Chair Emily Jackson
ROLL CALL : Committee Members Whitney McDonald, Riley Kuhn, Debbie Malicoat,
Jan Marx, Anni Wang, and Chair Emily Jackson
OTHERS PRESENT: Monique S. Spkye, PFM Asset Management LLC, Justin Resuello, PFM
Asset Management LLC, Sarah Walsh, PFM Asset Management LLC,
and Michelle Karpovich, Recording Secretary
PUBLIC COMMENT: At this time, people may address the Committee about items not on the
agenda. Persons wishing to speak should come forward and state their name and address.
Comments are limited to three minutes per person. Items raised at this time are generally referred
to staff and, if action by the Committee is necessary, may be scheduled for a future meeting.
CONSIDERATION OF MINUTES
1. Minutes of the Investment Oversight Committee of May 16, 2024.
BUSINESS ITEMS
2. Presentation of the Quarterly Investment Report on Portfolio Performance & Economic
Recommendation: Receive and confirm investment policy compliance.
COMMENT AND DISCUSSION
2
City of San Luis Obispo, Agenda, Planning Commission
Investment Oversight Committee Agenda for Thursday, August 15, 2024 Page 2
3. Staff Updates and Agenda Forecast
ADJOURNMENT
The next Regular Meeting of the Investment Oversight Committee is scheduled for
Thursday, November 21, at 3:00 p.m., in the Council Hearing Room, 990 Palm Street, San
Luis Obispo, California.
The City of San Luis Obispo wishes to make all of its public meetings accessible to the
public. Upon request, this agenda will be made available in appropriate alternative formats to
persons with disabilities. Any person with a disability who requires a modification or
accommodation in order to participate in a meeting should direct such request to the Finance
Department at (805) 781-7125 at least 48 hours before the meeting, if possible.
Telecommunications Device for the Deaf (805) 781-7107.
Meeting audio recordings can be found at the following web address:
http://opengov.slocity.org/WebLink/1/fol/61037/Row1.aspx
3
Minutes - Draft
Investment Oversight Committee
Thursday, May 16, 2024
Regular Meeting of the Investment Oversight Committee
CALL TO ORDER
A Regular meeting of the Investment Oversight Committee was called to order on Thursday,
May 16, 2024, at 3:02 p.m. in the Council Hearing Room at City Hall, 990 Palm Street, San
Luis Obispo, by Chair Jackson.
ROLL CALL
Present: Committee Members Whitney McDonald, Riley Kuhn, Debbie Malicoat,
Jan Marx, Anni Wang, and Chair Emily Jackson
Absent:
Others Present: Monique S. Spyke, PFM Asset Management LLC, Justin Resuello
PFM Asset Management LLC, Antonio Aiello, and Michelle
Karpovich, Recording Secretary
PUBLIC COMMENT ITEMS NOT ON THE AGENDA
None
--End of Public Comment--
APPROVAL OF MINUTES
1. Review of Minutes of the Investment Oversight Committee Meeting of February
15, 2024
PUBLIC COMMENT
None
--End of Public Comment--
ACTION FOR ITEM 1: UPON MOTION BY COMMITTEE MEMBER WANG SECONDED
BY COMMITTEE MEMBER MARX CARRIED 6-0-0, to approve the February 15, 2024,
minutes, as presented.
4
City of San Luis Obispo, Title, Subtitle
Minutes - Investment Oversight Committee Minutes of Thursday, May 16, 2024 Page 2
BUSINESS ITEMS
2.Presentation of the Quarterly Investment Report on Portfolio Performance &
Economic Outlook
Monique Spyke and Justin Resuello for PFM Asset Management LLC provided an
update via PowerPoint presentation and responded to Committee inquiries.
PUBLIC COMMENT
None
--End of Public Comment--
ACTION FOR ITEM 2: UPON MOTION BY COMMITTEE MEMBER MARX, SECONDED
BY COMMITTEE MEMBER KUHN, 6-0-0, to approve the recommendation to accept the
report.
COMMENT AND DISCUSSION
None
ADJOURNMENT
The meeting was adjourned at 3:39 p.m. The next Regular Meeting of the Investment
Oversight Committee is scheduled for Thursday, August 1 5 , 2024 at 3:00 p.m.
APPROVED BY INVESTMENT OVERSIGHT COMMITTEE: XX/XX/XXXX
5
Quarterly Investment Report
AS OF June 30, 2024
6
This report presents the City’s investment portfolio for
the quarter ending June 30,2024.It has been prepared
to comply with regulations contained in California
Government Code Section 53646.The report includes
all investments managed by the City on its own behalf
as well as for other third-party agencies on a fiduciary
basis such as the Whale Rock Commission.It also
includes all City related investments held by trustees for
bond debt service obligations.As required,the report
provides information on the investment type,issuer,
maturity date,cost,and current market value for each
security.
7
Market Considerations
U.S. economic conditions were
characterized by:
•Moderating economic growth
following two quarters of
exceptional strength
•Recent inflation prints resuming
the path towards the Federal
Reserve (Fed)’s 2% target
•Labor markets continuing to
show strength while
unemployment has ticked up
modestly
•Resilient consumer spending
supported by wage growth that is
outpacing inflation
Fed revises expectations from 3 rate
cuts in 2024 to 1 by year end
following a lack of progress in the
fight against inflation
Yields on maturities between 2 and
10 years rose 13-20 basis points
during the quarter
Source: Bloomberg as of June 30, 2024.
5.32%
4.75%4.38%4.37%4.40%4.56%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
Yi
e
l
d
Maturity
U.S. Treasury Yield Curve
June 30, 2024
March 31, 2024
3mo 2yr 5yr 7yr 10yr 30yr
0.82%
0.97%
1.18%
0.97%1.10%
0.0%
0.5%
1.0%
1.5%
U.
S
.
T
r
e
a
s
u
r
y
Ag
e
n
c
y
AB
S
Co
r
p
A
-
A
A
A
Co
r
p
B
B
B
1-5 Year Indices Quarterly Returns
8
5.1%
4.1%
3.1%2.8%
0%
1%
2%
3%
4%
5%
6%
2024 2025 2026 Longer
Run
Federal Funds Rate
March Projections June Projections
2.6%2.3%2.0%2.0%
0%
1%
2%
3%
4%
5%
6%
2024 2025 2026 Longer
Run
PCE Inflation
March Projections June Projections
4.0%4.2%4.1%4.2%
0%
1%
2%
3%
4%
5%
6%
2024 2025 2026 Longer
Run
Unemployment Rate
March Projections
2.1%2.0%2.0%1.8%
0%
1%
2%
3%
4%
2024 2025 2026 Longer
Run
Change in Real GDP
March Projections
What we are watching…
U.S. inflation readings continued to
make subtle progress toward the
Fed’s 2% target through most of Q2.
The Personal Consumption
Expenditures Index (“PCE”), tracked
lower in May after the April and March
readings showed no change. Core
PCE – which removes the volatile
food and energy components from
PCE – declined to 2.6% in May, which
also marked a multi-year low.
U.S. Real GDP growth cooled in Q1,
as the final reading of 1.4% was
notably lower than the third and fourth
quarters of 2023. The cooling in
growth was attributed to net negative
contributions from net exports and
private inventories, although a decline
in personal spending was also
noteworthy.
Overall, the labor market is expected
to remain supportive of personal
consumption as wage growth
continues to outpace inflation.
However, some signs of cooling in the
labor market, including increasing
jobless claims, underscore the
moderation in economic expectations
over the near-term.
Source: Federal Reserve, latest economic projections as of June 2024.9
Current Cash and Investment Summary
The following is a summary of the City’s cash
and investments based on market value, as of
June 30, 2024, compared to the prior quarter.
Investment Entity June 30, 2024 Percent of Total**March 31, 2024
City Held Cash & Investments $46,675,427.39 18.8%$37,896,156.24
JPMorgan Money Market Account $50,000,000.00 20.1%$50,000,000.00
LAIF Held Investments $46,986,955.71 18.9%$46,490,219.26
PFMAM Managed Investments*$104,931,145.75 42.2%$104,014,834.66
TOTAL**$248,593,528.85 100%$238,401,210.16
*Figures shown exclude accrued interest. **Details may not add up to total due to rounding.
10
Current Cash and Investment Summary
There are several factors
which result in changes in
cash and investment
balances from month-to-
month and quarter-to-
quarter, dependent on the
receipt of revenues or a
large disbursement.
•Some major City revenues are received on a
periodic rather than a monthly basis. Property Tax
is received in December, January, April, and May
of each year. Transient Occupancy Tax is
received monthly but varies considerably due to
seasonality.
•Payments for bonded indebtedness or large
capital projects can reduce the portfolio
substantially in the quarter in which they occur.
•The City pays its CalPERS obligation in a lump
sum at the beginning of the fiscal year to achieve
interest savings.
Factors
11
Securities
Securities in the City’s
portfolio are priced by
Refinitiv, an independent
pricing service, at the end
of every month. In some
cases, the City may have
investments with a current
market value that is greater
or less than the recorded
value. These changes in
market value are due to
fluctuations in the
marketplace, having no
effect on yield, as the City
does not intend to sell
securities prior to maturity.
Nevertheless, these
market changes can
impact the total value of
the portfolio.
Security Type Market Value
% of
Portfolio
% Change
vs. 3/31/24
Permitted by
Policy
U.S. Treasury 65,488,739 62.1%1.4%100%
Federal Agency 12,305,941 11.7%0.7%100%
Municipal Obligations 647,735 0.6%-31.1%30%
Negotiable CDs 1,974,852 1.9%0.1%30%
Corporate Notes 18,380,577 17.4%1.2%30%
Asset-Backed
Securities 5,886,212 5.6%-1.6%15%
Securities Sub-Total 104,684,056 0.8%
Money Market Fund 247,089 0.2%41.2%20%
Accrued Interest 523,677 0.5%
Securities Total 105,454,823 100.0%1.4%
12
PFMAM Managed 6/30/2024 3/31/2024
Average Maturity
(Years)2.37 2.43
Effective Duration1 2.07 2.12
Average Market Yield 4.80%4.67%
Total Return
Total return is calculated
based on interest and both
realized and unrealized
changes in market value;
this is expressed as a rate
of return over a specified
period of time based on
cost and is backward-
looking.
•Focused on long-term
performance and
growth
•Affected by both yield
and market value
fluctuations
•Reflects “true value” of
the portfolio
•Recommended
approach by the
Government Finance
Officers Association
Total Rate
of Return 3 Months 1 Year 3 Years Since
Inception
City of SLO 0.92%4.62%0.52%1.48%
0-5 Treasury
Index 0.93%4.45%0.34%1.28%
Variance -0.01%+0.18% +0.18% +0.20%
1Effective duration is the approximate percentage change in price for each 1% change in interest rates.
13
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Investment Objectives
The investment objectives of the City of San Luis Obispo are first, to
provide safety of principal to ensure the preservation of capital in the
overall portfolio; second, to provide sufficient liquidity to meet all
operating requirements; and third, to earn a commensurate rate of
return consistent with the constraints imposed by the safety and
liquidity objectives. The City follows the practice of pooling cash and
investments for all funds under its direct control. Funds held by outside
fiscal agents under provisions of bond indentures are maintained
separately. Interest earned on pooled cash and investments is
allocated quarterly to the various Quarterly Investment Report funds
based on the respective fund’s average quarterly cash balance.
Interest earned from cash and investments with fiscal agents is
credited directly to the related accounts.
It is common for governments to pool the cash and investments of
various funds to improve investment performance. By pooling funds,
the City can benefit from economies of scale, diversification, liquidity,
and ease of administration. The City uses the services of an
investment advisor, PFM Asset Management, to manage a portion of
the City’s portfolio. The City’s strategy is to retain approximately 25%
of the portfolio to manage its day-to-day cash flow needs, while PFM’s
focus is on longer-term investment management. In addition, the City
has retained direct control of several investments that had been
acquired before the City began to use investment advisors. All
investments are held by the City in a safekeeping account with Bank of
New York Mellon, except for investments held by trustees related to
bond financings, which are held by either US Bank or Bank of New
York Mellon.
14
Environmental, Social, and Governance (ESG) Investment Objectives
ESG investing is the process of incorporating the
analysis of non-financial environmental, social, and
governance factors into investment decisions
alongside traditional financial criteria. As set forth in
the City’s Investment Management Plan dated
August 18, 2020, it is City’s objective to integrate
environmental, social, and governance (“ESG”)
factors into investment decisions for its investment
portfolio to the extent practical and possible.
In order to achieve this objective, the City will apply
the ESG Investment Criteria to the following
Investments: Asset-Backed Securities, Bankers’
Acceptances, Commercial Paper, Corporate,
Medium-Term & Bank Notes, and Negotiable Bank
Deposit Obligations.
The ESG investment criteria is based on ESG Risk
Ratings, industry and subindustry definitions, and
subindustry rankings as provided by Sustainalytics.
15
Market Value includes accrued interest as of June 30, 2024. Average ESG Risk Rating is weighted by market value. Please see important
disclosures at the end of this presentation.
* U.S. Treasury and municipal obligations are not included in the analysis.
ESG Risk Composition Overview
The ESG Risk Rating measures
economic value at risk based on
ESG factors.
A company’s ESG Risk Rating is
comprised of a quantitative score
and a risk category. The score
indicates unmanaged ESG risk.
Risk categories are absolute and
comparable across industries.
Lower scores represent less
unmanaged risk. Ratings are
scored on a scale of 1-100 and are
assigned to one of the following
ESG risk categories:
•Negligible Risk (overall score
of 0-9.99 points)
•Low Risk (10-19.99 points)
•Medium Risk (20-29.99 points)
•High Risk (30-39.99 points)
•Severe Risk (40 and higher
points)
30/34 of portfolio issuers are rated with a total rated market value of $38.9 million (37%)
Negligible Low Medium High Severe
Portfolio Average
ESG Risk Rating
18.5
Allocation by ESG Risk Rating
Low
25%
Medium
12%
Not Rated
63%
16
Industry Diversification
Portfolio holdings and Sustainalytics data as of June 30, 2024. Average ESG Risk Rating represents the market value-weighted average ESG
risk rating for each industry.
28.0
18.4 18.6
23.9
20.2
14.8 14.5 15.3 14.6
0%
20%
40%
60%
80%
0
10
20
30
40
Po
r
t
f
o
l
i
o
W
e
i
g
h
t
(
%
)
ES
G
R
i
s
k
R
a
t
i
n
g
Industry Exposure and Weighted Average Risk Score
17
S&P Credit Rating Distribution
ESG Risk Rating Key
Negligible Low Medium High Severe
0-9.99 10-19.99 20-29.99 30-39.99 40-100
Portfolio holdings and Sustainalytics data as of June 30, 2024. If a security is not rated by S&P, the equivalent Moody’s rating is used. NR
stands for ‘no rating’ and implies that the issuer is not rated by S&P or Moody’s but is rated by Fitch.
$0 $5 $10 $15 $20
A
AA
AAA
Market Value Allocation (Millions $)
Credit Rating Grouped by ESG Risk Rating Category
21.4
15.7 20.1
0
10
20
30
40
AAA AA A
Average ESG Risk Rating by S&P Credit Rating
18
Holdings as of June 30, 2024
Sorted By ESG Risk Rating
Source: Sustainalytics. Holdings as of June 30, 2024.
Issuer % Weight Subindustry Subindustry
Percentile
ESG Risk
Rating
6/30/2024
CarMax Inc.0.1%Automotive Retail 14 11.1
Federal National Mortgage
Association 6.2%Thrifts and Mortgages 6 12.7
The Home Depot Inc 0.9%Home Improvement
Retail 22 12.9
Coöperatieve Rabobank
U.A.1.0%Diversified Banks 5 13.4
Novartis AG 1.4%Pharmaceuticals 1 13.6
Adobe Systems Inc 0.6%Enterprise and
Infrastructure Software 4 14.0
Microsoft Corp 1.5%Enterprise and
Infrastructure Software 5 14.2
Intel Corp 0.5%Semiconductor Design
and Manufacturing 6 15.3
Mastercard Incorporated 1.0%Data Processing 16 15.6
Deere & Co 0.7%Agricultural Machinery 13 16.0
Federal Home Loan
Mortgage Corp 4.8%Thrifts and Mortgages 13 16.8
Fifth Third Bancorp 0.7%Regional Banks 12 16.9
Target Corp 0.7%Department Stores 10 17.1
American Express
Company 0.8%Consumer Finance 13 18.3
BlackRock, Inc.1.2%Asset Management and
Custody Services 8 18.4
The Toronto-Dominion Bank 1.0%Diversified Banks 20 18.6
Federal Home Loan Bank
System 0.7%Consumer Finance 16 18.9
Bank of New York Mellon
Corp 0.9%Asset Management and
Custody Services 10 19.0
Kubota Corp 0.2%Agricultural Machinery 36 19.3
19
Holdings as of June 30, 2024
Sorted By ESG Risk Rating
Source: Sustainalytics. Holdings as of June 30, 2024.
(continued)
Issuer % Weight Subindustry Subindustry
Percentile
ESG Risk
Rating
6/30/2024
Bristol-Myers Squibb
Company 0.3%Biotechnology 7 21.2
Citigroup, Inc.1.7%Diversified Banks 31 22.1
The PNC Financial Services
Group, Inc.0.7%Regional Banks 31 23.7
Walmart Inc.1.3%Food Retail 48 23.9
Bank of America
Corporation 2.9%Diversified Banks 39 24.3
PACCAR Inc 0.7%Heavy Machinery and
Trucks 32 24.6
Hyundai Motor Company 0.3%Automobiles 54 26.1
JPMorgan Chase & Co.2.3%Diversified Banks 54 27.3
Honda Motor Co Ltd 0.6%Automobiles 67 27.4
General Motors Company 0.1%Automobiles 74 28.3
Toyota Motor Corp 1.0%Automobiles 78 28.8
20
Socially Responsible Investment Policy
In addition to the ESG
criteria, the City’s Socially
Responsible Investment
(SRI) Policy restricts portfolio
issuers who generate
revenue from casinos,
gambling, racetracks,
brewery, wine/spirits,
tobacco, electronic cigarette,
or tobacco-related products,
or who support the direct
production or drilling of fossil
fuels. The tables to the right
show the Bloomberg Industry
Classifications (“BICS”) for all
the portfolio’s holdings.
Issuer Sector (BICS)
Adobe Inc Software & Services
American Express Credit Account Credit Card ABS
Bank of America Auto Trust Automobile ABS
Bank of America Co Diversified Banks
BlackRock Funding Inc Financial Services
Bristol-Myers Squibb Co Pharmaceuticals
Carmax Auto Owner Trust Automobile ABS
Chase Issuance Trust Credit Card ABS
Citibank Credit Card Issuance Trust Credit Card ABS
Citigroup Inc Banks
Cooperatieve Rabobank U.A.Banks
Deere & Company Machinery Manufacturing
FHLB Government Agencies
FHLMC Government Agencies
Fifth Third Auto Trust Automobile ABS
FNMA Government Agencies
GM Financial Automobile ABS
Home Depot Inc Retail - Consumer Discretionary
Issuer Sector (BICS)
Honda Auto Receivables Automobile ABS
Hyundai Auto Receivables Automobile ABS
Intel Corporation Semiconductors
JP Morgan Chase & Co Diversified Banks
Kubota Credit Owner Trust Other ABS
Mastercard Inc Consumer Finance
Microsoft Corp Software & Services
New Jersey Turnpike Authority Transportation
Novartis Capital Corp Pharmaceuticals
Paccar Financial Corp Transportation & Logistics
PNC Financial Services Group Banks
State of Maryland General Government
Target Corp Mass Merchants
The Bank of New York Mellon Corporation Financial Services
Toyota Motor Corp Automobile ABS
U.S. Treasury Sovereigns
University of California Education
Source: Bloomberg. BICs is an industry classification system developed and utilized by Bloomberg that classifies securities based on
business, economic function, and other characteristics.
21
Distribution List
City Council
Erica A. Stewart
Mayor
Andy Pease
Vice Mayor
Jan Marx
Council Member
Emily Francis
Council Member
Michelle Shoresman
Council Member
Investment Oversight
Committee
Jan Marx
Council Liaison
Anni Wang
Public Member
Whitney McDonald
Interim City Manager
Emily Jackson
Director of Finance
Debbie Malicoat
Deputy Director of Finance/City
Controller
Riley Kuhn
Principal Financial Analyst—Budget
Independent Auditor
Badawi & Associates
PFM Asset
Management LLC
Monique Spyke
Managing Director
Justin Resuello
Relationship Manager
22
Appendix
•Additional ESG Information
•ESG Themes Information
23
0 5 10 15 20 25 30 35 40
Federal Agency & MBS
Certificates of Deposit
Corporate Notes
ABS
ESG Risk Rating
ESG Risk Rating Range and Average by Sector
Source: Sustainalytics. Data as of June 30, 2024. Bars represent the range of held issuers’ ESG risk rating that fall under each sector, and
lines indicate the sectors market value-weighted average ESG risk rating. Please see important disclosures at the end of this presentation.
Sector Analysis
23.3
19.7
16.0
14.8
24
ESG Themes Glossary
ESG Theme Theme Description Key Indicators
Environment
Carbon Output &
Energy Use
Refers to a company’s management of risks
related to its energy efficiency and
greenhouse gas emissions in its operation
as well as its products and services in the
production phase and during the product
use phase
•Carbon intensity
•Renewable energy use
•Env. Mgt. System certification
•GHG reporting / risk management
•Hazardous products
•Sustainable products & services
Waste & Pollution
Evaluates the management of emissions
and releases from a company’s own
operations to air, water, and land, excluding
greenhouse gas emissions
•Emergency response program
•Solid waste management
•Effluent management
•Radioactive waste management
•Hazardous waste management
•Non-GHG air emissions programs
•Oil spill disclosure & performance
•Recycled material use
Resource Use &
Biodiversity
Analyzes how efficiently and effectively a
company uses its raw material inputs and
water in production. It also encompasses
how a company manages the impact of its
operations on land, ecosystems, and wildlife
•Biodiversity programs
•Deforestation programs / polices
•Site closure & rehabilitation
•Water intensity & risk management
•Forest certifications
•Supplier environmental programs / certifications
•Sustainable agriculture programs
Community
Impact
(Environmental)
Evaluates the community impact from an
environmental risk perspective based on an
assessment of Community Relations,
Products & Services, Occupational Health
and Safety, and Product Governance
•Env Impact – Community Relations
•Env Impact – Products & Services
•Env Impact – Occupational Health and Safety
•Env Impact – Product Governance
25
ESG Theme Theme Description Key Indicators
Social
Human Capital
Management
Evaluates the management of risks
related to human rights, labor rights,
equality, talent development,
employee retention, and labor health
and safety
•Discrimination policy
•Diversity programs
•Gender pay equality / disclosures
•Employee development
•Supply chain management / standards
•Human rights policies & programs
•Employee health & safety
Product
Governance
Focuses on the management of
risks related to product quality,
safety, wellness, and nutrition, as
well as customer data privacy &
cybersecurity
•Product & service safety programs /
c certifications
•Data privacy management
•Media & advertising ethics policy
•Organic products / GMO policy
•Product health statement
Community
Impact (Social)
Assesses how companies engage
with local communities and their
management of access to essential
products or services to
disadvantaged communities or
groups
•Equitable pricing and availability
•Access to health care
•Price transparency
•Human rights / indigenous policy
•Community involvement programs
•Noise management
ESG Financial Integration
& Resilience
Analyzes financial stability and
issues that pose systemic risks and
potential external costs to society in
the financial services industry. Also
measures ESG activities by financial
institutions
•Systemic risk management / reporting
•Tier 1 capital
•Leverage ratio
•Responsible investment / asset management
•Underwriting standards
•Financial inclusion
•Credit & loan standards
•Green buildings investments
ESG Themes Glossary
26
ESG Themes Glossary
ESG Theme Theme Description Key Indicators
Governance Corporate
Governance
Evaluates a company’s rules, policies, and
practices with a focus on how a company's
board of directors manages and oversees
the operations of a company. Also assesses
the management of general professional
ethics and lobbying activities
•Board / management quality & integrity
•Board structure
•Ownership & shareholder rights
•Remuneration
•Audit & financial reporting
•Stakeholder governance
•Bribery & corruption policies / programs
•Money laundering policy
•Whistleblower programs
•Business ethics programs
•Political involvement policy
•Lobbying and political expenses
27
Disclosures
This material is based on information obtained from sources generally believed to be reliable and available to the public, however
PFM Asset Management LLC cannot guarantee its accuracy, completeness or suitability. This material is for general information
purposes only and is not intended to provide specific advice or a specific recommendation. All statements as to what will or may
happen under certain circumstances are based on assumptions, some but not all of which are noted in the presentation.
Assumptions may or may not be proven correct as actual events occur, and results may depend on events outside of your or our
control. Changes in assumptions may have a material effect on results. Past performance does not necessarily reflect and is not
a guaranty of future results. The information contained in this presentation is not an offer to purchase or sell any securities.
There is no guarantee the investment objectives will be achieved as the investment portfolio will only include holdings consistent
with the applicable Environmental, Social, and Governance (ESG) guidelines. As a result, the universe of investments available
will be more limited. ESG criteria risk is the risk that because the investment portfolio ESG criteria excludes securities of certain
issuers for nonfinancial reasons, the investment portfolio may forgo some market opportunities that would be available to
investment portfolios that do not apply ESG criteria.
PFM Asset Management LLC ("PFMAM") is an investment adviser registered with the U.S. Securities and Exchange Commission
and a subsidiary of U.S. Bancorp Asset Management, Inc. ("USBAM"). USBAM is a subsidiary of U.S. Bank National Association
("U.S. Bank"). U.S. Bank is a separate entity and subsidiary of U.S. Bancorp. U.S. Bank is not responsible for and does not
guarantee the products, services or performance of PFMAM. The information contained is not an offer to purchase or sell any
securities. Additional applicable regulatory information is available upon request.
For more information regarding PFMAM's services or entities, please visit www.pfmam.com.
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