HomeMy WebLinkAbout2026-04-01 Council Agenda - Work SessionC N AI
A. CALL TO ORDER
B. INTRODUCTION
C. DISCUSSION ITEM
Kenai City Council - Work Session
April 01, 2026 - 4:00 PM
Kenai City Council Chambers
210 Fidalgo Avenue, Kenai, Alaska
www.kenai.city
** Telephonic / Virtual Information on Page 1**
Agenda
1. Discussion - Alaska Permanent Capital Management to Discuss Potential Amendments to
Kenai Municipal Code Investment Options.
D. COUNCIL COMMENTS
E. PUBLIC COMMENTS (Public comments limited to five (5) minutes per speaker)
F. ADJOURNMENT
The agenda and supporting documents are posted on the City's website at www.kenai.city. Copies of
resolutions and ordinances are available at the City Clerk's Office or outside the Council Chamber prior
to the meeting. For additional information, please contact the City Clerk's Office at 907-283-8231.
Registration is required to join the meeting remotely through Zoom. Please use the following link to
register:
https://us02web.zoom.us/meeting/register/EKrsiqq4TKiRfS6i2CCqJw
Kenai City Council - Work Session Page 1 of 1
April 01, 2026
PUBLIC NOTICE
X NOTICE of WORK SESSION
K E N A I April 1, 2026 at 4:00 p.m.
Notice is hereby given: the Kenai City Council will be meeting in a work
session with Alaska Permanent Capital Management on Wednesday,
April 1, 2026 for the purpose of discussing:
Potential Amendments to Kenai Municipal Code
Section 7.22, Investment of Monies
The work session will begin at 4:00 p.m. and will be held in the Kenai City
Hall Chambers, 210 Fidalgo Avenue, Kenai, AK 99611.
The public is invited to attend and participate. Additional information is
available through the City Clerk's Office or by visiting the City of Kenai
website at www.kenai.c
Shellie Saner, MMC, City Clerk
Publish: 3/27/26
CERTIFICATE OF PUBLICATION & POSTING
I, Shellie Saner, City Clerk of the City of Kenai, do hereby
certify that on the 20th day of March 2026, 1 electronically
mailed or caused to be published the foregoing Notice of
Work Session to the Peninsula Clarion and requested that
this Notice be published in the March 27, 2026 edition of
their newspaper. On the 207h day of March, 2024, the full
work sessio agenda was also posted at Kenai City Hall and
qeShel
i ternet at www.kenai.ci�.
San C, City Clerk
City of Kenai Permanent Funds
As of December 31, 2025
2 |TRUSTED ADVISORS ·MORE EXPERTS ·BETTER ACCESS
City of Kenai Permanent Funds
As of December 31, 2025
Account Inception September 2008
Total Contributions $22,923,732
Withdrawals
Does not include custodial or management fees $18,619,071
Current Market Value
December 31, 2025 $39,931,916
Annualized Account Return*
Inception –December 31, 2025 +7.79%
Effective Annual Fee Rate
December 31, 2025 0.15%
Strategic
Asset
Allocation
Risk Assets 54%
Risk Control 29%
Alternatives 17%
*Performance is gross of management fees, net of internal fund fees, and annualized for periods greater than one year.
Staying focused on your goals
3 |TRUSTED ADVISORS ·MORE EXPERTS ·BETTER ACCESS
The power of consistency in cumulative earnings
Chart shows month-end portfolio market values and calendar year returns from inception to December 31, 2025.
15.6%13.1%
-0.1%
12.0%13.5%
6.0%
-0.1%
7.5%
12.0%
-4.5%
17.0%
10.8%11.9%
-13.6%
12.8%9.3%
13.4%
-$5
$5
$15
$25
$35
$45
2008 2010 2012 2014 2016 2018 2020 2022 2024
M
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l
i
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n
s
Net Earnings:
$35.6MContributions:
$22.9M
Withdrawals:
$18.6M
Current Market Value:
$39.9M
4 |TRUSTED ADVISORS ·MORE EXPERTS ·BETTER ACCESS
8.5%
17.8%
40.7%
7.5%
29.6%
5.9%
-5.2%
31.8%
65.2%
25.9%
32.1%
18.1%
28.9%
1.9%
15.5%
64.6%
6.0%
7.1%
6.1%
6.1%
3.0%
4.2%
-20.00%0.00%20.00%40.00%60.00%80.00%
High Yield
U.S. Large Cap
Semiconductors
U.S. Mid Cap
Electrical Grid
U.S. Small Cap
Cybersecurity
Developed Markets
European Financials
Japan
Emerging Markets
Infrastructure
Datacenters
REIT
Commodities
Gold
Alt. Beta
U.S. Fixed Income
1-5 G/C
Tips
International Bonds
Cash
Ri
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2025 Market Recap
4 |TRUSTED ADVISORS ·MORE EXPERTS ·BETTER ACCESS
Total Returns by Asset Class -Calendar year 2025
Source: Bloomberg and Oxford Economics.
Returns are representative of market returns, and do not reflect actual portfolio performance.
Markets navigated significant crosscurrents in
2025, beginning with heightened trade tensions as
U.S. tariff rates rose to levels not seen in decades,
driving a sharp bout of volatility early in the year.
Despite these concerns, markets ultimately proved
resilient. Trade fears faded, recession risks failed
to materialize, and investor focus shifted toward
the supportive effects of fiscal and monetary
stimulus in the second half of the year.
Risk-on sentiment broadened as the year
progressed, producing an “everything rally” and
marking the first year since the pandemic in which
all major asset classes delivered positive returns.
While medium-term inflation risks remain, fears of
a tariff-driven price shock similar to 2022 proved
unfounded, allowing central banks to continue
the gradual normalization of interest rates.
5 |TRUSTED ADVISORS ·MORE EXPERTS ·BETTER ACCESS
Evaluating returns against strategic goals
Portfolio performance is gross of management fees and net of fund fees.
7.8%7.3%
6.2%
11.8%
13.5%
1.9%
0.4%
7.9%
7.4%
6.2%
12.1%
13.0%
1.9%
0.3%
0.0%
5.0%
10.0%
15.0%
Since Inception 10 Year 5 Year 3 Year 1 Year Quarter to Date Month to Date
Account Performance
December 31, 2025
Permanent Fund Strategic Benchmark
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
Rolling 12 Month Total Return
Since Inception
Upper bound of expected range of returns within one year (28.5%)
Lower bound of expected range of returns within one year (-14.1%)
Avg. loss in extreme conditions within one year (-25.8%)
6 |TRUSTED ADVISORS ·MORE EXPERTS ·BETTER ACCESS
Aligning near-term tactical adjustments with your
long-term strategy
Asset Class Strategic
Weight
Overweight /
Underweight
Current
Allocation Range
Risk Control 29.0%0.6%29.6%
Risk Control U.S. FIXED INCOME 26.0%-1.3%24.7%6 - 36%
CASH 3.0%1.9%4.9%0 - 10%
Risk Assets 54.0%0.1%54.1%
Risk Assets U.S. HIGH YIELD FIXED INCOME 4.0%-0.2%3.8%0 - 8%
U.S. LARGE CAP EQUITY 22.0%0.0%22.0%12 - 32%
U.S. MID CAP EQUITY 10.0%-0.4%9.6%0 - 18%
U.S. SMALL CAP EQUITY 5.0%0.0%5.0%0 - 10%
DEVELOPED INTERNATIONAL EQUITY 8.0%0.5%8.5%4 - 16%
EMERGING MARKET EQUITY 5.0%0.2%5.2%0 - 10%
Alternatives 17.0%-0.7%16.3%
Alternatives REITS 2.0%-0.1%1.9%0 - 4%
INFRASTRUCTURE 5.0%-0.3%4.7%0 - 10%
ALTERNATIVE BETA 10.0%-0.3%9.7%0 - 15%
U.S. FIXED INCOME
CASH
U.S. HIGH YIELD FIXED INCOME
U.S. LARGE CAP EQUITY
U.S. MID CAP EQUITY
U.S. SMALL CAP EQUITY
DEVELOPED INTERNATIONAL
EQUITY
EMERGING MARKET EQUITY
REITS
INFRASTRUCTURE
ALTERNATIVE BETA
Ri
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Core Weight
Tilt Weight
2026 Returns Will Be Driven by Earnings Strength and Ongoing Economic Growth
7 |TRUSTED ADVISORS ·MORE EXPERTS ·BETTER ACCESS Source: Factset and JP Morgan
5
10
15
20
25
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Developed International Emerging Markets US Large Cap
NTM P/E
5
15
25
35
45
2008 2010 2012 2014 2016 2018 2020 2022 2024 2026
EBITDA Margin
US Large Cap Semiconductor Stocks
Earnings Growth Across Major Markets Supports Equity
Return Potential
Emerging Markets Combine Attractive Valuations, Stronger
Earnings Growth, and AI Exposure
Semiconductor Margins Remain Strong, Reinforcing the AI
Investment Cycle
1.5
3.9
1.9
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2022 2023 2024 2025 2026 2027
Real GDP Growth (%YoY)
Advanced economies Emerging market and developing economies United States
Global Growth Proved Resilient in 2025, with Expansion
Expected to Continue
Strategic Review
9 |TRUSTED ADVISORS ·MORE EXPERTS ·BETTER ACCESS
Forward-looking return and
risk characteristics
* Range denotes the 95% confidence interval. Risk and return data from Windham Portfolio Advisor.
Characteristics Current Allocation
Expected Range*
Annual Return (Gross)7.2%-14.1% to 28.5%
Long-Term Return (Gross)6.7%6.4% to 7.0%
Real Return (Gross)
Long-Term Return Less 2.5% Expected Inflation
4.2%3.9% to 4.5%
Avg. Loss in Extreme Conditions (Gross)
Within a 1-Year Horizon
-25.8%
54%
17%
29%
Current Allocation
Risk Assets Alternatives Risk Control Assets
The City of Kenai Permanent Funds’current asset
allocation is expected to meet the goals of the
portfolio over the long term.The expected real
return of the portfolio is in line with the maximum
distribution (4.2%)from either Permanent Fund per
code.There are no recommended changes at this
time.
Current allocation is expected to meet goals
10 |TRUSTED ADVISORS ·MORE EXPERTS ·BETTER ACCESS
Airport Land Sale Permanent Fund
Inflation and goals
Preservation
of
Capital
Sustain a
3.8% to 4.2%
withdrawal
Inflation
Protection
$23.4
$26.1
$28.6
$31.0
$26.1
$28.3
$29.9
$32.9
$25.0
$25.6
$26.5
$28.4
$30.2
$31.3
$32.2
$33.3
20.0
22.0
24.0
26.0
28.0
30.0
32.0
34.0
Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Dec-25
($
)
M
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Airport Land Sale Permanent Fund
Market Value Inflation Adjusted Principal
Period Inflation Rate
Annualized
Pre Covid
Inception –12/31/2020 1.49%
Post Covid
12/31/2020 -12/31/2025 4.46%
APCM’s Expectation
10 Year Projection 2.50%
YoY, the deficit has been
reduced by 85%
11 |TRUSTED ADVISORS ·MORE EXPERTS ·BETTER ACCESS
ALSPF withdrawal projections
10-year horizon
$1.13 $1.11 $1.13 $1.13 $1.11 $1.07 $1.05 $1.02 $1.01 $1.01
$1.13 $1.15 $1.21 $1.27 $1.33 $1.36 $1.40 $1.44 $1.47 $1.52
$1.13 $1.19
$1.32
$1.61
$1.77
$1.94
$2.11
$2.26
$2.41
$2.55
2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
95th Percentile 75th Percentile 50th Percentile 25th Percentile 5th Percentile
The probability that the ALSPF may withdraw at the 4.2% rate
begins at 0% and increases to 43% (vs. 36% estimate from 2025)
over the simulation horizon.
City of Kenai Municipal Code 7.30.020(5)(i)
Appropriations from the ALSPF may be made as follows:
In any fiscal year, the amount available for appropriation for airport operations and capital needs will be
based upon the five (5) year average of the fund’s calendar year end market value. An amount not to
exceed three and four-fifths percent (3.8%) of the five (5) year average market value may be distributed
if the average market value is less than the fund’s inflation adjusted principal balance . An amount not
the exceed four and one-fifth percent (4.2%) of the five (5) year average market value may be
distributed if the average market value is greater than the fund’s inflation adjusted principal balance .
12 |TRUSTED ADVISORS ·MORE EXPERTS ·BETTER ACCESS
Airport Land Sale Permanent Fund
Wealth Simulations 10-year horizon
▪All simulations utilized a $32.9M starting market
value for the ALSPF. No contributions were
included.
▪Withdrawals for the ALSPF conformed to City of
Kenai Municipal Code 7.30.020(5)(i)using the
actual change in CPI-U when available and APCM’s
forward-looking CPI expectation of 2.5% for all
future dates.
▪Utilizing APCM’s records of historical market values
and the spending policy per Kenai Municipal Code
7.30.020(5)(i), APCM’s calculation of the 2026
ALSPF distribution is $1.13M.
Distributions 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
ALSPF*
($ millions)1.13 1.15 1.21 1.27 1.33 1.36 1.4 1.44 1.47 1.52
Risk and return data from Windham Portfolio Advisor. Withdrawals shown at the 50th percentile.
Market values for each sub fund derived from the breakout provided by City of Kenai.
All distributions simulated at the 50th percentile were at the 3.8% rate.
$25.5
Expected (50%)
$42.9
$73.5
$20
$30
$40
$50
$60
$70
$80
Airport Land Sale Permanent Fund (ALSPF)
M
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50%
of
outcomes
Projected Ending Wealth
95% CI
5% CI
Expected Inflation
Adjusted Principal
13 |TRUSTED ADVISORS ·MORE EXPERTS ·BETTER ACCESS
General Fund Land Sale Permanent Fund
Inflation and goals
Preservation
of
Capital
Sustain a
4%
withdrawal
Inflation
Protection
$2.9
$3.4
$3.6
$3.9
$3.2
$3.7
$3.8
$4.3
$2.8 $2.9 $3.0
$3.2
$3.4
$3.5 $3.6 $3.7
2.0
2.5
3.0
3.5
4.0
4.5
Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Dec-25
($
)
M
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General Fund Land Sale Permanent Fund
Market Value Inflation Adjusted Principal
Period Inflation Rate
Annualized
Pre Covid
Inception –12/31/2020 1.49%
Post Covid
12/31/2020 -12/31/2025 4.46%
APCM’s Expectation
10 Year Projection 2.50%
YoY, the surplus has
increased by 116%
14 |TRUSTED ADVISORS ·MORE EXPERTS ·BETTER ACCESS
General Fund Land Sale Permanent
Fund Wealth Simulations 10-year horizon
▪All simulations utilized a $4.3M for the GLSPF. No contributions were
included.
▪Withdrawals for the GLSPF conformed to City of Kenai Municipal
Code 7.30.020(6)using the actual change in CPI-U when available and
APCM’s forward-looking CPI expectation of 2.5% for all future dates.
▪Per Kenai Municipal Code 7.30.020(6) distributions will be the lesser of
the cumulative earnings at calendar year end for the fund or four
percent (4%) of the fund’s fair market value. “Cumulative earnings” is
defined as the market value at calendar year end minus the fund’s
inflation adjusted principal balance.
▪Utilizing APCM’s records of historical market values and the spending
policy APCM’s calculation of the 2026 GLSPF distribution is $171K. In
any given year within the simulation, the probability that a
distribution can be made is 84%.
Thousands 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Distributions 171 175 179 183 189 194 200 206 214 220
Cumulative
Earnings 570 576 594 628 666 717 757 832 863 924
Risk and return data from Windham Portfolio Advisor. Withdrawals shown at the 50th percentile.
Market values for each sub fund derived from the breakout provided by City of Kenai.
$4.0
Expected (50%)
$5.7
$9.1
$3
$4
$5
$6
$7
$8
$9
$10
General Fund Land Sale Permanent Fund (GLSPF)
Projected Ending Wealth
Expected Inflation Adjusted Principal
50%
of
outcomes
95% CI
5% CI
15 |TRUSTED ADVISORS ·MORE EXPERTS ·BETTER ACCESS
GLSPF cumulative earnings projections
10-year horizon
$562
-$72 -$251 -$365 -$431 -$516 -$541 -$583 -$637 -$688 -$704
$562 $570 $576 $594 $628 $666 $717 $757 $832 $863 $924$562
$1,318
$1,725
$2,050
$2,364
$2,703
$3,030
$3,341
$3,702
$4,032
$4,331
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Th
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s
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s
95th Percentile 75th Percentile 50th Percentile 25th Percentile 5th Percentile
In any given year within the simulation, the probability
that a distribution can be made is 84%.
16 |TRUSTED ADVISORS ·MORE EXPERTS ·BETTER ACCESS
Delivering value through efficient
beta and selective alpha
APCM defines our investment philosophy on two key pillars:
customized asset allocation and controlling expenses.
Adhering to these concepts is the Firm’s area of specialization and expertise.
Beta (β)Alpha (α)
Broad market
exposure / market segment
Exposure to emphasize
compensated risk premia
Manager driven
non-systematic risk
FLEXSHARES STOXX GLOBAL INFRA
GLOBAL X DATA CENTER
JPM BETABLDRS MSCI US REIT
ISHARES CORE MSCI EAFE ETF
FIRST TRST NASD CL EDG SGIIF
ISHARES CORE MSCI EMERGING
SS SPDR P HIGH YIELD ETF
SPDR S&P 500 ETF TRUST
ISHARES SEMICONDUCTOR ETF
ISHARES CORE S&P MIDCAP ETF
ISHARES CORE S&P SMALL-CAP E
GLOBAL X CYBERSECURITY ETF
JPMORGAN HEDGED EQUITY ETF
NYLI HDG MLT-STR TRC ETF-USD
BLCKRCK SYST MULTI-STR-INST
CALAMOS MRKT NEU INC-I
VANGUARD HI YLD CORP-ADM
Due to APCM’s overall AUM size, we
are able to access institutional share
classes of mutual funds for our clients,
which typically have lower fees.
*Employer-sponsored retirement plan exclusive share classes were excluded
Fund Manager Fund Name Share Class in
Portfolio
Next best share
class
Calamos Market Neutral Income
Fund 0.97%1.22%
Vanguard High-Yield Corporate
Fund 0.12%0.22%
Blackrock Systematic Multi-
Strategy Fund 0.93%1.20%
17 |TRUSTED ADVISORS ·MORE EXPERTS ·BETTER ACCESS
Independent manager & strategy selection
APCM Due Diligence and Portfolio Fit
Risk | Role | Cost |
Correlation | Implementation
Client
Portfolios
An open-architecture approach focused solely on what serves clients best
Global Active Managers Index Solutions Factor Strategies
Open Investment Universe Ongoing Accountability Client-Aligned Decisions
•Access to both index-based
and active strategies
•Ability to select specialists
across asset classes
•No reliance on proprietary
funds or products
•Continuous evaluation of
managers and strategies
•Willingness to resize, replace,
or exit
•Decisions grounded in risk and
forward-looking expectations
•Strategy selection driven by
objectives
•Flexibility as leadership
evolves
•No embedded incentives
Sources Morningstar, Bloomberg, McKinsey, Prequin, Moonfare and World Bank
City of Kenai –Custody
As of December 31, 2025
19 |TRUSTED ADVISORS ·MORE EXPERTS ·BETTER ACCESS
City of Kenai –Custody (as of December 31, 2025)
Portfolio Review Performance
Gross Bench*GVIXX
QTD 1.10%1.14%0.97%
1 Year 5.02%5.17%4.17%
Since Inception
(11/6/2024)4.63%4.72%4.23%
Annual Yield Comparison Summary Statistics
Kenai -
Custody Bench*GVIXX
Market Value $35,127,630 --
Annual Yield **3.71%3.50%3.68%
Average Quality AA+AA+AAA
Average Maturity
(Years)1.72 1.98 -
What has happened:
▪As securities mature and cash becomes available for reallocation, we
have extended the portfolio's duration the extent possible in US
Treasuries and Callable Agencies.
▪The portfolio duration (sensitivity to interest rates) now stands at 1.46
years vs the bench at 1.88 years
▪There has been no liquidity needs from the portfolio since inception.
Going forward:
▪Annual coupon income over the next 12 months is expected to be
$1,062,925 on the current portfolio.
▪Work with staff and council to identify possible work session dates to
explore options to align liquidity, risk, and recommend changes to the
investment policy statement.
*Bench: Bloomberg 1-3 Gov **YTM for port/bench, 7-day SEC Yield for GVIXX
*Bench: Bloomberg 1-3 Yr Gov
Performance annualized for periods greater than one year.
2%
3%
4%
5%
6%
De
c
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2
3
Ja
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2
4
Fe
b
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2
4
Ma
r
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2
4
Ap
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Ma
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2
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Ju
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Ju
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2
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Au
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Se
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Oc
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No
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5
Fe
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2
5
Ma
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2
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Ap
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2
5
Ma
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2
5
Ju
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-
2
5
Ju
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2
5
Au
g
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2
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Se
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2
5
Oc
t
-
2
5
No
v
-
2
5
De
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2
5
Kenai - Custody Bench*Allspring MMF
*Bench: Bloomberg 1-3 Gov
20 |TRUSTED ADVISORS ·MORE EXPERTS ·BETTER ACCESS
City of Kenai –Custody
(as of December 31, 2025)
Time to Maturity Liquidity %Market Value
0-1 Years 43.5%$15,297,414
1-2 Years 24.0%$8,417,490
2-3 Years 10.2%$3,568,230
3-5 Years 22.3%$7,844,496
Total 100%$35,127,630
IPS Constraints and Characteristics of the Portfolio
▪Investments shall have maturities less than 5 years
▪At least 20% of the portfolio shall be held in maturities of 1-year or
less
▪No more than 30% of the portfolio may be invested in securities with
maturities of longer than 2-years
▪Authorized instruments shall be limited to the obligations of the US
Government, its agencies, repurchase agreements, and government
money market funds
Portfolio Composition
May not add to 100% due to rounding
Interest Rate & Market Outlook
▪The Federal Reserve decreased its benchmark rate three times over
2025 to 3.50-3.75%. Fed Fund Futures markets currently price in two
rate cuts by end of 2026.
▪The FOMC terminal target rate decreases to 3.15% in 2026 and in
2027 stays flat to 3.18%.
▪Interest rates steepened across the curve during the quarter. The 2yr
decreased by 13 basis points ending December at 3.48%. The 10yr
increased 2 by basis points ending December at 4.17%.
67%70%71%
29%18%17%
9%10%2%1%
2%2%1%
0%
20%
40%
60%
80%
100%
12/31/2024 6/30/2025 12/31/2025
Treasuries MBS Agencies Cash CDs
Appendix
22 |TRUSTED ADVISORS ·MORE EXPERTS ·BETTER ACCESS
Disclosures
Important Assumptions
IMPORTANT:The projections or other information generated by Alaska Permanent Capital Management Company (APCM)regarding the likelihood of various outcomes
are hypothetical in nature,do not reflect actual investment results,and are not guarantees of future results.There can be no assurance that the projected or simulated
results will be achieved or sustained.The charts and data only present a range of possible outcomes.Actual results will vary over time,and such results may be better or
worse than the simulated scenarios.Clients should be aware that the potential for loss (or gain)may be greater than that demonstrated in the simulations.Please note
that the analysis does not take into consideration all asset classes,and other asset classes not considered may have characteristics similar or superior to those being
analyzed.
Important Legal Information
These calculations are designed to be informational and educational only,and when used alone,do not constitute investment advice.APCM encourages investors to
review their investment strategy periodically as financial circumstances do change.
Model results are provided as a rough approximation of future financial performance.Actual results could produce different outcomes (either better or worse)than those
illustrated by the model,since it is not possible to anticipate every possible combination of financial market returns.APCM is not responsible for the consequences of any
decisions or actions taken in reliance upon or as a result of the information provided by the results of the model.
Other Influences on Rates of Return
Investment management fees:Returns are presented gross of management fees and include the reinvestment of all income.Actual returns will be reduced by investment
advisory fees and other expenses that may be incurred in the management of the account.The collection of fees produces a compounding effect on the total rate of
return net of management fees.As an example,the effect of investment management fees on the total value of a client’s portfolio assuming (a)quarterly fee assessment,
(b)$1,000,000 investment,(c)portfolio return of 8%a year,and (d)1.00%annual investment advisory fee would be $10,416 in the first year,and cumulative effects of
$59,816 over five years and $143,430 over ten years.Actual investment advisory fees incurred by clients may vary.
Taxes:Unless noted otherwise,model results have not been adjusted for any state or federal taxes or penalties.
Inflation:Unless noted otherwise,model results do not adjust any inputs or outcomes for inflation.Inflation is assumed to be constant over the investment horizon.
Limitations Inherent in Model Results
Limitations include but are not restricted to the following:
Model results do not represent actual trading and may not reflect the impact that material economic and market factors might have had on APCM’s decision making if the
actual client money were being managed.
Extreme market movements may occur more frequently than represented in the model.
Some asset classes have relatively limited histories.While future results for all asset classes in the model may materially differ from those assumed in APCM’s calculations,
the future results for asset classes with limited histories may diverge to a greater extent than the future results of asset classes with longer track records.
Market crises can cause asset classes to perform similarly over time;reducing the accuracy of the projected portfolio volatility and returns.The model is based on the
long-term behavior of the asset classes and therefore is less reliable for short-term periods.This means that the model does not reflect the average periods of "bull"and
"bear"markets,which can be longer than those modeled.
The model represent APCM’s best view of the next 7-10 years,but is unlikely to reflect actual investment returns worldwide over this period.