Fixed Income Management
24
GARCIA HAMILTON & ASSOCIATES Presented by: Gilbert A. Garcia, CFA Managing Partner Ruby Muñoz Dang Partner Fixed Income Management Quarter Ended September 30, 2021 Five Houston Center 1401 McKinney Street, Suite 1600 Houston, TX 77010 Tel: (713) 853-2359 [email protected] www .GarciaHamiltonAssociates.com
Transcript of Fixed Income Management
PowerPoint PresentationGARCIA HAMILTON & ASSOCIATES
P r e s e n t e d b y :
G i l b ert A . G a rc ia , C FA M a n a g i n g Pa r t n e r
Ru b y M u ñ o z D a n g Pa r t n e r
Fixed Income Management Quarter Ended September 30, 2021
Five Houston Center 1401 McKinney Street, Suite 1600 Houston, TX 77010 Tel: (713) 853-2359 [email protected] www.GarciaHamiltonAssociates.com
Agenda
Introduction
Garcia Hamilton & Associates
M a r s h a l l G e r o m e t t a / C T B U H
Introduction
4
Organization
• Fo u n d e d i n 1 9 8 8
• 1 0 0 % e m pl o y e e - o w n e d a n d M B E f i r m
• E S G / R I M a n a g e r, Pr i n c i p l e s fo r Re s po n s i b l e
I n v e s t m e n t ( P R I ) s i g n at o r y, a n d Ta s k Fo rc e o n
C l i m at e - re l ate d Fi n a n c i a l D i s c l o s u re s ( TC F D )
s u ppo r t e r
• 3 6 e m pl o y e e s i n H o u s t o n , Tex a s
• 1 2 - m e m b e r i n v e s t m e n t t ea m h a v e o v e r 2 5 0 y ea r s
o f i n d u s t r y ex pe r i e n c e a n d o v e r 1 1 0 y ea r s
c o m b i n e d f i r m ex pe r i e n c e
• $ 1 8 b i l l i o n i n a s s e t s u n d e r m a n a g e m e n t
• H i g h - qu a l i t y f i xe d i n c o m e s t ra t e g i e s d e s i g n e d t o
pre v e n t “ n e g at i ve s u r pr i s e s ”
Garcia Hamilton & Associates As o f Sep tember 30 , 2021
55
By Type By Client
36 14 12 9 15
0%
20%
40%
60%
80%
100%
Client Service
Female Male
0%
20%
40%
60%
80%
100%
Client Service
Gender
Race/Ethnicity
77
Partners
As of Sep tember 30 , 2021 | Ownersh ip numbers a re rounded.Garcia Hamilton & Associates
Investment Team
KEVIN LUNDAY, CPA
Chief Operations Officer
BETH L. MCWILLIAMS
Chief Compliance Officer
GARY MONTGOMERY Systems Manager Year Hired: 2007 Ownership: 1.5%
JANNA HAMILTON
RUBY MUÑOZ DANG
Ownership: 11.9%
MORGAN DOYLE
GILBERT ANDREW GARCIA, CFA
KAREN H. TASS, CFA
NANCY RODRIGUEZ
JEFFREY D. DETWILER, CFA, AAMS
Portfolio Manager Year Hired: 2007 Ownership: 3.0%
BENJAMIN D. MONKIEWICZ
DON ELESENBROCK
YVETTE M. DUEÑAS
88
KAREN H. TASS, CFA
NANCY RODRIGUEZ
Oversight
Partner Portfolio Manager Year Hired: 2007
Ind. Experience: 25 yrs Coverage: Short Term
BENJAMIN D. MONKIEWICZ
DON ELESENBROCK
Short Term
Ind. Experience: 14 yrs Coverage: Municipals
CONNIE FALCON DAVIS
Ind. Experience: 9 yrs Coverage: Analytics
REESE WELLER
Ind. Experience: 21 yrs Coverage: Municipals
BRIAN SIMON
2007, 2018 Ind. Experience: 23 yrs
GILBERT ANDREW GARCIA, CFA
Ind. Experience: 36 yrs
Ind. Experience: 1 yr
MARK R. DELANEY, CFA
Senior Portfolio Manager Strategist
Coverage: US TIPS, Municipals
Representative Client List
Garcia Hamilton & Associates
PUBLIC FUNDS City of Jacksonville Beach, FL City of Sarasota Police, FL Delta Dental Plan of New Hampshire, Inc., NH Baptist Health Foundation, AR Silicon Valley Community Foundation, CA Addison Police, IL Lake Bluff Police, IL City of Sebring Police, FL D.W. McMillan Hospital/Escambia County Barnabas Foundation Common Trust, IL Special Operations Warrior Foundation, GA City of Annapolis Police & FF, MD Lake Worth FF, FL South Walton Fire Control District FF, FL Healthcare, AL Board of Higher Education and Ministry, Tallahassee Memorial Healthcare Arkansas Local Police & FF, AR City of Lakeland, FL City of St. Cloud Police, GE & FF, FL Dimension Assurance Ltd, CI The United Methodist Church, TN Foundation, Inc., FL Arkansas State Highway ERS, AR Lantana Police & FF, FL City of St. Louis FF, MO Dimensions Health Corporation, MD The Boyd and Joan Kelley Charitable Triangle Community Foundation, NC City of Atlanta Police, GE & FF, GA Lemont Police, IL St. Petersburg Police, FL Emergency Medicine Professional Assurance Foundation, VA UNC Health Foundation, Inc., NC Town of Bay Harbor Islands ERS, FL Los Angeles City Employees' Retirement State Universities RS, IL Risk Corporation, FL Boys and Girls Club of Wichita Falls, TX United Methodist Foundation, Inc., NC Beaumont FF, TX System, CA Sunrise Police, FL Equal Justice Initiative, AL The Briarwood School, TX University of Guam Endowment, GU Berwyn Police & FF, IL Macon-Bibb County, GA City of Tamarac FF, FL FSM Development Bank, FM Brookwood Endowment, Inc., TX University of Hartford, CT City of Bloomington Police, IL Maryland-National Capital Park and Planning City of Tarpon Springs Police, FL H.N.S. Management Co., Inc., CT Catholic Community Foundation of Westminster Canterbury, VA Boynton Beach GE, FL Commission, MD Teachers' Retirement System, IL Hallmark Financial Services, Inc., TX Minnesota, MN White's Residential & Family Services Buffalo Grove Police, IL Matteson FF, IL City of Temple Terrace Police & FF, FL Integris Health, Inc., OK Central Indiana Community Foundation, Endowment, IN California Wildfire Fund, CA Medford RS, MA Village of Tequesta Public Safety Officers, FL John P. McGovern Museum of Inc., IN Wichita Falls Area Community Foundation, TX City of Cape Coral Police & FF, FL City of Melbourne Police & FF, FL City of Titusville Police & FF, FL Health & Medical Science, TX Charles Hayden Foundation, NY Xavier Univeristy of Louisiana, LA Capital Metropolitan Transportation Metropolitan Water Reclamation District, IL Travis County ESD #6 FF, TX KEW Management Investor, NY The Children's Home Foundation, TX
Authority, TX Miami GE & Sanitation ERS, FL Tyler Firefighter's Relief and Retirement, TX Maryland Medicine Self Insurance Trust, MD Colorado State University Foundation, CO TAFT- HARTLEY & UNION Chicago FF Annuity & Benefit, IL City of Miramar Police, FL Urbana Police, IL Micronesia Conservation Trust, FM The Community Foundation for Northeast Bricklayers of Indiana, IN Chicago Municipal Annuity & Benefit, IL Municipality of Anchorage, AK Utrik Atoll, Marshall Islands, MH Naples Community Hospital Healthcare Florida, Inc., FL Cement Masons Pension Trust Fund of Chicago Police Annuity & Benefit, IL MWRA ERS, MA City of Venice Police & FF, FL System, FL Community Foundation of Greater Flint, MI Northern California, CA Chicago Public Schools, IL NC Association of County Commissioners, NC City of Vero Beach Police, FL New York Power Authority, NY The Community Foundation of Herkimer & Central Illinois Carpenters Retirement, IL Chicago Transit Authority, IL Nevada Tuition Program, NV City of West Melbourne Police, FL Nissan Motor Co., Ltd., TN Oneida Counties, NY District 1199J New Jersey Healthcare College of Micronesia Land Grant, FM City of New Port Richey Police, FL City of West Palm Beach FF, FL Operators Reinsurance Company, CI Curtis Institute of Music, PA Employers, NJ Coral Gables RS, FL City of North Miami Beach Police, GE & FF, FL City of West Palm Beach GE & Police, FL Pacific Indemnity Insurance Company, GU E. Rhodes and Leona B. Carpenter IBEW Local Union #129, OH City of Coral Springs Police & FF, FL City of North Miami GE & Police, FL Westchester Police, IL Paradigm Indemnity Corporation, OR Foundation, PA IBEW Local Union #351, NJ Corpus Christi FF, TX Northern Marianas College, MP City of Westland Police & FF, MI Pheasants Forever, MN East Bay Community Foundation, CA Indiana Electrical Workers Pension Trust, IN County Employees' & Officers' Annuity and City of Oakland Park Police & FF, FL City of Wilton Manors Police & GE, FL Poor Handmaids of Jesus Christ Community East Texas Medical Center Foundation, TX Indianapolis Bricklayers Pension, IN
Benefit Fund of Cook County, IL City of Ocoee Police & FF, FL Winnetka Illinois Police & FF, IL Support Trust, IN Embry Riddle Aeronautical University, FL Local 665 IATSE Annuity, HI Dallas Area Rapid Transit, TX Oklahoma FF, OK City of Winston-Salem, NC Public Broadcasting Service, VA Florida A&M University Foundation, FL MARTA/ATU Local 732, GA Town of Davie Police & FF, FL Orlando Utilities Commission, FL City of Winter Garden Police, GE & FF, FL Quality Alliance Assurance Fort Hays State University Foundation, KS The Mason Tenders District Council of Greater City of Deerfield Beach FF, FL City of Ormond Beach Police, GE & FF, FL City of Winter Haven Police, FL Company, Ltd., CI Gilbert Family Foundation, MI New York and Long Island, NY City of Deerfield Beach Police, FL Overland Park Police & FF, KS Wood Dale Police, IL Roman Catholic Archdiocese of Atlanta, GA Greater Milwaukee Foundation, Inc., WI Northern California Genearl Teamsters, CA City of DeLand Police, FL Village of Palatine Police, IL The Woodlands FF RS, TX Serve Insurance Ltd., CI Guam Community College Foundation, GU Palm Tran, Inc./ATU Local 1577, GA Delray Beach Police & GE, FL Palm Beach County FF, FL Yap State Trust Fund, FM St. Ignatius College Prep, IL Hartford Foundation for Public Giving, CT Plumbers Local Union #68, TX Des Plaines Police & FF, IL City of Palm Beach Gardens FF, FL Stetson University, Inc., FL Integris Health Foundation, Inc., OK Roofers Local 149 Security Benefit Trust, MI City of Detroit General Health Care, MI Town of Palm Beach RS, FL CORPORATES STP Nuclear Operating Company, TX International Retinal Research Sacramento Area Electrical Workers, CA Detroit Retirement Protection Trust, MI Village of Palm Springs GE & Police, FL Air Force Association, VA Strategic Investment Fund for La Raza, DC Foundation, Inc., AL San Mateo HERE, CA DFW International Airport, TX City of Pembroke Pines, FL American Baptist Home Mission Society, PA Sulzer Pumps (US) Inc., TX Jewish Senior Life Foundation, NY Service Employees International Union Health Dukes County RS, MA Pennsylvania Turnpike Commission Retiree American Quarter Horse Association, TX Superior Enterprise Holdings, Inc., MI Louisiana Baptist Foundation, LA and Welfare Fund, DC East Bay Municipal Utility District ERS, CA Medical Trust, PA American Speech-Language-Hearing Sweeny Community Hospital, TX Marin Community Foundation, CA Sheet Metal Air, Rail, and Transportation Englewood Area FF, FL City of Pensacola GE & FF, FL Association, MD Terrapin Insurance Company, CI Mary Institute & St. Louis Country Day Association Local #33, OH ERF of the City of Dallas, TX Philadelphia Gas Works, PA Amerilodge Group LLC, MI Tufts Medical Center, Inc, MA School, MO Sheet Metal Workers Health Plan, CA ERS of Baltimore County, MD Philadelphia Public ERS, PA AOA Deposit and Loan Fund LLC, GA UnidosUS, DC Mary Louise Curtis Bok Foundation, PA Sheet Metal Workers Pension Plan, CA City of Evanston FF, IL City of Pinellas Park Police, GE & FF, FL Archbold Medical Center, Inc., GA Union Presbyterian Seminary, VA McDaniel College, Inc., MD Teamsters Union Local #35, NJ City of Evanston Police, IL City of Plantation Police, FL Archdiocese of Portland, OR United Board for Christian Higher Medical University of South Carolina WMATA/Local 922 Retirement Plan, DC Fairfax County Uniformed RS, VA City of Pontiac Police & FF, MI Attorneys' Liability Assurance Society Ltd., IL Education in Asia, NY Foundation, SC City of Fort Lauderdale GE, FL Prince George's County Police & FF, MD Banner Health, AZ United Regional Health Care System, TX Morris Goldseker Foundation of Maryland, MD OTHER City of Fort Myers Police, FL Prince William County Police & FF, VA Baptist Health Foundation, AR University Athletic Association, Inc., GA National Recreation Foundation, NY American Beacon Garcia Hamilton Quality City of Fort Walton Beach GE, FL City of Punta Gorda Police & GE, FL Bedford Fund, QUE University of Arizona Academic Enhancement Nellie Mae Education Foundation, MA Bond (Mutual Fund), TX City of Fort Walton Beach Police & FF, FL Rantoul Police, IL Bethesda, Inc./TriHealth, OH Trust, AZ Northfield Mount Hermon School, MA Garcia Hamilton Quality Aggregate FSM Social Security Administration, FM Republic of Palau Civil Service, Palau Bivium Capital Partners, LLC, CA University of Maryland Medical System, MD PBS Endowment, VA Bond, LP, TX General RS of the City of Detroit, MI Republic of Palau COFA Trust, Palau Brooklyn Museum, NY The Walters Art Gallery, MD The Poetry Foundation, IL Government of Guam, GU River Forest Police, IL Catholic Education of North Georgia, GA The Widows Corporation, PA Racine Community Foundation Inc., WI Greater Orlando Aviation Authority, FL City of Riviera Beach Police & GE, FL Caymich Insurance, CI Wistar Institute of Anatomy and Biology, PA Rhode Island Community Foundation, RI City of Hialeah FF, FL Road Commission for Oakland County, MI Century Insurance Company Ltd., GU San Francisco Foundation, CA Hoffman Estates FF, IL City of Roanoke, VA Church Extension Fund of the Michigan ENDOWMENTS/FOUNDATIONS San Juan Island Community Foundation, WA Hollywood FF & Police, FL City of Rockledge Police, GE & FF, FL District, MI American Quarter Horse Foundation, TX Sarah Campbell Blaffer Foundation, TX Illinois State Board of Investment, IL City of Sanford Police, FL City Public Service Decommissioning Trust, TX Arkansas Tech University Foundation, AR Seattle Foundation, WA Illinois Student Assistance Commission, IL City of Sanford FF, FL Construction Association of Michigan, MI Bakersfield College Foundation, CA Shelby Country Community Health Jackson County ERS, MI Santa Barbara County ERS, CA Crime Stoppers of Houston, TX Baptist Health Foundation of San Antonio, TX Foundation, AL
Clients who have retained GH&A for 10 years or more are noted in green. This representative client list is provided for informational purposes only and should not be construed as an endorsement of our services. These clients were chosen for name recognition and may be invested in products other than those included in the presentation.
As o f Sep tember 30 , 2021
1 01 0
INVESTMENT GOAL
Our goal is to outperform the benchmark, net of fees, over a full market cycle using a high-quality strategy with less risk and an ESG focus. By setting realistic expectations, we avoid taking unnecessary risks.
Core Principles Preserve Principal
High-Quality
• Portfolio dominated by US Treasuries, agency debentures and agency 15-year MBS
• Corporate securities rated A or better
• Spread product exclusively in the short to intermediate maturities to reduce volatility
No Big Surprises
• No foreign bonds/yankees
• No derivatives
• No soft dollars
attribution • Peer group
Garcia Hamilton & Associates
The firm normally operates in a duration range of +/- 10% of the benchmark index. In extreme market environments, the firm operates in a duration range of +/- 25%.
Source Ideas for Key Rate Duration
ESG Overlay
Sectors Treasuries Spread Product
1 41 4
Fixed Income – Aggregate Composite Returns Calendar Year Rates of Return
2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
GH&A Gross of Fees -2.07% 8.10% 7.26% 0.98% 3.82% 3.18% 0.85% 8.02% 0.09% 10.48% 5.33% 8.21% 12.13% 5.88% 8.61% 4.19% 3.80% 4.93% 4.08% 10.35%
GH&A Net of Fees -2.19% 7.92% 7.09% 0.81% 3.64% 2.98% 0.65% 7.81% -0.12% 10.25% 5.13% 8.01% 11.93% 5.68% 8.41% 4.00% 3.62% 4.75% 3.90% 10.15%
Bloomberg US Aggregate -1.55% 7.51% 8.72% 0.01% 3.54% 2.65% 0.55% 5.97% -2.02% 4.22% 7.84% 6.54% 5.93% 5.24% 6.97% 4.33% 2.43% 4.34% 4.10% 10.25%
-3%
-1%
1%
3%
5%
7%
9%
11%
13% Outperformed 8 of Last 10 Time Periods, and 15 of Last 20 Time Periods*
*Gross of Fees
As o f Sep tember 30 , 2021 | B loombergGarcia Hamilton & Associates
Additional information is in the performance disclosure.
PreliminaryPreliminary
Fixed Income – Aggregate Composite Returns Comparative Annualized Rates of Return
QTD YTD 1 Yr 3 Yrs 5 Yrs 7 Yrs 10 Yrs 15 Yrs Inception GG*
GH&A Gross of Fees -0.06% -2.07% -1.34% 4.73% 3.03% 3.48% 4.15% 5.39% 5.50%
GH&A Net of Fees -0.10% -2.19% -1.50% 4.56% 2.85% 3.30% 3.96% 5.20% 5.31%
Bloomberg US Aggregate 0.05% -1.55% -0.90% 5.36% 2.94% 3.26% 3.01% 4.17% 4.44%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
Periods longer than 12 months are annualized. *Gilbert Garcia management inception March 31, 2002
Addi t iona l in format ion i s in the p er formanc e d isc losure. As o f Sep tember 30 , 2021 | B loombergGarcia Hamilton & Associates
Preliminary
2016 2017 2018 2019 2020
Total Trade Value Diverse Non-diverse
Par Volume Traded (in Millions
Diverse fixed income brokers in 2020 executed 54% of total market value traded
Demographic of brokers by ownership
Female 10%
Hispanic 25%
Disabled Veteran
1 9
Mentorship/Internship Programs • Our goa l i s to introduce women and minor i ty
youth to the f inancia l industry
• The Firm has a paid summer in ternsh ip program for 20 minor i ty undergraduate and high school s tudents each year to promote the next generat ion of diverse ta lent
• Our in terns get incredible exposure working wi th port fo l io managers and they have had conversat ions wi th key industry g iants such as SEO Chairman Henry Krav is and former SEC Chairman Jay Clayton
• We promote from with in as many of our partners s tar ted at GH&A as junior team members (2 of our current f i rm partners started as interns with the Firm)
• The Firm mentors youth through speaking engagements at co l lege campuses , h igh schools and conferences as we unders tand the value and im pact on minor i ty youth see ing and hear ing from diverse business leaders
Garcia Hamilton & Associates
2 02 0
GH&A Community Engagement We are proud to have donated over 35,000
masks, boxes of hand sanitizers and
cleaning supplies, and over $100,000 to
underserved and underrepresented
We partnered twice with the Houston Food
Bank and Texas State Representatives
Christina Morales and Mary Ann Perez to
provide free food, water, CO2 detectors, pet
food, diapers, fresh local produce, hand
sanitizers and $25,000 in food gift cards to
those most in need in our local community.
We are Garcia Hamilton, and we are Houston strong!
Garcia Hamilton & Associates
2 12 1
Garcia Hamilton & Associates
We also partnered with HEB and The Baptist Ministers Association to donate $30,000 in HEB gift cards for food to 120 families from 24 churches.
We are Garcia Hamilton, and we are Houston strong!
2 22 2
2 32 3
Garcia Hamilton & Associates
GH&A became a Principles for Responsible Investment (PRI) signatory in 2019.
We completed our first PRI Transparency Report in March 2020. PRI signatories are required to report publicly on their responsible investment activities each year.
We received our first PRI Assessment Report in July 2020 and received an ‘A’ grade in Strategy & Governance – which is considered the main module/section of the report.
GH&A became a Task Force on Climate- related Financial Disclosures (TCFD) supporter in 2021.
As an investment management firm with a long-standing commitment to responsible investment, GH&A supports the TCFD framework. We utilize the third-party research of industry experts in our ESG evaluation including Bloomberg ESG disclosure metrics which incorporate TCFD disclosures. The reports from these third-party providers assist the investment team in its overall evaluation process and provides a base to further study/research these securities for continued inclusion in our portfolio. TCFD disclosures increase transparency around climate-related risks which are incorporated considerations in our investment process.
2 4
Performance Disclosure
FIXED INCOME – AGGREGATE COMPOSITE (Disclosure Presentation as of December 31, 2020) Garcia Hamilton & Associates, L.P.
Year End
Gross Composite Total Return
% of Firm Assets
2002 10.4 10.2 10.3 NM - - 3 85 3,280 3 2003 4.1 3.9 4.1 NM - - 3 88 4,628 2 2004 4.9 4.8 4.3 NM - - 4 98 4,710 2 2005 3.8 3.6 2.4 NM - - 4 121 4,152 3 2006 4.2 4.0 4.3 NM - - 4 126 3,025 4 2007 8.6 8.4 7.0 0.1 - - 6 184 2,215 8 2008 5.9 5.7 5.2 0.2 - - 9 248 1,538 16 2009 12.1 11.9 5.9 1.7 - - 16 419 1,939 22 2010 8.2 8.0 6.5 0.4 - - 27 653 2,382 27 2011 5.3 5.1 7.8 0.3 3.5 2.8 42 983 2,704 36 2012 10.5 10.3 4.2 0.2 3.1 2.4 47 1,084 3,227 34 2013 0.1 -0.1 -2.0 0.2 3.4 2.7 59 1,372 3,387 40 2014 8.0 7.8 6.0 0.2 2.8 2.6 111 2,485 4,962 50 2015 0.8 0.7 0.6 0.1 3.2 2.9 146 3,768 6,340 59 2016 3.2 3.0 2.7 0.1 3.3 3.0 168 5,080 8,016 63 2017 3.8 3.6 3.5 0.1 3.1 2.8 185 7,135 10,071 71 2018 1.0 0.8 0.0 0.2 2.5 2.8 205 8,287 12,590 66 2019 7.3 7.1 8.7 0.5 2.3 2.9 250 10,113 14,997 67 2020 8.1 7.9 7.5 0.4 3.1 3.4 253 10,994 16,726 66
1Historical information not required prior to 2011. NM = Not statistically meaningful due to an insufficient number of portfolios in the composite for the entire year. Creation Date: 10/1/1999 Source: Bloomberg
The GH&A Fixed Income – Aggregate Composite is comprised of fully discretionary, fee paying institutional portfolios, including those portfolios no longer with the firm. The Fixed Income – Aggregate investment philosophy utilizes high-quality U.S. investment grade fixed income securities. To help control risk, the portfolios purchase spread product (non-Treasuries) with less than 10-year maturities, 15- and 20-year Agency Guaranteed Mortgage-Backed securities and Corporate Bonds rated a minimum of single “A-” or equivalent. The portfolios do not contain derivatives or short positions and do not employ leverage. The duration exposure is generally managed within a +/- 10% band around the Bloomberg US Aggregate Index and a maximum of +/- 25% in extreme market environments.
The composite benchmark is the Bloomberg US Aggregate Index. The benchmark is used for comparative purposes only and generally reflects the risk or investment style of the product. The account minimum for the composite is $2.0 million. The composite inception date is January 1, 1992.
Garcia Hamilton & Associates, L.P. (GH&A) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. GH&A has been independently verified for the periods January 1, 1993, through December 31, 2015, by Ashland Partners & Company LLP and from January 1, 2016, through December 31, 2019, by ACA Performance Services, LLC. The verification reports are available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report. GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.
Returns presented include the reinvestment of all income. The net of fees performance results are calculated based on actual fees. The standard fee schedule is: 0.25% of the first $25 million, 0.20% of the next $25 million, 0.18% of the next $50 million, 0.15% of the next $100 million, and 0.12% of the balance. GH&A is an investment management firm registered under the Investment Advisers Act of 1940. GH&A was known as Davis Hamilton Jackson & Associates prior to June 30, 2010. Past performance is no guarantee of future results. A complete list and description of firm composites is available upon request.
Policies for valuing investments, calculating performance, and preparing GIPS Reports are available upon request. Composite dispersion is calculated using an asset value-weighted standard deviation of annual gross of fees returns of those portfolios included in the composite the entire year. Standard deviation is presented as a 3-year annualized standard deviation measure of risk using monthly gross of fees returns as of each annual period end. While the composite is older, this date was selected when Mr. Garcia arrived and took over the portfolios.
Fixed Income – Aggregate Composite (Disclosure Presentation as of December 31, 2020) Garcia Hamilton & Associates, L.P.
Year End
27
653
2,382
27
2011
5.3
5.1
7.8
0.3
3.5
2.8
42
983
2,704
36
2012
10.5
10.3
4.2
0.2
3.1
2.4
47
1,084
3,227
34
2013
0.1
-0.1
-2.0
0.2
3.4
2.7
59
1,372
3,387
40
2014
8.0
7.8
6.0
0.2
2.8
2.6
111
2,485
4,962
50
2015
0.8
0.7
0.6
0.1
3.2
2.9
146
3,768
6,340
59
2016
3.2
3.0
2.7
0.1
3.3
3.0
168
5,080
8,016
63
2017
3.8
3.6
3.5
0.1
3.1
2.8
185
7,135
10,071
71
2018
1.0
0.8
0.0
0.2
2.5
2.8
205
8,287
12,590
66
2019
7.3
7.1
8.7
0.5
2.3
2.9
250
10,113
14,997
67
2020
8.1
7.9
7.5
0.4
3.1
3.4
253
10,994
16,726
66
1Historical information not required prior to 2011. NM = Not statistically meaningful due to an insufficient number of portfolios in the composite for the entire year. Creation Date: 10/1/1999 Source: Bloomberg
The GH&A Fixed Income – Aggregate Composite is comprised of fully discretionary, fee paying institutional portfolios, including those portfolios no longer with the firm. The Fixed Income – Aggregate investment philosophy utilizes high-quality U.S. investment grade fixed income securities. To help control risk, the portfolios purchase spread product (non-Treasuries) with less than 10-year maturities, 15- and 20-year Agency Guaranteed Mortgage-Backed securities and Corporate Bonds rated a minimum of single “A-” or equivalent. The portfolios do not contain derivatives or short positions and do not employ leverage. The duration exposure is generally managed within a +/- 10% band around the Bloomberg US Aggregate Index and a maximum of +/- 25% in extreme market environments.
The composite benchmark is the Bloomberg US Aggregate Index. The benchmark is used for comparative purposes only and generally reflects the risk or investment style of the product. The account minimum for the composite is $2.0 million. The composite inception date is January 1, 1992.
Garcia Hamilton & Associates, L.P. (GH&A) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. GH&A has been independently verified for the periods January 1, 1993, through December 31, 2015, by Ashland Partners & Company LLP and from January 1, 2016, through December 31, 2019, by ACA Performance Services, LLC. The verification reports are available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report. GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.
Returns presented include the reinvestment of all income. The net of fees performance results are calculated based on actual fees. The standard fee schedule is: 0.25% of the first $25 million, 0.20% of the next $25 million, 0.18% of the next $50 million, 0.15% of the next $100 million, and 0.12% of the balance. GH&A is an investment management firm registered under the Investment Advisers Act of 1940. GH&A was known as Davis Hamilton Jackson & Associates prior to June 30, 2010. Past performance is no guarantee of future results. A complete list and description of firm composites is available upon request.
Policies for valuing investments, calculating performance, and preparing GIPS Reports are available upon request. Composite dispersion is calculated using an asset value-weighted standard deviation of annual gross of fees returns of those portfolios included in the composite the entire year. Standard deviation is presented as a 3-year annualized standard deviation measure of risk using monthly gross of fees returns as of each annual period end. While the composite is older, this date was selected when Mr. Garcia arrived and took over the portfolios.
Fixed Income ManagementQuarter Ended September 30, 2021
Slide Number 2
Slide Number 3
Slide Number 17
Diverse Brokerage Utilization*
P r e s e n t e d b y :
G i l b ert A . G a rc ia , C FA M a n a g i n g Pa r t n e r
Ru b y M u ñ o z D a n g Pa r t n e r
Fixed Income Management Quarter Ended September 30, 2021
Five Houston Center 1401 McKinney Street, Suite 1600 Houston, TX 77010 Tel: (713) 853-2359 [email protected] www.GarciaHamiltonAssociates.com
Agenda
Introduction
Garcia Hamilton & Associates
M a r s h a l l G e r o m e t t a / C T B U H
Introduction
4
Organization
• Fo u n d e d i n 1 9 8 8
• 1 0 0 % e m pl o y e e - o w n e d a n d M B E f i r m
• E S G / R I M a n a g e r, Pr i n c i p l e s fo r Re s po n s i b l e
I n v e s t m e n t ( P R I ) s i g n at o r y, a n d Ta s k Fo rc e o n
C l i m at e - re l ate d Fi n a n c i a l D i s c l o s u re s ( TC F D )
s u ppo r t e r
• 3 6 e m pl o y e e s i n H o u s t o n , Tex a s
• 1 2 - m e m b e r i n v e s t m e n t t ea m h a v e o v e r 2 5 0 y ea r s
o f i n d u s t r y ex pe r i e n c e a n d o v e r 1 1 0 y ea r s
c o m b i n e d f i r m ex pe r i e n c e
• $ 1 8 b i l l i o n i n a s s e t s u n d e r m a n a g e m e n t
• H i g h - qu a l i t y f i xe d i n c o m e s t ra t e g i e s d e s i g n e d t o
pre v e n t “ n e g at i ve s u r pr i s e s ”
Garcia Hamilton & Associates As o f Sep tember 30 , 2021
55
By Type By Client
36 14 12 9 15
0%
20%
40%
60%
80%
100%
Client Service
Female Male
0%
20%
40%
60%
80%
100%
Client Service
Gender
Race/Ethnicity
77
Partners
As of Sep tember 30 , 2021 | Ownersh ip numbers a re rounded.Garcia Hamilton & Associates
Investment Team
KEVIN LUNDAY, CPA
Chief Operations Officer
BETH L. MCWILLIAMS
Chief Compliance Officer
GARY MONTGOMERY Systems Manager Year Hired: 2007 Ownership: 1.5%
JANNA HAMILTON
RUBY MUÑOZ DANG
Ownership: 11.9%
MORGAN DOYLE
GILBERT ANDREW GARCIA, CFA
KAREN H. TASS, CFA
NANCY RODRIGUEZ
JEFFREY D. DETWILER, CFA, AAMS
Portfolio Manager Year Hired: 2007 Ownership: 3.0%
BENJAMIN D. MONKIEWICZ
DON ELESENBROCK
YVETTE M. DUEÑAS
88
KAREN H. TASS, CFA
NANCY RODRIGUEZ
Oversight
Partner Portfolio Manager Year Hired: 2007
Ind. Experience: 25 yrs Coverage: Short Term
BENJAMIN D. MONKIEWICZ
DON ELESENBROCK
Short Term
Ind. Experience: 14 yrs Coverage: Municipals
CONNIE FALCON DAVIS
Ind. Experience: 9 yrs Coverage: Analytics
REESE WELLER
Ind. Experience: 21 yrs Coverage: Municipals
BRIAN SIMON
2007, 2018 Ind. Experience: 23 yrs
GILBERT ANDREW GARCIA, CFA
Ind. Experience: 36 yrs
Ind. Experience: 1 yr
MARK R. DELANEY, CFA
Senior Portfolio Manager Strategist
Coverage: US TIPS, Municipals
Representative Client List
Garcia Hamilton & Associates
PUBLIC FUNDS City of Jacksonville Beach, FL City of Sarasota Police, FL Delta Dental Plan of New Hampshire, Inc., NH Baptist Health Foundation, AR Silicon Valley Community Foundation, CA Addison Police, IL Lake Bluff Police, IL City of Sebring Police, FL D.W. McMillan Hospital/Escambia County Barnabas Foundation Common Trust, IL Special Operations Warrior Foundation, GA City of Annapolis Police & FF, MD Lake Worth FF, FL South Walton Fire Control District FF, FL Healthcare, AL Board of Higher Education and Ministry, Tallahassee Memorial Healthcare Arkansas Local Police & FF, AR City of Lakeland, FL City of St. Cloud Police, GE & FF, FL Dimension Assurance Ltd, CI The United Methodist Church, TN Foundation, Inc., FL Arkansas State Highway ERS, AR Lantana Police & FF, FL City of St. Louis FF, MO Dimensions Health Corporation, MD The Boyd and Joan Kelley Charitable Triangle Community Foundation, NC City of Atlanta Police, GE & FF, GA Lemont Police, IL St. Petersburg Police, FL Emergency Medicine Professional Assurance Foundation, VA UNC Health Foundation, Inc., NC Town of Bay Harbor Islands ERS, FL Los Angeles City Employees' Retirement State Universities RS, IL Risk Corporation, FL Boys and Girls Club of Wichita Falls, TX United Methodist Foundation, Inc., NC Beaumont FF, TX System, CA Sunrise Police, FL Equal Justice Initiative, AL The Briarwood School, TX University of Guam Endowment, GU Berwyn Police & FF, IL Macon-Bibb County, GA City of Tamarac FF, FL FSM Development Bank, FM Brookwood Endowment, Inc., TX University of Hartford, CT City of Bloomington Police, IL Maryland-National Capital Park and Planning City of Tarpon Springs Police, FL H.N.S. Management Co., Inc., CT Catholic Community Foundation of Westminster Canterbury, VA Boynton Beach GE, FL Commission, MD Teachers' Retirement System, IL Hallmark Financial Services, Inc., TX Minnesota, MN White's Residential & Family Services Buffalo Grove Police, IL Matteson FF, IL City of Temple Terrace Police & FF, FL Integris Health, Inc., OK Central Indiana Community Foundation, Endowment, IN California Wildfire Fund, CA Medford RS, MA Village of Tequesta Public Safety Officers, FL John P. McGovern Museum of Inc., IN Wichita Falls Area Community Foundation, TX City of Cape Coral Police & FF, FL City of Melbourne Police & FF, FL City of Titusville Police & FF, FL Health & Medical Science, TX Charles Hayden Foundation, NY Xavier Univeristy of Louisiana, LA Capital Metropolitan Transportation Metropolitan Water Reclamation District, IL Travis County ESD #6 FF, TX KEW Management Investor, NY The Children's Home Foundation, TX
Authority, TX Miami GE & Sanitation ERS, FL Tyler Firefighter's Relief and Retirement, TX Maryland Medicine Self Insurance Trust, MD Colorado State University Foundation, CO TAFT- HARTLEY & UNION Chicago FF Annuity & Benefit, IL City of Miramar Police, FL Urbana Police, IL Micronesia Conservation Trust, FM The Community Foundation for Northeast Bricklayers of Indiana, IN Chicago Municipal Annuity & Benefit, IL Municipality of Anchorage, AK Utrik Atoll, Marshall Islands, MH Naples Community Hospital Healthcare Florida, Inc., FL Cement Masons Pension Trust Fund of Chicago Police Annuity & Benefit, IL MWRA ERS, MA City of Venice Police & FF, FL System, FL Community Foundation of Greater Flint, MI Northern California, CA Chicago Public Schools, IL NC Association of County Commissioners, NC City of Vero Beach Police, FL New York Power Authority, NY The Community Foundation of Herkimer & Central Illinois Carpenters Retirement, IL Chicago Transit Authority, IL Nevada Tuition Program, NV City of West Melbourne Police, FL Nissan Motor Co., Ltd., TN Oneida Counties, NY District 1199J New Jersey Healthcare College of Micronesia Land Grant, FM City of New Port Richey Police, FL City of West Palm Beach FF, FL Operators Reinsurance Company, CI Curtis Institute of Music, PA Employers, NJ Coral Gables RS, FL City of North Miami Beach Police, GE & FF, FL City of West Palm Beach GE & Police, FL Pacific Indemnity Insurance Company, GU E. Rhodes and Leona B. Carpenter IBEW Local Union #129, OH City of Coral Springs Police & FF, FL City of North Miami GE & Police, FL Westchester Police, IL Paradigm Indemnity Corporation, OR Foundation, PA IBEW Local Union #351, NJ Corpus Christi FF, TX Northern Marianas College, MP City of Westland Police & FF, MI Pheasants Forever, MN East Bay Community Foundation, CA Indiana Electrical Workers Pension Trust, IN County Employees' & Officers' Annuity and City of Oakland Park Police & FF, FL City of Wilton Manors Police & GE, FL Poor Handmaids of Jesus Christ Community East Texas Medical Center Foundation, TX Indianapolis Bricklayers Pension, IN
Benefit Fund of Cook County, IL City of Ocoee Police & FF, FL Winnetka Illinois Police & FF, IL Support Trust, IN Embry Riddle Aeronautical University, FL Local 665 IATSE Annuity, HI Dallas Area Rapid Transit, TX Oklahoma FF, OK City of Winston-Salem, NC Public Broadcasting Service, VA Florida A&M University Foundation, FL MARTA/ATU Local 732, GA Town of Davie Police & FF, FL Orlando Utilities Commission, FL City of Winter Garden Police, GE & FF, FL Quality Alliance Assurance Fort Hays State University Foundation, KS The Mason Tenders District Council of Greater City of Deerfield Beach FF, FL City of Ormond Beach Police, GE & FF, FL City of Winter Haven Police, FL Company, Ltd., CI Gilbert Family Foundation, MI New York and Long Island, NY City of Deerfield Beach Police, FL Overland Park Police & FF, KS Wood Dale Police, IL Roman Catholic Archdiocese of Atlanta, GA Greater Milwaukee Foundation, Inc., WI Northern California Genearl Teamsters, CA City of DeLand Police, FL Village of Palatine Police, IL The Woodlands FF RS, TX Serve Insurance Ltd., CI Guam Community College Foundation, GU Palm Tran, Inc./ATU Local 1577, GA Delray Beach Police & GE, FL Palm Beach County FF, FL Yap State Trust Fund, FM St. Ignatius College Prep, IL Hartford Foundation for Public Giving, CT Plumbers Local Union #68, TX Des Plaines Police & FF, IL City of Palm Beach Gardens FF, FL Stetson University, Inc., FL Integris Health Foundation, Inc., OK Roofers Local 149 Security Benefit Trust, MI City of Detroit General Health Care, MI Town of Palm Beach RS, FL CORPORATES STP Nuclear Operating Company, TX International Retinal Research Sacramento Area Electrical Workers, CA Detroit Retirement Protection Trust, MI Village of Palm Springs GE & Police, FL Air Force Association, VA Strategic Investment Fund for La Raza, DC Foundation, Inc., AL San Mateo HERE, CA DFW International Airport, TX City of Pembroke Pines, FL American Baptist Home Mission Society, PA Sulzer Pumps (US) Inc., TX Jewish Senior Life Foundation, NY Service Employees International Union Health Dukes County RS, MA Pennsylvania Turnpike Commission Retiree American Quarter Horse Association, TX Superior Enterprise Holdings, Inc., MI Louisiana Baptist Foundation, LA and Welfare Fund, DC East Bay Municipal Utility District ERS, CA Medical Trust, PA American Speech-Language-Hearing Sweeny Community Hospital, TX Marin Community Foundation, CA Sheet Metal Air, Rail, and Transportation Englewood Area FF, FL City of Pensacola GE & FF, FL Association, MD Terrapin Insurance Company, CI Mary Institute & St. Louis Country Day Association Local #33, OH ERF of the City of Dallas, TX Philadelphia Gas Works, PA Amerilodge Group LLC, MI Tufts Medical Center, Inc, MA School, MO Sheet Metal Workers Health Plan, CA ERS of Baltimore County, MD Philadelphia Public ERS, PA AOA Deposit and Loan Fund LLC, GA UnidosUS, DC Mary Louise Curtis Bok Foundation, PA Sheet Metal Workers Pension Plan, CA City of Evanston FF, IL City of Pinellas Park Police, GE & FF, FL Archbold Medical Center, Inc., GA Union Presbyterian Seminary, VA McDaniel College, Inc., MD Teamsters Union Local #35, NJ City of Evanston Police, IL City of Plantation Police, FL Archdiocese of Portland, OR United Board for Christian Higher Medical University of South Carolina WMATA/Local 922 Retirement Plan, DC Fairfax County Uniformed RS, VA City of Pontiac Police & FF, MI Attorneys' Liability Assurance Society Ltd., IL Education in Asia, NY Foundation, SC City of Fort Lauderdale GE, FL Prince George's County Police & FF, MD Banner Health, AZ United Regional Health Care System, TX Morris Goldseker Foundation of Maryland, MD OTHER City of Fort Myers Police, FL Prince William County Police & FF, VA Baptist Health Foundation, AR University Athletic Association, Inc., GA National Recreation Foundation, NY American Beacon Garcia Hamilton Quality City of Fort Walton Beach GE, FL City of Punta Gorda Police & GE, FL Bedford Fund, QUE University of Arizona Academic Enhancement Nellie Mae Education Foundation, MA Bond (Mutual Fund), TX City of Fort Walton Beach Police & FF, FL Rantoul Police, IL Bethesda, Inc./TriHealth, OH Trust, AZ Northfield Mount Hermon School, MA Garcia Hamilton Quality Aggregate FSM Social Security Administration, FM Republic of Palau Civil Service, Palau Bivium Capital Partners, LLC, CA University of Maryland Medical System, MD PBS Endowment, VA Bond, LP, TX General RS of the City of Detroit, MI Republic of Palau COFA Trust, Palau Brooklyn Museum, NY The Walters Art Gallery, MD The Poetry Foundation, IL Government of Guam, GU River Forest Police, IL Catholic Education of North Georgia, GA The Widows Corporation, PA Racine Community Foundation Inc., WI Greater Orlando Aviation Authority, FL City of Riviera Beach Police & GE, FL Caymich Insurance, CI Wistar Institute of Anatomy and Biology, PA Rhode Island Community Foundation, RI City of Hialeah FF, FL Road Commission for Oakland County, MI Century Insurance Company Ltd., GU San Francisco Foundation, CA Hoffman Estates FF, IL City of Roanoke, VA Church Extension Fund of the Michigan ENDOWMENTS/FOUNDATIONS San Juan Island Community Foundation, WA Hollywood FF & Police, FL City of Rockledge Police, GE & FF, FL District, MI American Quarter Horse Foundation, TX Sarah Campbell Blaffer Foundation, TX Illinois State Board of Investment, IL City of Sanford Police, FL City Public Service Decommissioning Trust, TX Arkansas Tech University Foundation, AR Seattle Foundation, WA Illinois Student Assistance Commission, IL City of Sanford FF, FL Construction Association of Michigan, MI Bakersfield College Foundation, CA Shelby Country Community Health Jackson County ERS, MI Santa Barbara County ERS, CA Crime Stoppers of Houston, TX Baptist Health Foundation of San Antonio, TX Foundation, AL
Clients who have retained GH&A for 10 years or more are noted in green. This representative client list is provided for informational purposes only and should not be construed as an endorsement of our services. These clients were chosen for name recognition and may be invested in products other than those included in the presentation.
As o f Sep tember 30 , 2021
1 01 0
INVESTMENT GOAL
Our goal is to outperform the benchmark, net of fees, over a full market cycle using a high-quality strategy with less risk and an ESG focus. By setting realistic expectations, we avoid taking unnecessary risks.
Core Principles Preserve Principal
High-Quality
• Portfolio dominated by US Treasuries, agency debentures and agency 15-year MBS
• Corporate securities rated A or better
• Spread product exclusively in the short to intermediate maturities to reduce volatility
No Big Surprises
• No foreign bonds/yankees
• No derivatives
• No soft dollars
attribution • Peer group
Garcia Hamilton & Associates
The firm normally operates in a duration range of +/- 10% of the benchmark index. In extreme market environments, the firm operates in a duration range of +/- 25%.
Source Ideas for Key Rate Duration
ESG Overlay
Sectors Treasuries Spread Product
1 41 4
Fixed Income – Aggregate Composite Returns Calendar Year Rates of Return
2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
GH&A Gross of Fees -2.07% 8.10% 7.26% 0.98% 3.82% 3.18% 0.85% 8.02% 0.09% 10.48% 5.33% 8.21% 12.13% 5.88% 8.61% 4.19% 3.80% 4.93% 4.08% 10.35%
GH&A Net of Fees -2.19% 7.92% 7.09% 0.81% 3.64% 2.98% 0.65% 7.81% -0.12% 10.25% 5.13% 8.01% 11.93% 5.68% 8.41% 4.00% 3.62% 4.75% 3.90% 10.15%
Bloomberg US Aggregate -1.55% 7.51% 8.72% 0.01% 3.54% 2.65% 0.55% 5.97% -2.02% 4.22% 7.84% 6.54% 5.93% 5.24% 6.97% 4.33% 2.43% 4.34% 4.10% 10.25%
-3%
-1%
1%
3%
5%
7%
9%
11%
13% Outperformed 8 of Last 10 Time Periods, and 15 of Last 20 Time Periods*
*Gross of Fees
As o f Sep tember 30 , 2021 | B loombergGarcia Hamilton & Associates
Additional information is in the performance disclosure.
PreliminaryPreliminary
Fixed Income – Aggregate Composite Returns Comparative Annualized Rates of Return
QTD YTD 1 Yr 3 Yrs 5 Yrs 7 Yrs 10 Yrs 15 Yrs Inception GG*
GH&A Gross of Fees -0.06% -2.07% -1.34% 4.73% 3.03% 3.48% 4.15% 5.39% 5.50%
GH&A Net of Fees -0.10% -2.19% -1.50% 4.56% 2.85% 3.30% 3.96% 5.20% 5.31%
Bloomberg US Aggregate 0.05% -1.55% -0.90% 5.36% 2.94% 3.26% 3.01% 4.17% 4.44%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
Periods longer than 12 months are annualized. *Gilbert Garcia management inception March 31, 2002
Addi t iona l in format ion i s in the p er formanc e d isc losure. As o f Sep tember 30 , 2021 | B loombergGarcia Hamilton & Associates
Preliminary
2016 2017 2018 2019 2020
Total Trade Value Diverse Non-diverse
Par Volume Traded (in Millions
Diverse fixed income brokers in 2020 executed 54% of total market value traded
Demographic of brokers by ownership
Female 10%
Hispanic 25%
Disabled Veteran
1 9
Mentorship/Internship Programs • Our goa l i s to introduce women and minor i ty
youth to the f inancia l industry
• The Firm has a paid summer in ternsh ip program for 20 minor i ty undergraduate and high school s tudents each year to promote the next generat ion of diverse ta lent
• Our in terns get incredible exposure working wi th port fo l io managers and they have had conversat ions wi th key industry g iants such as SEO Chairman Henry Krav is and former SEC Chairman Jay Clayton
• We promote from with in as many of our partners s tar ted at GH&A as junior team members (2 of our current f i rm partners started as interns with the Firm)
• The Firm mentors youth through speaking engagements at co l lege campuses , h igh schools and conferences as we unders tand the value and im pact on minor i ty youth see ing and hear ing from diverse business leaders
Garcia Hamilton & Associates
2 02 0
GH&A Community Engagement We are proud to have donated over 35,000
masks, boxes of hand sanitizers and
cleaning supplies, and over $100,000 to
underserved and underrepresented
We partnered twice with the Houston Food
Bank and Texas State Representatives
Christina Morales and Mary Ann Perez to
provide free food, water, CO2 detectors, pet
food, diapers, fresh local produce, hand
sanitizers and $25,000 in food gift cards to
those most in need in our local community.
We are Garcia Hamilton, and we are Houston strong!
Garcia Hamilton & Associates
2 12 1
Garcia Hamilton & Associates
We also partnered with HEB and The Baptist Ministers Association to donate $30,000 in HEB gift cards for food to 120 families from 24 churches.
We are Garcia Hamilton, and we are Houston strong!
2 22 2
2 32 3
Garcia Hamilton & Associates
GH&A became a Principles for Responsible Investment (PRI) signatory in 2019.
We completed our first PRI Transparency Report in March 2020. PRI signatories are required to report publicly on their responsible investment activities each year.
We received our first PRI Assessment Report in July 2020 and received an ‘A’ grade in Strategy & Governance – which is considered the main module/section of the report.
GH&A became a Task Force on Climate- related Financial Disclosures (TCFD) supporter in 2021.
As an investment management firm with a long-standing commitment to responsible investment, GH&A supports the TCFD framework. We utilize the third-party research of industry experts in our ESG evaluation including Bloomberg ESG disclosure metrics which incorporate TCFD disclosures. The reports from these third-party providers assist the investment team in its overall evaluation process and provides a base to further study/research these securities for continued inclusion in our portfolio. TCFD disclosures increase transparency around climate-related risks which are incorporated considerations in our investment process.
2 4
Performance Disclosure
FIXED INCOME – AGGREGATE COMPOSITE (Disclosure Presentation as of December 31, 2020) Garcia Hamilton & Associates, L.P.
Year End
Gross Composite Total Return
% of Firm Assets
2002 10.4 10.2 10.3 NM - - 3 85 3,280 3 2003 4.1 3.9 4.1 NM - - 3 88 4,628 2 2004 4.9 4.8 4.3 NM - - 4 98 4,710 2 2005 3.8 3.6 2.4 NM - - 4 121 4,152 3 2006 4.2 4.0 4.3 NM - - 4 126 3,025 4 2007 8.6 8.4 7.0 0.1 - - 6 184 2,215 8 2008 5.9 5.7 5.2 0.2 - - 9 248 1,538 16 2009 12.1 11.9 5.9 1.7 - - 16 419 1,939 22 2010 8.2 8.0 6.5 0.4 - - 27 653 2,382 27 2011 5.3 5.1 7.8 0.3 3.5 2.8 42 983 2,704 36 2012 10.5 10.3 4.2 0.2 3.1 2.4 47 1,084 3,227 34 2013 0.1 -0.1 -2.0 0.2 3.4 2.7 59 1,372 3,387 40 2014 8.0 7.8 6.0 0.2 2.8 2.6 111 2,485 4,962 50 2015 0.8 0.7 0.6 0.1 3.2 2.9 146 3,768 6,340 59 2016 3.2 3.0 2.7 0.1 3.3 3.0 168 5,080 8,016 63 2017 3.8 3.6 3.5 0.1 3.1 2.8 185 7,135 10,071 71 2018 1.0 0.8 0.0 0.2 2.5 2.8 205 8,287 12,590 66 2019 7.3 7.1 8.7 0.5 2.3 2.9 250 10,113 14,997 67 2020 8.1 7.9 7.5 0.4 3.1 3.4 253 10,994 16,726 66
1Historical information not required prior to 2011. NM = Not statistically meaningful due to an insufficient number of portfolios in the composite for the entire year. Creation Date: 10/1/1999 Source: Bloomberg
The GH&A Fixed Income – Aggregate Composite is comprised of fully discretionary, fee paying institutional portfolios, including those portfolios no longer with the firm. The Fixed Income – Aggregate investment philosophy utilizes high-quality U.S. investment grade fixed income securities. To help control risk, the portfolios purchase spread product (non-Treasuries) with less than 10-year maturities, 15- and 20-year Agency Guaranteed Mortgage-Backed securities and Corporate Bonds rated a minimum of single “A-” or equivalent. The portfolios do not contain derivatives or short positions and do not employ leverage. The duration exposure is generally managed within a +/- 10% band around the Bloomberg US Aggregate Index and a maximum of +/- 25% in extreme market environments.
The composite benchmark is the Bloomberg US Aggregate Index. The benchmark is used for comparative purposes only and generally reflects the risk or investment style of the product. The account minimum for the composite is $2.0 million. The composite inception date is January 1, 1992.
Garcia Hamilton & Associates, L.P. (GH&A) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. GH&A has been independently verified for the periods January 1, 1993, through December 31, 2015, by Ashland Partners & Company LLP and from January 1, 2016, through December 31, 2019, by ACA Performance Services, LLC. The verification reports are available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report. GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.
Returns presented include the reinvestment of all income. The net of fees performance results are calculated based on actual fees. The standard fee schedule is: 0.25% of the first $25 million, 0.20% of the next $25 million, 0.18% of the next $50 million, 0.15% of the next $100 million, and 0.12% of the balance. GH&A is an investment management firm registered under the Investment Advisers Act of 1940. GH&A was known as Davis Hamilton Jackson & Associates prior to June 30, 2010. Past performance is no guarantee of future results. A complete list and description of firm composites is available upon request.
Policies for valuing investments, calculating performance, and preparing GIPS Reports are available upon request. Composite dispersion is calculated using an asset value-weighted standard deviation of annual gross of fees returns of those portfolios included in the composite the entire year. Standard deviation is presented as a 3-year annualized standard deviation measure of risk using monthly gross of fees returns as of each annual period end. While the composite is older, this date was selected when Mr. Garcia arrived and took over the portfolios.
Fixed Income – Aggregate Composite (Disclosure Presentation as of December 31, 2020) Garcia Hamilton & Associates, L.P.
Year End
27
653
2,382
27
2011
5.3
5.1
7.8
0.3
3.5
2.8
42
983
2,704
36
2012
10.5
10.3
4.2
0.2
3.1
2.4
47
1,084
3,227
34
2013
0.1
-0.1
-2.0
0.2
3.4
2.7
59
1,372
3,387
40
2014
8.0
7.8
6.0
0.2
2.8
2.6
111
2,485
4,962
50
2015
0.8
0.7
0.6
0.1
3.2
2.9
146
3,768
6,340
59
2016
3.2
3.0
2.7
0.1
3.3
3.0
168
5,080
8,016
63
2017
3.8
3.6
3.5
0.1
3.1
2.8
185
7,135
10,071
71
2018
1.0
0.8
0.0
0.2
2.5
2.8
205
8,287
12,590
66
2019
7.3
7.1
8.7
0.5
2.3
2.9
250
10,113
14,997
67
2020
8.1
7.9
7.5
0.4
3.1
3.4
253
10,994
16,726
66
1Historical information not required prior to 2011. NM = Not statistically meaningful due to an insufficient number of portfolios in the composite for the entire year. Creation Date: 10/1/1999 Source: Bloomberg
The GH&A Fixed Income – Aggregate Composite is comprised of fully discretionary, fee paying institutional portfolios, including those portfolios no longer with the firm. The Fixed Income – Aggregate investment philosophy utilizes high-quality U.S. investment grade fixed income securities. To help control risk, the portfolios purchase spread product (non-Treasuries) with less than 10-year maturities, 15- and 20-year Agency Guaranteed Mortgage-Backed securities and Corporate Bonds rated a minimum of single “A-” or equivalent. The portfolios do not contain derivatives or short positions and do not employ leverage. The duration exposure is generally managed within a +/- 10% band around the Bloomberg US Aggregate Index and a maximum of +/- 25% in extreme market environments.
The composite benchmark is the Bloomberg US Aggregate Index. The benchmark is used for comparative purposes only and generally reflects the risk or investment style of the product. The account minimum for the composite is $2.0 million. The composite inception date is January 1, 1992.
Garcia Hamilton & Associates, L.P. (GH&A) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. GH&A has been independently verified for the periods January 1, 1993, through December 31, 2015, by Ashland Partners & Company LLP and from January 1, 2016, through December 31, 2019, by ACA Performance Services, LLC. The verification reports are available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report. GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.
Returns presented include the reinvestment of all income. The net of fees performance results are calculated based on actual fees. The standard fee schedule is: 0.25% of the first $25 million, 0.20% of the next $25 million, 0.18% of the next $50 million, 0.15% of the next $100 million, and 0.12% of the balance. GH&A is an investment management firm registered under the Investment Advisers Act of 1940. GH&A was known as Davis Hamilton Jackson & Associates prior to June 30, 2010. Past performance is no guarantee of future results. A complete list and description of firm composites is available upon request.
Policies for valuing investments, calculating performance, and preparing GIPS Reports are available upon request. Composite dispersion is calculated using an asset value-weighted standard deviation of annual gross of fees returns of those portfolios included in the composite the entire year. Standard deviation is presented as a 3-year annualized standard deviation measure of risk using monthly gross of fees returns as of each annual period end. While the composite is older, this date was selected when Mr. Garcia arrived and took over the portfolios.
Fixed Income ManagementQuarter Ended September 30, 2021
Slide Number 2
Slide Number 3
Slide Number 17
Diverse Brokerage Utilization*
