State of Wisconsin
Investment Board
February 5, 2009
The Honorable, The Senate:
Whether during favorable markets or during a major market downturn such as in 2008, SWIB must diligently seek ways to manage the Wisconsin Retirement System (WRS) assets more effectively and efficiently. After an extensive review of best practices in the industry, SWIB initiated several changes designed to better manage risk and increase return potential.
The first was to restructure SWIB's domestic large company stock portfolios, which represent the biggest category of investments held by the WRS. The second was to move funds from external to internal management to reduce costs and increase net returns.
So far, the results look promising.
At the end of 2007, SWIB realigned its three internally managed large company domestic stock portfolios into
portfolios that cover market sectors and reorganized the staff to provide more efficient market coverage. The new structure gives managing analysts individual discretion over trades within their assigned market sector, making the most of their knowledge and expertise. The six sectors staffed to date are consumer discretionary, financials, health care, industrials, technology and materials. Four additional sector portfolios will be implemented as resources become available.
The ultimate goal is to improve the analysts' depth of coverage and eventually merge the large company domestic and international portfolios to form global sector portfolios. This will allow the analyst for industrials, for example, to review and evaluate all large cap industrial companies, regardless of where they are located.
Early this year, the Governor and Legislature approved additional budget and staff to allow SWIB to move assets from outside money managers to less expensive management by SWIB staff. Since the beginning of 2008 we have moved nearly $2.4 billion from external to internal management. The use of external managers in certain areas - such as emerging markets, which requires highly specialized skills and expertise - continues to be an effective strategy. SWIB has always had a focus on internal money management, but a growth in assets and restraints on resources meant more assets were moved to external mangers over the years.
In addition, SWIB is also working to further optimize the mix of indexed, enhanced indexed and active investment strategies as well as the mix of portfolio managers to improve diversification and reduce costs. Formal targets for the amount of active risk in the Core and Variable Funds have been adopted. Additional tools and emphasis are being applied to ensure that risk is allocated where it is most likely to add return.
Today's investment universe offers a wide range of opportunities. We are charged with scrutinizing each opportunity to determine if it fits within the investment strategy appropriate for the trust funds as we continually manage the WRS into the future.
Sincerely,
james a. senty
Chair
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The committee on Transportation, Tourism, Forestry, and Natural Resources reports and recommends:
Relating to neighborhood electric vehicles.
No action taken.
Relating to allowing the operation of certain 2-vehicle combinations on certain highways without a permit.
No action taken.
Jim Holperin
Chairperson
__________________
The committee on Veterans and Military Affairs, Biotechnology, and Financial Institutions reports and recommends:
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Relating to making it a dishonest or unethical practice for securities licensees to make use of misleading designations or certifications purporting to demonstrate special expertise in the financial or retirement needs of seniors.
No action taken.
Jim Sullivan
Chairperson
__________________
Motions Under Senate Rule
98 and Joint Rule
7
for the Month of January 2009
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Grothman, for Andrew David Alt, on the occasion of earning and attaining the rank of the Eagle Scout Award.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Lazich, for the Big Bend/Vernon Lions Club, on the occasion of their sponsoring the annual Special Olympics Basketball Tournament since 1996 and the outstanding dedication and service to Big Bend, Vernon and the State of Wisconsin.
A certificate of commendation by the Wisconsin Senate on the motion of Senator Sullivan, for Joanne Benz, on the occasion of her tireless work in the Wauwatosa community.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Lazich, for Mark Carstensen Construction & Development Companies, on the occasion of being named the South Suburban Chamber of Commerce 2008 Business of the Year.
A certificate of commendation by the Wisconsin Legislature on the motion of Senator Fitzgerald, for Pat Coe, on the occasion of being chosen as Beaver Dam Chamber's Citizen of the Year 2009.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Erpenbach, for Victoria G. Cothroll, on the occasion of her retirement after 13 years of service as Library Director for the village of Oregon Public Library.
A certificate of commendation by the Wisconsin Legislature on the motion of Senator Fitzgerald, for Countryside GM Auto Group, on the occasion of being selected as the Beaver Dam Chamber Business of the Year for 2009.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Holperin, for the City of Crandon, on the occasion of their Centennial celebration.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Taylor, for Willie B. Davis, on the occasion of the celebration of his Birthday.
A certificate of commendation by the Wisconsin Senate on the motion of Senator Lasee, for Greg De Cleene, on the occasion of receiving the Outstanding Restaurateur of the Year Award.
A certificate of commendation by the Wisconsin Senate on the motion of Senator Risser, for the Divine Performing Arts Chinese New Year Spectacular, on the occasion of their festival celebration.
A certificate of commendation by the Wisconsin Legislature on the motion of Senator Ellis, for Anthony F. Dold, on the occasion of earning and attaining the rank of the Eagle Scout Award.
A certificate of commendation by the Wisconsin Senate on the motion of Senator Schultz, for Patricia Duffey, on the occasion of her leadership and service to the community of Shullsburg.
A certificate of congratulations by the Wisconsin Legislature on the motion of Senator Fitzgerald, for Norm and Martha Ecksteadt, on the occasion of receiving the Wisconsin Restaurant Association's Milwaukee Chapter Outstanding Restaurateur of the Year 2009.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Kanavas, for Simon Felhofer, on the occasion of earning and attaining the rank of the Eagle Scout Award.
A certificate of commendation by the Wisconsin Legislature on the motion of Senator Harsdorf, for Matt Friedel, on the occasion of earning and attaining the rank of the Eagle Scout Award.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Taylor, for Paul Gannaway, on the occasion of his leap of faith into another chapter of his life while leaving employment from the State after 30 years to become the W-2 Ombudsperson.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Darling, for E. Erik Gauger, on the occasion of being honored with the 2009 Menomonee Falls Chamber of Commerce "Chairperson of the Year Award".
A certificate of commendation by the Wisconsin Legislature on the motion of Senator Fitzgerald, for Ralph Germain, on the occasion of being chosen as Lomira Chamber of Commerce's Citizen of the Year for 2009.
A certificate of commendation by the Wisconsin Senate on the motion of Senator Darling, for John T. Gerrits, on the occasion of earning and attaining the rank of the Eagle Scout Award.
A certificate of commendation by the Wisconsin Senate on the motion of Senator Erpenbach, for Derek W. Grade, on the occasion of earning and attaining the rank of the Eagle Scout Award.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Lazich, for Greedale, Wisconsin, on the occasion of being recognized as the 2008 America in Bloom winners.
A certificate of commendation by the Wisconsin Senate on the motion of Senator Lasee, for Phillip Jacques, on the occasion of earning and attaining the rank of the Eagle Scout Award.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Darling, for Chad Johnson, on the occasion of being honored with the 2009 Menomonee Falls Chamber of Commerce "President's Award".
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Lazich, for Kujawa Enterprise, Incorporated, on the occasion of receiving the 2008 South Suburban Chamber of Commerce Pride in Premises Award.
A certificate of commendation by the Wisconsin Senate on the motion of Senator Erpenbach, for Matthew K. Lincicum, on the occasion of earning and attaining the rank of the Eagle Scout Award.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Kanavas, for Abby Lorenz, on the occasion of being named Pewaukee's Person of the Year.
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A certificate of congratulations by the Wisconsin Legislature on the motion of Senator Fitzgerald, for Dwight Maasz, on the occasion of his years of invaluable public service to the Jefferson County Emergency Commuications.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Kanavas, for Brian D. Markovich, on the occasion of earning and attaining the rank of the Eagle Scout Award.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Kanavas, for Andrew R. Martin, on the occasion of earning and attaining the rank of the Eagle Scout Award.
A certificate of commendation by the Wisconsin Legislature on the motion of Senator Ellis, for Wade R. Martin, on the occasion of earning and attaining the rank of the Eagle Scout Award.
A certificate of commendation by the Wisconsin Senate on the motion of Senator Grothman, forJudge Joseph D. McCormack, on the occasion of his retirement after 29 years of dedicated service to the residents of Ozaukee County, the Circut Court and the State of Wisconsin.
A certificate of commendation by the Wisconsin Legislature on the motion of Senator Harsdorf, for Mr. David McQuillen, on the occasion of his retirement after years of dedicated service to the residents of St. Croix County as Assistant District Attorney.
A certificate of commendation by the Wisconsin Senate on the motion of Senator Darling, for the Menomonee Falls Village Centre, on the occasion of being selected to receive the 2008 Menomonee Falls Chamber of Commerce "Community Betterment Award".
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Erpenbach, for Rev. Dr. Sun Myung Moon, on the occasion of the celebration of his 90th Birthday.
A certificate of congratulations by the Wisconsin Legislature on the motion of Senator Vinehout, for Joanne Palzkill, on the occasion of being named the Outstanding Restaurateur of the Year for the West Wisconsin Chapter.
A certificate of commendation by the Wisconsin Legislature on the motion of Senator Hansen, for Keith Pamperin, on the occasion of his retirement after 37 years of distinguished service to the City of Green Bay.
A certificate of congratulations by the Wisconsin Legislature on the motion of Senator Cowles, for Bruce Petri, on the occasion of his 22 years of service at Fox Banquets and Rivertyme Catering.
A certificate of commendation by the Wisconsin Legislature on the motion of Senator Ellis, for Alex T. Piekarski, on the occasion of earning and attaining the rank of the Eagle Scout Award.
A certificate of commendation by the Wisconsin Senate on the motion of Senator Darling, for Mitchell Rath, on the occasion of earning and attaining the rank of the Eagle Scout Award.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Kanavas, for Christopher John Reiels, on the occasion of earning and attaining the rank of the Eagle Scout Award.
A certificate of commendation by the Wisconsin Legislature on the motion of Senator Harsdorf, for Matthew Schmitt, on the occasion of earning and attaining the rank of the Eagle Scout Award.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Kanavas, for Aaron Joseph Schoofs, on the occasion of earning and attaining the rank of the Eagle Scout Award.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Darling, for Tailored Label Product, on the occasion of being honored with the 2009 Menomonee Falls Chamber of Commerce "Business of the Year Award".
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Kanavas, for Floyd Tucker, on the occasion of his extraordinary dedication to both patients and staff at Froedtert Hospital as the patient transporter for the past 22 years.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Darling, for Waukesha West High School's Concert Choir, on the occasion of being selected to perform for Music in Schools Month and were the featured group for Arts Day 2009 at the Wisconsin State Capitol
A certificate of commendation by the Wisconsin Legislature on the motion of Senator Fitzgerald, for Jim Werner, on the occasion of being chosen as Jefferson Chamber of Commerce's Citizen of the Year 2009.
A certificate of commendation by the Wisconsin Senate on the motion of Senator Taylor, for Joanne Williams, on the occasion of years of dedication to the community and her work in Broadcast Journalism.
A certificate of commendation by the Wisconsin Legislature on the motion of Senator Fitzgerald, for the Women's Affiliateof Beaver Dam, on the occasion of being selected as the Beaver Dam Non-Profit of the Year for 2009.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Lassa, for Connor Wolfgram, on the occasion of earning and attaining the rank of the Eagle Scout Award.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Erpenbach, for Woods Hollow Children's Center, on the occasion of receiving the 2009 Wisconsin Early Childhood Association Profile in Excellence Award.
A certificate of congratulations by the Wisconsin Senate on the motion of Senator Holperin, for Jim Wurster, on the occasion of his retirement from the Town of King after 45 years of outstanding service.
A certificate of commendation by the Wisconsin Senate on the motion of Senator Carpenter, for Norman Zych, on the occasion of his service to his country and community and also the celebration his 80th Birthday shared with family and friends.
