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Sa plemental Investment Fund , <br /> <br />Ob <br /> <br /> Ac, <br /> fix~ <br />is <br /> <br /> bo~ <br /> iht <br /> <br /> 19 <br /> A( <br /> <br />rc <br />Ca <br /> <br />ra <br />fc <br />it <br /> <br />Bond Market <br />Account <br /> <br />ective <br />objective of the Bond Market <br />ount is to earn high returns from <br />d income securities. The Account <br />~vested primarily in investment- <br />de government bonds, corporate <br />ids and mortgage securities with <br />,,rmediate to long maturities. As <br />:h, it is a more conservative <br />estment alternative than the <br />:ounts described in the previous <br />;tions. At the end of fiscal year <br />99, the market value of the <br />count was $132 million. <br /> <br />e Account earns investment <br />urns through interest income and <br />)ital appreciation. Because bond <br />ces move inversely with interest <br />es, the Account entails some risk <br />r investors. However, historically, <br />represents a lower risk alternative <br />an the investment options that <br />elude common stocks. <br /> <br />anagement <br />~nce July 1997, the structure of the <br /> .nd Market Account has included <br /> :ive and semi-passive managers <br /> has invested in the Bond Pool <br />Iilized by the Basic and Post Funds. <br />~rior to July 1997, the Bond Market <br /> :count used only active managers.) <br /> <br /> ~ormance <br />l~e Bond Market Account is <br />xpected to exceed the performance <br />f the bond market, as represented by <br />ne Lehman Brothers Aggregate <br />lond Index. For fiscal year 1999, the <br />tccount underperformed by 0.3 <br />tercentage point. For the most recent <br />ire years, the Account has <br />)utpefformed by 0.4 percentage <br />)oint annualized. See the discussion <br />)f bond manager performance on <br />~age 18. Total Account results for <br />he last five years are shown in <br /> gure 30. <br /> <br />Figure 30. Bond Market Account FY 1995-1999 <br /> <br /> 15 <br /> <br />· Bond <br /> Market 10 <br /> <br />[] Lehman 'E <br /> Agg. ~ <br /> .o 5 <br /> <br />-5 <br /> <br />1995 1996 1997 1998 1999 3Yr. 5Yr. <br /> <br />Bond Market <br />Lehman Aggregate <br /> <br />1995 <br />12.8% <br />12.5 <br /> <br /> Annualized <br /> <br />1996 1997 1998 1999 3 Yr. 5 Yr. <br />5.3% 9.3% 11.0% 2.8% 7.6% 8.2% <br />5.0 8.2 10.5 3.1 7.2 7.8 <br /> <br />29 <br /> <br /> <br />