St. Louis Public Schools Retirement System

*Source: PSRS Investment Flash Report, dated 6/30/08 and PSN. Past performance is not indicative of future performance. A DEEPER LOOK AT EVALUATING INVESTMENT PERFORMANCE Top performing money managers typically beat not only their comparative style index but also exhibit above median performance in their peer group for longer periods (i.e. 5 years+). Active managers should not be expected to outperform in every month, quarter, or year. However, persistent underperformance (i.e. 5 years+) should warrant concern and a re-investigation of the managers process, philosophy and people. As of 6/30/08, SLPSRS engaged 6 traditional managers with below- median peer returns for the trailing 5 years. These managers oversee a combined $197 million under management.* Three of the six underperformed more than 70% of their peers in that timeframe.

SLPSRS Worst Case Scenario

Six of the equity managers (totaling $197 million in assets) have below median performance for the 5 years ending 6/30/08. Using only those managers returns and calculating the difference between their returns and the return of the median of each managers peer group, the dollar return differential was $9 million over 5 years. WORST CASE SCENARIOS *Source: PSRS Investment Flash Report, dated 6/30/08 and PSN. Past performance is not indicative of future performance. Buford, Dickson, Harper, Sparrow$21,256,989 Return amount below the median manager:($1,000,932) Monetary Management$61,125,673 Return amount below the median manager:($487,443) New Amsterdam Partners$33,350,246 Return amount below the median manager:($825,460) Edgar Lomax$30,415,669 Return amount below the median manager:($2,527,300) Systematic Financial$28,258,552 Return amount below the median manager:($2,935,843) Dimensional Fund Advisors$22,571,984 Return amount below the median manager:($1,579,047) Total Assets for Worst Case Managers$196,979,113 Combined amount below the median manager:($9,356,025)

Quartile Report Slides