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Reccsf bulletin 5 2011


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Reccsf bulletin 5 2011

  1. 1. Retirement Committee ReportBy Jean S. Thomas, funds, will soon be offered to participants. TargetHerb Meiberger, CFA, and Stephen Herold date funds tailor investors’ asset allocation to a definite time horizon and adjust stock and bondSFERS Performance…Moving Upward! weights automatically as members approach Preliminary figures for the fiscal year to date retirement.(FYTD) nine months ended 3/31/2011 are, intotal, Plan Market value, $15.2 B, total FYTD Other Items of Interestearnings, 19.6%. How the performance, gross • The SFERS’ Board is holding hired outsideof fees, breaks down by investment category is: money managers to their contractual per- Plan Market formance goals! Examples: At its 4/12/2011 Value FYTD meeting, the Board terminated one manager in billions (B) Percentage (Ashmore) for underperformance, and over- of dollars Earnings ruled staff’s and consultant’s recommendationInvestment Category to give another (Western Management) leewayEquities (Stocks) $7.7B 30.7% to depart somewhat from their contractualFixed Income (Bonds) 4.2 7.3 performance mandate.Real Estate 1.3 16.2 • SFERS approved “up to” $25M in Capital Mar-Alternatives (Private Equity) 1.8 13.4 ket International Private Equity Fund, VI to take advantage of investment opportunities inOther .2 3.0 “emerging markets”; Asia, Middle and Eastern Equities, slightly over half of the portfolio’s Europe, and Latin America. Portfolio Advisors,market value, clearly are the star performers. SFERS’ alternative assets consultants, believesAnd real estate, the former laggard, is recover- that the collective growth potential in theseing nicely and apparently is expected to continue countries more than offsets their political anddoing well. SFERS’ investment management says social instability (i.e., “growing pains”).that Japan’s continuing troubles have had littlenegative impact on overall Plan performance. Questions? Comments? Contact: Herb at herb.(Japanese investments, about 3% of the portfolio,; Jean at,include real estate with warehouses located in or (415) 665-4149; Stephen at stephenhome@att.the Tokyo area.) net, or (415) 664-1201. Even with the caveat that available nine-monthFYTD performance results are, indeed, prelimi-nary, it is nevertheless clear that earnings are April Generallikely to exceed the 7.75% actuarial rate, or long-term annual earnings estimate, in FY 2010/11. Membership MeetingAside from the possibility of a supplementaryCOLA next fiscal year—please, way too early totell—, this should help quell the cries that SFERSretirees’ defined benefit plan is “breaking” the City.Deferred Compensation Plan Health Service Great West’s Monthly Activity Report, March, System Executive2011, show Stable Value Fund’s balance on Director3/31/2011 at $837.6M; year-to-date return, .83%. Catherine Dodd(Stable Value is about 42% of the total portfo- updates memberslio.) General consultants, Angeles Investment on plan changesAdvisors, presented a Semi-Annual Investment for 2011-2012.Performance Analysis of the Deferred Compensa-tion Plan, 7/1/2010-12/31/2010 at the 4/12/2011SFERS Board meeting. Angeles’s conclusion onoverall Deferred Compensation Plan performance:All 18 investment options posted healthy returnsin 2010; seven of these beat their respective an-nual benchmark earnings. Another new investment vehicle, target datePage 3