Friday, September 26, 2014
Investment report affords positive news about 2014
At the regular meeting held on September 24, 2014, the Investment Committee received a complete update about OCERS' fund performance as of August 31, 2014. Chief Investment Officer Girard Miller reported that OCERS' total fund recorded a 1.32 percent positive return for August, and a year-to-date (YTD) return of 6.35 percent as of the end of that month. OCERS reported a trailing one-year return of 13.82 percent, a three-year return of 9.54 percent, and a trailing five-year return of 9.55 percent. Over the longer 10-year span, OCERS' return also outdistanced the retirement system's investment assumption rate with a 7.66 percent return as of August 31, 2014.
As of August 31, 2014, OCERS' total fund was more than $12 billion.
Investment Committee September 24, 2014 highlights
Here are additional highlights of other activity taken or discussed by the Investment Committee related to OCERS' portfolio.
The Committee received an update from Aksia LLC regarding OCERS' hedge fund portfolio performance. The program has delivered a strong performance with a 4.49 percent return YTD as of August 31, 2014. Hedge fund investments recorded a 9.94 percent gain in 2013.
The Committee approved a staff- and RVK, Inc.-recommended Non-Core real estate fund candidate profile. In the wake of an earlier discussion to have OCERS' real estate portfolio move towards a 50/50 Core/Non-Core real estate allocation (OCERS is currently weighted 67 percent to core real estate), a new opportunity exists to invest in a diversified non-core real estate strategy, which can provide attractive risk-adjusted returns.
In other action, the Committee voted to retain its cash overlay program with a zero policy allocation to cash. By participating in a cash overlay program, OCERS is essentially 100 percent invested and avoids a "frictional cash drag" from an asset earning virtually zero in today's low-interest rate environment.
OCERS' Investment Committee will next meet at the Investment Education Forum, to be held at 8:30 a.m. on Wednesday, October 1, 2014.