Investments

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Current Portfolio

As of March 31, 2020

Asset Class Market Value Actual Target
Global Public Equity $5,312,804,800 32.9% 35.0%
Private Equity $1,795,160,402 11.1% 10.0%
Fixed Income $2,859,922,863 17.7% 17.0%
Credit $1,482,539,592 9.2% 11.0%
Real Assets $2,238,916,575 13.8% 17.0%
Risk Mitigation $1,739,004,782 10.8% 10.0%
Cash $743,296,681 4.6% 0.0%
Total Assets* $16,172,629,372 100.0% 100.0%

*Total Assets include $983,677 of strategies that are winding down.

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Investment Performance
Market Commentary – Quarter ended March 31, 2020

The first quarter of 2020 was one of the most volatile and challenging periods in recent history for markets and nations across the globe. Heightened volatility in global equity markets led to stocks suffering their worst quarterly declines since the Global Financial Crisis in 2008. During the quarter, the CBOE Volatility Index (VIX) hit a record high as the direct impact of a global shutdown and uncertainty surrounding the fast spreading coronavirus pandemic led investors to flee risk assets and seek haven in the perceived safest parts of the market.

Rapid and expansive US monetary and fiscal policy responses helped mitigate some losses and concerns as governments globally looked to inject liquidity where most needed. While the Fed helped address immediate liquidity issues and stabilize markets, buffering losses for the corporate world, additional policy responses helped address potential economic stress on individuals. However, even with stimulus measures applied, record unemployment levels caused by a spike in new claims from the sectors of the economy most impacted, left a cloud of uncertainty over the shape and speed of any potential recovery.

The broad US equity market, as measured by the Russell 3000 Index, was down just over 20 percent for the quarter. OCERS’ portfolio performed among the top decile plans through the quarter and continues to be well-positioned for the intermediate and long-term. However, given the speed and magnitude of the correction that occurred, the portfolio was not completed insulated from the broad losses experienced across markets.

As of March 31, 2020, OCERS’ plan assets stood at $16.2 billion. Down from $17.3 billion of December 31, 2019. One-year total plan performance as of March 31, 2020 was -1.3 percent net of fees. Longer-term performance numbers remained strong with the plan returning 4.0, 4.4 and 6.1 percent over the respective three-, five- and ten-year time horizons. Overall portfolio liquidity remains sufficient to cover expected benefits obligations in the near-term and the Investment Team continues to monitor current investments as well as seek out potential new opportunities that can often arise amid dislocations.

What follows is OCERS’ Total Fund (net of fees) return data as of March 31, 2020:

  1 Year 3 Year 5 Year 10 Year
Total Fund (net of fees) -1.3% 4.0% 4.4% 6.1%
Policy Benchmark 0.0% 4.8% 5.3% 6.7%

Looking forward, many markets have now significantly recovered from their first quarter 2020 lows. However, the long path to economic recovery will likely be shaped by both the management of resources and responses that help control the coronavirus in the near-term, and the development of successful treatments, including vaccines, in the longer-term. While governments continue to actively support measures to advance a successful global health response they will also have to continue to be vigilant about applying monetary and fiscal measures that may be needed to stop potential stress that could arise from issues like prolonged and heightened unemployment levels.