Current Portfolio

As of June 30, 2019

Asset Class Market Value Actual Target
Global Public Equity $6,310,139,603 37.8% 35.0%
Private Equity $1,642,434,416 9.8% 10.0%
Core Fixed Income $2,731,838,139 16.3% 17.0%
Credit $1,748,443,641 10.5% 11.0%
Real Assets $2,432,955,454 14.6% 17.0%
Risk Mitigation $1,153,985,186 6.9% 10.0%
Cash $690,867,017 4.1% 0.0%
Total Assets* $16,711,945,353 100.0% 100.0%

*Total Assets include $1,281,879 of strategies that are winding down.


Investment Performance

As of June 30, 2019

The second quarter of 2019 resulted in solid gains in equities despite a sharp market decline in May. The selloff was primarily the result of increased volatility caused by the continued uncertainty surrounding trade tensions and interest rates. The S&P ended up just over 4 percent for the quarter, setting a new high during that period. OCERS’ equity benchmark Russell 3000 was up roughly 4 percent as well. Bond markets were also positive with support of the expectation of a Federal Reserve rate cut, which the market ultimately received in July. The broader corporate bond markets were positive as well and outperformed government bonds and higher quality Investment Grade bonds outperformed High Yield over the period.

At the start of the third quarter monthly performance in July, while still positive, was muted. This was somewhat expected given the overhang of some of the uncertainty remaining from the issues noted above, as well as the general summer slowdown we see in the markets during this time annually. Additionally, economic data over the prior quarter was mixed, with employment stats still firm, but GDP numbers down slightly along with weaker consumer and business confidence indices. Survey data also showed business activity slowing, firming the expectation of more accommodative Federal Reserve interest rate management going forward.

As of June 30, 2019, OCERS’ total fund was valued at $16.7 billion, up from $15.1 billion at the end of 2018. OCERS’ benefited from its asset class diversification, which helped dampen the volatility of portfolio returns over the quarter. The Fund’s overall continued positive performance is reflected over the longer trailing periods. OCERS’ trailing one-year net performance was 6.28 percent; OCERS’ portfolio has returned on average net 5.74 percent per year over the past five years and has recorded net 8.10 percent per year over the last 10 years.

Looking forward, global growth is expected to continue to slow as the long post-crisis expansion nears its likely last leg. Any signs of a material slowdown in growth, increase in new trade disputes or softness in economic data will create increased uncertainty and market instability. While more dovish monetary policy will act as a potential ballast, the battle among the opposing market dynamics at play will likely intensify throughout the coming quarters and carry us into the New Year as investors seek direction heading into a potentially new market regime.

  1 Year 3 Year 5 Year 10 Year
Total Fund (net of fees) 3.6% 8.6% 5.8% 8.7%
Policy Benchmark 4.7% 8.6% 6.4% 9.2%