Investments

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Current Portfolio

As of March 31, 2019

Asset Class Market Value Actual Target
Global Public Equity $6,164,818,276 37.8% 35.0%
Private Equity $1,557,877,886 9.6% 10.0%
Core Fixed Income $2,651,397,572 16.3% 17.0%
Credit $1,965,205,104 12.1% 11.0%
Real Assets $2,460,947,159 15.1% 17.0%
Risk Mitigation $1,087,478,447 6.7% 10.0%
Cash $401,028,239 2.5% 0.0%
Total Assets $16,289,959,709 100.0% 100.0%
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Investment Performance

As of March 31, 2019

The first quarter of 2019 started off with general optimism and positive momentum following one of the most volatile Decembers in recent history. Much of that volatility was caused by fears surrounding the potential escalation of the trade war between the US and China, as well as fears that higher interest rates could hurt the US economy. While some of these concerns seemed to abate at the start of the year, some lingering worries about a slowdown in global growth remained, which allowed both equities and government bonds to perform well over the quarter.

The S&P 500 finished up over 13% for the quarter. This was the best Q1 performance since 1998 with positive returns in all three months of the quarter and January’s 7.87% return posting the best start to the year since 1987. The OCERS equity benchmark Russel 3000 was up 14.04% for the quarter. The benchmark 10‑year Treasury yield has fell to its lowest level since late 2017, hitting a 15‑month low of 2.39% in March 2019 before finishing the quarter at 2.41%.

As of March 31, 2019, OCERS’ total fund was at $16.3 billion, up from $15.1 billion at the end of 2018. OCERS’ benefited from the recovery over the quarter and the Fund’s overall continued positive performance is reflected over the longer trailing period. OCERS’ trailing one-year performance was 3.6 percent; OCERS’ portfolio has returned on average 5.8 percent per year over the past five years and has recorded 8.7 percent per year over the last 10 years.

Looking forward we continue to be cautious given that we are late in the business cycle with more than 10 year in the expansion phase. While a less aggressive Federal Reserve and discussions around more balance trade policies could continue to support markets, neither of the concerns that help generate uncertainty and volatility at the end of 2018 have subsided. The Fed has indicated a “patient” stance on interest rates which could last for “some time.”, but many of the underlying tensions between the US and China are unlikely to be resolved in the near-term. Expect increasingly volatile market behavior to be driven by both the news stream and evolving sentiment around these key themes.

  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%