Investment Performance
Market Commentary – Quarter ended June 30, 2021


Global equities continued their rally during the second quarter, driven by supportive fiscal and monetary policies, strong vaccine rollout, and economic reopening. Across equity markets, volatility dropped to pre-pandemic levels. US equities outperformed the rest of the world as the S&P 500 generated 8.5% and reached all-time highs in late June. Energy, technology and real estate were the best performing sectors. In a reversal of the Q1 trend, value lagged growth stocks.

Longer-term Treasury yields declined, which caused the curve to flatten relative to the first quarter. The ten-year yield fell from 1.74% to 1.47%. The Federal Reserve indicated during its June policy meeting an earlier time frame for raising rates. Corporate credit outperformed government bonds with lower-quality credits advancing the most, which was driven by improving fundamentals and bullish investor sentiment. Emerging market debt generated solid gains and reversed last quarter’s losses, most notably in high yield.

Commodities performed strongly during the second quarter, which was due mainly to energy’s continued rally. The price of West Texas Intermediate increased 24% as the global economic recovery continued to drive demand higher. The US dollar weakened modestly against a basket of major currencies.

The portfolio’s market value stood at $ 21.5 billion, up from $ 20.2 billion at the end of the first quarter. OCERS’ portfolio generated a quarterly return of 6.9% relative to the policy benchmark return of 6.0%. This placed OCERS in the top 4% best performing pension plans. On a trailing one-year basis, the portfolio generated a net return of 26.2%, matching the performance of the policy benchmark. 

OCERS’ Total Fund (net of fees) return data as of June 30, 2021:

  Q2 1 Year 3 Year 5 Year 10 Year
Total Fund (net of fees) 6.9% 26.2% 10.9% 10.7% 7.9%
Policy Benchmark 6.0% 26.2% 10.6% 10.4% 8.2%