Issue - meetings
Pension Fund Investment Performance Review for Quarter End 30 June 2015
Meeting: 17/09/2015 - Pensions Committee (Item 5)
Minutes:
The Committee received a report that informed Members of the performance of the Fund and its investment managers for the quarter ending 30 June 2015. For the quarter, the Fund underperformed the benchmark by -0.5%, delivering a negative absolute return of -2.14% against benchmark return of -1.9%.
It was noted that the Fund is slightly ahead its benchmark for the last twelve months to end of June 2015, the Fund returned 7.2%, and this exceeds the benchmark by 0.2%. Whilst for longer term performance the Fund posted three year returns of 10.7% ahead the benchmark return of 10% and posted five year returns of 9.2% against benchmark return of 9.0%.
Whilst for this quarter end the Committee was informed that four out of the eight mandates matched or achieved returns above the benchmark. The Fund performance was below the benchmark over the quarter, which was mainly due to poor returns from Ruffer, Baillie Gifford (DGF), Investec and Schroder Property Funds.
Finally, the Committee was informed that the Fund is still in line with its long term strategic equity asset allocation and the distribution of the Fund’s assets amongst the different asset classes is broadly in line with the strategic benchmark weight. An outline of the discussions may be summarised as follows:
The Committee:
- Heard that the market value of the assets as of 30th for Baillie Gifford & Co was £220.9m and not £2200.9m as listed in the report;
- Noted the performance, gross of fees of the individual managers relative to the appropriate benchmarks over the past five years;
- Was advised that the Portfolio returned over the quarter by Schroder (Property) was 0.5% and not 2.8% below the benchmark of 3.3% as listed in the report; and
- Was informed that the Council does not have to invest the fund money itself and may appoint one or more investment managers. Where the Council appoints an investment manager, it must keep the manager’s performance under review. At least once every three months the Council must review the investments that the manager has made and, periodically, the Council must consider whether or not to retain that manager. Accordingly, the Committee noted that Investec (Bonds) had delivered a return of -1.2% on the Fund that they managed against a performance benchmark return of 0.6%. The main reason for this underperformance being the currency exposure where returns had been adversely affected by US dollar weakness and sterling strength.
Accordingly, it was:-
Resolved
To:
Note the contents of the report.