Investment report shows strong 1 year portfolio returns despite October decline

The Oklahoma City Employee Retirement System meeting on November 14, 2024, focused on the financial performance of the retirement fund, highlighting significant market returns and investment strategies.

During the meeting, representatives discussed the quarterly investment report, emphasizing a strong performance for the year ending September 2024. Notably, all asset classes reported returns exceeding 10%, with large-cap U.S. stocks up 36% and small-cap stocks up 26%. The overall portfolio value stood at approximately $912.7 million, reflecting a positive return of nearly $78 million over the past three years, despite net outflows of about $199.8 million due to benefit payments and expenses.

The discussion also covered recent changes in interest rates, with the Federal Open Market Committee lowering the Fed funds rate by 50 basis points in September and an additional 25 basis points following the recent elections. This shift has influenced bond yields, with the 10-year Treasury rate rising to about 4.40%. The meeting highlighted the importance of maintaining a balanced portfolio, noting that the retirement system has been conservative in its approach, successfully keeping its funded status close to 100%.

In terms of asset allocation, the meeting revealed a recent rebalancing effort, moving funds from large-cap equities to international investments and fixed income. This strategic adjustment aims to align the portfolio with market conditions and enhance overall performance.

The meeting concluded with the approval of both the monthly and quarterly investment reports, setting the stage for continued monitoring of the retirement system's financial health as it navigates market fluctuations and economic changes.