Portfolio fell in March drawdown, rebounded significantly by early June; consultants flag risks in fixed income and real estate

Brandon Bridal, investment consultant, and Brandon's team reviewed quarter-ended March 31 performance and provided an updated market-value estimate as of the morning of the meeting.

Bridal said the March quarter reflected an equity sell-off tied to the coronavirus and sharp interest-rate declines. "Large-cap was down about 19.5% and small caps over 30% in the quarter," he said. Fixed income benefited from falling yields and some Treasury exposure. He noted swift Federal Reserve and federal fiscal actions, including new lending facilities and stimulus packages, that supported markets and later helped stabilize returns.

Bridal reported manager-level results from the March 31 report but said the fund had recovered considerably since then: the plan's assets were reported at roughly $85.5 million as of March 31, but when Bridal re-ran the portfolio the morning of the meeting he reported market-value assets of about $95.3 million, a near-full recovery from the March trough.

He highlighted several manager issues and near-term risks: Templetont Global Bond had underperformed in the latest period and was recommended for watch and further discussion; real estate returns were likely to soften, especially for retail and office property valuations, while industrial/warehouse sectors could remain strong. He also noted the plan remained broadly in policy targets after the rebound and that overall multi-year returns and peer rankings were generally favorable despite the quarter loss. Trustees voted to accept the quarterly investment performance report.