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Monthly and quarterly investment reports: April tariffs drove volatility; board approves reports and consultant recommends raising $15M cash and moving Harding
Summary
The system's investment consultant briefed trustees on April volatility tied to tariff announcements, recommended raising $15,000,000 from the State Street S&P 500 index fund to meet cash needs, and proposed moving Harding Loebner from a mutual fund into a lower‑fee collective investment trust.
Patty (investment consultant) presented the system's April monthly report and the quarterly investment report to the Oklahoma City Employees Retirement System board on May 8, 2025, citing tariff announcements on April 2 as the main driver of market volatility in April.
"Markets have been significantly impacted by the tariff announcements that came on April 2," Patty said, adding that a subsequent pause on April 9 helped markets recover. She said the S&P 500 finished the month down about 4.9% and that fixed‑income (Barclays Aggregate) finished modestly positive. Patty also noted first‑quarter GDP contracted and unemployment stood at 4.2%.
Patty recapped portfolio positioning: the total plan value at the April reporting date was about $882,000,000; large‑cap equity was slightly overweight (roughly 20% versus a 15% target); private equity target is 15% but the plan holds about 10% at present; non‑U.S. equity total target is 20% (15% developed, 5% emerging); fixed income target is 25% and the plan was about 23%.
To meet near‑term cash needs for benefit payments and private equity capital calls, Patty recommended raising $15,000,000 from the State Street S&P 500 index fund (a U.S. large‑cap passive vehicle). She told trustees the recommendation reflects the portfolio's slight overweight in equities and underweight in fixed income.
Patty also alerted the board that the manager Harding Loebner(currently in a mutual fund vehicle) has launched a collective investment trust (CIT) with lower fees. She said moving the assets to the CIT would reduce the fee from about 73 basis points to roughly 58–61 basis points and save the plan an estimated $70,000–$90,000 per year, depending on asset levels. "No changes to the strategy," she said; the transition is a vehicle change for the same team and process.
Trustees approved a motion to receive the monthly report and later approved receipt of the quarterly report. The board did not take separate action at the meeting to implement the $15,000,000 reallocation or the Harding Loebner vehicle transfer; Patty said staff would work with Jenna (staff) to carry out the mechanics and paperwork.
