Leesburg trust hears PFM review showing portfolio projections fall short of 7% discount rate

PFM representatives Scott Fleming and Allison Corbeli briefed the Howell Leesburg OPAT Trust Finance Board on economic conditions and the fund—s fourth-quarter performance, saying the current portfolio mix is unlikely to meet the trust—s 7% discount-rate assumption without taking additional equity risk.

PFM summarized U.S. economic strength and market drivers ahead of the portfolio review. "2024 turned out to be another excellent year for the financial markets," Allison Corbeli, representative, PFM, said, and Scott Fleming, representative, PFM, added that "we continue to grow at above 2%." The advisers told the board that solid corporate earnings, a still-healthy labor market and steady consumer spending helped returns in 2024, while headline inflation remained elevated relative to the Fed—s 2% goal.

PFM then reviewed the trust—s asset allocation and modeled expected returns. The consultants said the trust—s current target mix (60% equities, 40% fixed income) produces a median projected intermediate return near 6.7%, slightly below the 7% discount rate…