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Trustees hear Wellington and Kellum reports as committee weighs rebalancing and structural shifts
Summary
Wellington and Kellum LLC presented portfolio updates and a macro review. Managers and trustees discussed a speculative ‘‘low-quality’’ rally that has weighed on SMIDcap active managers; the investment committee proposed structural and implementation changes and recommended a rebalancing to meet the IPS.
Wellington and Kellum LLC presented separate reviews of the trust’s portfolios and market outlook, telling trustees that a speculative, low-quality rally in small and mid-cap equities has been a key driver of recent returns and left many active managers behind.
Mary Ross of Wellington opened with a firm update and Kara Burley, who manages the core bond-plus sleeve, told trustees the strategy closed the quarter with about $21.4 billion in assets and year-to-date net inflows of roughly $1.85 billion. Burley said the team has positioned the portfolio slightly longer in duration than the benchmark—about a half-year longer—overweighting the 10-, 20- and 30-year parts of the curve and adding roughly 10 percentage points to agency mortgage exposure to capture carry opportunities.
Burley also announced a…
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