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Callan tells MCERA trustees to expect ~7% long‑run return; board reviews pending $8.6M funding and fee comparisons
Summary
Callan presented 10-year capital market expectations (portfolio pre-alpha ~7.1% with ~12% volatility). Trustees were briefed on an $8.6 million pending funding to Kane Anderson and reviewed a fee-comparison showing MCERA's reported total expense ratio at about 57 bps (24 bps direct only). Trustees discussed passive vs. active implementation and reporting inconsistencies among California systems.
At the Mendocino County Board of Retirement’s Jan. 1 meeting, investment consultants from Callan presented the plan’s 10-year capital market expectations and reviewed recent performance, valuation measures and portfolio implications.
Callan said its methodology emphasizes a conservative bias toward mean reversion and long-run risk premiums. For the plan’s time horizon Callan presented 10-year expected returns: roughly 7.3% for U.S. equities, slightly higher for international equities, bonds near 5%, real estate around…
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