Investment consultant reports May gains; trustees warned about inflation and equity concentration

The board received its investment update covering the March 31 and May 31 reporting periods. The presenter said the fund began the fiscal year near $32 million, was about $31.2 million at March 31 and stood near $33.8 million at the most recent reporting date.

For the quarter the plan was down roughly 1.85%, the presenter said, but the one-year return was about 15.07%, ahead of the benchmark of 14.66. Fiscal year-to-date figures moved from a small negative to a positive position after May; the presenter reported fiscal year-to-date returns of about 10.18 in the May book.

The presenter warned trustees that inflation and potential Federal Reserve moves are risks to watch. He noted the plan’s equity allocation is roughly 70%, higher than many peers’ 60–65% targets, which can increase downside when equities fall but may boost recovery during rebounds.

“We were down about almost 2%… That's largely because we have about 70% equity,” the presenter said, explaining variance from peers and benchmarks. He recommended monitoring asset allocation and said fixed income has been less attractive given inflation expectations and the possibility of rising rates.

Trustees asked questions about international exposure, liquidity (about $330,000 in cash), and manager changes; the presenter reported one active manager change into a Fidelity U.S. bond index fund and said managers’ relative performance and exposure to specific high-profile issuers (e.g., SpaceX through managers) varied by mandate.

The board did not take formal investment policy actions at the meeting; the presentation served as an informational update to trustees.