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Investment consultant says portfolio outperformed benchmarks; board hears volatility risks from tariffs
Summary
The board’s investment consultant reported a strong quarter — with a quarter return cited at 6.91% and fiscal-year figures above target — while cautioning that tariff-driven geopolitical moves could keep markets volatile; no allocation changes were recommended.
Scott, the board’s investment consultant, delivered the quarterly performance review and told members the portfolio outperformed its benchmarks for the quarter and fiscal year to date. He reported the quarter return on the portfolio at 6.91% and said the one-year number was around 10.52% while the board’s target for the fiscal year is 7.6%.
Scott reviewed sector and manager performance, noting that growth led the quarter after a period when value had outperformed and that some passive funds (Vanguard, iShares) will show negative alpha relative to benchmarks because they aim to match market returns at lower cost. He also explained that tactical changes — moving money out of certain international allocations into mid-cap managers — were a small bet that underweighted international exposure and that, while that decision hurt performance this quarter, the portfolio’s active managers have generally added value net of fees.
Scott framed current risks as driven by geopolitical policy and tariff announcements, saying market direction has become harder to predict and that volatility is likely to persist. He recommended no immediate tactical changes at this time and emphasized the portfolio’s risk/return profile and manager selection as reasons to maintain the current strategy.
No formal vote followed this presentation; Scott concluded with a recommendation to keep the portfolio as-is and the board did not instruct staff to change allocations at the meeting.
