2014 Annual Performance Review

Transcription

1 Omaha Public Power District 2014 Annual Performance Review Retirement Plan March 17, 2015 Jeffrey C. Boucek, CFA Senior Vice President Copyright 2014 by Segal Rogerscasey, Inc. All rights reserved. 1

2 Presenter Today 2

3 Agenda I. Market Environment II. Total Fund Results Review of Retirement Fund Financial Objectives III. Individual Manager Results Domestic Equity International Equity Domestic Fixed Income Global Fixed Income/Emerging Market Debt IV. Total Fund Summary V. Appendix 3

4 I. Market Environment 4

5 2014 Market Environment 5

6 2014 Market Environment 6

7 S&P 500 Index at Inflection Points The S&P 500 Index set 52 new highs in 2014 vs. 69 in

8 2014 Investment Performance: U.S. Equities 16.00% 14.00% 13.69% 13.24% 13.05% 13.45% 12.56% 12.00% 10.00% 8.00% 6.00% 4.00% 4.89% 5.60% 4.22% 2.00% 0.00% S&P 500 Russell 1000 Russell 1000 Growth Russell 1000 Value Russell 2000 Russell 2000 Growth Russell 2000 Value Russell 3000 The U.S. equity market continued its positive trend in Annual returns far surpassed other regions of the world. Large cap stocks outperformed small cap stocks. All sectors gained except for energy, due in large part to a dramatic drop in oil prices. 8

9 2014 Investment Performance: Non-US Equities/Global 6.00% 4.94% 4.00% 2.00% 0.00% -2.00% -4.00% -6.00% -4.90% -2.19% MSCI EAFE MSCI Emerging Markets MSCI World International equities posted negative returns for Concerns about Europe possibly falling back into recession hurt performance. The strengthening U.S. dollar negatively impacted foreign equity returns. Heavy oil dependence, specifically in Russia, detracted from Emerging Markets results. 9

10 2014 Investment Performance: Fixed Income 25.00% 20.00% 19.31% 15.00% 10.00% 5.97% 6.01% 6.08% 5.00% 3.13% 2.45% 0.00% 0.02% -5.00% Barcap Aggregate Barcap Govt/Credit Barcap Intl Govt/Credit Barcap Long Govt/Credit Barcap Mortgage Barcap U.S. Corporate High Yield -2.68% Citi Non-U.S. WGBI (Unhdg) Citi 3-Month T- Bill U.S. Fixed Income rebounded in Decelerating inflation pushed interest rates lower at the intermediate and long ends of the yield curve. Long Bonds largely outperformed all other areas of the U.S. fixed income markets. Non-U.S. Developed markets posted solid returns on a hedged basis, but ended the year in negative territory on an unhedged basis, due to strength of the U.S. dollar. 10

11 U.S. Treasury Yield Curve The yield curve flattened in The short end of the curve moved up modestly, while the intermediate and long ends of the curve fell sharply. The Fed ended its quantitative easing program in 2014, setting market expectations for an eventual federal funds rate increase in

12 II. Total Fund Results 12

13 2014 Asset Growth ASSET GROWTH ($000's) 12/31/ /31/2014 Beginning Market Value $887,211 Net External Growth* -$17,374 Return on Investment Income Received $13,748 Gain/Loss $20,477 $34,225 Ending Market Value $904,062 *OPPD and employee contributions less benefit payments and Plan expenses. 13

14 2014 Asset Allocation 14

15 Review of Retirement Fund Financial Objective #1 The District s Retirement Fund Objective #1 is to earn 4.0% above the rate of inflation. For the current 10 year period ( ) the Retirement Fund has earned 6.1% which is slightly below the Objective of 6.2%. For the current 20 year period ( ) the Retirement Fund has earned 7.8% which is well above the Objective of 6.4%. 15

16 Review of Retirement Fund Financial Objective #2 The District s Retirement Fund Objective #2 is to rank in the top 40 th percentile of Segal Rogerscasey s universe for balanced funds. For the current 10 year period ( ) the Retirement Fund ranked at the 32 nd percentile which meets the Objective. For the current 15 year period ( ) the Retirement Fund ranked at the 32 nd percentile which meets the Objective. 16

17 III. Individual Manager Results 17

18 Domestic Equity 18

19 International Equity 19

20 Domestic Fixed Income 20

21 Global Fixed Income/Emerging Market Debt 21

22 IV. Total Fund Summary 22

23 Total Fund Summary The Total Fund returned 4.06% during Assets increased by over $34 million. Year-end market value was $904.1 million. The Total Fund underperformed its Policy Index by 0.65% in Longer three- and five-year results remain strong and ahead of the Policy Index. Continue to closely monitor any managers on the Watch List Wellington and Goldman have been removed from the Watch List INTECH will be placed on the Watch List following the Board meeting. ALM Study expected late 2015 / early

24 V. Appendix 24

25 Domestic Equity 25

26 International Equity 26

27 Domestic Fixed Income 27

28 Global Fixed Income 28