Councillors and committees

Issue - meetings

Performance for Quarter to 30/9/2018

Meeting: 12/02/2019 - Pension Fund Panel (Item 36)

36 Performance for Quarter to 30/12/2018 pdf icon PDF 690 KB

Additional documents:

Minutes:

The value of the fund at December was £817.6m a decrease of £66.3m (7.5%) from September, illustrating the fall in markets. The fund value is now at the same level as March 2018.

 

The composition of the Fund at 31 December was

 

Equities

59.3%

Property

5.5%12.3%

Cash

0.8%

DGF

22%

Bonds

 

 

 

 

 The majority of the fall is in equities across all sectors and market conditions are reflected through the performance against benchmark.  

The Panel was provided with a commentary from each of the fund managers outlining their investment performance during the quarter to 31 December 2018.

 

Over 1 year UBS had a positive return over the year albeit they are the only fund still reporting performance as gross figures. All of the fund managers failed to meet their benchmark returns and performance targets.

 

Over 3 years the 3 equity fund managers provided the highest returns and the only fund with a negative return was the Aberdeen Standard DGF.

Columbia Threadneedle and Janus Henderson ASC exceeded their benchmark.

 

On the residential property fund investment M&G has confirmed its commitment to the subscription but has not yet issued a notice calling for funds.  The Panel is aware that it may take 2 years (from February 2018) for the investment to be made the subscription.

 

The Investment strategy is considering options to reduce equity risk, Overall several asset classes do not look particularly attractive.  As part of the consideration of diversification options, the investment in Aberdeen Standard, where the allocation has already been reduced, is also being reviewed.

 

Developments since the December meeting.

Ryan Myerberg, portfolio manager in the Global Bonds team and co-Portfolio Manager on the Janus Henderson Total Return Bond Fund has left the firm to pursue other opportunities.

 

Chris Diaz, Co-Head of Global Bonds, has joined Andy Mulliner as co-Portfolio Manager on the Janus Henderson Total Return Bond Fund. There will be no changes to the investment process or philosophy of the Total Return Bond Fund.

 

Resolved that the latest performance information is noted.


Meeting: 13/12/2018 - Pension Fund Panel (Item 25)

25 Performance for Quarter to 30/9/2018 pdf icon PDF 300 KB

Additional documents:

Minutes:

The value of the Fund's investments at 30 June 2018 was £883.9.m. This is an increase of £28.2m (3.3%) from the total value at the end of June 2018.

Over the year Sept 17 – Sept 18 the Fund has increased from £814.6m. The composition of the Fund at 30 September was

 

Equities

62.5%

DGF

21%

Bonds

11.4%

Property

5.1%

 

 

 

A commentary from each of the fund managers outlining their investment performance during the quarter to 30 September 2018 was included as Annexes 1- 9.  Performance figures are net of fees except in the case of UBS which for the present is shown gross. This is due to technical issues with the data feed they use and their internal reporting systems; possible solutions to this are being discussed with officers for future reporting.

 

Performance over the year to September 2018 - The Baillie Gifford and Ruffer portfolios are not included, as these investments began in October 2017.

The highest fund returns for the year were from the  equity fund managers, Fidelity (12.5%), Columbia Threadneedle (16.6%), Schroders (9.7%) and the property fund manager UBS (8.7% gross).

Columbia Threadneedle were the only fund manager to both exceed their benchmark return and outperformance target.

The Janus Henderson All Stocks Credit Fund (ASC) was the only other fund to exceed its benchmark (0.6%).

The Janus Henderson Total Return Bond Fund (TRB) fell short of the 6% pa target return by -7.5%. This fund is intended to provide some diversification by protecting against falls in bond asset prices

 

The Diversified Growth Funds (DGF) - London CIV Pyrford Total Return Diversified Growth Fund and Standard Life returns for the year were 1.2% and -2.2% respectively.

 

Bonds - The Janus Henderson All Stocks Credit Bond Fund (ASC) returned 1.0% exceeding its benchmark by 0.4%

The Janus Henderson Horizon Total Return Bond Fund (TRB) fell short of the 6% pa target return by -6.6%. The TRB is intended to provide some diversification by protecting against falls in bond.

Performance over 3 years to September 18 - The three equity fund managers provided the highest returns over the rolling three year period. The Standard Life DGF was the lowest.

 

The managers exceeding their benchmark return were Columbia Threadneedle, Janus Henderson ASC and Pyrford. Fidelity, Schroders, UBS and Standard Life all failed to meet both their benchmark return and outperformance targets.

 

Developments since the September meeting

In November Aberdeen Standard Investments (ASI) advised that Guy Stern, Head of the Multi-Asset Investing team and lead for managing the Standard Life Global Absolute Return Strategies (GARS) fund, is planning to retire in 2019.  In February 2019 Aymeric Forest, is expected to join the firm in February 2019 in this role and begin the transition of responsibilities from Mr Stern of as Head of Multi-Asset Investing. Mr Forest was previously a senior investment professional in the Multi-Asset team at Schroders,

 

Points from the Panel discussion concerned the performance of equities and the rewards for this; the changing market  ...  view the full minutes text for item 25