SDCERS Reports Preliminary Return of 1.1% for Fiscal Year 2016

Date: Aug 26, 2016


San Diego City Employees’ Retirement System (SDCERS) reported a preliminary return of 1.1% (net of fees) for the fiscal year ending June 30, 2016. Despite the low absolute return, the performance was in the top third of the All Public Funds Universe obtained from BNY Mellon and Investment Metrics. Assets under management were $6.8 billion as of June 30, 2016.
Fiscal year performance was largely driven by the performance of stocks, which accounted for 47% of total Fund assets. SDCERS’s U.S. stock returns were -0.9%, reflecting SDCERS’ small cap bias and mixed active manager performance. Non-U.S. stocks also produced negative results following the aftermath of the Brexit vote that raised questions about European Union stability and the potential for an economic downturn. Emerging market equities also registered negative returns in the low teens on commodity price weakness and an economic slowdown in China.
Moderately positive returns were generated by U.S. fixed income  and emerging market debt. SDCERS’ exposure to alternative investments in Private Equity and Real Estate continued to deliver strong results (+8.5% and +13.0%, respectively), and provided good diversification in the Fund.
Longer term net returns over 10 years and 20 years are 5.8% and 7.8%, respectively.
SDCERS, established in 1927, maintains a successful long-term investment strategy to ensure the continued payment of benefits to its members. SDCERS  administers defined benefit plans for the City of San Diego, the San Diego Unified Port District, and the San Diego Regional Airport Authority, and provides service retirement, disability retirement, and death and survivor benefits to more than 20,000 members.

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