SDCERS Reports 8.9% Final Investment Return for Fiscal Year 2018

Date: Nov 27, 2018


SDCERS’ Total Fund reported performance of +8.9% net of fees compared to the benchmark of 7.6% and assets topped $8 billion for the fiscal year ended June 30, 2018. U.S. equities were a strong source of value-add during the year, up 16.3% compared to the benchmark of 14.8%.

All active managers in the Fund outperformed their benchmarks and small cap stocks performed especially well with the Russell 2000 Index up 17.6%. These returns were a function of strong economic growth in the U.S. led by technology, energy and consumer discretionary stocks.

Alternative investments in private equity and real estate also turned in strong performance with results of 16.5% and 11.8% respectively. The weakest sectors of the market were emerging market debt and U.S. fixed income with index returns of -2.0% and -0.3%.
Emerging market debt returns were impacted by a strengthening U.S. dollar and a slowdown in non-U.S. economic growth.  Increases in short term rates by the Federal Reserve impacted U.S. bond returns since prices fall when interest rates rise. Long term returns since inception continue to be favorable at 9.0%.

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