FROM: Don Pierce, Chief Investment Officer
SUBJECT: Informational: 2024 Preliminary Asset Allocation Review
RECOMMENDATION:
title
2024 Preliminary Asset Allocation Review.
body
BACKGROUND:
Each year, NEPC updates their expected return estimates for various asset classes. Staff then reviews their findings with the SBCERA Investment Committee and the Board as part of the annual asset allocation review and update.
Unlike last year’s preliminary review using 2022 data, which saw a meaningful increase in 10-year forward return expectations, this year’s 10-year forward return expectations have been tempered in large part due to 2023 equity returns and interest rate expectations. This report is an interim review of the process and data inputs for use in next month’s asset allocation review which will also include a preview of benchmark recommendations and options for the Investment Committee and Board to consider. Staff and NEPC are evaluating the output and will be prepared to present the initial asset allocation recommendation to the Investment Committee at its May 2023 meeting.
BUDGET IMPACT:
None.
STRATEGIC PLANNING GOAL/OBJECTIVE:
Prudent Fiscal Management
STAFF CONTACT:
Don Pierce
ATTACHMENTS:
Exhibit A: NEPC 2024 Preliminary Asset Allocation Review