FROM: Don Pierce, Chief Investment Officer
SUBJECT: Informational: 2025 Preliminary Asset Allocation Review
RECOMMENDATION:
title
2025 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.
This year, NEPC has made some adjustments to their equity return assumption methodology that increased their forward return expectations for that asset class. Additionally, NEPC has increased the return expectations for fixed income assets to reflect the market expectation that rates can remain ‘higher for longer’.
For the SBCERA portfolio, these assumptions modestly improve the forward return expectation for the current portfolio on both a 10-year and 30-year basis.
BUDGET IMPACT:
None.
STRATEGIC PLANNING GOAL/OBJECTIVE:
Prudent Fiscal Management
STAFF CONTACT:
Don Pierce
ATTACHMENTS:
Exhibit A: NEPC 2025 Preliminary Asset Allocation Review