Agenda item

Report FSD14052

Report FSD14052 provided details of investment performance for Bromley’s Pension Fund in both the 4th quarter of the 2013/14 financial year and the 1^st quarter of 2014/15 (the first complete performance report since implementing Phase 2 of the revised investment strategy). Appended reports from the Fund’s Investment Adviser provided further commentary on performance during the two quarters.

Information on general financial and membership trends of the Pension Fund was outlined along with summarised information on early retirements. Baillie Gifford also provided commentary on the three portfolios under their management and a view on the economic outlook.

Quarterly reports from all fund managers had been circulated to Sub-Committee Members with the meeting agenda.  

A proposed timetable of attendance by fund managers at future Sub Committee meetings was proposed as follows:

2^nd December 2014 – Baillie Gifford (global equities, DGF and fixed income)

24th February 2015 – Blackrock and MFS (global equities)

19^th May 2015 – Fidelity (fixed income) and Standard Life (DGF)

On  performance, the fund value stood at £636.1m at 31^st July 2014. Although 2013/14 was a year of transition and change (some 70% of total fund assets moving from previous balanced mandates to new global equity mandates in December 2013), the Fund returned +7.6% in 2013/14 compared to the benchmark return of +6.2%. With regard to the local authority universe average for the year (+6.4%), the Fund achieved an overall ranking in the 29^th percentile (the lowest rank being 100%) representing a further good year.  

Medium and long-term, returns for the fund had remained particularly strong. Long-term rankings to 31st March 2014 (19th percentile for three years, 3rd percentile for five years and 2nd percentile for ten years) were very good underlining particularly strong performance in the last few years.

For the last two quarters, the total fund returned +1.6% in the June 2014 quarter and 1.5% in the March 2014 quarter. This compared to overall benchmark returns of +2.3% and 1.0% respectively. In terms of local authority average, the fund’s performance in the March quarter was in the 12^th percentile (local authority average data for the June quarter was not yet available and would be reported to the next meeting).

For the Global Equity Portfolios, Mr Stevenson suggested that it was too soon to make substantive comment on performance. The allocations were still “bedding in” and at least four quarters were ideally needed. Concerning the portfolio “Blackrock Ascent Life Enhanced Global Equity Fund (pooled)”, Mr Stevenson highlighted that the Manager had reviewed the allocation of a number of equities without informing clients or explaining the change. This was taken up by Mr Stevenson and arrangements were now in place to ensure that appropriate procedures would be followed in advising clients.

Mr Stevenson also provided a brief economic commentary and market assessment for Members.    

RESOLVED that:

(1)  Report FSD14052 be noted; and

(2)  the programme of Fund Manager attendance, as set out at paragraph 3.10 of Report FSD14052, be agreed.