Chairman Mayor Smiley? Present. Vice chairwoman's Liberia? Present. City treasurer, husband?
Present. Councilman Ryan is absent. Mister Costello
We we'll start with time one, investment performance analysis, and ask you in from single digits growth patients. Very good. Good afternoon, everyone.
If I could bring your attention to the first document and the three documents that we handed out, this is entitled City of Providence Employee Retirement System Monthly Flash. This would be the report on the market in very much brief terms as well as on the performance of the portfolio. The retirement system portfolio and the good strong returns in the month of May. If you look at Page one, the strong performance of the portfolio is explained by good market environment for public equities in May. We saw a continuation of strong returns in stocks due to the market's reaction, strong corporate earnings, a little bit of optimism about pulling down of tensions in The Middle East, which of course would hopefully lead to a resume of flow of energy and flow of other goods and services that have been interrupted due to war.
And so you saw just to pick out a couple of indexes that the portfolio is invested against the S and P 500 year to date now through May, plus 11.3%, established non U. S. Equities, high single digits returns and the best performing part of the public equity market where you're invested as well, emerging markets, particularly in Asia, you saw strong returns. Bond returns, The U.
Aggregate index, is on the far right hand side of page one, this is all in more detail in a longer report. That's the third document that we won't get to here. But just want to give you the highlights. Bond returns have more or less been flat. We saw some increases in yields in the April, May time frame based on concerns about the war, but lately yields have come down a little bit.
So you're more or less in a flat return to bond market. If we go to page three, this would just be a summary of performance, and I'll ask Peter to speak to the financial reconciliation. Upper left hand side, you can see the market value, and please stop me if if I'm getting other people. 636,300,000. Mhmm.
And if you move from left to right, you can see the return in the month fourth column in from the left in the month of May, 2.6%, of course, driven overwhelmingly by stock market returns, which are strong. And then the year to date return, which is the first five months of the calendar year, 7.1%. And looking at the one year rolling return, which should be June through May 17.2% for your fiscal year. We're nearing the end of the fiscal year, so hopefully, there'll be a good strong return for the fiscal year with the year is over. Looking at the portfolio itself, about 71% of the portfolio's assets were in public equities as of the end of the five month calendar year period.
The public equity portfolio returns for the year to date period 10.6%. If we go to the next page, you can see fixed income about halfway down page four. Approximately 20.5% of the portfolio
In fixed income return in line with the market, more or less flat, three tenths percent return for the year to date. That's about halfway across from left to right and halfway down the page. And then you can see at the bottom about or sorry, on page five, the alternative portfolio, which we're doing some work on, hedge funds in particular, is you could see had a negative return. I'll just focus on year to date. Hedge funds held 6.8% of the total portfolio.
The return was negative 3.7%. Again, we'll be reporting back to finance staff and board of investment commissioners at a future meeting the work we're doing there. And you can see cash at 1.4%. Bottom line on the portfolio's return, good strong return in terms, a little bit of underperformance, some of which we're working on, obviously, in the alternatives portfolio. In the public equity portfolio, the managers there who have been underperforming Brandeis in international equities, Robico, Boston Partners.
All those managers have outperformed since you've hired them. Not that's the only metric we use to determine whether or not they still are suitable for the portfolio, but we have a good strong conviction. We've had some active managers who underperformed the benchmark indexes in recent periods, a little more than usual. And, partially, that is attributable to kind of a buying and selling in tech stocks based on speculation about how much the hundreds of billions of dollars in investments in artificial intelligence are gonna deal in terms of profits. So that's the bottom line on the performance for the portfolio.
And I'll let Peter speak to the financial reconciliation. I'll ask so many questions on the performance. The only other point I'd make is the market environment through the first three weeks of June has been modestly negative. Some of that, again, selling off of tech stocks. I think it was modestly positive this morning, probably a little more than modestly positive because of my current earnings, one of the technology companies.
So this is volatility in the market right now, the stock market due to tech stocks. But on balance, it's been, more positive than negative, and you can see that, in the in the relatively strong returns for the return on system portfolio. And, Peter, I'll let you speak to, the cash movements and for the reconciliation. Any other comments you wanna make, starting on page
Sorry. Again, we we do this every month with the financial reconciliation and just specifically what happened in the other words in terms of market value and cash flows. We have we did see a roughly $12,000,000 contribution come in to the pension portfolio. Mhmm. You'll see moving left to right that big distributions of 7,500,000, which is, pension payroll, as which is very typical.
And, you know, we had a very strong kind of growth cap appreciation outcome for the month of May, and that's consistent with the strong equity returns and the snapback and very sharp rally from, the kind of risk off period that we saw, earlier in the year. So, the portfolio grew from an investment return standpoint roughly 15,500,000, and I think that's $636.09.
I think great. Any questions, Seagull, item one? Any votes? You guys have it? Goodbye.
I have two special eligibility trusts. Okay. No. No. You guys have it?
I'll I'll take it over on it. Right? Sure. Yes. So, everybody, we have the analysis of investment performance of CCD and products trust funds.
If we can move to page three, you know, generally, we're looking at the performance of the various trusts, which are generally invested in the same way, the same targets. There are some differences in the trust based on fast flows going in and out of the trust and and certain cash balances between marriage, you know, over time. I think very this is similar to pension. We we dominated by a very strong one month return of 3.4% a month average throughout the portfolio, in line or slightly below the plant index. You know, ultimately, there was a smattering of active manager underperformance, kind of consistent to what we talked about with the.
It's been a very difficult period for active management in this very strong up and down markets. Just like the pension, the risk management, how we manage our exposures relative to targets is very positive. So we managed risk well as we added value relative to the plan index. And largely, the outcome is our portfolio returned pretty much in line with its planned networks. One thing I I would highlight on a one and three year basis, five, seven, and 10, if you look at each one of these portfolios, they are well exceeding our objectives for a trust in a normal market environment.
And you're bogey for returns, which is around 8%. So a 24%, 25% return on a one year basis, 18% Mhmm. Annualized on a three year basis. That's probably two or three times what we would expect from portfolio as return. Great outcome.
I'd love to see it. May not last. May have to give someone this back. But short and long term, that performance is quite good. Yeah.
I have nothing This is when at
a future date, you remind us at the June meeting, you said.
said it may not last. Right?
Yes. Thank you, mayor. I'll trust you. You'll bring that up. Thank you.
Uh-huh. That that's all I have.
Great. Any questions for Siegel or drug management? Seeing none, I'll take a motion to approve item two. John? Second.
All those in favor, say aye. Aye. Aye. Any opposed? Any other questions, the ayes have it.
Item three is the carryforward item for possible discussion to oppose relevant and rebalancing. There are none in this meeting, and so we would take a motion to continue item three to the next agenda. Aye. Moved by John. Seconded by Sarah.
All those in favor, say aye. Aye. Any opposed? The ayes have it. Now we will well, eventually, we will vote on these together to save you a little bit of effort.
But as board members will remember, this is a annual process whereby the parts department drops down from dedicated funds. We have some representatives from department in case of any questions that we have drawdowns from the Eli Fund. There's a very profound account. The Charles Smith Trust Fund, the Elizabeth Gold Trust Fund, and the team lead trust, along with the the Indian Trust. You'll see in your packet, you got letters backing up the requests, And we also have law departments at that station, but these are all inconsistent with intent of the various trusts and within the guidelines for their level of distribution.
I can share because I can share the parks commissioner the board of parks commissioners that the board of parks commissioners have voted on these as well. And just as a reminder, it is the board of parks commissioner's decision on how to spend these funds. It's our job to distribute from them assuming that it is in accordance with the drug guidelines and the guidelines. Having said all of that, are there questions or comments on the parks withdrawals? Seeing none, I'll take a motion to approve items four through nine.
Moved by John, seconded by Sarah. And then we need to do this on a roll call. I'll ask the clerks to please take the roll call. Chairman
Vice chairwoman Sliverio? Yes. City treasurer, her husband?
Apostle McBrien is absent. Mr. Perez Zelvo is absent. Mr. Hirsch is absent.
Four ayes. Three absence. The motion passes. Wonderful.
And I can say, just as an aside, that the projects that the government has approved are gonna be great contributions to our city. Last item of business, which also happens every month, Sarah Silveria has shared with us the cash flow report to show city contributions and outflows. This finds your way into your flash reports, but this is a cumulative accounting. We'll see there was a large deposit made this week, and and the city continues to do very well towards meeting those contributions and then actually making contributions early throughout the plan here where we get the benefit of some of the return interest on those contributions. But that report, and I've updated monthly and included here.
So I'll take a motion to enter into the report which says employee retirement system cash flow of FY 02/2026 as exhibited. Second. Second. By Sarah. Seconded by John.
All those in favor say aye. Aye. Any opposed? The ayes have it. Of course, there's all the things on the right.
Great. So if there's no other questions or comments, I'll take a motion to adjourn. John? I'm in. Seconded by the treasurer.
