Second Quarter Investment Update
The S&P 500 Index reached new all-time highs during the second quarter, gaining 15.2%, a significant rebound from the 4.3% decline experienced in the first quarter. The best-performing sectors were Information Technology (+31.8%) and Industrials (+14.9%). Year-to-date, as of June 30, U.S. equities, as represented by the S&P 500 Index, gained 10.2% and U.S. bonds, as represented by the Bloomberg U.S. Aggregate Bond Index, returned 0.62%, while global equities outside the United States, as represented by the MSCI ACWI ex USA IMI Index, gained 13.1%.
Over the same period, the Fund's portfolio returned 10.2%, net of fees. While we understand and monitor short-term performance, the Fund is a long-term investor and investment results over longer periods show positive returns as illustrated in the following chart. The chart also reflects historically strong Fund performance versus the actuarial required rate of return, which is the assumed investment return that is used by the actuaries in calculating employer contributions.
The Fund’s investment portfolio is built on the foundation of a long-term investment horizon, diversification of assets, and disciplined investment policy compliance. This foundation helps support the Fund’s investment returns through the ups and downs of financial markets. Tools such as asset smoothing, strategic asset allocation, and periodic portfolio rebalancing help the Fund maintain stability and meet long-term obligations.
In addition to monitoring the investment portfolio, the Board tracks the required employer contributions from the city. Through the August Board Meeting, the Fund has received $278,436,037 of the $445,321,101 employer contributions due to for 2026.
The Board receives regular updates on its investment portfolio from its investment consultant Callan, and remains diligent in monitoring employer contributions, and will respond to any situation that would negatively impact the Fund’s ability to meet current obligations.
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