Investment Update – 2nd Quarter 2012
For the second quarter of 2012, US equities declined during the quarter as slowing growth in China and sovereign bond market funding stress in peripheral Europe dampened investor sentiment.The NASDAQ led declines in the US, falling 5.1%.The S&P 500 and DJIA fell 2.8% and 1.8%, respectively, but were able to outperform other domestic equity indices in Q2.Russell 1000, 2000, and 3000 Index declined 3.1%, 3.5%, and 3.1%, respectively.As the European crisis entered a crucial phase and growth prospects diminished throughout the developed world and in China, risk aversion was exhibited across emerging markets. The MSCI Emerging Market Index declined 8.8% vs. 6.9% for the MSCI EAFE Index for developed markets. With investors looking for safer havens in the bond markets, the Barclays Capital Aggregate Bond Index gained 2.1%.
ACERA is a long-term investor with a well-diversified, conservative portfolio. For the quarter ending June 30, 2012, ACERA’s Total Fund returned -3.2%, ranking in the 98th percentile among public funds greater than $100 million and finished the second quarter at a market value of $5,303,217,745. Domestic Equities returned -4.6%, International Equities returned -7.0%, and Fixed Income returned 1.8%. ACERA’s Real Estate managers (composite) returned 1.2%. The Private Equity and Alternatives Return Leading Strategies* (PEARLS) composite returned 2.7% and the Real Return Pool Composite returned -6.8%.
* Real Estate and PEARLS composite returns are subject to a quarter lag in reporting results.