Agenda item

12.20

This report will cover an overview of the financial markets, the overall performance of the Fund’s investments against the Investment Strategy Statement and commentary on any issues related to the specific investment portfolios. The report includes the standard quarterly investment performance monitoring reports.

The Fund’s Independent Investment Adviser submitted a report which provided an overview of the financial markets, the overall performance of the Fund’s investments against the Investment Strategy Statement and commentary on any issues related to the specific investment portfolios. The report also included the standard quarterly investment performance monitoring reports.

The Committee was informed that the value of the Fund in the quarter had fallen to £3.05bn, a decrease of £215m compared to the end March value of £3.26bn.

Reference was made to the conflict in Ukraine which was impacting on public markets. With an increasingly inflationary environment, with higher energy and food prices which were driving CPI even higher. Future strategy would have to make provision for the likelihood of a higher level of inflation beyond the short-term outlook.

There were concerns expressed regarding Brunel’s lack of transparency concerning the management of their sub-funds, particularly in relation to performance of their managers. Members noted that Brunel held around 80% of Oxfordshire Pension Fund assets and Members requested that Brunel be asked to give the Independent Investment Adviser to the Fund, access to the relevant information. [Action: Service Manager for Pensions, Insurance, and Money Management]

The Independent Investment Adviser informed the Committee that in relation to currencies in quarter 3 there would be big differentials. With the strength of the US dollar and the pounds current weakness, there were recession fears, rising living costs, inflation and the threats of public sector strikes. Rising inflation was not good news for the Fund.

In relation to interest rates which were continuing to rise, it was expected that they would continue to rise as the Bank of England try to counter rising inflation.

RESOLVED – (1) That depending on the feedback from Hyman Robertson’s knowledge assessment, Brunel be asked to produce a training programme for Fund elected members and others that will provide information about the asset classes that they manage and their processes.

(2) That Brunel be asked to support the forthcoming Strategic Asset Allocation review, to ensure that the Fund’s developing requirements can be accommodated.