Category Archives: Uncategorized

Entering the Spring Quarter, which in the recent past has proven to be a troublesome stretch for equities in particular, the SPTRFA portfolio remained in positive territory by 3% for the fiscal year to date. However, with two months left in this fiscal year, the SPTRFA Fund is unlikely to reach its annualized performance target of 8%, subsiding on the heels of its stellar 25% gain during the same stretch in the prior year. Starting July 1, as a result of the recently enacted legislation, the annual return target drops from 8.5% to 8%.

During April, the domestic equity portfolio, which accounts for 43% of the portfolio, recorded an overall negative 1% return.  Growth stocks did relatively better than value shares, and larger capitalization holdings edged out small and mid-sized firms, but nothing was too all-star in equity markets. Looking at the past ten month stretch of this fiscal year, the top performing active domestic equity manager is our all cap core portfolio managed by Fifth Third Advisors of Minneapolis. However, the disappointing feature is that all of our active domestic managers trail the index (passive) portfolios. The large cap growth index fund is ahead just over 10% for the period while domestic equities, as a whole, have added 5% to the portfolio, as the small and mid-cap holdings have recorded negative performance. Non-US stocks performed similar to their domestic counterparts for April, down about 1%. Like our smaller cap US holdings, international stocks have recorded a disappointing 5% loss for the fiscal year.

Fixed income was slightly positive, along with real estate for April. Bonds enjoyed a stretch this month over the past quarter as the inflationary pressures in the first quarter abated somewhat while the migration into government bonds as a safe haven from European woes escalated.  These factors helped the price of bonds with yields driving still lower, which in turn helped prices and drove the ten-year Treasury to its lowest yield in 50 years.  However, this continuing buoyancy in fixed income is not expected to continue as the mountains of US government debt are expected to drive up inflation which translates into lower bond prices.  The Real Estate Investment Trust (REIT) portfolio added 3% to continue its strong showing.  REIT is ahead over 30% annually for the past three years and it is managed by Saint Paul based Advantus.