Issue - meetings

The Committee considered and noted the update, which included the performance of the Fund over periods to the end of March 2022.

Mr Dickson noted the following key points regarding the economic and market update and performance monitoring report:

-       He clarified that Q1 2022 represented the first quarter of the calendar year (i.e. 1 January 2022 – 31 March 2022).

-       The invasion of Ukraine had a significant impact on the markets, in particular inflation and oil and gas prices. This fed into discussions, which Cllr Rutherford raised earlier regarding the cost of living crisis and high inflation.

-       Central banks across the world have remits to keep inflation under control. With the increase in inflation partly, as a reaction to the invasion, central banks had tightened their monetary policies by raising interest rates. The Federal Reserve were due to meet today and expected to increase the base rate by 0.75%. This would have implications on market values.

-       As determined from page 242, the biggest impact was on fixed income assets.

-       Page 257 included the executive dashboard, but all items were green so there were no major areas of concerns for the Committee.

-       The asset allocation of the Fund outlined on page 260, showed the total assets of the Fund at 31 March 2022 to be just under £2.5 billion. Page 260 also showed a pie chart with the benchmark allocation, which is what drives the Fund’s expected investment returns.

-       Page 261 summarised the performance of the Fund over Q1 2022, 1 year and 3 years. This summary identified the strong performance of the Fund in comparison to the actuarial target at the bottom of the table.

-       A breakdown of the manager performance against the benchmarks was outlined on page 264.

Mr Latham added that the performance monitoring figures in the report were at 31 March 2022 and asked how the figures might have changed since then. Mr Dickson said the markets were extremely volatile and given central banks were raising interest rates; this was feeding into the markets. Mr Dickson did not have up to date figures to hand to the Committee but expected the assets to have fallen from the current position at 30 June 2022. He mentioned the importance of looking at the Fund from a longer-term perspective as the Fund would be paying benefits for decades so it was crucial to look at whether the Fund were investing appropriately for the longer-term.

Mrs McWilliam then asked what Mr Dickson’s thoughts were about the markets and if he had any concerns about that longer-term view. Mr Dickson said the Fund was well diversified and will see many challenging economic periods, but he did not have any long-term concerns.

RESOLVED:

The Committee considered and noted the update, which included the performance of the Fund over periods to the end of March 2022.