Issue - meetings

The Committee noted the performance of the Fund over periods to the end of September 2022 along with the Economic and Market update which effectively sets the scene.

Mr Harkin noted the following key points relating to the general economy and markets:

-          The market position detailed in the report covered 1 July to 30 September 2022, which had been a challenging period for the markets. For the UK, as with many other regions, the most difficult position remained the ongoing persistence of high inflation.

-          Over the three months to 30 September 2022, the Fund’s total market value decreased by £64.2 million to £2,216 million.

-          Major developed economies continued to deal with the difficult position around inflation through additional monetary policy tightening. While during the quarter there was some relief for the short-term inflation, nevertheless, this dissipated at the end of the period and therefore risk assets rose and most major asset classes ended the quarter with negative returns.

-          This was one of the worst quarters for equity and bond portfolios in the history of holding these assets together in combination and this highlights how difficult 2022 has been for investors.

-          There was no clear path forward but whilst there are indications that the US inflation rate could be levelling off, this was not the case for the UK inflation rate.

Mr Dickson updated the Committee on some key points regarding the Funds investment strategy:

-          Page 314 outlined that the Fund achieved an investment return of -2.5% over Q3 2022, this being an extremely challenging period.

-          Over the last 12 months, the Fund achieved an investment return of -6.5% and over 3 years the Fund had a positive performance with an investment return of 4.1%.

-          The outperformance vs the strategic benchmark added value over all of the periods as shown in the table on page 314.

-          On page 317, it could be seen that the Fund’s significant allocation to private markets, had a strong beneficial effect, with returns over a 12 month period of 24.6%. This was a strong driver of the total investment return, given the high weighting allocated to private markets.

RESOLVED:

The Committee noted the performance of the Fund over periods to the end of September 2022 along with the Economic and Market update which effectively sets the scene.