Pension fund executives and other institutional investors believe there is less than a 25% chance the S&P 500 will produce a fourth straight year of 20%-plus returns in 1998, a Pensions & Investments fax survey found.
The 146 respondents, on average, predict the stock market this year will return less than 9% and the rate of long-term Treasury bonds at both midyear and year end 1998 will be 5.7%.
Factors that will favor the market for 1998 include: low interest rates, cited by 83 respondents; low inflation, 53; growing corporate earnings, 32; continued growth in 401(k) and other savings entering the market, 15. Negative factors cited included: slower growth in earnings, mentioned by 82 respondents; and the continuing economic crisis in the Far East, 51.
Police and Firemen's Disability & Pension Fund of Ohio's investment
committee will review its existing active large-cap equity managers at its Jan. 21 meeting, and may decide to conduct a manager search as a result, said Alan Proctor, executive director.
Mr. Proctor said the five active large-cap managers that invest 30% of the fund's assets have been underperforming the $7.2 billion fund's small-cap equity and bond managers. They are: Atalanta/Sosnoff; Lakefront Capital; Oppenheimer; Value Line; and Bond Procope.
The review is part of a new monitoring and rating system approved at the fund's December board meeting. The committee will make recommendations to the board Jan. 28.
The fund also approved increasing the amount of large-cap index equities by 10 percentage points to 35% of the equity portfolio. Bankers Trust currently manages the portfolio. Funding comes from a reallocation from the active large-cap managers.
Attleboro (Mass.) Municipal Contributory Retirement System, with about $37 million in assets, is searching for a real estate manager to invest $2 million in publicly traded REITs, its first investment in real estate, said Leslie Ring, retirement analyst. Money for the new investment will come from existing fixed-income or equities managers, Ms. Ring said. The fund has 55% of its assets in equities and the balance in bonds. The deadline for RFPs is Feb. 20.
Segal Advisors is assisting.
