The article about the San Diego County Employees' Retirement Association performance return is a classic example of there being no “there there” in an article (Pensions & Investments, “San Diego County hit by performance blip,” page 3, Feb. 3).
As best I can tell, the premise of the article was SDCERA suffered a “performance blip” because the SDCERA portfolio went from a top-quartile performer in 2012 to a bottom-quartile performer in 2013.
Might be a story, if SDCERA trustees had ever stated as a performance measurement peer comparison. But SDCERA explicitly ruled out peer comparison as a measure of portfolio success when the program was adopted. And, as SDCERA revisits the portfolio allocation later this year, trustees have again ruled out peer comparison as a measurement of success in the construction of the future portfolio.
So, if as the story reported, SDCERA wanted a portfolio which provided “steady gains in up markets and protect those gains in volatile markets” — if there was a story, it would be whether these goals were met.
Well, it turns out those goals have been met since the portfolio was implemented. Performance returns have been steady in both up and down markets, and consistently beaten the assumed rate of return. In comparison, peer performance has been volatile, which in turn has caused the SDCERA peer ranking to fluctuate. The article's focus on this “non-goal” did little to enlighten readers, although it did make for a snappy headline.
I guess the old newspaper saw “if planes land, it's not a story” applies in this case. Apparently, to “make a story” P&I felt it needed to move the runways.
DOUGLAS ROSE
Trustee, San Diego County Employees'
Retirement Association
San Diego
EDITOR'S NOTE: Mr. Rose notes the opinion expressed is his own.
