Miami Beach (Fla.) Fire & Police Pension Fund is eliminating its 5% target allocation to international fixed income.
The $1.1 billion pension fund’s board approved the change at its Feb. 15 meeting, recently released meeting minutes show.
The elimination of the 5% target was recommended by Brendon Vavrica, senior consultant at AndCo Consulting, the pension fund’s investment consultant. He said models are predicting international bonds may not add much value over the next 10 years and those strategies are generally more expensive than domestic bond strategies, according to the minutes.
Also according to the minutes, Allspring Global Investments, which is the pension fund’s sole manager in its international fixed-income asset class with $53 million in assets, is closing that strategy.
As a result, the board approved raising the targets to domestic equities to 51.5% from 49% and domestic fixed income to 19.5% from 17%. The board approved terminating Allspring and reallocating the assets to existing managers.
The pension fund’s other targets, which remain unchanged, are 17% real estate, 6% cash equivalents, 5% international equities and 1% hedge funds.
As of Dec. 31, the actual allocation was 50.8% domestic equities, 16.8% domestic fixed income, 14% real estate, 6.8% cash equivalents, 5.4% international equities, 4.7% international fixed income, 1% hedge funds and 0.5% private equity.
