Santa Barbara County Employees chalks up 8.8% fiscal-year return, short of benchmark

Santa Barbara County (Calif.) Employees’ Retirement System returned a net 8.8% for the fiscal year ended June 30.

The $4.4 billion pension fund’s return fell short of its policy benchmark return of 11% for the period, according to a performance report on its website.

For the three, five and 10 years ended June 30, SBCERS returned an annualized net 5.4%, 7.9% and 6.7%, respectively, compared with their respective benchmarks of 4.7%, 7.8% and 6.8%.

The pension fund had returned a net 7.1% for the fiscal year ended June 30, 2023.

For the most recent fiscal year, SBCERS’ positive performance reflected a strong market environment for public equities. For the year ended June 30, the Russell 3000 index returned 23.1%.

Of the 37 U.S. public pension funds whose fiscal-year returns have been tracked by Pensions & Investments as of Aug. 28, the median return is 9.9%.

The top-performing asset class for the pension fund was domestic equities, which returned a net 20.3% for the fiscal year ended June 30 (below the benchmark return of 23.1%); that was followed by international developed markets equities, which returned a net 14.8% (benchmark 11.5%); emerging markets equities, 13.2% (12.6%); real return, 9% (7.1%); non-core fixed income, 8.6% (9.5%); private equity, 5% (33.2%); core fixed income, 2.9% (2.6%); and real estate, -4.8% (-12%).

As of June 30, the actual allocation was 19% domestic equities, 14.3% real return, 14% core fixed income, 13.3% private equity, 10.7% international developed markets equities, 10.4% real estate, 9.7% non-core fixed income, 6.7% emerging markets equities, and 1.9% cash and other.

The target allocation is 19% domestic equities, 17% core fixed income, 15% real return, 11% each international developed markets equities and non-core fixed income, 10% each private equity and real estate, and 7% emerging markets equities.