SBCERA Reports Preliminary Net Investment Return for the 2021-22 Fiscal Year

The San Bernardino County Employees’ Retirement Association (SBCERA) announces a preliminary -0.06% net return on investments for the 12-month period that ended June 30, 2022. Assets stood at $13.4 billion at the end of the fiscal year.

In this last year, during a time of global economic stress, our long-term strategy has shown resilience. The global turbulence in the markets related to inflation concerns, rising interest rates, and supply chain fragility has been challenging for all funds, and SBCERA was no exception.

“We didn’t receive the positive number we were aiming for, but it’s important to view these results from a relative return basis, especially as they compare to our policy index and in relation to our peers,” said Marc Bracco, Chair of the SBCERA Investment Committee. “We have a dependable and versatile strategy in place to pay promised benefits to our members for years to come.”

For the 12-month period that ended June 30, 2022, SBCERA outperformed our policy index by 11.3%. The policy index is a benchmarking tool that compares SBCERA’s portfolio to a broadly diversified global stock and bond portfolio. This index helps us monitor and evaluate the fund’s overall asset allocation and investment implementation efficacy.

“I am proud of our Investment Team for their diligence and defensive posture that prepared our fund for conditions like these,” said Debby Cherney, SBCERA Chief Executive Officer. “I’m also grateful we have a supportive Board that has empowered our team to work together cohesively, allowing us to be nimble enough to make quick decisions and take advantage of market opportunities.”

Total fund annualized returns for the 3-year period ending June 30, 2022, stood at 8.8% versus our policy at 3.2% and our 5-year annualized return was also positive, standing at 8.0% and outperforming our policy at 4.5%. (These returns are “net of fees,” which means that we’ve already subtracted all costs associated with the investment—like management or transaction expenses.)

Over the last 40 years, we have earned an average annual return of almost 9% on our investments, a period which includes numerous recessions and other economic disruptions.

“As we look to the future, we believe we will see strong results,” said Donald Pierce, SBCERA Chief Investment Officer. “Much of this prediction can be attributed to the new asset allocation our Board recently adopted, which will add modest equity exposure and create more credit opportunities than before.”

SBCERA has a long-term investment strategy, focused on income, and we’ve built an investment portfolio designed to generate positive returns over decades—rather than weeks or months.

While our fund is not immune to short-term volatility and extreme market fluctuations, our proactive strategy helps SBCERA provide retirement security to our members now and well into the future.

SBCERA’s 2021-22 final fiscal year investment performance will be calculated based on audited figures. The ending value of the fund is based on several factors and not investment performance alone. Contributions made to SBCERA from employers and employees, monthly payments made to retirees, investments fees, and the performance of its investments, among other factors, will all be considered in SBCERA’s Actuarial Valuation and Review, which determines contribution levels for our participating employers and employees.

For more information, contact: Olivia Applegate, Director of Communications & Stakeholder Relations at oapplegate@SBCERA.org or 909.341.0651.