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INVESTMENT SUBCOMMITTEE MEETING MINUTES
| Date: 5/16/2016 | Time: 2:00 p.m. |
|---|---|
| x Regularly Scheduled | ___ Special |
| Attendees: | Was a quorum present? Yes |
| Retirement Commission | Other Attendees |
| Charlie Casella |
Frank Picarelli, SegalRogersCasey |
| Michael Carey | Vanessa Vargas, SegalRogersCasey |
| Sal Luciano | |
| Comptroller's Office | |
| Thomas Woodruff, Director, HPBSD | |
| Margaret Haering, Assistant Director, HPBSD | |
| Bonnie Price, Assistant Director, RSD |
Matters Discussed:
Consideration of fund replacement in the investment line-up for the plans. The Committee reviewed SegalRogersCasey's initial recommendations for replacement of the Hartford Capital Appreciation Fund in the large cap growth category. There are currently three actively managed funds under consideration; however, the committee asked our consultants to also review the Vanguard Russell 1000 Growth Index due to the fact that in each year since 2006 the Funds under review had underperformed the Russell 1000 Growth Index. The Vanguard Fund tracks the index and has a significantly lower asset charge at 8 basis points. The Committee will vote on whether to replace the Hartford Fund with the Vanguard Fund on a follow-up conference call once Segal reports on the availability of the Vanguard Fund on the Prudential platform or the timing for adding it. The committee also discussed the potential for streamlining the large growth category by eliminating a second fund, Wells Fargo Premier Large Company Growth Fund.
SegalRogersCasey also conducted a search for a fund to replace the Pimco Total Return Fund, which has struggled since the departure of Bill Gross as manager. There are currently three funds under review. Of the three funds, DoubleLine Total Return Bond, MetWest Total Return Bond and TCW Total Return Bond, the consultant favored MetWest primarily because it had a more diversified portfolio. The Committee concurred with the Segal recommendation largely because Metwest is the better diversified of the Funds under consideration. We also discussed whether to eliminate the Calvert Social Bond Fund; however, the committee decided to defer that decision until soliciting the view of Steve Greatorex, who could not attend the meeting. This issue will be taken up on the follow-up conference call.
Our consultants outlined their ongoing review of the investment line up, analysis of whether offerings in other asset classes might be eliminated and the potential for adding a new fund in the Small Cap Value class.
Materials Reviewed:
SegalRogersCasey Analysis of Investment Performance, First Quarter of 2016,
SegalRogersCasey U.S.Core Fixed Income Search, SegalRogersCasey U.S. Large Cap
Growth Search.
Decisions voted upon:
None.
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