Issue - meetings

To receive a report from AON

To follow

The Committee received a presentation from Daniel Carpenter and Jo Peach from AON.

The presentation ‘Market Update and June Valuation’ highlighted market reactions as a result of the pandemic including Equities, Bond yields etc and looked at future economic prospects. It gave the latest valuation of our fund assets as at the end of June 2020.  An Equity Manager Update was given on Baillie Gifford and Longview.  It also provided an update on the Lansdowne Developed Market Fund.

The following key points made

·         Markets have bounced back sharply recovering bulk of its losses since the start of the pandemic – unprecedented fiscal and monetary stimulus measures boosted

·         Sustainable gains from here look more difficult with valuations looking stretched

·         Market appreciation has ruled out scope to add to equity portfolios

·         Diversification has paid off during volatile market conditions AON believe it retains an important role in portfolios given the degree of market uncertainty.

Councillor Leaver spoke about the need for caution when facing a potential second wave of the pandemic.  

Councillor Taylor spoke about previous expressed concerns from Councillor Levy about the high cash levels in the Fund and whether AON had advice on moving this in the short term.

They responded that there were challenges in terms of cash being at a higher level than normal. We should be mindful that we are still drawing down proceeds to fund mandates over the course of this year. Also there is an upcoming investment strategy review which would look at this.  In this environment of increased market volatility need to look at capital preservation for example investing in absolute return bonds or looking at areas such as multi asset credit.