202, I'll call to order this meeting.

It's almost Leisberg OBEB Trust Finance Board meeting.

It is May 27, 2026 at 202 p.m.

In person, we have Alexandra Gressad, Tamar Keesaker, Owen Snyder.

This is all town staff.

Josh Didwick and Coleface and Baker.

And then with PFM, we have Alison Corbley and Jack Schnormis.

And the first or the second item on the agenda is the approval of the minutes of February 25th, 2026.

Finance board meeting.

Is there a motion to approve the minutes?

So moved.

Second.

All in favor.

Aye.

That motion passes.

And then that leads to our main item for discussion, led by PFM, which is the investment performance review approval.

We have our first quarter report, talk about performance, and then we'll give you a little bit of an update since a lot has changed since the close of March, be it that the markets have been very volatile in light of the crisis in Iran.

So I'll start with an overview for the March returns under the first under the first tab.

We'll begin as somewhat of a muted quarter, market very resilient as it was in 2025.

Experienced this for January and February.

All the markets were in positive territory.

Energy prices were up, inflation concerns were heightened, and then you had a consumer a bit waning on sentiment terms.

And then lastly, the reevaluation of future Fed rate cuts.

And would the Fed continue to cut rates as we anticipated they would do at the close of 2025 with two cuts into 2026.

Currently we don't haven't had a cut yet, and that really has to do a lot with the unprecedented events.

You can see majority in the US were in negative territory, uh, really a flight to safety for the US equity markets, risk off, and the area that got punished the most was the growth in the growth area.

Positive returns, you can see if you look down that first column would be really in anything that was value just because that flight to safety.

On the non-US side, non-US markets were impacted along with the US mock markets on the geopolitical concerns.

Um you did have at least more faring better in the emerging markets, emerging markets where a lot of um the issues in some of those primary countries benefited from semiconductor-oriented companies, markets such as South Korea and Taiwan benefited.

And then if you look at the listed real assets, these are really are uncorrelated.

We talked about listed real assets last quarter when we had shared and asset allocation, including listed real assets.

Real assets tend to be uncorrelated with your traditional uh public equities and your fixed income markets.

They are liquid, um, they're not alternatives.

You can get them in alternatives, but we're proposing uh liquid infrastructure or liquid real assets being REITs and infrastructure, uncorrelated to judicial asset classes, and can really dampen the volatility in portfolio.

So those are two and ad diversification or three reasons why uh we have proposed a consideration for the committee to incorporate it.

You can see the returns are positive for the quarter to date.

Um, not always the case, but um areas that again we think would add value to the portfolio.

And for fixed income markets, broadly flat to modestly negative for the quarter, as we did see rising yields and spreads widening, offsetting any income.

I'll stop there and hand it over to Jack to uh share with the committee uh current event of first quarter event economy and up to date current events.

Absolutely.

So you'll see a little bit of a change in the slides versus our typical arrangement.

And this is uh in part due to we're gonna see a renovation of our overall reporting, uh, probably starting Q1 of next year.

Uh but in lieu of that, I wanted to try and just change things up just because there's so much going on in the news.

Uh I wanted to make sure that everything gets covered.

Um as we all know, the markets really have repriced this conflict several times over.

Um SP 500 was on a five-week losing streak in March.

So it's been 11 weeks.

Uh I think to the later this week that we've been in this conflict.

Um, and it really comes down to the duration of how long this will last.

Um we've we're kind of in this headline ping pong with we're close to a deal, we can wait it out, we're close to a deal.

Um, and markets have come to the point where they're they're waiting on the sideline.

They can only do so much.

Um we've seen, as Allison mentioned, we've seen equity markets rise to um historic levels, um, all-time highs across um multiple sectors.

And then on the other side, we've seen the fixed income markets really start to show uh higher yields.

And this this is um unique.

This is a unique situation because of just the energy shock that we're seeing across the market.

Um, from the US standpoint, we're not a big net importer of oil or energy from the Strait of Hormuz.

We take in about maybe seven to 10% of supplies from, and that includes nitrogen.

So if you look at slide 1.3, um, we really that's maybe our primary importer from the strait.

Uh we do take a little bit of natural gas, but the big uh consumer of liquid natural gas from the strait is China.