Global equities rallied in the first quarter of 2024, driven by the strength of the US economy and investors’ excitement around the promise of artificial intelligence. The US significantly outperformed the rest of the world, with the S&P 500 returning 10.6%. Developed markets lagged the US but posted solid returns, rising 5.8%. Emerging market equities underperformed their international counterparts, advancing 2.4%.    

The Federal Reserve continued to hold rates steady. However, strong economic data and sticky inflation readings caused expectations of early rate cuts to diminish. Furthermore, rates rose across the yield curve. Investment grade bonds were down -0.4%, while risker high yield bonds rose 1.5%. Emerging markets debt performance was mixed, with local debt rising while its external counterpart sold off.

The Bloomberg Commodity Index increased 2.2% during the first quarter. The positive performance of the index was generally broad based, with oil being the best performer, rallying 15.0%. The agriculture sub-component was the index’s biggest detractor and registered a negative return of -3.0%.

As of March 31, 2024, OCERS’ portfolio had a market value of $23.3 billion, up from $22.3 billion at the end of the fourth quarter. OCERS’ portfolio generated a quarterly return of 4.7% relative to the policy benchmark return of 4.3%.