Quarterly Investment Update

FPIF will now publish recorded investment updates on its website following the end of each quarter. Marquette Associates, who serves as FPIF's general investment consultant, has recorded an investment update for the 4th quarter of 2023. The update and the December Investment Performance Report can be found under the Investments heading on the FPIF website (link).

For the quarter ending December 31, 2023, the FPIF investment portfolio returned 9.7%, net of fees, outperforming the policy benchmark of 9.4%. For calendar year 2023 the FPIF investment portfolio returned 15.5%, net of fees, outperforming the policy benchmark of 15.3%. Highlighting the quarter was the significant rally out of traditional equity and fixed income markets. For the quarter, the U.S. equity market returned 12.1%, non-U.S. equity market returned 9.8%, and U.S. fixed income market retuned 6.8%.

Positive economic data including the release of 3Q GDP (+4.9%) as well as continued labor market strength, robust jobs numbers, and resilient consumer spending reaffirmed the markets expectation that a soft landing, successfully bringing down inflation without tipping the economy into a recession, continues to be a possibility. While both headline inflation (3.4%) and core inflation (3.9%) remain above the Federal Reserve long-term target of 2%, continued moderation on inflation readings supported market optimism and the prospects of the Fed cutting short term interest rates in 2024. Within the quarter the Fed held short-term interest rates steady, within the range of 5.25%-5.5%, at both of their meetings.

Going forward a focus on economic, inflation, and consumer data will play an important role in determining future Fed action and capital market performance.