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Oklahoma Fund Managers Show Little Concern Over ‘Brexit’ Fallout

Brexit poll card
Flickr (CC BY 2.0)

The United Kingdom’s vote to leave the European Union sent stock markets around the globe tumbling. But managers of large funds in Oklahoma say they haven't felt the Brexit's aftershocks.

Bob Jones, executive director of the Oklahoma Firefighters Pension System, told The Journal Record’s Brian Brus that’s because he is a long-term investor.

“We’re deployed to take big gains and large losses. Compared to the losses in late 2008, this is nothing,” said Bob Jones, executive director at the Oklahoma Firefighters Pension System. . . . “I’m not saying this event is not important. But in the larger scheme of things and how it affects this pension system, it’s a yawn.”

Kirk Stebbins, chief investment officer for the Oklahoma Teachers Retirement System, said the same. Over the last 10 years, the $14 billion fund’s returns have averaged 8.3 percent, though some have been as high as 23 percent and some have lost as much as 15 percent.

From Brus:

“It’s a very long-term, strategic focus,” Stebbins said. “Investment management firms may take more day-to-day tactical market portfolios adjustment decisions. … Some managers may take advantage of dislocations to purchase securities cheaply. But that’s a different level of focus.” The same is true for the $2.2 billion firefighters pension fund, Jones said, although his organization hires outside investment managers such as JPMorgan and State Street Corp.

Bob Tillberg at the Oklahoma Public Employees Retirement system said he builds diversified portfolios, so there’s no need to shuffle money.

“We build portfolios in a diversified manner so they can withstand this type of tumult,” he said. “This is just an unfortunate, temporary market disturbance.” As for concerns about the pound’s value in comparison with the dollar, Tillberg said portfolios typically have more direct exposure to currency differences via non-U.S. securities. “This is a dislocation that’s unfortunate, but what can you do?” he said.

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