Reso 2026-070 2026 Q1 OPEB Trust and Pension Trust Investment Report

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QUARTERLY MARKET SUMMARY For the Quarter Ended March 31, 2026 Multi-Asset Class Management CommentsOur Q2 2026 Investment OutlookAsset Class •The duration of U.S.-Iran conflict and its impact on energy supply will impact inflation and growth, rates, and market returns near-term but we expect impact to be more muted in the U.S. •Underlying fundamentals still supportive of positive equity returns, with economic growth still intact and corporate earnings expected to grow at a high double-digit pace. •Resilient economic growth, ongoing consumer strength, expected rate cuts, equity market broadening and strong earnings growth led us to modestly overweight domestic small caps in Q1, prior to the U.S.-Iran conflict. The recent pullback has improved attractiveness of valuations relative to historical averages. We maintain the overweight despite elevated uncertainty. U.S. Equities Large-Caps Small-Caps •International equities are at a higher risk of pullback if energy prices remain elevated. Major central banks outside the U.S. are now expected to hike two to three times this year as near-term inflation pressures rise, reversing earlier expectations for rate cuts. •Energy-importing developed and emerging market economies are more vulnerable to higher energy prices, leading us to remain neutral. Tariff- related uncertainty also remains a headwind as alternative tariff mechanisms are considered. Non-U.S. Equities Developed Markets Emerging Markets •The Fed held rates steady at its March meeting, while the conflict-driven inflation outlook has increased uncertainty around rate cuts. Our base case is that Fed’s next move is a cut rather than a hike. •We continue to monitor increased volatility across fixed income yields. Absolute yield levels look attractive. Credit spreads have widened slightly. Strong profit margins, continued issuance, continued buybacks and ongoing M&A activity points to healthy corporate sentiment. •We remain neutral across duration and credit sectors. Fixed Income Core Bonds Investment-Grade Credit High-Yield Credit •Listed REITs and listed global infrastructure outperformed domestic and global equities respectively during the March pullback, highlighting their diversification benefits. •In addition to diversified sources of return, improving AI sentiment continues to support data center and utilities buildout as a tailwind for listed real assets. Diversifying Assets Listed Real Estate Listed Global Infrastructure Investment Strategy Overview The view expressed within this material constitute the perspective and judgment of PFM Asset Management, a division of U.S. Bancorp Asset Management, Inc., at the time of distribution (March 31, 2026) and are subject to change. Current outlook Outlook one quarter ago PositiveSlightly PositiveNeutralSlightly NegativeNegative 2.9 Exhibit A Resolution No. 2026-070 Page 12