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

Home

QUARTERLY MARKET SUMMARY For the Quarter Ended March 31, 2026 Multi-Asset Class Management INTERNATIONAL EQUITY • Markets outside of the United States, as measured by the MSCI ACWI ex-U.S. Index, also saw the impacts of the conflict in the Middle East, with posted a return of -0.7% for the first quarter, as sharp declines in March offset gains recorded earlier in the year. During March alone, the index returned -10.8%. • Four of the 11 sectors posted positive returns for the quarter. As in the U.S., Energy (28.5%), Utilities (9.2%) and Materials (5.4%) led performance. The weakest sectors were Real Estate (-4.4%), Communication Services (-9.5%), and Consumer Discretionary (-13.3%). • Developed ex-U.S. markets, as represented by the MSCI EAFE Index, and emerging markets (EM), as represented by the MSCI Emerging Markets Index, returned -1.2% and -0.2%. • Among the five largest-weighted countries in the MSCI EAFE Index, the MSCI United Kingdom (2.0%) and MSCI Japan (1.4%), indices outperformed the broader index, while MSCI Switzerland (-4.2%), MSCI France (-5.4%), and MSCI Germany (-8.5%) indices underperformed. • Within EM, MSCI Korea (16.5%), MSCI Taiwan (9.1%), and MSCI Brazil (19.1%) outperformed the MSCI Emerging Markets index, while MSCI China (-8.9%) and MSCI India (-18.1%) underperformed with notable negative returns. While Korea and Taiwan’s posted positive quarterly returns, this is due to extremely strong gains earlier in the quarter which offset pronounced losses in March (-25.5% and -13.0%, respectively) • Value stocks outperformed growth stocks for the quarter as represented by the broad benchmarks. The MSCI AC World ex-USA Growth Index returned -3.6%, while the MSCI AC World ex-USA Value Index returned 2.1%. Within EM, value stocks (MSCI EM Value) returned 0.7% versus -1.7% for growth. Small-cap stocks, as represented by the MSCI ACWI ex-U.S. Small Cap Index, declined -0.5%. • Equity valuations increased across both emerging and developed markets and now sit modestly above long-term averages. At quarter end, the MSCI EAFE’s adjusted positive forward P/E ratio stood at 15.9, above its five-year average of 15.3. The MSCI Emerging Markets Index ended the quarter at an adjusted positive forward P/E ratio of 11.7, below its five-year average of 13.0. Source: Bloomberg. MSCI ACWI ex-U.S. Sectors Periods Ended March 31, 2026 Source: Bloomberg. *P/E ratios are calculated based on one-year forward estimates and adjusted to include only posi- tive earnings results for consistency. P/E Ratios of MSCI Equity Indices* Consumer Disc. Consumer Staples Energy Financials Healthcare Industrials Info Tech Materials Real Estate Telecom Utilities QTD -13.28%-2.92%28.55%-3.64%-3.10%-0.20%4.58%5.41%-4.37%-9.46%9.22% YTD -13.28%-2.92%28.55%-3.64%-3.10%-0.20%4.58%5.41%-4.37%-9.46%9.22% 1 Year -3.84%6.58%45.66%25.71%9.72%27.68%56.95%43.99%11.77%6.77%36.33% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 8 10 12 14 16 18 20 Apr-21 Apr-22 Apr-23 Apr-24 Apr-25 MSCI EAFE MSCI EAFE 5-Year Average MSCI Emerging Markets MSCI Emerging Markets 5-Year Average 2.5 Exhibit A Resolution No. 2026-070 Page 8