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Notice: UPAL Retirement Program Change

August 23, 2016

A few changes will be made this week to 3 of the 4 UPAL Pooled Fund Models in the UPAL Retirement Plan Program as indicated below.  These changes are recommended by the BOKF Asset Allocation Committee:

  • No changes will occur in the Fixed Income Model Allocation.
  • Conservative Model Allocation – Reduce the allocation to the UPAL Alternative Investment Fund by 2%, increase the allocation to the UPAL Core Bond Fund by 1% and increase the allocation to the UPAL International Fund by 1%.
  • Balanced Model Allocation – Reduce the allocation to the UPAL Alternative Investment Fund by 3%, increase the allocation to the UPAL International Fund by 1%, increase the allocation to the UPAL Core Bond Income Fund by 1% and increase the allocation to the UPAL Global Public Real Estate Fund by 1%.
  • Aggressive Model Allocation – Reduce the allocation to the UPAL Alternative Investment Fund by 4%, increase the allocation to the UPAL Global Public Real Estate Fund by 2%, increase the allocation to the UPAL International Fund by 1% and increase the allocation to the UPAL Core Bond Fund by 1%.

In addition to the allocation changes, the BOKF Asset Allocation Committee is recommending changes within the UPAL Alternative Investment Fund by removing all existing real asset strategies from the fund.  While these asset classes have provided diversification benefits in the past due to lower correlations with traditional equity and fixed income markets, our research has shown that they have become increasingly more highly correlated with stocks and bonds.  In addition, the securitization of these areas of investment, especially commodities, has increased the volatility of returns while at the same time reducing the diversification benefits.  It is important to note that the remaining alternatives strategies have some exposure to gold.

  • The following investment managers were removed from the UPAL Alternative Investment Fund: DFA Inflation Protected Securities, Inst.; Vanguard Short-Term Ifl-Prot Secs Index, Adm; Credit Suisse Commodity Return, Inst.; Shares Gold Trust ETF; Shares S&P Global Infrastructure Index ETF.  The small allocation to these managers has been reallocated to the remaining managers.

Within pre-determined allocation ranges approved by the UPAL Financial Management Committee and Board of Directors, BOKF has discretion over the underlying investments held by UPAL funds and models.

If you have any questions about these changes, please do not hesitate to contact Lea Ann Nunley, Vice President, Retirement Plan Services at 918-747-5585.

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