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Item No.5
OPEB &
Pension
Section 115
Trust
Investment
Policy
Presentations
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For Institutional Investor or Investment Professional Use Only –This material
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City of Cupertino
Investment Review
December 17, 2025
Dennis Mullins
Emiline Jacobs
Agenda
Ex Fossil Fuel Historical Index Return
Current Lineup
Sample Passive ESG ETF Lineup
Sample Customized SMA Lineup
Carbon Risk Ratings in Current Equities Portfolio
Carbon Risk Ratings in Sample Equities Portfolio
Customized SMA Introduction
MSCI USA ex
Fossil Fuel Index
3
Historical ex Fossil Fuel Index Returns
4Source: MSCI USA ex Fossil Fuels November 2025 Factsheet
1.6
17.7
33.5
15.2
3.1
10.8
23.2
-4.0
32.5
23.5 26.5
-21.5
28.8 25.7
2.0
16.1
32.6
13.4
1.3
11.6
21.9
-4.5
31.6
21.4
27.0
-19.5
27.1 25.1
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Annual Performance
MSCI USA ex Fossil Fuels MSCI USA
Gross Returns as of November 28, 2025
1 Mo 3 Mo 1 Yr YTD 3 Yr 5 Yr 10 Yr Since Nov
30, 2010
MSCI USA ex
Fossil Fuels -0.09 6.43 15.42 18.11 21.56 14.60 14.93 15.06
MSCI USA 0.03 6.16 14.74 17.74 20.77 14.79 14.6 14.52
Fossil Fuel Exclusion Risk: Concentration
5Source: MSCI USA ex Fossil Fuels November 2025 Factsheet, Source: MSCI USA November 2025 Factsheet
MSCI USA EX FOSSIL FUELS MSCI USA
Sample Lineups
6
Current Lineup
City of Cupertino 115P Pension
7Manager lineup and expense ratios are as of December 12, 2025 and are subject to change.
Policy Targets Tactical Weights Expense Ratio
Domestic Equity 42.00%43.58%
iShares Russell 1000 ETF 41.25%0.15%
Fidelity Small Cap Index Fund 2.33%0.03%
International Equity 21.00%21.50%
Fidelity International Index Fund 15.80%0.04%
Fidelity Emerging Markets Index Fund 5.70%0.08%
Listed Real Assets 5.00%4.92%
iShares Core U.S. REIT ETF 4.92%0.08%
Commodities 2.00%0.00%
Fixed Income 29.00%27.72%
Fidelity U.S. Bond Index Fund 22.97%0.03%
Aristan High Income Fund 4.75%0.71%
Cash Equivalents 1.00%2.27%
First American Government Obligations Fund Class X 2.27%0.14%
0.12%
Sample Passive ESG Lineup ETFs
8Manager lineup and expense ratios are as of December 12, 2025 and are subject to change.
Policy Targets Current Weight Expense Ratio
Domestic Equity 42.00%43.58%
iShares ESG Optimized MSCI USA ETF 21.79%0.25%+10 bps
Xtrackers MSCI USA ESG Leaders Eq ETF 21.79%0.10%+8 bps
International Equity 21.00%21.50%
iShares ESG Aware MSCI EAFE ETF 15.05%0.20%+17 bps
iShares ESG Aware MSCI EM ETF 6.45%0.25%+ 18 bps
Listed Real Assets 5.00%4.92%
iShares Core U.S. REIT ETF 4.92%0.08%
Commodities 2.00%0.00%
Fixed Income 29.00%27.72%
Fidelity U.S. Bond Index Fund 22.97%0.03%
Aristan High Income Fund 4.75%0.71%
Cash Equivalents 1.00%2.27%
First American Government Obligations Fund Class X 2.27%0.14%
0.17%
Customized Equity SMAs
9Manager lineup and expense ratios are as of December 12, 2025 and are subject to change.
Policy Targets Current Weight Expense Ratio
Domestic Equity 42.00%43.58%
Parametric Custom US Equity SMA 41.25%0.18%+3 bps
Parametric Custom US Equity SMA 2.33%0.18%+16 bps
International Equity 21.00%21.50%
Parametric Custom IE Equity SMA 15.80%0.18%+15 bps
Parametric Custom IE Equity SMA 5.70%0.18%+ 11 bps
Listed Real Assets 5.00%4.92%
iShares Core U.S. REIT ETF 4.92%0.08%
Commodities 2.00%0.00%
Fixed Income 29.00%27.72%
Fidelity U.S. Bond Index Fund 22.97%0.03%
Aristan High Income Fund 4.75%0.71%
Cash Equivalents 1.00%2.27%
First American Government Obligations Fund Class X 2.27%0.14%
0.14%
Current Equities
Ratings
10
Current Equities Carbon Risk Overview
City of Cupertino 115P Pension
11Benchmark : iShares MSCI ACWI ETF
Source: Morningstar Direct
1.3
2.6
16.1
64.2
15.8
1.4
2.7
17.7
62.6
15.6
0.0 20.0 40.0 60.0 80.0
Severe Carbon Risk
High Carbon Risk
Medium Carbon Risk
Low Carbon Risk
Negligible Carbon Risk
Distribution of Carbon Risk
City of Cupertino 115P pension iShares MSCI ACWI ETF
Carbon Coverage (% of AUM) 97.94
7.4 7.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
City of Cupertino 115P
pension
iShares MSCI ACWI ETF
Portfolio Carbon Risk Score
Portfolio Carbon Risk C ore: the asset -weighted average of
the carbon risk scores for the portfolio's covered, corporate
holdings. The carbon risk score indicates the overall material
risk a company faces from the transition to a low -carbon
economy. The c arbon risk core is measured on an open -ended
scale starting at zero (no risk) and a maximum score that is
typically below 100. A lower score is better. At least 67% of
the portfolio's eligible assets must have carbon risk scores
available in order for a score to be calculated.
Carbon Involvement
City of Cupertino 115P Pension
12
Benchmark : iShares MSCI ACWI ETF
Source: Morningstar Direct
Morningstar’s Portfolio Fossil Fuel Involvement measures the percentage of the portfolio’s corporate assets that are involved in fossil fuels based on
revenues.
Companies are considered involved in fossil fuels if they derive at
least an aggregate 5% share of total revenue from the activities listed
in the Fossil Fuel Related Activities table. Companies involved in
Arctic Oil & Gas Exploration and Oil Sands Extraction will be included
only if there is no involvement in Oil & Gas Production.
7.6
8.4
0.0
2.0
4.0
6.0
8.0
10.0
City of Cupertino 115P pension iShares MSCI ACWI ETF
Morningstar® Portfolio Fossil Fuel Involvement
% of Covered Portfolio Involved
0.7
2.9
6.5
4.5
17.5
1.6
1.6
0.7
3.1
6.2
4.6
17.2
1.6
1.4
0.0 5.0 10.0 15.0 20.0
Thermal Coal Extraction
Involvement
Thermal Coal Power
Generation Involvement
Oil and Gas Production
Involvement
Oil and Gas Power Generation
Involvement
Oil and Gas Products and
Services Involvement
Arctic Oil and Gas Exploration
Involvement
Oil Sands Extraction
Involvement
Fossil Fuel Related Activities
City of Cupertino 115P pension iShares MSCI ACWI ETF
Sample ESG ETF
Lineup Equities
Ratings
13
Carbon Risk Overview
Sample Passive ESG ETF Lineup
14Benchmark : iShares MSCI ACWI ETF
Source: Morningstar Direct
Carbon Coverage (% of AUM) 98.66
1.3
2.6
16.1
64.2
15.8
0.2
1.3
13.8
67.2
17.5
0.0 20.0 40.0 60.0 80.0
Severe Carbon Risk
High Carbon Risk
Medium Carbon Risk
Low Carbon Risk
Negligible Carbon Risk
Distribution of Carbon Risk
Sample ESG Lineup iShares MSCI ACWI ETF
5.5
7.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
Sample ESG Lineup iShares MSCI ACWI ETF
Portfolio Carbon Risk Score
Portfolio Carbon Risk C ore: the asset -weighted average of
the carbon risk scores for the portfolio's covered, corporate
holdings. The carbon risk score indicates the overall material
risk a company faces from the transition to a low -carbon
economy. The c arbon risk core is measured on an open -ended
scale starting at zero (no risk) and a maximum score that is
typically below 100. A lower score is better. At least 67% of
the portfolio's eligible assets must have carbon risk scores
available in order for a score to be calculated.
Carbon Involvement
Sample Passive ESG ETF Lineup
15
Benchmark : iShares MSCI ACWI ETF
Source: Morningstar Direct
Morningstar’s Portfolio Fossil Fuel Involvement measures the percentage of the portfolio's corporate assets that are involved in fossil fuels based on
revenues.
4.4
8.4
0.0
2.0
4.0
6.0
8.0
10.0
Sample ESG Lineup iShares MSCI ACWI ETF
Morningstar® Portfolio Fossil Fuel
Involvement
% of Covered Portfolio Involved
0.7
2.9
6.5
4.5
17.5
1.6
1.6
0.5
1.0
4.2
2.4
16.3
0.5
0.2
0.0 10.0 20.0
Thermal Coal Extraction
Involvement
Thermal Coal Power
Generation Involvement
Oil and Gas Production
Involvement
Oil and Gas Power Generation
Involvement
Oil and Gas Products and
Services Involvement
Arctic Oil and Gas Exploration
Involvement
Oil Sands Extraction
Involvement
Fossil Fuel Related Activities
Sample ESG Lineup iShares MSCI ACWI ETF
Companies are considered involved in fossil fuels if they derive at
least an aggregate 5% share of total revenue from the activities listed
in the Fossil Fuel Related Activities table. Companies involved in
Arctic Oil & Gas Exploration and Oil Sands Extraction will be included
only if there is no involvement in Oil & Gas Production.
Customized
Separately
Managed
Account
Intro to Parametric Process for
Customized SMA
17Source: Parametric Custom Core Tax Advantaged Equity SMA Solutions Third Quarter 2025
Design the Exposure:
Provide exposure to selected benchmark (e.g. Russell
1000)
Determine the screen:
Complete the responsible investing menu and
decide screening approach (e.g. Fossil Fuel Free)
Customized SMA (e.g. Russell 1000 ex Fossil Fuel)
For illustrative purposes only
Parametric Screens Available
Customized core equity sub -advised SMA with Parametric Portfolio Associates® LLC (“Parametric”)
18Source: Parametric Responsible Investing Overview
Parametric ESG Screen Definitions
The definitions below stipulate the criteria for failure. Only securities that pass will be eligible for investment
19*Research coverage is at least the MSCI ACWI Investable Market Index universe.
Source: Parametric Responsible Investing Screen Menu
Appendix
20
ESG Risk Overview
City of Cupertino 115P Pension
21Benchmark : iShares MSCI ACWI ETF
Source: Morningstar Direct
Lower score => Less ESG risk
Portfolio Corporate Sustainability Score :
Asset -weighted average of Sustainalytics’ company -
level ESG Risk Score. The Sustainalytics' company -
level ESG Risk Score measures the degree to which a
company’s economic value may be at risk driven by
ESG factors. Like the ESG Risk Scores, the Portfolio
Sustainability Score is rendered on a 0 -100 scale,
where lower scores are better, using an asset -
weighted average of all covered securities.
19.0 18.6
0.0
5.0
10.0
15.0
20.0
25.0
City of Cupertino 115P pension iShares MSCI ACWI ETF
Portfolio Corporate Sustainability Score
Portfolio
Corporate ESG
Risk Score ESG Risk Date
Portfolio
Weighting %
Prospectus Net
Expense Ratio Ticker
iShares Russell 1000 ETF 18.44 10/31/2025 63.38 0.15 IWB
Fidelity International Index 18.08 10/31/2025 24.28 0.04 FSPSX
Fidelity Emerging Markets Index 21.04 10/31/2025 8.76 0.08 FPADX
Fidelity Small Cap Index 26.37 10/31/2025 3.58 0.03 FSSNX
ESG Risk Score Breakdown
City of Cupertino 115P Pension
22Benchmark : iShares MSCI ACWI ETF
Source: Morningstar Direct
ESG Risk Score Coverage
Coverage (% of AUM)99.3
Coverage (# of Securities Scored)4,534
1.0
4.8
29.3
61.9
2.9
1.0
5.9
27.5
62.7
2.9
0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0
Corporate - Percent of Portfolio Covered with Severe ESG Risk
Scores
Corporate - Percent of Portfolio Covered with High ESG Risk
Scores
Corporate - Percent of Portfolio Covered with Medium ESG Risk
Scores
Corporate - Percent of Portfolio Covered with Low ESG Risk
Scores
Corporate - Percent of Portfolio Covered with Negligible ESG
Risk Scores
ESG Risk Scores
City of Cupertino 115P pension iShares MSCI ACWI ETF
ESG Risk Overview
Sample Passive ESG ETF Lineup
23Benchmark : iShares MSCI ACWI ETF
Source: Morningstar Direct
Lower score => Less ESG risk
Portfolio Corporate Sustainability Score :
Asset -weighted average of Sustainalytics’ company -
level ESG Risk Score. The Sustainalytics' company -
level ESG Risk Score measures the degree to which a
company’s economic value may be at risk driven by
ESG factors. Like the ESG Risk Scores, the Portfolio
Sustainability Score is rendered on a 0 -100 scale,
where lower scores are better, using an asset -
weighted average of all covered securities
Portfolio
Corporate ESG
Risk Score ESG Risk Date
Portfolio
Weighting %
Prospectus Net
Expense Ratio Ticker
iShares ESG Optimized MSCI USA ETF 16.92 10/31/2025 33.33 0.25 SUSA
Xtrackers MSCI USA Selection Eq ETF 16.71 10/31/2025 33.33 0.09 USSG
iShares ESG Aware MSCI EAFE ETF 17.57 10/31/2025 23.33 0.21 ESGD
iShares ESG Aware MSCI EM ETF 19.27 10/31/2025 10.00 0.26 ESGE
17.4 18.6
0.0
5.0
10.0
15.0
20.0
25.0
Sample ESG Lineup iShares MSCI ACWI ETF
Portfolio Corporate Sustainability Score
ESG Risk Score Breakdown
Sample Passive ESG ETF Lineup
24Benchmark : iShares MSCI ACWI ETF
Source: Morningstar Direct
ESG Risk Score Coverage
Coverage (% of AUM)99.8
Coverage (# of Securities Scored)1,406
1.0
4.8
29.3
61.9
2.9
0.1
2.9
21.9
71.5
3.7
0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0
Corporate - Percent of Portfolio Covered with Severe ESG Risk
Scores
Corporate - Percent of Portfolio Covered with High ESG Risk
Scores
Corporate - Percent of Portfolio Covered with Medium ESG Risk
Scores
Corporate - Percent of Portfolio Covered with Low ESG Risk
Scores
Corporate - Percent of Portfolio Covered with Negligible ESG
Risk Scores
ESG Risk Scores
Sample ESG Lineup iShares MSCI ACWI ETF
DisclaimerDisclosures
This report contains information developed by Morningstar and Sustainalytics. Such information and data are proprietary of
Sustainalytics and/or its third-party suppliers (Third Party Data) and are provided for informational purposes only. The use of the
data does not constitute an endorsement of any product or project, nor investment advice and are not warranted to be complete ,
timely, accurate or suitable for a particular purpose. The use of their data is subject to their conditions. For more informa tion visit
http://www.sustainalytics.com/legal-disclaimer.
Although PFM Asset Management’s information providers, including without limitation, Morningstar, Sustainalytics, Inc. and it s
affiliates (the “ESG Parties”), obtain information from sources they consider reliable, none of the ESG Parties warrants or
guarantees the originality, accurate and/or completeness of any data herein. None of the ESG Parties make any express or impl ied
warranties of any kind, and the ESG Parties hereby expressly disclaim all warranties of merchantability and fitness for a par ticular
purpose, with respect to any data herein. None of the ESG Parties shall have any liability for any errors or omissions in con nect
with any data herein. Further, without limiting any of the foregoing, in no event shall any of the ESG Parties have any liabi lity for
any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility
of such damages.
Indexes shown are not available for investment. The index data reference herein is the property of the index provider and / o r its
licensors. The index provider assumes no liability in connections with its use and does not sponsor, endorse or recommend the
products or services contained herein. Index returns do not reflect payment of any sales charges or fees an investor would pa y to
purchase the securities they represent. The imposition of these fees and charges would cause investment performance to be
lower than the performance shown.
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DisclaimerDisclosures
The views expressed within this material constitute the perspective and judgment of U.S. Bancorp Asset
Management, Inc. at the time of distribution and are subject to change. Any forecast, projection, or
prediction of the market, the economy, economic trends, and equity or fixed-income markets are based
upon current opinion as of the date of issue and are also subject to change. Opinions and data presented
are not necessarily indicative of future events or expected performance. Information contained herein is
based on data obtained from recognized statistical services, issuer reports or communications, or other
sources, believed to be reliable. No representation is made as to its accuracy or completeness.
PFM Asset Management serves clients in the public sector and is a division of U.S. Bancorp Asset
Management, Inc., which is the legal entity providing investment advisory services. U.S. Bancorp Asset
Management, Inc. is a registered investment adviser, a direct subsidiary of U.S. Bank N.A. and an indirect
subsidiary of U.S. Bancorp. U.S. Bank N.A. is not responsible for and does not guarantee the products,
services, or performance of U.S. Bancorp Asset Management, Inc.
NOT FDIC INSURED : NO BANK GUARANTEE : MAY LOSE VALUE
For Institutional Investor or Investment Professional Use Only – This material is not for inspection by,
distribution to, or quotation to the general public.
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